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As filed with the Securities and Exchange Commission on July 10, 2018

Registration No. 333-225846


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933

Replimune Group, Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
  2836
(Primary Standard Industrial
Classification Code Number)
  82-2082553
(I.R.S. Employer
Identification Number)

Replimune Group, Inc.
18 Commerce Way, Woburn, MA 01801
(781) 995-2443

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

Philip Astley-Sparke, Executive Chairman
Replimune Group, Inc.
18 Commerce Way, Woburn, MA 01801
(781) 995-2443

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

Please send copies of all communications to:

Timothy J. Corbett
Gitte J. Blanchet
Morgan, Lewis & Bockius LLP
One Federal Street
Boston, MA 02110
(617) 341-7700
  William V. Fogg
Johnny G. Skumpija
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000

Approximate date of commencement of the proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

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

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

Emerging growth company ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.    ý

CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered

  Amount to be
registered(1)(2)

  Proposed maximum
offering price
per share

  Proposed maximum
aggregate offering
price(1)(2)

  Amount of
registration fee(3)

 

Common stock, par value $0.001 per share

  7,705,000   $16.00   $123,280,000   $15,349

 

(1)    Includes additional shares of common stock that the underwriters have the option to purchase.

(2)    Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

(3)    The registrant previously paid $12,450 of the registration fee in connection with the original filing of this Registration Statement filed on June 22, 2018.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


Table of Contents

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated July 10, 2018

LOGO

6,700,000 shares

Replimune Group, Inc.

Common stock

$               per share

This is the initial public offering of our common stock. We are selling 6,700,000 shares of our common stock. We currently expect the initial public offering price to be between $14.00 and $16.00 per share of common stock.

Prior to this offering, there has been no public market for our common stock. We have applied to have our common stock listed on the Nasdaq Global Market, or Nasdaq, under the symbol "REPL."

We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, and therefore have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See "Prospectus summaryImplications of being an emerging growth company."

Investing in our common stock involves risks. See "Risk factors" beginning on page 14.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 
  Per share
  Total
 

Initial public offering price

  $                  $                 

Underwriting discount(1)

 
$

              
 
$

              
 

Proceeds to Replimune Group, Inc. (before expenses)

 
$

              
 
$

              
 

(1)    See "Underwriting" for additional information regarding total underwriting compensation.

The underwriters expect to deliver the shares to purchasers on or about                           , 2018.

We have granted the underwriters an option for a period of 30 days to purchase up to 1,005,000 additional shares of our common stock at the initial public offering price less the underwriting discount.

Several of our existing stockholders (or their affiliates), including stockholders affiliated with certain of our directors, have indicated an interest in purchasing up to an aggregate of approximately $40.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, fewer or no shares to any of these stockholders and any of these stockholders could determine to purchase more, fewer or no shares in this offering. The underwriters will receive the same underwriting discount on any shares purchased by these stockholders as they will on any other shares sold to the public in this offering.

J.P. Morgan           Leerink Partners   BMO Capital Markets

Prospectus dated                           , 2018


Table of Contents

Table of contents

 
  Page
 

Prospectus summary

    1  

Risk factors

    14  

Special note regarding forward-looking statements

    70  

Market data

    72  

Use of proceeds

    73  

Dividend policy

    74  

Capitalization

    75  

Dilution

    78  

Selected consolidated financial data

    81  

Management's discussion and analysis of financial condition and results of operations

    83  

Business

    102  

Management

    146  

Executive and director compensation

    154  

Certain relationships and related party transactions

    171  

Principal stockholders

    177  

Description of capital stock

    180  

Material United States federal income tax consequences to non-U.S. holders of our common stock

    185  

Shares eligible for future sale

    191  

Underwriting

    194  

Legal matters

    203  

Experts

    203  

Where you can find more information

    203  

Index to consolidated financial statements

    F-1  

Unless the context otherwise requires, references in this prospectus to (i) "Replimune," the "Company," "we," "us" and "our" refer to Replimune Group, Inc. and its consolidated subsidiaries and (ii) a year are references to the applicable calendar year and not our fiscal year.

You should rely only on the information contained in this prospectus or contained in any free writing prospectus prepared by or on behalf of us and filed with the Securities and Exchange Commission, or the SEC. Neither we nor the underwriters have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us and filed with the SEC. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell, and seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of our common stock. Our business, financial conditions, results of operations and prospects may have changed since that date.

Through and including                             , 2018 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons who come into possession of this prospectus in jurisdictions outside of the United States are required to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus outside of the United States.

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Prospectus summary

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should read the entire prospectus carefully, including the sections entitled "Risk factors" and "Management's discussion and analysis of financial condition and results of operations," and our consolidated financial statements and the related notes.

Business overview

We are a clinical-stage biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients. We use our proprietary Immulytic platform to design and develop product candidates that are intended to maximally activate the immune system against solid tumors. The foundation of our platform consists of a proprietary, engineered strain of herpes simplex virus 1, or HSV-1, that has been "armed" with a fusogenic therapeutic protein intended to substantially increase anti-tumor activity. Our platform enables us to design multiple product candidates that incorporate various further genes whose expression is intended to augment the inherent properties of HSV-1 to both directly destroy tumor cells and induce an anti-tumor immune response.

We are currently conducting a Phase 1/2 clinical trial with our lead product candidate, RP1, in approximately 150 patients with a range of solid tumors. We have entered into a collaboration with Bristol-Myers Squibb Company, or BMS, under which it has granted us a non-exclusive, royalty-free license to, and is supplying at no cost, its anti-PD-1 therapy, nivolumab, for use in combination with RP1 in this clinical trial. BMS has no further development-related obligations under this collaboration. The first part of this clinical trial is underway in the United Kingdom and we intend to conduct the second part of the clinical trial, which will enroll patients with four solid tumor types, in both the United Kingdom and, pending the opening of an Investigational New Drug Application, or IND, in the United States. We have also entered into a collaboration agreement with Regeneron Pharmaceuticals, Inc., or Regeneron, under which we intend to conduct clinical development of our product candidates in combination with cemiplimab, an anti-PD-1 therapy being developed by Regeneron. For each clinical trial conducted under this collaboration, Regeneron will fund one-half of the clinical trial costs, supply cemiplimab at no cost, and grant us a non-exclusive, royalty-free license to cemiplimab for use in the clinical trial. The first planned clinical trial to be conducted under this collaboration is a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with cutaneous squamous cell carcinoma, or CSCC, which we intend to initiate in the first half of 2019. If compelling clinical data are generated demonstrating the benefits of the combined treatment, we believe the data from this trial could support a filing with regulatory authorities for marketing approval. We also intend to initiate a clinical trial with our second product candidate, RP2, in additional tumor types in the first half of 2019.

Oncolytic immunotherapy is an emerging class of cancer treatment that exploits the ability of certain viruses to selectively replicate in and directly kill tumors, as well as induce a potent, patient-specific, anti-tumor immune response. While clinically active alone, oncolytic immunotherapy may have synergy with certain other treatments and, in particular, with immune checkpoint blockade therapies. Immune checkpoint blockade therapies have recently become established for the treatment of cancer, but only for patients with an ongoing anti-tumor immune response, that is, whose tumors are immunologically "hot." Our product candidates are designed to induce a robust immune response against a patient's cancer, including to the neo-antigens that are uniquely present in tumors, with the goal of improving responses in

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immunologically "hot" tumors, turning immunologically "cold" tumors "hot," and enabling patients to respond to immune checkpoint blockade therapies to which they otherwise may not respond.

Our approach combines multiple mechanisms of action into single product candidates in a practical, "off-the-shelf" format. We believe that the bundling of multiple approaches for the treatment of cancer into single therapies will simplify the development path of our product candidates, while also improving patient outcomes at a lower cost to the healthcare system than the use of multiple different drugs.

Our management team has worked together for more than ten years and successfully developed the first oncolytic immunotherapy, Imlygic, also known as talimogene laherparepvec, or T-Vec, which was approved by the U.S. Food and Drug Administration, or FDA, for the treatment of advanced melanoma in 2015.

Our product candidate pipeline

We are developing a pipeline of oncolytic immunotherapy product candidates that we believe have the potential to provide meaningful and long-lasting clinical benefits to cancer patients. The following table summarizes our current pipeline and expectations for development timelines:

GRAPHIC

(1)    Two additional tumor types to be selected for Phase 2 clinical development, with clinical trials expected to commence in H2 2019, assuming in each case the opening of an IND or foreign equivalent.

We are conducting an ongoing Phase 1/2 clinical trial of RP1 in approximately 150 patients. RP1 is the first product candidate from our Immulytic platform and is armed with two therapeutic genes that are intended to increase the natural ability of HSV-1 to kill tumor cells and induce an anti-tumor immune response. In the first part of the clinical trial, which we are currently conducting in the United Kingdom, we are evaluating safety in approximately 30 patients with a range of solid tumor types both alone and in

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combination with nivolumab. No serious adverse events have been reported to date that have been determined to be related to RP1. In the second part of the trial, which we will conduct in both the United Kingdom and, pending the opening of an IND, in the United States, we will test RP1 in combination with nivolumab in four different tumor types in cohorts of approximately 30 patients each. These tumor types are metastatic melanoma, metastatic bladder cancer, microsatellite instability high cancer, and non-melanoma skin cancer. In this part of the study, we intend to continue to evaluate the safety and tolerability of RP1 in combination with nivolumab, assess efficacy endpoints under the clinical trial protocol, and then analyze each cohort's data to determine the indications that merit progressing into further clinical development. In addition, we are preparing to initiate a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with CSCC in the first half of 2019. If compelling clinical data are generated demonstrating the benefits of the combined treatment, we believe the data from this trial could support a filing with regulatory authorities for marketing approval.

We are also developing additional product candidates, including RP2 and RP3, built on our Immulytic platform that are additionally engineered to further enhance anti-tumor immune responses and to address additional tumor types. RP2 has been engineered to express an antibody-like molecule that blocks the activity of CTLA-4, a protein that inhibits immune responses to tumors. We are engineering RP3 with the intent not only to block the activity of CTLA-4, but also to further stimulate an anti-tumor immune response through activation of the immune co-stimulatory pathways. We intend to file INDs and foreign equivalents for both RP2 and RP3 and, subject to regulatory approval, expect that RP2 will enter clinical development in the first half of 2019, and that RP3 will enter clinical development in the first half of 2020. As demonstrated by our planned development timelines, we believe that a particular advantage of our Immulytic platform is that it allows us to develop new product candidates that contain additional genes encoding therapeutic proteins rapidly from conception through to the initiation of clinical trials.

We administer our product candidates by direct injection into solid tumors. We believe that direct injection maximizes virus-mediated tumor cell death, provides the most efficient delivery of virus-encoded immune activating proteins into the tumor, and limits the systemic toxicities that could be associated with intravenous administration. Activation of systemic immunity through local administration can lead to systemic clinical benefit through the induction of responses in tumors which have not themselves been injected, which is known as an "abscopal" effect.

While products and product candidates based on the oncolytic immunotherapy approach have shown single-agent activity, we believe our product candidates will demonstrate particular synergy in combination with immune checkpoint blockade therapies, including those that target the programmed cell death protein 1, or PD-1, a tumor cell surface receptor that plays an important role in inhibiting, or shutting down, immune responses, or the receptor or ligand for PD-1, called PD-L1. We are designing our product candidates with additional mechanisms of action as compared to T-Vec, as well as other oncolytic immunotherapies in development, with the goal of maximizing both direct tumor killing and the activation of the patients' immune system against their particular cancer. We believe these additional mechanisms of action of our product candidates will increase tumor susceptibility to immune checkpoint blockade therapies and, in particular, work synergistically with antibodies targeting PD-1 or PD-L1 to enhance response rates across a range of tumor types.

Our founders and core management team, including Robert Coffin, our President and Chief Executive Officer, Philip Astley-Sparke, our Executive Chairman, and Colin Love, our Chief Operating Officer, were the founder and senior management team of BioVex Group, Inc., or BioVex, where they invented and developed T-Vec. BioVex was acquired by Amgen Inc., or Amgen, in 2011. Our Chief Medical Officer, Howard

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Kaufman, was the principal investigator for the pivotal clinical trial upon which T-Vec was approved and previously served as President of the Society for the Immunotherapy of Cancer.

We are backed by a group of leading institutional life science investors, including affiliates of Atlas Ventures, Bain Capital Life Sciences, BVF Partners, Cormorant Capital, Forbion Capital Partners, Foresite Capital, Omega Funds and Redmile Group.

Our strategy

Our goal is to create the leading oncolytic immunotherapy company that discovers, develops and commercializes next-generation products with multiple mechanisms of action for the treatment of a broad range of solid tumor types. Key elements of our strategy include the following:

Advance the development of, and seek regulatory approval for, our lead product candidate, RP1.    In the first half of 2019, we are planning to commence a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with CSCC. In addition, we are currently conducting an approximately 150 patient Phase 1/2 clinical trial of RP1 targeting four different tumor types in the United Kingdom and, pending the opening of an IND, in the United States. We intend to analyze data for each tumor type to determine the indications that merit further clinical development.

Initiate the clinical development of and obtain regulatory approval for RP2, our next product candidate.    We plan to initiate a Phase 1/2 clinical trial in the first half of 2019 of RP2 in combination with anti-PD-1 therapy in triple negative breast cancer and two further indications.

Leverage our Immulytic platform to build a portfolio of product candidates that target a range of immune mechanisms and progress these product candidates into the clinic.    We plan to utilize our Immulytic platform to develop additional product candidates, including RP3, that express further combinations of proteins aimed at activating multiple immune mechanisms for the treatment of a broad range of solid tumor types. Our current goal in the coming years is to introduce one product candidate into the clinic each year.

Apply our extensive expertise to establish, equip, and operate our own in-house manufacturing facility.    We intend to establish, equip, and operate our own manufacturing facility in Framingham, Massachusetts for multi-product current Good Manufacturing Practice, or cGMP, manufacturing. We expect our facility to be ready to produce clinical-grade material during the first half of 2020 and ultimately to be able to support commercial product launch.

Retain significant economic and commercial rights to our product candidates in key geographic areas.    We intend to retain rights in the United States for our product candidates and to develop an oncology-focused commercial organization. When economically attractive, we intend to evaluate and enter into development and marketing agreements with pharmaceutical and biotechnology partners for geographic areas in which we are unlikely to pursue development and commercialization on our own.

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Risks affecting our business

You should consider carefully the risks described under the "Risk factors" section beginning on page 14 and elsewhere in this prospectus. The risks that could materially and adversely affect our business, financial condition, operating results and prospects include the following:

Our product candidates are in the early stages of development, are not approved for commercial sale and might never receive regulatory approval or become commercially viable. We have never generated any revenue from product sales and may never be profitable.

We currently have only one product candidate, RP1, in clinical development. A failure of this product candidate in clinical development would adversely affect our business and may require us to discontinue development of other product candidates based on the same therapeutic approach.

We will not be able to commercialize our product candidates if our preclinical studies do not produce successful results and/or our clinical trials do not demonstrate the safety and efficacy of our product candidates.

We anticipate that our product candidates will be used in combination with third-party drugs, some of which are still in development, and we have limited or no control over the supply, regulatory status, or regulatory approval of these drugs.

