Bermuda | 98-1333697 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Suite 1, 3rd Floor 11-12 St. James's Square London SW1Y 4LB, United Kingdom | Not Applicable | |
(Address of principal executive offices) | (Zip Code) |
Title of each Class | Trading Symbol | Name of each exchange on which registered | ||
Common Shares, par value $0.00001 per share | AXGT | The Nasdaq Global Select Market |
Large accelerated filer | o | Accelerated filer | ý |
Non-accelerated filer | o | Smaller reporting company | ý |
Emerging growth company | ý |
Page | |
• | the success and timing of our ongoing development and potential commercialization of our product candidates; |
• | our relationships under our license agreements; |
• | the success of our interactions with the U.S. Food and Drug Administration ("FDA") and international regulatory authorities; |
• | the anticipated start dates, durations and completion dates of our ongoing and future nonclinical studies and clinical trials, as well as subsequent portions or cohorts of our ongoing clinical trials; |
• | the receipt of approvals or endorsements by data monitoring or other committees necessary for commencement or continuation of clinical trials; |
• | the anticipated designs of our future clinical studies; |
• | anticipated future regulatory submissions and the timing of, and our ability to, obtain and maintain regulatory approval for our product candidates; |
• | the rate and degree of market acceptance and clinical utility of any approved product candidate; |
• | our ability to identify and in-license or acquire additional product candidates; |
• | our commercialization, marketing and manufacturing capabilities and strategy; |
• | continued service of our executive officers or other key scientific or management personnel; |
• | our ability to obtain, maintain and enforce intellectual property rights for our product candidates; |
• | our anticipated future cash position; |
• | our estimates regarding our results of operations, financial condition, liquidity, capital requirements, prospects, growth and strategies; |
• | the success of competing therapies that are or may become available; and |
• | our stated objective of building the world's leading gene therapy company for the treatment of neurological diseases. |
Gene Therapy Program | Clinical Indication | Development Stage |
AXO-LENTI-PD | Parkinson's disease | Clinical |
AXO-AAV-GM1 | GM1 gangliosidosis | Clinical |
AXO-AAV-GM2 | GM2 gangliosidosis (including Tay-Sachs disease | Clinical |
and Sandhoff disease) | ||
• | completion of extensive nonclinical laboratory tests, animal studies, and formulation studies in accordance with the FDA's Good Laboratory Practice ("GLP") regulations; |
• | submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin; |
• | performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice ("GCP") requirements to establish the safety and efficacy of the product for each proposed indication; |
• | submission to the FDA of a BLA, in the case of biological product candidates including gene therapy product candidates, after completion of all pivotal clinical trials; |
• | satisfactory completion of an FDA inspection of sites involved in our clinical trials; |
• | satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient ("API") and finished product are produced and tested to assess compliance with cGMPs; and |
• | FDA review and approval of the BLA prior to any commercial marketing or sale of the product in the United States. |
• | Phase 1. The biological product is initially introduced into healthy human subjects and tested for safety. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. Guidelines on clinical trials with gene therapy products issued by the FDA's Office of Tissues and Advanced Therapies state that the FDA has determined that the benefit-risk ratio of these products does not warrant their evaluation in healthy human subjects. |
• | Phase 2. The biological product is evaluated in 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, optimal dosage and dosing schedule. |
• | Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. |
• | the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; |
• | the applicant consents to a second orphan medicinal product application; or |
• | the applicant cannot supply enough orphan medicinal product. |
• | successfully commence and complete clinical trials and obtain regulatory approval for the marketing of our gene therapy product candidates; |
• | establish effective sales, marketing and distribution systems for our gene therapy product candidates; |
• | add operational, financial and management information systems and personnel, including personnel to support our clinical, manufacturing and planned future commercialization efforts and operations as a public company; |
• | initiate and continue relationships with third-party suppliers and manufacturers, including Oxford BioMedica (UK) Ltd. ("Oxford BioMedica"), Nationwide Children's Hospital and other third-party cGMP manufacturers, and have clinical and commercial quantities of our gene therapy product candidates manufactured at acceptable cost and quality levels; |
• | attract and retain an experienced management and advisory team; |
• | raise additional funds when needed and on terms acceptable to us; |
• | achieve broad market acceptance of our products in the medical community and with third-party payors and consumers; |
• | launch commercial sales of our products, whether alone or in collaboration with others; |
• | compete effectively with other biotechnology and gene therapy companies targeting neurological diseases; and |
• | obtain, maintain, expand and protect necessary intellectual property rights. |
• | pre-clinical and early clinical results of any product candidates we acquire may not be predictive of future clinical results; |
• | potential product candidates may, on further study, be 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; or |
• | potential product candidates may not be effective in treating their targeted diseases. |
• | we may not be able to demonstrate that a product candidate is safe and effective as a treatment for our targeted indications to the satisfaction of the applicable regulatory authorities; |
• | our BLA or other key regulatory filings may be delayed or rejected due to issues, including those related to product quality and manufacturing, timing of results from supporting studies, database lock and data transfer; |
• | the regulatory authorities may require additional nonclinical studies or clinical studies of the product candidate in Parkinson’s disease or other indications, which would increase our costs and prolong our development; |
• | the results of our clinical trials may not meet the level of statistical or clinical significance required for marketing approval; |
• | the regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; |
• | the contract research organizations ("CROs") that we retain to conduct clinical trials may take actions outside of our control, or otherwise commit errors or breaches of protocols, that adversely impact our clinical trials; |
• | the regulatory authorities may not find the data from nonclinical studies and clinical trials sufficient to demonstrate that the clinical and other benefits of the product candidate outweigh its safety risks; |
• | the regulatory authorities may disagree with our interpretation of data from our nonclinical studies and clinical trials or may require that we conduct additional studies; |
• | the regulatory authorities may not accept data generated at our clinical trial sites; |
• | the regulatory authorities may require, as a condition of approval, limitations on approved labeling or distribution and use restrictions; |
• | the FDA may require development of a risk evaluation and mitigation strategy ("REMS") as a condition of approval; |
• | the regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturers; or |
• | the regulatory authorities may change their approval policies or adopt new regulations. |
• | the progress, timing, costs and results of our clinical trials of our product candidates; |
• | the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA, or the PMDA, and other comparable foreign regulatory authorities; |
• | the achievement of certain development, regulatory and commercialization milestones that give rise to milestone and royalty payments to licensors; |
• | the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; |
• | the cost of obtaining necessary intellectual property and defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates or any future product candidates; |
• | the effect of competing technological and market developments; |
• | the cost and timing of completion of commercial-scale manufacturing activities; |
• | the cost of establishing sales, marketing and distribution capabilities for our product candidates in regions where we choose to commercialize our products on our own; and |
• | the initiation, progress, timing and results of our commercialization of our product candidates, if approved for commercial sale. |
• | multiple, conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses; |
• | failure by us or our distributors to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidates, if approved, in various countries; |
• | difficulties in managing foreign operations; |
• | unexpected changes in tariffs or trade barriers; |
• | complexities associated with managing multiple payor-reimbursement regimes or self-pay systems; |
• | financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to foreign currency exchange rate fluctuations; |
• | reduced protection for intellectual property rights; |
• | reduced protection of contractual rights in the event of bankruptcy or insolvency of the other contracting party; |
• | natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; |
• | failure to comply with foreign laws, regulations, standards and regulatory guidance governing the collection, use, disclosure, retention, security and transfer of personal data, including the European Union General Data Privacy Regulation ("GDPR"); and |
• | failure to comply with the United Kingdom Bribery Act 2010 ("UK Bribery Act") and similar anti-bribery and anti-corruption laws in other jurisdictions, and the Foreign Corrupt Practices Act, including its books and records provisions and its anti-bribery provisions, including by failing to maintain accurate information and control over sales and distributors’ activities. |
• | impairment of our business reputation and significant negative media attention; |
• | withdrawal of participants from our clinical trials; |
• | significant costs to defend related litigation; |
• | distraction of management’s attention from our primary business; |
• | substantial monetary awards to patients or other claimants; |
• | inability to commercialize our product candidates or any future product candidate; |
• | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
• | decreased demand for our product candidates or any future product candidate, if approved for commercial sale; and |
• | loss of revenue. |
• | failure to obtain regulatory approval to commence a trial; |
• | unforeseen safety issues; |
• | determination of dosing issues; |
• | lack of effectiveness during clinical trials; |
• | inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites; |
• | slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial; |
• | changes in or modifications to clinical trial design; |
• | failure to manufacture or obtain supply of sufficient quantities of a gene therapy product candidate or placebo or failure to obtain sufficient quantities of concomitant medication for use in clinical trials; |
• | inability to monitor patients adequately during or after treatment; |
• | inability or unwillingness of medical investigators to follow our clinical and other applicable protocols; |
• | failure to establish sufficient number of clinical trial sites; or |
• | clinical sites or others deviating from trial protocol, inappropriately unblinding results, or dropping out of a trial. |
• | develop and commercialize products that are superior to other products in the market; |
• | demonstrate through our clinical trials that our gene therapy product candidates are differentiated from existing and future therapies; |
• | attract qualified scientific, product development and commercial personnel; |
• | obtain patent or other proprietary protection for our medicines; |
• | obtain required regulatory approvals; |
• | obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; and |
• | successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new medicines. |
• | regulatory authorities may withdraw their approval of the product or require a REMS to impose restrictions on its distribution or other risk management measures; |
• | 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 to conduct additional clinical trials; |
• | we could be sued and held liable for harm caused to patients; |
• | we could elect to discontinue the sale of our product; and |
• | our reputation may suffer. |
• | restrictions on manufacturing such products; |
• | restrictions on the labeling or marketing of such products; |
• | restrictions on product marketing, distribution or use; |
• | requirements to conduct post-marketing studies or clinical trials; |
• | warning or untitled letters; |
• | withdrawal of the products from the market; |
• | recall of products; |
• | fines, restitution or disgorgement of profits or revenues; |
• | suspension or withdrawal of marketing approvals; |
• | refusal to permit the import or export of such products; |
• | product seizure; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | the efficacy and potential advantages compared to alternative treatments; |
• | the effectiveness of sales and marketing efforts; |
• | the cost of treatment in relation to alternative treatments, including any similar generic treatments; |
• | our ability to offer our products for sale at competitive prices; |
• | the convenience and ease of administration compared to alternative treatments; |
• | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; |
• | the ethical, social and legal concerns about gene therapy; |
• | the strength of marketing and distribution support; |
• | the availability of third-party coverage and adequate reimbursement; |
• | the prevalence and severity of any side effects; and |
• | any restrictions on the use of our product together with other medications. |
• | our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; |
• | the inability of sales personnel to obtain access to physicians or attain adequate numbers of physicians to prescribe any drugs; |
• | the inability to negotiate with payors regarding reimbursement for our products; and |
• | unforeseen costs and expenses associated with creating an independent sales and marketing organization. |
• | different regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries; |
• | reduced protection for intellectual property rights; |
• | unexpected changes in tariffs, trade barriers and regulatory requirements; |
• | economic weakness, including inflation, or political instability in particular foreign economies and markets; |
• | compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; |
• | foreign reimbursement, pricing and insurance regimes; |
• | foreign taxes; |
• | foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; |
• | workforce uncertainty in countries where labor unrest is more common than in the United States; |
• | potential noncompliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery and anti-corruption laws in other jurisdictions; |
• | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and |
• | business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires. |
• | the federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act; |
• | the federal false claims laws and civil monetary penalties laws, including the civil False Claims Act, which can be enforced through civil whistleblower or qui tam actions, impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or knowingly making, or causing to be made, a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; in addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act; |
• | HIPAA imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false or fraudulent statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on health plans, health care clearing houses, and most health care providers, known as covered entities, and their business associates, defined as independent contractors or agents of covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of a covered entity; |
• | a number of federal, state and foreign laws, regulations, guidance and standards that impose requirements regarding the protection of health or other personal data that are applicable to or affect our operations; |
• | the federal Physician Payments Sunshine Act, which 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 certain exceptions) to report annually to the government information related to payments or other "transfers of value" made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members; and |
• | analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and 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; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing, as well as state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. |
• | an annual, nondeductible fee payable by any entity that manufactures or imports specified branded prescription drugs and biologic agents; |
• | an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; |
• | a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; |
• | a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts of 50% prior to January 1, 2019, and 70% thereafter, off negotiated prices of applicable brand drugs to eligible beneficiaries under their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; |
• | extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; |
• | expansion of eligibility criteria for Medicaid programs in certain states; |
• | expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; |
• | a licensure framework for follow on biologic products; |
• | a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and |
• | a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. |
• | failure to satisfy their contractual duties or obligations; |
• | inability to meet our product specifications and quality requirements consistently; |
• | delay or inability to procure or expand sufficient manufacturing capacity; |
• | manufacturing and/or product quality issues related to manufacturing development and scale-up; |
• | costs and validation of new equipment and facilities required for scale-up; |
• | failure to comply with applicable laws, regulations, and standards, including cGMP and similar foreign standards; |
• | deficient or improper record-keeping; |
• | contractual restrictions on our ability to engage additional or alternative manufacturers; |
• | inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; |
• | termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; |
• | reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell our product candidates or any future product candidate in a timely fashion, in sufficient quantities or under acceptable terms; |
• | lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier; |
• | lack of access or licenses to proprietary manufacturing methods used by third-party manufacturers to make our product candidates; |
• | operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier or regulatory sanctions related to the manufacture of our or other company’s products; |
• | carrier disruptions or increased costs that are beyond our control; and |
• | failure to deliver our products under specified storage conditions and in a timely manner. |
• | collaborators have significant discretion in determining the amount and timing of the efforts and resources that they will apply to these collaborations; |
• | collaborators may not perform their obligations as expected; |
• | the nonclinical studies and clinical trials conducted as part of these collaborations may not be successful; |
• | collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on nonclinical study or clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; |
• | collaborators may delay nonclinical studies and clinical trials, provide insufficient funding for nonclinical studies and clinical trials, stop a nonclinical study or clinical trial or abandon a product candidate, repeat or conduct new nonclinical studies or clinical trials or require a new formulation of a product candidate for nonclinical studies or clinical trials; |
• | we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates; |
• | collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; |
• | product candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; |
• | a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; |
• | disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product candidates, may cause delays or termination of the research, development or commercialization of such product candidates, may lead to additional responsibilities for us with respect to such product candidates or may result in litigation or arbitration, any of which would be time consuming and expensive; |
• | collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; |
• | disputes may arise with respect to the ownership or inventorship of intellectual property developed pursuant to our collaborations; |
• | collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; |
• | the terms of our collaboration agreement may restrict us from entering into certain relationships with other third parties, thereby limiting our options; and |
• | collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. |
• | the scope of rights granted under the agreement and other interpretation-related issues; |
• | whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the agreement; |
• | our right to sublicense patent and other rights to third parties; |
• | our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; |
• | our right to transfer or assign our license; and |
• | the effects of termination. |
• | others may be able to make products that are the same as or similar to our product candidates, but that are not covered by the claims of the patents or other intellectual property rights that we own or that we have exclusively licensed and have the right to enforce; |
• | we, our licensor or any collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or license; |
• | we or our licensor might not have been the first to file patent applications covering certain of our inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; |
• | it is possible that our pending patent applications will not lead to issued patents; |
• | issued patents that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; |
• | our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and |
• | we may not develop additional proprietary technologies that are patentable. |
• | any additional delays in the commencement, enrollment and ultimate completion of our clinical trials; |
• | results of clinical trials of our product candidates or those of our competitors; |
• | any delay in filing applications for marketing approval of our product candidates, and any adverse development or perceived adverse development with respect to applicable regulatory authorities’ review of those applications; |
• | failure to successfully develop and commercialize our product candidates; |
• | failure to maintain our relationship with Oxford BioMedica or UMMS or comply with the terms of the Oxford BioMedica Agreement or the UMMS Agreement; |
• | inability to obtain additional funding; |
• | inability to obtain, protect or maintain necessary intellectual property; |
• | regulatory or legal developments in the United States and other countries applicable to our product candidates, including gene therapies; |
• | adverse regulatory decisions or statements; |
• | changes in the structure of healthcare payment systems; |
• | inability to obtain adequate product supply for our current product candidates or any future product candidate, or the inability to do so at acceptable prices; |
• | introduction of new products, services or technologies by our competitors; |
• | failure to meet or exceed financial projections we provide to the public; |
• | failure to meet or exceed the estimates and projections of the investment community; |
• | changes in the market valuations of similar companies; |
• | market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations; |
• | announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; |
• | significant lawsuits, including patent or shareholder litigation, and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; |
• | additions or departures of key scientific or management personnel; |
• | short sales of our common shares; |
• | sales of our common shares by us or our shareholders in the future; |
• | negative coverage in the media or analyst reports, whether accurate or not; |
• | issuance of subpoenas or investigative demands, or the public fact of an investigation by a government agency, whether meritorious or not; |
• | trading volume of our common shares; |
• | general economic, industry and market conditions; and |
• | the other factors described in this "Risk Factors" section. |
• | that a majority of its board of directors consists of independent directors; |
• | for an annual performance evaluation of the nominating and corporate governance and compensation committees; |
• | to require director nominees to be selected, or recommended for the board of directors' selection, either by independent directors constituting a majority of the Board's independent directors in a vote in which only independent directors participate or a nominations committee comprised solely of independent directors; and |
• | to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility. |
Years Ended March 31, | Period from October 31, 2014 (Date of Inception) to March 31, | ||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Statements of Operations Data: | (In thousands, except share and per share data) | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development expenses | |||||||||||||||||||
(includes $4,758, $16,597, $19,186, $30,622 and $3,178 of share-based compensation expense for the years ended March 31, 2019, 2018, 2017 and 2016 and the period from October 31, 2014 (Date of Inception) to March 31, 2015, respectively) | $ | 87,552 | $ | 141,412 | $ | 134,778 | $ | 76,644 | $ | 14,324 | |||||||||
General and administrative expenses | |||||||||||||||||||
(includes $11,671, $15,281, $17,184, $41,764 and $5,118 of share-based compensation expense for the years ended March 31, 2019, 2018, 2017 and 2016 and the period from October 31, 2014 (Date of Inception) to March 31, 2015, respectively) | 39,466 | 71,906 | 45,721 | 56,518 | 6,722 | ||||||||||||||
Total operating expenses | 127,018 | 213,318 | 180,499 | 133,162 | 21,046 | ||||||||||||||
Interest expense | 7,530 | 7,545 | 1,143 | — | — | ||||||||||||||
Other (income) expense | (5,616 | ) | (211 | ) | 369 | — | — | ||||||||||||
Loss before income tax expense (benefit) | (128,932 | ) | (220,652 | ) | (182,011 | ) | (133,162 | ) | (21,046 | ) | |||||||||
Income tax expense (benefit) | 133 | 921 | (1,060 | ) | (17 | ) | 1 | ||||||||||||
Net loss | $ | (129,065 | ) | $ | (221,573 | ) | $ | (180,951 | ) | $ | (133,145 | ) | $ | (21,047 | ) | ||||
Net loss per common share — basic and diluted | $ | (8.02 | ) | $ | (16.51 | ) | $ | (14.60 | ) | $ | (11.28 | ) | $ | (10.53 | ) | ||||
Weighted average common shares outstanding — basic and diluted | 16,100,686 | 13,421,984 | 12,394,837 | 11,808,146 | 1,998,355 |
As of March 31, | |||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Balance Sheet Data: | (In thousands) | ||||||||||||||||||
Cash and cash equivalents | $ | 106,999 | $ | 154,337 | $ | 212,573 | $ | 276,251 | $ | — | |||||||||
Working capital | 71,085 | 111,687 | 173,422 | 266,331 | (2,760 | ) | |||||||||||||
Total assets | 122,706 | 160,786 | 222,539 | 282,498 | 1,117 | ||||||||||||||
Long-term liabilities | 22,994 | 42,925 | 51,436 | — | 5,000 | ||||||||||||||
Accumulated deficit | (686,016 | ) | (556,951 | ) | (335,143 | ) | (154,192 | ) | (21,047 | ) | |||||||||
Total shareholders’ equity (deficit) | 56,213 | 71,286 | 124,837 | 266,743 | (7,751 | ) |
• | direct third-party costs, which include expenses incurred under agreements with CROs and contract manufacturing organizations, the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, manufacturing costs in connection with producing materials for use in conducting nonclinical and clinical studies, and any other third-party expenses directly attributable to the development of our product candidates; and |
• | upfront payments for the purchase of in-process research and development, which include costs incurred under our agreements with Oxford BioMedica and UMMS, as well as costs incurred for our discontinued AXO-AAV-OPMD, intepirdine and nelotanserin programs. |
• | share-based compensation expense for research and development personnel, including expense related to RSL common share awards and RSL options issued by RSL to RSI and RSG employees; |
• | personnel-related expenses, which include employee-related expenses, such as salaries, benefits and travel expenses, for research and development personnel; |
• | costs allocated to us under our services agreements with RSI and RSG; and |
• | other expenses, which includes the cost of consultants who assist with our research and development but are not allocated to a specific program. |
• | the number of trials required for approval; |
• | the per patient trial costs; |
• | the number of patients who participate in the trials; |
• | the number of sites included in the trials; |
• | the countries in which the trials are conducted; |
• | the length of time required to enroll eligible patients; |
• | the dose that patients receive; |
• | the drop-out or discontinuation rates of patients; |
• | the potential additional safety monitoring or other studies requested by regulatory agencies; |
• | the duration of patient follow-up; |
• | the timing and receipt of regulatory approvals; and |
• | the efficacy and safety profile of the product candidates. |
Years Ended March 31, | ||||||||
2019 | 2018 | |||||||
Operating expenses: | ||||||||
Research and development expenses | ||||||||
(includes $4,758 and $16,597 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively) | $ | 87,552 | $ | 141,412 | ||||
General and administrative expenses | ||||||||
(includes $11,671 and $15,281 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively) | 39,466 | 71,906 | ||||||
Total operating expenses | 127,018 | 213,318 | ||||||
Interest expense | 7,530 | 7,545 | ||||||
Other income | (5,616 | ) | (211 | ) | ||||
Income tax expense | 133 | 921 | ||||||
Net loss | $ | (129,065 | ) | $ | (221,573 | ) |
Years Ended March 31, | |||||||||||
2019 | 2018 | Change | |||||||||
Program-specific costs: | |||||||||||
AXO-LENTI-PD | $ | 30,253 | $ | — | $ | 30,253 | |||||
AXO-AAV-OPMD | 14,573 | — | 14,573 | ||||||||
AXO-AAV-GM1 and AXO-AAV-GM2 | 11,154 | — | 11,154 | ||||||||
Intepirdine | 1,251 | 80,243 | (78,992 | ) | |||||||
Nelotanserin | 8,099 | 18,905 | (10,806 | ) | |||||||
RVT-103 | — | 690 | (690 | ) | |||||||
RVT-104 | — | 1,781 | (1,781 | ) | |||||||
Unallocated internal costs: | |||||||||||
Share-based compensation | 4,758 | 16,597 | (11,839 | ) | |||||||
Personnel-related | 10,031 | 15,376 | (5,345 | ) | |||||||
Services agreements | 2,352 | 2,689 | (337 | ) | |||||||
Other | 5,081 | 5,131 | (50 | ) | |||||||
Total research and development expenses | $ | 87,552 | $ | 141,412 | $ | (53,860 | ) |
• | the progress, timing, costs and results of our clinical trials of our gene therapy product candidates; |
• | the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA, or the PMDA, and other comparable foreign regulatory authorities; |
• | the achievement of certain development, regulatory and commercialization milestones that give rise to milestone and royalty payments to licensors; |
• | the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; |
• | the cost of obtaining necessary intellectual property and defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or our gene therapy product candidates or any future gene therapy product candidates; |
• | the effect of competing technological and market developments; |
• | the cost and timing of completion of commercial-scale manufacturing activities; |
• | the cost of establishing sales, marketing and distribution capabilities for our gene therapy product candidates in regions where we choose to commercialize our products on our own; and |
• | the initiation, progress, timing and results of our commercialization of our gene therapy product candidates, if approved for commercial sale. |
Years Ended March 31, | |||||||
2019 | 2018 | ||||||
Net cash used in operating activities | $ | (134,207 | ) | $ | (190,348 | ) | |
Net cash used in investing activities | (202 | ) | (4,284 | ) | |||
Net cash provided by financing activities | 87,071 | 136,396 |
Contractual Obligations (in thousands) (1) | Total | Under 1 year | 1-3 years | 3-5 years | Over 5 years | ||||||||||||||
