ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
|
||
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☒ |
Smaller reporting company |
||||
Emerging growth company |
Page |
||||||
PART I |
||||||
Item 1. |
6 |
|||||
Item 1A. |
61 |
|||||
Item 1B. |
120 |
|||||
Item 2. |
120 |
|||||
Item 3. |
120 |
|||||
Item 4. |
120 |
|||||
PART II |
||||||
Item 5. |
121 |
|||||
Item 6. |
121 |
|||||
Item 7. |
122 |
|||||
Item 7A. |
131 |
|||||
Item 8. |
132 |
|||||
Item 9. |
153 |
|||||
Item 9A. |
153 |
|||||
Item 9B. |
153 |
|||||
Item 9C. |
156 |
|||||
PART III |
||||||
Item 10. |
157 |
|||||
Item 11. |
157 |
|||||
Item 12. |
157 |
|||||
Item 13. |
157 |
|||||
Item 14. |
157 |
|||||
PART IV |
||||||
Item 15. |
158 |
|||||
Item 16. |
158 |
|||||
162 |
• | our expectation that our existing capital resources will be sufficient to enable us to fund our planned development of MGTA-117, MGTA-145 and any other product candidates we may identify and pursue; |
• | the initiation, timing and success of clinical trials of MGTA-117, MGTA-145 and any other product candidates; |
• | our ability to commence and enroll patients in our clinical trials at the pace that we project; |
• | regulatory actions with respect to our product candidates or our competitors’ products and product candidates; |
• | the outcomes of our preclinical studies; |
• | our ability to manufacture MGTA-117, MGTA-145 or any other product candidate in conformity with the U.S. Food and Drug Administration’s requirements and to scale up manufacturing of our product candidates to commercial scale, if approved; |
• | whether the results of our trials will be sufficient to support domestic or foreign regulatory approvals for MGTA-117, MGTA-145 or any other product candidates we may develop; |
• | our reliance on third parties to conduct our clinical trials; |
• | our reliance on third-party contract development and manufacturer organizations to manufacture and supply our product candidates for us; |
• | our ability to establish clinical programs moving forward in multiple indications, with a rapidly advancing portfolio and sustainable platform; |
• | our ability to obtain, including on an expedited basis, and maintain regulatory approval of MGTA-117, MGTA-145 or any other product candidates we may develop; |
• | the level of expenses related to any of our product candidates or clinical development programs; |
• | the benefits of the use of MGTA-117, MGTA-145 or any other product candidate, if approved; |
• | our ability to successfully commercialize MGTA-117, MGTA-145 or any other product candidates we may identify and pursue, if approved; |
• | the rate and degree of market acceptance of MGTA-117, MGTA-145 or any other product candidates we may identify and pursue; |
• | our expectations regarding government and third-party payor coverage and reimbursement; |
• | our ability to obtain and maintain intellectual property protection for MGTA-117, MGTA-145 or any other product candidates we may identify and pursue; |
• | our ability to obtain orphan drug designation for any of our product candidates we may identify and pursue; |
• | our ability to successfully build a specialty sales force and commercial infrastructure; |
• | our ability to compete with companies currently producing or engaged in the clinical development of treatments for the disease indications that we pursue and treatment modalities that we develop; |
• | our ability to successfully find collaborators for E478 or any of our current and future programs and product candidates; |
• | our ability to retain and recruit key personnel; |
• | our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing; |
• | our expectations regarding the time during which we will continue to be an emerging growth company or smaller reporting company as defined in federal securities regulations; |
• | our financial performance; and |
• | developments and projections relating to our competitors or our industry. |
• | We are a clinical stage company with a limited operating history, have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future. |
• | We have no products approved for commercial sale and have not generated any revenue from product sales. If we are unable to raise additional capital when needed or on terms acceptable to us, we could be forced to significantly delay, scale back or discontinue our development or commercialization efforts. |
• | Although we have initiated and conducted clinical trials for some of our product candidates, including MGTA-117 and MGTA-145, we have not yet demonstrated the ability to successfully advance our clinical trials for our product candidates through the final regulatory processes and obtain marketing approvals for such products, or to conduct sales and marketing activities necessary for successful commercialization of such products. |
• | If we are unable to obtain regulatory approval for MGTA-117, MGTA-145 or any other product candidates that we may identify or develop, our business will be substantially harmed. |
• | We have not yet demonstrated an ability to manufacture or process drug product on a commercial-scale and may not be able to do so for any of our product candidates. |
• | The results of earlier studies and interim data from our ongoing studies may not be predictive of future clinical trial results, and we may fail to establish an adequate safety or efficacy profile to conduct advanced clinical trials or obtain regulatory approval for MGTA-117, MGTA-145 or any other product candidates that we may pursue. |
• | Stem cell transplant is a high-risk procedure that may result in complications or adverse events for patients in our clinical trials or for patients that use any of our product candidates, if approved. If serious adverse events, undesirable side effects, or unexpected characteristics are identified during the development of any of our product candidates, we may need to limit, delay or abandon our further clinical development of those product candidates, even if such events, effects or characteristics were the result of stem cell transplant or related procedures generally, and not directly or specifically caused or exacerbated by our product candidates. |
• | If we are not able to identify a safe and effective dose for any of our antibody-drug conjugates, or ADCs, we may need to delay, abandon or limit our development of any potential product candidates. |
• | We rely, and expect to continue to rely, on third parties to manufacture our clinical product supplies, and we intend to rely on third parties to produce and process our product candidates, if approved. |
• | We are highly dependent on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business. |
• | It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection. If we are unable to obtain and maintain sufficient intellectual property protection for MGTA-117, MGTA-145 or any of our other current or any future product candidates, or our technologies, we may not be able to compete effectively in our markets. |
• | If we are unable to successfully develop our current programs into a comprehensive portfolio of product candidates, or experience significant delays in doing so, we may not realize the full commercial potential of our current and future product candidates. |
• | The commercial success of any of our product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community. |
• | We face substantial competition, including from companies with greater financial, technical, research, manufacturing, marketing, distribution and other resources than us, which may result in others discovering, developing or commercializing products before or more successfully than we do. |
• | We have entered into collaborations and may enter into additional collaborations, strategic alliances or additional licensing arrangements in the future, and we may not realize the benefits of such collaborations, alliances or licensing arrangements. |
• | We are developing E478 specifically to partner with gene therapy and genome editing companies, and if we are unable to find willing collaborators, this may adversely affect the development of E478 and our business. |
• | The coronavirus, or COVID-19, pandemic or any future pandemic, epidemic or outbreak of any other highly infectious disease could have a material adverse effect on our business, financial condition and results of operations. |
• | Our future success depends in part upon our ability to attract and retain highly skilled personnel, including the members of our executive team and key scientific and medical personnel employees. |
• | Changes in tax law could adversely affect our business and financial condition. |
ITEM 1. |
BUSINESS |
• | maximize the patient impact of our portfolio by finding value-creating partnerships to enable gene and cell therapies, including stem cell-based gene therapies, genome editing and CAR-T therapies; |
• | build relationships with partners to access complementary expertise and capabilities to bring our therapies as quickly as possible to all patients who can benefit; and |
• | opportunistically bring in preclinical or clinical assets that fit with our integrated portfolio. |
• | Targeted Conditioning Programs MGTA-117 program is focused on selectively depleting stem cells from patients prior to transplant or HSC-based gene therapy to lessen the need for high-dose or high-intensity chemotherapeutic agents or, in the case of gene therapy applications, to potentially eliminate the need for chemotherapeutic agents altogether. Our second targeted conditioning program, CD45-ADC, is focused on depleting both stem and immune cells to enable transplant as a single agent in autologous autoimmune disease and allogenic blood cancer transplants. |
• | Stem Cell Mobilization & Collection Program MGTA-145 program is focused on enabling rapid, reliable, predictable and safe mobilization and collection of high numbers of functional blood stem cells for transplant. |
• | Research Programs |
• | First, the antibody component of the ADC must specifically target a receptor that is expressed on the cells of interest. |
• | Second, to comply with typical stem cell transplant conditioning timelines, the ADC must have suitable potency to ensure that the agent is able to remove the target cells rapidly, in days rather than weeks or months. |
• | Third, the ADC clearance from the body needs to be accelerated so that it is eliminated by the time the transplanted cells are infused into the patient, typically within a week of starting conditioning. This requirement stems from the fact that the target receptor is expressed on cells present in the patient but also on the newly transplanted cells which should not be targeted for depletion in order for the transplant to be successful. |
• | Finally, the drug must be well-tolerated for patients at dose levels where stem cells are effectively removed. We designed the ADC with a stable linker-payload which is intended to ensure that the payload used for cell depletion is primarily released intracellularly following internalization by target cells. |
• | MGTA-117: |
• | CD45-ADC: |
• | selectively target CD117 as measured by receptor occupancy; |
• | potently deplete CD117-expressing cells such as stem cells, progenitors, and tumor cells; and |
• | rapidly clear from the body with a well-tolerated profile as determined by pharmacokinetic analysis and clinical chemistry tests, respectively. |
• | Lysosomal Storage Disorders. MGTA-117 for conditioning of patients receiving one or more of AVROBIO, Inc.’s investigational lentiviral gene therapies. |
• | Hemoglobinopathies. MGTA-117 for conditioning of patients with sickle cell disease and beta-thalassemia receiving Beam Therapeutics, Inc.’s base editing gene therapies. |
• | mobilization into the peripheral blood, which typically requires several days of injections of a drug or combination of drugs to mobilize the cells, or move them from the bone marrow into the bloodstream, where they are then collected through a process called apheresis; |
• | extraction from the bone marrow in a process known as bone marrow harvest, which requires a procedure performed under general anesthesia where cells are withdrawn directly from the bone marrow with needle aspirates; or |
• | harvesting from umbilical cord blood units, which are stored in cord blood banks. |
• | Medexus Pharmaceuticals, Inc., which is developing treosulfan (reduced intensity conditioning alkylating agent used in allogeneic stem cell transplant) to replace busulfan; and |
• | Jasper Therapeutics, Inc., which is developing an antibody to CD117 that is not conjugated to a payload. |
• | Actinium Pharmaceuticals, Inc., which is developing an antibody to CD45 that is linked to radioisotope iodine-131; and |
• | Molecular Templates Inc., which is developing an antibody to CD45 that is conjugated to engineered Shiga-toxin. |
• | BioLineRx Ltd., which is developing BL-8040, a peptide that functions as a high-affinity antagonist for CXCR4. They have Phase 3 data in multiple myeloma patients; |
• | Yifan Pharmaceutical Co., Ltd., which is developing YF-H-2015005, |
• | TaiGen Biotechnology Co., Ltd. & GPCR Therapeutics, Inc., which are developing burixafor, a CXCR4 receptor antagonist. |
• | Allogene Therapeutics, Inc., which is developing an antibody to CD52 that is not conjugated to any toxin; |
• | Telix Pharmaceuticals Ltd, which is developing a CD66-radioconjugate; |
• | Cellectis S.A., |
• | Precision Biosciences, Inc., which is developing foralumab, a humanized anti-CD3 monoclonal antibody (Phase 1). |
• | completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice, or GLP, requirements; |
• | submission to the FDA of an application for an IND application, which must become effective before human clinical trials may begin; |
• | approval by an institutional review board, or IRB, or independent ethics committee at each clinical trial site before each trial may be initiated; |
• | performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; |
• | submission to the FDA of an NDA or BLA; |
• | a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review; |
• | satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug or biologic will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug or biologic’s identity, strength, quality and purity; |
• | potential FDA audit of the clinical trial sites that generated the data in support of the NDA or BLA; |
• | payment of user fees for FDA review of the NDA or BLA; and |
• | FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the U.S. |
• | Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the product candidate. |
• | Phase 2 clinical trials involve studies in disease-affected patients to evaluate proof of concept and/or determine the dose required to produce the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy is conducted. |
• | Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the product candidate’s safety and effectiveness for its intended use, and to establish the overall benefit/risk relationship of the product candidate and provide an adequate basis for product labeling. |
• | created an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs; |
• | expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; |
• | expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices; |
• | addressed 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; |
• | expanded the types of entities eligible for the 340B drug discount program; |
• | established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount, |
• | created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. |
• | The centralized MA is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the European Medical Agency, or EMA, and is valid throughout the European Union. The centralized procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, advanced-therapy medicines (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and medicinal products containing a new active substance indicated for the treatment of |
HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions and viral diseases. The centralized procedure is optional for products containing a new active substance not yet authorized in the European Union, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union. Under the centralized procedure the maximum timeframe for the evaluation of a marketing authorization application, or MAA, by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation. Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of major public health interest, particularly from the point of view of therapeutic innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding clock stops, but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment. |
• | National MAs, which are issued by the competent authorities of the European Union Member States and only cover their respective territory, are available for products not falling within the mandatory scope of the centralized procedure. Where a product has already been authorized for marketing in a European Union Member State, this national MA can be recognized in other European Union Member States through the mutual recognition procedure. If the product has not received a national MA in any European Union Member State at the time of application, it can be approved simultaneously in various European Union Member States through the decentralized procedure. Under the decentralized procedure an identical dossier is submitted to the competent authorities of each of the European Union Member States in which an MA is sought, one of which is selected by the applicant as the Reference Member State, or RMS. The competent authority of the RMS prepares a draft assessment report, a draft summary of the product characteristics, or SmPC, and a draft of the labeling and package leaflet, which are sent to the other European Union Member States (referred to as the Concerned Member States) for their approval. If the Concerned Member States raise no objections, based on a potential serious risk to public health, to the assessment, SmPC, labeling, or packaging proposed by the RMS, the product is subsequently granted a national MA in all the European Union Member States (i.e., in the RMS and the Concerned Member States). |
• | The Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year. These reductions went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022. Then, a 1% payment reduction will occur beginning April 1, 2022 through June 30, 2022, and the 2% payment reduction will resume on July 1, 2022. |
• | The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. |
• | The Middle Class Tax Relief and Job Creation Act of 2012 required that the Centers for Medicare & Medicaid Services reduce the Medicare clinical laboratory fee schedule by 2% in 2013, which served as a base for 2014 and subsequent years. In addition, effective January 1, 2014, CMS also began bundling the Medicare payments for certain laboratory tests ordered while a patient received services in a hospital outpatient setting. |
ITEM 1A. |
RISK FACTORS |
• | the initiation, progress, timing, costs and results of research, preclinical studies and clinical trials for our product candidates; |
• | the costs to develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates; |
• | the clinical development plans we establish for these product candidates; |
• | the number and characteristics of product candidates that we develop or may in-license; |
• | the cost of milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreements; |
• | the outcome, timing and cost of meeting regulatory requirements established by the FDA, the European Medical Agency, or EMA, and other comparable foreign regulatory authorities; |
• | the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; |
• | the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; |
• | the effect of competing technological and market developments; |
• | the cost and timing of completion of commercial-scale outsourced manufacturing activities; |
• | the cost of seeking to attract, hire and retain skilled personnel; and |
• | the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own. |
• | identify product candidates and complete research and preclinical and clinical development of any product candidates we may identify; |
• | seek and obtain regulatory and marketing approvals for any of our product candidates for which we complete clinical trials; |
• | launch and commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner; |
• | qualify for adequate coverage and reimbursement by government and third-party payors for any of our product candidates for which we obtain regulatory and marketing approval; |
• | develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for the product candidates we may develop; |
• | establish and maintain supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and the market demand for any of our product candidates for which we obtain regulatory and marketing approval; |
