SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

[Rule 13d-101]

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 24.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO § 240.13D-2(a)

(Amendment No. )*

Homology Medicines, Inc.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

438083107

(CUSIP Number)

David Clark

Elliot Press

Deerfield Mgmt, L.P.

780 Third Avenue, 37th Floor

New York, New York 10017

(212) 551-1600With

a copy to:

Jonathan D. Weiner, Esq.

Mark D. Wood, Esq.

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

(212) 940-8800 

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

April 2, 2018

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☐.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

(Page 1 of 18 Pages)

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

(1) Comprised of shares held by Deerfield Private Design Fund III, L.P.

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(2) Comprised of shares held by Deerfield Partners, L.P.

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(3) Comprised of shares held by Deerfield Healthcare Innovations Fund, L.P.

 SCHEDULE 13D

(4) Comprised of 2,613,517 shares held by Deerfield Private Design Fund III, L.P., 625,000 shares held by Deerfield Partners, L.P. and 1,988,518 shares held by Deerfield Healthcare Innovations Fund, L.P.

SCHEDULE 13D

(5) Comprised of 2,613,517 shares held by Deerfield Private Design Fund III, L.P., 625,000 shares held by Deerfield Partners, L.P. and 1,988,518 shares held by Deerfield Healthcare Innovations Fund, L.P.

This Schedule 13D is filed by (i) Deerfield Mgmt III, L.P. (“Deerfield Mgmt III”), (ii) Deerfield Private Design Fund III, L.P. (“Deerfield Private Design Fund III”), (iii) Deerfield Mgmt, L.P. (“Deerfield Mgmt”), (iv) Deerfield Partners, L.P. (“Deerfield Partners”), (v) Deerfield Healthcare Innovations Fund, L.P. (“Deerfield Healthcare Innovations Fund”), (vi) Deerfield Mgmt HIF, L.P. (“Deerfield Mgmt HIF”), (vii) Deerfield Management Company, L.P. (“Deerfield Management”) and (viii) James E. Flynn, a natural person (“Flynn” and collectively with Deerfield Mgmt III, Deerfield Private Design Fund III, Deerfield Mgmt, Deerfield Partners, Deerfield Healthcare Innovations Fund, Deerfield Mgmt HIF and Deerfield Management, the “Reporting Persons”), with respect to the common stock of Homology Medicines, Inc. Deerfield Private Design Fund III, Deerfield Partners and Deerfield Healthcare Innovations Fund are collectively referred to herein as the “Funds”).

This Statement on Schedule 13D relates to the shares of common stock, par value $0.0001 per share (the “Common Stock”), of Homology Medicines, Inc., a Delaware corporation (the “Company”). The address of the Company's principal executive offices is 45 Wiggins Avenue, Bedford, Massachusetts 01730.

On August 21, 2017, Deerfield Management voluntarily agreed to settle an SEC administrative proceeding relating to alleged violations of Section 204A of the Investment Advisers Act of 1940 (the “Advisers Act”), without admitting or denying the SEC’s allegations, pursuant to an order under Section 203(e) and 203(k) of the Advisers Act (the “Order”). The Order resolved the SEC’s allegations that Deerfield Management, from 2012 through 2014, violated Section 204A of the Advisers Act by failing to establish, maintain, and enforce policies and procedures reasonably designed to prevent the misuse of material, nonpublic information, particularly taking into consideration the nature of Deerfield Management’s business. The Order alleged that, as part of Deerfield Management’s research in the healthcare sector, Deerfield Management engaged third party consultants and research firms, including firms that specialized in providing “political intelligence” regarding upcoming regulatory and legislative decisions, that Deerfield Management employees based certain trading recommendations on such information, and that hedge funds advised by Deerfield Management then made those trades. The Order required Deerfield Management to cease and desist from committing or causing any violations and any future violations of Section 204A of the Advisers Act, censured Deerfield Management and provided that Deerfield Management would pay disgorgement and interest of $811,695 and a civil money penalty of $3,946,267.

Other than as set forth above in this Item 2(e), during the last five years, none of the Reporting Persons, nor, to the best of each of the Reporting Person’s knowledge, any of the persons listed on Schedule A attached hereto, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

The Reporting Persons have entered into a Joint Filing Agreement, a copy of which is attached hereto as Exhibit 99.1.