Debt obligations, including interest (2) | $ | 51,453 | $ | 25,664 | $ | 25,789 | $ | — | $ | — | |||||||||
Real property lease obligations (3) | 2,689 | 1,791 | 898 | — | — | ||||||||||||||
Total | $ | 54,142 | $ | 27,455 | $ | 26,687 | $ | — | $ | — | |||||||||
(1) This table does not include any milestone and royalty payments which may become payable to third parties for which the timing and likelihood of such payments are not known. Potential milestone and royalty payments are described below under "-Milestone and Royalty Payments." | |||||||||||||||||||
(2) Amounts estimated using interest rate in effect at March 31, 2019. Debt obligations are described below under "-Debt Obligations." | |||||||||||||||||||
(3) Amounts due, net of prepayments. Real property lease obligations are described below under “-Real Property Leases.” |
Page | ||
Exhibit No. | Description of Document | Schedule/Form | File No. | Exhibit No. | Filing Date | |
3.1 | S-1 | 333-204073 | 3.1 | 05/11/2015 | ||
3.2 | S-1 | 333-204073 | 3.2 | 05/11/2015 | ||
3.3 | 8-K | 001-37418 | 3.1 | 12/21/2017 | ||
10.1 | S-1/A | 333-204073 | 10.9 | 05/22/2015 | ||
10.2+ | S-1/A | 333-204073 | 10.1 | 05/22/2015 | ||
10.3+ | S-1/A | 333-204073 | 10.2 | 05/22/2015 | ||
10.4+ | S-1/A | 333-204073 | 10.3 | 05/22/2015 | ||
10.5+ | S-1/A | 333-204073 | 10.7 | 05/22/2015 | ||
10.6+ | S-1/A | 333-204073 | 10.4 | 05/22/2015 | ||
10.7* | 10-Q | 001-37418 | 10.2 | 02/09/2016 | ||
10.8+ | 10-K | 001-37418 | 10.12 | 06/13/2017 | ||
10.9 | 10-K | 001-37418 | 10.13 | 06/13/2017 | ||
10.10 | 10-K | 001-37418 | 10.15 | 06/13/2017 | ||
10.11 | 10-Q | 001-37418 | 10.1 | 11/02/2017 | ||
10.12+ | 10-K | 001-37418 | 10.24 | 06/11/2018 | ||
10.13 | 8-K | 001-37418 | 1.1 | 06/22/2018 | ||
10.14 | 10-Q | 001-37418 | 10.1 | 08/07/2018 | ||
10.15 | 10-Q | 001-37418 | 10.2 | 08/07/2018 | ||
10.16* | 10-Q | 001-37418 | 10.3 | 08/07/2018 | ||
10.17* | 10-Q | 001-37418 | 10.1 | 11/07/2018 | ||
10.18* | 10-Q | 001-37418 | 10.2 | 11/07/2018 | ||
10.19* | 10-Q | 001-37418 | 10.1 | 02/07/2019 | ||
10.20†+ | ||||||
10.21† | ||||||
10.22† | ||||||
21.1† | ||||||
23.1† | ||||||
24.1† | ||||||
31.1† | ||||||
31.2† | ||||||
32.1** | ||||||
32.2** | ||||||
101.INS XBRL | Instance Document | |||||
101.SCH XBRL | Taxonomy Extension Schema | |||||
101.CAL XBRL | Taxonomy Extension Calculation Linkbase | |||||
101.DEF XBRL | Taxonomy Extension Definition Linkbase | |||||
101.LAB XBRL | Taxonomy Extension Label Linkbase | |||||
101.PRE XBRL | Taxonomy Extension Presentation Linkbase |
AXOVANT GENE THERAPIES LTD. | ||
By: | /s/ Pavan Cheruvu | |
Pavan Cheruvu Principal Executive Officer | ||
June 11, 2019 | ||
Signature | Title | Date | ||
/s/ Pavan Cheruvu | Principal Executive Officer and Director | June 11, 2019 | ||
Pavan Cheruvu | ||||
/s/ Gregory Weinhoff | Principal Financial Officer and Principal Accounting Officer | June 11, 2019 | ||
Gregory Weinhoff | ||||
/s/ Frank Torti | Director, Chairman of the Board | June 11, 2019 | ||
Frank Torti | ||||
/s/ Atul Pande | Director, Lead Independent Director | June 11, 2019 | ||
Atul Pande | ||||
/s/ George Bickerstaff | Director | June 11, 2019 | ||
George Bickerstaff | ||||
/s/ Roger Jeffs | Director | June 11, 2019 | ||
Roger Jeffs | ||||
/s/ Berndt Modig | Director | June 11, 2019 | ||
Berndt Modig | ||||
/s/ Ilan Oren | Director | June 11, 2019 | ||
Ilan Oren | ||||
/s/ Myrtle Potter | Director | June 11, 2019 | ||
Myrtle Potter |
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AXOVANT GENE THERAPIES LTD. | ||
Page | ||
March 31, 2019 | March 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 106,999 | $ | 154,337 | |||
Prepaid expenses and other current assets | 5,859 | 2,174 | |||||
Income tax receivable | 1,726 | 1,751 | |||||
Total current assets | 114,584 | 158,262 | |||||
Long-term investment | 5,871 | — | |||||
Other non-current assets | 973 | — | |||||
Property and equipment, net | 1,278 | 2,524 | |||||
Total assets | $ | 122,706 | $ | 160,786 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,698 | $ | 3,949 | |||
Due to Roivant Sciences Ltd., Roivant Sciences, Inc. and Roivant Sciences GmbH | — | 1,011 | |||||
Accrued expenses | 20,619 | 31,862 | |||||
Current portion of long-term debt | 21,182 | 9,753 | |||||
Total current liabilities | 43,499 | 46,575 | |||||
Long-term debt | 22,994 | 42,925 | |||||
Total liabilities | 66,493 | 89,500 | |||||
Commitments and contingencies (Note 11) | |||||||
Shareholders’ equity: | |||||||
Common shares, par value $0.00001 per share, 1,000,000,000 shares authorized, 22,779,891 and 13,473,512 issued and outstanding at March 31, 2019 and March 31, 2018, respectively | — | — | |||||
Accumulated other comprehensive income | 911 | 126 | |||||
Additional paid-in capital | 741,318 | 628,111 | |||||
Accumulated deficit | (686,016 | ) | (556,951 | ) | |||
Total shareholders’ equity | 56,213 | 71,286 | |||||
Total liabilities and shareholders’ equity | $ | 122,706 | $ | 160,786 |
Years Ended March 31, | |||||||
2019 | 2018 | ||||||
Operating expenses: | |||||||
Research and development expenses(1) | |||||||
(includes $4,758 and $16,597 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively) | $ | 87,552 | $ | 141,412 | |||
General and administrative expenses(2) | |||||||
(includes $11,671 and $15,281 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively) | 39,466 | 71,906 | |||||
Total operating expenses | 127,018 | 213,318 | |||||
Interest expense | 7,530 | 7,545 | |||||
Other income | (5,616 | ) | (211 | ) | |||
Loss before income tax expense | (128,932 | ) | (220,652 | ) | |||
Income tax expense | 133 | 921 | |||||
Net loss | $ | (129,065 | ) | $ | (221,573 | ) | |
Net loss per common share — basic and diluted | $ | (8.02 | ) | $ | (16.51 | ) | |
Weighted average common shares outstanding — basic and diluted | 16,100,686 | 13,421,984 |
Years Ended March 31, | |||||||
2019 | 2018 | ||||||
Net loss | $ | (129,065 | ) | $ | (221,573 | ) | |
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustment | 785 | (252 | ) | ||||
Total other comprehensive income (loss) | 785 | (252 | ) | ||||
Comprehensive loss | $ | (128,280 | ) | $ | (221,825 | ) |
Common Shares | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balance at March 31, 2017 | 12,395,492 | $ | — | $ | 459,602 | $ | (335,143 | ) | $ | 378 | $ | 124,837 | ||||||||||
Adjustment to adopt ASU 2016-09 | — | — | 235 | (235 | ) | — | — | |||||||||||||||
Issuance of shares upon exercise of stock options | 92,604 | — | 1,557 | — | — | 1,557 | ||||||||||||||||
Exercise of warrant | 16,228 | — | — | — | — | — | ||||||||||||||||
Stock issued for equity financing, net of underwriting discounts and commissions and offering expenses of $9.2 million | 969,188 | — | 134,515 | — | — | 134,515 | ||||||||||||||||
Capital contribution | — | — | 324 | — | — | 324 | ||||||||||||||||
Share-based compensation expense | — | — | 26,465 | — | — | 26,465 | ||||||||||||||||
Capital contribution — share-based compensation | — | — | 5,413 | — | — | 5,413 | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (252 | ) | (252 | ) | ||||||||||||||
Net loss | — | — | — | (221,573 | ) | — | (221,573 | ) | ||||||||||||||
Balance at March 31, 2018 | 13,473,512 | $ | — | $ | 628,111 | $ | (556,951 | ) | $ | 126 | $ | 71,286 | ||||||||||
Issuance of shares upon exercise of stock options | 39,130 | — | 335 | — | — | 335 | ||||||||||||||||
Issuance of shares in connection with Private Placement with RSL | 1,785,714 | — | 25,000 | — | — | 25,000 | ||||||||||||||||
Shares sold in public offerings, net of underwriting discounts and commissions and offering expenses of $3.7 million | 7,478,448 | — | 69,488 | — | — | 69,488 | ||||||||||||||||
Shares sold under share sales agreement | 3,087 | — | 61 | — | — | 61 | ||||||||||||||||
Share-based compensation expense | — | — | 19,067 | — | — | 19,067 | ||||||||||||||||
Capital contribution — share-based compensation expense | — | — | (2,638 | ) | — | — | (2,638 | ) | ||||||||||||||
Non-cash capital contribution received by ASG from RSI | — | — | 1,894 | — | — | 1,894 | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 785 | 785 | ||||||||||||||||
Net loss | — | — | — | (129,065 | ) | — | (129,065 | ) | ||||||||||||||
Balance at March 31, 2019 | 22,779,891 | $ | — | $ | 741,318 | $ | (686,016 | ) | $ | 911 | $ | 56,213 |
Years Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (129,065 | ) | $ | (221,573 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Disposal of fixed assets | 148 | 24 | |||||
Foreign currency translation adjustment | 785 | (252 | ) | ||||
Share-based compensation | 16,429 | 31,878 | |||||
Depreciation and non-cash amortization | 2,450 | 3,083 | |||||
Noncash gain on long-term investment | (5,871 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Prepaid expenses and other current assets | (3,685 | ) | 4,283 | ||||
Other non-current assets | (973 | ) | — | ||||
Deferred tax assets | — | 2,709 | |||||
Income tax receivable | 25 | (1,093 | ) | ||||
Accounts payable | (2,251 | ) | (4,602 | ) | |||
Due to Roivant Sciences Ltd., Roivant Sciences, Inc. and Roivant Sciences GmbH | (956 | ) | (1,871 | ) | |||
Accrued expenses | (11,243 | ) | (2,934 | ) | |||
Net cash used in operating activities | (134,207 | ) | (190,348 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (202 | ) | (4,284 | ) | |||
Net cash used in investing activities | (202 | ) | (4,284 | ) | |||
Cash flows from financing activities: | |||||||
Capital contribution from Roivant Sciences Ltd., Roivant Sciences, Inc. and Roivant Sciences GmbH | 1,894 | 324 | |||||
Payment of long-term debt | (9,707 | ) | — | ||||
Exercise of stock options | 335 | 1,557 | |||||
Cash proceeds from issuance of common shares, net of issuance costs | 94,549 | 134,515 | |||||
Net cash provided by financing activities | 87,071 | 136,396 | |||||
Net change in cash and cash equivalents | (47,338 | ) | (58,236 | ) | |||
Cash and cash equivalents—beginning of year | 154,337 | 212,573 | |||||
Cash and cash equivalents—end of year | $ | 106,999 | $ | 154,337 | |||
Non-cash financing activities: | |||||||
Issuance of common stock upon exercise of warrant | $ | — | $ | 2,594 | |||
Supplemental disclosure of cash paid: | |||||||
Income taxes | $ | 71 | $ | 377 | |||
Interest | $ | 6,376 | $ | 6,365 |
• | Level 1-Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. |
• | Level 2-Valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. |
• | Level 3-Valuations are based on inputs that are unobservable (supported by little or no market activity) and significant to the overall fair value measurement. |
Fair Value | Price Quotations (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Money market fund | $ | 30,000 | $ | 30,000 | $ | — | $ | — |
March 31, 2019 | March 31, 2018 | ||||||
Research and development expenses | $ | 13,416 | $ | 21,855 | |||
Salaries, bonuses, and other compensation expenses | 3,899 | 7,718 | |||||
Legal expenses | 1,319 | 779 | |||||
Other expenses | 1,985 | 1,510 | |||||
Total accrued expenses | $ | 20,619 | $ | 31,862 |
March 31, 2019 | March 31, 2018 | |||||||
Principal amount | $ | 45,295 | $ | 55,000 | ||||
Less: unamortized discount and debt issuance costs | (1,119 | ) | (2,322 | ) | ||||
Loan payable less unamortized discount and debt issuance costs | 44,176 | 52,678 | ||||||
Less: current portion of long-term debt | 21,182 | 9,753 | ||||||
Long-term loan payable, net of current maturities | $ | 22,994 | $ | 42,925 |
Years ending March 31, | ||||
2020 | $ | 21,182 | ||
2021 | 24,113 | |||
Thereafter | — | |||
Total | $ | 45,295 |
Years Ended March 31, | |||||
2019 | 2018 | ||||
Expected share price volatility | 85.5 | % | 79.6 | % | |
Expected risk free interest rate | 2.82 | % | 2.33 | % | |
Expected term, in years | 6.03 | 6.50 | |||
Expected dividend yield | — | % | — | % |
Expected share price volatility | 70.6 - 85.6% |
Contractual term, in years | 10 |
Number of Options | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | ||||||||||||
Options outstanding at March 31, 2017 | 979,986 | $ | 59.93 | $ | 96.50 | 8.49 | $ | 61,104,445 | ||||||||
Granted | 2,148,976 | 81.14 | 55.51 | |||||||||||||
Exercised | (92,604 | ) | 17.06 | 110.84 | $ | 13,002,098 | ||||||||||
Forfeited | (1,275,756 | ) | 117.25 | 80.56 | ||||||||||||
Cancelled | 0 | — | — | |||||||||||||
Options outstanding at March 31, 2018 | 1,760,602 | $ | 44.11 | $ | 52.68 | 8.73 | $ | 1,347,255 | ||||||||
Granted | 606,599 | 16.41 | 11.42 | |||||||||||||
Exercised | (39,130 | ) | 8.57 | 100.42 | $ | 242,574 | ||||||||||
Forfeited | (408,913 | ) | 53.04 | 53.64 | ||||||||||||
Cancelled | — | — | — | |||||||||||||
Options outstanding at March 31, 2019 | 1,919,158 | $ | 34.09 | $ | 49.35 | 6.86 | $ | 1,569,809 | ||||||||
Options vested and expected to vest at March 31, 2019 | 1,919,158 | $ | 34.09 | $ | 49.35 | 6.86 | $ | 1,569,809 | ||||||||
Options exercisable at March 31, 2019 | 1,501,655 | $ | 37.15 | $ | 55.57 | 6.82 | $ | 1,241,873 |
Year ended March 31, 2019 | Year ended March 31, 2018 | ||||||
Loss before income taxes: | |||||||
United States | $ | (11,345 | ) | $ | (13,039 | ) | |
Switzerland | (111,383 | ) | (197,765 | ) | |||
Bermuda1 | (6,206 | ) | (9,697 | ) | |||
Other2 | 2 | (151 | ) | ||||
Total loss before income taxes | $ | (128,932 | ) | $ | (220,652 | ) | |
Current taxes: | |||||||
United States | $ | 123 | $ | (1,455 | ) | ||
Switzerland | — | — | |||||
Bermuda1 | — | — | |||||
Other3 | 10 | (333 | ) | ||||
Total current tax expense (benefit) | 133 | (1,788 | ) | ||||
Deferred taxes: | |||||||
United States | — | 2,669 | |||||
Switzerland | — | — | |||||
Bermuda1 | — | — | |||||
Other2 | — | 40 | |||||
Total deferred tax expense | — | 2,709 | |||||
Total income tax expense | $ | 133 | $ | 921 | |||
1Bermuda entity is centrally controlled and managed in the United Kingdom. | |||||||
2AHL (United Kingdom) and ASEU (Ireland). | |||||||
3Includes state income tax expense. |
Year Ended | Year Ended | |||||||||||||
March 31, 2019 | March 31, 2018 | |||||||||||||
$ | % | $ | % | |||||||||||
Income tax benefit at Bermuda statutory rate | $ | — | — | % | $ | — | — | % | ||||||
Foreign rate differential1 | (14,653 | ) | 11.37 | (122,908 | ) | 55.70 | ||||||||
Valuation allowance | 29,962 | (23.24 | ) | 113,070 | (51.24 | ) | ||||||||
Research and development credit | (1,437 | ) | 1.12 | — | — | |||||||||
Research and development true-up | 318 | (0.25 | ) | — | — | |||||||||
Switzerland rate change | (14,057 | ) | 10.90 | 6,216 | (2.82 | ) | ||||||||
U.S. tax reform implications | — | — | 4,543 | (2.06 | ) | |||||||||
Other | — | — | — | — | ||||||||||
Total income tax expense | $ | 133 | (0.10 | )% | $ | 921 | (0.42 | )% |
March 31, 2019 | March 31, 2018 | ||||||
Deferred tax assets: | |||||||
Research tax credits | $ | 9,876 | $ | 8,757 | |||
Intangibles | 5,995 | — | |||||
Other | 18 | 293 | |||||
Net operating loss | 144,866 | 118,661 | |||||
Share-based compensation | 10,249 | 9,635 | |||||
Subtotal | 171,004 | 137,346 | |||||
Valuation allowance | (171,004 | ) | (137,211 | ) | |||
Deferred tax liabilities: | |||||||
Depreciation | — | (135 | ) | ||||
Total net deferred tax assets | $ | — | $ | — |
2020 | $ | 1,791 | |
2021 | 898 | ||
Thereafter | — | ||
Total | $ | 2,689 |
Balance as of April 1, 2018 | Expenses, net | Cash | Noncash | Balance as of March 31, 2019 | ||||||||||||||||
Employee severance and other personnel benefits | $ | 2,460 | $ | — | $ | (2,452 | ) | $ | — | $ | 8 |
First Quarter Ended | Second Quarter Ended | Third Quarter Ended | Fourth Quarter Ended | First Quarter Ended | Second Quarter Ended | Third Quarter Ended | Fourth Quarter Ended | ||||||||||||||||||||||||
June 30, | September 30, | December 31, | March 31, | June 30, | September 30, | December 31, | March 31, | ||||||||||||||||||||||||
2018 | 2018 | 2018 | 2019 | 2017 | 2017 | 2017 | 2018 | ||||||||||||||||||||||||
Research and development expenses | $ | 37,418 | $ | 21,502 | $ | 21,483 | $ | 7,149 | $ | 43,712 | $ | 38,555 | $ | 37,346 | $ | 21,799 | |||||||||||||||
General and administrative expenses | 11,754 | 10,622 | 10,933 | 6,157 | 21,518 | 30,112 | 18,032 | 2,244 | |||||||||||||||||||||||
Total operating expenses | 49,172 | 32,124 | 32,416 | 13,306 | 65,230 | 68,667 | 55,378 | 24,043 | |||||||||||||||||||||||
Net loss | (51,888 | ) | (33,835 | ) | (34,296 | ) | (9,046 | ) | (69,266 | ) | (69,086 | ) | (57,902 | ) | (25,319 | ) | |||||||||||||||
Net loss per share attributable to common shareholders - basic and diluted | $ | (3.85 | ) | $ | (2.24 | ) | $ | (2.13 | ) | $ | (0.45 | ) | $ | (5.21 | ) | $ | (5.14 | ) | $ | (4.30 | ) | $ | (1.88 | ) |
1. | Parties To This Agreement |
2. | What You Will Receive Regardless of Whether You Enter Into This Agreement |
a. | Your regular base pay (less applicable withholding) through February 15, 2019; and |
b. | If you are currently enrolled and participating in the Company’s medical/dental/vision benefits, your coverage will extend until the end of February 2019 (the month in which your separation from Axovant takes place.) Thereafter, you will be able to continue as a member of the Company’s Group Health Plans at your expense in accordance with the terms of those plans, as well as COBRA, for the legally required benefit continuation period. You will be receiving a separate letter explaining your rights and responsibilities with regard to electing your COBRA benefits; and |
c. | Accrued vested benefits under any applicable retirement plans offered by the Company. You will receive information directly from Fidelity and you may direct questions to them at 1-800-603-4015; and |
d. | Reimbursement for all approved business-related expenses incurred up to your last day of employment consistent with established travel and expense policies; and |
e. | As long as you direct reference inquiries from potential employers to Raquel Crystal, Vice President, Human Resources, Axovant Sciences, Inc., 11 Times Square, 33rd Floor, New York, NY 10036, Raquel.Crystal@axovant.com, unless otherwise authorized in writing, the Company will limit information it discloses in response to reference requests to: (1) your dates of employment; and (2) your last position held. Of course, the Company reserves the right to respond truthfully to any compulsory process of law (such as a subpoena) or as otherwise required by law. |
3. | What You Will Receive Only If You Enter Into This Agreement. |
• | You will receive the target annual performance bonus for which you would have been eligible in the performance review cycle ending March 31, 2019 (“Axovant Bonus”), prorated for the period from April 1, 2018 through February 15, 2019. The Axovant Bonus will be paid to you as soon as practicable following the day eight days following your execution of the Agreement, provided you do not revoke the Agreement under Section 24. Your receipt of the Axovant Bonus is also expressly contingent on your continued cooperation with the Company, as set forth in Section 16 of this Agreement; and |
• | You will receive the modifications to your outstanding Axovant options, as described in Section 4. |
4. | Modifications That Will Be Made To Outstanding Axovant Options Only If You Enter Into and Abide by the Terms of This Agreement |
• | You will vest in your time-vesting Options in accordance with the current vesting schedule through to your Termination Date. In addition, if, on January 31, 2019, you have completed part of a vesting period, a pro rata portion of the time-vesting Options that would have vested on the next vesting date will vest on an accelerated basis, based on the number of days completed in that vesting period through to January 31, 2019. For example, if you last vested in a tranche of an Option grant on December 15, 2018, and you will vest in another 6.25% of the Option grant on March 15, 2019, you will have completed 47 days of the 90-day vesting period for that next tranche by January 31, 2019. Therefore, you will be treated as having vested in another 47/90 of the 6.25% tranche on January 31, 2019. The balance of that tranche (43/90 of the 6.25% tranche) will not be subject to prorated vesting and therefore will be forfeited, along with all other unvested Options. |
• | You will vest in your performance-based Options to the extent that the stock price performance criteria under your Options have been met on or before your Termination Date. |
• | Under the terms of the Incentive Plan and your Option grant agreements and notices, the exercise period for your vested Options generally expires three months after the termination of your Continuous Service, which would be May 15, 2019. However, this exercise period will be extended by nine months (for a total of 12 months following your Termination Date). As a result, you may exercise your vested Options through February 15, 2020, the one-year anniversary of your Termination Date. You acknowledge that, as a result of this extension, any Options that qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (whether time-vesting or performance-based), will cease to qualify as incentive stock options immediately prior to your Termination Date. |
5. | How To Enter Into This Agreement. |
a. | You must sign and date the Agreement and the attached Form of Acknowledgement. Signing and dating the Agreement and Form of Acknowledgment is how you “Execute” the Agreement. |
b. | You must return the Executed Agreement to me on or before March 29, 2019, (unless such period is extended in writing by the Company). If the Company does not receive the signed and dated Agreement and Form of Acknowledgement by that date, the offer will be deemed withdrawn, this Agreement will not take effect and you will not receive the benefits described in Section 3 or Section 4. |
c. | You must comply with the terms and conditions of this Agreement. |
6. | Your Acknowledgments. |
• | The benefits in Section 3 and Section 4 are more than any benefits that you are otherwise promised or entitled to receive under any policy, plan, handbook or practice of the Company or any prior offer letter, agreement or understanding between the Company and you. |
• | Your post-employment obligations under your offer letter, employment agreement, and any non-disclosure, confidentiality and restrictive covenant agreements between you and the Company or any of the Releasees, as defined below, shall remain in full force and effect, and you acknowledge and re-affirm those obligations. |
• | You understand and agree that the opportunity created in relation to the cenobomate asset while you were employed by Axovant is Axovant’s corporate opportunity and you have fiduciary and contractual obligations to Axovant with respect to such corporate opportunity, until and unless you accept and commence employment with Arvelle. Therefore, you acknowledge and agree not to accept employment with or participate in any activity related to the cenobomate asset, other than as an employee of Arvelle, without the express written consent of Axovant. |
• | Your outstanding stock options (the “Options”) previously granted to you under the Axovant Sciences Ltd. 2015 Equity Incentive Plan and the applicable award agreements shall be modified in accordance with Section 4. |
• | Except for the items set forth in Section 2 of this Agreement, which you will receive regardless of whether you Execute this Agreement, the Company does not owe you anything except for what it is obligated to do by the terms this Agreement. |
• | You have no legal entitlement to reemployment with the Company and its affiliates, and you waive and release any right to be considered for employment or reemployment with the Company and its affiliates, and/or the Company and its affiliates from any liability for any failure or refusal to hire you or engage you to perform services |
• | During your employment with the Company, you did not violate any federal, state, or local law, statute, or regulation while acting within the scope of your employment with the Company, nor did you violate any material provision of a Company policy (collectively, “Violations”). |
• | You are not aware of any Violation(s) committed by a Company employee, vendor, or customer acting within the scope of his/her/its employment or business with the Company that have not been previously reported to the Company; or to the extent you are aware of any such unreported Violation(s), you will, prior to your execution of this Agreement, immediately report such Violation(s) to the Company. |
7. | YOU ARE RELEASING AND WAIVING CLAIMS |
• | shareholders |
• | officers, directors, employees, attorneys and agents |
• | subsidiaries, divisions and any and all affiliated and related entities |
• | employee benefit and pension plans or funds |
• | successors and assigns |
• | trustees, fiduciaries and administrators |
8. | YOU ARE AGREEING NOT TO SUE |
9. | Representations Under The FMLA (leave law) And FLSA (wage and hour law). |
10. | You Have Not Already Filed An Action. |
11. | Exceptions To Your Release Of Claims And Covenant Not To Sue. |
• | Enforce the terms of this Agreement; or |
• | Challenge the validity of this Agreement; or |
• | Make any disclosure of information required by law; or |
• | Provide information to, testify before or otherwise assist in any investigation or proceeding brought by, any regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company; or |
• | Provide truthful testimony in any forum; or |
• | Cooperate fully and provide information as requested in any investigation by a governmental agency or commission; or |
• | File a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”); or |
• | File a lawsuit or other action to pursue Claims that arise after you Execute this Agreement. |
12. | Your Continuing Obligations. |
13. | Return Of Property. |
14. | Prior Disclosures. |
15. | Non-Disparagement. |
16. | Confidentiality. |
17. | Duty of Cooperation. |
18. | The Company’s Remedies For Breach. |
19. | Governing Law. |
20. | Successors And Assigns. |
21. | Severability And Construction. |
22. | No Admission. |
23. | Do Not Rely On Verbal Statements. |
• | This Agreement sets forth the complete understanding between the Parties. |
• | This Agreement may not be changed orally. |
• | This Agreement constitutes and contains the complete understanding of the Parties with regard to the end of your employment, and supersedes and replaces all prior oral and written agreements and promises between the Parties, except that, as set forth in Section 12, the obligations concerning confidentiality or post-termination activities remain in full force and effect. |
• | Neither the Company nor any representative (nor any representative of any other company affiliated with the Company), has made any promises to you other than as written in this Agreement. All future promises and agreements must be in writing and signed by both Parties. |
24. | Your Opportunity To Review and Revoke. |
a. | Review Period. You have forty-five (45) calendar days from the day you receive this Agreement to consider the terms of this Agreement, sign it and return it to Raquel Crystal, Vice President, Human Resources, Axovant Sciences, Inc., 11 Times Square, 33rd Floor, New York, NY 10036, Raquel.Crystal@axovant.com. Your opportunity to accept the terms of this Agreement will expire at the conclusion of the forty-five (45) calendar day period if you do not accept those terms before time expires. That means that your opportunity to accept the terms of this Agreement will expire on March 29, 2019. You may sign the Agreement in fewer than forty-five (45) calendar days, if you wish to do so. If you elect to do so, you acknowledge that you have done so voluntarily. Your signature below indicates that you are entering into this Agreement freely, knowingly and voluntarily, with full understanding of its terms. |
b. | Talk To A Lawyer. During the review period, and before executing this Agreement, the Company advises you to consult with an attorney, at your own expense, regarding the terms of this Agreement. |
c. | Seven Days to Change Your Mind. You have seven (7) calendar days from the date of signing this Agreement to revoke the Agreement by expressing a desire to do so in writing addressed to Raquel Crystal, Vice President, Human Resources, Axovant Sciences, Inc., 11 Times Square, 33rd Floor, New York, NY 10036, Raquel.Crystal@axovant.com. |
25. | We Want To Make Absolutely Certain That You Understand This Agreement. |
• | You have carefully read this Agreement in its entirety; |
• | You have had an opportunity to consider the terms of this Agreement; |
• | You have had an opportunity to consider the terms of this Agreement for at least forty-five (45) calendar days; |
• | You understand that the Company urges you to consult with an attorney of your choosing, at your expense, regarding this Agreement; |
• | You have received an attachment to this Agreement (Exhibit B) that identifies: |
o | the decisional unit, which means the class, unit, or group of individuals covered by the offer of the payment(s) in consideration for signing this release as a part of a group termination; |
o | the factors the Company used to determine who was eligible or selected; |
o | the job titles and ages of all individuals within the decisional unit eligible or selected (Exhibit B-1); and |
o | the job titles and ages of all individuals within the decisional unit who were not selected or made eligible (Exhibit B-2); |
• | You have the opportunity to discuss this Agreement with a lawyer of your choosing, and agree that you had a reasonable opportunity to do so, and he or she has answered to your satisfaction any questions you asked with regard to the meaning and significance of any of the provisions of this Agreement; |
• | You fully understand the significance of all of the terms and conditions of this Agreement; and |
• | You are Executing this Agreement voluntarily and of your own free will and agree to all the terms and conditions contained in this Agreement. |
1. | DEFINITIONS |
1.1 | Additional Service Recipient. “Additional Service Recipient” shall mean any Affiliate of Service Recipient who executes a joinder with the Service Provider, in a form provided by the Service Provider pursuant to which such Affiliate joins as a party to this Agreement and the Service Provider agrees to such joinder. |
1.2 | Affiliate. “Affiliate” shall mean any Person, whether de jure or de facto, other than a Party, that directly or indirectly owns, is owned by or is under common ownership with a Party to the extent of at least fifty (50) percent of the equity having the power to vote on or direct the affairs of the entity, and any Person actually controlled by, controlling, or under common control with a Party. |
1.3 | Axovant Disclosure. “Axovant Disclosure” shall mean (i) any disclosure of information that any Service Recipient is required to make under the Securities Laws or any other laws or regulations obligating such Service Recipient to disclose information or (ii) any document, financial report, or other materials that any Service Recipient files with the Securities and Exchange Commission or any other Government Authority. |
1.4 | Confidential Information. “Confidential Information” includes any information or materials in any form or format owned or controlled by the disclosing party, or entrusted to it by others, including, but not limited to, inventions, technology, formulas, processes, technical data, prototypes, biological or other specimens, unpublished patent applications, research results or plans, notes and notebooks, product or development plans, test results or protocols, market research or analysis, marketing plans, regulatory information, business plans, personnel data, customer or prospects lists, existing or anticipated agreements or relationships with Third Parties, and financial information, that is marked as “proprietary,” or “confidential,” or which would, under the circumstances (even without any such markings), be understood by a reasonable person to be proprietary and nonpublic. Any data generated by Service Provider in connection with the Services will be treated as Confidential Information of the applicable Service Recipient. |
1.5 | Costs. “Costs” shall mean the fully-burdened cost incurred by the Service Provider and its Affiliates during any applicable month to provide the Services. For purposes of this definition, the fully-burdened cost includes without limitation: (i) the costs of any materials used in providing the Services; (ii) the salary, benefits (if any) (including without limitation, medical plans and 401(k) or other retirement plans), and employment taxes (if any) of all the Service Provider’s employees involved in providing such services (excluding, however, any compensation that is provided to an employee or independent contractor in the form of equity instruments, options to acquire stock (stock options), rights with respect to (or determined by reference to) equity instruments or stock options, or any non-cash compensation provided by a third party to an employee or independent contractor); (iii) related overhead expenses (including, without limitation, cost of facilities and utilities costs, insurance, and the cost of all general support, operational and business services); (iv) any and all licensing fees paid or payable to Third Parties for any intellectual property incorporated into such services; and (v) any depreciation, amortization or other cost recovery for financial accounting purposes related to assets of the Service Provider to the extent such assets are used in providing the Services; provided, however, that the fully-burdened cost shall not include costs incurred by the Service Provider to engage a Third Party for the purpose of providing Services pursuant to Section 3.4 of the Agreement. |