• | obtain market acceptance of any product candidates we may develop as viable treatment options; |
• | address competing technological and market developments; |
• | implement internal systems and infrastructure, as needed; |
• | negotiate favorable terms in any collaboration, licensing, or other arrangements into which we may enter and perform our obligations in such collaborations; |
• | maintain, protect, and expand our portfolio of intellectual property rights, including patents, trade secrets, and know-how; |
• | avoid and defend against third-party interference or infringement claims; and |
• | attract, hire, and retain qualified personnel. |
• | successful completion of preclinical studies and successful enrollment and completion of clinical trials, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable, under the FDA’s current Good Clinical Practices, or cGCPs, and the FDA’s current Good Laboratory Practices; |
• | effective IND applications or Clinical Trial Authorizations that allow commencement of our planned clinical trials or future clinical trials for our product candidates; |
• | positive results from our preclinical and clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile of our product candidates in the intended populations; |
• | receipt of regulatory approvals from applicable regulatory authorities; |
• | establishment of arrangements with third-party manufacturers for clinical supply and, where applicable, commercial manufacturing capabilities; |
• | successful development of our internal or external manufacturing processes or transfer to larger-scale facilities operated by either a third-party contract development and manufacturing organization, or CDMO, or by us; |
• | establishment and maintenance of patent and trade secret protection or regulatory exclusivity for our product candidates; |
• | commercial launch of our product candidates, if and when approved, whether alone or in collaboration with others; |
• | acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors; |
• | effective competition against other therapies; |
• | establishment and maintenance of healthcare coverage and adequate reimbursement; |
• | enforcement and defense of intellectual property rights and claims; and |
• | maintenance of a continued acceptable safety profile of our product candidates following approval. |
• | preclinical study results may show the therapies to be less effective than desired or to have harmful or problematic side effects; |
• | clinical trial results may show the therapies to be less effective than expected (e.g., the trial failed to meet its primary endpoint or the results are not competitive compared to other therapeutic alternatives) or to have unacceptable side effects or toxicities; |
• | failure to receive the necessary regulatory approvals or a delay in receiving such approvals, which delays may be caused by, among other things, slow enrollment in clinical trials, delays due to investigations concerning safety, length of time to achieve study endpoints, additional requirements for data by regulatory agencies, additional time requirements for data analysis, or biologics license application, or BLA, preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data, or unexpected safety or manufacturing issues; |
• | manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make the therapy uneconomical; and |
• | the proprietary rights of others and their competing products and technologies that may prevent the therapy from being commercialized. |
• | regulators, IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organization, or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
• | clinical trials of any product candidates may fail to show safety or efficacy, produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; |
• | the number of patients required for clinical trials of any product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; |
• | our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; |
• | we may elect to, or regulators, IRBs or ethics committees may require, that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; |
• | the cost of preclinical studies and clinical trials of any product candidates may be greater than we anticipate; |
• | the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and |
• | our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, IRBs or ethics committees to suspend or terminate the trials, or reports may arise from preclinical or clinical testing of other blood and immune reset and cell-based therapies that raise safety or efficacy concerns about our product candidates. |
• | the patient eligibility criteria defined in the protocol; |
• | the size of the patient population required for analysis of the trial’s primary endpoints; |
• | the proximity of patients to trial sites; |
• | the design of the trial; |
• | our ability to recruit clinical trial investigators with the appropriate competencies and experience; |
• | our ability to obtain and maintain patient consents; and |
• | the risk that patients enrolled in clinical trials will drop out of the trials before completion. |
• | the research methodology used may not be successful in identifying potential indications and/or product candidates; |
• | potential product candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective drugs; or |
• | it may take greater human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio. |
• | reliance on the third party for regulatory compliance and quality assurance; |
• | the possible breach of the manufacturing agreement by the third party; |
• | regulatory or judicial termination or modification of our agreement with the third party due to the third party’s insolvency or winddown, a change in regulations or other reason; |
• | the possible misappropriation of our proprietary information, including our trade secrets and know-how; and |
• | the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. |
• | the efficacy, durability and safety of such product candidates as demonstrated in clinical trials; |
• | the potential and perceived advantages of product candidates over alternative treatments; |
• | the cost of treatment relative to alternative treatments; |
• | our ability to offer the product for sale at competitive prices; |
• | the clinical indications for which the product candidate is approved by the FDA or the EMA; |
• | the product’s convenience and ease of administration compared to alternative treatments; |
• | the willingness of physicians to prescribe new therapies; |
• | the willingness of the target patient population to try new therapies; |
• | the prevalence and severity of any side effects; |
• | product labeling or product insert requirements of the FDA, EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; |
• | relative convenience and ease of administration; |
• | the strength of marketing and distribution support; |
• | the timing of market introduction of competitive products; |
• | publicity concerning our products or competing products and treatments; |
• | changes in the standard of care for the targeted indications for the product; and |
• | sufficient third-party payor coverage and adequate reimbursement. |
• | a covered benefit under its health plan; |
• | safe, effective and medically necessary; |
• | appropriate for the specific patient; |
• | cost-effective; and |
• | neither experimental nor investigational. |
• | the scope of rights, if any, granted under the license 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 license agreement; |
• | whether our licensor or its licensor had the right to grant the license agreement; |
• | whether third parties are entitled to compensation or equitable relief, such as an injunction, for our use of the intellectual property without their authorization; |
• | our right to sublicense patent and other rights to third parties under collaborative development relationships; |
• | whether we are complying with our obligations with respect to the use of the licensed technology in relation to our development and commercialization of product candidates; |
• | our involvement in the prosecution of the licensed patents and our licensors’ overall patent enforcement strategy; |
• | the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners; and |
• | the amounts of royalties, milestones or other payments due under the license agreement. |
• | the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case; |
• | patent applications may not result in any patents being issued; |
• | patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; |
• | our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates; |
• | there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and |
• | countries other than the U.S. may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates. |
• | others may be able to make products that are similar to any product candidates we may develop or utilize similar technology but that are not covered by the claims of the patents that we license or own; |
• | we, or our current or future licensors might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or own; |
• | we, or our current or future licensors might not have been the first to file patent applications covering certain of our or their inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; |
• | it is possible that our pending owned or licensed patent applications or those that we may own or license in the future will not lead to issued patents; |
• | issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; |
• | our competitors might conduct research and development activities 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; |
• | we may not develop additional proprietary technologies that are patentable; |
• | the patents of others may harm our business; and |
• | we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. |
• | Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations. |
• | Collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus, available funding or external factors such as an acquisition that diverts resources or creates competing priorities. |
• | Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing. |
• | A collaborator’s product candidate may have a safety or efficacy profile that would impact the collaborator’s ability to continue to pursue the development and commercialization of its product candidate, which in turn, would negatively impact our ability to continue to pursue the development and commercialization of our product candidate. |
• | Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our medicines or 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. |
• | Collaborators with marketing and distribution rights to one or more medicines may not commit sufficient resources to the marketing and distribution of such medicine or medicines. |
• | Collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation. |
• | Disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our medicines or product candidates or that result in costly litigation or arbitration that diverts management attention and resources. |
• | We may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control. |
• | Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates. |
• | Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished, or terminated. |
• | The COVID-19 pandemic has had, and will likely continue to have, an adverse impact on various aspects of our ongoing and planned clinical trials, and preclinical studies. |
• | Other potential impacts of the COVID-19 pandemic on our various clinical trials include impacts on patient dosing and study monitoring, which may be paused or delayed due to changes in policies at various clinical sites; federal, state, local or foreign laws, rules and regulations, including quarantines or other travel restrictions; the prioritization of healthcare resources toward pandemic efforts, including diminished attention from physicians serving as our clinical trial investigators and reduced availability of site staff supporting the conduct of our clinical trials; and interruption or delays in the operations of the U.S. Food and Drug Administration, or FDA, among other reasons related to the COVID-19 pandemic. If the COVID-19 pandemic continues, other aspects of our clinical trials will likely be adversely affected, delayed or interrupted, including, for example, site initiation, patient recruitment and enrollment, availability of clinical trial materials and data analysis. Some patients and clinical investigators may not be able to comply with clinical trial protocols and patients may choose to withdraw from our studies or we may choose to, or be required to, pause enrollment and or patient dosing in our ongoing clinical trials in order to preserve health resources and protect trial participants. It is unknown how long these pauses or disruptions could continue. |
• | We currently rely on third parties, including CROs, CDMOs, and other contractors and consultants to, among other things, conduct our preclinical and clinical trials, manufacture raw materials, manufacture and supply our product candidates, ship investigational drugs and clinical trial samples, perform quality testing and supply other goods and services to run our business. If any such third party is adversely impacted by restrictions resulting from the COVID-19 pandemic, including staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted, which could limit our ability to manufacture our product candidates for our clinical trials and conduct our research and development operations. |
• | We have established a work-from-home policy for all employees, as well as safety measures for those using our offices and laboratory facilities that are designed to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic. Our increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cyber security risk, create data accessibility concerns and make us more susceptible to communication disruptions, any of which could adversely impact our business operations or delay necessary interactions with local and federal regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors. |
• | Our employees and contractors conducting non-business critical research and development activities have not been able to, and may not in the future be able to, access our laboratory for an extended period of time as a result of the current work-from-home policy and the possibility that governmental authorities further modify current restrictions. This could delay timely completion of preclinical activities, including completing Investigational New Drug, or IND, enabling studies or our ability to |
select future development candidates, and initiation of additional clinical trials for our other product candidates. |
• | Certain government agencies, such as health regulatory agencies and patent offices, within the U.S. or internationally have experienced, and may continue to experience, disruptions in their operations as a result of the COVID-19 pandemic. The FDA and comparable foreign regulatory agencies may have slower response times or be under-resourced to continue to monitor our clinical trials and, as a result, review, inspection and other timelines may be materially delayed. It is unknown how long these disruptions could continue. Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates. For example, regulatory authorities may require that we not distribute a product candidate lot until the relevant agency authorizes its release. Such release authorization may be delayed as a result of the COVID-19 pandemic, which would likely result in delays to our ongoing clinical trials. |
• | The trading prices for our common stock and those of other biopharmaceutical companies have been highly volatile, partly due to the COVID-19 pandemic. As a result, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the COVID-19 pandemic could materially and adversely affect our business and the value of our common stock. |
• | identifying, recruiting, integrating, maintaining and motivating additional employees; |
• | managing our internal development efforts effectively, including the clinical, FDA and international regulatory review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and |
• | improving our operational, financial and management controls, reporting systems and procedures. |
• | decreased demand for our products; |
• | injury to our reputation; |
• | withdrawal of clinical trial participants and inability to continue clinical trials; |
• | initiation of investigations by regulators; |
• | costs to defend the related litigation; |
• | a diversion of management’s time and our resources; |
• | substantial monetary awards to trial participants or patients; |
• | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
• | loss of revenue; |
• | exhaustion of any available insurance and our capital resources; |
• | the inability to commercialize any product candidate; and |
• | a decline in our share price. |
• | the success of existing or new competitive products or technologies; |
• | regulatory actions with respect to our product candidates or our competitors’ products and product candidates; |
• | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; |
• | the timing and results of preclinical studies for any of our product candidates; |
• | the timing and results of clinical trials of MGTA-145, MGTA-117 and any other product candidates; |
• | commencement or termination of collaborations for E478 or any of our current and future programs and product candidates; |
• | failure or discontinuation of any of our development programs; |
• | results of clinical trials of product candidates of our competitors; |
• | regulatory or legal developments in the U.S. and other countries; |
• | developments or disputes concerning patent applications, issued patents or other proprietary rights; |
• | the recruitment or departure of key personnel; |
• | the level of expenses related to any of our product candidates or clinical development programs; |
• | the results of our efforts to develop additional product candidates or products; |
• | actual or anticipated changes in estimates as to financial results or development timelines; |
• | announcement or expectation of additional financing efforts; |
• | sales of our common stock by us, our insiders or other stockholders; |
• | variations in our financial results or those of companies that are perceived to be similar to us; |
• | changes in estimates or recommendations by securities analysts, if any, that cover us; |
• | changes in the structure of healthcare payment systems; |
• | market conditions in the pharmaceutical and biotechnology sectors; |
• | disruptions to political, governmental or regulatory systems, including shutdowns of the government and its agencies; |
• | general economic, industry and market conditions; and |
• | the other factors described in this “Risk Factors” section. |
• | establish a classified board of directors such that all members of the board are not elected at one time; |
• | allow the authorized number of our directors to be changed only by resolution of our board of directors; |
• | limit the manner in which stockholders can remove directors from the board; |
• | establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on at stockholder meetings; |
• | require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; |
• | limit who may call a special meeting of stockholders; |
• | authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and |
• | require the approval of the holders of at least 66.67% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
ITEM 2. |
PROPERTIES |
ITEM 3. |
LEGAL PROCEEDINGS |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
ITEM 6. |
RESERVED |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | initiate, enroll and conduct a Phase 1/2 clinical trial for MGTA-117 and Phase 2 clinical trials for MGTA-145 |
• | initiate and conduct preclinical studies and clinical trials of our other product candidates; |
• | develop any other future product candidates we may choose to pursue; |
• | seek marketing approval for any of our product candidates that successfully complete clinical development, if any; |
• | maintain compliance with applicable regulatory requirements; |
• | develop and scale up our capabilities to support our ongoing preclinical activities and clinical trials for our product candidates and commercialization of any of our product candidates for which we obtain marketing approval, if any; |
• | maintain, expand, protect and enforce our intellectual property portfolio; |
• | develop and expand our sales, marketing and distribution capabilities for our product candidates for which we obtain marketing approval, if any; and |
• | expand our operational, financial and management systems and increase personnel, including to support our clinical development and commercialization efforts and our operations as a public company. |