Even if our development efforts are successful, we may not obtain regulatory approval for any of our product candidates in the United States or other jurisdictions, which could prevent us from commercializing our product candidates.

Following submission of our IND for RP1 in February 2018, the FDA informed us that our Phase 1/2 clinical trial of RP1 may not commence at sites in the United States until we submit the results of an additional preclinical toxicology and biodistribution study that the FDA requested at a pre-IND meeting held in October 2017, and the FDA clears us to proceed with the clinical trial. Until such time, the clinical trial is on clinical hold. If we are not able to obtain, or if we experience delays in obtaining, required regulatory approvals from the FDA, we may not be able to commercialize our product candidates in the United States as expected, and our ability to generate revenue may be materially impaired.

Even if we obtain regulatory approval for our product candidates, any such approval may be subject to limitations, including with respect to the approved indications or patient populations, which could impair our ability to successfully commercialize our product candidates.

If we are unable to successfully commercialize any product candidate for which we receive regulatory approval, or experience significant delays in doing so, our business will be materially harmed.

Negative developments in the field of immuno-oncology could damage public perception of RP1 or any of our other product candidates and negatively affect our business.

We face significant competition from other biopharmaceutical and biotechnology companies, academic institutions, government agencies, and other research organizations, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us. If their product candidates are shown to be safer or more effective than ours, our commercial opportunity could be reduced or eliminated.

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We are a clinical-stage biopharmaceutical company with a very limited operating history. We have incurred net losses since our inception and anticipate that we will continue to incur substantial and increasing net losses in the foreseeable future. We may never achieve or sustain profitability.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

If we are unable to obtain, maintain and protect our intellectual property rights for our technology and product candidates, or if our intellectual property rights are inadequate, our competitive position could be harmed.

We have agreements with BMS and Regeneron, and in the future may have agreements with other companies, to obtain the supply of anti-PD-1 therapies for the development of RP1 and our other product candidates. If our relationships with BMS, Regeneron or any future collaborator or supplier are not successful, we may be delayed in completing the development of RP1 and our other product candidates.

We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials, and if those third parties do not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements, we may be unable to obtain regulatory approval for our product candidates or any product candidates that we may develop in the future.

We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability and have to limit the commercialization of any approved products and/or our product candidates.

We are highly dependent on our key personnel, including our founders, Robert Coffin, Ph.D., our President and Chief Executive Officer, Philip Astley-Sparke, our Executive Chairman, Howard Kaufman, M.D., our Chief Medical Officer, and Colin Love, Ph.D., our Chief Operating Officer. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

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

Company and other information

The parent company of our group is Replimune Group, Inc., a Delaware corporation that was formed in July 2017. Prior to the corporate reorganization described below, the parent company of our group was Replimune Limited, a private company limited by shares incorporated in England and Wales (registered number 09496393), which was organized in March 2015.

In July 2017, all of the outstanding equity securities of Replimune Limited were exchanged for equity securities of Replimune Group, Inc., a newly formed Delaware corporation. Following the reorganization, Replimune Limited is a wholly owned subsidiary of Replimune Group, Inc. See "Management's discussion and analysis of financial condition and results of operations—Overview" for more information.

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Our principal executive office is located at 18 Commerce Way, Woburn, MA 01801 and our telephone number is (781) 995-2443. Our website address is https://www.replimune.com. We do not incorporate the information on or accessible through our website into this prospectus and you should not consider any information on, or that can be accessed through, our website as part of this prospectus. Our fiscal year end is March 31.

We own various United Kingdom registered trademarks and United States federal trademark applications and unregistered trademarks, including our company name and the "Immulytic" platform name. All other trademarks, service marks and trade names used in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the symbols ® and ™, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

Implications of being an emerging growth company

We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We refer to the Jumpstart Our Business Startups Act of 2012 in this prospectus as the "JOBS Act," and references in this prospectus to "emerging growth company" have the meaning ascribed to it in the JOBS Act.

An emerging growth company may take advantage of specified reduced reporting requirements and other burdens that are otherwise applicable generally to public companies. These provisions include, but are not limited to:

being permitted to present only two years of audited financial statements and only two years of related Management's discussion and analysis of financial condition and results of operations in this prospectus;

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or Sarbanes-Oxley Act;

an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations;

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

exemptions from the requirement to hold a nonbinding advisory vote on executive compensation and to obtain stockholder approval of any golden parachute payments not previously approved.

We may use these provisions until such time as we cease to be an emerging growth company.

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our investors may be different from the information you might receive from other public reporting companies that are not emerging growth companies in which you hold equity interests.

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The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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The offering

Common stock we are offering   6,700,000 shares.

Underwriters' option to purchase additional shares

 

We have granted the underwriters an option for a period of 30 days to purchase up to 1,005,000 additional shares of our common stock.

Common stock outstanding after giving effect to this offering

 

30,838,587 shares (31,843,587 shares if the underwriters exercise their option to purchase additional shares in full).

Use of proceeds

 

We estimate that the net proceeds from the sale of 6,700,000 shares of common stock in this offering will be approximately $90.8 million, or approximately $104.8 million if the underwriters exercise their option to purchase additional shares in full, based on an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We currently expect to use the net proceeds from this offering, together with our existing cash and cash equivalents and short-term investments, as follows:

 

approximately $20.0 million to fund the development of RP1 through the completion of the ongoing Phase 1/2 clinical trial in four solid tumor types;

 

approximately $15.0 million to fund our share of the costs to fully recruit our planned Phase 2 clinical trial with RP1 in CSCC;

 

approximately $20.0 million to fund the completion of the preclinical development and the initial clinical trials of RP2 in approximately 100 patients;

 

approximately $10.0 million to fund the completion of preclinical development and a Phase 1 clinical trial of RP3;

 

approximately $20.0 million to fund capital expenditures associated with establishing and equipping our planned manufacturing facility in Framingham, Massachusetts; and

 

the remainder for general corporate purposes, including working capital requirements and operating expenses.

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Dividend policy   We do not intend to pay dividends for the foreseeable future. Any future determination to pay dividends on our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial position, results of operations, liquidity and legal requirements. See "Dividend policy."

Risk factors

 

See "Risk factors" beginning on page 14 and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed Nasdaq Symbol

 

"REPL"

Several of our existing stockholders (or their affiliates), including stockholders affiliated with certain of our directors, have indicated an interest in purchasing up to an aggregate of approximately $40.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, fewer or no shares to any of these stockholders and any of these stockholders could determine to purchase more, fewer or no shares in this offering. The underwriters will receive the same underwriting discount on any shares purchased by these stockholders as they will on any other shares sold to the public in this offering.

The number of shares of our common stock to be outstanding after this offering is based on 24,138,587 shares of our common stock outstanding as of March 31, 2018, after giving effect to the conversion of all outstanding shares of our preferred stock as of March 31, 2018 into an aggregate of 19,157,360 shares of our common stock upon the completion of this offering, and excludes:

2,520,247 shares of our common stock issuable upon the exercise of stock options outstanding as of March 31, 2018 at a weighted average exercise price of $2.72 per share;

497,344 shares of our common stock issuable upon the exercise of warrants outstanding as of March 31, 2018, at an exercise price of $1.01 per share;

3,486,118 shares of our common stock reserved for future issuance under our 2018 Omnibus Incentive Compensation Plan, or our 2018 Plan, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part;

131,850 shares of our common stock reserved for future issuance as of March 31, 2018 under our 2017 Equity Compensation Plan, as amended, or our 2017 Plan, which will become available for issuance under our 2018 Plan upon the effectiveness of our 2018 Plan;

348,612 shares of our common stock reserved for future issuance under our Employee Stock Purchase Plan, or our ESPP, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part; and

26,258 shares of our common A stock outstanding as of March 31, 2018, all of which will be repurchased by us and canceled immediately prior to the completion of this offering.

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Unless otherwise indicated, all information in this prospectus reflects or assumes the following:

the conversion of all outstanding shares of our preferred stock into 19,157,360 shares of our common stock upon the completion of this offering;

the repurchase and cancellation of all outstanding shares of our common A stock immediately prior to the completion of this offering;

a 1-for-9.94688 forward stock split of our common stock effected on July 9, 2018, and corresponding adjustments to (i) the rate at which shares of our preferred stock convert into shares of our common stock, (ii) the exercise price of all outstanding stock options and warrants and (iii) the number of shares of our common stock subject to each outstanding option and warrant;

no exercise by the underwriters of their option to purchase additional shares of our common stock;

the filing of our amended and restated certificate of incorporation and adoption of our amended and restated bylaws immediately prior to the completion of this offering; and

the conversion of all outstanding warrants to purchase shares of series seed convertible preferred stock, or series seed preferred stock, into warrants to purchase 497,344 shares of our common stock upon the completion of this offering.

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Summary consolidated financial data

You should read the following summary consolidated financial data together with our consolidated financial statements and the related notes appearing at the end of this prospectus and the "Selected consolidated financial data" and "Management's discussion and analysis of financial condition and results of operations" sections of this prospectus. We have derived the consolidated statement of operations data for the years ended March 31, 2017 and 2018 and the consolidated balance sheet data as of March 31, 2017 and 2018 from our audited consolidated financial statements appearing at the end of this prospectus. Our historical results are not necessarily indicative of results that should be expected in any future period.

 
   
   
 
 
  Year ended March 31,  
 
  2017
  2018
 
 
  (Amounts in thousands, except share and per share data)
 

Consolidated statement of operations data

             

Operating expenses:

             

Research and development

  $ 6,936   $ 13,516  

General and administrative

    2,711     5,713  

Total operating expenses

    9,647     19,229  

Loss from operations

    (9,647 )   (19,229 )

Other income (expense):

             

Research and development incentives

    1,442     2,267  

Interest income

    25     288  

Change in fair value of warrant liability

    (150 )   (972 )

Other income (expense), net

    626     (2,056 )

Total other income (expense), net

    1,943     (473 )

Net loss

    (7,704 )   (19,702 )

Net loss attributable to common stockholders

  $ (7,704 ) $ (19,702 )

Net loss per share attributable to common stockholders, basic and diluted(1)

  $ (1.55 ) $ (3.96 )

Weighted average common shares outstanding, basic and diluted(1)

    4,973,439     4,978,539  

Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(1)

        $ (0.87 )

Pro forma weighted average common shares outstanding, basic and diluted (unaudited)(1)

          21,506,697  

(1)    See Note 12 to our consolidated financial statements appearing at the end of this prospectus for further details on the calculation of basic and diluted net loss per share attributable to common stockholders and the calculation of unaudited pro forma basic and diluted net loss per share attributable to common stockholders.

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  As of March 31, 2018  
 
  Actual
  Pro forma(2)
  Pro forma as
adjusted(2)(3)

 
 
  (Amounts in thousands)
 

Consolidated balance sheet data

                   

Cash and cash equivalents and short-term investments

  $ 61,551   $ 61,551   $ 152,316  

Working capital(1)

    59,539     59,539     150,304  

Total assets

    65,151     65,151     155,916  

Warrant liability

    1,642          

Total liabilities

    6,858     5,216     5,216  

Convertible preferred stock

    86,361          

Total stockholders' equity (deficit)

    (28,068 )   59,935     150,700  

(1)    We define working capital as current assets less current liabilities.

(2)    The pro forma consolidated balance sheet data give effect to (i) the conversion of all outstanding shares of our preferred stock into an aggregate of 19,157,360 shares of common stock upon the completion of this offering, (ii) all outstanding warrants to purchase shares of series seed preferred stock becoming warrants to purchase shares of common stock upon the completion of this offering and (iii) all outstanding shares of our common A stock being repurchased by us and canceled immediately prior to the completion of this offering.

(3)    The pro forma as adjusted balance sheet data gives further effect to our issuance and sale of 6,700,000 shares of our common stock in this offering at an assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as adjusted information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents and short-term investments, additional paid-in capital, total stockholders' equity (deficit) and total capitalization on a pro forma as adjusted basis by approximately $6.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents and short-term investments, additional paid-in capital, total stockholders' equity (deficit) and total capitalization on a pro forma as adjusted basis by approximately $14.0 million, assuming the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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Risk factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes appearing at the end of this prospectus, before deciding whether to purchase shares of our common stock. If any of the following risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

Risks related to product development

Our product candidates are in the early stages of development, are not approved for commercial sale and might never receive regulatory approval or become commercially viable. We have never generated any revenue from product sales and may never be profitable.

All of our product candidates are in research or early development. We have not generated any revenues from the sale of products and do not expect to do so for at least the next several years. Our lead product candidate, RP1, and any other product candidates will require extensive preclinical and/or clinical testing and regulatory approval prior to commercial use. Our research and development efforts may not be successful. Even if our clinical development efforts result in positive data, our product candidates may not receive regulatory approval or be successfully introduced and marketed at prices that would permit us to operate profitably.

We currently have only one product candidate, RP1, in clinical development. A failure of this product candidate in clinical development would adversely affect our business and may require us to discontinue development of other product candidates based on the same therapeutic approach.

RP1 is our only clinical development-stage product candidate. Although we have other product candidates, RP2 and RP3, in preclinical development and we intend to develop additional product candidates in the coming years, it will take additional investment and time for such product candidates to reach the same stage of development as RP1, and there can be no assurance that they will ever do so. Since all of the product candidates in our current pipeline are based on our Immulytic platform, if RP1 fails in development as a result of any underlying problem with our Immulytic platform, then we may be required to discontinue development of all product candidates that are based on our therapeutic approach. If we were required to discontinue development of RP1 or our other product candidates, or if any of them were to fail to receive regulatory approval or achieve sufficient market acceptance, we could be prevented from or significantly delayed in achieving profitability. We can provide no assurance that we would be successful at developing other product candidates based on an alternative therapeutic approach.

We will not be able to commercialize our product candidates if our preclinical studies do not produce successful results and/or our clinical trials do not demonstrate the safety and efficacy of our product candidates.

Our lead product candidate, RP1, is in the early stages of a Phase 1/2 clinical trial in the United Kingdom and, pending the opening of an IND, in the United States, while our other product candidates, RP2 and RP3, are in preclinical development. We expect to file INDs and foreign equivalents for RP2 and RP3 and, subject to regulatory clearance, expect RP2 to begin a Phase 1/2 clinical trial in the first half of 2019 and

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expect RP3 to enter clinical development in the first half of 2020. Our product candidates will require preclinical and clinical trials before we can submit a marketing application to the applicable regulatory authorities. Our product candidates are susceptible to the risks of failure inherent at any stage of product development, including the occurrence of unexpected or unacceptable adverse events or the failure to demonstrate efficacy in clinical trials. Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain.

The results of preclinical studies, preliminary study results, and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. While we are currently conducting an early stage Phase 1/2 clinical trial with RP1, we do not yet have clinical results for any of our product candidates. Our product candidates may not perform as we expect, may ultimately have a different or no impact on tumors, may have a different mechanism of action than we expect in humans, and may not ultimately prove to be safe and effective.