1.6 | Effective Date. “Effective Date” shall mean, with respect to ASL, ASI and ASG, the date hereof, and with respect to any Additional Service Recipient, the date of full execution of its joinder. |
1.7 | General Works. “General Works” shall mean any Works or portion(s) thereof (including any models, formats, processes, data, databases, software (whether in source code or object code), or algorithms) that both (i) do not directly relate to any of Service Recipient or its Affiliate’s drug products’ or portfolio candidates’ intellectual property (including any formulation(s), specification(s), dosage(s), indication(s), delivery mechanism(s), manufacturing, development, or commercialization thereof), and (ii) have general applicability to the operation of the business of the Service Provider (including for the purposes of undertaking analytics or improving or enhancing any of the Services or any other services of the Service Provider). |
1.8 | Government Authority. “Government Authority” shall mean any United States or non-United States federal, national, state, territory, provincial or local court, arbitral tribunal, administrative agency or commission or other governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), including any regulatory agency or authority, any securities exchange and any organization or body exercising, or entitled exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature. |
1.9 | Marks. “Marks” shall mean and include trademarks, service marks, trade names, domain names, trade dress, logos, and similar designations, whether registered or unregistered, and all applications and registrations therefor. |
1.10 | Party. “Party” shall mean either the Service Provider or any of the Service Recipients, individually, and “Parties” shall mean the Service Provider and the Service Recipients collectively. |
1.11 | Person. “Person” shall mean and include any individual, corporation, trust, estate, partnership, joint venture, company, association, Government Authority, or any other entity regardless of the type or nature thereof. |
1.12 | Representatives. “Representatives” shall mean the directors, officers, managers, members, employees, agents, partners, service providers, existing or potential financing sources, existing or potential investors, and advisors of a Party and its Affiliates (including, without limitation, attorneys, accountants, consultants, and financial advisors) that receive Confidential Information or have Confidential Information made available to them. |
1.13 | Securities Laws. “Securities Laws” shall mean the Securities Act of 1933 (15 U.S.C. § 77), the Securities Exchange Act of 1934 (15 U.S.C. § 78), the Investment Company Act of 1940 (15 U.S.C. § 80a), and any regulations promulgated thereunder. |
1.14 | Service Recipient Works. “Service Recipient Works” shall mean any Works that both (i) relate to intellectual property or potential intellectual property originating from research and development of any Service Recipient or its Affiliate’s drug products or portfolio candidates, and (ii) arise out of Services provided directly or indirectly (e.g., through an employee, consultant clinical research organization, other vendor or other Third Party engaged by the Service Provider) in connection with such research and development. For clarity, Service Recipient Works shall not include any General Works. |
1.15 | Third Party. “Third Party” shall mean any Person other than a Party or an Affiliate of a Party. |
1.16 | Works. “Works” shall mean any work product, technical knowledge, creations, know-how, formulations, recipes, specifications, rights, devices, drawings, instructions, expertise, trade practices, customer lists, computer data, software (whether in source code or object code), algorithms, analytical and quality data, Marks, copyrights, commercial information, inventions, works of authorship, designs, methods, processes, technology, patterns, techniques, data, patents, trade secrets, related contracts, licenses and agreements and the like, and all other intellectual property, in each case, created, authored, composed, or invented by the Service Provider, whether solely or jointly with others, whether patented, patentable or not, whether in written form or otherwise, in performing the Services or any other of Service Provider’s obligations under this Agreement. |
1.17 | Year. “Year” shall mean the 12-month period ending on March 31. |
2. | ENGAGEMENT |
2.1 | Subject to the terms of this Agreement, the Service Recipients hereby engage the Service Provider to perform the services it requires from among those set forth on Exhibit A attached hereto (the “Services”). Any additional services requested by the Service Recipients that are not included within the Services shall, if mutually agreed upon by the Parties, each in its sole discretion, be negotiated and included in this Agreement through written amendments to Exhibit A hereto. The scope of the Service Provider’s authority shall be specifically limited to those activities outlined in this Agreement. |
2.2 | Each Service Recipient agrees to provide reasonable assistance to, and to cooperate reasonably and in good faith with, the Service Provider with respect to the performance and receipt of the Services. Each Service Recipient shall perform (or cause to be performed) such actions and deliver (or cause to be delivered) to the Service Provider such reports, information, and other materials, in each case, as reasonably requested by the Service Provider in furtherance of the performance of the Services or as otherwise necessary for the Service Provider to perform the Services in an effective manner or to comply with any obligations imposed on it under applicable law or by any Government Authority. Without limiting the foregoing, each Service Recipient will (and will cause its Affiliates to) cooperate with, and provide reasonable assistance to, the Service Provider in connection with any communications with or investigations, inquiries, audits, or other requests for information issued by any Government Authority. |
2.3 | Each Service Recipient acknowledges and agrees that the Service Provider’s performance of the Services is subject to the cooperation of such Service Recipient and the timely performance of certain actions and timely delivery of certain reports, information, and other materials by such Service Recipient necessary to enable the performance of the Services. In furtherance of the foregoing, each Service Recipient agrees that the Service Provider shall not be deemed to be in breach of any of its obligations hereunder to the extent that any failure of the Service Provider to perform such obligations is caused by any failure or delay of a Service Recipient in such performance or delivery. |
2.4 | Each Service Recipient agrees with the Service Provider that such Service Recipient shall not, and shall cause its Affiliates not to, resell any of the Services to any Person whatsoever or to permit the use of the Services by any Person otherwise than as expressly contemplated by this Agreement or expressly agreed in advance in writing by the Service Provider. |
3. | RELATIONSHIP OF THE PARTIES |
3.1 | The Service Provider, on one hand, and each Service Recipient, on the other hand, are each independent contractors and not joint venturers, partners, agents, or representatives of the other. The Service Provider shall perform the Services for the Service Recipients under this Agreement as an independent contractor and neither the Service Provider nor its employees, subcontractors or agents shall be deemed to be agents, servants or employees of any Service Recipient, nor shall the Service Provider and any Service Recipient be deemed or construed solely by this Agreement to be partners or joint venturers. The Service Provider shall have exclusive control over the direction and conduct of its employees in carrying out the activities required under this Agreement. |
3.2 | Neither the Service Provider nor its employees, subcontractors or agents shall have the authority to (i) negotiate the terms of or execute contracts and agreements of any Service Recipient outside of agreed guidelines, except as agreed pursuant to this Agreement or other arrangements, or in furtherance of the purposes and activities contained herein or therein; (ii) hire personnel for any Service Recipient; (iii) exercise binding authority with respect to the operations of any Service Recipient; (iv) make binding recommendations to any Service Recipient; (v) make decisions or have decision-making rights with respect to any Service Recipient; (vi) hold itself out as having the authority to bind or conclude contracts on behalf of any Service Recipient or (vii) perform Services for any Service Recipient that are not covered by this Agreement except as mutually agreed. |
3.3 | The Service Provider and its employees, subcontractors or agents shall have the authority, in connection with the provision of the Services to a Service Recipient, to, (i) provide advice, assistance, and recommendations to each such Service Recipient with respect to the operation of the business of the Service Recipient; (ii) make recommendations on key points of contracts; (iii) participate in discussions on contracts and agreements; (iv) arrange transactions between each such Service Recipient and other parties, provided that the Service Provider does not make any actual, binding decisions for the Service Recipient; and (v) contact banks in connection with raising capital for each such Service Recipient. Each Service Recipient reserves the right to make all decisions with regard to such matters upon which the Service Provider has rendered advice, assistance, or recommendations. |
3.4 | Engagement of Third Parties. For purposes of performing Services under this Agreement, the Service Provider may engage such Persons (including employees, consultants, clinical research organizations, vendors and other Third Parties) as it deems necessary or desirable; provided, however, that the Service Provider shall remain responsible for the performance of all such Services and shall be considered to engage with such Persons in its own name and on its own behalf. |
3.5 | Use of Certain Systems. Each Service Recipient acknowledges and agrees that, in order to receive certain of the Services, such Service Recipient may be required to use certain systems or technology that are the same as, that integrate with, or that are otherwise compatible with the systems and technology used by the Service Provider in performing the Services. Each Service Recipient further acknowledges and agrees that in using such system or technology, it will abide by the policies and procedures established by Service Provider governing the use of that system and technology. With respect to each Service requested by a Service Recipient, the Service Provider will notify the Service Recipient in writing of any such system and technological requirements. If, after reviewing the system and technological requirements, the Service Recipient chooses to have Service Provider perform the requested Service, the Service Recipient shall implement such systems and/or technology at its sole expense. The Parties acknowledge and agree that, if a Service Recipient fails to implement such systems and technology, then the Service Provider shall have no obligation to perform the applicable Services unless and until such Service Recipient implements such systems and technology. |
4. | FEES AND EXPENSES |
4.1 | Each Service Recipient shall pay the Service Provider a fee in accordance with Exhibit B attached hereto for the Services provided to such Service Recipient hereunder. The fees specified in Exhibit B attached hereto shall be reviewed and may be updated from time to time by the Parties. Fees for Services performed by the Service Provider will be billed by the Service Provider to the applicable Service Recipient on a monthly basis. All other costs for Third Party services shall be billed, by or on behalf of the Service Provider, to the applicable Service Recipient, in such manner and format and with such supporting information as the Parties may reasonably agree from time to time. Payment for undisputed invoices received by the applicable Service Recipient shall be due within sixty (60) days after the billing date. Any fees and expenses not paid by the due date thereof shall accrue interest at the safe harbor interest rate based on the applicable Federal rate as set forth in U.S. Treasury Regulations Section 1.482-2(a)(2)(iii)(B). All fees and expenses shall be invoiced and payable in U.S. dollars. |
4.2 | Yearly Reconciliation. The Parties shall perform a yearly reconciliation for the compensation amounts paid as follows: |
a. | Administrative Services Yearly Reconciliation. |
i. | As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in Exhibit A, subsection 1 (“Administrative and Support Services”) owing under this Agreement by each Service Recipient for the Year (the “Exhibit B Administrative Services Fees”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with Exhibit B, and adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by such Service Recipient for the Year under Section 4.1 with respect to the activities listed in Exhibit A, subsection 1 (“Administrative and Support Services”), adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services (the “Actual Administrative Services Fees”). |
ii. | If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is greater than the Exhibit B Administrative Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Administrative Services Fees paid by such Service Recipient and the total Exhibit B Administrative Services Fees for such Service Recipient for the Year (hereinafter “Administrative Services Excess”). |
iii. | If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is less than the total Exhibit B Administrative Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total Exhibit B Administrative Services Fees for such Service Recipient and the total Actual Administrative Services Fees paid by such Service Recipient (hereinafter “Administrative Services Shortfall”). |
b. | Other Services Yearly Reconciliation. |
i. | As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in Exhibit A, subsection 2 (“Other Services”) owing under this Agreement by each Service Recipient for the Year (the “Exhibit B Other Services Fees”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with Exhibit B, and adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by each Service Recipient for the Year under Section 4.1 with respect to the activities listed in Exhibit A, subsection 1 (“Other Services”), adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services (the “Actual Other Services Fees”). |
ii. | If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is greater than the Exhibit B Other Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Other Services Fees paid by such Service Recipient and the total Exhibit B Other Services Fees for such Service Recipient for the Year (hereinafter “Other Services Excess”). |
iii. | If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is less than the total Exhibit B Other Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total Exhibit B Other Services Fees for such Service Recipient and the total Actual Other Services Fees paid by such Service Recipient (hereinafter “Other Services Shortfall”). |
c. | Settlement of Excess or Shortfall Amounts. |
i. | If, for any Year, (1) the sum of the Administrative Services Shortfall for a Service Recipient and the Other Services Shortfall for such Service Recipient exceeds (2) the sum of the Administrative Services Excess for such Service Recipient and the Other Services Excess for such Service Recipient (such excess amount, the “Net Shortfall”), such Service Recipient shall pay such Net Shortfall to the Service Provider within thirty (30) days after the Exhibit B Administrative Services Fees, Exhibit B Other Services Fees, Actual Administrative Services Fees, and Actual Other Services Fees have been calculated for such Year. |
ii. | If, for any Year, (1) the sum of the Administrative Services Excess for a Service Recipient and the Other Services Excess for such Service Recipient exceeds (2) the sum of the Administrative Services Shortfall for such Service Recipient and the Other Services Shortfall for such Service Recipient (such excess amount, the “Net Excess”), the Service Provider shall treat such Net Excess, in whole or in part, as an overpayment to the Service Provider that must be repaid to such Service Recipient within thirty (30) days after the end of the Year. |
4.3 | Withholding. The Service Recipients shall be entitled to deduct from any payments to the Service Provider the amount of any withholding taxes with respect to such amounts payable, or any taxes in each case required to be withheld by the applicable Service Recipient to the extent that such Service Recipient pays to the appropriate Government Authority on behalf of the Service Provider such taxes, levies, or charges. Such Service Recipient shall, upon the request of the Service Provider, deliver to the Service Provider proof of payment of all such taxes, levies, and other charges and the appropriate documentation that is necessary to obtain a tax credit, to the extent such tax credit can be obtained. |
5. | ACCESS TO BOOKS AND RECORDS |
6. | CONFIDENTIAL INFORMATION |
6.1 | Obligations. The Parties acknowledge that, from time to time, one Party (the “Disclosing Party”) may disclose to another Party (the “Receiving Party”) Confidential Information. The Receiving Party shall retain such Confidential Information in confidence and shall not disclose such Confidential Information to any Third Parties other than: |
a. | in connection with the performance or receipt of the Services, as applicable; |
b. | in connection with the purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties; or |
c. | to the Receiving Party’s or its Affiliates' Representatives, provided that such Persons owe an obligation of confidence to the Receiving Party that is no less protective than the terms and conditions contained herein. |
6.2 | In the event that a Receiving Party or its Representatives are required by any governmental, quasi-governmental or regulatory entity, any judicial body or any legal process to disclose any Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt notice of any such requirement (unless prohibited by applicable law, rule or regulation or the entity, body or process requiring such disclosure) so that the Disclosing Party may in its sole discretion seek a protective order or other appropriate remedy, each at the Disclosing Party’s sole expense, and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Disclosing Party, the Receiving Party or any of its Representatives are nonetheless, as advised by counsel, legally compelled to disclose Confidential Information, the Receiving Party and its Representatives may, without liability hereunder, disclose only that portion of Confidential Information or discussion information related to Confidential Information which such counsel advises the Receiving Party or its Representatives is legally required to be disclosed, provided that, upon request by the Disclosing Party, the Receiving Party shall use commercially reasonable efforts to preserve the confidentiality of Confidential Information, including, without limitation, by cooperating with the Disclosing Party at the Disclosing Party’s sole expense to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded Confidential Information upon such required disclosure. Notwithstanding anything in this Agreement to the contrary, either Party and its Representatives may disclose Confidential Information, without notice, a protective order or other remedy solely where such disclosure is in connection with a routine audit or examination by, or a blanket document request from, a regulatory or self-regulatory authority, bank examiner or auditor that does not reference the other Party provided that the auditor is advised of the confidential nature of the Confidential Information. |
6.3 | Exceptions. Notwithstanding anything to the contrary contained herein, the term Confidential Information shall not include information that, and nothing in this Agreement shall prevent the disclosure by the Receiving Party, or its Representatives of Confidential Information that: |
a. | Prior to the transmittal thereof to the Receiving Party was of general public knowledge; |
b. | Becomes, subsequent to the time of transmittal to the Receiving Party, a matter of general public knowledge otherwise than as a consequence of a breach by the Receiving Party of any obligation under this Agreement; |
c. | Is made public by the Disclosing Party; |
d. | Was in the possession of the Receiving Party or its Representatives in documentary form prior to the time of disclosure thereof to the Receiving Party by the Disclosing Party, and is held by Receiving Party free of any obligation of confidence to the Disclosing Party or any Third Party; |
e. | Is received in good faith from a Third Party who, to the best of the Receiving Party’s knowledge, did not obtain the same from the Disclosing Party and who imposed no obligation of secrecy on the Receiving Party with respect to such information; or |
f. | Can be demonstrated to be independently developed by the Receiving Party or its Representatives without use or benefit of or reference to the Confidential Information. |
6.4 | No Unauthorized Use. The Receiving Party shall refrain from using or exploiting any and all Confidential Information for any purposes or activities other than in connection with: |
a. | the performance or receipt of the Services, as applicable; |
b. | those purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties; |
c. | corporate or financial transactions, including securing financing, any contemplated merger, acquisition, or sale of all or substantially all of the Receiving Party’s business, equity or assets, or an initial public offering of, or any investment in, the Receiving Party provided that any use thereof is subject to obligations of confidence that are no less protective than the terms and conditions contained herein; or |
d. | the Receiving Party’s compliance with any obligations imposed on Receiving Party under applicable law or by any Government Authority. |
6.5 | Residuals. Notwithstanding anything to the contrary in this Agreement regarding Confidential Information, neither Party nor its Affiliates (including its employees, subcontractors, consultants and agents) shall be prohibited or enjoined from utilizing general knowledge, skills and experience, concepts, know-how and techniques retained in the unaided memory of an individual and acquired as a result of such individual’s authorized access to the other Party’s Confidential Information during the course of the performance or receipt of the Services provided that none of such retained general knowledge, skills and experience, concepts, know-how and techniques include any trade secrets of the other Party. |
6.6 | Survival. The Parties’ obligations under this Article 6 shall survive the termination of this Agreement for any reason whatsoever. |
7. | OWNERSHIP OF AND LICENSE TO SERVICE RECIPIENT WORKS |
7.1 | Ownership. The Service Provider agrees that all right, title and interest in and to any and all Service Recipient Works will be owned exclusively by the applicable Service Recipient immediately and automatically upon creation, authoring, composition, or invention thereof. All Service Recipient Works, as applicable, shall be considered “works made for hire” to the extent permitted under applicable copyright law and will be considered the sole property of the Service Recipients immediately and automatically upon creation, authoring, composition, or invention thereof. To the extent such Service Recipient Works are not considered “works made for hire,” the Service Provider hereby assigns to the applicable Service Recipient, and the applicable Service Recipient hereby receives, all of the Service Provider’s entire right, title, and interest to such Service Recipient Works, including all copyrights, patents and trade secrets therein, effective immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider agrees, at the applicable Service Recipient’s expense, to execute any documents reasonably requested by such Service Recipient or any successor in interest to such Service Recipient, at any time in relation to such assignment. The Service Provider further acknowledges and agrees that any and all derivative works, developments, or improvements based on the Service Recipient Works that also constitute Service Recipient Works, shall also be deemed Service Recipient Works and all right, title and interest therein shall be exclusively owned by the applicable Service Recipient pursuant to the foregoing immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider shall cooperate with the applicable Service Recipient and any of its Affiliates, at the applicable Service Recipient’s expense (whether during or after the term of this Agreement), in the confirmation, registration, protection and enforcement of the rights and property of the Service Recipients and their successors in interest in such Service Recipient Works. The Service Provider shall not at any time do or cause to be done, or fail to do or cause to be done, any act or thing, directly or indirectly, contesting or in any way impairing any Service Recipient’s right, title, or interest in the Service Recipient Works. Every use of any Service Recipient Works (and any derivative works, developments, or improvements based on the Service Recipient Works) by the Service Provider shall inure to the benefit of the applicable Service Recipient. For clarity, notwithstanding anything contained herein to the contrary, exclusive ownership of any Works other than Service Recipient Works vests in and remains with the Service Provider, and the Service Provider has and shall retain all right, title and interest in and to all such Works (including all General Works). To the extent that any such Works (including General Works) are incorporated into or otherwise required to use or exploit any Service Recipient Works, Service Provider agrees to grant and hereby grants, and will cause its Affiliates to grant, the Service Recipients a perpetual, worldwide, irrevocable, fully paid-up, royalty-free, transferrable, sublicensable, non-exclusive license under such Works to use, execute, reproduce, display, perform, distribute, prepare derivative works of and otherwise exploit all Service Recipient Works provided, or required to be provided, by Service Provider to the Service Recipients under this Agreement. |
7.2 | License. Each of the Service Recipients hereby grants to the Service Provider a non-exclusive, royalty-free, fully-paid up, worldwide right and license, subject to section 12.1, to all intellectual property rights therein or arising therefrom (a) to use the Service Recipient Works and any other intellectual property provided by each such Service Recipient to the Service Provider solely in connection with the performance of the Services under this Agreement; and (b) notwithstanding anything contained herein to the contrary, to use any and all data provided to, accessed by, or collected by the Service Provider, in whole or in part, in performing the Services (including any data in any Service Recipient Works or Confidential Information) for analytics purposes and/or for purposes of improving or enhancing any of the Services or the operation of the business of the Service Provider generally (including any other Services of the Service Provider); provided, however, that any data that constitutes the Confidential Information of any Service Recipient must be anonymized, de-identified or aggregated, subject to policies that are consistent with the applicable data privacy and security laws – which policies are reasonably acceptable to Service Recipient. Furthermore, Service Provider shall not distribute such data externally without the prior consent of the Service Recipient. The Service Provider agrees that all uses of any Marks included in the Service Recipient Works pursuant to this license are subject to and shall comply with Article 8 hereof. The rights and license granted in this Section 7.2 may be sublicensed, assigned or otherwise transferred to Affiliates of Service Provider which provide Services to Service Provider in furtherance of the purposes and activities contained herein, in connection with the performance of Services or as a result of a merger, acquisition, sale of all or substantially all of the Service Provider’s business, equity or assets or other business combination. |
8. | USE OF TRADEMARKS |
9. | AXOVANT DISCLOSURES; ETC. |
9.1 | The Service Recipients shall have ultimate authority over, and complete and total responsibility for, any and all Axovant Disclosures. For the avoidance of doubt, this includes all decisions regarding (i) whether to make or not make a Axovant Disclosure; (ii) the contents of any Axovant Disclosure; or (iii) whether any Axovant Disclosure is complete, accurate, or complies with applicable legal requirements. |
9.2 | The Service Provider shall have no authority over or responsibility for any Axovant Disclosure. For the avoidance of doubt, the Service Provider will not (and will not have the authority to): (i) approve or certify the accuracy or completeness of any Axovant Disclosure; (ii) make any public statements or disclosures on behalf of any Service Recipient; (iii) make, or provide any advice for the Service Recipients to make, any decisions regarding when a Axovant Disclosure is required or whether any Axovant Disclosure complies with applicable law. |
9.3 | The Service Provider has no authority to make any statements or disclosure on behalf of any Service Recipient in the disclosures of the Service Recipient, and no Service Recipient will attribute any statements in any Axovant Disclosure to the Service Provider or any of the Service Provider’s employees (except to the extent the employee is an officer, director or employee of Service Recipient and then only in such employee’s capacity as an officer, director or employee of Service Recipient). |
9.4 | Third-Party Information and U.S. Defend Trade Secrets Act. |
a. | During the Term and thereafter, neither Party will improperly use or disclose to the other any confidential, proprietary or secret information of such Party’s former clients or any other person, and such Party will not bring any such information onto the other Party’s property or place of business. |
b. | Notwithstanding the foregoing, the U.S. Defend Trade Secrets Act of 2016 (“DTSA”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. |
10. | CERTAIN REGULATIONS |
10.1 | Reporting of Compensation. |
10.2 | Insider Trading. |
11. | COOPERATION REGARDING THE PHARMACEUTICAL QUALITY SYSTEM AND COMPLIANCE |
11.1 | To the extent that the Service Recipient seeks Services related to its quality management systems, the Parties agree to cooperate and coordinate as appropriate concerning the quality systems, to enter into a Quality Agreement, and to adopt, implement and maintain at all times while this Services Agreement is in effect, quality standards, as periodically updated, that are consistent with (and no less restrictive than) the Service Provider’s quality standards; provided that such Service Provider quality standards are reasonably necessary or appropriate to comply with applicable rules and industry regulations. |
11.2 | Each Party further agrees to notify the other Parties if it identifies any quality systems or compliance issues that could reasonably expected to adversely impact the provision or receipt of Services or performance under the provisions of this Agreement, and to cooperate and coordinate as appropriate in addressing any such issues. |
12. | INDEMNIFICATION; LIMITATION OF LIABILITY |
12.1 | Service Provider Indemnity. The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipients and their officers, employees and directors, as the case may be (“Recipient Indemnified Parties”), harmless from and against any and all losses, demands, damages, liabilities, interest, awards, judgments, settlements and compromises relating to any Third Party claims, actions or causes of action, or suits, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“Losses”) which may be incurred by a Recipient Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services, except to the extent that such Losses are the result of: |
a. | the combination of the Services with any other product or service; |
b. | any technology, materials, information, directions, or specifications provided by such Recipient Indemnified Party or the performance of the Services in accordance with the foregoing; |
c. | any conduct requested or instructed by such Recipient Indemnified Party; or |