• | employee-related expenses, including salaries and related costs, and stock-based compensation expense, for employees engaged in research and development functions; |
• | expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with contract research organizations, or CROs; |
• | the cost of consultants and third-party contract development and manufacturing organizations, or CDMOs, that manufacture drug products for use in our preclinical studies and clinical trials; |
• | facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and supplies; and |
• | payments made under third-party licensing agreements. |
• | the continuing impact of the COVID-19 pandemic on our industry, the healthcare system, and our current and future operations; |
• | successful completion of preclinical studies and clinical trials; |
• | receipt and related terms of marketing approvals from applicable regulatory authorities; |
• | raising additional funds necessary to complete clinical development of and commercialize our product candidates; |
• | obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; |
• | making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; |
• | developing and implementing marketing and reimbursement strategies; |
• | establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; |
• | acceptance of our products, if and when approved, by patients, the medical community and third-party payors; |
• | effectively competing with other therapies; |
• | obtaining and maintaining third-party coverage and adequate reimbursement; |
• | protecting and enforcing our rights in our intellectual property portfolio; and |
• | maintaining a continued acceptable safety profile of the products following approval. |
• | vendors in connection with the preclinical development activities; |
• | CROs in connection with preclinical and clinical trials; |
• | CDMOs in connection with the production of preclinical and clinical trial materials; and |
• | investigative sites in connection with clinical trials. |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Operating expenses: |
||||||||||||
Research and development |
$ | 46,766 | $ | 50,615 | $ | (3,849 | ) | |||||
General and administrative |
27,926 | 28,087 | (161 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
74,692 | 78,702 | (4,010 | ) | ||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(74,692 | ) | (78,702 | ) | 4,010 | |||||||
Interest and other income, net |
3,556 | 3,766 | (210 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (71,136 | ) | $ | (74,936 | ) | $ | 3,800 | ||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Direct research and development expenses by program: |
||||||||||||
Conditioning |
$ | 9,677 | $ | 16,127 | $ | (6,450 | ) | |||||
Mobilization |
5,203 | 4,066 | 1,137 | |||||||||
Cell therapy |
684 | 4,398 | (3,714 | ) | ||||||||
Unallocated expenses: |
||||||||||||
Personnel related (including stock-based compensation) |
18,418 | 14,848 | 3,570 | |||||||||
Consultant (including stock-based compensation) |
1,488 | 1,196 | 292 | |||||||||
Facility related and other |
11,296 | 9,980 | 1,316 | |||||||||
|
|
|
|
|
|
|||||||
Total research and development expenses |
$ | 46,766 | $ | 50,615 | $ | (3,849 | ) | |||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Personnel related (including stock-based compensation) |
$ | 13,902 | $ | 14,219 | $ | (317 | ) | |||||
Professional and consultant |
6,555 | 7,290 | (735 | ) | ||||||||
Facility related and other |
7,469 | 6,578 | 891 | |||||||||
|
|
|
|
|
|
|||||||
Total general and administrative expenses |
$ | 27,926 | $ | 28,087 | $ | (161 | ) | |||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Cash used in operating activities |
$ | (59,531 | ) | $ | (64,023 | ) | ||
Cash provided by (used in) investing activities |
43,428 | (10,635 | ) | |||||
Cash provided by financing activities |
89,601 | 67,739 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
$ | 73,498 | $ | (6,919 | ) | |||
|
|
|
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. |
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page(s) |
||||
133 | ||||
134 | ||||
135 | ||||
136 | ||||
137 | ||||
138 |
December 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Restricted cash |
||||||||
Property and equipment, net |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Deferred rent |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments and contingencies (Note 8) |
||||||||
Stockholders’ Equity: |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating expenses: |
||||||||
Research and development |
$ | $ | ||||||
General and administrative |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Loss from operations |
( |
) | ( |
) | ||||
Interest and other income, net |
||||||||
|
|
|
|
|
||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|
||||
Net loss per share, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|
||||
Weighted average common shares outstanding, basic and diluted |
||||||||
|
|
|
|
|
||||
Comprehensive loss: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive loss: |
||||||||
Unrealized losses on marketable securities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Common Stock |
Additional Paid-in |
Accumulated Other Comprehensive |
Accumulated |
Total Stockholders’ |
||||||||||||||||||||
Shares |
Amount |
Capital |
Income (Loss) |
Deficit |
Equity |
|||||||||||||||||||
Balances at December 31, 2019 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Issuance of common stock upon public offering net of underwriting discounts, commissions and offering costs |
— | — | ||||||||||||||||||||||
Vesting of restricted stock |
— | — | — | — | — | |||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | ||||||||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan |
— | — | — | |||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Unrealized losses on marketable securities |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2020 |
( |
) | ( |
) | ||||||||||||||||||||
Issuance of common stock upon private investment, net of offering costs |
— | — | ||||||||||||||||||||||
Vesting of restricted stock |
— | — | — | — | — | |||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | — | |||||||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan |
— | — | — | |||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Unrealized losses on marketable securities |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Stock-based compensation expense |
||||||||
Depreciation and amortization expense |
||||||||
Loss on disposal of property and equipment |
||||||||
Net amortization of premiums on marketable securities |
||||||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses and other current assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Accrued expenses and other current liabilities |
( |
) | ||||||
Deferred rent |
||||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
( |
) | ( |
) | ||||
Purchases of marketable securities |
( |
) | ( |
) | ||||
Maturities of marketable securities |
||||||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities |
( |
) | ||||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from private investment |
— | |||||||
Proceeds from public offerings, net of underwriting discounts and commissions |
— | |||||||
Payments of offering costs |
( |
) | ( |
) | ||||
Proceeds from exercise of common stock options |
||||||||
Proceeds from issuance of common stock under Employee Stock Purchase Plan |
||||||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
( |
) | ||||||
Cash, cash equivalents and restricted cash at beginning of period |
||||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
|
|
|
|
Estimated Useful Life | ||
Lab equipment |
||
Computer equipment |
||
Furniture and fixtures |
||
Leasehold improvements |
Shorter of life of lease or estimated useful life |
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Stock options to purchase common stock |
||||||||
Unvested restricted common stock and units |
||||||||
Shares of common stock issuable under Employee Stock Purchase Plan |
||||||||
|
|
|
|
|||||
|
|
|
|
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
U.S. treasury notes (due within one year) |
$ | $ | $ | ( |
) | $ | ||||||||||
U.S. treasury Notes (due after one year through two years) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | |
$ | |
$ | ( |
) |
$ | |
|||||||
|
|
|
|
|
|
|
|
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
U.S. treasury notes (due within one year) |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | |
$ | |
$ | ( |
) |
$ | |
|||||||
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2021 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
Marketable securities: |
||||||||||||||||
U.S. treasury notes |
— | — | ||||||||||||||
Total |
$ | |
$ | |
$ | — | $ | |
||||||||
Fair Value Measurements at December 31, 2020 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
U.S. treasury notes |
— | — | ||||||||||||||
Marketable securities: |
||||||||||||||||
U.S. treasury notes |
— | — | ||||||||||||||
Total |
$ | |
$ | |
$ | — | $ | |
||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Laboratory and computer equipment |
$ | $ | ||||||
Furniture and fixtures |
||||||||
Leasehold improvements |
||||||||
Less: Accumulated depreciation and amortization |
( |
) | ( |
) | ||||
$ | $ | |||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
Accrued payroll and related expenses |
$ | $ | ||||||
Accrued external research and development expenses |
||||||||
Deferred rent, current portion |
||||||||
Accrued professional fees |
||||||||
Accrued other |
||||||||
$ | $ | |||||||
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Risk-free interest rate |
% | % | ||||||
Expected term (in years) |
||||||||
Expected volatility |
% | % | ||||||
Expected dividend yield |
% | % |
Number of Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
(in years) |
(in thousands) |
|||||||||||||||
Outstanding as of December 31, 2020 |
$ | $ | ||||||||||||||
Granted |
$ | |||||||||||||||
Exercised |
( |
) | $ | |||||||||||||
Forfeited |
( |
) | $ | |||||||||||||
|
|
|||||||||||||||
Outstanding as of December 31, 2021 |
$ | $ | — | |||||||||||||
|
|
|||||||||||||||
Options vested and expected to vest as of December 31, 2021 |
$ | $ | — | |||||||||||||
|
|
|||||||||||||||
Options exercisable as of December 31, 2021 |
$ | $ | — | |||||||||||||
|
|
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding as of December 31, 2020 |
$ |
|||||||
Vested |
( |
) | $ | |||||
Forfeited |
— | |||||||
|
|
|||||||
Outstanding as of December 31, 2021 |
— | |||||||
|
|
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding as of December 31, 2020 |
$ | |||||||
Granted |
$ | |||||||
Vested |
( |
) | $ | |||||
Forfeite d |
( |
) | $ | |||||
|
|
|||||||
Outstanding as of December 31, 2021 |
$ | |||||||
|
|
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding as of December 31, 2020 |
$ | |||||||
Granted |
$ | |||||||
Vested |
( |
) | $ | |||||
Forfeited |
( |
) | $ | |||||
Outstanding as of December 31, 2021 |
$ | |||||||
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Research and development expenses |
$ | $ | ||||||
General and administrative expenses |
||||||||
$ | $ | |||||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
$ |
||||
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Federal statutory income tax rate |
% | % | ||||||
State taxes, net of federal benefit |
||||||||
Research and orphan drug tax credits |
||||||||
Other |
( |
) | ||||||
Increase in deferred tax asset valuation allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Effective income tax rate |
% | % | ||||||
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating loss carryforwards |
$ | $ | ||||||
Capitalized research and development expenses |
||||||||
Research and orphan drug tax credit carryforwards |
||||||||
Stock compensation expense |
||||||||
Accrued expense |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net deferred tax assets |
||||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Depreciation and amortization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net deferred tax assets and liabilities |
$ | $ | ||||||
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Valuation allowance as of beginning of year |
$ | $ | ||||||
Net increases recorded to income tax provision |
||||||||
|
|
|
|
|||||
Valuation allowance as of end of year |
$ | $ | ||||||
|
|
|
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
ITEM 9B. |
OTHER INFORMATION |
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. |
EXECUTIVE COMPENSATION |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES |
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
ITEM 16. |
FORM 10-K SUMMARY |
Exhibit Number |
Description | |
101SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |
101PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
101DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* | Filed herewith. |
** | Furnished herewith. |
# | Represents management compensation plan, contract or arrangement. |
† | Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions. Omitted material for which confidential treatment has been requested has been filed separately with the Securities and Exchange Commission. |
^ | Portions of this exhibit have been omitted in accordance with the rules of the Securities and Exchange Commission. |
MAGENTA THERAPEUTICS, INC. | ||||||
Date: March 8, 2022 |
By: | /s/ Stephen Mahoney | ||||
Stephen Mahoney | ||||||
Chief Financial and Operating Officer (Principal Financial and Accounting Officer) |
Signature |
Title |
Date | ||
/s/ Jason Gardner, D.Phil. |
President, Chief Executive Officer and Director (Principal Executive Officer) |
March 8, 2022 | ||
Jason Gardner, D.Phil. | ||||
/s/ Stephen Mahoney |
Chief Financial and Operating Officer (Principal Financial and Accounting Officer) |
March 8, 2022 | ||
Stephen Mahoney | ||||
/s/ Jeffrey Albers |
Director | March 8, 2022 | ||
Jeffrey Albers | ||||
/s/ Bruce Booth, D.Phil. |
Director | March 8, 2022 | ||
Bruce Booth, D.Phil. | ||||
/s/ Alexis A. Borisy |
Director | March 8, 2022 | ||
Alexis A. Borisy | ||||
/s/ Thomas O. Daniel, M.D. |
Director | March 8, 2022 | ||
Thomas O. Daniel, M.D. | ||||
/s/ Alison F. Lawton |
Director | March 8, 2022 | ||
Alison F. Lawton | ||||
/s/ Anne M. McGeorge |
Director | March 8, 2022 | ||
Anne M. McGeorge | ||||
/s/ Amy L. Ronneberg |
Director | March 8, 2022 | ||
Amy L. Ronneberg | ||||
/s/ David T. Scadden, M.D. |
Director | March 8, 2022 | ||
David T. Scadden, M.D. |
Exhibit 10.11
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [**], HAS BEEN OMITTED BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT MAGENTA THERAPEUTICS, INC. TREATS AS PRIVATE OR CONFIDENTIAL.
Master Services Agreement
BETWEEN
Heidelberg Pharma Research GmbH,
with its registered offices at Schriesheimer Str. 101, 68526 Ladenburg, Germany
(hereafter HDPR)
AND
Magenta Therapeutics, Inc.
with its registered offices at 100 Technology Square, 5th Floor, Cambridge, MA 02139, USA
(hereafter Customer)
(each also referred to as a Party or collectively as the Parties)
1
Table of Contents
Recitals |
3 | |||||
1 |
Definitions |
3 | ||||
2 |
Principles of performance of the Agreement; General obligations |
5 | ||||
3 |
HDPRs specific obligations |
6 | ||||
4 |
Subcontracting |
7 | ||||
5 |
Service Fee; payment |
8 | ||||
6 |
Quality |
9 | ||||
7 |
Customers inspection rights |
9 | ||||
8 |
Transfer of ownership and risk; Delivery; Acceptance |
9 | ||||
9 |
Warranties of HDPR |
10 | ||||
10 |
Customers use of Goods and representations |
11 | ||||
11 |
No Other Warranty |
11 | ||||
12 |
Liability |
11 | ||||
13 |
Indemnification |
12 | ||||
14 |
Insurance |
13 | ||||
15 |
Intellectual Property |
13 | ||||
16 |
Confidentiality |
13 | ||||
17 |
Force majeure |
14 | ||||
18 |
General provisions |
15 | ||||
19 |
Notices |
16 | ||||
20 |
Term and termination |
16 | ||||
21 |
Applicable law and jurisdiction |
17 |
2
Recitals
This Agreement is made this 22nd day of May, 2019.
WHEREAS:
A. | Customer and HDPR have concluded an Exclusive Research, Development Option and License Agreement dated March 1st 2018 (the ERDOLA), setting forth the terms and conditions for a target-exclusive license for Customer to HDPRs technology of amatoxin-based antibody drug conjugates, as well as the framework for the negotiation of a separate agreement between Customer and HDPR on the supply of Amanitin Toxin Constructs (the term is used in this Agreement as defined in the ERDOLA); |
B. | HDPR is the owner of certain technology and patent rights regarding the Amanitin Toxin Constructs and is subcontracting process development, manufacturing and supply services of active pharmaceutical ingredients and intermediates related to the Amanitin Toxin Constructs to [**]; and |
C. | Customer will during the term of this Agreement from time to time request HDPR to perform certain services related to the manufacturing of Amanitin Toxin Constructs, and HDPR is willing to provide such services through its existing relationship with [**]; and |
D. | This Agreement shall exclusively govern the relationship of the Parties with regard to the provision of the Services (as defined below) by HDPR to the Customer, and no general terms and conditions of a Party shall be binding to the other Party. |
NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1 Definitions
For the purpose of this Agreement:
a) | Affiliate means any Person directly or indirectly, controlling, controlled by, or under common control with another Person. For purposes of this definition, controlling (including, controlled by and under common control) shall mean: (a) ownership of more than fifty percent (50%) of the equity capital or other ownership interest in or of an entity; (b) the power to control or otherwise direct the affairs of an entity; (c) in the case of non-stock organizations, the power to control the distribution of profits of an entity; or (d) such other relationship as, in fact, results in actual control over the management, business, and affairs of an entity; |
b) | Agreement means this Master Services Agreement, together with all its appendices and documents incorporated by reference therein and part hereof, as amended or modified from time to time in accordance with the terms hereof; |
c) | Applicable Law means any law, statute, rule, regulation, order, judgement or ordinance of any governmental or Regulatory Authority or agency that may be in effect from time to time during the Term and applicable to a particular activity or country hereunder; |
3
d) | Business Day means any day that is not a Saturday, a Sunday on which banking institutions in Frankfurt A.M., Germany, Zurich, Switzerland and New York, New York are open for business. |
e) | [**] |
f) | Confidential Information means any and all non-public and proprietary information, whether technical or non-technical, oral or written, that is disclosed by one Party or its Affiliates to the other Party or its Affiliates in connection with this Agreement. Notwithstanding the foregoing, Confidential Information shall not include any information or any portion thereof which: |
(i) | was known to the recipient or any of its Affiliates, as evidenced by its written records, before receipt thereof under this Agreement; |
(ii) | is disclosed to the recipient or any of its Affiliates, without restriction, after the Effective Date by a Third Party who has the right to make such disclosure; |
(iii) | is or becomes part of the public domain through no breach of this Agreement by the recipient or any of its Affiliates; or |
(iv) | is independently developed by or for the recipient or any of its Affiliates, as evidenced by its written records, by individuals or entities who have not had access to the disclosing Partys Confidential Information that was disclosed under this Agreement. |
The Confidential Information may include data, know-how, formulae, processes, designs, sketches, photographs, plans, drawings, specifications, samples, reports, studies, data, findings, inventions, ideas, production facilities, machines, production capacities, prices, market share, research and development projects, and other market data. The terms of this Agreement will constitute Confidential Information of both Parties. For clarity, specific aspects or details of Confidential Information will not be deemed to be within the public domain or in the possession of the recipient merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the recipient. Further, any combination of Confidential Information will not be considered in the public domain or in the possession of the recipient merely because individual elements of such Confidential Information are in the public domain or in the possession of the recipient, unless the combination and its principles are in the public domain or in the possession of the recipient.