Preliminary and final results from preclinical studies and early stage trials, and trials in compounds that we believe are similar to ours, may not be representative of results that are found in larger, controlled, blinded, and longer-term studies. Product candidates may fail at any stage of preclinical or clinical development. Product candidates may fail to show the desired safety and efficacy traits even if they have progressed through preclinical studies or initial clinical trials. Preclinical studies and clinical trials may also reveal unfavorable product candidate characteristics, including safety concerns. A number of companies in the biopharmaceutical industry have suffered significant setbacks in clinical trials, notwithstanding promising results in earlier preclinical studies or clinical trials or promising mechanisms of action. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants. Moreover, should there be an issue with the design of a clinical trial, our results may be impacted. We may not discover such a flaw until the clinical trial is at an advanced stage.

We may also experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:

regulators or institutional review boards, or IRBs, may not authorize us or our investigators to commence a clinical trial, conduct a clinical trial at a prospective trial site, or amend trial protocols, or may require that we modify or amend our clinical trial protocols;

we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and/or clinical research organizations, or CROs;

clinical trials of our product candidates may produce negative or inconclusive results, or our studies may fail to reach the necessary level of statistical significance, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

the number of patients required for clinical trials of our 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 be lost to follow-up at a higher rate than we anticipate, or may elect to participate in alternative clinical trials sponsored by our competitors with product candidates that treat the same indications as our product candidates;

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our third-party contractors may fail to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or we may be required to engage in additional clinical trial site monitoring;

we, regulators, or IRBs may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics of the product candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic or therapeutic candidate;

changes could be adopted in marketing approval policies during the development period, rendering our data insufficient to obtain marketing approval;

statutes or regulations could be amended or new ones could be adopted;

changes could be adopted in the regulatory review process for submitted product applications;

the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a Biologics License Application, or BLA, or equivalent authorizations from comparable foreign regulatory authorities;

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;

we may decide, or regulators may require us, to conduct or gather, as applicable, additional clinical trials, analyses, reports, data, or preclinical trials, or we may abandon product development programs;

we may fail to reach an agreement with regulators or IRBs regarding the scope, design, or implementation of our clinical trials, and the FDA or comparable foreign regulatory authorities may require changes to our study designs that make further study impractical or not financially prudent;

regulators may ultimately disagree with the design or our conduct of our preclinical studies or clinical trials, finding that they do not support product candidate approval;

we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites;

patients that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the study or clinical trial, increase the needed enrollment size for the clinical trial or extend its duration;

there may be regulatory questions or disagreements regarding interpretations of data and results, or new information may emerge regarding our product candidates;

the FDA or comparable foreign regulatory authorities may disagree with our study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials or find that a product candidate's benefits do not outweigh its safety risks;

the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries;

the FDA or comparable foreign regulatory authorities may disagree with our intended indications;

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the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or our manufacturing facilities for clinical and future commercial supplies;

the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;

the FDA or comparable foreign regulatory authorities may take longer than we anticipate to make a decision on our product candidates; and

we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development.

Our development costs will also increase if we experience delays in testing or approvals, and we may not have sufficient funding to complete the testing and approval process for any of our product candidates. We may be required to obtain additional funds to complete clinical trials and prepare for possible commercialization of our product candidates. We do not know whether any preclinical tests or clinical trials beyond what we currently have planned will be required, will begin as planned, will need to be restructured, or will be completed on schedule, or at all. Significant delays relating to any preclinical or clinical trials also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. In addition, many of the factors that cause, or lead to, delays in clinical trials may ultimately lead to the denial of marketing approval of any of our product candidates. If any of these occur, our business, financial condition, results of operations, stock price and prospects may be materially harmed.

We anticipate that our product candidates will be used in combination with third-party drugs, some of which are still in development, and we have limited or no control over the supply, regulatory status, or regulatory approval of such drugs.

Our product candidates are intended to be administered in combination with checkpoint blockade drugs, a class of drugs that are intended to stop tumor cells from "switching off" an immune system attack against themselves. We have entered into an agreement with BMS for the supply of nivolumab, its anti-PD-1 therapy, for use in connection with our current Phase 1/2 clinical trial with RP1. We have also entered into a clinical collaboration agreement with Regeneron which includes the supply of cemiplimab, its anti-PD-1 therapy, for clinical trials conducted under the agreement. The first planned clinical trial to be conducted under the agreement is a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, compared to cemiplimab alone, in approximately 240 patients with CSCC. We may enter into additional agreements for the supply of anti-PD-1 products for use in connection with the development of one or more of our product candidates. Our ability to develop and ultimately commercialize our product candidates used in combination with nivolumab, cemiplimab or any other checkpoint blockade therapy will depend on our ability to access such drugs on commercially reasonable terms for the clinical trials and their availability for use with the commercialized product, if approved. We cannot be certain that current or potential future commercial relationships will provide us with a steady supply of such drugs on commercially reasonable terms or at all.

Any failure to maintain or enter into new successful commercial relationships, or the expense of purchasing checkpoint blockade therapies in the market, may delay our development timelines, increase

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our costs and jeopardize our ability to develop our product candidates as commercially viable therapies. If any of these occur, our business, financial condition, results of operations, stock price and prospects may be materially harmed.

Moreover, the development of product candidates for use in combination with another product or product candidate may present challenges that are not faced for single agent product candidates. We are developing RP1 and our other product candidates for use in combination with anti-PD-1 or anti-PD-L1 therapies and may develop RP1 or our other product candidates for use with other therapies. The FDA may require us to use more complex clinical trial designs in order to evaluate the contribution of each product and product candidate to any observed effects. It is possible that the results of these trials could show that any positive previous trial results are attributable to the combination therapy and not our product candidates. Moreover, following product approval, the FDA may require that products used in conjunction with each other be cross labeled for combined use. To the extent that we do not have rights to the other product, this may require us to work with a third party to satisfy such a requirement. Moreover, developments related to the other product may impact our clinical trials for the combination as well as our commercial prospects should we receive marketing approval. Such developments may include changes to the other product's safety or efficacy profile, changes to the availability of the approved product, and changes to the standard of care.

In the event that BMS, Regeneron or any future collaborator or supplier cannot continue to supply their products on commercially reasonable terms, we would need to identify alternatives for accessing an anti-PD-1 therapy. Additionally, should the supply of products from BMS, Regeneron or any future collaborator or supplier be interrupted, delayed or otherwise be unavailable to us, our clinical trials may be delayed. In the event we are unable to source a supply of an alternative anti-PD-1 therapy, or are unable to do so on commercially reasonable terms, our business, financial condition, results of operations, stock price and prospects may be materially harmed.

If we fail to develop additional product candidates, our commercial opportunity could be limited.

We expect initially to develop our lead product candidate, RP1. A key part of our strategy, however, is to pursue clinical development of additional product candidates, including RP2 and RP3. Developing, obtaining marketing approval for, and commercializing additional product candidates will require substantial additional funding beyond the net proceeds of this offering and will be subject to the risks of failure inherent in medical product development. We cannot assure you that we will be able to successfully advance any of these additional product candidates through the development process.

Even if we obtain approval from the FDA or comparable foreign regulatory authorities to market additional product candidates for the treatment of solid tumors, we cannot assure you that any such product candidates will be successfully commercialized, widely accepted in the marketplace, or more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize additional product candidates our commercial opportunity may be limited and our business, financial condition, results of operations, stock price and prospects may be materially harmed.

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Risks related to regulatory approval

Even if our development efforts are successful, we may not obtain regulatory approval for any of our product candidates in the United States or other jurisdictions, which would prevent us from commercializing our product candidates. Even if we obtain regulatory approval for our product candidates, any such approval may be subject to limitations, including with respect to the approved indications or patient populations, which could impair our ability to successfully commercialize our product candidates.

We are not permitted to market or promote or sell any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate's safety and efficacy for that indication. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities and clinical trial sites by, the regulatory authorities. If we do not receive approval from the FDA and comparable foreign regulatory authorities for any of our product candidates, we will not be able to commercialize such product candidates in the United States or in other jurisdictions. If significant delays in obtaining approval for and commercializing our product candidates occur in any jurisdictions, our business, financial condition, results of operations, stock price and prospects will be materially harmed. Even if our product candidates are approved, they may:

be subject to limitations on the indicated uses or patient populations for which they may be marketed, distribution restrictions, or other conditions of approval;

contain significant safety warnings, including boxed warnings, contraindications, and precautions;

not be approved with label statements necessary or desirable for successful commercialization; or

contain requirements for costly post-market testing and surveillance, or other requirements, including the submission of a risk evaluation and mitigation strategy, or REMS, to monitor the safety or efficacy of the products.

We have not previously submitted a BLA to the FDA, or a similar marketing application to comparable foreign regulatory authorities, for any product candidate, and we can provide no assurance that will ultimately be successful in obtaining regulatory approval for claims that are necessary or desirable for successful marketing, or at all.

The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are not able to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates as expected, and our ability to generate revenue may be materially impaired.

The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate's clinical development and may vary among jurisdictions. For example, the FDA verbally informed us on March 23, 2018 and confirmed in writing on April 18, 2018 that our Phase 1/2 clinical trial of RP1 is on clinical hold and may not commence at U.S. sites until we submit the results of a preclinical toxicology and biodistribution study with a longer follow-up period than

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was required by the regulatory authorities in the United Kingdom and the FDA clears us to proceed with the clinical trial. We anticipate that we will be submitting the results from this study to the FDA in the third quarter of 2018. These regulatory requirements may require us to amend our clinical trial protocols, conduct additional preclinical studies or clinical trials that may require regulatory or IRB approval, or otherwise cause delays in the approval or rejection of an application. Any delay in obtaining or failure to obtain required approvals could materially adversely affect our ability to generate revenue from the particular product candidate, which may materially harm our business, financial condition, results of operations, stock price and prospects.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. The number and types of preclinical studies and clinical trials that will be required for regulatory approval also varies depending on the product candidate, the disease or condition that the product candidate is designed to address, and the regulations applicable to any particular product candidate. Approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate's clinical development and may vary among jurisdictions, and there may be varying interpretations of data obtained from preclinical studies or clinical trials, any of which may cause delays or limitations in the approval or a decision not to approve an application. It is possible that our product candidates will never obtain the appropriate regulatory approvals necessary for us to commence product sales.

If we experience delays in obtaining approval, if we fail to obtain approval of a product candidate or if the label for a product candidate does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate, the commercial prospects for such product candidate may be harmed and our ability to generate revenues from that product candidate may be materially impaired.

The FDA or a comparable foreign regulatory authority may determine that our product candidates have undesirable side effects that could delay or prevent their regulatory approval or commercialization.

To date, the most commonly reported adverse events observed for RP1 are local erythematous and inflammatory reactions and systemic fevers and chills. However, there can be no assurance that additional undesirable side effects or serious adverse events will not be caused by or associated with RP1 or our other product candidates as they continue through or enter clinical development. Serious adverse events or undesirable side effects caused by our product candidates could cause us, IRBs, and other reviewing entities or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. For example, if concerns are raised regarding the safety of a new therapeutic as a result of undesirable side effects identified during clinical or preclinical testing, the FDA or comparable foreign regulatory authority may order us to cease further development, decline to approve product candidate or issue a letter requesting additional data or information prior to making a final decision regarding whether or not to approve the product candidate. The FDA or comparable foreign regulatory authorities, or IRBs and other reviewing entities, may also require, or we may voluntarily develop, strategies for managing adverse events during clinical development, which could include restrictions on our enrollment criteria, the use of stopping criteria, adjustments to a study's design, or the monitoring of safety data by a data monitoring committee, among other strategies. The FDA or a comparable foreign regulatory authority requests for additional data or information could also result in substantial delays in the approval of our product candidates.

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Undesirable side effects caused by any of our product candidates could also result in denial of regulatory approval by the FDA or comparable foreign regulatory authorities for any or all targeted indications or the inclusion of unfavorable information in our product labeling, such as limitations on the indicated uses for which the products may be marketed or distributed, a label with significant safety warnings, including boxed warnings, contraindications, and precautions, a label without statements necessary or desirable for successful commercialization, or may result in requirements for costly post-marketing testing and surveillance, or other requirements, including REMS, to monitor the safety or efficacy of the products, and in turn prevent us from commercializing and generating revenues from the sale of our product candidates. Undesirable side effects may limit the potential market for any approved products or could result in the discontinuation of the sales and marketing of the product, or withdrawal of product approvals. Later discovered undesirable side effects may further result in the imposition of a REMS, label revisions, post-approval study requirements, or other testing and surveillance.

If any of our product candidates is associated with serious adverse events or undesirable side effects or have properties that are unexpected, we may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. The therapeutic-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may materially harm our business, financial condition, results of operations, stock price and prospects.

Changes in product candidate manufacturing or formulation may result in additional costs or delay.

As product candidates are developed through preclinical studies to later-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. Any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. Such changes may also require additional testing, or notification to, or approval by the FDA or a comparable foreign regulatory authority. This could delay completion of clinical trials, require the conduct of bridging clinical trials or studies, require the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates and/or jeopardize our ability to commence product sales and generate revenue.

Regulatory approval by the FDA or comparable foreign regulatory authorities is limited to those specific indications and conditions for which approval has been granted, and we may be subject to substantial fines, criminal penalties, injunctions, or other enforcement actions if we are determined to be promoting the use of our products for unapproved or "off-label" uses, resulting in damage to our reputation and business.

We must comply with requirements concerning advertising and promotion for any product candidates for which we obtain marketing approval. Promotional communications with respect to therapeutics are subject to a variety of legal and regulatory restrictions and continuing review by the FDA, Department of Justice, Department of Health and Human Services' Office of Inspector General, state attorneys general, members of Congress, and the public. When the FDA or comparable foreign regulatory authorities issue regulatory approval for a product candidate, the regulatory approval is limited to those specific uses and indications for which a product is approved. If we are not able to obtain FDA approval for desired uses or indications for our product candidates, we may not market or promote them for those indications and uses, referred to as off-label uses, and our business, financial condition, results of operations, stock price and prospects

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will be materially harmed. We also must sufficiently substantiate any claims that we make for our products, including claims comparing our products to other companies' products, and must abide by the FDA's strict requirements regarding the content of promotion and advertising.

While physicians may choose to prescribe products for uses that are not described in the product's labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities we are prohibited from marketing and promoting the products for indications and uses that are not specifically approved by the FDA. These off-label uses are common across medical specialties and may constitute an appropriate treatment for some patients in varied circumstances. Regulatory authorities in the United States generally do not restrict or regulate the behavior of physicians in their choice of treatment within the practice of medicine. Regulatory authorities do, however, restrict communications by biopharmaceutical companies concerning off-label use.