d. | the gross negligence or willful misconduct of such Recipient Indemnified Party. |
12.2 | Service Recipient Indemnity. Each Service Recipient, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Provider and its Affiliates and each of their officers, employees and directors, as the case may be (“Provider Indemnified Parties”), harmless from and against any and all Losses which may be incurred by a Provider Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the receipt of the Services by the Service Recipient, except to the extent that either: (a) such Losses are the result of the gross negligence or willful misconduct of such Provider Indemnified Party, or (b) such Losses are indemnifiable under Section 12.1 (Service Provider Indemnity). |
12.3 | The Service Provider’s aggregate liability under this Agreement for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, shall be limited to the payments made by the applicable Service Recipient under this Agreement for the specific Service that allegedly caused or was related to the Losses during the twelve (12) month period prior to the date the Losses were first incurred. In no event shall the Service Provider be liable for any Losses caused by any Service Recipient’s failure to perform its obligations under this Agreement. |
12.4 | NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY AND EXCEPT TO THE EXTENT THAT ANY THIRD PARTY IS CONTRACTUALLY OBLIGATED TO AND DOES INDEMNIFY THE LIABLE PARTY THEREFOR AND SUCH REMEDIES MAY BE PASSED THROUGH TO THE OTHER PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, ACTIONS OF THIRD PARTIES OR ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR THE PERFORMANCE OR THE FAILURE TO PERFORM THE SERVICES. |
13. | TERM AND TERMINATION |
13.1 | Term. This Agreement shall commence on the Effective Date and continue until terminated by a Party in accordance with this Section 13.1 (the “Term”). The Service Provider may terminate this Agreement at its discretion by giving written notice to the Service Recipients at least ninety (90) days before the proposed termination date. Each Service Recipient may terminate this Agreement solely with respect to itself at its discretion by giving written notice to the Service Provider at least ninety (90) days before the proposed termination date. Article 1, Article 5, Article 6, Article 7, Section 9.4, Article 10, Article 12, Section 13.2 and Article 15 shall survive the termination of this Agreement. Each Service Recipient hereby specifically agrees and acknowledges that all obligations of the Service Provider to provide any and all Services shall immediately cease upon termination of this Agreement. The Service Provider hereby specifically agrees and acknowledges that all of its rights to use Marks pursuant to Article 8 of this Agreement shall cease after a reasonable and mutually-agreed wind-down period commencing upon termination of this Agreement. To the extent permitted by applicable law, no Party shall be liable to another Party for, and each Party hereby expressly waives any right to, any termination compensation of any kind or character whatsoever, to which such Party may be entitled solely by virtue of termination of this Agreement. |
13.2 | Rights and Duties on Termination. Upon termination of this Agreement for any reason, each Party shall cease all use of the other Parties’ Confidential Information, and the Service Recipients shall pay the Service Provider all accrued and unpaid fees for Services performed through the date of termination. |
14. | COMPLIANCE WITH LAWS |
14.1 | General Compliance. The Parties shall at all times strictly comply with all applicable laws, rules, regulations, and governmental orders, now or hereafter in effect, relating to their performance of this Agreement. Each Party further agrees to make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, licenses, permits, and authorizations (collectively, “Authorizations”) required under applicable law, regulation, or order for such Party to perform its obligations under this Agreement. Each Service Recipient shall provide the Service Provider with such assistance as the Service Provider may reasonably request in making or obtaining any such Authorizations. |
15. | GENERAL PROVISIONS |
15.1 | Notices. Any and all notices, elections, offers, acceptances, and demands permitted or required to be made under this Agreement shall be in writing, signed by the Party giving such notice, election, offer, acceptance, or demand and shall be delivered personally, by messenger, courier service, telecopy, first class mail or similar transmission, to the Party, at its address on file with the Party giving such notice, election, offer, acceptance or demand or at such other address as may be supplied in writing. The date of personal delivery or the date of mailing, as the case may be, shall be the date of such notice, election, offer, acceptance, or demand. |
15.2 | Force Majeure. If the performance of any part of this Agreement by a Party, or of any obligation under this Agreement (other than an obligation to pay money), is prevented, restricted, interfered with, or delayed by reason of any cause beyond the reasonable control of the Party liable to perform, unless conclusive evidence to the contrary is provided, the Party so affected shall, on giving written notice to the other Parties, be excused from such performance to the extent of such prevention, restriction, interference, or delay, provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution. |
15.3 | Successors and Assigns. This Agreement may not be assigned or otherwise conveyed by any Party without the prior written consent of the other Parties; provided however that such prior written consent will not be required for an assignment to an Affiliate of a Party. This Agreement shall be binding on and inure to the benefit of the Parties hereto and their respective successors, successors in title and assigns to the extent that such assignment is permitted under this paragraph. |
15.4 | Entire Agreement, Amendments. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, and communications between the Parties, whether oral or written, relating to the same subject matter. No change, modification, or amendment of this Agreement shall be valid or binding on the Parties unless such change or modification shall be in writing signed by the Party or Parties against whom the same is sought to be enforced. |
15.5 | Remedies Cumulative. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which the Party may be lawfully entitled. |
15.6 | Other Persons. Nothing in this Agreement shall be construed to prevent or prohibit the Service Provider from providing services to any other Person or from engaging in any other business activity. |
15.7 | Not for the Benefit of Third Parties. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any Third Party. |
15.8 | Further Assurances. Each Party hereby covenants and agrees that it shall execute and deliver such deeds and other documents as may be required to implement any of the provisions of this Agreement. |
15.9 | No Waiver. The failure of any Party to insist on strict performance of a covenant hereunder or of any obligation hereunder shall not be a waiver of such Party’s right to demand strict compliance therewith in the future, nor shall the same be construed as a novation of this Agreement. |
15.10 | Integration. This Agreement constitutes the full and complete agreement of the Parties. |
15.11 | Captions. Titles or captions of articles and paragraphs contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision hereof. |
15.12 | Construction. Whenever required by the context, the singular number shall include the plural, the plural number shall include the singular, and the gender of any pronoun shall include all genders. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). The term “includes” or “including” shall mean “including without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear. The use of “or” is not intended to be exclusive unless expressly indicated otherwise. |
15.13 | Counterparts. This Agreement may be executed in multiple copies, each one of which shall be an original and all of which shall constitute one and the same document, binding on the Parties, and each Party hereby covenants and agrees to execute all duplicates or replacement counterparts of this Agreement as may be required. |
15.14 | Governing Law; Arbitration. This Agreement shall be governed by, and construed and enforced in accordance with, the Laws of the State of New York, without regard to the provisions governing conflict of laws. Any dispute, controversy or claim between the Parties to this Agreement, including any claim arising out of, in connection with, or in relation to the interpretation, performance, breach, or termination thereof, shall be resolved exclusively and finally by confidential binding arbitration. The seat, or legal place, of arbitration shall be New York, New York. The language of the arbitration shall be English. The arbitration shall be administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules in force when the Notice of Arbitration is submitted in accordance with such Rules. Each Party shall select one person to act as arbitrator and the two selected shall select a third arbitrator, who shall act as president of the panel. Where there are multiple claimants or multiple respondents, the multiple claimants, jointly, and the multiple respondents, jointly, shall select the party-appointed arbitrators. Except as may be required by law, to comply with a legal duty, or to pursue a legal right, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the Parties. Nothing herein shall prevent a Party from seeking provisional measures from any court of competent jurisdiction, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. Each Party shall consent, for purposes of provisional measures or the enforcement of any arbitral award, to the non-exclusive jurisdiction of the state and federal courts located in New York, New York, and each Party shall not assert that such courts constitute forum non-conveniens. The award shall be final and binding on the Parties. Judgment on the award may be entered in any court of competent jurisdiction. |
15.15 | Computation of Time. Whenever the last day for the exercise of any privilege or the discharge of any duty hereunder shall fall on a Saturday, Sunday, or any public or legal holiday, whether local or national, the Party having such privilege or duty shall have until 5:00 p.m. (EST or, if in effect in New York, EDT) on the next succeeding business day to exercise such privilege, or to discharge such duty. |
15.16 | Severability. In the event any provision, clause, sentence, phrase, or word hereof, or the application thereof in any circumstances, is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder hereof, or of the application of any such provision, sentence, clause, phrase, or word in any other circumstances. |
15.17 | Costs and Expenses. Unless otherwise provided in this Agreement, each Party shall bear all fees and expenses incurred in performing its obligations under this Agreement. |
15.18 | Provisions of Law. A reference in this Agreement to a provision of law, regulation, rule, official directive, request, or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory, or other authority or organization is a reference to that provision as amended or re-enacted currently or in the future. |
15.19 | Meaning in Notices. Unless a contrary indication appears, a term used in any notice given under or in connection with this Agreement has the same meaning in that notice as in this Agreement. |
15.20 | No Fiduciary Duties. Each Party shall not have any fiduciary obligations or duties to the other Parties by reason of this Agreement. |
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written. |
AXOVANT GENE THERAPIES LTD. | ROIVANT SCIENCES, INC. | |||
/s/ Mathew Bazley | /s/ Matthew Gline | |||
By: | Mathew Bazley | By: | Matthew Gline | |
Title: | Authorized Officer | Title: | CFO | |
Date: | June 10, 2019 | Date: | June 11, 2019 |
AXOVANT SCIENCES, INC. | AXOVANT SCIENCES GMBH | |||
/s/ Gregory Weinhoff | /s/ Pavan Cheruvu, M.D. | |||
By: | Gregory Weinhoff | By: | Pavan Cheruvu, M.D. | |
Title: | Authorized Officer | Title: | Director | |
Date: | June 10, 2019 | Date: | June 10, 2019 |
1. | Administrative and Support Services. Various administrative and supportive services, which may include, but are not limited to: |
2. | Other Services |
(a) | The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding Third Party costs as provided in (c), incurred in providing the Administrative and Support Services described in Exhibit A to such Service Recipient or in making, obtaining, and maintaining in force the Authorizations as described in Section 14.1 for such Service Recipient and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis. |
(b) | The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding third-party costs as provided in (c), incurred in providing the Other Services described in Exhibit A to such Service Recipient, and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis. |
(c) | If the Service Provider engages a Third Party pursuant to Section 3.4 hereof, the applicable Service Recipient shall reimburse the Service Provider for all reasonable and actual out-of-pocket costs incurred by the Service Provider in connection with such engagement to the extent such Service Recipient is the beneficiary of the services performed by such Third Party. |
1. | DEFINITIONS |
1.1 | Additional Service Recipient. “Additional Service Recipient” shall mean any Affiliate of Service Recipient who executes a joinder with the Service Provider, in a form provided by the Service Provider pursuant to which such Affiliate joins as a party to this Agreement and the Service Provider agrees to such joinder. |
1.2 | Affiliate. “Affiliate” shall mean any Person, whether de jure or de facto, other than a Party, that directly or indirectly owns, is owned by or is under common ownership with a Party to the extent of at least fifty (50) percent of the equity having the power to vote on or direct the affairs of the entity, and any Person actually controlled by, controlling, or under common control with a Party. |
1.3 | Axovant Disclosure. “Axovant Disclosure” shall mean (i) any disclosure of information that any Service Recipient is required to make under the Securities Laws or any other laws or regulations obligating such Service Recipient to disclose information or (ii) any document, financial report, or other materials that any Service Recipient files with the Securities and Exchange Commission or any other Government Authority. |
1.4 | Confidential Information. “Confidential Information” includes any information or materials in any form or format owned or controlled by the disclosing party, or entrusted to it by others, including, but not limited to, inventions, technology, formulas, processes, technical data, prototypes, biological or other specimens, unpublished patent applications, research results or plans, notes and notebooks, product or development plans, test results or protocols, market research or analysis, marketing plans, regulatory information, business plans, personnel data, customer or prospects lists, existing or anticipated agreements or relationships with Third Parties, and financial information, that is marked as “proprietary,” or “confidential,” or which would, under the circumstances (even without any such markings), be understood by a reasonable person to be proprietary and nonpublic. Any data generated by Service Provider in connection with the Services will be treated as Confidential Information of the applicable Service Recipient. |
1.5 | Costs. “Costs” shall mean the fully-burdened cost incurred by the Service Provider and its Affiliates during any applicable month to provide the Services. For purposes of this definition, the fully-burdened cost includes without limitation: (i) the costs of any materials used in providing the Services; (ii) the salary, benefits (if any) (including without limitation, medical plans and 401(k) or other retirement plans), and employment taxes (if any) of all the Service Provider’s employees involved in providing such services (excluding, however, any compensation that is provided to an employee or independent contractor in the form of equity instruments, options to acquire stock (stock options), rights with respect to (or determined by reference to) equity instruments or stock options, or any non-cash compensation provided by a third party to an employee or independent contractor); (iii) related overhead expenses (including, without limitation, cost of facilities and utilities costs, insurance, and the cost of all general support, operational and business services); (iv) any and all licensing fees paid or payable to Third Parties for any intellectual property incorporated into such services; and (v) any depreciation, amortization or other cost recovery for financial accounting purposes related to assets of the Service Provider to the extent such assets are used in providing the Services; provided, however, that the fully-burdened cost shall not include costs incurred by the Service Provider to engage a Third Party for the purpose of providing Services pursuant to Section 3.4 of the Agreement. |
1.6 | Effective Date. “Effective Date” shall mean, with respect to ASG, the date hereof, and with respect to any Additional Service Recipient, the date of full execution of its joinder. |
1.7 | General Works. “General Works” shall mean any Works or portion(s) thereof (including any models, formats, processes, data, databases, software (whether in source code or object code), or algorithms) that both (i) do not directly relate to any of Service Recipient or its Affiliate’s drug products’ or portfolio candidates’ intellectual property (including any formulation(s), specification(s), dosage(s), indication(s), delivery mechanism(s), manufacturing, development, or commercialization thereof), and (ii) have general applicability to the operation of the business of the Service Provider (including for the purposes of undertaking analytics or improving or enhancing any of the Services or any other services of the Service Provider). |
1.8 | Government Authority. “Government Authority” shall mean any United States or non-United States federal, national, state, territory, provincial or local court, arbitral tribunal, administrative agency or commission or other governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), including any regulatory agency or authority, any securities exchange and any organization or body exercising, or entitled exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature. |
1.9 | Marks. “Marks” shall mean and include trademarks, service marks, trade names, domain names, trade dress, logos, and similar designations, whether registered or unregistered, and all applications and registrations therefor. |
1.10 | Party. “Party” shall mean either the Service Provider or any of the Service Recipients, individually, and “Parties” shall mean the Service Provider and the Service Recipients collectively. |
1.11 | Person. “Person” shall mean and include any individual, corporation, trust, estate, partnership, joint venture, company, association, Government Authority, or any other entity regardless of the type or nature thereof. |
1.12 | Representatives. “Representatives” shall mean the directors, officers, managers, members, employees, agents, partners, service providers, existing or potential financing sources, existing or potential investors, and advisors of a Party and its Affiliates (including, without limitation, attorneys, accountants, consultants, and financial advisors) that receive Confidential Information or have Confidential Information made available to them. |
1.13 | Securities Laws. “Securities Laws” shall mean the Securities Act of 1933 (15 U.S.C. § 77), the Securities Exchange Act of 1934 (15 U.S.C. § 78), the Investment Company Act of 1940 (15 U.S.C. § 80a), and any regulations promulgated thereunder. |
1.14 | Service Recipient Works. “Service Recipient Works” shall mean any Works that both (i) relate to intellectual property or potential intellectual property originating from research and development of any Service Recipient or its Affiliate’s drug products or portfolio candidates, and (ii) arise out of Services provided directly or indirectly (e.g., through an employee, consultant clinical research organization, other vendor or other Third Party engaged by the Service Provider) in connection with such research and development. For clarity, Service Recipient Works shall not include any General Works. |
1.15 | Third Party. “Third Party” shall mean any Person other than a Party or an Affiliate of a Party. |
1.16 | Works. “Works” shall mean any work product, technical knowledge, creations, know-how, formulations, recipes, specifications, rights, devices, drawings, instructions, expertise, trade practices, customer lists, computer data, software (whether in source code or object code), algorithms, analytical and quality data, Marks, copyrights, commercial information, inventions, works of authorship, designs, methods, processes, technology, patterns, techniques, data, patents, trade secrets, related contracts, licenses and agreements and the like, and all other intellectual property, in each case, created, authored, composed, or invented by the Service Provider, whether solely or jointly with others, whether patented, patentable or not, whether in written form or otherwise, in performing the Services or any other of Service Provider’s obligations under this Agreement. |
1.17 | Year. “Year” shall mean the 12-month period ending on March 31. |
2. | ENGAGEMENT |
2.1 | Subject to the terms of this Agreement, the Service Recipients hereby engage the Service Provider to perform the services it requires from among those set forth on Exhibit A attached hereto (the “Services”). Any additional services requested by the Service Recipients that are not included within the Services shall, if mutually agreed upon by the Parties, each in its sole discretion, be negotiated and included in this Agreement through written amendments to Exhibit A hereto. The scope of the Service Provider’s authority shall be specifically limited to those activities outlined in this Agreement. |
2.2 | Each Service Recipient agrees to provide reasonable assistance to, and to cooperate reasonably and in good faith with, the Service Provider with respect to the performance and receipt of the Services. Each Service Recipient shall perform (or cause to be performed) such actions and deliver (or cause to be delivered) to the Service Provider such reports, information, and other materials, in each case, as reasonably requested by the Service Provider in furtherance of the performance of the Services or as otherwise necessary for the Service Provider to perform the Services in an effective manner or to comply with any obligations imposed on it under applicable law or by any Government Authority. Without limiting the foregoing, each Service Recipient will (and will cause its Affiliates to) cooperate with, and provide reasonable assistance to, the Service Provider in connection with any communications with or investigations, inquiries, audits, or other requests for information issued by any Government Authority. |
2.3 | Each Service Recipient acknowledges and agrees that the Service Provider’s performance of the Services is subject to the cooperation of such Service Recipient and the timely performance of certain actions and timely delivery of certain reports, information, and other materials by such Service Recipient necessary to enable the performance of the Services. In furtherance of the foregoing, each Service Recipient agrees that the Service Provider shall not be deemed to be in breach of any of its obligations hereunder to the extent that any failure of the Service Provider to perform such obligations is caused by any failure or delay of a Service Recipient in such performance or delivery. |
2.4 | Each Service Recipient agrees with the Service Provider that such Service Recipient shall not, and shall cause its Affiliates not to, resell any of the Services to any Person whatsoever or to permit the use of the Services by any Person otherwise than as expressly contemplated by this Agreement or expressly agreed in advance in writing by the Service Provider. |
3. | RELATIONSHIP OF THE PARTIES |
3.1 | The Service Provider, on one hand, and each Service Recipient, on the other hand, are each independent contractors and not joint venturers, partners, agents, or representatives of the other. The Service Provider shall perform the Services for the Service Recipients under this Agreement as an independent contractor and neither the Service Provider nor its employees, subcontractors or agents shall be deemed to be agents, servants or employees of any Service Recipient, nor shall the Service Provider and any Service Recipient be deemed or construed solely by this Agreement to be partners or joint venturers. The Service Provider shall have exclusive control over the direction and conduct of its employees in carrying out the activities required under this Agreement. |
3.2 | Neither the Service Provider nor its employees, subcontractors or agents shall have the authority to (i) negotiate the terms of or execute contracts and agreements of any Service Recipient outside of agreed guidelines, except as agreed pursuant to this Agreement or other arrangements, or in furtherance of the purposes and activities contained herein or therein; (ii) hire personnel for any Service Recipient; (iii) exercise binding authority with respect to the operations of any Service Recipient; (iv) make binding recommendations to any Service Recipient; (v) make decisions or have decision-making rights with respect to any Service Recipient; (vi) hold itself out as having the authority to bind or conclude contracts on behalf of any Service Recipient or (vii) perform Services for any Service Recipient that are not covered by this Agreement except as mutually agreed. |
3.3 | The Service Provider and its employees, subcontractors or agents shall have the authority, in connection with the provision of the Services to a Service Recipient, to, (i) provide advice, assistance, and recommendations to each such Service Recipient with respect to the operation of the business of the Service Recipient; (ii) make recommendations on key points of contracts; (iii) participate in discussions on contracts and agreements; (iv) arrange transactions between each such Service Recipient and other parties, provided that the Service Provider does not make any actual, binding decisions for the Service Recipient; and (v) contact banks in connection with raising capital for each such Service Recipient. Each Service Recipient reserves the right to make all decisions with regard to such matters upon which the Service Provider has rendered advice, assistance, or recommendations. |
3.4 | Engagement of Third Parties. For purposes of performing Services under this Agreement, the Service Provider may engage such Persons (including employees, consultants, clinical research organizations, vendors and other Third Parties) as it deems necessary or desirable; provided, however, that the Service Provider shall remain responsible for the performance of all such Services and shall be considered to engage with such Persons in its own name and on its own behalf. |
3.5 | Use of Certain Systems. Each Service Recipient acknowledges and agrees that, in order to receive certain of the Services, such Service Recipient may be required to use certain systems or technology that are the same as, that integrate with, or that are otherwise compatible with the systems and technology used by the Service Provider in performing the Services. Each Service Recipient further acknowledges and agrees that in using such system or technology, it will abide by the policies and procedures established by Service Provider governing the use of that system and technology. With respect to each Service requested by a Service Recipient, the Service Provider will notify the Service Recipient in writing of any such system and technological requirements. If, after reviewing the system and technological requirements, the Service Recipient chooses to have Service Provider perform the requested Service, the Service Recipient shall implement such systems and/or technology at its sole expense. The Parties acknowledge and agree that, if a Service Recipient fails to implement such systems and technology, then the Service Provider shall have no obligation to perform the applicable Services unless and until such Service Recipient implements such systems and technology. |
4. | FEES AND EXPENSES |
4.1 | Each Service Recipient shall pay the Service Provider a fee in accordance with Exhibit B attached hereto for the Services provided to such Service Recipient hereunder. The fees specified in Exhibit B attached hereto shall be reviewed and may be updated from time to time by the Parties. Fees for Services performed by the Service Provider will be billed by the Service Provider to the applicable Service Recipient on a monthly basis. All other costs for Third Party services shall be billed, by or on behalf of the Service Provider, to the applicable Service Recipient, in such manner and format and with such supporting information as the Parties may reasonably agree from time to time. Payment for undisputed invoices received by the applicable Service Recipient shall be due within sixty (60) days after the billing date. Any fees and expenses not paid by the due date thereof shall accrue interest at the safe harbor interest rate based on the applicable Federal rate as set forth in U.S. Treasury Regulations Section 1.482-2(a)(2)(iii)(B). All fees and expenses shall be invoiced and payable in U.S. dollars. |
4.2 | Yearly Reconciliation. The Parties shall perform a yearly reconciliation for the compensation amounts paid as follows: |
a. | Administrative Services Yearly Reconciliation. |
i. | As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in Exhibit A, subsection 1 (“Administrative and Support Services”) owing under this Agreement by each Service Recipient for the Year (the “Exhibit B Administrative Services Fees”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with Exhibit B, and adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by such Service Recipient for the Year under Section 4.1 with respect to the activities listed in Exhibit A, subsection 1 (“Administrative and Support Services”), adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services (the “Actual Administrative Services Fees”). |
ii. | If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is greater than the Exhibit B Administrative Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Administrative Services Fees paid by such Service Recipient and the total Exhibit B Administrative Services Fees for such Service Recipient for the Year (hereinafter “Administrative Services Excess”). |
iii. | If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is less than the total Exhibit B Administrative Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total Exhibit B Administrative Services Fees for such Service Recipient and the total Actual Administrative Services Fees paid by such Service Recipient (hereinafter “Administrative Services Shortfall”). |
b. | Other Services Yearly Reconciliation. |
i. | As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in Exhibit A, subsection 2 (“Other Services”) owing under this Agreement by each Service Recipient for the Year (the “Exhibit B Other Services Fees”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with Exhibit B, and adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by each Service Recipient for the Year under Section 4.1 with respect to the activities listed in Exhibit A, subsection 1 (“Other Services”), adding the amount of any third-party costs reimbursable under Exhibit B paragraph (c) that relate to such Services (the “Actual Other Services Fees”). |
ii. | If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is greater than the Exhibit B Other Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Other Services Fees paid by such Service Recipient and the total Exhibit B Other Services Fees for such Service Recipient for the Year (hereinafter “Other Services Excess”). |
iii. | If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is less than the total Exhibit B Other Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total Exhibit B Other Services Fees for such Service Recipient and the total Actual Other Services Fees paid by such Service Recipient (hereinafter “Other Services Shortfall”). |
c. | Settlement of Excess or Shortfall Amounts. |
i. | If, for any Year, (1) the sum of the Administrative Services Shortfall for a Service Recipient and the Other Services Shortfall for such Service Recipient exceeds (2) the sum of the Administrative Services Excess for such Service Recipient and the Other Services Excess for such Service Recipient (such excess amount, the “Net Shortfall”), such Service Recipient shall pay such Net Shortfall to the Service Provider within thirty (30) days after the Exhibit B Administrative Services Fees, Exhibit B Other Services Fees, Actual Administrative Services Fees, and Actual Other Services Fees have been calculated for such Year. |