Prior to the Company’s April 2, 2018 initial public offering (the “IPO”), Deerfield Healthcare Innovations Fund and Deerfield Private Design Fund III had participated in equity financings involving the Company and had acquired shares of Series A Preferred Stock and Series B Preferred Stock (collectively, the “Preferred Stock”). Specifically, Deerfield Healthcare Innovations Fund acquired 3,521,126 shares of Series A Preferred Stock and 6,944,445 shares of Series B Preferred Stock, and Deerfield Private Design Fund III acquired 3,521,126 shares of Series A Preferred Stock and 6,944,444 shares of Series B Preferred Stock. Deerfield Healthcare Innovations Fund and Deerfield Private Design Fund III paid an aggregate of $12,500,000.80 and $12,499,99.36, respectively, for the Preferred Stock.

On April 2, 2018, in connection with the closing of the IPO, each share of the Preferred Stock automatically converted into 0.1900057 shares of Common Stock (after giving effect to a 1-for-5.263 reverse stock split in connection with the IPO). The number of shares of Common Stock acquired by the Reporting Persons upon such conversion was:

In addition, in connection with the IPO, each of Deerfield Private Design Fund III and Deerfield Partners acquired 625,000 shares of Common Stock for $16.00 per share. The aggregate purchase price paid by Deerfield Private Design Fund III and Deerfield Partners for such shares was $10,000,000.00 and $10,000,000.00, respectively. Deerfield Private Design Fund III and Deerfield Partners utilized their respective working capital to purchase the shares of Common Stock reported herein.

Shares of Common Stock beneficially owned by the Reporting Persons are or may be held from time to time by the applicable Fund in margin accounts established with their respective brokers or banks, and a portion of the purchase price for the Common Stock may have been obtained through margin borrowing. Common Stock positions held in margin accounts may be pledged as collateral security for the repayment of debit balances in the margin accounts.

The information set forth in Items 3 and 6 is incorporated herein by reference.

The Reporting Persons have acquired the shares reported herein for investment purposes. Cameron Wheeler, Ph.D., an employee of Deerfield Management, was appointed to serve on the Company’s board of directors prior to the IPO and continues to serve in such capacity.

Depending on various factors and subject to the obligations described herein, the Reporting Persons may take such actions with respect to their investments in the Company as they deem appropriate, including, without limitation, purchasing additional shares of Common Stock or other financial instruments related to the Company or selling some or all of their beneficial or economic holdings, engaging in hedging or similar transactions with respect to the securities relating to the Issuer and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.

On July 28, 2017, prior to the IPO Deerfield Private Design Fund III, Deerfield Healthcare Innovations Fund, the Company and other investors entered into an Amended and Restated Investors’ Rights Agreement of the Company (the “Investor Rights Agreement”), the terms of which are described in Item 6 below.

Item 5. Interest in Securities of the Issuer.

(a)        

(1)       Deerfield Mgmt III

Number of shares: 2,613,517 (comprised of shares held by Deerfield Private Design Fund III)

Percentage of shares: 6.98%

(2)        Deerfield Private Design Fund III

Number of shares: 2,613,517

Percentage of shares: 6.98%

(3)        Deerfield Mgmt

Number of shares: 625,000 (comprised of shares held by Deerfield Partners)

Percentage of shares: 1.67%

(4)       Deerfield Partners

Number of shares: 625,000

Percentage of shares: 1.67%

(5)       Deerfield Healthcare Innovations Fund

Number of shares: 1,988,518

Percentage of shares: 5.31%

(6)       Deerfield Mgmt HIF

Number of shares: 1,988,518 (comprised of shares held by Deerfield Healthcare Innovations Fund)

Percentage of shares: 5.31%

(7)       Deerfield Management

Number of shares: 5,227,035 (comprised of shares held by Deerfield Private Design Fund III, Deerfield Partners and Deerfield Healthcare Innovations Fund)

Percentage of shares: 13.96%

(8)       Flynn

Number of shares: 5,227,035 (comprised of shares held by Deerfield Private Design Fund III, Deerfield Partners and Deerfield Healthcare Innovations Fund)

Percentage of shares: 13.96%

(b)       