If we are found to have impermissibly promoted any of our product candidates, we may become subject to significant liability and government fines. The FDA and other agencies actively enforce the laws and regulations regarding product promotion, particularly those prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted a product may be subject to significant sanctions. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

In the United States, engaging in the impermissible promotion of our products, following approval, for off-label uses can also subject us to false claims and other litigation under federal and state statutes. These include fraud and abuse and consumer protection laws, which can lead to civil and criminal penalties and fines, agreements with governmental authorities that materially restrict the manner in which we promote or distribute therapeutic products and conduct our business. These restrictions could include corporate integrity agreements, suspension or exclusion from participation in federal and state healthcare programs, and suspension and debarment from government contracts and refusal of orders under existing government contracts. These False Claims Act lawsuits against manufacturers of drugs and biologics have increased significantly in volume and breadth, leading to several substantial civil and criminal settlements, up to $3.0 billion, pertaining to certain sales practices and promoting off-label uses. In addition, False Claims Act lawsuits may expose manufacturers to follow-on claims by private payers based on fraudulent marketing practices. This growth in litigation has increased the risk that a biopharmaceutical company will have to defend a false claim action, pay settlement fines or restitution, as well as criminal and civil penalties, agree to comply with burdensome reporting and compliance obligations, and be excluded from Medicare, Medicaid, or other federal and state healthcare programs. If we do not lawfully promote our approved products, if any, we may become subject to such litigation and, if we do not successfully defend against such actions, those actions may have a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

In the United States, the promotion of biopharmaceutical products are subject to additional FDA requirements and restrictions on promotional statements. If after one or more of our product candidates obtains marketing approval the FDA determines that our promotional activities violate its regulations and policies pertaining to product promotion, it could request that we modify our promotional materials or subject us to regulatory or other enforcement actions, including issuance of warning letters or untitled letters, suspension or withdrawal of an approved product from the market, requests for recalls, payment of civil fines, disgorgement of money, imposition of operating restrictions, injunctions or criminal prosecution, and other enforcement actions. Similarly, industry codes in foreign jurisdictions may prohibit companies

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from engaging in certain promotional activities and regulatory agencies in various countries may enforce violations of such codes with civil penalties. If we become subject to regulatory and enforcement actions our business, financial condition, results of operations, stock price and prospects will be materially harmed.

Even if our product candidates receive regulatory approval, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense and limit how we manufacture and market our products.

Any product candidate for which we obtain marketing approval will be subject to extensive and ongoing requirements of and review by the FDA and comparable foreign regulatory authorities, including requirements related to the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising, marketing, and promotional activities for such product. These requirements further include submissions of safety and other post-marketing information, including manufacturing deviations and reports, registration and listing requirements, the payment of annual fees, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance, and corresponding maintenance of records and documents, and good clinical practices, or GCPs, for any clinical trials that we conduct post-approval.

The FDA and comparable foreign regulatory authorities will continue to closely monitor the safety profile of any product even after approval. If the FDA or comparable foreign regulatory authorities become aware of new safety information after approval of any of our product candidates, they may withdraw approval, issue public safety alerts, require labeling changes or establishment of a REMS or similar strategy, impose significant restrictions on a product's indicated uses or marketing, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. Any such restrictions could limit sales of the product.

We and any of our suppliers or collaborators, including our contract manufacturers, could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMPs and other FDA regulatory requirements. Application holders must further notify the FDA, and depending on the nature of the change, obtain FDA pre-approval for product and manufacturing changes.

In addition, later discovery of previously unknown adverse events or that the product is less effective than previously thought or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements both before and after approval, may yield various negative results, including:

restrictions on manufacturing, distribution, or marketing of such products;

restrictions on the labeling, including required additional warnings, such as black boxed warnings, contraindications, precautions, and restrictions on the approved indication or use;

modifications to promotional pieces;

issuance of corrective information;

requirements to conduct post-marketing studies or other clinical trials;

clinical holds or termination of clinical trials;

requirements to establish or modify a REMS or similar strategy;

changes to the way the product candidate is administered;

liability for harm caused to patients or subjects;

reputational harm;

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the product becoming less competitive;

warning, untitled, or cyber letters;

suspension of marketing or withdrawal of the products from the market;

regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product candidate;

refusal to approve pending applications or supplements to approved applications that we submit;

recalls of products;

fines, restitution or disgorgement of profits or revenues;

suspension or withdrawal of marketing approvals;

refusal to permit the import or export of our products;

product seizure or detention;

FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or

injunctions or the imposition of civil or criminal penalties, including imprisonment.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, or could substantially increase the costs and expenses of commercializing such product, which in turn could delay or prevent us from generating significant revenues from its marketing and sale. Any of these events could further have other material and adverse effects on our operations and business and could adversely impact our business, financial condition, results of operations, stock price and prospects.

The FDA's policies or those of comparable foreign regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates, limit the marketability of our product candidates, or impose additional regulatory obligations on us. Changes in medical practice and standard of care may also impact the marketability of our product candidates.

If we are slow or unable to adapt to changes in existing requirements, standards of care, or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and be subject to regulatory enforcement action.

Should any of the above actions take place, we could be prevented from or significantly delayed in achieving profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operations and business and could adversely impact our business, financial condition, results of operations, stock price and prospects.

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Obtaining and maintaining marketing approval for our product candidates in one jurisdiction would not mean that we will be successful in obtaining marketing approval of that product candidate in other jurisdictions, which could prevent us from marketing our products internationally.

Obtaining and maintaining marketing approval of our product candidates in one jurisdiction would not guarantee that we will be able to obtain or maintain marketing approval in any other jurisdiction, while a failure or delay in obtaining marketing approval in one jurisdiction may have a negative effect on the marketing approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable foreign regulatory authorities must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining foreign marketing approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of RP1 and our other product candidates will be harmed. If we obtain approval for any product candidate and ultimately commercialize that product in foreign markets, we would be subject to additional risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and the reduced protection of intellectual property rights in some foreign countries.

Risks related to commercialization

If we are unable to successfully commercialize any product candidate for which we receive regulatory approval, or experience significant delays in doing so, our business will be materially harmed.

If we are successful in obtaining marketing approval from applicable regulatory authorities for RP1 or any of our other product candidates, our ability to generate revenues from our product candidates will depend on our success in:

launching commercial sales of our product candidates, whether alone or in collaboration with others;

receiving an approved label with claims that are necessary or desirable for successful marketing, and that does not contain safety or other limitations that would impede our ability to market the product candidates;

creating market demand for our product candidates through marketing, sales and promotion activities;

hiring, training, and deploying a sales force or contracting with third parties to commercialize product candidates in the United States;

manufacturing product candidates in sufficient quantities and at acceptable quality and cost to meet commercial demand at launch and thereafter;

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establishing and maintaining agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms;

creating partnerships with, or offering licenses to, third parties to promote and sell product candidates in foreign markets where we receive marketing approval;

maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

achieving market acceptance of our product candidates by patients, the medical community, and third-party payors;

achieving appropriate reimbursement for our product candidates;

effectively competing with other therapies; and

maintaining a continued acceptable safety profile of our product candidates following launch.

To the extent we are not able to do any of the foregoing, our business, financial condition, results of operations, stock price and prospects will be materially harmed.

We face significant competition from other biopharmaceutical and biotechnology companies, academic institutions, government agencies, and other research organizations, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us. If their product candidates are shown to be safer or more effective than ours, our commercial opportunity may be reduced or eliminated.

The development and commercialization of cancer immunotherapy products is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary rights. We face competition with respect to our current product candidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from major biopharmaceutical companies, specialty biopharmaceutical companies, and biotechnology companies worldwide. There are a number of large biopharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of solid tumors, including oncolytic immunotherapy and cancer vaccine approaches. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization.

While our product candidates are intended to be used in combination with other drugs with different mechanisms of action, if and when marketed they will still compete with a number of drugs that are currently marketed or in development that also target cancer. To compete effectively with these drugs, our product candidates will need to demonstrate advantages in clinical efficacy and safety compared to these competitors when used alone or in combination with other drugs.

Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are easier to administer or are less expensive alone or in combination with other therapies than any products that we may develop alone or in combination with other therapies. Our competitors also may obtain FDA or comparable foreign regulatory authorities' approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the

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market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors coverage decisions.

Many of the companies with which we are competing or may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. Mergers and acquisitions in the biopharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in developing or acquiring technologies complementary to, or necessary for, our programs. If we are unable to successfully compete with these companies our business, financial condition, results of operations, stock price and prospects may be materially harmed.

If we are unable to establish effective marketing, sales and distribution capabilities or enter into agreements with third parties to market and sell our product candidates, if they are approved, the revenues that we generate may be limited and we may never become profitable.

We currently do not have a commercial infrastructure for the marketing, sale, and distribution of our cancer immunotherapies. If and when our product candidates receive marketing approval, we intend to commercialize our product candidates on our own in the United States and potentially with pharmaceutical or biotechnology partners in other geographies. In order to commercialize our products, we must build our marketing, sales, and distribution capabilities or make arrangements with third parties to perform these services. We may not be successful in doing so. Should we decide to move forward in developing our own marketing capabilities, we may incur expenses prior to product launch or even approval in order to recruit a sales force and develop a marketing and sales infrastructure. If a commercial launch is delayed as a result of the FDA or comparable foreign regulatory authority requirements or other reasons, we would incur these expenses prior to being able to realize any revenue from sales of our product candidates. Even if we are able to effectively hire a sales force and develop a marketing and sales infrastructure, our sales force and marketing teams may not be successful in commercializing our product candidates. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

We may also or alternatively decide to collaborate with third-party marketing and sales organizations to commercialize any approved product candidates in the United States, in which event, our ability to generate product revenues may be limited. To the extent we rely on third parties to commercialize any products for which we obtain regulatory approval, we may receive less revenues than if we commercialized these products ourselves, which could materially harm our prospects. In addition, we would have less control over the sales efforts of any other third parties involved in our commercialization efforts, and could be held liable if they failed to comply with applicable legal or regulatory requirements.

We have no prior experience in the marketing, sale, and distribution of biopharmaceutical products, and there are significant risks involved in building and managing a commercial infrastructure. The establishment and development of commercial capabilities, including compliance plans, to market any products we may develop will be expensive and time consuming and could delay any product launch, and we may not be able to successfully develop this capability. We will have to compete with other biopharmaceutical and biotechnology companies, including oncology-focused companies, to recruit, hire, train, manage, and retain marketing and sales personnel, which is expensive and time consuming and

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could delay any product launch. Developing our sales capabilities may also divert resources and management attention away from product development.

In the event we are unable to develop a marketing and sales infrastructure, we may not be able to commercialize our product candidates in the United States or elsewhere, which could limit our ability to generate product revenues and materially harm our business, financial condition, results of operations, stock price and prospects. Factors that may inhibit our efforts to commercialize our product candidates include:

the inability to recruit, train, manage, and retain adequate numbers of effective sales and marketing personnel;

the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe our product candidates;

our inability to effectively oversee a geographically dispersed sales and marketing team;

the costs associated with training sales and marketing personnel on legal and regulatory compliance matters and monitoring their actions;

an inability to secure adequate coverage and reimbursement by government and private health plans;

the clinical indications for which the products are approved and the claims that we may make for the products;

limitations or warnings, including distribution or use restrictions, contained in the products' approved labeling;

any distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities or to which we agree as part of a mandatory REMS or voluntary risk management plan;

liability for sales or marketing personnel who fail to comply with the applicable legal and regulatory requirements;

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

unforeseen costs and expenses associated with creating an independent sales and marketing organization or engaging a contract sales organization.

Our product candidates are based on a novel approach to the treatment of cancer, which makes it difficult to predict the time and cost of product candidate development.

We have concentrated all of our research and development efforts on product candidates based on our Immulytic platform, and our future success depends on the successful development of this therapeutic approach. There can be no assurance that any development problems we experience in the future will not cause significant delays or unanticipated costs, or that such development problems can be solved. Should we encounter development problems, including unfavorable preclinical or clinical trial results, the FDA and foreign regulatory authorities may refuse to approve our product candidates, or may require additional information, tests, or trials, which could significantly delay product development and significantly increase our development costs. Moreover, even if we are able to provide the requested information or trials to the FDA, there would be no guarantee that the FDA would accept them or approve our product candidates. We may also experience delays in developing a sustainable, reproducible and scalable manufacturing process,

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or developing or qualifying and validating product release assays, other testing and manufacturing methods, and our equipment and facilities in a timely manner, which may prevent us from completing our clinical trials or commercializing our product candidates on a timely or profitable basis, if at all.

In addition, the clinical trial requirements of the FDA and comparable foreign regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential products. The FDA and comparable foreign regulatory authorities have limited experience with the approval of oncolytic immunotherapies. Only one oncolytic immunotherapy, T-Vec, has received FDA approval to date. Any product candidates that are approved may be subject to extensive post-approval regulatory requirements, including requirements pertaining to manufacturing, distribution, and promotion. We may need to devote significant time and resources to compliance with these requirements.

If our product candidates do not achieve broad market acceptance, the revenues that we generate from their sales may be limited, and we may never become profitable.

We have never commercialized a product candidate for any indication. Even if our product candidates are approved by the appropriate regulatory authorities for marketing and sale, they may not gain acceptance among physicians, patients, third-party payors, and others in the medical community. If any product candidates for which we obtain regulatory approval do not gain an adequate level of market acceptance, we could be prevented from or significantly delayed in achieving profitability. Market acceptance of our product candidates by the medical community, patients, and third-party payors will depend on a number of factors, some of which are beyond our control. For example, physicians are often reluctant to switch their patients and patients may be reluctant to switch from existing therapies even when new and potentially more effective or safer treatments enter the market.

Efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may not be successful. If any of our product candidates is approved but does not achieve an adequate level of market acceptance, we could be prevented from or significantly delayed in achieving profitability. The degree of market acceptance of any of our product candidates will depend on a number of factors, including:

the efficacy of our product candidates in combination with marketed checkpoint blockade drugs;

the commercial success of the checkpoint blockade drugs with which our products are co-administered;

the prevalence and severity of adverse events associated with our product candidates or those products with which they are co-administered;

the clinical indications for which the products are approved and the approved claims that we may make for the products;

limitations or warnings contained in the product's FDA-approved labeling or those of comparable foreign regulatory authorities, including potential limitations or warnings for our product candidates that may be more restrictive than other competitive products;

changes in the standard of care for the targeted indications for our product candidates, which could reduce the marketing impact of any claims that we could make following FDA approval or approval by comparable foreign regulatory authorities, if obtained;

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the relative convenience and ease of administration of our product candidates and any products with which they are co-administered;

the cost of treatment compared with the economic and clinical benefit of alternative treatments or therapies;

the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid;

the price concessions required by third-party payors to obtain coverage;

the extent and strength of our marketing and distribution of our product candidates;

the safety, efficacy, and other potential advantages over, and availability of, alternative treatments already used or that may later be approved;

distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities with respect to our product candidates or to which we agree as part of a REMS or voluntary risk management plan;

the timing of market introduction of our product candidates, as well as competitive products;

our ability to offer our product candidates for sale at competitive prices;

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

the extent and strength of our third-party manufacturer and supplier support;

the actions of companies that market any products with which our product candidates are co-administered;

the approval of other new products;

adverse publicity about our product candidates or any products with which they are co-administered, or favorable publicity about competitive products; and

potential product liability claims.

The size of the potential market for our product candidates is difficult to estimate and, if any our assumptions are inaccurate, the actual markets for our product candidates may be smaller than our estimates.

The potential market opportunities for our product candidates are difficult to estimate and will depend in large part on the drugs with which our product candidates are co-administered and the success of competing therapies and therapeutic approaches. In particular, the market opportunity for oncolytic immunotherapies is hard to estimate given that it is an emerging field with only one existing FDA-approved oncolytic immunotherapy, T-Vec, which has yet to enjoy broad market acceptance. Our estimates of the potential market opportunities are predicated on many assumptions, which may include industry knowledge and publications, third-party research reports, and other surveys. Although we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain, and their reasonableness has not been assessed by an

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independent source. If any of the assumptions proves to be inaccurate, the actual markets for our product candidates could be smaller than our estimates of the potential market opportunities.