ii. | If, for any Year, (1) the sum of the Administrative Services Excess for a Service Recipient and the Other Services Excess for such Service Recipient exceeds (2) the sum of the Administrative Services Shortfall for such Service Recipient and the Other Services Shortfall for such Service Recipient (such excess amount, the “Net Excess”), the Service Provider shall treat such Net Excess, in whole or in part, as an overpayment to the Service Provider that must be repaid to such Service Recipient within thirty (30) days after the end of the Year. |
4.3 | Withholding. The Service Recipients shall be entitled to deduct from any payments to the Service Provider the amount of any withholding taxes with respect to such amounts payable, or any taxes in each case required to be withheld by the applicable Service Recipient to the extent that such Service Recipient pays to the appropriate Government Authority on behalf of the Service Provider such taxes, levies, or charges. Such Service Recipient shall, upon the request of the Service Provider, deliver to the Service Provider proof of payment of all such taxes, levies, and other charges and the appropriate documentation that is necessary to obtain a tax credit, to the extent such tax credit can be obtained. |
5. | ACCESS TO BOOKS AND RECORDS |
6. | CONFIDENTIAL INFORMATION |
6.1 | Obligations. The Parties acknowledge that, from time to time, one Party (the “Disclosing Party”) may disclose to another Party (the “Receiving Party”) Confidential Information. The Receiving Party shall retain such Confidential Information in confidence and shall not disclose such Confidential Information to any Third Parties other than: |
a. | in connection with the performance or receipt of the Services, as applicable; |
b. | in connection with the purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties; or |
c. | to the Receiving Party’s or its Affiliates' Representatives, provided that such Persons owe an obligation of confidence to the Receiving Party that is no less protective than the terms and conditions contained herein. |
6.2 | In the event that a Receiving Party or its Representatives are required by any governmental, quasi-governmental or regulatory entity, any judicial body or any legal process to disclose any Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt notice of any such requirement (unless prohibited by applicable law, rule or regulation or the entity, body or process requiring such disclosure) so that the Disclosing Party may in its sole discretion seek a protective order or other appropriate remedy, each at the Disclosing Party’s sole expense, and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Disclosing Party, the Receiving Party or any of its Representatives are nonetheless, as advised by counsel, legally compelled to disclose Confidential Information, the Receiving Party and its Representatives may, without liability hereunder, disclose only that portion of Confidential Information or discussion information related to Confidential Information which such counsel advises the Receiving Party or its Representatives is legally required to be disclosed, provided that, upon request by the Disclosing Party, the Receiving Party shall use commercially reasonable efforts to preserve the confidentiality of Confidential Information, including, without limitation, by cooperating with the Disclosing Party at the Disclosing Party’s sole expense to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded Confidential Information upon such required disclosure. Notwithstanding anything in this Agreement to the contrary, either Party and its Representatives may disclose Confidential Information, without notice, a protective order or other remedy solely where such disclosure is in connection with a routine audit or examination by, or a blanket document request from, a regulatory or self-regulatory authority, bank examiner or auditor that does not reference the other Party provided that the auditor is advised of the confidential nature of the Confidential Information. |
6.3 | Exceptions. Notwithstanding anything to the contrary contained herein, the term Confidential Information shall not include information that, and nothing in this Agreement shall prevent the disclosure by the Receiving Party, or its Representatives of Confidential Information that: |
a. | Prior to the transmittal thereof to the Receiving Party was of general public knowledge; |
b. | Becomes, subsequent to the time of transmittal to the Receiving Party, a matter of general public knowledge otherwise than as a consequence of a breach by the Receiving Party of any obligation under this Agreement; |
c. | Is made public by the Disclosing Party; |
d. | Was in the possession of the Receiving Party or its Representatives in documentary form prior to the time of disclosure thereof to the Receiving Party by the Disclosing Party, and is held by Receiving Party free of any obligation of confidence to the Disclosing Party or any Third Party; |
e. | Is received in good faith from a Third Party who, to the best of the Receiving Party’s knowledge, did not obtain the same from the Disclosing Party and who imposed no obligation of secrecy on the Receiving Party with respect to such information; or |
f. | Can be demonstrated to be independently developed by the Receiving Party or its Representatives without use or benefit of or reference to the Confidential Information. |
6.4 | No Unauthorized Use. The Receiving Party shall refrain from using or exploiting any and all Confidential Information for any purposes or activities other than in connection with: |
a. | the performance or receipt of the Services, as applicable; |
b. | those purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties; |
c. | corporate or financial transactions, including securing financing, any contemplated merger, acquisition, or sale of all or substantially all of the Receiving Party’s business, equity or assets, or an initial public offering of, or any investment in, the Receiving Party provided that any use thereof is subject to obligations of confidence that are no less protective than the terms and conditions contained herein; or |
d. | the Receiving Party’s compliance with any obligations imposed on Receiving Party under applicable law or by any Government Authority. |
6.5 | Residuals. Notwithstanding anything to the contrary in this Agreement regarding Confidential Information, neither Party nor its Affiliates (including its employees, subcontractors, consultants and agents) shall be prohibited or enjoined from utilizing general knowledge, skills and experience, concepts, know-how and techniques retained in the unaided memory of an individual and acquired as a result of such individual’s authorized access to the other Party’s Confidential Information during the course of the performance or receipt of the Services provided that none of such retained general knowledge, skills and experience, concepts, know-how and techniques include any trade secrets of the other Party. |
6.6 | Survival. The Parties’ obligations under this Article 6 shall survive the termination of this Agreement for any reason whatsoever. |
7. | OWNERSHIP OF AND LICENSE TO SERVICE RECIPIENT WORKS |
7.1 | Ownership. The Service Provider agrees that all right, title and interest in and to any and all Service Recipient Works will be owned exclusively by the applicable Service Recipient immediately and automatically upon creation, authoring, composition, or invention thereof. All Service Recipient Works, as applicable, shall be considered “works made for hire” to the extent permitted under applicable copyright law and will be considered the sole property of the Service Recipients immediately and automatically upon creation, authoring, composition, or invention thereof. To the extent such Service Recipient Works are not considered “works made for hire,” the Service Provider hereby assigns to the applicable Service Recipient, and the applicable Service Recipient hereby receives, all of the Service Provider’s entire right, title, and interest to such Service Recipient Works, including all copyrights, patents and trade secrets therein, effective immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider agrees, at the applicable Service Recipient’s expense, to execute any documents reasonably requested by such Service Recipient or any successor in interest to such Service Recipient, at any time in relation to such assignment. The Service Provider further acknowledges and agrees that any and all derivative works, developments, or improvements based on the Service Recipient Works that also constitute Service Recipient Works, shall also be deemed Service Recipient Works and all right, title and interest therein shall be exclusively owned by the applicable Service Recipient pursuant to the foregoing immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider shall cooperate with the applicable Service Recipient and any of its Affiliates, at the applicable Service Recipient’s expense (whether during or after the term of this Agreement), in the confirmation, registration, protection and enforcement of the rights and property of the Service Recipients and their successors in interest in such Service Recipient Works. The Service Provider shall not at any time do or cause to be done, or fail to do or cause to be done, any act or thing, directly or indirectly, contesting or in any way impairing any Service Recipient’s right, title, or interest in the Service Recipient Works. Every use of any Service Recipient Works (and any derivative works, developments, or improvements based on the Service Recipient Works) by the Service Provider shall inure to the benefit of the applicable Service Recipient. For clarity, notwithstanding anything contained herein to the contrary, exclusive ownership of any Works other than Service Recipient Works vests in and remains with the Service Provider, and the Service Provider has and shall retain all right, title and interest in and to all such Works (including all General Works). To the extent that any such Works (including General Works) are incorporated into or otherwise required to use or exploit any Service Recipient Works, Service Provider agrees to grant and hereby grants, and will cause its Affiliates to grant, the Service Recipients a perpetual, worldwide, irrevocable, fully paid-up, royalty-free, transferrable, sublicensable, non-exclusive license under such Works to use, execute, reproduce, display, perform, distribute, prepare derivative works of and otherwise exploit all Service Recipient Works provided, or required to be provided, by Service Provider to the Service Recipients under this Agreement. |
7.2 | License. Each of the Service Recipients hereby grants to the Service Provider a non-exclusive, royalty-free, fully-paid up, worldwide right and license, subject to section 12.1, to all intellectual property rights therein or arising therefrom (a) to use the Service Recipient Works and any other intellectual property provided by each such Service Recipient to the Service Provider solely in connection with the performance of the Services under this Agreement; and (b) notwithstanding anything contained herein to the contrary, to use any and all data provided to, accessed by, or collected by the Service Provider, in whole or in part, in performing the Services (including any data in any Service Recipient Works or Confidential Information) for analytics purposes and/or for purposes of improving or enhancing any of the Services or the operation of the business of the Service Provider generally (including any other Services of the Service Provider); provided, however, that any data that constitutes the Confidential Information of any Service Recipient must be anonymized, de-identified or aggregated, subject to policies that are consistent with the applicable data privacy and security laws – which policies are reasonably acceptable to Service Recipient. Furthermore, Service Provider shall not distribute such data externally without the prior consent of the Service Recipient. The Service Provider agrees that all uses of any Marks included in the Service Recipient Works pursuant to this license are subject to and shall comply with Article 8 hereof. The rights and license granted in this Section 7.2 may be sublicensed, assigned or otherwise transferred to Affiliates of Service Provider which provide Services to Service Provider in furtherance of the purposes and activities contained herein, in connection with the performance of Services or as a result of a merger, acquisition, sale of all or substantially all of the Service Provider’s business, equity or assets or other business combination. |
8. | USE OF TRADEMARKS |
9. | AXOVANT DISCLOSURES; ETC. |
9.1 | The Service Recipients shall have ultimate authority over, and complete and total responsibility for, any and all Axovant Disclosures. For the avoidance of doubt, this includes all decisions regarding (i) whether to make or not make an Axovant Disclosure; (ii) the contents of any Axovant Disclosure; or (iii) whether any Axovant Disclosure is complete, accurate, or complies with applicable legal requirements. |
9.2 | The Service Provider shall have no authority over or responsibility for any Axovant Disclosure. For the avoidance of doubt, the Service Provider will not (and will not have the authority to): (i) approve or certify the accuracy or completeness of any Axovant Disclosure; (ii) make any public statements or disclosures on behalf of any Service Recipient; (iii) make, or provide any advice for the Service Recipients to make, any decisions regarding when an Axovant Disclosure is required or whether any Axovant Disclosure complies with applicable law. |
9.3 | The Service Provider has no authority to make any statements or disclosure on behalf of any Service Recipient in the disclosures of the Service Recipient, and no Service Recipient will attribute any statements in any Axovant Disclosure to the Service Provider or any of the Service Provider’s employees (except to the extent the employee is an officer, director or employee of Service Recipient and then only in such employee’s capacity as an officer, director or employee of Service Recipient). |
9.4 | Third-Party Information and U.S. Defend Trade Secrets Act. |
a. | During the Term and thereafter, neither Party will improperly use or disclose to the other any confidential, proprietary or secret information of such Party’s former clients or any other person, and such Party will not bring any such information onto the other Party’s property or place of business. |
b. | Notwithstanding the foregoing, the U.S. Defend Trade Secrets Act of 2016 (“DTSA”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. |
10. | CERTAIN REGULATIONS |
10.1 | Reporting of Compensation. |
10.2 | Insider Trading. |
11. | COOPERATION REGARDING THE PHARMACEUTICAL QUALITY SYSTEM AND COMPLIANCE |
11.1 | To the extent that the Service Recipient seeks Services related to its quality management systems, the Parties agree to cooperate and coordinate as appropriate concerning the quality systems, to enter into a Quality Agreement, and to adopt, implement and maintain at all times while this Services Agreement is in effect, quality standards, as periodically updated, that are consistent with (and no less restrictive than) the Service Provider’s quality standards; provided that such Service Provider quality standards are reasonably necessary or appropriate to comply with applicable rules and industry regulations. |
11.2 | Each Party further agrees to notify the other Parties if it identifies any quality systems or compliance issues that could reasonably expected to adversely impact the provision or receipt of Services or performance under the provisions of this Agreement, and to cooperate and coordinate as appropriate in addressing any such issues. |
12. | INDEMNIFICATION; LIMITATION OF LIABILITY |
12.1 | Service Provider Indemnity. The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipients and their officers, employees and directors, as the case may be (“Recipient Indemnified Parties”), harmless from and against any and all losses, demands, damages, liabilities, interest, awards, judgments, settlements and compromises relating to any Third Party claims, actions or causes of action, or suits, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“Losses”) which may be incurred by a Recipient Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services, except to the extent that such Losses are the result of: |
a. | the combination of the Services with any other product or service; |
b. | any technology, materials, information, directions, or specifications provided by such Recipient Indemnified Party or the performance of the Services in accordance with the foregoing; |
c. | any conduct requested or instructed by such Recipient Indemnified Party; or |
d. | the gross negligence or willful misconduct of such Recipient Indemnified Party. |
12.2 | Service Recipient Indemnity. Each Service Recipient, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Provider and its Affiliates and each of their officers, employees and directors, as the case may be (“Provider Indemnified Parties”), harmless from and against any and all Losses which may be incurred by a Provider Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the receipt of the Services by the Service Recipient, except to the extent that either: (a) such Losses are the result of the gross negligence or willful misconduct of such Provider Indemnified Party, or (b) such Losses are indemnifiable under Section 12.1 (Service Provider Indemnity). |
12.3 | The Service Provider’s aggregate liability under this Agreement for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, shall be limited to the payments made by the applicable Service Recipient under this Agreement for the specific Service that allegedly caused or was related to the Losses during the twelve (12) month period prior to the date the Losses were first incurred. In no event shall the Service Provider be liable for any Losses caused by any Service Recipient’s failure to perform its obligations under this Agreement. |
12.4 | NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY AND EXCEPT TO THE EXTENT THAT ANY THIRD PARTY IS CONTRACTUALLY OBLIGATED TO AND DOES INDEMNIFY THE LIABLE PARTY THEREFOR AND SUCH REMEDIES MAY BE PASSED THROUGH TO THE OTHER PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, ACTIONS OF THIRD PARTIES OR ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR THE PERFORMANCE OR THE FAILURE TO PERFORM THE SERVICES. |
13. | TERM AND TERMINATION |
13.1 | Term. This Agreement shall commence on the Effective Date and continue until terminated by a Party in accordance with this Section 13.1 (the “Term”). The Service Provider may terminate this Agreement at its discretion by giving written notice to the Service Recipients at least ninety (90) days before the proposed termination date. Each Service Recipient may terminate this Agreement solely with respect to itself at its discretion by giving written notice to the Service Provider at least ninety (90) days before the proposed termination date. Article 1, Article 5, Article 6, Article 7, Section 9.4, Article 10, Article 12, Section 13.2 and Article 15 shall survive the termination of this Agreement. Each Service Recipient hereby specifically agrees and acknowledges that all obligations of the Service Provider to provide any and all Services shall immediately cease upon termination of this Agreement. The Service Provider hereby specifically agrees and acknowledges that all of its rights to use Marks pursuant to Article 8 of this Agreement shall cease after a reasonable and mutually-agreed wind-down period commencing upon termination of this Agreement. To the extent permitted by applicable law, no Party shall be liable to another Party for, and each Party hereby expressly waives any right to, any termination compensation of any kind or character whatsoever, to which such Party may be entitled solely by virtue of termination of this Agreement. |
13.2 | Rights and Duties on Termination. Upon termination of this Agreement for any reason, each Party shall cease all use of the other Parties’ Confidential Information, and the Service Recipients shall pay the Service Provider all accrued and unpaid fees for Services performed through the date of termination. |
14. | COMPLIANCE WITH LAWS |
14.1 | General Compliance. The Parties shall at all times strictly comply with all applicable laws, rules, regulations, and governmental orders, now or hereafter in effect, relating to their performance of this Agreement. Each Party further agrees to make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, licenses, permits, and authorizations (collectively, “Authorizations”) required under applicable law, regulation, or order for such Party to perform its obligations under this Agreement. Each Service Recipient shall provide the Service Provider with such assistance as the Service Provider may reasonably request in making or obtaining any such Authorizations. |
15. | GENERAL PROVISIONS |
15.1 | Notices. Any and all notices, elections, offers, acceptances, and demands permitted or required to be made under this Agreement shall be in writing, signed by the Party giving such notice, election, offer, acceptance, or demand and shall be delivered personally, by messenger, courier service, telecopy, first class mail or similar transmission, to the Party, at its address on file with the Party giving such notice, election, offer, acceptance or demand or at such other address as may be supplied in writing. The date of personal delivery or the date of mailing, as the case may be, shall be the date of such notice, election, offer, acceptance, or demand. |
15.2 | Force Majeure. If the performance of any part of this Agreement by a Party, or of any obligation under this Agreement (other than an obligation to pay money), is prevented, restricted, interfered with, or delayed by reason of any cause beyond the reasonable control of the Party liable to perform, unless conclusive evidence to the contrary is provided, the Party so affected shall, on giving written notice to the other Parties, be excused from such performance to the extent of such prevention, restriction, interference, or delay, provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution. |
15.3 | Successors and Assigns. This Agreement may not be assigned or otherwise conveyed by any Party without the prior written consent of the other Parties; provided however that such prior written consent will not be required for an assignment to an Affiliate of a Party. This Agreement shall be binding on and inure to the benefit of the Parties hereto and their respective successors, successors in title and assigns to the extent that such assignment is permitted under this paragraph. |
15.4 | Entire Agreement, Amendments. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, and communications between the Parties, whether oral or written, relating to the same subject matter. No change, modification, or amendment of this Agreement shall be valid or binding on the Parties unless such change or modification shall be in writing signed by the Party or Parties against whom the same is sought to be enforced. |
15.5 | Remedies Cumulative. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which the Party may be lawfully entitled. |
15.6 | Other Persons. Nothing in this Agreement shall be construed to prevent or prohibit the Service Provider from providing services to any other Person or from engaging in any other business activity. |
15.7 | Not for the Benefit of Third Parties. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any Third Party. |
15.8 | Further Assurances. Each Party hereby covenants and agrees that it shall execute and deliver such deeds and other documents as may be required to implement any of the provisions of this Agreement. |
15.9 | No Waiver. The failure of any Party to insist on strict performance of a covenant hereunder or of any obligation hereunder shall not be a waiver of such Party’s right to demand strict compliance therewith in the future, nor shall the same be construed as a novation of this Agreement. |
15.10 | Integration. This Agreement constitutes the full and complete agreement of the Parties. |
15.11 | Captions. Titles or captions of articles and paragraphs contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision hereof. |
15.12 | Construction. Whenever required by the context, the singular number shall include the plural, the plural number shall include the singular, and the gender of any pronoun shall include all genders. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). The term “includes” or “including” shall mean “including without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear. The use of “or” is not intended to be exclusive unless expressly indicated otherwise. |
15.13 | Counterparts. This Agreement may be executed in multiple copies, each one of which shall be an original and all of which shall constitute one and the same document, binding on the Parties, and each Party hereby covenants and agrees to execute all duplicates or replacement counterparts of this Agreement as may be required. |
15.14 | Governing Law; Arbitration. This Agreement shall be governed by, and construed and enforced in accordance with, the Laws of the State of New York, without regard to the provisions governing conflict of laws. Any dispute, controversy or claim between the Parties to this Agreement, including any claim arising out of, in connection with, or in relation to the interpretation, performance, breach, or termination thereof, shall be resolved exclusively and finally by confidential binding arbitration. The seat, or legal place, of arbitration shall be New York, New York. The language of the arbitration shall be English. The arbitration shall be administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules in force when the Notice of Arbitration is submitted in accordance with such Rules. Each Party shall select one person to act as arbitrator and the two selected shall select a third arbitrator, who shall act as president of the panel. Where there are multiple claimants or multiple respondents, the multiple claimants, jointly, and the multiple respondents, jointly, shall select the party-appointed arbitrators. Except as may be required by law, to comply with a legal duty, or to pursue a legal right, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the Parties. Nothing herein shall prevent a Party from seeking provisional measures from any court of competent jurisdiction, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. Each Party shall consent, for purposes of provisional measures or the enforcement of any arbitral award, to the non-exclusive jurisdiction of the state and federal courts located in New York, New York, and each Party shall not assert that such courts constitute forum non-conveniens. The award shall be final and binding on the Parties. Judgment on the award may be entered in any court of competent jurisdiction. |
15.15 | Computation of Time. Whenever the last day for the exercise of any privilege or the discharge of any duty hereunder shall fall on a Saturday, Sunday, or any public or legal holiday, whether local or national, the Party having such privilege or duty shall have until 5:00 p.m. (EST or, if in effect in New York, EDT) on the next succeeding business day to exercise such privilege, or to discharge such duty. |
15.16 | Severability. In the event any provision, clause, sentence, phrase, or word hereof, or the application thereof in any circumstances, is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder hereof, or of the application of any such provision, sentence, clause, phrase, or word in any other circumstances. |
15.17 | Costs and Expenses. Unless otherwise provided in this Agreement, each Party shall bear all fees and expenses incurred in performing its obligations under this Agreement. |
15.18 | Provisions of Law. A reference in this Agreement to a provision of law, regulation, rule, official directive, request, or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory, or other authority or organization is a reference to that provision as amended or re-enacted currently or in the future. |
15.19 | Meaning in Notices. Unless a contrary indication appears, a term used in any notice given under or in connection with this Agreement has the same meaning in that notice as in this Agreement. |
15.20 | No Fiduciary Duties. Each Party shall not have any fiduciary obligations or duties to the other Parties by reason of this Agreement. |
AXOVANT SCIENCES GMBH | ROIVANT SCIENCES GMBH | |||
/s/ Pavan Cheruvu, M.D. | /s/ Marianne Romeo | |||
By: | Pavan Cheruvu, M.D. | By: | Marianne Romeo Dinsmore | |
Title: | Director | Title: | Managing Director | |
Date: | June 10, 2019 | Date: | June 11, 2019 |
1. | Administrative and Support Services. Various administrative and supportive services, which may include, but are not limited to: |
2. | Other Services |
(a) | The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding Third Party costs as provided in (c), incurred in providing the Administrative and Support Services described in Exhibit A to such Service Recipient or in making, obtaining, and maintaining in force the Authorizations as described in Section 14.1 for such Service Recipient and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis. |
(b) | The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding third-party costs as provided in (c), incurred in providing the Other Services described in Exhibit A to such Service Recipient, and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis. |
(c) | If the Service Provider engages a Third Party pursuant to Section 3.4 hereof, the applicable Service Recipient shall reimburse the Service Provider for all reasonable and actual out-of-pocket costs incurred by the Service Provider in connection with such engagement to the extent such Service Recipient is the beneficiary of the services performed by such Third Party. |
Name of Subsidiary | Jurisdiction of Incorporation or Organization | |
Axovant Sciences, Inc. | Delaware | |
Axovant Holdings Ltd. | England and Wales | |
Axovant Sciences GmbH | Switzerland | |
Axovant Sciences America, Inc. | Delaware | |
Axovant Treasury Holdings, Inc. | Delaware | |
Axovant Treasury, Inc. | Delaware | |
Axovant Sciences Europe Ltd. | Ireland |
Date: June 11, 2019 | By: | /s/ Pavan Cheruvu |
Pavan Cheruvu | ||
Principal Executive Officer |
Date: June 11, 2019 | By: | /s/ Gregory Weinhoff |
Gregory Weinhoff | ||
Principal Financial Officer and Principal Accounting Officer |
Date: June 11, 2019 | By: | /s/ Pavan Cheruvu |
Pavan Cheruvu | ||
Principal Executive Officer |
Date: June 11, 2019 | By: | /s/ Gregory Weinhoff |
Gregory Weinhoff | ||
Principal Financial Officer and Principal Accounting Officer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Jun. 07, 2019 |
Sep. 30, 2018 |
|
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Axovant Gene Therapies Ltd. | ||
Entity Central Index Key | 0001636050 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 22,779,891 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 79,278,116 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|
Common stock | ||
Common shares par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common shares issued (in shares) | 22,779,891 | 13,473,512 |
Common shares outstanding (in shares) | 22,779,891 | 13,473,512 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
||||||
Operating expenses: | |||||||
Research and development expenses | [1] | $ 87,552 | $ 141,412 | ||||
General and administrative expenses | [2] | 39,466 | 71,906 | ||||
Total operating expenses | 127,018 | 213,318 | |||||
Interest expense | 7,530 | 7,545 | |||||
Other income | (5,616) | (211) | |||||
Loss before income tax expense | (128,932) | (220,652) | |||||
Income tax expense | 133 | 921 | |||||
Net loss | $ (129,065) | $ (221,573) | |||||
Net loss per common share — basic and diluted (in dollars per share) | $ (8.02) | $ (16.51) | |||||
Weighted average common shares outstanding - basic and diluted (in shares) | 16,100,686 | 13,421,984 | |||||
Research and development | |||||||
Costs allocated | $ (450) | $ 7,034 | |||||
General and administrative | |||||||
Costs allocated | $ 2,898 | $ 6,883 | |||||
|
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Research and development | ||
Share-based compensation expense | $ 4,758 | $ 16,597 |
General and administrative | ||
Share-based compensation expense | $ 11,671 | $ 15,281 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (129,065) | $ (221,573) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 785 | (252) |
Total other comprehensive income (loss) | 785 | (252) |
Comprehensive loss | $ (128,280) | $ (221,825) |
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands |
Total |
Common Shares |
Additional Paid in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Public Offering |
Public Offering
Common Shares
|
Public Offering
Additional Paid in Capital
|
Roivant Sciences, Ltd.
Private Placement
|
Roivant Sciences, Ltd.
Private Placement
Common Shares
|
Roivant Sciences, Ltd.