g) | Effective Date means the date first written above; |
h) | Facility means [**] premises where the Goods are made ready for shipment. |
i) | Good Manufacturing Practices or GMP means all Applicable Laws relating to manufacturing practices for products (including ingredients, testing, storage, handling, intermediates, bulk and finished products) promulgated by the FDA and any other Regulatory Authority (including, without limitation, the EMA or member state level and Swissmedic) having jurisdiction over the manufacturing practices for products, including standards in the form of Applicable Laws, guidelines, advisory opinions and compliance policy guides and current interpretations of the applicable authority or agency thereof (as applicable to pharmaceutical and biological products and ingredients), as the same may be updated, supplemented or amended from time to time. |
4
j) | Goods means the product(s), chemical(s), intermediate(s), substance(s) or compound(s) created through the performance of the Services by HDPR; |
k) | Intellectual Property Right means any and all intellectual property rights throughout the world, however denominated, including if registered or not (including patents, copyrights, trade secrets, trade marks, general know-how, processes, etc.); |
l) | Non-Compliance or Non-Compliant Good has the meaning as defined in Section 8.3; |
m) | Party means either HDPR or Customer, as the case may be, and Parties shall mean HDPR and the Customer; |
n) | Project Leader means the responsible person of either Customer or HDPR for planning, managing, directing and overseeing specific activities regarding the Agreement; |
o) | Project Management Fee means the consideration payable to HDPR by Customer for the provision of project management for Services as set forth in the applicable Work Order; |
p) | Proposal means a description of the Services to be provided by HDPR to Customer, including, without limitation, a description of any Goods to be created through the performance of the Services, and the Service Fees, timelines or cycle times for such Services and Goods; |
q) | Quality Agreement means the agreement concluded by the Parties, which shall govern the responsibilities related to quality systems, quality requirements, quality control, testing, Reports, audits, complaints, inspections and release for the Goods; as incorporated herein by reference and part hereof; |
r) | Report means the description of the performed Services by HDPR in written form and in the agreed depth of detail as further specified in the Agreement; |
s) | Section means a section of this Agreement; |
t) | Services means those development, synthesis, analytical purification, (pre-) formulation, packaging, storage, stability, release testing, quality control services or other related services to be provided by HDPR to Customer (including the targeted quantity of Goods to be delivered), as further defined in the applicable Work Order; |
u) | Service Fee means the consideration payable to HDPR by Customer for the provision of every particular Service set forth in the applicable Work Order and as set out in Section 5; |
v) | Third Party means any Person other than (i) a Party, (ii) an Affiliate of a Party or (iii) [**]. |
w) | Work Order means a description of the individual Services to be performed by HDPR, including, without limitation, a description of any Goods to be created through the performance of the Services, and the Service Fees, timelines or cycle times for such Services and Goods; as incorporated herein by reference and part hereof. |
2 Principles of performance of the Agreement; General obligations
2.1 Upon receipt of Customers request to perform certain services, HDPR will, as a rule not more than [**] of such request (the Proposal Preparation Timeframe), prepare a Proposal for such services. HDPR will employ commercially reasonable efforts to comply with the Proposal Preparation Timeframe. If the Proposal Preparation Timeframe cannot be met HDPR will promptly inform Customer about the reasons and the envisaged new timeline. If Customer agrees to the terms of such Proposal, it shall send to HDPR the signed Proposal as agreed by the Parties within the timeline set forth in the Proposal, for countersignature by HDPR, which countersignature shall take place without delay upon receipt of the signed Proposal by HDPR and shall not be unreasonably withheld. Upon signature by both Parties the Proposal shall become a Work Order that will be binding for both Parties. For the avoidance of any doubt, HDPR shall not be obliged to perform any Services if Customer has not, in its sole discretion, sent a signed Proposal to HDPR.
5
2.2 Both Parties shall always cooperate, communicate and act diligently and in good faith in order to ensure the proper performance of the Agreement. HDPR undertakes to make every commercially reasonable effort to implement requested amendments to each Work Order. Such amendments of any Work Order, including any adjustment of the Service Fee and estimated term, if applicable, shall be in writing and become binding upon the Parties execution of the amended Work Order. HDPR shall promptly notify Customer of any unanticipated adverse effect or any adverse event that becomes known to it occurring during the performance of the Agreement.
2.3 Customer has the obligation to render all necessary support reasonably requested by HDPR to enable a proper performance of the Agreement, such as, but not limited to, taking and notifying decisions, accepting or declining requests, giving or refusing consents, etc.
2.4 The day-to-day management of the Agreement shall be the responsibility of Customers Project Leader and HDPRs Project Leader. The Customers Project Leader shall be the ultimate authority with respect to all Agreement related issues and decisions on behalf of the Customer and hence shall be assumed to have all necessary authority and power to take any and all actions on behalf of Customer with respect to such day-to-day issues and decisions. In addition, the Parties shall appoint a joint program team composed of qualified representatives from HDPR and Customer, with the option to include representatives from [**] from time to time whenever both Parties agree that this would be necessary or useful (the Program Team). The Program Team shall be responsible for carrying out the Work Order(s). The Program Team shall meet at least every other week by teleconference and shall meet quarterly in person, unless the Parties mutually agree otherwise. HDPR shall be responsible for coordinating meetings and meeting minutes and circulating meeting minutes to the Program Team as soon as reasonably practicable for comments and approval. For the avoidance of doubt, the Program Team shall not have the authority to amend or modify this Agreement, the Quality Agreement, or any Work Order. Any additional responsibilities of the Program Team will be specified in the applicable Work Order.
2.5 In case of any discrepancies between the provisions of the body of this Agreement with any of its appendices or documents incorporated by reference herein, the body of this Agreement shall take precedence over all and any such appendices or documents; provided, however, that such appendices or documents shall expressly modify, amend or supersede a specific Section of the body of this Agreement if such appendices or documents expressly reference to the Section being modified, amended or superseded. Notwithstanding the foregoing, if an amendment or a modification of this Agreement is expressly agreed in a specific Work Order only, such amendment or modification shall only apply for such specific Work Order. The Quality Agreement (if any) shall take precedence in all matters regarding the standard of quality of the Services.
3 HDPRs specific obligations
3.1 As the Parties consider the Services as of an experiential and development nature, subject to Sections 3.2 to 3.5 below, HDPR cannot and does not guarantee the achievement of any specific or particular result or outcome nor guarantee completing thereof to or within a defined deadline. For avoidance of doubt, the foregoing sentence shall not relieve HDPR of its obligation to provide the Services or Goods in accordance with this Agreement, the Quality Agreement, or the applicable Work Order.
6
3.2 HDPR shall cause [**] to perform the Services (a) in accordance with this Agreement, the Quality Agreement and each Work Order, including within the agreed time targets, (b) in a manner that meets professional and industry standards reasonably to be expected from a first-class provider of similar services in similar circumstances and (c) in compliance with all Applicable Laws at the place of performance thereof.
3.3 HDPR shall ensure that [**] reserves time slots and qualified personnel as necessary to perform the Services, as agreed in each Work Order.
3.4 HDPR shall ensure that the personnel that [**] on behalf of HDPR causes to be applied in the performance of the Agreement shall be appropriately qualified and experienced for the tasks that they are to perform.
3.5 HDPR shall ensure that any machinery and equipment that [**] on behalf of HDPR provides or causes to be applied in the performance of the Agreement shall be of an appropriate quality and, as required by normal practice, shall be certified and approved by the relevant body or organisation.
3.6 HDPR shall cause [**] to have and maintain, at its own cost, any and all licenses, permits and other authorisations, which are required for its performance of this Agreement and the Services provided hereunder.
3.7 HDPR shall not be liable for any raw material supply issues beyond its or [**] direct control. The impact of any quality or delivery issues shall be discussed in good faith between Customer and HDPR and the Work Order revised accordingly. HDPR will employ commercially reasonable efforts, and shall cause [**] to employ commercially reasonable efforts to find an adequate replacement, taking into account the timelines envisaged in the Work Order.
3.8 HDPR shall cause [**] to perform the Services at its facilities as set forth in Annex 3.8. If [**] intends to perform any part of the Services at any other facility, HDPR shall seek Customers prior written approval before doing so, such approval not to be unreasonably withheld, delayed or conditioned, and Annex 3.8 shall be amended accordingly if Customer provides its approval as aforesaid.
3.9 Notwithstanding the delegation of activities to [**] hereunder, HDPR shall remain primarily responsible for its obligations (and the obligations of [**]) under this Agreement.
4 Subcontracting
HDPR may allow [**] to subcontract the Services to subcontractors agreed between [**] and HDPR. If [**] intends to subcontract any part of the Services, HDPR shall (a) notify Customer in writing, including the identity of the proposed subcontractor and the Services to be subcontracted and (b) cause [**] to appropriately qualify the potential subcontractor according to [**] vendor qualification procedure and conclude a quality agreement with such subcontractor enforcing the terms of this Agreement and the Quality Agreement, with respect to (a)-(b), before subcontracting such activity. In addition, any documentation on supplier qualification and the quality agreement shall be available for Customer review in the course of Customers audits pursuant to Section 7.1. Customer understands and acknowledges that parts of the documentation may be redacted to comply with [**] confidentiality obligations. However, if Customer should require the disclosure of redacted information in order to comply with its obligations towards applicable authorities it may request disclosure of such information, and HDPR shall cause [**] to discuss in good faith disclosure of such information with the corresponding subcontractor. In any event, HDPR shall be responsible for oversight of the subcontracted Services and all obligations under this Agreement and the Quality Agreement shall remain vested in HDPR.
7
5 Service Fee; payment
5.1 In consideration of HDPR providing the Services to Customer, Customer shall pay HDPR Service Fees specified in the applicable Work Order. The Service Fee will be agreed in each Work Order for Services.
5.2 Customer shall pay HDPR according to the payment schedule in the applicable Work Order.
5.3 All Goods are shipped FCA (Incoterms 2010) [**] loading docks at the Facility.
5.4 The amount, weight and quantity of Goods will be measured or weighed at the Facility.
5.5 The Service Fee does not include any state or local taxes, duties, governmental or similar charges, VAT, customs duties or any additional costs (such as but not limited to insurance costs, etc.). Any such costs, if any, will be additionally charged to Customer.
5.6 Costs for disposal of any Goods or unused raw materials are not included in the Service Fee. Such costs will therefore additionally be charged to Customer at cost, unless such Goods or unused raw material are required to be disposed on account of HDPRs gross negligence, fraud, intentional misconduct or breach of this Agreement, in which case, HDPR shall pay for the cost of such disposal.
5.7 Third Party costs for analytical services, specific chromatography columns, reagents or reference standards will be described in the applicable Work Order.
5.8 HDPR will cause [**] to store and insure the Goods to be delivered to Customer free of charge for a period of [**] following the date of release. Any storage and insurance exceeding this period of time will additionally be invoiced to Customer at reasonable cost. In case of postponement of the delivery date and/or the project at Customers request, storage and insurance of Goods and raw materials will additionally be charged to Customer at reasonable cost.
5.9 Prices for raw materials will be described in the applicable Work Order.
5.10 Invoices for Service Fees and other amounts payable to HDPR are payable by Customer within [**] of the date an invoice is received by Customer. If Customer disputes all or any portion of an invoice, then the Parties will attempt to resolve such dispute in good faith for [**] following Customers notice to HDPR that it disputes an invoice or portion thereof. In furtherance of the foregoing dispute resolution process, HDPR will maintain written records of the fees and expenses charged to Customer with respect to the Services. HDPR shall retain such records for [**] after the completion or termination of the Services to which they pertain and shall make such records available to Customer during normal business hours upon reasonable advanced notice. In the event the Parties are unable to resolve a payment dispute in such [**] period, then either Party may initiate dispute resolution in accordance with Section 21. Customer will have no obligation to pay any amounts disputed in good faith until such dispute is finally resolved and no appeal can be taken, except that HDPR may request payment of a portion of the invoice to fulfill its payment obligations towards [**], such amount to be repaid to Customer in case that no amounts are owed by Customer as a result of the dispute resolution. If amounts are finally determined to be owed to HDPR, Customer will pay such amounts to HDPR within [**] of such determination (including interest due). In the event that any payment due under this Agreement is not made when due, the payment shall accrue interest calculated on a daily basis from the due date until full payment at the rate of EURIBOR plus [**] per year.
8
6 Quality
6.1 The appropriate level of quality for the specific Services (GMP, non GMP, etc.) will be defined in the Work Order.
6.2 If not defined in the Work Order, the responsibilities related to quality systems, quality requirements, quality control, testing and manufacturing records, audits, complaints, inspections and release of Goods shall be governed by the Quality Agreement.
7 Customers inspection rights
7.1 Customers audit inspection and audit rights are set forth in the Quality Agreement.
8 Transfer of ownership and risk; Delivery; Acceptance
8.1 Delivery of Goods shall be deemed completed, and risk of loss or damage with respect thereto, shall pass to Customer upon delivery to the carrier. Title to Goods shall pass to Customer upon complete payment of the corresponding invoice.
8.2 Subject to Sections 3.2 to 3.5 above, delivery times of HDPR shall not be regarded as binding, and delays of anticipated delivery shall not entitle Customer to claim damages resulting from any such delay. However, HDPR will employ commercially reasonable efforts, and will cause [**] to employ commercially reasonable efforts to comply with the timelines agreed in the Work Orders. In case that a timeline cannot be met HDPR will notify Customer promptly upon receipt of knowledge on such deviation.
8.3 Within [**] of any Goods, Customer shall examine any such Goods and Services. Notice of all claims arising out of non-compliance with the agreed level of quality (e.g. GMP), specifications, compliance with this Agreement, the Quality Agreement, Applicable Law or the applicable Work Order, or deliverables or any shortages or defects of delivered Goods or Services (any of the before a Non-Compliance or Non-Compliant Good), shall be given in writing to HDPR within [**] (the Notice of Rejection). With respect to any Non-Compliance, which would not be apparent from a reasonable visual inspection on delivery and, in case of any hidden or latent Non-Compliance, Notice of Rejection shall be given not later than [**] from the time Customer discovers or should have discovered the relevant Non-Compliance, however in no event later than (i) within [**], or (ii) the expiry of the shelf life of the affected Goods; whatever is shorter. The failure of Customer or its designees to notify HDPR of any Non-Compliance of a Good in the manner set forth herein above shall constitute confirmation of the acceptance thereof.