(1)        Deerfield Mgmt III

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 2,613,517

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 2,613,517

(2)       Deerfield Private Design Fund III

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 2,613,517

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 2,613,517

(3)        Deerfield Mgmt

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 625,000

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 625,000

(4)       Deerfield Partners

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 625,000

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 625,000

(5)       Deerfield Healthcare Innovations Fund

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 1,988,518

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 1,988,518

(6)       Deerfield Mgmt HIF

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 1,988,518

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 1,988,518

(7)       Deerfield Management

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 5,227,035

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 5,227,035

(8)        Flynn

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote: 5,227,035

Sole power to dispose or to direct the disposition: 0

Shared power to dispose or direct the disposition: 5,227,035

Flynn is the managing member of the general partner of each of Deerfield Mgmt, Deerfield Mgmt III, Deerfield Mgmt HIF and Deerfield Management.   Deerfield Mgmt III is the general partner of Deerfield Private Design Fund IIII, Deerfield Mgmt is the general partner of Deerfield Partners, Deerfield Mgmt HIF is the general partner of Deerfield Healthcare Innovations Fund and Deerfield Management is the investment manager of the Funds.

(c) Except as set forth in Items 3, 4 and 6 of this Schedule 13D, no Reporting Person has effected any transactions in the Common Stock during the past 60 days.

(d) Not applicable

(e) Not applicable.

Pursuant to the terms of the Investors’ Rights Agreement, Deerfield Healthcare Innovations Fund and Deerfield Private Design Fund III (together with certain other investors party thereto) are entitled to rights with respect to the registration of their Common Stock under the Securities Act of 1933, as amended. In addition, Cameron Wheeler, Ph.D., an employee of Deerfield Management, was designated by Deerfield Healthcare Innovations Fund and Deerfield Private Design Fund III to serve on the Company’s board of directors. Although Deerfield Private Design Fund III and Deerfield Healthcare Innovation Fund’s right to designate directors to the board of directors of the Company terminated upon consummation of the Company’s initial public offering, Dr. Wheeler continues to serve on the Company’s board of directors.

As an employee of Deerfield Management, all grants received by Dr. Wheeler as a director of the Company are for the benefit of Deerfield Management. In this regard, on March 28, 2017, Dr. Wheeler received stock options for the purchase of an aggregate of 31,160 shares of Common Stock, which grants are held for the benefit and at the direction, of Deerfield Management.

* Filed herewith.

SIGNATURE

After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated: April 6, 2018

Schedule A

General Partner of Deerfield Mgmt, L.P.

The general partner of Deerfield Mgmt is J.E. Flynn Capital, LLC. The address of the principal business and/or principal office of Deerfield Mgmt and J.E. Flynn Capital, LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Partners, L.P.

The general partner of Deerfield Partners is Deerfield Mgmt. The address of the principal business and/or principal office of Deerfield Mgmt and Deerfield Partners is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Mgmt III, L.P.

The general partner of Deerfield Mgmt III is J.E. Flynn Capital III, LLC. The address of the principal business and/or principal office of Deerfield Mgmt III and J.E. Flynn Capital III, LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Private Design Fund III, L.P.

The general partner of Deerfield Private Design Fund III is Deerfield Mgmt III. The address of the principal business and/or principal office of Deerfield Mgmt III and Deerfield Private Design Fund III is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Healthcare Innovations Fund, L.P.

The general partner of Deerfield Healthcare Innovations Fund is Deerfield Mgmt HIF, L.P. The address of the principal business and/or principal office of Deerfield Healthcare Innovations Fund and Deerfield Mgmt HIF, L.P is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Mgmt HIF, L.P.

The general partner of Deerfield Mgmt HIF is J.E. Flynn Capital HIF, LLC. The address of the principal business and/or principal office of Deerfield Mgmt HIF, L.P. and J.E. Flynn Capital HIF, LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Management Company, L.P.

The general partner of Deerfield Management is Flynn Management LLC. The address of the principal business and/or principal office of Deerfield Management and Flynn Management LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

Exhibit Index

* Filed herewith.

Exhibit 99.1

The undersigned agree that this Schedule 13D, and all amendments thereto, relating to the Common Stock of Homology Medicines, Inc. shall be filed on behalf of the undersigned.