Private Placement
Additional Paid in Capital
|
Cowen and Company, LLC
Private Placement
|
Cowen and Company, LLC
Private Placement
Common Shares
|
Cowen and Company, LLC
Private Placement
Additional Paid in Capital
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at Mar. 31, 2017 | $ 124,837 | $ 0 | $ 459,602 | $ (335,143) | $ 378 | |||||||||
Balance (in shares) at Mar. 31, 2017 | 12,395,492 | |||||||||||||
Increase (Decrease) in Shareholders' Equity (Deficit) | ||||||||||||||
Issuance of shares upon exercise of stock options | $ 1,557 | 1,557 | ||||||||||||
Issuance of shares upon exercise of stock options (in shares) | 92,604 | 92,604 | ||||||||||||
Exercise of warrant | $ 0 | $ 0 | ||||||||||||
Exercise of warrant (in shares) | 16,228 | |||||||||||||
Stock issued | 134,515 | 134,515 | ||||||||||||
Stock issued (in shares) | 969,188 | |||||||||||||
Capital contribution | 324 | 324 | ||||||||||||
Share-based compensation expense | 26,465 | 26,465 | ||||||||||||
Capital contribution — share-based compensation | 5,413 | 5,413 | ||||||||||||
Foreign currency translation adjustment | (252) | (252) | ||||||||||||
Net loss | (221,573) | (221,573) | ||||||||||||
Balance at Mar. 31, 2018 | 71,286 | $ 0 | 628,111 | (556,951) | 126 | |||||||||
Balance (in shares) at Mar. 31, 2018 | 13,473,512 | |||||||||||||
Increase (Decrease) in Shareholders' Equity (Deficit) | ||||||||||||||
Issuance of shares upon exercise of stock options | $ 335 | 335 | ||||||||||||
Issuance of shares upon exercise of stock options (in shares) | 39,130 | 39,130 | ||||||||||||
Stock issued | $ 69,488 | $ 0 | $ 69,488 | $ 25,000 | $ 25,000 | $ 61 | $ 61 | |||||||
Stock issued (in shares) | 7,478,448 | 1,785,714 | 3,087 | |||||||||||
Share-based compensation expense | $ 19,067 | 19,067 | ||||||||||||
Capital contribution — share-based compensation | (2,638) | (2,638) | ||||||||||||
Non-cash capital contribution received by ASG from RSI | 1,894 | 1,894 | ||||||||||||
Foreign currency translation adjustment | 785 | 785 | ||||||||||||
Net loss | (129,065) | (129,065) | ||||||||||||
Balance at Mar. 31, 2019 | $ 56,213 | $ 0 | $ 741,318 | $ (686,016) | $ 911 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 22,779,891 |
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Public Offering | ||
Underwriting discounts, commissions, and offering expenses | $ 3.7 | $ 9.2 |
Description of Business |
12 Months Ended |
---|---|
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Axovant Gene Therapies Ltd. ("AGT"), together with its wholly owned subsidiaries (the "Company"), is a clinical-stage company focused on gene therapy for neurological diseases. The Company is developing a pipeline of innovative product candidates for the treatment of these debilitating diseases, including Parkinson’s disease, GM1 gangliosidosis, and GM2 gangliosidosis (including Tay-Sachs disease and Sandhoff disease). The Company is dedicated to realizing the potential of gene therapies to offer transformative patient outcomes in areas of high unmet medical need. Axovant Sciences Ltd. ("ASL") is an exempted limited company incorporated under the laws of Bermuda, which was originally formed under the name Roivant Neurosciences Ltd. in October 2014 and changed its name to ASL in March 2015 and to AGT in March 2019. in March 2019. AGT has seven wholly owned subsidiaries: Axovant Holdings Limited ("AHL"), a direct wholly owned subsidiary of AGT, was incorporated in England and Wales in August 2016; Axovant Sciences, Inc. ("ASI"), a direct wholly owned subsidiary of AHL, was incorporated in Delaware in February 2015; Axovant Sciences GmbH ("ASG"), a direct wholly owned subsidiary of AHL, was organized in Switzerland in August 2016; Axovant Sciences America, Inc. ("ASA"), a direct wholly owned subsidiary of AHL, was incorporated in Delaware in July 2017; Axovant Treasury Holdings, Inc. ("ATH"), a direct wholly owned subsidiary of AGT and Axovant Treasury, Inc. ("ATI"), a direct wholly owned subsidiary of ATH, were each incorporated in Delaware in March 2018; and Axovant Sciences Europe Limited ("ASEU"), a direct wholly owned subsidiary of AHL, was incorporated in Ireland in December 2018. As of March 31, 2019, ASG held all of the Company's intellectual property rights and is the principal operating company for conducting the Company’s business. Since its inception, the Company has devoted substantially all of its efforts to organizing and staffing the Company, raising capital, acquiring product candidates and advancing its product candidates into clinical development. The Company has determined that it has one operating and reporting segment as it allocates resources and assesses financial performance on a consolidated basis. The Company does not expect to generate revenue unless and until it successfully completes development and obtains regulatory approval for one of its product candidates. |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (A) Basis of Presentation: The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform with the current period presentation. These reclassifications had no effect on the previously reported results of operations. A 1-for-8 reverse share split of the Company's outstanding common stock was effected on May 8, 2019 as approved by the Company's Board of Directors and a majority of its shareholders. The reverse share split reduced the number of common shares issued and outstanding from approximately 182.2 million to 22.8 million as of March 31, 2019. As such, all references to share and per share amounts in the financial statements and accompanying notes to the financial statements have been retroactively restated to reflect the 1-for-8 reverse share split, except for the authorized number of shares of the Company's common stock and the par value per share, which were not affected. (B) Going Concern and Management's Plans: The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Topic 205-40, "Presentation of Financial Statements—Going Concern," which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that its annual and interim consolidated financial statements are issued. Certain additional financial statement disclosures are required if such conditions or events are identified. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting. Determining the extent, if any, to which conditions or events raise substantial doubt about the Company’s ability to continue as a going concern, or the extent to which mitigating plans sufficiently alleviate any such substantial doubt, as well as whether or not liquidation is imminent, requires significant judgment by management. The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of March 31, 2019, the Company’s cash and cash equivalents totaled $107.0 million and its accumulated deficit was $686.0 million. For the fiscal years ended March 31, 2019 and 2018, the Company incurred net losses of $129.1 million and $221.6 million, respectively. As of March 31, 2019, the Company had aggregate net interest-bearing indebtedness of $44.2 million, of which $21.2 million was due within one year. The Company also had $22.3 million of other non-interest-bearing current liabilities due within one year. The Company’s Loan Agreement (as defined in Note 6) with Hercules Capital, Inc. ("Hercules") requires that the Company maintain a minimum cash balance equal to the lesser of $30.0 million or the outstanding amount due under the Loan Agreement. Failure to meet this minimum covenant would be considered an event of default under the Loan Agreement and could result in the acceleration of the Company’s existing indebtedness. The Company expects to continue to incur significant operating and net losses, as well as negative cash flows, for the foreseeable future as it continues to develop its gene therapy product candidates and prepares for potential future regulatory approvals and commercialization of its products. The Company has not generated any revenue to date and does not expect to generate product revenue unless and until it successfully completes development and obtains regulatory approval for at least one of its product candidates. The Company anticipates that its current cash and cash equivalents balance will not be sufficient to maintain compliance with the minimum liquidity financial covenant under the Loan Agreement beyond the one-year period following the date that these consolidated financial statements were issued if the Loan Agreement is not amended or an additional financing is not completed. The Company's current cash and cash equivalents balance will also not be sufficient to complete all necessary development activities and commercially launch its products. To continue as a going concern, the Company will need, among other things, to raise additional capital resources. The Company continually assesses multiple options to obtain additional funding to support its operations, including proceeds from offerings of the Company’s equity securities or debt, cash received from the exercise of outstanding common stock options, or transactions involving product development, technology licensing or collaboration arrangements, or other sources of capital to complete its currently planned development programs. Management can provide no assurances that any sources of a sufficient amount of financing will be available to the Company on favorable terms, if at all. Although the Company has successfully obtained financing in the past, and management believes that it will continue to do so in the future, ASC Subtopic 205-40, "Financial Statement Presentation - Going Concern," does not permit future financing activities that are not probable of being implemented and probable of alleviating the conditions that raise substantial doubt to be included in the Company's assessment of its liquidity. Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as going concern. The consolidated financial statements and footnotes have been prepared on the basis that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. (C) Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to certain assets, including assumptions used in the determination of some of its costs incurred under the services agreements with Roivant Sciences, Inc. ("RSI") and Roivant Sciences GmbH ("RSG"), which costs are charged to research and development and general and administrative expense, as well as assumptions used to estimate its ability to continue as a going concern and estimate the fair value of its common shares. Specifically, the Company estimates the grant date fair value of stock option awards with only time-based vesting requirements using a Black-Scholes valuation model and uses a Monte Carlo Simulation method under the income approach to estimate the grant date fair value of stock option awards with market-based performance conditions. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. (D) Risks and Uncertainties: The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of intellectual property rights. (E) Concentrations of Credit Risk: Financial instruments that potentially subject the Company to concentration of credit risk include cash. At March 31, 2019, substantially all of the cash balances are deposited in 7 banking institutions and are all in excess of insured levels. (F) Cash and Cash Equivalents: The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and amounts held in money market funds. (G) Property and Equipment: Property and equipment, consisting of leasehold improvements, furniture and fixtures, computers, software and other office equipment, is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Upon disposal, retirement or sale, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Depreciation is recorded for property and equipment using the straight-line method over the estimated useful lives of the respective assets, generally three to five years, once the asset is installed and placed in service. Amortization of leasehold improvements is recorded over the shorter of the lease term or estimated useful life of the related asset. The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Recoverability is measured by comparison of the book values of the assets to future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets. (H) Debt Issuance Costs and Debt Discount: Debt issuance costs related to a recognized debt liability are presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and are amortized to interest expense over the term of the related debt using the effective interest method. Further, debt discounts created as a result of the allocation of proceeds received from a debt issuance to warrants issued in conjunction with the debt issuance are amortized to interest expense under the effective interest method over the life of the recognized debt liability. (I) Research and Development Expense: Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development. Milestone payments made in connection with regulatory approvals are capitalized and amortized to cost of revenue over the remaining useful life of the asset. Research and development costs primarily consist of intellectual property and research and development materials acquired under license and license and collaboration agreements (see Note 3), certain costs charged by RSI and RSG under their services agreements with the Company (see Note 7) and expenses from third parties who conduct research and development activities on behalf of the Company. The Company expenses in-process research and development projects acquired as asset acquisitions which have not reached technological feasibility, and which have no alternative future use. (J) Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, after consideration of all positive and negative evidence, it is not more likely than not that the Company's deferred tax assets will be realizable. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. When and if the Company were to recognize interest and penalties related to unrecognized tax benefits, they would be reported in tax expense in the consolidated statement of operations. (K) Share-Based Compensation: Share-based awards to employees and directors with only time-based vesting requirements are valued at fair value on the date of grant and that fair value is recognized on a straight-line basis over the requisite service period of the entire award. The Company values such time-based stock options using the Black-Scholes option pricing model. Certain assumptions are made with respect to utilizing the Black-Scholes option pricing model, including the expected life of the award, volatility of the underlying shares and the risk-free interest rate. The expected life of such time-based stock options is calculated using the simplified method (based on the mid-point between the vesting date and the end of the contractual term), and the risk-free interest rate is based on the rates paid on securities issued by the U.S. Treasury with a term approximating the expected life of the equity award. The expected share price volatility for such time-based stock option awards was estimated by taking the average historical price volatility for industry peers. The Company estimates the grant date fair value of stock option awards to employees with market-based performance conditions using a Monte Carlo Simulation method under the income approach. Certain assumptions are made with respect to utilizing the Monte Carlo Simulation method, including the volatility of the underlying shares and the drift rate, or estimated cost of equity. The expected share price volatility for such market-based performance stock option awards was estimated by taking the median historical price volatility for industry peers over the contractual term of the options. The drift rate, or estimated cost of equity, for such market-based performance stock option awards is based on various financial and risk-associated metrics of industry peers, as well as estimated factors specific to us. The Company accounts for share-based payments to nonemployees issued in exchange for services based upon the fair value of the equity instruments issued. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes option pricing model and is recorded over the service performance period. Prior to the Company's adoption of ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting" ("ASU No. 2018-07") on April 1, 2019, options subject to vesting were periodically remeasured over the service performance period, which was generally the same as the vesting period. After the adoption of ASU No. 2018-07, the Company measures equity-classified share-based payment awards issued to nonemployees on the grant date, rather than remeasuring the awards through the performance completion date as previously required (see Note 2(N)). The Company recognizes forfeitures of awards when they occur. (L) Net Loss per Common Share: Basic net loss per common share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted net loss per common share is computed by dividing the net loss applicable to common shareholders by the diluted weighted-average number of common shares outstanding during the year calculated in accordance with the treasury stock method. Stock options and a warrant to purchase a total of 1.9 million and 1.8 million common shares were not included in the calculation of diluted weighted-average common shares outstanding for the years ended March 31, 2019 and 2018, respectively, because they were anti-dilutive given the net loss of the Company. (M) Financial Instruments and Fair Value Measurement: The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. Fair value is defined as the exchange price, or exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a three-tier fair value hierarchy that distinguishes among the following:
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company's financial instruments include cash and cash equivalents, accounts payable and long-term debt. Cash consists of non-interest-bearing deposits denominated in the U.S. dollar and Swiss franc, while cash equivalents consists of interest-bearing money market fund deposits denominated in the U.S. dollar, which are invested in debt securities issued or guaranteed by the U.S. government and repurchase agreements fully collateralized by U.S. Treasury and U.S. government securities. Cash and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. The carrying value of the Company's money market fund included in cash and cash equivalents of $30.0 million at March 31, 2019 approximates fair value, which is based on quoted prices in active markets for identical securities. At March 31, 2019, the Company held a long-term investment in nonredeemable convertible preferred stock, which is accounted for in accordance with the provisions of ASC 321, "Investments - Equity Securities" whereby the Company elected to use the measurement alternative therein (see Note 4). The following table summarizes the fair value of the Company's money market fund included in cash equivalents based on the inputs used at March 31, 2019 in determining such values (in thousands):
The carrying value of the Company’s debt of $44.2 million at March 31, 2019 approximates fair value, which is based on current interest rates for similar types of borrowings and is in Level 2 of the fair value hierarchy. (N) Recent Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU No. 2016-02"), which requires lessees to recognize on the consolidated balance sheets a liability to make lease payments and a right-of-use ("ROU") asset representing its right to use the underlying asset for the lease term for both finance and operating leases with lease terms greater than twelve months. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. ASU No. 2016-02 allows entities to choose to use either (i) the effective date or (ii) the beginning of the earliest comparative period presented in the financial statements as the date of initial application. ASU No. 2016-02 provides a number of optional practical expedients in transition. The Company adopted the provisions of ASU No. 2016-02 on April 1, 2019 using the effective date as its date of initial application, and elected the “package of practical expedients,” which permits it to not reassess under ASU No. 2016-02 its prior conclusions about lease identification, lease classification, and initial direct costs. While the Company continues to assess all the effects of adoption, the Company believes the most significant effects relate to the recognition of ROU assets and corresponding lease liabilities on its consolidated balance sheet, primarily related to existing facility operating leases, and providing new disclosures with regards to the Company’s leasing activities. The Company currently expects that the adoption of ASU No. 2016-02 will result in the recording of ROU assets and corresponding liabilities of approximately $3.0 million and $2.4 million, respectively, in its consolidated balance sheet. In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU No. 2016-16"), which eliminates the prohibition of immediate recognition of current and deferred income tax impact for all intra-entity asset transfers, except for inventory. The Company has adopted ASU No. 2016-16 in the year ended March 31, 2019 and recognized a deferred tax asset of $3.8 million upon adoption with a corresponding valuation allowance of $3.8 million, which was subsequently impaired. In November 2016, the FASB issued ASU No. 2016-18 "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2016-18"). ASU 2016-18 requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown in the statements of cash flows. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017 and is required to be adopted using a retrospective approach, if applicable, with early adoption permitted. The Company adopted the provisions of ASU 2016-18 on April 1, 2018, which did not have an impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" ("ASU No. 2017-01"), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the provisions of ASU No. 2017-01 on April 1, 2018, on a prospective basis. The impact on the Company's consolidated financial statements and disclosures will depend on the facts and circumstances of any specific future transactions. See Note 3 for further information regarding the impact of the adoption of ASU No. 2017-01 on the license agreements executed during the year ended March 31, 2019. In February 2018, the FASB issued ASU No. 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU No. 2018-02"). On December 22, 2017, an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as the "Tax Cuts and Jobs Act") was enacted in the United States, which introduced a comprehensive set of tax reforms. ASU No. 2018-02 allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act, from accumulated other comprehensive (loss) income to retained earnings. ASU No. 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company adopted the provisions of ASU No. 2018-02 for the fiscal year beginning April 1, 2019 and does not expect it to have a material impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, which requires equity-classified share-based payment awards issued to nonemployees to be measured on the grant date, rather than remeasuring the awards through the performance completion date as previously required. Additionally, for nonemployee awards with performance conditions, compensation cost associated with the award is to be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. Further, the requirement to reassess the liability or equity classification for nonemployee awards upon vesting is eliminated, except for awards in the form of convertible instruments. ASU No. 2018-07 also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, "Revenue from Contracts with Customers". ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted after the adoption of ASU No. 2014-09. The Company adopted the provisions of ASU No. 2018-07 for the fiscal year beginning April 1, 2019, which did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU No. 2018-13"). ASU No. 2018-13 removes, modifies, and adds certain recurring and nonrecurring fair value measurement disclosures, including removing disclosures around the amount(s) of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements, among other things. ASU No. 2018-13 adds disclosure requirements around changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and a narrative description of measurement uncertainty. The amendments in ASU No. 2018-13 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption, with all other amendments applied retrospectively to all periods presented. Early adoption is permitted. The Company early adopted the provisions of ASU No. 2018-13 during the three months ended September 30, 2018, which did not have a material impact on its consolidated financial statements or disclosures because the Company did not have any Level 3 fair value measurements on a recurring or nonrecurring basis at the adoption date, and also did not have transfers between Level 1 and Level 2 of the fair value hierarchy. (O) Foreign Currency: The Company has operations in the United States, the United Kingdom, Ireland and Switzerland. The results of its non-U.S. dollar based functional currency operations are translated to U.S. dollars at the average exchange rates during the year. The Company’s assets and liabilities are translated using the current exchange rate as of the balance sheet date and shareholders’ equity is translated using historical rates. Adjustments resulting from the translation of the financial statements of the Company’s foreign functional currency subsidiaries into U.S. dollars are excluded from the determination of net loss and are accumulated in a separate component of shareholders’ equity. Foreign exchange transaction gains and losses are included in other (income) expense in the Company’s results of operations. |
License and Collaboration Agreements |
12 Months Ended |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
License and Collaboration Agreements | (A) Oxford BioMedica License Agreement: On June 5, 2018, the Company, through its wholly owned subsidiary, ASG, entered into an exclusive license agreement (the "Oxford BioMedica Agreement") with Oxford BioMedica (UK) Ltd. ("Oxford BioMedica"), pursuant to which the Company received a worldwide, exclusive, royalty-bearing, sub-licensable license under certain patents and other intellectual property controlled by Oxford BioMedica to develop and commercialize AXO-LENTI-PD and related gene therapy products for all diseases and conditions. In June 2018, as consideration for the license, the Company made an upfront nonrefundable payment to Oxford BioMedica of $30.0 million, $5.0 million of which was applied as a credit against the process development work and clinical supply that Oxford BioMedica is obligated to provide to the Company over the term of the Oxford BioMedica Agreement. Under the terms of the Oxford BioMedica Agreement, the Company could be obligated to make payments to Oxford BioMedica totaling up to $55.0 million upon the achievement of specified development milestones, of which $15.0 million was achieved in April 2019, and $757.5 million upon the achievement of specified regulatory and sales milestones. The Company will also be obligated to pay Oxford BioMedica a tiered royalty from 7% to 10%, based on yearly aggregate net sales of the underlying gene therapy products, subject to specified reductions upon the occurrence of certain events as set forth in the Oxford BioMedica Agreement. These royalties are required to be paid, on a product-by-product and country-by-country basis, until the latest to occur of the expiration of the last to expire valid claim of a licensed patent covering such product in such country, the expiration of regulatory exclusivity for such product in such country, or 10 years after the first commercial sale of such product in such country. The Company is solely responsible, at its expense, for all activities related to the development and commercialization of the gene therapy products underlying the Oxford BioMedica Agreement. Pursuant to the Oxford BioMedica Agreement, the Company is required to use commercially reasonable efforts to develop, obtain regulatory approval of, and commercialize a gene therapy product underlying the Oxford BioMedica Agreement in the United States and at least one major market country in Europe. In addition, the Company is required to meet certain diligence milestones and to include at least one U.S.-based clinical trial site in a pivotal study of a gene therapy product underlying the Oxford BioMedica Agreement. If the Company fails to meet any of these specified development milestones, it may cure such failure by paying Oxford BioMedica certain fees, which range from $0.5 million to $1.0 million. The Company has evaluated the Oxford BioMedica Agreement and has determined that the acquired set of assets and activities did not meet the definition of a business and thus the transaction was not considered a business combination. The Company determined that the in-process research and development ("IPR&D") had not reached technological feasibility and therefore has no alternative future use. Accordingly, $25.0 million of the $30.0 million upfront nonrefundable payment to Oxford BioMedica under the Oxford BioMedica Agreement was recorded as research and development expense in the Company's consolidated statements of operations during the year ended March 31, 2019. As the remaining $5.0 million of the upfront payment under the licensing agreement represents a nonrefundable payment for process development work and clinical supply that Oxford BioMedica is obligated to provide over the term of the Oxford BioMedica Agreement, the Company fully capitalized this portion of the payment upon execution, with $3.2 million remaining capitalized within prepaid expenses and other current assets and $0.3 million remaining capitalized within other non-current assets in its consolidated balance sheet as of March 31, 2019, which is recorded to research and development expense as the process development work and clinical supply are provided by Oxford BioMedica. Additionally, the Company incurred $5.3 million of AXO-LENTI-PD program-specific costs within research and development expenses in its consolidated statements of operations and paid a total of $31.5 million to Oxford BioMedica, including the upfront nonrefundable payment, during the year ended March 31, 2019. (B) Benitec Biopharma License and Collaboration Agreement: In July 2018, the Company, through its wholly owned subsidiary, ASG, entered into a license and collaboration agreement (the "Benitec Agreement") with Benitec Biopharma Limited ("Benitec"), pursuant to which the Company received a worldwide, exclusive, royalty-bearing, sub-licensable license under certain patents and other intellectual property controlled by Benitec to develop and commercialize investigational gene therapy AXO-AAV-OPMD and related gene therapy products (collectively, the "AXO-AAV-OPMD Program") for all diseases and conditions. In June 2019, the Company notified Benitec of its intention to terminate the Benitec Agreement in its entirety (see Note 14). Under the Benitec Agreement, the Company also collaborated with Benitec on five additional research plans ("Collaboration Programs") for other genetic neurological or neuromuscular disorders using Benitec technologies. The Company received a worldwide, exclusive, royalty-bearing, sub-licensable license under certain patents and other intellectual property controlled by Benitec to develop and commercialize products arising from each Collaboration Program. Under the Benitec Agreement, Benitec performed certain research activities for each Collaboration Program and development and manufacturing activities for the AXO-AAV-OPMD Program, and the Company reimburses Benitec for its costs incurred, in accordance with an agreed-upon research and development plan and budget. The Company was solely responsible, at its expense, for all other activities related to the research, development and commercialization of products from the Collaboration Programs and the AXO-AAV-OPMD Program. Under the terms of the Benitec Agreement, the Company made an upfront payment of $10.0 million. The Company has evaluated the Benitec Agreement and has determined that the acquired set of assets and activities did not meet the definition of a business and thus the transaction was not considered a business combination. The Company determined that the IPR&D had not reached technological feasibility and therefore has no alternative future use. Accordingly, the $10.0 million upfront nonrefundable payment was recorded as research and development expense in the Company's consolidated statements of operations during the year ended March 31, 2019. The Company also incurred $4.6 million of AXO-AAV-OPMD program-specific costs within research and development expenses in its consolidated statement of operations during the year ended March 31, 2019. During the year ended March 31, 2019, the Company paid a total of $12.1 million to Benitec, including the upfront nonrefundable payment. In addition, the Company would have been obligated to make payments to Benitec totaling up to (i) for the AXO-AAV-OPMD Program, $67.5 million upon the achievement of specified development and regulatory milestones and $120.0 million upon the achievement of specified sales milestones, and (ii) for each Collaboration Program, $33.5 million upon the achievement of specified development and regulatory milestones and $60.0 million upon the achievement of specified sales milestones. Benitec would have received 30% of net profits of the Company's world-wide sales of products from the AXO-AAV-OPMD Program, subject to an agreed minimum amount for such payments. This profit-sharing payment was to be made for so long as the Company or its affiliates or sublicensees commercialize such products. The Company would have also paid Benitec a tiered royalty based on yearly aggregate net sales of products arising from each Collaboration Program, subject to specified reductions upon the occurrence of certain events as set forth in the Benitec Agreement. These royalties would have been required to be paid, on a product-by-product and country-by-country basis, until the latest to occur of the expiration of the last to expire valid claim of a licensed patent covering such product in such country, the expiration of regulatory exclusivity for such product in such country, or ten years after the first commercial sale of such product in such country. (C) The University of Massachusetts Medical School Exclusive License Agreement: On December 7, 2018, the Company, through its wholly owned subsidiary, ASG, entered into an exclusive license agreement (the "UMMS Agreement"), with the University of Massachusetts Medical School ("UMMS") pursuant to which the Company received a worldwide, royalty-bearing, sub-licensable license under certain patent applications and any patents issuing therefrom, biological materials and know-how controlled by UMMS to develop and commercialize gene therapy product candidates, including AXO-AAV-GM1 and AXO-AAV-GM2, for the treatment of GM1 gangliosidosis and GM2 gangliosidosis (including Tay-Sachs disease and Sandhoff disease), respectively. This license is exclusive with respect to patents and biological materials and non-exclusive with respect to know-how and is subject to UMMS' retained rights for academic research, teaching and non-commercial patient care purposes, as well as to certain pre-existing rights of the U.S. government. Under the UMMS Agreement, the Company is solely responsible, at its expense, for the research, development and commercialization of the licensed gene therapy product candidates. The Company will reimburse UMMS for payments made by UMMS for the manufacture of clinical trial materials for the Company, up to a specified amount. The Company is obligated to use diligent efforts to develop and commercialize the licensed gene therapy product candidates and is required to achieve certain development and commercial milestones in accordance with the timeline set forth in the agreement. The Company has evaluated the UMMS Agreement and has determined that the acquired set of assets and activities did not meet the definition of a business and thus the transaction was not considered a business combination. The Company determined that the IPR&D had not reached technological feasibility and therefore has no alternative future use. Accordingly, the upfront payment of $10.0 million made from the Company to UMMS was recorded as research and development expense in the Company's consolidated statements of operations during the year ended March 31, 2019. In addition, the Company could be obligated to make payments to UMMS totaling up to $24.5 million upon the achievement of specified development and regulatory milestones, of which $1.0 million was achieved in February 2019, and $39.8 million upon the achievement of specified commercial milestones. The Company is also obligated to pay UMMS tiered mid-single digit royalties based on yearly net sales of the licensed products, subject to a specified annual minimum amount. Additionally, the Company will pay UMMS a percent of any revenues it receives from any third-party sublicenses to licensed products at rates ranging in the mid-single digits to mid-teens. The UMMS Agreement will expire upon the expiration of the Company's obligations to make royalty payments to UMMS, which continues until the later of the expiration of licensed patents and any applicable orphan designation exclusivity and 10 years after the first commercial sale of the licensed products. Upon such expiration, the licenses granted to the Company by UMMS will automatically convert to perpetual, irrevocable, worldwide royalty-free licenses. The Company has the right to terminate the UMMS Agreement at any time upon 90 days' advance written notice to UMMS. Either party may terminate the UMMS Agreement for the other party's uncured material breach upon 60 days' advance written notice, including in the event that UMMS reasonably determines the Company has not fulfilled its diligence obligations. During the year ended March 31, 2019, the Company incurred $1.2 million of program-specific costs related to AXO-AAV-GM1 and AXO-AAV-GM2 within research and development expenses in its consolidated statements of operations and paid a total of $10.2 million to UMMS, including the upfront payment. |