8.4 If HDPR disputes the Notice of Rejection within [**], then the Parties shall investigate Customers assertion of Non-Compliance and discuss in good faith a resolution of any such disagreement regarding the Goods or Services. The Parties shall act promptly and shall cooperate fully and in good faith in such investigations. If the Parties do not reach an agreement, then HDPR and Customer shall (each acting reasonably and in good faith) mutually elect an independent Third Party laboratory or expert (acting as an expert and not an arbitrator) to determine if the Goods or Services are Non-Compliant Goods and make a determination regarding the cause of the Non-Compliance. Such results shall be binding upon both Parties. The cost of the testing and evaluation by the expert shall be borne entirely by the Party against whom such laboratorys or experts findings are made. In the event of Non-Compliance, Customer shall have the remedies set forth in Article 12.
9
9 Warranties of HDPR
HDPR hereby represents, warrants and covenants to Customer as of the Effective Date as follows:
a) | HDPR has been duly organized and is validly subsisting and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement; |
b) | HDPR has the right to enter into this Agreement and this Agreement is a legal and valid obligation binding upon HDPR and enforceable in accordance with its terms (including the right to enforce the actions or obligations taken by [**] on behalf of HDPR under this Agreement or any Work Order); |
c) | the execution, delivery and performance of this Agreement by HDPR has been duly authorized by all necessary corporate action; |
d) | HDPR has not made and will not make any commitments to Third Parties inconsistent with or in derogation of HDPRs obligations under this Agreement and HDPR is not subject to any obligations that would prevent it from entering into or carrying out its obligations under this Agreement; |
e) | all delivered Goods shall, at the time of delivery, (i) conform to the specifications agreed between HDPR and Customer in the Work Order and (ii) comply with this Agreement, the Quality Agreement and Applicable Law; |
f) | the Services shall be provided (a) in accordance with this Agreement, the Quality Agreement and each Work Order, including within the agreed time targets, (b) in a manner that meets professional and industry standards reasonably to be expected from a first-class provider of similar services in similar circumstances and (c) in compliance with all Applicable Laws at the place of performance thereof. |
g) | it has not and shall not, and shall cause [**] (or any other Third Party acting on HDPRs behalf) to not, at any time from and after the Effective Date, retain or use the services of (i) any Person of whom HDPR, respectively [**], has knowledge that such Person is debarred under 21 U.S.C. § 335a or (ii) any Person of whom HDPR, respectively [**] (or such other Third Party), has knowledge that such Person has been convicted of a crime as defined under the FDCA, in each case, in any capacity associated with or related to the Services to be provided under this Agreement. HDPR agrees to immediately disclose in writing to Customer if it receives knowledge that any of its or [**] employees or agents is debarred, or if any action or investigation is pending or, to the best of HDPRs knowledge, is threatened in relation to the debarment of HDPR or any person performing Services or providing services in any capacity in connection with this Agreement; |
h) | to HDPRs knowledge as of the Effective Date, the performance of Services and the Goods provided under this Agreement shall not infringe the intellectual property rights of any Third Party; |
i) | all records and reports required to be maintained by HDPR or [**] under Applicable Law, including GMP, where applicable, shall be accurate and complete in all material respects; |
j) | it shall not terminate its agreement with [**] relating to the process development, manufacturing and supply services of Amanitin Toxin Constructs without cause and shall notify Customer promptly if such agreement is terminated; and |
k) | each of HDPRs and [**] employees, consultants, agents or any contractors performing Services under a Work Order are bound by written obligations or Applicable Law to assign all of their rights, title and interests in, to and under any intellectual property resulting from their performance of Services to HDPR or [**], as applicable. |
10
10 Customers use of Goods and representations
Customer hereby represents, warrants and covenants to HDPR as of the Effective Date as follows:
a) | Customer has been duly organized and is validly subsisting and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement; |
b) | Customer has the right to enter into this Agreement and this Agreement is a legal and valid obligation binding upon Customer and enforceable in accordance with its terms; |
c) | the execution, delivery and performance of this Agreement by Customer has been duly authorized by all necessary corporate action; |
d) | Customer has not made and will not make any commitments to Third Parties inconsistent with or in derogation of Customers obligations under this Agreement and Customer is not subject to any obligations that would prevent it from entering into or carrying out its obligations under this Agreement; and |
e) | Customer will use any Goods manufactured under this Agreement in strict compliance with all Applicable Laws. |
11 No Other Warranty
THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT ARE THE SOLE REPRESENTATIONS AND WARRANTIES MADE BY EITHER PARTY TO THE OTHER AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY DISCLAIM ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12 Liability
12.1 If Customer issues a Notice of Rejection (other than for shortages, which are governed by Section 12.2), and (a) if HDPR does not contest (or does not contest within [**]) or (b) if the independent Third Party laboratory or expert confirms such Non-Compliance pursuant to Section 8.4, with respect to each, then HDPRs sole and exclusive liability and Customers exclusive remedy with respect to Non-Compliant Goods shall either be replacement of such Non-Compliant Goods without charge or the refund of the Service Fees paid with respect to the Non-Complaint Goods, at Customers sole discretion. Any further claims of whatever nature (e.g. , damages, compensation, etc.) are herewith expressly excluded, except with respect to Claims brought under Article 13. HDPR shall have a right to remedy, through reprocessing, any Non-Compliance within a reasonable period of time, failing which Customer shall be entitled to the remedies set forth herein. HDPR shall not do any reprocess work without Customers prior written approval, which shall not be withheld or delayed unreasonably.
12.2 UNLESS (A) IN CASE OF A PARTYS GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD, (B) BREACH OF A PARTYS REPRESENTATIONS, WARRANTIES AND COVENANTS HEREUNDER, (C) A PARTYS INDEMNIFICATION OBLIGATION UNDER SECTION 13, (D) A PARTYS BREACH OF SECTION 16, OR (E) IN ANY CASE OF PERSONAL INJURY OR DEATHRESULTING FROM A PARTYS GROSS NEGLIGENCE, INTENTIONAL MISCONDUCT OR FRAUD, WITH RESPECT TO EACH, EACH PARTYS OVERALL LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED [**]) UNDER THIS AGREEMENT.
11
12.3 UNLESS RELATING TO (A) A PARTYS GROSS NEGLIGENCE, INTENTIONAL MISCONDUCT OR FRAUD, (B) A PARTYS BREACH OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS, (C) A PARTYS INDEMNIFICATION OBLIGATION UNDER SECTION 13, (D) A PARTYS BREACH OF SECTION 16, OR (D) ANY CASE OF PERSONAL INJURY OR DEATH CAUSED BY A PARTYS GROSS NEGLIGENCE, INTENTIONAL MISCONDUCT OR FRAUD, WITH RESPECT TO EACH, NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL LOSSES AND DAMAGES, PUNITIVE DAMAGES, ANTICIPATED OR LOST PROFITS, BUSINESS INTERRUPTION, INCIDENTAL DAMAGES, LOSS OF TIME, OR OTHER SIMILAR LOSSES IN CONNECTION WITH THIS AGREEMENT.
13 Indemnification
13.1 Each Party shall indemnify the other Party and its representatives, consultants and Affiliates from and against any and all losses and claims (including reasonable legal fees and other costs of defending any action) arising or resulting from Third Party Claims (as defined below) made against the other Party with respect to any death or personal injury arising as a result of the gross negligence, fraud or intentional misconduct of such Party in connection, directly or indirectly, with this Agreement.
13.2 Customer shall indemnify and hold HDPR and its Affiliates (and its and their officers, agents, employees, successors, subcontractors and assigns) (collectively, the HDPR Indemnitees) harmless from and against any and all losses and claims (including reasonable legal fees and other costs of defending any action each and all together referred to as the Claims) that an HDPR Indemnitee incurs as a result of any action brought by a Third Party (other than [**]) against an HDPR Indemnitee in connection with (a) Customers breach of this Agreement, (b) the gross negligence, fraud or intentional misconduct of a Customer Indemnitee or (c) the use, commercialisation, sale or transfer of the Goods by Customer. The indemnification obligations under this Section 13.2 shall not apply to the extent that any such Third Party Claim is the result of (i) the gross negligence, fraud or intentional misconduct by an HDPR Indemnitee, (ii) the breach of this Agreement by an HDPR Indemnitees (iii) any Claim for which HDPR is obligated to indemnify Customer pursuant to Section 13.3 or (iv) in any case of personal injury or death caused by the negligent conduct, fraud or intentional misconduct of an HDPR Indemnitee.
13.3 HDPR shall indemnify and hold Customer and its Affiliates (and its and their officers, agents, employees, successors, subcontractors and assigns) (collectively, the Customer Indemnitees) harmless from and against any and all losses and Claims that a Customer Indemnitee incurs as a result of any action brought by a Third Party against a Customer Indemnitee in connection with (a) HDPRs breach of this Agreement, (b) the gross negligence, fraud or intentional misconduct of an HDPR Indemnitee or (c) claims that the Goods or Services infringe the intellectual property rights of a Third Party in violation of Section 9 h) above. The indemnification obligations under this Section 13.3 shall not apply to the extent that any such Third Party Claim is the result of (i) the gross negligence, fraud or intentional misconduct by a Customer Indemnitee, (ii) the breach of this Agreement by a Customer Indemnitees (iii) any Claim for which Customer is obligated to indemnify HDPR pursuant to Section 13.2 or (iv) in any case of personal injury or death caused by the negligent conduct, fraud or intentional misconduct of an Customer Indemnitee.
13.4 The indemnifying Party shall defend, contest or otherwise protect against any Claims at its own cost and expense; provided that the Party seeking indemnification regarding any such Claims gives written notice to the indemnifying Party promptly upon receiving notice of said Claims (but failure to give prompt written notice shall only relieve the indemnifying Party of its obligations under Section 13.4 if, and in such event, only to the extent that, the indemnifying Party can demonstrate actual prejudice on account of such failure). The indemnified Party may, but will not be obligated to, participate at its own expense in the defense of any Claim by counsel of its own choosing, but the indemnifying Party shall be entitled to control the defense, unless the indemnified Party has relieved
12
the indemnifying Party from liability with respect to the particular matter. The indemnifying Party shall have the right, after consultation with the indemnified Party, to resolve and settle any such claims or suits; provided that, in no event may the indemnifying Party compromise or settle any such claim in a manner which admits fault or negligence on the part of the indemnified Party or includes injunctive relief or includes the payment of money or other property by the indemnified Party without the prior written consent of the indemnified Party. The indemnifying Party shall not be responsible for any settlement or other disposition or agreement reached in respect of any such action, claim or other matter unless the indemnifying Party shall have given its prior written consent in respect of such settlement, disposition or other agreement. The indemnified Party shall cooperate and provide such assistance as the indemnifying Party may reasonably request in connection with the defence of the matter subject to indemnification.
14 Insurance
Each Party shall have and maintain the insurance coverage that is required by Applicable Law. Each Party may self-insure its liabilities under this Agreement and shall otherwise maintain such insurance as it, in its sole discretion, deems appropriate and necessary.
15 Intellectual Property
The Parties agree that (a) as between Customer and HDPR, each Party owns its respective Confidential Information and (b) HDPR owns all rights in intellectual property related to Amanitin Toxin Constructs (subject to the licenses granted to Customer with respect thereto as set forth in the ERDOLA) and, subject to any rights of [**] thereto, all rights in intellectual property related to the performance of Services. HDPR shall diligently pay all government fees required to maintain any of its patents used for the performance of Services under this Agreement. HDPR shall not knowingly use in the performance of Services any intellectual property right of a Third Party to the extent such use would adversely impact or restrict Customers rights to freely exploit the Goods, except with the prior written consent of Customer. For the avoidance of doubt, nothing in this Agreement shall be construed to grant Customer ownership of know-how, processes, techniques and innovations owned or controlled by HDPR or by [**], nor the right to use deliverables provided hereunder to manufacture Amanitin Toxin Constructs without the previous completion of a GMP Full Manufacturing Technology Transfer as defined in the ERDOLA.
16 Confidentiality
16.1 It is contemplated that in the course of the performance of this Agreement each Party may, from time to time, disclose Confidential Information to the other and that HDPR and [**] may also disclose the confidential information of [**] to Customer in the course of the performance of this Agreement, which shall be regarded as the Confidential Information of HDPR. Each Party agrees:
a) | to keep and use in strict confidence all Confidential Information of the other Party that each Party acquires, sees or is informed of as a direct or indirect consequence of this Agreement and to not, without the prior written consent of the other Party, disclose any such Confidential Information or recollections thereof to any Person other than its financial or legal advisors, employees and contractors who are under an obligation of confidentiality on terms substantially similar to those set out in this Agreement, who have been informed of the confidential nature of the Confidential Information and who reasonably require such information in the performance of their duties; |
b) | not to use, copy, duplicate, reproduce, translate or adapt, either directly or indirectly, any of the Confidential Information of the other Party or any recollections thereof for any purpose other than the performance of each Partys obligations under this Agreement, without the other Partys prior written approval; and |
13
c) | to take all reasonable steps (but never less than the degree of care such Party uses to protect its own confidential information) to prevent material in its possession that contains or refers to Confidential Information of the other Party from being discovered, used or copied by Third Parties and that it shall use reasonable steps (but never less than the degree of care such Party uses to protect its own confidential information) to protect and safeguard all Confidential Information of the other Party in its possession from all loss, theft or destruction. |
Upon the termination of this Agreement, each Party shall promptly return or destroy, at the disclosing Partys election, all Confidential Information of the disclosing Party; provided that the receiving Party may retain one copy of all such Confidential Information in its legal records for the purposes of ensuring compliance with this Agreement and the receiving Party may keep such copies that may have been generated by automatic back-up systems. Notwithstanding anything in this Agreement to the contrary, any return or destruction of Confidential Information by the receiving Party is subject to Applicable Law.
16.2 A Party receiving Confidential Information may, with the written consent of the disclosing Party, disclose the disclosing Partys Confidential Information also to Persons other than its financial and legal advisors, employees and contractors.
16.3 The Parties agree that no press release, public announcement or publication regarding this Agreement or the relationship of the Parties (except to the extent that it may be legally required), shall be made unless mutually agreed to in writing prior to the release or dissemination of any such press release, public announcement or publication.
16.4 No provision of this Agreement shall be construed so as to preclude any disclosure of Confidential Information that is required, in the reasonable opinion of the receiving Partys legal advisors, to be disclosed by the receiving Party pursuant to Applicable Law or legal process, subpoena, warrant or court order. To the extent required by Applicable Law or legal process, subpoena, warrant or court order, the receiving Party may disclose Confidential Information only to the extent required to comply with said Applicable Law or legal process, subpoena, warrant or court order; provided that the receiving Party shall, if legally permitted and reasonably practicable, provide reasonable prior notice to the disclosing Party so as to allow the disclosing Party to take steps to oppose or limit the required disclosure, at the disclosing Partys sole cost and expense.