Negative developments in the field of immuno-oncology could damage public perception of RP1 or any of our other product candidates and negatively affect our business.

The commercial success of our product candidates will depend in part on public acceptance of the use of cancer immunotherapies. Adverse events in clinical trials of RP1 or our other product candidates or in clinical trials of others developing similar products and the resulting publicity, as well as any other negative developments in the field of immuno-oncology that may occur in the future, including in connection with competitor therapies, could result in a decrease in demand for RP1 or our other product candidates that we may develop. These events could also result in the suspension, discontinuation, or clinical hold of or modification to our clinical trials. If public perception is influenced by claims that the use of cancer immunotherapies is unsafe, whether related to our therapies or those of our competitors, our product candidates may not be accepted by the general public or the medical community and potential clinical trial subjects may be discouraged from enrolling in our clinical trials. As a result, we may not be able to continue or may be delayed in conducting our development programs.

As our product candidates consist of a modified virus, adverse developments in anti-viral vaccines or clinical trials of other oncolytic immunotherapy products based on viruses may result in a disproportionately negative effect for RP1 or our other product candidates as compared to other products in the field of immuno-oncology that are not based on viruses. Future negative developments in the field of immuno-oncology or the biopharmaceutical industry could also result in greater governmental regulation, stricter labeling requirements and potential regulatory delays in the testing or approvals of our products. Any increased scrutiny could delay or increase the costs of obtaining marketing approval for RP1 or our other product candidates.

Risks related to our financial position and need for additional capital

We are a clinical-stage biopharmaceutical company with a very limited operating history. We have incurred net losses since our inception and anticipate that we will continue to incur substantial and increasing net losses in the foreseeable future. We may never achieve or sustain profitability.

We are a clinical-stage biopharmaceutical company with a limited operating history, and we are early in our development efforts. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain marketing approval and become commercially viable. We have financed our operations to date primarily through the sale of equity securities. Since our inception, most of our resources have been dedicated to the preclinical and clinical development of our Immulytic platform, RP1 and our other product candidates. The size of our future net losses will depend, in part, on our future expenses and our ability to generate revenue, if any.

We are not profitable and have incurred losses in each period since our inception. For the years ended March 31, 2017 and 2018, we reported a net loss of $7.7 million and $19.7 million, respectively. At March 31, 2018, we had an accumulated deficit of $28.9 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and

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development of, and seek marketing approvals for, RP1 and any additional product candidates we may develop.

Even if we succeed in receiving marketing approval for and commercialize RP1, we will continue to incur substantial research and development and other expenditures to develop and market additional potential products. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders' equity and working capital.

We have never generated any revenue from product sales, and our ability to generate revenue from product sales and become profitable will depend significantly on our success in achieving a number of goals.

We have no products approved for commercial sale, have not generated any revenue from product sales, and do not anticipate generating any revenue from product sales until after we have received marketing approval for the commercial sale of a product candidate, if ever. Our ability to generate revenue and achieve profitability depends significantly on our success in achieving a number of goals, including:

completing research regarding, and preclinical and clinical development of RP1 and our other product candidates;

obtaining marketing approvals for RP1 and our other product candidates for which we complete clinical trials;

developing a sustainable and scalable manufacturing process for RP1 and our other product candidates, including establishing and maintaining commercially viable supply and manufacturing relationships with third parties;

launching and commercializing RP1 and our other product candidates for which we obtain marketing approvals, either directly or with a collaborator or distributor;

obtaining market acceptance of RP1 and our other product candidates as viable treatment options;

addressing any competing technological and market developments;

identifying, assessing, acquiring and developing new product candidates;

negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;

obtaining, maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and

attracting, hiring, and retaining qualified personnel.

Even if our product candidates or any future product candidates that we develop are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any such product candidate. Our expenses could increase beyond expectations if we are required by the FDA or comparable foreign regulatory authorities to change our manufacturing processes or assays, or to perform clinical, nonclinical, or other types of studies in addition to those that we currently anticipate.

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If we are successful in obtaining regulatory approvals to market RP1 or our other product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain marketing approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory. If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, the labels for our product candidates contain significant safety warnings, regulatory authorities impose burdensome or restrictive distribution requirements, or the reasonably accepted patient population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. If we are not able to generate revenue from the sale of any approved products, we could be prevented from or significantly delayed in achieving profitability.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

Our operations have consumed substantial amounts of cash since inception. At March 31, 2018, our cash and cash equivalents and short-term investments were $61.6 million. We expect to continue to spend substantial amounts to continue the clinical and preclinical development of RP1 and our other product candidates. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives. If we are able to gain marketing approval of any product candidate, we will require significant additional amounts of cash in order to launch and commercialize such product. In addition, other unanticipated costs may arise.

Our future capital requirements depend on many factors, including:

the scope, progress, results and costs of researching and developing RP1 and our other product candidates, and conducting preclinical studies and clinical trials;

the timing of, and the costs involved in, obtaining marketing approvals RP1 and our other product candidates if clinical trials are successful;

the success of any collaborations;

the cost of commercialization activities for any approved product, including marketing, sales and distribution costs;

the cost and timing of establishing, equipping, and operating our planned manufacturing facility;

the cost of manufacturing RP1 and our other product candidates for clinical trials in preparation for marketing approval and commercialization;

our ability to establish and maintain strategic licensing or other arrangements and the financial terms of such agreements;

the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;

the timing, receipt, and amount of sales of, or royalties on, our future products, if any; and

the emergence of competing cancer therapies and other adverse market developments.

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We do not have any committed external source of funds or other support for our development efforts. Until we can generate sufficient product revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements. Based on our research and development plans, we expect that the net proceeds from this offering, together with our existing cash and cash equivalents and short-term investments, will enable us to fund our planned operating expenses and capital expenditure requirements into the second half of 2021. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. In addition, because the design and outcome of our planned and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of RP1 or our other product candidates.

Raising additional capital may cause dilution to our stockholders, including purchasers of common stock in this offering, restrict our operations or require us to relinquish rights to our technologies or product candidates.

To the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, your ownership interest will be diluted. Debt financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to grant rights to develop and market one or more of our product candidates or technologies that we would otherwise prefer to develop and market ourselves.

Risks related to intellectual property

If we are unable to obtain, maintain and protect our intellectual property rights for our technology and product candidates, or if our intellectual property rights are inadequate, our competitive position could be harmed.

Our commercial success will depend in part on our ability to obtain and maintain patent and other intellectual property protection in the United States and other countries with respect to our technology, Immulytic platform, RP1 and our other product candidates. We rely on trade secret, patent, copyright and trademark laws, and confidentiality, licensing and other agreements with employees and third parties, all of which offer only limited protection. We seek to protect our proprietary position by filing and prosecuting patent applications in the United States and abroad related to our technology and product candidates.

The patent positions of biotechnology and pharmaceutical companies generally are highly uncertain, involve complex legal and factual questions and have in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our licensed patents and any patents we own in the future are highly uncertain. The steps we have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights, both inside and outside of the United States.

Further, the examination process may require us to narrow the claims for our pending patent applications, which may limit the scope of patent protection that may be obtained if these applications issue. The scope of a patent may also be reinterpreted after issuance. The rights that may be granted under our future

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issued patents may not provide us with the proprietary protection or competitive advantages we are seeking. If we are unable to obtain and maintain patent protection for our technology or for RP1 or our other product candidates, or if the scope of the patent protection obtained is not sufficient, our competitors could develop and commercialize products similar or superior to ours, and our ability to successfully commercialize RP1 or our other product candidates and future technologies may be adversely affected. It is also possible that we will fail to identify patentable aspects of inventions made in the course of our development and commercialization activities before it is too late to obtain patent protection on them.

In addition, the patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, collaborators, and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. It is also possible that we will fail to identify patentable aspects of our research and development efforts in time to obtain patent protection.

For the core technology in our Immulytic platform and each of our product candidates, patent applications are pending under the Patent Cooperation Treaty, or PCT, and are currently at the international stage. As of July 9, 2018, we own five PCT patent applications and four U.S. provisional applications, none of which have been issued by any patent office or examined by any patent examining authority. Any future provisional patent applications are not eligible to become issued patents until, among other things, we file a non-provisional patent application within 12 months of filing of one or more of our related provisional patent applications. If we do not timely file any non-provisional patent applications, we may lose our priority date with respect to our provisional patent applications and any patent protection on the inventions disclosed in our provisional patent applications. Although we intend to timely file non-provisional patent applications relating to our provisional patent applications, we cannot predict whether any of our future patent applications will result in the issuance of patents that effectively protect our technology or RP1 or our other product candidates, or if any of our future issued patents will effectively prevent others from commercializing competitive products. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or in some cases not at all until they are issued as a patent. Therefore, we cannot be certain that we were the first to make the inventions claimed in our pending patent applications, or that we were the first to file for patent protection of such inventions.

Our pending applications cannot be enforced against third parties practicing the inventions claimed in such applications unless and until a patent issues from such applications. Because the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, issued patents that we license from third parties or own in the future may be challenged in the courts or patent offices in the United States and abroad, including through opposition proceedings, derivation proceedings, inter partes review, interference proceedings or litigation. Such proceedings may result in the loss of patent protection, the narrowing of claims in such patents or the invalidity or unenforceability of such patents, which could limit our ability to stop others from using or commercializing similar or identical products, or limit the duration of the patent protection for our technology. Protecting against the unauthorized use of our patented inventions, trademarks and other intellectual property rights is expensive, time consuming, difficult and in some cases may not be possible. In some cases, it may be difficult or impossible to detect third-party

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infringement or misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult. If we are unable to obtain, maintain, and protect our intellectual property our competitive advantage could be harmed, and it could result in a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.

In addition to seeking patent protection, we also rely on other proprietary rights, including protection of trade secrets, know-how and confidential and proprietary information. To maintain the confidentiality of our trade secrets and proprietary information, we enter into confidentiality agreements with our employees, consultants, collaborators and other third parties who have access to our trade secrets. Our agreements with employees also provide that any inventions conceived by the individual in the course of rendering services to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. In addition, in the event of unauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularly for our trade secrets or other confidential information. To the extent that our employees, consultants or contractors use technology or know-how owned by third parties in their work for us, disputes may arise between us and those third parties as to the rights in related inventions.

Adequate remedies may not exist in the event of unauthorized use or disclosure of our confidential information including a breach of our confidentiality agreements. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, and time consuming, and the outcome is unpredictable. In addition, some courts in and outside of the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us. The disclosure of our trade secrets or the independent development of our trade secrets by a competitor or other third party would impair our competitive position and may materially harm our business, financial condition, results of operations, stock price and prospects.

Third parties may in the future initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business.

Our commercial success depends on our ability and the ability of our current or future collaborators to develop, manufacture, market and sell RP1 and our other product candidates, and to use our related proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties. The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights. We may become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our current and any other future product candidates, including interference proceedings, post-grant review, inter partes review and derivation proceedings before the U.S. Patent and Trademark Office, or USPTO. Third parties may assert infringement or other intellectual property claims against us based on existing patents or patents that may be granted in the future. If we are found to infringe a third party's intellectual property rights, and we are unsuccessful in demonstrating that such

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intellectual property rights are invalid or unenforceable, we could be required to obtain a license from such third party to continue developing, manufacturing and commercializing RP1 and our other product candidates. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. We also could be forced, including by court order, to cease developing, manufacturing, and commercializing RP1 or our other product candidates. In addition, in any such proceeding or litigation, we could be found liable for significant monetary damages, including treble damages and attorneys' fees, if we are found to have willfully infringed a patent or other intellectual property right. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, stock price and prospects. Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar material adverse effect on our business.

In addition, we are developing RP1 in combination with nivolumab and cemiplimab, which are covered by patents or licenses held by BMS and Regeneron, respectively, to which we do not have a license other than for use in connection with the applicable clinical trial. We also plan to develop our product candidates in combination with products developed by additional companies that are covered by patents or licenses held by those entities to which we do not have a license. In the event that a labeling instruction is required in product packaging recommending that combination, we could be accused of, or held liable for, infringement of the third-party patents covering the product candidate or product recommended for administration with RP1 or our other product candidates. In such a case, we could be required to obtain a license from the other company or institution to use the required or desired package labeling, which may not be available on commercially reasonable terms, or at all.

We may not be able to protect our intellectual property and proprietary rights throughout the world.

Filing, prosecuting and defending patents on our technology throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws and practices of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop and/or manufacture their own products, and may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the United States. These products may compete with our products and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the granting or enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to obtain patent rights or stop the infringement of our patents or marketing of competing products in violation of our intellectual property and proprietary rights generally in those countries. Proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could

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provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to protect and enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property we develop or license.

In addition, the laws of certain foreign countries may not protect our rights to the same extent as the laws of the United States, and those foreign laws may also be subject to change. For example, methods of treatment and manufacturing processes may not be patentable in certain jurisdictions, and the requirements for patentability may differ in certain countries. Furthermore, biosimilar product manufacturers or other competitors may challenge the scope, validity and enforceability of our patents, requiring us to engage in complex, lengthy and costly litigation or proceedings.

Moreover, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. Many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired and our business and results of operations may be adversely affected.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payments and other similar provisions during the patent application process and to maintain patents after they are issued. For example, periodic maintenance fees, renewal fees, annuity fees and various other government fees on issued patents and patent applications often must be paid to the USPTO and foreign patent agencies over the lifetime of our licensed patents or any patents we own in the future. In certain circumstances, we may rely on future licensing partners to take the necessary action to comply with these requirements with respect to licensed intellectual property. Although an unintentional lapse can be cured for a period of time by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to obtain and maintain the patents and patent applications covering our products or procedures, we may not be able to stop a competitor from marketing products that are the same as or similar to RP1 or our other product candidates, which could have a material adverse effect on our business.

Changes to the patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect RP1 and our other product candidates.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs. Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act, or the Leahy-Smith Act, signed into law on September 16, 2011, could

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increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. After March 2013, under the Leahy-Smith Act, the United States transitioned to a first inventor to file system in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and have a material adverse effect on the success of our business.

Competitors may infringe any future licensed patents or any patent we own in the future or misappropriate or otherwise violate our intellectual property rights. We may also be required to defend against claims of infringement and our licensed patents and any patents we own in the future may become involved in priority or other intellectual property related disputes. To counter infringement or unauthorized use, litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity and scope of our own intellectual property rights or the proprietary rights of others. Also, third parties may initiate legal proceedings against us to assert that we are infringing their intellectual property rights or to challenge the validity or scope of our owned or licensed intellectual property rights. These proceedings can be expensive and time consuming. Many of our current and potential competitors have the ability to dedicate substantially greater resources to conduct intellectual property related litigations or proceedings than we can. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property. Litigation and other intellectual property related proceedings could result in substantial costs and diversion of management resources, which could harm our business and financial results. In addition, in an infringement proceeding, a court may decide that a patent owned by or licensed to us is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or other intellectual property related proceeding could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation in the United States, there is a risk that some of our confidential information could be

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compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments in any such proceedings. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of shares of our common stock. Any of the foregoing may have a material adverse effect our business, financial condition, results of operations, stock price and prospects.