Long-term Investment |
12 Months Ended |
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Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Long-term Investment | Long-term Investment On February 13, 2019, ASG entered into a share subscription agreement (the "Subscription Agreement") to purchase up to approximately 8.1 million shares of nonredeemable convertible preferred stock of Arvelle Therapeutics B.V. ("Arvelle") in exchange for €0.00001 per share paid in cash, as well as certain goods and services provided by ASG to Arvelle. The first closing under the Subscription Agreement occurred on February 25, 2019 with ASG purchasing approximately 5.9 million nonredeemable convertible preferred shares of Arvelle, which was initially recorded at a fair value of $5.9 million and was capitalized as a long-term investment in the Company's consolidated balance sheet and recorded to other non-operating income in the Company's consolidated statement of operations. ASG also received the right to purchase up to approximately 2.2 million additional nonredeemable convertible preferred shares of Arvelle at a price of €0.00001 per share upon a potential future second closing under the Subscription Agreement. The Company accounts for its investment in Arvelle in accordance with the provisions of ASC 321, "Investments - Equity Securities", and elected to use the measurement alternative therein. The investment will be remeasured upon future observable price change(s) in orderly transaction(s) or upon impairment, if any. Pursuant to the terms of the Subscription Agreement, the Company billed Arvelle a total of $3.6 million during the year ended March 31, 2019 for third-party costs incurred and paid on behalf of Arvelle, which were primarily recorded as offsets to the general and administrative expenses initially charged. On February 13, 2019, ASI and ASG also entered into a transition services agreement with two wholly owned subsidiaries of Arvelle, whereby ASI and ASG are entitled to receive reimbursement for any expenses they, or third parties acting on their behalf, incur on behalf of Arvelle or its subsidiaries (the "Transition Services Agreement"). For any general and administrative and research and development activities performed by its employees, ASI charges back the employee compensation expense plus a predetermined mark-up, whereby the Company recorded $0.1 million to other income in its consolidated statement of operations during the year ended March 31, 2019 for such costs, inclusive of the mark-up. All other costs are billed back at cost, whereby the Company billed Arvelle a total of $0.2 million during the year ended March 31, 2019 for such charges under the terms of the Transition Services Agreement. |
Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses As of March 31, 2019 and 2018, accrued expenses consisted of the following (in thousands):
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Long Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Term Debt | Long-term Debt On February 2, 2017, the Company and its subsidiaries, AHL, ASG and ASI entered into a loan and security agreement (as amended on May 24 and September 22, 2017, the "Loan Agreement") with Hercules, under which the Company, AHL and ASG (the "Borrowers") borrowed an aggregate of $55.0 million (the "Term Loan"). Subsequently, the Company added its subsidiary ASA as a Borrower in July 2017 and its subsidiaries ATH and ATI as Borrowers in April 2018. Pursuant to the Loan Agreement, ASI has issued a guaranty of the Borrowers’ obligations under the Loan Agreement. The Term Loan bears interest at a variable per annum rate calculated for any day as the greater of either (i) the prime rate plus 6.80%, and (ii) 10.55%. The Term Loan has a scheduled maturity date of March 1, 2021. The Borrowers were obligated to make monthly payments of accrued interest under the Loan Agreement until September 1, 2018, followed by monthly installments of principal and interest beginning October 1, 2018 through March 1, 2021. In connection with the Loan Agreement, the Borrowers and ASI, as guarantor, granted Hercules a first position lien on substantially all of their respective assets, excluding intellectual property. Prepayment of the Term Loan is subject to penalty. The Loan Agreement with Hercules requires that the Company maintain a minimum cash balance equal to the lesser of $30.0 million or the outstanding amount due under the Loan Agreement. The Loan Agreement also includes customary events of default. Upon the occurrence of an event of default, a default interest rate of an additional 5.0% may be applied to the outstanding principal balance, and Hercules may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. At no time has the Company been in default under the provisions of the Loan Agreement. In addition, for so long as the Term Loan remains outstanding, the Company shall be required to use its commercially reasonable efforts to afford Hercules the opportunity to participate in future underwritten equity offerings of the Company’s common shares up to a total of $3.0 million. In connection with the Loan Agreement, the Company issued a warrant to Hercules, exercisable for an aggregate of 34,260 of the Company’s common shares at an exercise price of $96.32 per share (the "Warrant"). In August 2017, Hercules exercised the Warrant on a cashless basis and received a net issuance of 16,228 of the Company's common shares. The Warrant was accounted for as an equity instrument since it was indexed to the Company’s common shares and met the criteria for classification in shareholders’ equity. The relative fair value of the Warrant on the date of issuance of approximately $2.3 million was estimated using the Black-Scholes model. In addition, at the closing of the Term Loan, the Company paid transaction costs of $1.5 million. These amounts were recorded as a discount on the debt and are amortized to interest expense using the effective interest method over the life of the Term Loan, which is a period of 48 months. Outstanding debt obligations were as follows (in thousands):
Annual maturities of debt outstanding as of March 31, 2019 are as follows (in thousands):
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Related Party Transactions |
12 Months Ended |
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Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions (A) Services Agreements: In 2015, the Company and ASI entered into a services agreement with RSI (the "RSI Services Agreement") under which RSI agreed to provide certain administrative and research and development services to the Company. The Company and ASI amended and restated the RSI Services Agreement with RSI on October 13, 2015, effective for the fiscal year commencing April 1, 2015. Under the RSI Services Agreement, as amended and restated, the Company pays or reimburses RSI for any expenses it, or third parties acting on its behalf, incurs for the Company. For any general and administrative and research and development activities performed by RSI employees, RSI charges back the employee compensation expense plus a predetermined mark-up. Employee compensation expense, inclusive of base salary and fringe benefits, is determined based upon the relative percentage of time utilized on Company matters. All other costs are billed back at cost. The accompanying consolidated financial statements include third-party expenses that have been paid by RSI and RSL, as well as share-based compensation expense allocated to the Company by RSL (see Note 9(B)(2)). In February 2017, the Company and ASI amended and restated the RSI Services Agreement, effective as of December 13, 2016, to add ASG as a services recipient. In addition, in February 2017, ASG entered into a separate services agreement with RSG (the "RSG Services Agreement"), a wholly owned subsidiary of RSL, effective as of December 13, 2016, for the provision of services by RSG to ASG in relation to the identification of potential product candidates and project management of clinical trials, as well as other services related to development, administrative and financial activities. In June 2019, both the RSI Services Agreement and the RSG Services Agreement were amended, whereby RSI and RSG, respectively, as service providers, have agreed to indemnify the Company and each of its officers, employees and directors against all losses arising out of, due to or in connection with the provision of services (or the failure to provide services) under the applicable services agreement, subject to certain limitations set forth in the applicable services agreement. In addition, the Company has agreed to indemnify RSI and RSG, respectively, and their respective affiliates and officers, employees and directors against all losses arising out of, due to or in connection with the receipt of services under the applicable services agreement, subject to certain limitations set forth in the applicable services agreement. Such indemnification obligations will not exceed the payments made by the Company under the applicable services agreement for the specific service that allegedly caused or was related to the losses during the period in which such alleged losses were incurred. The term of each of the services agreements will continue until terminated upon 90 days’ written notice by any party with respect to the services such party provides or receives thereunder. Under the RSI Services Agreement and the RSG Services Agreement, the Company incurred expenses of $5.1 million and $8.5 million for the years ended March 31, 2019 and 2018, respectively, inclusive of the mark-up, which includes a portion of the expenses incurred by RSI and RSL on behalf of the Company that have been treated as capital contributions (see Note 8(B)). (B) Information Sharing and Cooperation Agreement: In March 2015, the Company entered into an information sharing and cooperation agreement (the "Cooperation Agreement") with RSL. The Cooperation Agreement, among other things, grants the Company a right of first review on any potential dementia-related product or investment opportunity that RSL may consider pursuing and obligates the Company to deliver periodic financial statements and other financial information to RSL and comply with other specified financial reporting requirements. On June 5, 2018, in connection with the Private Placement, the Company entered into an amended and restated information sharing and cooperation agreement (the "Restated Cooperation Agreement") with RSL, which became effective as of July 9, 2018, the closing date of the Private Placement. The Restated Cooperation Agreement, among other things: (1) obligates the Company to deliver to RSL periodic financial statements and other information upon reasonable request and to comply with other specified financial reporting requirements; (2) requires the Company to supply certain material information to RSL to assist it in preparing any future SEC filings; and (3) requires the Company to implement and observe certain policies and procedures related to applicable laws and regulations. The Company agreed to indemnify RSL and its affiliates and their respective officers, employees and directors against all losses arising out of, due to or in connection with RSL’s status as a shareholder under the Restated Cooperation Agreement and the operations of or services provided by RSL or its affiliates or their respective officers, employees or directors to the Company or any of its subsidiaries, subject to certain limitations set forth in the Restated Cooperation Agreement. Subject to specified exceptions, the Restated Cooperation Agreement will terminate at such time as RSL is no longer required (a) under U.S. GAAP to consolidate the Company's results of operations and financial position, (b) under U.S. GAAP to account for its investment in the Company under the equity method of accounting, or (c) otherwise to include separate financial statements of the Company in its filings with the SEC pursuant to any SEC rule. In addition, the Cooperation Agreement may be terminated upon mutual written consent of the parties or upon written notice from RSL to the Company in the event of the Company's bankruptcy, liquidation, dissolution or winding-up. (C) Family Relationships: Geetha Ramaswamy, MD, the former Vice President, Medical and Scientific Strategy of ASI and an employee of RSI, is the mother of Vivek Ramaswamy, the Chief Executive Officer of RSI, former Chairman of the Company's Board of Directors and former Chief Executive Officer of the Company. Shankar Ramaswamy, MD, the Chief Business Officer of ASI and a former employee of RSI, is the brother of Vivek Ramaswamy. Geetha Ramaswamy, MD was no longer employed by ASI beginning in October 2017. The consolidated financial statements include share-based compensation expense associated with family members Geetha Ramaswamy, MD and Shankar Ramaswamy, MD (see Note 9(B)(3)). Salary expenses were $300,000 and $267,800 for Shankar Ramaswamy for the years ended March 31, 2019 and 2018, respectively. Salary expense was $133,900 for Geetha Ramaswamy for the year ended March 31, 2018. There was no salary expense for Geetha Ramaswamy for the year ended March 31, 2019. (D) RSL Financings: On July 9, 2018, the Company received $25.0 million of net proceeds from RSL in exchange for the issuance and sale of 1,785,714 of the Company's common shares to RSL at a purchase price of $14.00 per common share, which was the closing price per share of the Company's common shares on the Nasdaq Global Select Market on June 5, 2018, the date of the share purchase agreement (see Note 8(B)). On December 18, 2018, the Company issued and sold 4,145,115 common shares in a follow-on public offering, including 395,115 common shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares, at an offering price of $8.00 per common share for gross proceeds of $33.2 million, including 1,250,000 shares issued and sold to RSL. The aggregate net proceeds to the Company were approximately $31.6 million, after deducting underwriting discounts and commissions and offering expenses incurred (see Note 8(B)). In March 2019, the Company issued and sold 3,333,333 common shares at an offering price of $12.00 per common share for gross proceeds of $40.0 million, including 833,333 shares issued and sold to RSL. The aggregate net proceeds to the Company were approximately $37.9 million, after deducting underwriting discounts and commissions and offering expenses incurred (see Note 8(B)). |
Shareholders' Equity |
12 Months Ended |
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Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity (A) Overview: The Company’s Memorandum of Association, filed on October 31, 2014 in Bermuda, authorized the issuance of one class of shares. The total number of shares authorized was 1,000,000,000 with a par value per share of $0.00001 at March 31, 2019. A 1-for-8 reverse share split of the Company's outstanding common stock was effected on May 8, 2019 as approved by the Company's Board of Directors and a majority of its shareholders. The reverse share split reduced the number of common shares issued and outstanding from approximately 182.2 million to 22.8 million as of March 31, 2019. As such, all references to share and per share amounts in the financial statements and accompanying notes to the financial statements have been retroactively restated to reflect the 1-for-8 reverse share split, except for the authorized number of shares of the Company's common stock and the par value per share, which were not affected. (B) Transactions: In April 2017, the Company issued and sold 969,188 common shares, including 126,415 common shares sold pursuant to the exercise in full of the underwriters' option to purchase additional shares, at an offering price of $148.32 per common share for gross proceeds of $143.7 million. The net proceeds to the Company were $134.5 million, after deducting underwriting discounts and commissions and offering expenses paid by the Company. For the years ended March 31, 2019 and March 31, 2018, RSI and RSG incurred $1.9 million and RSL incurred $0.3 million, respectively, of expenses on behalf of the Company. These amounts were treated as capital contributions. On June 5, 2018, the Company entered into a share purchase agreement with RSL, its majority shareholder, pursuant to which the Company agreed to issue and sell to RSL 1,785,714 of its common shares at a purchase price of $14.00 per share, which was the closing price per share of the Company's common shares on the Nasdaq Global Select Market on June 5, 2018. On July 9, 2018, the Company received $25.0 million of net proceeds from RSL upon the closing of this private placement (see Note 7 (D)). On June 22, 2018, the Company entered into a sales agreement with Cowen and Company, LLC ("Cowen") to sell the Company's common shares having an aggregate offering price of up to $75.0 million from time to time through an at-the-market equity offering program under which Cowen is acting as the Company's agent. Cowen is entitled to compensation for its services in an amount up to 3% of the gross proceeds of any of the Company's common shares sold under the sales agreement. As of March 31, 2019, approximately $74.9 million of the Company's common shares remained available for sale under the sales agreement. On December 18, 2018, the Company issued and sold 4,145,115 common shares in a follow-on public offering, including 395,115 common shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares, at an offering price of $8.00 per common share for gross proceeds of $33.2 million. The aggregate net proceeds to the Company were approximately $31.6 million, after deducting underwriting discounts and commissions and offering expenses incurred. See Note 7(D) for information regarding RSL's participation in this offering. In March 2019, the Company issued and sold 3,333,333 common shares at an offering price of $12.00 per common share for gross proceeds of $40.0 million. The aggregate net proceeds to the Company were approximately $37.9 million, after deducting underwriting discounts and commissions and offering expenses incurred. See Note 7(D) for information regarding RSL's participation in this offering. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Stock Options: In March 2015, the Company adopted its 2015 Equity Incentive Plan (the "2015 Plan"). A 1-for-8 reverse share split of the Company's outstanding common stock was effected on May 8, 2019 as approved by the Company's Board of Directors and a majority of its shareholders. The reverse share split reduced the number of shares authorized for issuance, the number of shares available for issuance, and the number of options outstanding under the 2015 Plan from approximately 24.8 million to 3.1 million, from approximately 8.4 million to 1.0 million, and from approximately 15.4 million to 1.9 million, respectively, as of March 31, 2019. As such, all references to share and per share amounts in the financial statements and accompanying notes to the financial statements have been retroactively restated to reflect the 1-for-8 reverse share split, except for the authorized number of shares of the Company's common stock and the par value per share, which were not affected. Stock options granted under the 2015 Plan provide option holders, if approved by the Board of Directors, the right to exercise their options prior to vesting. In the event that an option holder exercises the unvested portion of any option, such unvested portion will be subject to a repurchase option held by the Company at the lower of (1) the fair market value of its common shares on the date of repurchase and (2) the exercise price of the options. Any common shares underlying such unvested portion will continue to vest in accordance with the original vesting schedule of the option. On March 1, 2018, the Board of Directors approved the repricing of 159,880 stock options previously granted to 52 individuals, including some now employed by RSI. The revised exercise price for these options is $11.92, the closing price for the Company's common shares on March 1, 2018. The Company immediately recorded $0.1 million of additional share-based compensation expenses related to 18,764 vested options and increased unrecognized compensation related to 141,116 non-vested options by $0.5 million, which is recognized over the remaining service period of the non-vested options. The Company estimated the fair value of each time-based stock option on the date of grant using the Black-Scholes closed-form option-pricing model applying the weighted average assumptions in the following table:
The Company estimated the grant date fair value of each market-based performance stock option granted during the year ended March 31, 2019 using a Monte Carlo Simulation method under the income approach by applying the following assumptions:
The following table presents a summary of option activity and data under the Company's stock incentive plans through March 31, 2019:
At March 31, 2019, there were vested options to purchase 0.9 million common shares outstanding. (A) Stock Options Granted to Employees and Directors: During the years ended March 31, 2019 and 2018, the Company granted to its employees and directors under the 2015 Plan options to purchase a total of 0.5 million and 2.0 million common shares, respectively, with weighted average exercise prices of $18.37 and $76.49, respectively, and recorded related share-based compensation expense of $16.9 million and $21.0 million, respectively. This share-based compensation expense is included in research and development and general and administrative expenses in the accompanying consolidated statements of operations. The stock options granted to employees during the year ended March 31, 2019 include options with market-based performance conditions to purchase 0.1 million common shares at a weighted average exercise price of $20.49 per share and a corresponding grant date fair value of $1.5 million, which was estimated using a Monte Carlo Simulation method under the income approach. At March 31, 2019, options with market-based performance conditions to purchase 0.2 million common shares at a weighted average exercise price of $16.24 per share were outstanding. The market-based performance options vest based on the Company's common shares exceeding certain closing prices. At March 31, 2019, options with market-based performance conditions to purchase 40 thousand common shares at a weighted average exercise price of $11.68 per share were vested, all of which vested during the year ended March 31, 2019. At March 31, 2019, total unrecognized compensation expense related to non-vested options was $14.0 million and is expected to be recognized over the remaining weighted-average service period of 2.42 years. (B) Share-Based Compensation for Related Parties: (1) Stock Options Granted to Nonemployees: During the years ended March 31, 2019 and 2018, the Company granted stock options to purchase 125,000 and 130,815 shares, respectively, of the Company's common shares to consultants as well as employees and consultants of RSI as compensation for support services provided to the Company. The fair value of the stock options granted to RSI employees and other consultants is accounted for by the Company in accordance with the authoritative guidance for nonemployee equity awards. Each award is subject to a specified vesting schedule. Compensation expense will be recognized by the Company over the required service period to earn each award. The Company recorded $0.9 million and $4.8 million of share-based compensation expense, respectively, for the years ended March 31, 2019 and 2018. The share-based compensation expense was recorded within research and development and general and administrative expense in the accompanying consolidated statements of operations. The total remaining unrecognized compensation cost related to the non-vested stock options amounted to $0.3 million as of March 31, 2019, which is expected to be recognized over the weighted-average remaining service period of 2.32 years. (2) Share-Based Compensation Allocated to the Company by RSL: The Company incurs share-based compensation expense for RSL common share awards and RSL options issued by RSL to RSL, RSG and RSI employees. Share-based compensation expense is allocated to the Company by RSL based upon the relative percentage of time utilized by RSL, RSG and RSI employees on Company matters. A significant component of total share-based compensation expense relates to the RSL common share awards and RSL options issued by RSL to RSL, RSG and RSI employees. The Company recorded share-based compensation (benefit) expense of $(2.6) million and $5.4 million, respectively, for the years ended March 31, 2019 and 2018, in relation to the RSL common share awards and options issued by RSL to RSL, RSG and RSI employees. The RSL common share awards and RSL options are fair valued on the date of grant, which is recognized over the requisite service period. The fair value of each RSL option is estimated on the date of grant using the Black-Scholes closed-form option-pricing model. Significant judgment and estimates were used to estimate the fair value of these awards and options as RSL is not publicly traded, and as such, these awards and options classified as Level 3 due to their unobservable nature. RSL common share awards and RSL options are subject to specified vesting schedules and requirements (a mix of time-based, performance-based and corporate event-based, including targets for RSL’s post-IPO market capitalization and future financing events). (3) RSL Common Share Awards and Options: Certain employees of the Company have been granted RSL common share awards and options, which have been valued consistently with those issued to RSL, RSI and RSG employees as detailed above. The Company recorded share-based compensation expense of $1.3 million and $0.7 million for the years ended March 31, 2019 and 2018, respectively, related to these awards. (4) Share-Based Compensation for Family Members: During the year ended March 31, 2018, the Company granted Geetha Ramaswamy and Shankar Ramaswamy stock options to purchase 4,687 common shares and 73,435 common shares, respectively, as annual stock option grants in their capacities as employees of ASI. Geetha Ramaswamy, MD was no longer employed by ASI beginning in October 2017. The Company recorded aggregate share-based compensation expense of $3.2 million and $4.0 million, respectively, for the years ended March 31, 2019 and 2018 in connection with options vesting for Geetha Ramaswamy, MD and Shankar Ramaswamy, MD. Shankar Ramaswamy, while previously employed by RSI, was also granted RSL common shares. For the years ended March 31, 2019 and 2018, respectively, the Company recorded share-based compensation expense of $0.1 million and $0.5 million related to the RSL common share awards held by Shankar Ramaswamy, which the Company has recorded as research and development expense in the accompanying consolidated statements of operations. At March 31, 2019, all compensation expense related to these RSL common share awards had been recognized. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The loss before income taxes and the related tax expense (benefit) are as follows (in thousands):
A reconciliation of income tax benefit computed at the Bermuda statutory rate to income tax expense reflected in the financial statements is as follows (in thousands):
1 Primarily related to current tax on United States operations including permanent and temporary differences, Swiss net operating losses and United Kingdom taxation of the parent company. The Company is not subject to taxation under the laws of Bermuda since it was organized as a Bermuda Exempted Limited Company, for which there is no current tax regime. The Company's provision for income taxes is primarily federal, state and local taxes in the United States. The Company's effective tax rates of (0.10)% and (0.42)% , respectively, for the years ended March 31, 2019 and March 31, 2018 differ from the Bermuda federal statutory rate of 0% primarily due to the U.S. permanent unfavorable tax differences, stock compensation deductions and a valuation allowance that effectively eliminates the Company's net deferred tax assets. On October 24, 2016, the FASB issued ASU No. 2016-16, which eliminates the prohibition of immediate recognition of current and deferred income tax impact for all intra-entity asset transfers, except for inventory. The Company has adopted ASU No. 2016-16 in the year ended March 31, 2019 and recognized a deferred tax asset of $3.8 million upon adoption with a corresponding valuation allowance of $3.8 million, which was subsequently impaired. As of March 31, 2019, the Company had an aggregate tax receivable of $1.7 million from various federal, state and local jurisdictions. Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. Significant components of the deferred tax assets (liabilities) at March 31, 2019 and 2018 are as follows (in thousands):
The Company has net operating losses in the United States, Switzerland, the United Kingdom and Ireland in the amounts of $22 thousand, $1.01 billion, $6.3 million and $4 thousand, respectively. The United States federal net operating loss can be carried forward indefinitely with utilization limited to 80% of future taxable income. The Switzerland net operating loss will begin to expire as of March 31, 2025. The United Kingdom net operating loss can be carried forward indefinitely with an annual limitation on utilization. As of March 31, 2019, the Company has federal research and development carryforwards of approximately $9.9 million. If not utilized, the research and development credit carryforwards will start to expire in 2038. The Company assesses the realizability of the deferred tax assets at each balance sheet date based on available positive and negative evidence in order to determine the amount which is more likely than not to be realized and record a valuation allowance as necessary. Due to the Company's cumulative loss position which provides significant negative evidence difficult to overcome, the Company has recorded a full valuation allowance of $171.0 million as of March 31, 2019, representing the portion of the deferred tax asset that is not more likely than not to be realized. The Company will continue to assess the realizability of deferred tax assets at each balance sheet date in order to determine the proper amount, if any, required for a valuation allowance. There are outside basis differences related to the Company's investment in subsidiaries for which no deferred taxes have been recorded as these would not be subject to tax on repatriation as Bermuda has no tax regime for Bermuda exempted limited companies, and the United Kingdom tax regime relating to company distributions and sales generally provides for exemption from tax for most overseas profits, subject to certain exceptions. The Company is subject to tax and files income tax returns in the United Kingdom, Switzerland, Ireland and the United States federal and United States state and local jurisdictions. The Company is subject to tax examinations for tax years ended March 31, 2016 and forward in all applicable income tax jurisdictions. Tax audits and examinations can involve complex issues, interpretations and judgments. The resolution of matters may span multiple years particularly if subject to litigation or negotiation. The Company believes it has appropriately recorded its tax position using reasonable estimates and assumptions, however the potential tax benefits may impact the results of operations or cash flows in the period of resolution, settlement or when the statutes of limitations expire. There are no uncertain tax benefits recorded as of March 31, 2019. |
Commitments and Contingencies |
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Mar. 31, 2019 | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies As of March 31, 2019, the Company had entered into commitments under the Oxford BioMedica Agreement (see Note 3), the UMMS Agreement (see Note 3), the Benitec Agreement (see Note 3), the Loan Agreement (see Note 6), a development, marketing and supply agreement with Arena Pharmaceuticals GmbH, the services agreements with RSI and RSG (see Note 7 (A)), and agreements to rent office space. On June 5, 2019, the Company, through its wholly owned subsidiary, ASG, notified Benitec of its intention to terminate Benitec Agreement in its entirety, which will be effective on September 3, 2019 with no termination penalties to be incurred by the Company (see Note 14). In addition, the Company has entered into services agreements with third parties for pharmaceutical manufacturing and research activities. The manufacturing agreements can be terminated by the Company with 30 days written notice. License Agreements During the year ended March 31, 2019, $1.0 million was accrued as research and development expense for a development milestone achieved under the UMMS Agreement. Additionally, $15.0 million was accrued as research and development expense subsequent to the year ended March 31, 2019 for a development milestone achieved in April 2019 under the Oxford BioMedica Agreement (see Note 14). Real Property Leases In June 2017, the Company entered into an agreement with a third-party to lease approximately 19,554 square feet of office space in New York, New York. This agreement was originally set to expire in January 2019 and was extended to January 2021 in August 2018. ASA leases 955 square feet of office space in Princeton, New Jersey under a lease agreement expiring in August 2020. For the year ended March 31, 2019, the Company incurred $1.7 million in rent expense under these agreements. During the year ended March 31, 2016, the Company entered into two subleases with RSI for office space in New York, New York. Under the terms of the subleases, RSI paid rent obligations directly pursuant to a master lease, and then invoiced the Company based on the Company's proportionate share of the space and overhead expenses, calculated based upon the relative numbers of full-time equivalent employees located on the premises. As a result, the Company's rent obligations were not fixed. The Company ceased incurring rent expense under this arrangement with RSI after entering into the June 2017 agreement for office space. For the year ended March 31, 2018, the Company incurred $0.9 million in rent expense under this arrangement with RSI. The following table sets forth the remaining future minimum lease payments, net of prepayments, outstanding for operating leases as of March 31, 2019 and due within each respective fiscal year ending March 31 (in thousands):
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Restructuring |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring In October 2017, the Company initiated and committed to the first of two corporate realignments to focus its efforts and resources on the Company's ongoing and future programs that included a reduction in its workforce and a transfer of certain employees to affiliates. The second realignment was initiated and committed to in February 2018. The Company completed the reduction in headcount from these actions in the fourth quarter of fiscal 2018. During the year ended March 31, 2019, the Company made cash expenditures of approximately $2.5 million for one-time severance and related costs in connection with the corporate realignments completed in the prior fiscal year. The impacted employees are eligible to receive severance payments in specified amounts, health benefits and outplacement services. The Company has recorded these charges in research and development and general and administrative expenses in the accompanying consolidated statements of operations based on responsibilities of the impacted employees. A reconciliation of accrued employee severance and other personnel benefits from April 1, 2018 to March 31, 2019 is as follows (in thousands):
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Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following table presents selected quarterly financial data for the years ended March 31, 2019 and March 31, 2018:
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Subsequent Events |