16.5 Unless otherwise agreed by the Parties in writing, the obligations of the Parties relating to Confidential Information set out in this Article 16 shall survive the termination or expiration of this Agreement for a period of [**] thereafter; provided that such obligations will survive with respect to any Confidential Information that constitutes a trade secret for so long as such Confidential Information remains a trade secret.
17 Force majeure
17.1 Neither Party shall be held liable for any failure in performance of any part of this Agreement or any breach of contract resulting from force majeure events, including but not limited to fire, flood, explosion, war, strike, embargo, shortages, acts of God, terrorism, riots or similar causes. If a Party is affected by an event of force majeure, it will forthwith notify the other Party of the nature and extent of such force majeure event and the Parties will enter into bona fide discussions with a view to alleviating its effects and to agreeing such alternative arrangements as may be fair, reasonable and practicable. The Party affected by a force majeure event is under obligation to give full particulars thereof and to use its best efforts to minimize the effect of occurrence and to take the necessary remedial measures.
14
17.2 If as a result of force majeure events, performance of the Agreement, in whole or material part, is suspended for more than [**] or [**], either Party shall have the right to terminate the Agreement or any affected Work Order by giving written notice to that effect to the other Party.
18 General provisions
18.1 No course of dealing or failure of either Party to strictly enforce any term, right or condition of this Agreement shall be construed as a waiver of that term, right or condition.
18.2 Should one of the provisions of this Agreement or of any additional stipulations agreed upon be or become invalid, the validity of the remaining conditions and stipulations shall not be affected thereby. Parties shall use their best endeavours to replace the invalid provisions with a valid provision with respect to the same subject matter.
18.3 This Agreement constitutes the entire agreement and understandings (oral and written) between the Parties relating to the subject matter hereof and supersede all previous oral and written communications between the Parties with respect hereof.
18.4 No modification, alteration or amendment to this Agreement, including without limitation this Section 18.4, shall be of any force or effect unless done in writing with the express reference to the Sections of the Agreement being modified, altered or amended and signed by duly authorized representative of both Parties.
18.5 This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their successors and permitted assigns. The provisions set forth in the ERDOLA with regard to Assignment (as defined therein) shall also apply to this Agreement (except with respect to a Non-GMP Partial Manufacturing Technology Transfer, a Non-GMP Full Manufacturing Technology Transfer or a GMP Full Manufacturing Technology Transfer (each as defined in the ERDOLA)).
18.6 The Parties hereto are independent contractors and nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, employment, franchise, agency or fiduciary relationship between the Parties.
18.7 The table of contents and headings are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless the context otherwise clearly requires or otherwise specified, whenever used in this Agreement: (a) the word including and words of similar import shall mean including, without limitation; (b) the words hereof, herein, hereby and derivative or similar words refer to this Agreement; (c) whenever the word or is used in this Agreement, it shall not be deemed to be exclusive; (d) all references to the word will are interchangeable with the word shall and shall be understood to be imperative or mandatory in nature; and (e) all words used in this Agreement shall be construed to be of such gender or number, as the circumstances require.
18.8 This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Any PDF or facsimile copy of this Agreement, or of any counterpart, shall be deemed the equivalent of an original.
15
19 Notices
19.1 Any official notice required under this Agreement shall be in writing and shall specifically refer to this Agreement. Notices shall be sent via one of the following means and will be effective: (a) on the date of delivery, if delivered and handed over in person; (b) if sent by email (with delivery confirmed) (i) on the date of receipt, provided, however, that the email was received by recipient on a Business Day at his domicile between 00.00 and 17.00 his time zone; (ii) the next Business Day following receipt, if the email was received by recipient outside a Business Day at his domicile or between 17.00 and 24.00 his time zone; or (c) seventy two (72) hours after postage, if sent by private express courier or by first class certified mail, return receipt requested. Any notice sent via email shall be followed as soon as reasonably possible by a copy of such notice by private express courier or by first class mail.
19.2 Notices shall be sent to the other Party at the addresses set forth below. Either Party may change its addresses or addressees for purposes of this Article 19 by sending written notice to the other Party.
If to HDPR, to: |
Heidelberg Pharma Research GmbH Attn: Business Development Schriesheimer Strasse 101 68526 Ladenburg Germany [**] [**] | |
and: |
Attn: Legal Department [**] [**] | |
If to Customer, to: |
Magenta Therapeutics, Inc. 100 Technology Square, 5th Floor Cambridge, MA 02139 USA [**] [**] |
or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed delivered on the date received.
19.3 The provisions of this Article 19 shall not be applicable for the day-to-day communication between the Parties.
20 Term and termination
20.1 This Agreement shall be effective as of and commence on the Effective Date and continue in full force and effect for an indefinite term unless terminated pursuant to Sections 20.2, 20.3 or 20.4.
20.2 (a) Customer may terminate this Agreement or any Work Order at any time and for any reason upon at least sixty (60) calendar days written notice. (b) Either Party may terminate this Agreement if the corresponding agreement between HDPR and [**] is terminated.
16
20.3 Either Party may terminate this Agreement upon written notice to the other Party with immediate effect if the other Party makes a general assignment for the benefit of creditors or if a petition in bankruptcy or under any insolvency law is filed by or against the other Party and such petition is not dismissed within [**] after it has been filed.
20.4 Either Party may terminate this Agreement (in its entirety, for a material breach that relates to this Agreement in its entirety) or a Work Order (only with respect to a Work Order, if a material breach solely relates to such Work Order) upon written notice to the other Party with immediate effect if the other Party has committed a material breach of this Agreement, a Work Order, or the Quality Agreement, and:
(i) | the breach is not cured within [**] after written notice of such breach has been provided to the breaching Party; or |
(ii) | if the breach is of a type that cannot be cured within [**], but the breaching Party has promptly commenced and is diligently pursuing remediation of such breach following the breaching Party receiving written notice of such breach, then only if such breach has not been cured within [**] after written notice of such breach has been provided to the breaching Party. |
20.5 In case of termination of a Service by Customer, Customer shall pay to HDPR the fees set forth in the corresponding Work Order.
20.6 Notwithstanding the foregoing, in case of a termination by Customer pursuant to Sections 17.2, 20.3 or 20.4, or by either Party pursuant to Section 20.2(b), then Section 20.5 shall not apply.
20.7 Upon termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate and be of no further force or effect. No termination of this Agreement will relieve the parties of any obligation accruing prior to such termination. In addition, the following Sections shall survive termination of this Agreement: 2.5; 5; 6; 8 to 19 (included); 20.5; 20.6, 20.7 and 21.
21 Applicable law and jurisdiction
21.1 This Agreement shall be construed, interpreted, governed and enforced exclusively in accordance with the substantive Swiss law except as for its conflict of law rules, which would refer to another applicable law. The application of the Convention of the United Nations of April 11, 1980 on Contract for the International Sale of Goods is hereby expressly excluded.
21.2 The Parties shall try to resolve any disputes arising out of or in connection with this Agreement amicably through good faith negotiations. In the event that such attempts should fail within [**] from the first negotiation, the dispute shall be exclusively and finally resolved by the Civil-Court of Basel-Stadt, Switzerland (Zivilgericht Basel-Stadt). This shall not limit the right to appeal in Switzerland.
[Remainder Intentionally Blank.]
17
In WITNESS OF THE FOREGOING, the Parties have caused their authorized representatives to execute this Agreement as of the Effective Date.
Heidelberg Pharma Research GmbH: | Magenta Therapeutics, Inc.: | |||||
By: | /s/ Dr. Jan Schmidt-Brand |
By: | /s/ Jason Gardner | |||
Name: | Dr. Jan Schmidt-Brand | Name: | Jason Gardner | |||
Chief Executive Officer | ||||||
Date: | 23. MAI 2019 | Date: | 6/3/19 | |||
By: | ppa. /s/ Prof. Dr. Andreas Pahl |
By: | /s/ Christina Isacson | |||
Name: | Prof. Dr. Andreas Pahl | Name: | Christina Isacson | |||
Chief Scientific Officer | ||||||
Date: | 23. MAI 2019 | Date: | 6/3/19 |
ANNEX 3.8
[**]
EXHIBIT 10.12
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (Agreement) is made by and between Magenta Therapeutics, Inc., a Delaware corporation (the Company), and Jason Gardner, D.Phil. (the Executive) and is effective as March 3, 2022.
WHEREAS, the Executive is currently serving as the Companys Chief Executive Officer and President, and possesses certain experience and expertise that qualify the Executive to provide the direction and leadership required by the Company and its affiliates;
WHEREAS, the Company and the Executive are party to an Employment Agreement dated as of June 25, 2018 (the Original Agreement); and
WHEREAS, the Company and the Executive wish to amend and restate the Original Agreement in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. | Employment. |
(a) Term. The Company and the Executive desire to continue their employment relationship pursuant to this Agreement as of the Effective Date and continuing in effect until terminated by either party in accordance with this Agreement (the Term). The Executives employment with the Company will continue to be at will, meaning that the Executives employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement.
(b) Position and Duties. During the Term, the Executive shall serve as the President and Chief Executive Officer of the Company and shall have powers and duties that may from time to time be prescribed by the Board of Directors of the Company (the Board). The Executive shall devote his full working time and efforts to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may serve on up to two other boards of directors, with the prior written approval of the Board, or engage in not-for-profit, charitable or other community activities as long as the foregoing does not, individually or in the aggregate, materially interfere with the Executives performance of his duties to the Company as provided in this Agreement. The Executive reaffirms that he has no contractual commitments or other legal obligations that would prohibit him from fully performing his duties for the Company.
(c) Regular Place of Employment. The Executives regular place of work will be at Magenta Therapeutics, Inc., which is currently located at 100 Technology Square, Cambridge, MA 02139, provided that the Executive may be required to travel from time to time, consistent with business needs.
2. | Compensation and Related Matters. |
(a) Base Salary. The Executives annual base salary shall be $565,000, which is subject to review and redetermination by the Board. The base salary in effect at any given time is referred to herein as Base Salary. The Base Salary shall be payable in a manner that is consistent with the Companys usual payroll practices for senior executives.
(b) Incentive Compensation. During the Term, the Executive shall be eligible to receive cash incentive compensation as determined by and in the sole discretion of the Board or the Compensation Committee from time to time. The Executives target annual incentive compensation shall be fifty-five percent (55%) of his Base Salary, as may be redetermined from time to time (the Target Incentive Compensation). To earn incentive compensation, the Executive must be employed by the Company on the day such incentive compensation is paid.
(c) Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its senior executive officers.
(d) Other Benefits. During the Term, the Executive shall be entitled to continue to participate in or receive benefits under the Companys employee benefit plans in effect from time to time, including paid sick time under applicable law, subject to the terms of such plans and to the Companys ability to amend, modify, replace or terminate such plans and programs.
(e) Vacations. During the Term, the Executive shall be entitled to take paid vacation in accordance with the Companys vacation policy, as may be in effect from time to time. The Executive shall also be entitled to all paid holidays given by the Company to its executives.
(f) Equity. The equity awards held by the Executive shall be governed by the terms and conditions of the Companys applicable equity incentive plan(s) and the applicable award agreement(s) governing the terms of such equity awards held by the Executive (collectively, the Equity Documents); provided, however, and notwithstanding anything to the contrary in the Equity Documents, Section 6(a)(ii) of this Agreement shall apply in the event of a termination by the Company without Cause or by the Executive for Good Reason in either event within the Change in Control Period (as such terms are defined below).
3. Termination. During the Term, the Executives employment hereunder may be terminated without any breach of this Agreement under the following circumstances:
(a) Death. The Executives employment hereunder shall terminate upon his death.
(b) Disability. The Company may terminate the Executives employment if he is disabled and unable to perform the essential functions of the Executives then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executives then existing position or positions with or without reasonable
2
accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executives guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Companys determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executives rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
(c) Termination by Company for Cause. The Company may terminate the Executives employment hereunder for Cause. For purposes of this Agreement, Cause shall mean: (i) the Executives dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers vendors or other third parties with which such entity does business; (ii) the Executives commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Executives failure to perform his assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, thirty (30) or more days after written notice has been given to the Executive by the Company reasonably describing such failure; (iv) the Executives gross negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; or (v) the Executives material violation of any provision of any agreement(s) between the Executive and the Company relating to noncompetition, nonsolicitation, nondisclosure, nondisparagement and/or assignment of inventions.
(d) Termination Without Cause. The Company may terminate the Executives employment hereunder at any time without Cause. Any termination by the Company of the Executives employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.
(e) Termination by the Executive. The Executive may terminate his employment hereunder at any time for any reason, including but not limited to Good Reason. For purposes of this Agreement, Good Reason shall mean that the Executive has complied with the Good Reason Process (hereinafter defined) following the occurrence of any of the following events: (i) a material diminution in the Executives responsibilities, authority or duties; (ii) a material diminution in the Executives Base Salary except for across-the-board salary reductions based at least in part on the Companys financial performance similarly affecting all or substantially all senior management employees of the Company; (iii) a material change in the geographic location at which the Executive provides services to the Company; or (iv) the material breach of this Agreement by the Company. Good Reason Process shall mean that (i) the Executive reasonably determines in good faith that a Good Reason condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Companys efforts, for a period not less than thirty (30) days following such notice (the Cure Period), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason
3
condition continues to exist; and (v) the Executive terminates his employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.
If the Executives employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to his authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement) on or before the time required by law but in no event more than thirty (30) days after the Executives Date of Termination; (ii) accrued but unused vacation and personal days (if applicable and in accordance with Company policy and applicable law); and (iii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the Accrued Benefits).
4. | Notice and Date of Termination. |
(a) Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executives employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.
(b) Date of Termination. Date of Termination shall mean: (i) if the Executives employment is terminated by his death, the date of his death; (ii) if the Executives employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executives employment is terminated by the Company under Section 3(d), the date on which a Notice of Termination is given; (iv) if the Executives employment is terminated by the Executive under Section 3(e) without Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executives employment is terminated by the Executive under Section 3(e) for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.