We may be subject to claims by third parties asserting that our collaborators, employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Many of our employees, including our senior management team, were previously employed at, or consulted for, universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Our collaborators' employees may currently be or previously have been employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some of these persons, including each member of our senior management team, executed proprietary rights, non-disclosure and non-competition agreements, or similar agreements, in connection with such previous employment or consulting agreements, that assigned ownership of intellectual property relating to work performed under such agreements to the contracting third party. Although we try to ensure that our employees do not use, claim as theirs, or misappropriate the intellectual property, proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used, claimed as theirs, misappropriated or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual's current or former employer. Litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commercially reasonable terms, or at all. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. Any of the foregoing may have a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed confidential information of third parties or are in breach of non-competition or non-solicitation agreements with our competitors.

We could be subject to claims that we or our employees, including senior management, have inadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of former employers or competitors or others. Although we try to ensure that our employees and consultants do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we caused an employee to breach the terms of their non-competition or non-solicitation agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor or other party. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and could be a distraction to management. If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from using technologies or features that are essential to RP1 and our other product candidates, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers, competitors or other parties. An inability to incorporate such technologies or features would have a material adverse effect on our business, and may

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prevent us from successfully commercializing RP1 and our other product candidates. In addition, we may lose valuable intellectual property rights or personnel as a result of such claims. Moreover, any such litigation or the threat thereof may adversely affect our ability to hire employees or consultants. A loss of key personnel or their work product could hamper or prevent our ability to develop and commercialize RP1 and our other product candidates, which could have an adverse effect on our business, financial condition, results of operations, stock price and prospects.

If we obtain any issued patents covering our technology, such patents could be found invalid or unenforceable if challenged in court or before the USPTO or comparable foreign regulatory authority.

If we or one of our licensing partners initiate legal proceedings against a third party to enforce a patent covering any of our technology, the defendant could counterclaim that the patent covering our product candidate is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Grounds for a validity challenge could be, among other things, an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be, among other things, an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter partes review, post-grant review, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions, such as opposition proceedings. Such proceedings could result in revocation, cancellation or amendment to our patents in such a way that they no longer cover and protect RP1 and our other product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. For example, with respect to the validity of our licensed patents or any patents we obtain in the future, we cannot be certain that there is no invalidating prior art of which we, our or our licensing partner's patent counsel, and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on RP1 and our other product candidates. Such a loss of patent protection could have a material adverse impact on our business.

Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time, and our product candidates for which we intend to seek approval as biological products may face competition sooner than anticipated.

Given the amount of time required for the development, testing and regulatory review of new product candidates, such as RP1 and our other product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, but no longer than 14 years from the product's approval date, which is limited to the approved indication (or any additional indications approved during the period of extension). However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authorities in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their products earlier than might otherwise be the case, which could have a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

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The enactment of the Biologics Price Competition and Innovation Act of 2009, or BPCIA, as part of the Patient Protection and Affordable Care Act, or ACA, created an abbreviated pathway for the approval of biosimilar and interchangeable biological products. The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as "interchangeable" based on its similarity to an existing brand product. Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the original branded product was approved under a BLA. Certain changes, however, and supplements to an approved BLA, and subsequent applications filed by the same sponsor, manufacturer, licensor, predecessor in interest, or other related entity do not qualify for the 12-year exclusivity period.

RP1 and our other product candidates are all biological product candidates. We anticipate being awarded market exclusivity for each of our biological product candidates that is subject to its own BLA for 12 years in the United States, 10 years in Europe and significant durations in other markets. However, the term of the patents that cover such product candidates may not extend beyond the applicable market exclusivity awarded by a particular country. For example, in the United States, if all of the patents that cover our particular biological product expire before the 12-year market exclusivity expires, a third party could submit a marketing application for a biosimilar product four years after approval of our biological product, the FDA could immediately review the application and approve the biosimilar product for marketing 12 years after approval of our biological product, and the biosimilar sponsor could then immediately begin marketing. Alternatively, a third party could submit a full BLA for a similar or identical product any time after approval of our biological product, and the FDA could immediately review and approve the similar or identical product for marketing and the third party could begin marketing the similar or identical product upon expiry of all of the patents that cover our particular biological product.

There is also a risk that this exclusivity could be changed in the future. For example, this exclusivity could be shortened due to congressional action or through other actions, including future proposed budgets, international trade agreements and other arrangements or proposals. Additionally, there is a risk that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated. The extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. It is also possible that payers will give reimbursement preference to biosimilars over reference biologics, even absent a determination of interchangeability.

To the extent that we do not receive any anticipated periods of regulatory exclusivity for our product candidates or the FDA or foreign regulatory authorities approve any biosimilar, interchangeable, or other competing products to our product candidates, it could have a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

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Risks related to manufacturing and our reliance on third parties

We have agreements with BMS and Regeneron, and in the future may have agreements with other companies, to obtain the supply of anti-PD-1 therapies for the development of RP1 and our other product candidates. If our relationships with BMS, Regeneron, or any future collaborator or supplier are not successful, we may be delayed in completing the development of RP1 and our other product candidates.

We have entered into arrangements with BMS and Regeneron as part of our clinical development for RP1. BMS is providing nivolumab, its anti-PD-1 therapy, for use in our ongoing Phase 1/2 clinical trial with RP1 and Regeneron is providing cemiplimab, its anti-PD-1 therapy, for use in our planned randomized, controlled Phase 2 clinical trial with RP1 in approximately 240 patients with CSCC and other potential clinical trials. We may also enter into agreements with additional companies for the supply of anti-PD-1 therapies for use in the development of RP1 and our other product candidates. The outcome of these clinical trials is dependent both on the performance of our partners' products and product candidates and also on our partners' ability to deliver sufficient quantities of adequately produced product. Should any of our partners' products or product candidates fail to produce the results that we anticipate, we may have to rerun clinical trials for RP1 or our other product candidates or may otherwise be delayed in the commercialization of RP1 or our other product candidates. Similarly, should any partner fail to provide us with a product or product candidate that suits our requirements we may have to rerun clinical trials for RP1 or our other product candidates or may be otherwise delayed in the commercialization of RP1 or our other product candidates.

Our collaboration agreements with any future partners may not be successful, which could adversely affect our ability to develop and commercialize our product candidates.

We may in the future seek collaboration arrangements with other parties for the development or commercialization of our product candidates. The success of any collaboration arrangements may depend on the efforts and activities of our collaborators. Collaborators generally have significant discretion in determining the efforts and resources that they will apply to these arrangements. Disagreements between parties to a collaboration arrangement regarding clinical development and commercialization matters can lead to delays in the development process or commercializing the applicable product candidate and, in some cases, termination of the collaboration arrangement. These disagreements can be difficult to resolve if neither of the parties has final decision making authority.

Collaborations with biopharmaceutical companies and other third parties often are terminated or allowed to expire by the other party. Any such termination or expiration could adversely affect us financially and could harm our business reputation.

Any future collaborations we might enter into may pose a number of risks, including the following:

collaborators may not perform their obligations as expected;

collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

collaborators may delay 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;

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collaborators could fail to make timely regulatory submissions for a product candidate;

collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions;

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products 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;

product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;

a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product;

disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive;

collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; and

collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.

If any collaborations we might enter into in the future do not result in the successful development and commercialization of products or if one of our collaborators subsequently terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under such potential future collaboration. If we do not receive the funding we expect under the agreements, our development of our product candidates could be delayed and we may need additional resources to develop our product candidates and our product platform.

Additionally, if any future collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate development or commercialization of any product candidate licensed to it by us. If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our reputation in the business and financial communities could be adversely affected.

We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for any collaboration will depend, among other things, upon our assessment of the collaborator's resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator's evaluation of a number of factors.

If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development

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program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms, or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates or bring them to market or continue to develop our product platform and our business may be materially and adversely affected.

We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials. If those third parties do not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements, we may be unable to obtain regulatory approval for our product candidates or any other product candidates that we may develop in the future.

We rely on third-party CROs, study sites, and others to conduct, supervise, and monitor our preclinical studies and clinical trials for our product candidates and do not currently plan to independently conduct preclinical studies or clinical trials of any other potential product candidates. We expect to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions, and clinical investigators, to conduct our preclinical studies and clinical trials. Although we have agreements governing their activities, we have limited influence over their actual performance and control only certain aspects of their activities. The failure of these third parties to successfully carry out their contractual duties or meet expected deadlines could substantially harm our business because we may be delayed in completing or unable to complete the studies required to support future approval of our product candidates, or we may not obtain marketing approval for or commercialize our product candidates in a timely manner or at all. Moreover, these agreements might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into alternative arrangements our product development activities would be delayed and our business, financial condition, results of operations, stock price and prospects may be materially harmed.

Our reliance on these third parties for development activities will reduce our control over these activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards and our reliance on third parties does not relieve us of our regulatory responsibilities. For example, we will remain responsible for ensuring that each of our trials is conducted in accordance with the general investigational plan and protocols for the trial. We must also ensure that our preclinical trials are conducted in accordance with the FDA's Good Laboratory Practice, or GLP, regulations, as appropriate. Moreover, the FDA and comparable foreign regulatory authorities require us to comply with standards, commonly referred to as GCPs for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity, and confidentiality of trial participants are protected. Regulatory authorities enforce these requirements through periodic inspections of trial sponsors, clinical investigators, and trial sites. If we or any of our third parties fail to comply with applicable GCPs or other regulatory requirements, we or they may be subject to enforcement or other legal actions, the data generated in our trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional studies.

In addition, we will be required to report certain financial interests of our third-party investigators if these relationships exceed certain financial thresholds or meet other criteria. The FDA or comparable foreign

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regulatory authorities may question the integrity of the data from those clinical trials conducted by investigators who may have conflicts of interest.

We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our trials complies with the applicable regulatory requirements. In addition, our clinical trials must be conducted with product candidates that were produced under cGMP regulations. Failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in enforcement actions and adverse publicity.

The third parties with which we work may also have relationships with other entities, some of which may be our competitors, for whom they may also be conducting trials or other therapeutic development activities that could harm our competitive position. In addition, such third parties are not our employees, and except for remedies available to us under our agreements with such third parties we cannot control whether or not they devote sufficient time and resources to our ongoing clinical, non-clinical, and preclinical programs. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our preclinical studies or clinical trials in accordance with regulatory requirements or our stated protocols, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or for other reasons, our trials may be repeated, extended, delayed, or terminated; we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates; we may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates; or we or they may be subject to regulatory enforcement actions. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. To the extent we are unable to successfully identify and manage the performance of third-party service providers in the future, our business, financial condition, results of operations, stock price and prospects may be materially harmed.

If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative providers or to do so on commercially reasonable terms. Switching or adding additional third parties involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays could occur, which could compromise our ability to meet our desired development timelines.

We also rely on other third parties to store and distribute our products for the clinical trials that we conduct. Any performance failure on the part of our distributors could delay clinical development, marketing approval, or commercialization of our product candidates, which could result in additional losses and deprive us of potential product revenue.

If the manufacturers upon which we rely fail to produce our product candidates in the volumes that we require on a timely basis, or to fail comply with stringent regulations applicable to biopharmaceutical manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates and may lose potential revenues.

Until our planned manufacturing facility is complete, we will continue to rely on third-party contract manufacturers to manufacture our clinical trial product supplies. There can be no assurance that our clinical development will not be limited, interrupted, or of satisfactory quality or continue to be available at acceptable prices. In particular, any replacement of our contract manufacturer could require significant effort and expertise because there may be a limited number of qualified replacements. Any delays in

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obtaining adequate supplies of our product candidates that meet the necessary quality standards may delay our development or commercialization.

We may not succeed in our efforts to establish manufacturing relationships or other alternative arrangements for any of our product candidates or programs. Our product candidates may compete with other products and product candidates for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that are both capable of manufacturing and filling our viral product for us and willing to do so. If our existing third-party manufacturers, or the third parties that we engage in the future should cease to work with us, we likely would experience delays in obtaining sufficient quantities of our product candidates for us to meet commercial demand or to advance our clinical trials while we identify and qualify replacement suppliers. If for any reason we are unable to obtain adequate supplies of our product candidates or the therapeutic substances used to manufacture them, it will be more difficult for us to develop our product candidates and compete effectively. Further, even if we do establish such collaborations or arrangements, our third-party manufacturers may breach, terminate, or not renew these agreements.

Any problems or delays we experience in preparing for commercial-scale manufacturing of a product candidate or component may result in a delay in product development timelines and FDA or comparable foreign regulatory authority approval of the product candidate or may impair our ability to manufacture commercial quantities or such quantities at an acceptable cost and quality, which could result in the delay, prevention, or impairment of clinical development and commercialization of our product candidates and may materially harm our business, financial condition, results of operations, stock price and prospects.

We currently have only one contract manufacturer for our product candidates for use in our clinical trials. In addition, we do not have any long-term commitments from our suppliers of clinical trial material or guaranteed prices for our product candidates or their components. The manufacture of biopharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of therapeutics often encounter difficulties in production, particularly in scaling up initial production. These problems include difficulties with production costs and yields, quality control, including stability of the product candidate and quality assurance testing, shortages of qualified personnel or key raw materials, and compliance with strictly enforced federal, state, and foreign regulations. Our contract manufacturers may not perform as agreed. If our manufacturers were to encounter these or other difficulties, our ability to provide product candidates to patients in our clinical trials could be jeopardized.

Contract manufacturers of our product candidates may be unable to comply with our specifications, applicable cGMP requirements or other FDA, state or foreign regulatory requirements. Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of a product candidate that may not be detectable in final product testing. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or other regulatory authorities, they will not be able to secure or maintain regulatory approval for their manufacturing facilities. Any such deviations may also require remedial measures that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical trial or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. Any delays in obtaining products or product candidates that comply with the applicable regulatory requirements may result in delays to clinical trials, product approvals, and commercialization. It may also require that we conduct additional studies.

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While we are ultimately responsible for the manufacturing of our product candidates and therapeutic substances, other than through our contractual arrangements, we have little control over our manufacturers' compliance with these regulations and standards. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Any new manufacturers would need to either obtain or develop the necessary manufacturing know-how, and obtain the necessary equipment and materials, which may take substantial time and investment. We must also receive FDA approval for the use of any new manufacturers for commercial supply.

A failure to comply with the applicable regulatory requirements, including periodic regulatory inspections, may result in regulatory enforcement actions against our manufacturers or us (including fines and civil and criminal penalties, including imprisonment) suspension or restrictions of production, injunctions, delay or denial of product approval or supplements to approved products, clinical holds or termination of clinical trials, warning or untitled letters, regulatory authority communications warning the public about safety issues with the product candidate, refusal to permit the import or export of the products, product seizure, detention, or recall, operating restrictions, suits under the civil False Claims Act, corporate integrity agreements, consent decrees, withdrawal of product approval, environmental or safety incidents and other liabilities. If the safety of any quantities supplied is compromised due to our manufacturers' failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.

Any failure or refusal to supply our product candidates or components for our product candidates that we may develop could delay, prevent or impair our clinical development or commercialization efforts. Any change in our manufacturers could be costly because the commercial terms of any new arrangement could be less favorable and because the expenses relating to the transfer of necessary technology and processes could be significant.