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Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 30, 2019, the Company announced the dosing of the first patient of the second cohort in the SUNRISE-PD Phase 2 trial of AXO-LENTI-PD in Parkinson’s disease patients, which represented the achievement of a development milestone specified in the Oxford BioMedica Agreement and obligated the Company to make a payment of $15.0 million to Oxford BioMedica. On May 8, 2019, a 1-for-8 reverse share split of the Company's outstanding common stock was effected as approved by the Company's Board of Directors and a majority of its shareholders. The reverse share split reduced the number of common shares issued and outstanding from approximately 182.2 million to 22.8 million as of March 31, 2019. The reverse share split also reduced the number of shares authorized for issuance, the number of shares available for issuance, and the number of options outstanding under the 2015 Plan from approximately 24.8 million to 3.1 million, from approximately 8.4 million to 1.0 million, and from approximately 15.4 million to 1.9 million, respectively, as of March 31, 2019. As such, all references to share and per share amounts in the financial statements and accompanying notes to the financial statements have been retroactively restated to reflect the 1-for-8 reverse share split, except for the authorized number of shares of the Company's common stock and the par value per share, which were not affected. On June 5, 2019, the Company notified Benitec of its intention to terminate the Benitec Agreement in its entirety. The termination of the Benitec Agreement will be effective on September 3, 2019, the 90th day following the date of the Company's notice of termination. Upon the effective date of the termination of the Benitec Agreement, all rights and licenses granted to the Company thereunder will cease, including its rights to AXO-AAV-OPMD, which was in preclinical development for the treatment of oculopharyngeal muscular dystrophy, and all other early-stage research collaboration programs. No termination penalties are to be incurred by the Company in connection with the termination of the Benitec Agreement. |
Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2019 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation: The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform with the current period presentation. These reclassifications had no effect on the previously reported results of operations. |
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Going Concern and Management's Plans | Going Concern and Management's Plans: The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Topic 205-40, "Presentation of Financial Statements—Going Concern," which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that its annual and interim consolidated financial statements are issued. Certain additional financial statement disclosures are required if such conditions or events are identified. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting. Determining the extent, if any, to which conditions or events raise substantial doubt about the Company’s ability to continue as a going concern, or the extent to which mitigating plans sufficiently alleviate any such substantial doubt, as well as whether or not liquidation is imminent, requires significant judgment by management. The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of March 31, 2019, the Company’s cash and cash equivalents totaled $107.0 million and its accumulated deficit was $686.0 million. For the fiscal years ended March 31, 2019 and 2018, the Company incurred net losses of $129.1 million and $221.6 million, respectively. As of March 31, 2019, the Company had aggregate net interest-bearing indebtedness of $44.2 million, of which $21.2 million was due within one year. The Company also had $22.3 million of other non-interest-bearing current liabilities due within one year. The Company’s Loan Agreement (as defined in Note 6) with Hercules Capital, Inc. ("Hercules") requires that the Company maintain a minimum cash balance equal to the lesser of $30.0 million or the outstanding amount due under the Loan Agreement. Failure to meet this minimum covenant would be considered an event of default under the Loan Agreement and could result in the acceleration of the Company’s existing indebtedness. The Company expects to continue to incur significant operating and net losses, as well as negative cash flows, for the foreseeable future as it continues to develop its gene therapy product candidates and prepares for potential future regulatory approvals and commercialization of its products. The Company has not generated any revenue to date and does not expect to generate product revenue unless and until it successfully completes development and obtains regulatory approval for at least one of its product candidates. The Company anticipates that its current cash and cash equivalents balance will not be sufficient to maintain compliance with the minimum liquidity financial covenant under the Loan Agreement beyond the one-year period following the date that these consolidated financial statements were issued if the Loan Agreement is not amended or an additional financing is not completed. The Company's current cash and cash equivalents balance will also not be sufficient to complete all necessary development activities and commercially launch its products. To continue as a going concern, the Company will need, among other things, to raise additional capital resources. The Company continually assesses multiple options to obtain additional funding to support its operations, including proceeds from offerings of the Company’s equity securities or debt, cash received from the exercise of outstanding common stock options, or transactions involving product development, technology licensing or collaboration arrangements, or other sources of capital to complete its currently planned development programs. Management can provide no assurances that any sources of a sufficient amount of financing will be available to the Company on favorable terms, if at all. Although the Company has successfully obtained financing in the past, and management believes that it will continue to do so in the future, ASC Subtopic 205-40, "Financial Statement Presentation - Going Concern," does not permit future financing activities that are not probable of being implemented and probable of alleviating the conditions that raise substantial doubt to be included in the Company's assessment of its liquidity. Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as going concern. The consolidated financial statements and footnotes have been prepared on the basis that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. |
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Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to certain assets, including assumptions used in the determination of some of its costs incurred under the services agreements with Roivant Sciences, Inc. ("RSI") and Roivant Sciences GmbH ("RSG"), which costs are charged to research and development and general and administrative expense, as well as assumptions used to estimate its ability to continue as a going concern and estimate the fair value of its common shares. Specifically, the Company estimates the grant date fair value of stock option awards with only time-based vesting requirements using a Black-Scholes valuation model and uses a Monte Carlo Simulation method under the income approach to estimate the grant date fair value of stock option awards with market-based performance conditions. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
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Concentrations of Credit Risk | Concentrations of Credit Risk: Financial instruments that potentially subject the Company to concentration of credit risk include cash. At March 31, 2019, substantially all of the cash balances are deposited in 7 banking institutions and are all in excess of insured levels. |
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Cash and Cash Equivalents | Cash and Cash Equivalents: The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and amounts held in money market funds. |
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Property and Equipment | Property and Equipment: Property and equipment, consisting of leasehold improvements, furniture and fixtures, computers, software and other office equipment, is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Upon disposal, retirement or sale, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Depreciation is recorded for property and equipment using the straight-line method over the estimated useful lives of the respective assets, generally three to five years, once the asset is installed and placed in service. Amortization of leasehold improvements is recorded over the shorter of the lease term or estimated useful life of the related asset. The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Recoverability is measured by comparison of the book values of the assets to future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets. |
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Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt Discount: Debt issuance costs related to a recognized debt liability are presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and are amortized to interest expense over the term of the related debt using the effective interest method. Further, debt discounts created as a result of the allocation of proceeds received from a debt issuance to warrants issued in conjunction with the debt issuance are amortized to interest expense under the effective interest method over the life of the recognized debt liability. |
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Research and Development Expense | Research and Development Expense: Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development. Milestone payments made in connection with regulatory approvals are capitalized and amortized to cost of revenue over the remaining useful life of the asset. Research and development costs primarily consist of intellectual property and research and development materials acquired under license and license and collaboration agreements (see Note 3), certain costs charged by RSI and RSG under their services agreements with the Company (see Note 7) and expenses from third parties who conduct research and development activities on behalf of the Company. The Company expenses in-process research and development projects acquired as asset acquisitions which have not reached technological feasibility, and which have no alternative future use. |
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Income Taxes | Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, after consideration of all positive and negative evidence, it is not more likely than not that the Company's deferred tax assets will be realizable. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. When and if the Company were to recognize interest and penalties related to unrecognized tax benefits, they would be reported in tax expense in the consolidated statement of operations. |
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Share-Based Compensation | Share-Based Compensation: Share-based awards to employees and directors with only time-based vesting requirements are valued at fair value on the date of grant and that fair value is recognized on a straight-line basis over the requisite service period of the entire award. The Company values such time-based stock options using the Black-Scholes option pricing model. Certain assumptions are made with respect to utilizing the Black-Scholes option pricing model, including the expected life of the award, volatility of the underlying shares and the risk-free interest rate. The expected life of such time-based stock options is calculated using the simplified method (based on the mid-point between the vesting date and the end of the contractual term), and the risk-free interest rate is based on the rates paid on securities issued by the U.S. Treasury with a term approximating the expected life of the equity award. The expected share price volatility for such time-based stock option awards was estimated by taking the average historical price volatility for industry peers. The Company estimates the grant date fair value of stock option awards to employees with market-based performance conditions using a Monte Carlo Simulation method under the income approach. Certain assumptions are made with respect to utilizing the Monte Carlo Simulation method, including the volatility of the underlying shares and the drift rate, or estimated cost of equity. The expected share price volatility for such market-based performance stock option awards was estimated by taking the median historical price volatility for industry peers over the contractual term of the options. The drift rate, or estimated cost of equity, for such market-based performance stock option awards is based on various financial and risk-associated metrics of industry peers, as well as estimated factors specific to us. The Company accounts for share-based payments to nonemployees issued in exchange for services based upon the fair value of the equity instruments issued. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes option pricing model and is recorded over the service performance period. Prior to the Company's adoption of ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting" ("ASU No. 2018-07") on April 1, 2019, options subject to vesting were periodically remeasured over the service performance period, which was generally the same as the vesting period. |
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Net Loss per Common Share | Net Loss per Common Share: Basic net loss per common share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted net loss per common share is computed by dividing the net loss applicable to common shareholders by the diluted weighted-average number of common shares outstanding during the year calculated in accordance with the treasury stock method. |
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Financial Instruments and Fair Value Measurement | Financial Instruments and Fair Value Measurement: The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. Fair value is defined as the exchange price, or exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a three-tier fair value hierarchy that distinguishes among the following:
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company's financial instruments include cash and cash equivalents, accounts payable and long-term debt. Cash consists of non-interest-bearing deposits denominated in the U.S. dollar and Swiss franc, while cash equivalents consists of interest-bearing money market fund deposits denominated in the U.S. dollar, which are invested in debt securities issued or guaranteed by the U.S. government and repurchase agreements fully collateralized by U.S. Treasury and U.S. government securities. Cash and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. Financial Instruments and Fair Value Measurement: The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. Fair value is defined as the exchange price, or exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a three-tier fair value hierarchy that distinguishes among the following:
To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company's financial instruments include cash and cash equivalents, accounts payable and long-term debt. Cash consists of non-interest-bearing deposits denominated in the U.S. dollar and Swiss franc, while cash equivalents consists of interest-bearing money market fund deposits denominated in the U.S. dollar, which are invested in debt securities issued or guaranteed by the U.S. government and repurchase agreements fully collateralized by U.S. Treasury and U.S. government securities. Cash and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. |
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Recently Issued Accounting Pronouncements | Recent Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU No. 2016-02"), which requires lessees to recognize on the consolidated balance sheets a liability to make lease payments and a right-of-use ("ROU") asset representing its right to use the underlying asset for the lease term for both finance and operating leases with lease terms greater than twelve months. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. ASU No. 2016-02 allows entities to choose to use either (i) the effective date or (ii) the beginning of the earliest comparative period presented in the financial statements as the date of initial application. ASU No. 2016-02 provides a number of optional practical expedients in transition. The Company adopted the provisions of ASU No. 2016-02 on April 1, 2019 using the effective date as its date of initial application, and elected the “package of practical expedients,” which permits it to not reassess under ASU No. 2016-02 its prior conclusions about lease identification, lease classification, and initial direct costs. While the Company continues to assess all the effects of adoption, the Company believes the most significant effects relate to the recognition of ROU assets and corresponding lease liabilities on its consolidated balance sheet, primarily related to existing facility operating leases, and providing new disclosures with regards to the Company’s leasing activities. The Company currently expects that the adoption of ASU No. 2016-02 will result in the recording of ROU assets and corresponding liabilities of approximately $3.0 million and $2.4 million, respectively, in its consolidated balance sheet. In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU No. 2016-16"), which eliminates the prohibition of immediate recognition of current and deferred income tax impact for all intra-entity asset transfers, except for inventory. The Company has adopted ASU No. 2016-16 in the year ended March 31, 2019 and recognized a deferred tax asset of $3.8 million upon adoption with a corresponding valuation allowance of $3.8 million, which was subsequently impaired. In November 2016, the FASB issued ASU No. 2016-18 "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2016-18"). ASU 2016-18 requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown in the statements of cash flows. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017 and is required to be adopted using a retrospective approach, if applicable, with early adoption permitted. The Company adopted the provisions of ASU 2016-18 on April 1, 2018, which did not have an impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" ("ASU No. 2017-01"), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the provisions of ASU No. 2017-01 on April 1, 2018, on a prospective basis. The impact on the Company's consolidated financial statements and disclosures will depend on the facts and circumstances of any specific future transactions. See Note 3 for further information regarding the impact of the adoption of ASU No. 2017-01 on the license agreements executed during the year ended March 31, 2019. In February 2018, the FASB issued ASU No. 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU No. 2018-02"). On December 22, 2017, an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as the "Tax Cuts and Jobs Act") was enacted in the United States, which introduced a comprehensive set of tax reforms. ASU No. 2018-02 allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act, from accumulated other comprehensive (loss) income to retained earnings. ASU No. 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company adopted the provisions of ASU No. 2018-02 for the fiscal year beginning April 1, 2019 and does not expect it to have a material impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, which requires equity-classified share-based payment awards issued to nonemployees to be measured on the grant date, rather than remeasuring the awards through the performance completion date as previously required. Additionally, for nonemployee awards with performance conditions, compensation cost associated with the award is to be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. Further, the requirement to reassess the liability or equity classification for nonemployee awards upon vesting is eliminated, except for awards in the form of convertible instruments. ASU No. 2018-07 also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, "Revenue from Contracts with Customers". ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted after the adoption of ASU No. 2014-09. The Company adopted the provisions of ASU No. 2018-07 for the fiscal year beginning April 1, 2019, which did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU No. 2018-13"). ASU No. 2018-13 removes, modifies, and adds certain recurring and nonrecurring fair value measurement disclosures, including removing disclosures around the amount(s) of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements, among other things. ASU No. 2018-13 adds disclosure requirements around changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and a narrative description of measurement uncertainty. The amendments in ASU No. 2018-13 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption, with all other amendments applied retrospectively to all periods presented. Early adoption is permitted. The Company early adopted the provisions of ASU No. 2018-13 during the three months ended September 30, 2018, which did not have a material impact on its consolidated financial statements or disclosures because the Company did not have any Level 3 fair value measurements on a recurring or nonrecurring basis at the adoption date, and also did not have transfers between Level 1 and Level 2 of the fair value hierarchy. |
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Foreign Currency | Foreign Currency: The Company has operations in the United States, the United Kingdom, Ireland and Switzerland. The results of its non-U.S. dollar based functional currency operations are translated to U.S. dollars at the average exchange rates during the year. The Company’s assets and liabilities are translated using the current exchange rate as of the balance sheet date and shareholders’ equity is translated using historical rates. Adjustments resulting from the translation of the financial statements of the Company’s foreign functional currency subsidiaries into U.S. dollars are excluded from the determination of net loss and are accumulated in a separate component of shareholders’ equity. Foreign exchange transaction gains and losses are included in other (income) expense in the Company’s results of operations. |
Summary of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Cash Equivalents | The following table summarizes the fair value of the Company's money market fund included in cash equivalents based on the inputs used at March 31, 2019 in determining such values (in thousands):
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Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | As of March 31, 2019 and 2018, accrued expenses consisted of the following (in thousands):
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Long Term Debt (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Debt Obligations | Outstanding debt obligations were as follows (in thousands):
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Long-term Debt Obligations Due | :
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Share-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Assumptions Used for Estimating the Fair Value of Stock Options | The Company estimated the fair value of each time-based stock option on the date of grant using the Black-Scholes closed-form option-pricing model applying the weighted average assumptions in the following table:
The Company estimated the grant date fair value of each market-based performance stock option granted during the year ended March 31, 2019 using a Monte Carlo Simulation method under the income approach by applying the following assumptions:
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Schedule of Stock Option Activity | The following table presents a summary of option activity and data under the Company's stock incentive plans through March 31, 2019:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The loss before income taxes and the related tax expense (benefit) are as follows (in thousands):
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Reconciliation of Income Tax Benefit to Statutory Rate | A reconciliation of income tax benefit computed at the Bermuda statutory rate to income tax expense reflected in the financial statements is as follows (in thousands):
1 Primarily related to current tax on United States operations including permanent and temporary differences, Swiss net operating losses and United Kingdom taxation of the parent company. |
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Schedule of Deferred Tax Assets and Liabilities | Significant components of the deferred tax assets (liabilities) at March 31, 2019 and 2018 are as follows (in thousands):
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||
Future Minimum Lease Payments | The following table sets forth the remaining future minimum lease payments, net of prepayments, outstanding for operating leases as of March 31, 2019 and due within each respective fiscal year ending March 31 (in thousands):
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Restructuring (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring | A reconciliation of accrued employee severance and other personnel benefits from April 1, 2018 to March 31, 2019 is as follows (in thousands):
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Selected Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | The following table presents selected quarterly financial data for the years ended March 31, 2019 and March 31, 2018:
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Description of Business (Details) |
12 Months Ended |
---|---|
Mar. 31, 2019
subsidiary
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of subsidiaries | subsidiary | 7 |
Number of operating segments | 1 |
Number of reporting segments | 1 |
Summary of Significant Accounting Policies - Basis of Presentation (Details) |
May 08, 2019 |
Mar. 31, 2019
shares
|
Mar. 31, 2018
shares
|
Mar. 31, 2017
shares
|
---|---|---|---|---|
Common Shares | ||||
Class of Stock [Line Items] | ||||
Shares outstanding before split (in shares) | 182,200,000 | |||
Shares outstanding (in shares) | 22,779,891 | 13,473,512 | 12,395,492 | |
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Stock split ratio | 0.125 |
Summary of Significant Accounting Policies - Going Concern and Management's Plans (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2019 |
Mar. 31, 2018 |
May 24, 2017 |
|
Debt Instrument [Line Items] | |||||||||||
Cash and cash equivalents | $ 106,999 | $ 154,337 | $ 106,999 | $ 154,337 | |||||||
Accumulated deficit | 686,016 | 556,951 | 686,016 | 556,951 | |||||||
Net loss | 9,046 | $ 34,296 | $ 33,835 | $ 51,888 | 25,319 | $ 57,902 | $ 69,086 | $ 69,266 | 129,065 | 221,573 | |
Interest bearing indebtedness | 44,176 | 52,678 | 44,176 | 52,678 | |||||||
Current portion of long-term debt | 21,182 | $ 9,753 | 21,182 | $ 9,753 | |||||||
Other non-interest bearing current liabilities | $ 22,300 | $ 22,300 | |||||||||
Loan and Security Agreement with Hercules Capital, Inc. | Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Minimum cash balance | $ 30,000 |
Summary of Significant Accounting Policies - Concentration Risk (Details) |
Mar. 31, 2019
bank
|
---|---|
Credit Concentration Risk | |
Concentration Risk [Line Items] | |
Number of banking institutions | 7 |
Summary of Significant Accounting Policies - Property and Equipment (Details) |
12 Months Ended |
---|---|
Mar. 31, 2019 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Summary of Significant Accounting Policies - Net Loss per Common Share (Details) - shares shares in Millions |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Stock options and warrants | ||
Net Loss per Common Share | ||
Anti-dilutive securities not included in calculation of common shares outstanding (in shares) | 1.9 | 1.8 |
Summary of Significant Accounting Policies - Financial Instruments and Fair Value Measurement (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|
Accounting Policies [Abstract] | ||
Money market fund | $ 30,000 | |
Debt | $ 44,176 | $ 52,678 |
Summary of Significant Accounting Policies - Fair Value of Cash Equivalents (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market fund | $ 30,000 |
Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market fund | 30,000 |
Significant Other Observable Inputs (Level 2) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market fund | 0 |
Significant Unobservable Inputs (Level 3) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Money market fund | $ 0 |
Summary of Significant Accounting Policies - Recently Issued Accounting Policies (Details) - USD ($) $ in Thousands |
Apr. 01, 2019 |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | $ 171,004 | $ 137,346 | |
Valuation allowance on deferred tax assets | 171,004 | $ 137,211 | |
Accounting Standards Update 2016-16 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | 3,800 | ||
Valuation allowance on deferred tax assets | $ 3,800 | ||
Subsequent Event | Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset | $ 3,000 | ||
Lease liability | $ 2,400 |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Research and development expenses | $ 13,416 | $ 21,855 |
Salaries, bonuses, and other compensation expenses | 3,899 | 7,718 |
Legal expenses | 1,319 | 779 |
Other expenses | 1,985 | 1,510 |
Total accrued expenses | $ 20,619 | $ 31,862 |
Long Term Debt (Details) - USD ($) |
1 Months Ended | ||
---|---|---|---|
Feb. 02, 2017 |
Aug. 31, 2017 |
May 24, 2017 |
|
Debt Instrument [Line Items] | |||
Exercise of warrant (in shares) | 16,228 | ||
Common Shares | |||
Debt Instrument [Line Items] | |||
Number of shares for which warrants are exercisable (in shares) | 34,260 | ||
Exercise price of warrants (in dollars per share) | $ 96.32 | ||
Fair value of warrants | $ 2,300,000 | ||
Term Loan | Loan and Security Agreement with Hercules Capital, Inc. | |||
Debt Instrument [Line Items] | |||
Amount borrowed | $ 55,000,000 | ||
Minimum cash balance | $ 30,000,000 | ||
Interest rate in the event of debt default | 5.00% | ||
Maximum equity offering opportunity to be provided | $ 3,000,000.0 | ||
Transaction costs | $ 1,500,000 | ||
Loan term | 48 months | ||
Term Loan | Loan and Security Agreement with Hercules Capital, Inc. | Minimum | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 10.55% | ||
Term Loan | Loan and Security Agreement with Hercules Capital, Inc. | Prime Rate | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 6.80% |
Long Term Debt - Outstanding Debt Obligations (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
Principal amount | $ 45,295 | $ 55,000 |
Less: unamortized discount and debt issuance costs | (1,119) | (2,322) |
Loan payable less unamortized discount and debt issuance costs | 44,176 | 52,678 |
Less: current portion of long-term debt | 21,182 | 9,753 |
Long-term loan payable, net of current maturities | $ 22,994 | $ 42,925 |
Long Term Debt - Long-term Debt Obligations Due (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
2020 | $ 21,182 | |
2021 | 24,113 | |
Thereafter | 0 | |
Total | $ 45,295 | $ 55,000 |
Share-Based Compensation - Stock Option, Fair Value Assumptions (Details) |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Time-Based Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected share price volatility | 85.50% | 79.60% |
Expected risk free interest rate | 2.82% | 2.33% |
Expected term, in years | 6 years 11 days | 6 years 6 months |
Expected dividend yield | 0.00% | 0.00% |
Market-Based Performance Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term, in years | 10 years | |
Market-Based Performance Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected share price volatility | 70.60% | |
Market-Based Performance Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected share price volatility | 85.60% |
Income Taxes- Summary of Income Tax Expense by Jurisdiction (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Loss before income taxes: | ||
Bermuda | $ (6,206) | $ (9,697) |
Total loss before income taxes | (128,932) | (220,652) |
Current taxes: | ||
Bermuda | 0 | 0 |
Total current tax expense (benefit) | 133 | (1,788) |
Deferred taxes: | ||
Bermuda | 0 | 0 |
Total deferred tax expense | 0 | 2,709 |
Total income tax expense | 133 | 921 |
United States | ||
Loss before income taxes: | ||
Foreign | (11,345) | (13,039) |
Current taxes: | ||
Foreign | 123 | (1,455) |
Deferred taxes: | ||
Foreign | 0 | 2,669 |
Switzerland | ||
Loss before income taxes: | ||
Foreign | (111,383) | (197,765) |
Current taxes: | ||
Foreign | 0 | 0 |
Deferred taxes: | ||
Foreign | 0 | 0 |
Other | ||
Loss before income taxes: | ||
Foreign | 2 | (151) |
Current taxes: | ||
Foreign | 10 | (333) |
Deferred taxes: | ||
Foreign | $ 0 | $ 40 |
Income Taxes Income Taxes - Reconciliation of Income Tax Benefit to Statutory Rate (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
$ | ||
Income tax benefit at Bermuda statutory rate | $ 0 | $ 0 |
Foreign rate differential | (14,653) | (122,908) |
Valuation allowance | 29,962 | 113,070 |
Research and development credit | (1,437) | 0 |
Research and development true-up | 318 | 0 |
Switzerland rate change | (14,057) | 6,216 |
U.S. tax reform implications | 0 | 4,543 |
Other | 0 | 0 |
Total income tax expense | $ 133 | $ 921 |
% | ||
Income tax benefit at Bermuda statutory rate | 0.00% | 0.00% |
Foreign rate differential | 11.37% | 55.70% |
Valuation allowance | (23.24%) | (51.24%) |
Research and development credit | 1.12% | (0.00%) |
Research and development true-up | (0.25%) | (0.00%) |
Switzerland rate change | 10.90% | (2.82%) |
U.S. tax reform implications | 0.00% | (2.06%) |
Other | 0.00% | 0.00% |
Total income tax expense | (0.10%) | (0.42%) |
Income Taxes- Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate | (0.10%) | (0.42%) |
Deferred tax asset | $ 171,004 | $ 137,346 |
Valuation allowance on deferred tax assets | 171,004 | 137,211 |
Income tax receivable | 1,726 | $ 1,751 |
United States | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 22 | |
Switzerland | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 1,010,000 | |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 6,300 | |
Ireland | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 4 | |
Accounting Standards Update 2016-16 | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax asset | 3,800 | |
Valuation allowance on deferred tax assets | 3,800 | |
Research and Development Tax Credit | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward | $ 9,900 |
Income Taxes- Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Mar. 31, 2018 |
---|---|---|
Deferred tax assets: | ||
Research tax credits | $ 9,876 | $ 8,757 |
Intangibles | 5,995 | 0 |
Other | 18 | 293 |
Net operating loss | 144,866 | 118,661 |
Share-based compensation | 10,249 | 9,635 |
Subtotal | 171,004 | 137,346 |
Valuation allowance | (171,004) | (137,211) |
Deferred tax liabilities: | ||
Depreciation | 0 | (135) |
Total net deferred tax assets | $ 0 | $ 0 |
Commitments and Contingencies (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019
USD ($)
ft²
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
ft²
|
Mar. 31, 2019
USD ($)
ft²
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2016
agreement
|
|||||
Other Commitments [Line Items] | |||||||||||||||
Research and development expenses | $ 7,149 | $ 21,483 | $ 21,502 | $ 37,418 | $ 21,799 | $ 37,346 | $ 38,555 | $ 43,712 | $ 87,552 | [1] | $ 141,412 | [1] | |||
The University of Massachusetts Medical School | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Research and development expenses | $ 1,000 | ||||||||||||||
Third Party | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Area leased (in sq ft) | ft² | 19,554 | ||||||||||||||
Area subleased (in sq ft) | ft² | 955 | 955 | |||||||||||||
Rent expense | $ 1,700 | ||||||||||||||
RSL | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of subleases | agreement | 2 | ||||||||||||||
Rent expense | $ 900 | ||||||||||||||
|
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 1,791 |
2021 | 898 |
Thereafter | 0 |
Total | $ 2,689 |
Restructuring (Details) $ in Thousands |
12 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Balance as of April 1, 2018 | $ 2,460 |
Expenses, net | 0 |
Cash | (2,452) |
Noncash | 0 |
Balance as of March 31, 2019 | $ 8 |
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Research and development expenses | $ 7,149 | $ 21,483 | $ 21,502 | $ 37,418 | $ 21,799 | $ 37,346 | $ 38,555 | $ 43,712 | $ 87,552 | [1] | $ 141,412 | [1] | ||||
General and administrative expenses | 6,157 | 10,933 | 10,622 | 11,754 | 2,244 | 18,032 | 30,112 | 21,518 | 39,466 | [2] | 71,906 | [2] | ||||
Research and development expenses | 13,306 | 32,416 | 32,124 | 49,172 | 24,043 | 55,378 | 68,667 | 65,230 | 127,018 | 213,318 | ||||||
Net loss | $ (9,046) | $ (34,296) | $ (33,835) | $ (51,888) | $ (25,319) | $ (57,902) | $ (69,086) | $ (69,266) | $ (129,065) | $ (221,573) | ||||||
Net loss per share attributable to common stockholders — basic and diluted (in dollars per share) | $ (0.45) | $ (2.13) | $ (2.24) | $ (3.85) | $ (1.88) | $ (4.30) | $ (5.14) | $ (5.21) | $ (8.02) | $ (16.51) | ||||||
|
Label | Element | Value |
---|---|---|
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 235,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (235,000) |
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