5. Compensation Upon Termination by the Company without Cause or by the Executive for Good Reason Outside the Change in Control Period. During the Term, if the Executives employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates his employment for Good Reason as provided in Section 3(e), each outside of the Change in Control Period (as defined below), then the Company shall pay the Executive his Accrued Benefit. In addition, subject to (i) the Executive signing a separation agreement and release in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of the Executives Continuing Obligations (as defined below) and, in the Companys sole discretion, a one year post- employment noncompetition covenant, and shall
4
provide that if the Executive breaches any of the Continuing Obligations, all payments of the Severance Amount shall immediately cease (the Separation Agreement and Release), and (ii) the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release):
(a) the Company shall pay the Executive an amount equal to the sum of (A) one (1) times the Executives Base Salary plus (B) a pro-rata portion of the Executives Target Incentive Compensation, based on the number of days that have passed as of the Date of Termination in the year in which the Date of Termination occurs (the Severance Amount). Notwithstanding the foregoing, if the Executive breaches any of the provisions contained in Section 8 of this Agreement or the Restrictive Covenants Agreement, all payments of the Severance Amount shall immediately cease; and
(b) if the Executive was participating in the Companys group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay the monthly employer COBRA premium for the same level of group health coverage as in effect for the Executive on the Date of Termination until the earliest of the following: (i) the twelve (12) month anniversary of the Date of Termination; (ii) the Executives eligibility for group health coverage through other employment; or (iii) the end of the Executives eligibility under COBRA for continuation coverage for health care. If the payment of any COBRA or health insurance premiums by Company on behalf of Executive as described herein would otherwise violate any applicable nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010 (collectively, the Healthcare Acts) or Section 105(h) of the Code, the COBRA premiums paid by the Company shall be treated as taxable payments (subject to customary and required taxes and employment-related deductions) and be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Healthcare Acts or Section 105(h) of the Code. If Company determines in its sole discretion that it cannot provide the COBRA benefits described herein under Companys health insurance plan without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), Company shall in lieu thereof provide to Executive a taxable lump-sum payment in an amount equal to the sum of the monthly (or then remaining) COBRA premiums that Executive would be required to pay to maintain Executives group health insurance coverage in effect on the separation date for the remaining portion of the period for which Executive shall receive the payments described in this Section 5(b).
(c) The amounts payable under this Section 5 shall be paid out in substantially equal installments in accordance with the Companys payroll practice, with the first installment commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).
5
6. Compensation Upon Termination by the Company without Cause or by the Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 regarding severance pay and benefits upon a termination by the Company without Cause or by the Executive for Good Reason if such termination of employment occurs during the three (3) months before through twelve (12) months after the occurrence of the first event constituting a Change in Control (such period, the Change in Control Period). These provisions shall terminate and be of no further force or effect beginning twelve (12) months after the occurrence of a Change in Control.
(a) Change in Control. If during the Change in Control Period the Executives employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates his employment for Good Reason as provided in Section 3(e), then, subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release):
(i) the Company shall pay the Executive a lump sum in cash in an amount equal to the sum of (A) 1.5 times the Executives current Base Salary (or the Executives Base Salary in effect immediately prior to the Change in Control, if higher) plus (B) one hundred and fifty percent (150%) of the Executives Target Incentive Compensation (the Change in Control Payment); and
(ii) notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all time-based stock options and other time-based stock-based awards held by the Executive shall immediately accelerate and become fully vested and exercisable or nonforfeitable as of the Date of Termination; and
(iii) if the Executive was participating in the Companys group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay the full monthly COBRA premium for the same level of group health coverage as in effect for the Executive on the Date of Termination until the earliest of the following: (i) the 18-month anniversary of the Date of Termination; (ii) the Executives eligibility for group health coverage through other employment; or (iii) the end of the Executives eligibility under COBRA for continuation coverage for health care. If the payment of any COBRA or health insurance premiums by Company on behalf of Executive as described herein would otherwise violate any applicable nondiscrimination rules or cause the reimbursement of claims to be taxable under the Healthcare Acts or Section 105(h) of the Code, the COBRA premiums paid by the Company shall be treated as taxable payments (subject to customary and required taxes and employment-related deductions) and be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Healthcare Acts or Section 105(h) of the Code. If Company determines in its sole discretion that it cannot provide the COBRA benefits described herein under Companys health insurance plan without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), Company shall in lieu thereof provide to Executive a taxable lump-sum payment in an amount equal to the sum of the monthly (or then remaining)
6
COBRA premiums that Executive would be required to pay to maintain Executives group health insurance coverage in effect on the separation date for the remaining portion of the period for which Executive shall receive the payments described in this Section 6(a).
The amounts payable under this Section 6(a) shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.
(b) Additional Limitation.
(i) Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the Aggregate Payments), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).
(ii) For purposes of this Section 6(b), the After Tax Amount means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executives receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
(iii) The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 6(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the Accounting Firm), which shall provide detailed supporting calculations both to the Company and the Executive within 15
7
business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.
(b) Definitions. For purposes of this Section 6, Change in Control shall mean any of the following:
(i) any person, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the Act) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all affiliates and associates (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the beneficial owner (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50 percent or more of the combined voting power of the Companys then outstanding securities having the right to vote in an election of the Board (Voting Securities) (in such case other than as a result of an acquisition of securities directly from the Company); or
(ii) the date a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or
(iii) the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than 50 percent of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of the combined voting power of all of the then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or more of the combined voting power of all of the then outstanding Voting Securities, then a Change in Control shall be deemed to have occurred for purposes of the foregoing clause (i).
8
7. Section 409A.
(a) Anything in this Agreement to the contrary notwithstanding, if at the time of the Executives separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executives separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executives separation from service, or (B) the Executives death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.
(b) All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
(c) To the extent that any payment or benefit described in this Agreement constitutes non-qualified deferred compensation under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executives termination of employment, then such payments or benefits shall be payable only upon the Executives separation from service. The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).
(d) The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.
9
(e) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
8. Restrictive Covenants.
(a) Restrictive Covenants Agreement. The terms of the Employee Confidentiality and Assignment Agreement dated June 12, 2016, between the Company and the Executive, as modified by the Original Agreement and reaffirmed herein (the Restrictive Covenants Agreement), continues to be in full force and effect. The Executive agrees that the term Company, as used in the Restrictive Covenants Agreement, shall mean the Company, its subsidiaries and other affiliates, and its and their successors and assigns. The Executive hereby reaffirms the terms of the Restrictive Covenants Agreement, and as modified by the Original Agreement and reaffirmed in Section 8(b) below, as material terms of this Agreement and agrees and acknowledges that such terms are incorporated by reference in this Agreement.
(b) Noncompetition and Nonsolicitation. This Section 8(b) amends, restates, and supersedes Section 8 of the Restrictive Covenants Agreement.
(i) Non-Solicitation. In order to protect the Companys proprietary information and good will, both during Executives employment and for a period of one (1) year following the date of the cessation of Executives employment with the Company for any reason, (the Restricted Period), the Executive will not either alone or in association with others:
(1) solicit, induce or attempt to induce, any employee or independent contractor of the Company to terminate his/her employment or other engagement with the Company;
(2) solicit, hire, or recruit or attempt to hire as an employee, or engage or attempt to engage as an independent contractor, any person who was employed or otherwise engaged by the Company at any time during the term of my employment with the Company; provided that this clause (2) shall not apply to the recruitment or hiring or other engagement of any individual whose employment or other engagement with the Company has been terminated for a period of six (6) months or longer, or was terminated at the discretion of the Company and not by such person; provided, further, that subsection (b) shall not apply to individuals who are employed by the Company or a subsequent employer, in California; or
(3) solicit, divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers, or business partners of the Company that were contacted, solicited, or served by the Company during the twelve (12) month period prior to the termination or cessation of my employment with the Company; provided, however, the foregoing shall not apply to services rendered by me in California after the date my employment by the Company terminates.
10
(ii) Non-Compete.
(1) Executive will not without the prior written approval of an executive officer of the Company, engage or assist others in engaging in any business or enterprise (whether as owner, partner, officer, director, employee, consultant, investor, lender or otherwise, except as the holder of not more than 1% of the outstanding stock of a publicly-held company) that is competitive with the Companys business by engaging in the research, development, manufacture, marketing, distribution, sale or commercialization of any products that the Company is, at the time of my termination, so engaged in, or, to my knowledge, planning to engage in or otherwise actively evaluating, or any alternatives to such products. This Section 8(b)(ii)(1) shall be effective (i) during the term of my employment by the Company, and (ii) for a period of one (1) year after my employment with the Company ends for any reason, provided that the Company makes a one-time payment to me of $5,000 within fifteen (15) calendar days after the date of my termination.
(2) Executive understands and agrees that payment set forth in Section 8(b)(ii)(1) above (i) has been mutually agreed upon by Executive and the Company; (ii) is fair and reasonable; and (iii) is sufficient in exchange for my obligations set forth in this paragraph.
(3) Executive understands and agrees, at or around the time Executives employment with the Company ends, and in the Companys sole discretion, the Company may waive the Executives obligations in this Section 8(b)(ii)(1), in which case the Company will not be required to provide me with any of the payments set forth in Section 8(b)(ii)(1) above.
The Executive acknowledges and agrees that if he violates any of the provisions of this Section 8(b), the running of the Restricted Period will be extended by the time during which the Executive engages in such violation(s). The Executive understands that the restrictions set forth in this Section 8(b) are intended to protect the Companys interest in its confidential information and established employee, customer and supplier relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. For purposes of this Agreement, the obligations in this Section 8 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the Continuing Obligations.
(c) Third-Party Agreements and Rights. The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executives use or disclosure of information or the Executives engagement in any business. The Executive represents to the Company that the Executives execution of this Agreement, the Executives employment with the Company and the performance of the Executives proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party. In the Executives work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.
11
(d) Litigation and Regulatory Cooperation. During and after the Executives employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company. The Executives full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executives employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executives performance of obligations pursuant to this Section 8(d).
(e) Injunction. The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in this Section 8, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.
(f) Protected Disclosures and Other Protected Actions. Nothing in this Agreement shall be interpreted or applied to prohibit the Executive from making any good faith report to any governmental agency or other governmental entity (a Government Agency) concerning any act or omission that the Executive reasonably believes constitutes a possible violation of federal or state law or making other disclosures that are protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation. In addition, nothing contained in this Agreement limits the Executives ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including the Executives ability to provide documents or other information, without notice to the Company. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law or under this Agreement or the Restrictive Covenants Agreements for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
9. Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the Superior Court of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts. Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.
12
10. Representations and Warranties. By signing this agreement, Executive represents that Executive has not been debarred under Subsection (a) or (b) of Section 306 of the United States Federal Food, Drug, and Cosmetic Act (21 U.S. C. 335a); and is not on any FDA clinical investigator enforcement lists (including the (i) Disqualified/Totally Restricted List, (ii) Restricted List and (iii) Adequate Assurances List).
11. Integration. This Agreement constitutes the entire agreement between the parties with respect to compensation, severance pay, benefits and accelerated vesting and supersedes in all respects all prior agreements between the parties concerning such the subject matter hereof, including without limitation the Original Agreement or any offer letter, employment agreement or severance agreement relating to the Executives employment relationship with the Company and/or the ending of that employment relationship. Notwithstanding the foregoing, the Restrictive Covenants Agreement (as modified herein), the Equity Documents, and any other agreement relating to confidentiality, noncompetition, nonsolicitation or assignment of inventions shall not be superseded by this Agreement and the Executive acknowledges and agrees that any such agreements remain in full force and effect.
12. Withholding. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.
13. Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
14. Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executives employment to the extent necessary to effectuate the terms contained herein.
15. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
16. Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.
13
17. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.
18. Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Companys benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Companys benefit plans, programs or policies except as otherwise may be provided in Section 8 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise. In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such agreement and this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both. Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall the Executive be entitled to payments or benefits pursuant to Section 5 and Section 6 of this Agreement.
19. Governing Law. This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles of such Commonwealth. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the First Circuit.
20. Assignment. Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the Executives consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization, consolidate with, or merge into or to whom it transfers all or substantially all of its properties or assets; provided further that if the purchaser in any transaction involving the transfer of all or substantially all of the Companys assets assumes this Agreement and the Executive accepts a position with the purchaser that is equivalent or better to his position immediately preceding such transaction, then the Executive shall not be entitled to any Severance Amount pursuant to Section 5 or any Change in Control Payment pursuant to Section 6. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executives and the Companys respective successors, executors, administrators, heirs and permitted assigns.
21. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.
22. Gender Neutral. Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.
[Signature Page Follows]
14
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Effective Date.
MAGENTA THERAPEUTICS, INC. | ||
By: | /s/ Kristen Stants | |
Kristen Stants | ||
Its: | Chief People Officer |
EXECUTIVE |
/s/ Jason Gardner |
Jason Gardner, D.Phil. |
15
Exhibit 10.13
AMENDED AND RESATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (Agreement) is made by and between Magenta Therapeutics, Inc., a Delaware corporation (the Company), and Stephen Mahoney (the Executive) and is effective as of March 3, 2022 (the Effective Date).
WHEREAS, the Executive is currently serving as the Companys Chief Financial and Operating Officer and possesses certain experience and expertise that qualify the Executive to provide the direction and leadership required by the Company and its affiliates;
WHEREAS, the Company and the Executive are party to an Employment Agreement dated as of November 9, 2020 (the Original Agreement); and
WHEREAS, the Company and the Executive wish to amend and restate the Original Agreement in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. | Employment. |
(a) Term. The Company and the Executive desire to continue their employment relationship pursuant to this Agreement as of the Effective Date and continuing in effect until terminated by either party in accordance with this Agreement (the Term). The Executives employment will continue to be at will, meaning that the Executives employment may be terminated by the Company or the Executive any time and for any reason, subject to the terms of this Agreement.
(b) Position and Duties. During the Term, the Executive shall serve as the Chief Financial and Operating Officer of the Company and shall have powers and duties that may from time to time be prescribed by the Companys Chief Executive Officer (the CEO) or another authorized executive. The Executive shall devote Executives full working time and efforts to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may serve on up to two (2) for-profit boards of directors, with the prior written approval of the CEO, or engage in not-for-profit, charitable or other community activities, as long as the foregoing does not, individually or in the aggregate, materially interfere with the Executives performance of Executives duties to the Company as provided in this Agreement. The Executive reaffirms that Executive has no contractual commitments or other legal obligations that would prohibit Executives from fully performing Executives duties for the Company.
(c) Regular Place of Employment. The Executives regular place of work will be at Magenta Therapeutics, Inc., which is currently located at 100 Technology Square, Cambridge, MA 02139, provided that the Executive may be required to travel from time to time, consistent with business needs.
1
2. | Compensation and Related Matters. |
(a) Base Salary. The Executives annual base salary shall be $448,000, which is subject to review and redetermination by the Companys Board or the Compensation Committee thereof. The base salary in effect at any given time is referred to herein as Base Salary. The Base Salary shall be payable in a manner that is consistent with the Companys usual payroll practices for senior executives.
(b) Incentive Compensation. During the Term, the Executive shall be eligible to receive cash incentive compensation as determined by and in the sole discretion of the Board or the Compensation Committee from time to time. The Executives target annual incentive compensation shall be 40% of the Executives Base Salary, as may be redetermined from time to time (the Target Incentive Compensation), with any incentive compensation for the year in which employment commences to be prorated based on the Effective Date. To earn incentive compensation, the Executive must be employed by the Company on the day such incentive compensation is paid.
(c) Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its senior executive officers.
(d) Other Benefits. During the Term, the Executive shall be entitled to participate in or receive benefits under the Companys employee benefit plans in effect from time to time, including paid sick time under applicable law, subject to the terms of such plans and to the Companys ability to amend, modify, replace or terminate such plans and programs.
(e) Vacations. During the Term, the Executive shall be entitled to take paid vacation in accordance with the Companys vacation policy, as may be in effect from time to time. The Executive shall also be entitled to all paid holidays given by the Company to its executives.
(f) Equity Awards. The equity awards held by the Executive shall be governed by the terms and conditions of the Companys applicable equity incentive plan(s) and the applicable award agreement(s) governing the terms of such equity awards held by the Executive (collectively, the Equity Documents); provided, however, and notwithstanding anything to the contrary in the Equity Documents, Section 6(a)(ii) of this Agreement shall apply in the event of a termination by the Company without Cause or by the Executive for Good Reason in either event within the Change in Control Period (as such terms are defined below).