If there are delays in completing our planned manufacturing facility, we may be delayed in scaling up manufacturing of our product candidates, may be forced to devote additional resources and management time to completing our manufacturing facility and may face delays in our product development timelines. Additionally, the transition of our manufacturing operations to our new facility may result in further delays or expenses, and we may not experience the anticipated operating efficiencies.

We have signed a lease for an approximately 63,000 square-foot facility in Framingham, Massachusetts at which we intend to establish and equip our own manufacturing facility in order to secure supplies for pivotal studies and commercial launch. This facility is intended to give us control over key aspects of the supply chain for our products and product candidates. We may face delays in the completion of the facility. In addition, we may not experience the anticipated operating efficiencies as we commence manufacturing operations at the new facility. Any such delays may disrupt or delay the supply of our product candidates if we have not maintained a sufficient back-up supply of our product candidates through third-party manufacturers. Moreover, changing manufacturing facilities may also require that we conduct additional studies, make notifications to the regulatory authorities, make additional filings to the regulatory authorities, and obtain regulatory authority approval for the new facilities, which may be delayed or which we may never receive. We will further need to comply with the FDA's and applicable foreign regulatory authorities' cGMP requirements for the production of our product candidates for clinical trials and, if approved, commercial supply, and will be subject to FDA and comparable foreign regulatory authority

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inspection. These requirements include the qualification and validation of our manufacturing equipment and processes. We may not be able to develop or acquire the internal expertise and resources necessary for compliance with these requirements. Should we fail to comply with cGMP regulations, the opening of our manufacturing facility will be delayed. If we fail to achieve the operating efficiencies that we anticipate, our manufacturing and operating costs may be greater than expected, which could have a material adverse impact on our operating results.

In order to complete our planned manufacturing facility, we may be forced to devote greater resources and management time than anticipated, particularly in areas relating to operations, quality, regulatory, facilities and information technology. If we experience unanticipated employee turnover in any of these areas, we may not be able to effectively manage our ongoing manufacturing operations and we may not achieve the operating efficiencies that we anticipate from the new facility, which may negatively affect our product development timeline.

Any such problems could result in the delay, prevention, or impairment of clinical development and commercialization of our product candidates and may materially harm our business, financial condition, results of operations, stock price and prospects.

Risks related to legal and compliance matters

We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability and have to limit the commercialization of any approved products and/or our product candidates.

The use of our product candidates in clinical trials, and the sale of any product for which we obtain regulatory approval, exposes us to the risk of product liability claims. We face inherent risk of product liability related to the testing of our product candidates in human clinical trials, including liability relating to the actions and negligence of our investigators, and will face an even greater risk if we commercially sell any product candidates that we may develop. For example, we may be sued if any product candidate we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. Product liability claims might be brought against us by consumers, healthcare providers or others using, administering or selling our products. If we cannot successfully defend ourselves against these claims, we will incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of merit or eventual outcome, liability claims may result in:

loss of revenue from decreased demand for our products and/or product candidates;

impairment of our business reputation or financial stability;

costs of related litigation;

substantial monetary awards to patients or other claimants;

diversion of management attention;

withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs;

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the inability to commercialize our product candidates;

significant negative media attention;

decreases in our stock price;

initiation of investigations and enforcement actions by regulators; and

product recalls, withdrawals or labeling, marketing or promotional restrictions, including withdrawal of marketing approval.

We believe we have sufficient insurance coverage in place for our business operations. However, our insurance coverage may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. We intend to expand our insurance coverage to include the sale of commercial products if we obtain FDA or comparable foreign regulatory approval for our product candidates in development, but we may be unable to obtain commercially reasonable product liability insurance for any products approved for marketing, or at all. Failure to obtain and retain sufficient product liability insurance at an acceptable cost could prevent or inhibit the commercialization of products we develop. On occasion, large judgments have been awarded in class action lawsuits based on therapeutics that had unanticipated side effects. A successful product liability claim or series of claims brought against us could cause our stock price to fall and, if judgments exceed our insurance coverage, could decrease our cash, and materially harm our business, financial condition, results of operations, stock price and prospects.

We are subject to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws, as well as import and export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect our business, financial condition, results of operations, stock price and prospects.

Our operations are subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act 2010, or the Bribery Act, and other anti-corruption laws that apply in countries where we do business. The FCPA, the Bribery Act, and these other laws generally prohibit us and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. We also may participate in collaborations and relationships with third parties whose actions, if non-compliant, could potentially subject us to liability under the FCPA, Bribery Act or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

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

We can provide no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws or other legal requirements, including trade control laws. If we are not in compliance with applicable anti-corruption laws or trade control laws, we may be subject to criminal and

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civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations, stock price and prospects. Likewise, any investigation of any potential violations of these anti-corruption laws or trade control laws by U.S., U.K. or other authorities could also have an adverse impact on our reputation, our business, financial condition, results of operations, stock price and prospects.

If we fail to comply with federal and state healthcare laws, including fraud and abuse and health and other information privacy and security laws, we could face substantial penalties and our business, financial condition, results of operations, stock price and prospects will be materially harmed.

We are subject to many federal and state healthcare laws, including those described in "Business—Regulatory matters," such as the federal Anti-Kickback Statute, the federal civil and criminal False Claims Acts, the civil monetary penalties statute, the Medicaid Drug Rebate statute and other price reporting requirements, the Veterans Health Care Act of 1992, or VHCA, the federal Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economics and Clinical Health Act, or HITECH), or HIPAA, the FCPA, the ACA, and similar state laws. Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws, and regulations pertaining to fraud and abuse, reimbursement programs, government procurement, and patients' rights are and will be applicable to our business. We would be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states and foreign jurisdictions in which we conduct our business. In the European Union, the data privacy laws are generally stricter than those which apply in the United States and include specific requirements for the collection of personal data of European Union persons or the transfer of personal data outside of the European Union to the United States to ensure that European Union standards of data privacy will be applied to such data.

If we or our operations are found to be in violation of any federal or state healthcare law, or any other governmental laws or regulations that apply to us, we may be subject to penalties, including civil, criminal, and administrative penalties, damages, fines, disgorgement, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from participation in U.S. federal or state health care programs, corporate integrity agreements, and the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, it may be subject to criminal, civil or administrative sanctions, including but not limited to, exclusions from participation in government healthcare programs, which could also materially affect our business.

Although an effective compliance program can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Moreover, achieving and sustaining compliance with applicable federal, state and foreign privacy, data protection, security, reimbursement, and fraud laws may prove costly. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management's attention from the operation of our business.

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If the government or third-party payors fail to provide adequate coverage, reimbursement and payment rates for our product candidates, or if health maintenance organizations or long-term care facilities choose to use therapies that are less expensive or considered a better value, our revenue and prospects for profitability will be limited.

In both domestic and foreign markets, sales of our products will depend in part upon the availability of coverage and reimbursement from third-party payors. Such third-party payors include government health programs such as Medicare and Medicaid, managed care providers, private health insurers, and other organizations. Coverage decisions may depend upon clinical and economic standards that disfavor new therapeutic products when more established or lower cost therapeutic alternatives are already available or subsequently become available, even if our products are alone in a class. If reimbursement is not available, or is available only to limited levels, our product candidates may be competitively disadvantaged, and we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain a market share sufficient to realize a sufficient return on our or their investments. Alternatively, securing favorable reimbursement terms may require us to compromise pricing and prevent us from realizing an adequate margin over cost.

There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved therapeutics. Marketing approvals, pricing, and reimbursement for new therapeutic products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a therapeutic before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription biopharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of the product, possibly for lengthy time periods, which may negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our or their investment in one or more product candidates, even if our product candidates obtain marketing approval. Our ability to commercialize our product candidates will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Regulatory authorities and third-party payors, such as private health insurers, and health maintenance organizations, decide which medications they will cover and establish reimbursement levels. The healthcare industry is acutely focused on cost containment, both in the United States and elsewhere. Several third-party payors are requiring that companies provide them with predetermined discounts from list prices, are using preferred drug lists to leverage greater discounts in competitive classes, are disregarding therapeutic differentiators within classes, are challenging the prices charged for therapeutics, and are negotiating price concessions based on performance goals.

Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In addition, in the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. Further, we believe that future coverage and reimbursement will likely be subject to increased restrictions both in the United States and in international markets. Third-party coverage and reimbursement for our products or product candidates for which we receive regulatory approval may not be available or adequate in either the United

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States or international markets, which could have a negative effect on our business, financial condition, results of operations, stock price and prospects.

Assuming coverage is approved, the resulting reimbursement payment rates might not be adequate. If payors subject our product candidates to maximum payment amounts, or impose limitations that make it difficult to obtain reimbursement, providers may choose to use therapies which are less expensive when compared to our product candidates. Additionally, if payors require high copayments, beneficiaries may seek alternative therapies. We may need to conduct post-marketing studies in order to demonstrate the cost-effectiveness of any products to the satisfaction of hospitals, other target customers and their third-party payors. Such studies might require us to commit a significant amount of management time and financial and other resources. Our products might not ultimately be considered cost-effective. Adequate third-party coverage and reimbursement might not be available to enable us to maintain price levels sufficient to realize an appropriate return on investment in product development.

In addition, federal programs impose penalties on manufacturers of therapeutics in the form of mandatory additional rebates and/or discounts if commercial prices increase at a rate greater than the Consumer Price Index-Urban, and these rebates and/or discounts, which can be substantial, may impact our ability to raise commercial prices. A few states have also passed or are considering legislation intended to prevent significant price increases. Regulatory authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability to sell our product candidates profitably. These payors may not view our products, if any, as cost-effective, and coverage and reimbursement may not be available to our customers, or may not be sufficient to allow our products, if any, to be marketed on a competitive basis. Cost-control initiatives could cause us to decrease, discount, or rebate a portion of the price we, or they, might establish for products, which could result in lower than anticipated product revenues. If the realized prices for our products, if any, decrease or if governmental and other third-party payors do not provide adequate coverage or reimbursement, our prospects for revenue and profitability will suffer.

There may also be delays in obtaining coverage and reimbursement for newly approved therapeutics, and coverage may be more limited than the indications for which the product is approved by the FDA or comparable foreign regulatory authorities. Such delays have made it increasingly common for manufacturers to provide newly approved drugs to patients experiencing coverage delays or disruption at no cost for a limited period in order to ensure that patients are able to access the drug. Moreover, eligibility for reimbursement does not imply that any therapeutic will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale, and distribution. Interim reimbursement levels for new therapeutics, if applicable, may also not be sufficient to cover our costs and may only be temporary. Reimbursement rates may vary, by way of example, according to the use of the product and the clinical setting in which it is used. Reimbursement rates may also be based on reimbursement levels already set for lower cost products or may be incorporated into existing payments for other services.

In addition, third-party payors are increasingly requiring higher levels of evidence of the benefits and clinical outcomes of new technologies, benchmarking against other therapies, seeking performance-based discounts, and challenging the prices charged. We cannot be sure that coverage will be available for any product candidate that we commercialize and, if available, that the reimbursement rates will be adequate. An inability to promptly obtain coverage and adequate payment rates from both government-funded and private payors for any of our product candidates for which we obtain marketing approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

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We are subject to new legislation, regulatory proposals and healthcare payor initiatives that may increase our costs of compliance, and adversely affect our ability to market our products, obtain collaborators, and raise capital.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any products for which we obtain marketing approval. We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we may receive for any approved products.

For example, legislative changes have been proposed and adopted since the ACA was enacted in 2010. These changes include, among other things, aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went effective on April 1, 2013. In addition, the American Taxpayer Relief Act of 2012, among other things, further 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 Centers for Medicare and Medicaid Services, or CMS, promulgated regulations governing manufacturers' obligations and reimbursement under the Medicaid Drug Rebate Program, and recently promulgated a regulation that limited Medicare Part B payment to certain hospitals for outpatient drugs purchased under the 340B program. The current Administration's budget request for fiscal year 2018 also seeks among other health care reforms legislation that would give states more tools to control their Medicaid costs. Changes imposed by recent legislative actions are further described in "Business—Regulatory matters." These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our products, if approved, and, accordingly, on our results of operations.

We expect that the ACA, as well as other federal and state healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria, increased regulatory burdens and operating costs, decreased net revenue from our biopharmaceutical products, decreased potential returns from our development efforts, and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government healthcare programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from commercializing our products and being able to generate revenue, and we could be prevented from or significantly delayed in achieving profitability.

In addition, there have been a number of other legislative and regulatory proposals aimed at changing the biopharmaceutical industry. For instance, the Drug Quality and Security Act imposes obligations on manufacturers of biopharmaceutical products related to product tracking and tracing. Among the requirements of this legislation, manufacturers are required to provide certain information regarding the product to individuals and entities to which product ownership is transferred, will be required to label products with a product identifier, and are required keep certain records regarding the product. The transfer of information to subsequent product owners by manufacturers is also required to be done electronically. Manufacturers are also being required to verify that purchasers of the manufacturers' products are appropriately licensed. Further, manufactures have product investigation, quarantine, disposition, and FDA, other comparable foreign regulatory authorities, and trading partner notification responsibilities related to counterfeit, diverted, stolen, and intentionally adulterated products that would result in serious adverse health consequences of death to humans, as well as products that are the subject

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of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.

Compliance with the federal track and trace requirements may increase our operational expenses and impose significant administrative burdens. As a result of these and other new proposals, we may determine to change our current manner of operation, provide additional benefits or change our contract arrangements, any of which could have a material adverse effect on our business, financial condition, results of operations, stock price and prospects.

Our employees, independent contractors, consultants, commercial partners, principal investigators, CMOs, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading, which could have a material adverse effect on our business.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees, independent contractors, consultants, commercial partners, principal investigators, contract manufacturing organizations, or CMOs, or CROs could include intentional, reckless, negligent, or unintentional failures to comply with FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the FDA, properly calculate pricing information required by federal programs, report financial information or data accurately or disclose unauthorized activities to us. This misconduct could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter this type of misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Moreover, it is possible for a whistleblower to pursue a False Claims Act case against us even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, financial condition, results of operations, stock price and prospects, including the imposition of significant fines or other sanctions.

Violations of or liabilities under environmental, health and safety laws and regulations could subject us to fines, penalties or other costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures, the handling, use, storage, treatment and disposal of hazardous materials and wastes and the cleanup of contaminated sites. Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also produce hazardous waste products. We would incur substantial costs as a result of violations of or liabilities under environmental requirements in connection with our operations or property, including fines, penalties and other sanctions, investigation and cleanup costs and third-party claims. Although we generally contract with third parties for the disposal of hazardous materials and wastes from our operations, we cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

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Although we maintain workers' compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

Our internal computer systems, or those of our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product candidates' development programs.

Despite our implementation of security measures, our internal computer systems, and those of our CROs, CMOs, IT suppliers and other contractors and consultants are vulnerable to damage from computer viruses, cyber attacks and other unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product candidate development programs. For example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of any of our product candidates could be delayed.

Risks related to our operations

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

As of July 9, 2018, we had 44 full-time employees, including 28 employees engaged in research and development. As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel. Future growth would impose significant added responsibilities on members of management, including:

identifying, recruiting, integrating, maintaining and motivating additional employees;

managing our internal development efforts effectively, including the clinical, FDA and comparable foreign 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.