3. Termination. During the Term, the Executives employment hereunder may be terminated without any breach of this Agreement under the following circumstances:
(a) Death. The Executives employment hereunder shall terminate upon his death.
2
(b) Disability. The Company may terminate the Executives employment if Executive is disabled and unable to perform the essential functions of the Executives then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executives then-existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executives guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Companys determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executives rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
(c) Termination by Company for Cause. The Company may terminate the Executives employment hereunder for Cause. For purposes of this Agreement, Cause shall mean: (i) the Executives dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the Executives commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Executives failure to perform Executives assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, thirty (30) or more days after written notice has been given to the Executive by the Company reasonably describing such failure; (iv) the Executives gross negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; or (v) the Executives material violation of any provision of any agreement(s) between the Executive and the Company relating to noncompetition, nonsolicitation, nondisclosure, nondisparagement and/or assignment of inventions.
(d) Termination Without Cause. The Company may terminate the Executives employment hereunder at any time without Cause. Any termination by the Company of the Executives employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.
(e) Termination by the Executive. The Executive may terminate his employment hereunder at any time for any reason, including but not limited to Good Reason. For purposes of this Agreement, Good Reason shall mean that the Executive has complied with the Good Reason Process (hereinafter defined) following the occurrence of any of the following events: (i) a material diminution in the Executives responsibilities, authority or duties ; provided that, a change in title, reporting relationships and/or responsibilities of the Executive could, but
3
do not necessarily in and of themselves, individually or in the aggregate, constitute a material diminution for purposes of this Section 3(e), and in all instances, the determination of whether a material diminution has occurred shall be made by the Company in good faith; (ii) a material diminution in the Executives Base Salary except for across-the-board salary reductions based at least in part on the Companys financial performance similarly affecting all or substantially all senior management employees of the Company; (iii) a material change in the geographic location of the principal office of the Company to which the Executive is assigned such that there is an increase of at least thirty (30) additional miles of diving distance to such new location from the Executives principal residence as of such change; or (iv) the material breach of this Agreement by the Company. Good Reason Process shall mean that (i) the Executive reasonably determines in good faith that a Good Reason condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within sixty (60) days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Companys efforts, for a period not less than thirty (30) days following such notice (the Cure Period), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive terminates his employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.
If the Executives employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to his authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement) on or before the time required by law but in no event more than 30 days after the Executives Date of Termination; (ii) accrued but unused vacation and personal days (if applicable and in accordance with Company policy and applicable law); and (iii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the Accrued Benefits).
4. | Notice and Date of Termination. |
(a) Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executives employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.
(b) Date of Termination. Date of Termination shall mean: (i) if the Executives employment is terminated by his death, the date of his death; (ii) if the Executives employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executives employment is terminated by the Company under Section 3(d), the date on which a Notice of Termination is given; (iv) if the Executives employment is terminated by the Executive under Section 3(e) without Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executives employment is terminated by the Executive under Section 3(e)
4
for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.
5. Compensation Upon Termination by the Company without Cause or by the Executive for Good Reason Outside the Change in Control Period. During the Term, if the Executives employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates his employment for Good Reason as provided in Section 3(e), each outside of the Change in Control Period (as defined below), then the Company shall pay the Executive his Accrued Benefits. In addition, subject to (i) the Executive signing a separation agreement and release in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of the Executives Continuing Obligations (as defined below) and, in the Companys sole discretion, a one year post- employment noncompetition covenant, and shall provide that if the Executive breaches any of the Continuing Obligations, all payments of the Severance Amount shall immediately cease (the Separation Agreement and Release), and (ii) the Separation Agreement and Release becoming irrevocable, all within sixty (60) days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release):
(a) the Company shall pay the Executive an amount equal to (A) 0.75 times the Executives Base Salary plus (B) a pro-rata portion of the Executives Target Incentive Compensation, based on the number of days that have passed as of the Date of Termination in the year in which the Date of Termination occurs (the Severance Amount); provided that in the event the Executive is entitled to any payments pursuant to the Restrictive Covenants Agreement, the Severance Amount received in any calendar year will be reduced by the amount the Executive is paid in the same such calendar year pursuant to the Restrictive Covenants Agreement (the Restrictive Covenants Agreement Setoff); and
(b) if the Executive was participating in the Companys group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay the full monthly COBRA premium for the same level of group health coverage as in effect for the Executive on the Date of Termination until the earliest of the following: (i) the 9-month anniversary of the Date of Termination; (ii) the Executives eligibility for group health coverage through other employment; or (iii) the end of the Executives eligibility under COBRA for continuation coverage for health care. If the payment of any COBRA or health insurance premiums by Company on behalf of Executive as described herein would otherwise violate any applicable nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010 (collectively, the Healthcare Acts) or Section 105(h) of the Code, the COBRA premiums paid by the Company shall be treated as taxable payments (subject to customary and required taxes and employment-related deductions) and be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Healthcare Acts or Section 105(h) of the Code. If Company determines in its sole discretion that it cannot provide the COBRA benefits described herein under Companys health
5
insurance plan without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), Company shall in lieu thereof provide to Executive a taxable lump-sum payment in an amount equal to the sum of the monthly (or then remaining) COBRA premiums that Executive would be required to pay to maintain Executives group health insurance coverage in effect on the separation date for the remaining portion of the period for which Executive shall receive the payments described in this Section 5(b).
(c) The amounts payable under this Section 5 shall be paid out in substantially equal installments in accordance with the Companys payroll practice, with the first installment commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).
6. Compensation Upon Termination by the Company without Cause or by the Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 regarding severance pay and benefits upon a termination by the Company without Cause or by the Executive for Good Reason if such termination of employment occurs during the three (3) months before through twelve (12) months after the occurrence of the first event constituting a Change in Control (such period, the Change in Control Period). These provisions shall terminate and be of no further force or effect beginning twelve (12) months after the occurrence of a Change in Control.
(a) Change in Control. If during the Change in Control Period the Executives employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates his employment for Good Reason as provided in Section 3(e), then, subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release):
(i) the Company shall pay the Executive a lump sum in cash in an amount equal to the sum of (A) 1.00 times the Executives current Base Salary (or the Executives Base Salary in effect immediately prior to the Change in Control, if higher) plus (B) one hundred percent (100%) of the Executives Target Incentive Compensation (the Change in Control Payment); provided that the Change in Control Payment shall be reduced by the amount of the Restrictive Covenants Agreement Setoff, if applicable, paid or to be paid in the same calendar year; and
(ii) notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all time-based stock options and other time-based stock-based awards held by the Executive shall immediately accelerate and become fully vested and exercisable or nonforfeitable as of the Date of Termination; and
6
(iii) if the Executive was participating in the Companys group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay the full monthly COBRA premium for the same level of group health coverage as in effect for the Executive on the Date of Termination until the earliest of the following: (i) the 12-month anniversary of the Date of Termination; (ii) the Executives eligibility for group health coverage through other employment; or (iii) the end of the Executives eligibility under COBRA for continuation coverage for health care. If the payment of any COBRA or health insurance premiums by Company on behalf of Executive as described herein would otherwise violate any applicable nondiscrimination rules or cause the reimbursement of claims to be taxable under the Healthcare Acts or Section 105(h) of the Code, the COBRA premiums paid by the Company shall be treated as taxable payments (subject to customary and required taxes and employment-related deductions) and be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Healthcare Acts or Section 105(h) of the Code. If Company determines in its sole discretion that it cannot provide the COBRA benefits described herein under Companys health insurance plan without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), Company shall in lieu thereof provide to Executive a taxable lump-sum payment in an amount equal to the sum of the monthly (or then remaining) COBRA premiums that Executive would be required to pay to maintain Executives group health insurance coverage in effect on the separation date for the remaining portion of the period for which Executive shall receive the payments described in this Section 6(b).
The amounts payable under this Section 6(a) shall be paid or commence to be paid within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.
(b) Additional Limitation.
(i) Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the Aggregate Payments), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based
7
payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).
(ii) For purposes of this Section 6(b), the After Tax Amount means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executives receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
(iii) The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 6(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the Accounting Firm), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.
(c) Definitions. For purposes of this Section 6, Change in Control shall mean any of the following:
(i) any person, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the Act) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all affiliates and associates (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the beneficial owner (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50 percent or more of the combined voting power of the Companys then outstanding securities having the right to vote in an election of the Board (Voting Securities) (in such case other than as a result of an acquisition of securities directly from the Company); or
(ii) the date a majority of the members of the Board is replaced during any 12- month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or
(iii) the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing
8
in the aggregate more than 50 percent of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of the combined voting power of all of the then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or more of the combined voting power of all of the then outstanding Voting Securities, then a Change in Control shall be deemed to have occurred for purposes of the foregoing clause (i).
7. Section 409A.
(a) Anything in this Agreement to the contrary notwithstanding, if at the time of the Executives separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executives separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executives separation from service, or (B) the Executives death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six- month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.
(b) All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
9
(c) To the extent that any payment or benefit described in this Agreement constitutes non-qualified deferred compensation under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executives termination of employment, then such payments or benefits shall be payable only upon the Executives separation from service. The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).
(d) The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.
(e) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
8. Restrictive Covenants.
(a) Restrictive Covenants Agreement. The Executive acknowledges and agrees that in consideration and as a condition of the commencement of employment by the Company, the Executive is required to enter into the Restrictive Covenants Agreement attached hereto as Exhibit A (the Restrictive Covenants Agreement). For purposes of this Agreement, the obligations in this Section 8 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the Continuing Obligations.
(b) Third-Party Agreements and Rights. The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executives use or disclosure of information or the Executives engagement in any business. The Executive represents to the Company that the Executives execution of this Agreement, the Executives employment with the Company and the performance of the Executives proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party. In the Executives work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.
(c) Litigation and Regulatory Cooperation. During and after the Executives employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf
10
of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company. The Executives full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executives employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executives performance of obligations pursuant to this Section 8(c).
(d) Injunction. The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in this Section 8, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.
(e) Protected Disclosures and Other Protected Actions. Nothing in this Agreement shall be interpreted or applied to prohibit the Executive from making any good faith report to any governmental agency or other governmental entity (a Government Agency) concerning any act or omission that the Executive reasonably believes constitutes a possible violation of federal or state law or making other disclosures that are protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation. In addition, nothing contained in this Agreement limits the Executives ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including the Executives ability to provide documents or other information, without notice to the Company. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law or under this Agreement or the Restrictive Covenants Agreement for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
9. Consent to Jurisdiction. In the event of any dispute regarding the terms or interpretation of this Agreement, the parties hereby consent to the sole and exclusive jurisdiction of the Superior Court of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts. Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction and venue of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, venue or service of process.
11
10. Indemnification. Executive shall be entitled to indemnification pursuant to the Officer Indemnification Agreement between the parties effective as of November 2, 2020, 2022 (Indemnification Agreement).
11. Representations and Warranties. By signing this agreement, Executive represents that Executive has not been debarred under Subsection (a) or (b) of Section 306 of the United States Federal Food, Drug, and Cosmetic Act (21 U.S. C. 335a); and is not on any FDA clinical investigator enforcement lists (including the (i) Disqualified/Totally Restricted List, (ii) Restricted List and (iii) Adequate Assurances List).
12. Notice of Resignation. If Executive elects to resign from employment with the Company, the Executive must provide the Company with written notification of resignation at least three (3) weeks prior to the Executives intended resignation date. The Company may elect to waive all or part of the three (3) week notice period in its sole discretion.
13. Integration. This Agreement, together with the Restrictive Covenants Agreement, the Indemnification Agreement and the Equity Documents, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes in all respects all prior agreements between the parties relating to the Executives employment relationship with the Company and/or the ending of that employment relationship.
14. Withholding. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.
15. Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
16. Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executives employment to the extent necessary to effectuate the terms contained herein.
17. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
18. Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.
12
19. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.
20. Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Companys benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Companys benefit plans, programs or policies except as otherwise may be provided herein, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise. Except with respect to the Restrictive Covenants Agreement, in the event that the Executive is party to an agreement with the Company providing for payments or benefits under such agreement and this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both. Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall the Executive be entitled to payments or benefits pursuant to Section 5 and Section 6 of this Agreement.
21. Governing Law. This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles of such Commonwealth. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the First Circuit.
22. Assignment. Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the Executives consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization, consolidate with, or merge into or to whom it transfers all or substantially all of its properties or assets; provided further that if the purchaser in any transaction involving the transfer of all or substantially all of the Companys assets assumes this Agreement and the Executive accepts a position with the purchaser that is equivalent or better to his or her position immediately preceding such transaction, then the Executive shall not be entitled to any Severance Amount pursuant to Section 5 or any Change in Control Payment pursuant to Section 6. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executives and the Companys respective successors, executors, administrators, heirs and permitted assigns.
23. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.
13
IN WITNESS WHEREOF, the parties have executed this Agreement, under seal, effective on the Effective Date.
MAGENTA THERAPEUTICS, INC. | ||
By: | /s/ Jason Gardner | |
Its: | Chief Executive Officer | |
Date: | March 3, 2022 | |
EXECUTIVE | ||
/s/ Stephen Mahoney | ||
Stephen Mahoney | ||
Date: March 3, 2022 |
14
Exhibit 21.1
Legal Name |
State of Organization | |||
Magenta Securities Corporation |
Massachusetts |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Magenta Therapeutics, Inc.:
We consent to the incorporation by reference in the registration statements (No. 333-233127 and No. 333-257381) on Form S-3 and (No. 333-225838, No. 333-230387, No. 333-233125, No. 333-236853, and No. 333-253815) on Form S-8 of Magenta Therapeutics, Inc. and subsidiary, of our report dated March 8, 2022, with respect to the consolidated balance sheets of Magenta Therapeutics, Inc. as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, stockholders equity, and cash flows for the years then ended, and the related notes, which report appears in the December 31, 2021 annual report on Form 10-K of Magenta Therapeutics, Inc.
/s/ KPMG LLP
Boston, Massachusetts
March 8, 2022
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULE 13A-14( A ) / RULE 15D-14( A ) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Jason Gardner, D.Phil., certify that:
1. I have reviewed this Annual Report on Form 10-K of Magenta Therapeutics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: March 8, 2022
/s/ Jason Gardner |
Jason Gardner, D.Phil. |
President, Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
RULE 13A-14(A) / RULE 15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Stephen Mahoney, certify that:
1. I have reviewed this Annual Report on Form 10-K of Magenta Therapeutics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: March 8, 2022
/s/ Stephen Mahoney |
Stephen Mahoney |
Chief Financial and Operating Officer |
(Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL
FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-K of Magenta Therapeutics, Inc. (the Company) for the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his or her knowledge:
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: March 8, 2022
/s/ Jason Gardner |
Jason Gardner, D.Phil. |
President and Chief Executive Officer |
(Principal Executive Officer) |
/s/ Stephen Mahoney |
Stephen Mahoney |
Chief Financial and Operating Officer |
(Principal Financial and Accounting Officer) |