Our future financial performance and our ability to commercialize RP1 and our other product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services. The services include substantially all aspects of clinical trial management and manufacturing, as well as support for our finance and accounting functions. We cannot assure you that the services of independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if

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the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain marketing approval of RP1 and our other product candidates or otherwise advance our business. We cannot assure you that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring qualified new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize RP1 and our other product candidates and, accordingly, may not achieve our research, development and commercialization goals.

We are highly dependent on our key personnel, including our founders, Robert Coffin, Ph.D., our President and Chief Executive Officer, Philip Astley-Sparke, our Executive Chairman, Howard Kaufman, M.D., our Chief Medical Officer, and Colin Love, Ph.D., our Chief Operating Officer. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management and particularly on the services of our founders, as well as our other scientific, manufacturing, quality and medical personnel. Robert Coffin, Ph.D., our President and Chief Executive Officer, Philip Astley-Sparke, our Executive Chairman, and Colin Love, Ph.D., our Chief Operating Officer, were the founder and senior management team of BioVex, where they invented and developed T-Vec, the only oncolytic immunotherapy to receive FDA approval. BioVex was acquired by Amgen Inc., or Amgen, in 2011. Our Chief Medical Officer, Howard Kaufman, M.D., was the principal investigator for the pivotal study upon which T-Vec was approved and previously served as President of the Society for the Immunotherapy of Cancer. We believe that their drug discovery and development experience, and overall biopharmaceutical company management experience, would be difficult to replace. The loss of the services of our key personnel and any of our other executive officers, key employees, and scientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm our business. Furthermore, the historical results, past performance and/or acquisitions of companies with which our founders were affiliated, including BioVex, do not necessarily predict or guarantee similar results for our company.

We conduct our operations at our facilities near Boston, Massachusetts and near Oxford, England, each of which are in regions that are home to many other biopharmaceutical companies and many academic and research institutions. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. We expect that we will need to recruit talent from outside of these regions, and doing so may be costly and difficult.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock option grants that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Although we have employment agreements with our key employees, these employment agreements generally provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. We do not maintain "key man" insurance policies on the lives of all of these individuals or the lives of any of our other employees.

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

In connection with the audits of our consolidated financial statements as of and for the years ended March 31, 2017 and 2018, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, our stock price and ability to access the capital markets in the future.

The material weaknesses we identified were as follows:

We did not design or maintain an effective control environment commensurate with our financial reporting requirements. We lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in our inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other things, our insufficient segregation of duties in our accounting function. This material weakness further contributed to the material weakness below.

We did not design and maintain formal accounting policies, processes and controls to analyze, account for and disclose complex transactions, including accounting for preferred stock, stock-based compensation, warrant liabilities and leases.

Each of these control deficiencies could result in a misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented or detected, and accordingly, we determined that these control deficiencies constitute material weaknesses.

These material weaknesses also resulted in adjustments to preferred stock, stock compensation expense, warrant liability and deferred rent in our consolidated financial statements as of and for the year ended March 31, 2017, which were recorded prior to their issuance.

Prior to the completion of this offering, we have been a private company with limited accounting personnel to adequately execute our accounting processes and other supervisory resources with which to address our internal control over financial reporting. We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to these material weaknesses, including hiring additional finance and accounting personnel and initiating design and implementation of our financial control environment, including the establishment of controls to account for and disclose complex transactions.

We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to these material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. In addition, neither our management nor an independent registered public accounting firm has performed an

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evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because no such evaluation has been required. Had we or our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses may have been identified. If we are unable to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, potentially resulting in restatements of our financial statements, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and applicable Nasdaq listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result.

If we fail to maintain proper and effective internal controls over financial reporting our ability to produce accurate and timely financial statements could be impaired.

We are required to maintain internal controls over financial reporting. Commencing with our fiscal year ending the year after this offering is completed, we must perform system and process design evaluation and testing of the effectiveness of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Form 10-K filing for that year, as required by Section 404 of the Sarbanes-Oxley Act. This will require that we incur substantial additional professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts. Prior to this offering, we have never been required to test our internal controls within a specified period and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner. In addition, in connection with the audits of our consolidated financial statements as of and for the years ended March 31, 2017 and 2018, we identified material weaknesses in our internal control over financial reporting. See "Risk factors—We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business."

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if our independent registered public accounting firm determines that we continue to have a material weakness or significant deficiency in our internal control over financial reporting, or if we are unable to maintain proper and effective internal controls over financial reporting, we may not be able to produce timely and accurate financial statements. If that were to happen, our investors could lose confidence in our reported financial information, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC, Nasdaq or other regulatory authorities.

We believe that any internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our consolidated financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required

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related party transaction disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Upon the completion of this offering, we will become subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We must design our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.

We may evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:

increased operating expenses and cash requirements;

the assumption of additional indebtedness or contingent liabilities;

the issuance of our equity securities;

assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;

the diversion of our management's attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;

retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;

risks and uncertainties associated with the other party to such a transaction, including the prospects of that party, their regulatory compliance status, and their existing products or product candidates and marketing approvals; and

our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

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In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business. Any of the foregoing may materially harm our business, financial condition, results of operations, stock price and prospects.

Unfavorable market and economic conditions may have serious adverse consequences on our business, financial condition, results of operations, stock price and prospects.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. The most recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including a reduced ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

At March 31, 2018, we had $61.6 million of cash and cash equivalents and short-term investments. Although we are not aware of any downgrades, material losses, or other significant deterioration in the fair value of our cash equivalents or short-term investments since that date, we cannot assure you that deterioration of the global credit and financial markets would not negatively impact our current portfolio of cash equivalents or short-term investments, or our ability to meet our financing objectives. Furthermore, our stock price may decline due, in part, to the volatility of the stock market and general economic downturns.

Exchange rate fluctuations may materially affect our results of operations and financial conditions

Owing to the international scope of our operations, fluctuations in exchange rates, particularly between the U.S. dollar and the British pound and the euro, may adversely affect us. Although we are based in the United States, we have significant research and development operations in the United Kingdom, and source third-party manufacturing, consulting and other services in the United Kingdom and the European Union. As a result, our business and the price of our common stock may be affected by fluctuations in foreign exchange rates, which may have a significant impact on our results of operations and cash flows from period to period. Currently, we do not have any exchange rate hedging arrangements in place.

Risks related to our common stock and this offering

An active trading market for our common stock may not develop, and you may not be able to resell your shares at or above the initial public offering price.

Prior to this offering, there has been no public market for shares of our common stock. Although our common stock will be approved for listing on Nasdaq, an active trading market for our shares may never develop or be sustained following this offering. The initial public offering price of our common stock was determined through negotiations between us and the underwriters. This initial public offering price may not be indicative of the market price of our common stock after this offering. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the initial public offering price or at the time that they would like to sell.

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The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock in this offering.

Our stock price is likely to be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including:

the success of competitive products or technologies;

results of clinical trials of RP1 and our other product candidates or those of our competitors;

regulatory or legal developments in the United States 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 the development of RP1 and our other product candidates or clinical development programs;

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

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

variations in our financial results or those of companies that are perceived to be similar to us;

changes in the structure of healthcare payment systems;

market conditions in the pharmaceutical and biotechnology sectors;

general economic, industry and market conditions; and

the other factors described in this "Risk factors" section.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance.

Our quarterly and annual operating results may fluctuate significantly in the future, which makes it difficult for us to predict our future operating results. From time to time, we may enter into license or collaboration agreements with other companies that include development funding and significant upfront and milestone payments and/or royalties, which may become an important source of our revenue. Accordingly, our revenue may depend on development funding and the achievement of development and clinical milestones under current and any potential future license and collaboration agreements and sales of our products, if approved. These upfront and milestone payments may vary significantly from period to period and any such variance could cause a significant fluctuation in our operating results from one period to the next.

In addition, we measure compensation cost for stock-based awards made to employees at the grant date of the award, based on the fair value of the award as determined by our board of directors, and recognize the cost as an expense over the employee's requisite service period. As the variables that we use as a

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basis for valuing these awards change over time, including, after the completion of this offering, our underlying stock price and stock price volatility, the magnitude of the expense that we must recognize may vary significantly.

Furthermore, our operating results may fluctuate due to a variety of other factors, many of which are outside of our control and may be difficult to predict, including the following:

the timing and cost of, and level of investment in, research and development activities relating to our current and any future product candidates, which will change from time to time;

the total expenses we incur in connection with establishing, equipping, and operating our planned manufacturing facility and the actual timing of the facility becoming operational;

our ability to enroll patients in clinical trials and the timing of enrollment;

the cost of manufacturing our current and any future product candidates, which may vary depending on the FDA's and comparable foreign regulatory authorities' guidelines and requirements, the quantity of production and the terms of any agreements with manufacturers;

expenditures that we will or may incur to acquire or develop additional product candidates and technologies;

the timing and outcomes of clinical and preclinical studies for RP1 and our other product candidates or competing product candidates;

competition from existing and potential future products that compete with RP1 and our other product candidates, and changes in the competitive landscape of our industry, including consolidation among our competitors or partners;

any delays in regulatory review or approval of RP1 or our other product candidates;

the level of demand for RP1 and our other product candidates, if approved, which may fluctuate significantly and be difficult to predict;

the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future products that compete with RP1 and our other product candidates;

our ability to commercialize RP1 and our other product candidates, if approved, inside and outside of the United States, either independently or working with third parties;

the success of and our ability to establish and maintain collaborations, licensing or other arrangements;

our ability to adequately support future growth;

potential unforeseen business disruptions that increase our costs or expenses;

future accounting pronouncements or changes in our accounting policies; and

the changing and volatile global economic environment.

These factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance.

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This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated revenue and/or earnings guidance we may provide.

We have broad discretion in how we use the proceeds of this offering and may not use these proceeds effectively, which could affect our results of operations and cause our stock price to decline.

We will have considerable discretion in the application of the net proceeds of this offering. We intend to use the net proceeds from this offering to fund our preclinical and clinical development programs and the establishment and equipping of our planned manufacturing facility, and the remainder for general corporate purposes, including working capital requirements and operating expenses. See "Use of proceeds." As a result, investors will be relying upon management's judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

You should not rely on an investment in our common stock to provide dividend income. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock, which may never occur, as the only way to realize any return on their investment.

If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

You will suffer immediate and substantial dilution in the pro forma as adjusted net tangible book value of the common stock you purchase in this offering. Assuming an initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, purchasers of common stock in this offering will experience immediate dilution of $10.11 per share in pro forma as adjusted net tangible book value of the common stock. In addition, investors purchasing common stock in this offering will contribute 53.6% of the total amount invested by stockholders since inception but will only own 21.7% of the shares of common stock outstanding. In the past, we have issued options and other securities to acquire common stock at prices significantly below the initial public offering price. To the extent these outstanding securities are ultimately exercised, investors purchasing common stock in this offering will sustain further dilution. See "Dilution" for a more detailed description of the dilution to new investors in the offering.

Our executive officers, directors, principal stockholders and their affiliates will continue to exercise significant influence over our company after this offering, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control.

Immediately following the completion of this offering, and disregarding any shares of common stock that they purchase in this offering, the existing holdings of our executive officers, directors, principal stockholders and their affiliates, will represent beneficial ownership, in the aggregate, of approximately

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76.5% of our outstanding common stock, assuming no exercise of the underwriters' option to acquire additional common stock in this offering and assuming we issue the number of shares of common stock set forth on the cover page of this prospectus. As a result, these stockholders, if they act together, will be able to influence our management and affairs and the outcome of matters submitted to our stockholders for approval, including the election of directors and any sale, merger, consolidation, or sale of all or substantially all of our assets. These stockholders acquired their shares of common stock for substantially less than the price of the shares of common stock being acquired in this offering, and these stockholders may have interests with respect to their common stock that are different from those of investors in this offering, and the concentration of voting power among these stockholders may have an adverse effect on the price of our common stock. In addition, this concentration of ownership might adversely affect the market price of our common stock by:

delaying, deferring or preventing a change of control of our company;

impeding a merger, consolidation, takeover or other business combination involving our company; or

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

See "Principal stockholders" in this prospectus for more information regarding the ownership of our outstanding common stock by our executive officers, directors, principal stockholders and their respective affiliates.

Conflicts of interest may arise because some members of our board of directors are representatives of our principal stockholders.

Certain of our principal stockholders or their affiliates are venture capital funds or other investment vehicles that could invest in entities that directly or indirectly compete with us. As a result of these relationships, when conflicts arise between the interests of the principal stockholders or their affiliates and the interests of other stockholders, members of our board of directors that are representatives of the principal stockholders may not be disinterested. Neither the principal stockholders nor the representatives of the principal stockholders on our board of directors, by the terms of our amended and restated certificate of incorporation, are required to offer us any transaction opportunity of which they become aware and could take any such opportunity for themselves or offer it their other affiliates, unless such opportunity is expressly offered to them solely in their capacity as members of our board of directors.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lock-up and other legal restrictions on resale discussed in this prospectus lapse, the market price of our common stock could decline. Based upon the number of shares of common stock, on an as-converted basis, outstanding as of July 9, 2018, upon the completion of this offering, we will have outstanding a total of 30,838,587 shares of common stock, assuming no exercise of the underwriters' option to purchase an additional 1,005,000 shares. Of these shares, as of the date of this prospectus, approximately 6,700,000 shares, or 22% of our common stock, plus any shares sold upon exercise of the underwriters' option to purchase additional shares, will be freely tradable, without restriction, in the public market immediately following this offering, assuming that current stockholders do not purchase shares in this offering.

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The lock-up agreements pertaining to this offering will expire 180 days from the date of this prospectus. After the lock-up agreements expire, based upon the number of shares of common stock, on an as-converted basis, outstanding as of July 9, 2018, up to an additional approximately 24.1 million shares of common stock will be eligible for sale in the public market, approximately 21% of which shares are held by directors, executive officers and other affiliates and will be subject to certain limitations of Rule 144 under the Securities Act, assuming that current stockholders do not purchase shares in this offering. See "Shares eligible for future sale" for more information. J.P. Morgan Securities LLC and Leerink Partners LLC, however, may, in their sole discretion, permit our officers, directors and other stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

Several of our existing stockholders (or their affiliates), including stockholders affiliated with certain of our directors, have indicated an interest in purchasing up to an aggregate of approximately $40.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, fewer or no shares to any of these stockholders and any of these stockholders could determine to purchase more, fewer or no shares in this offering. The underwriters will receive the same underwriting discount on any shares purchased by these stockholders as they will on any other shares sold to the public in this offering. The shares purchased by such stockholders in this offering will reduce the available public float of our common shares. As a result, the purchase of common shares by such stockholders in this offering may reduce the liquidity of our common shares relative to what it would have been had these shares been purchased by other investors or not subject to lock-up agreements.

Upon completion of this offering, approximately 6.8 million shares of common stock that are either subject to outstanding options, reserved for future issuance under our equity incentive plans or subject to outstanding warrants will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the market price of our common stock could decline.

After the completion of this offering, the holders of approximately 19.7 million shares of our common stock, or their permitted transferees, will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to the lock-up agreements described above. See "Certain relationships and related party transactions—Stockholder agreements—Investors' rights agreement." Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates. Any sales of securities by these stockholders could have a material adverse effect on the market price of our common stock.

We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Exchange Act, which will require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, and related SEC and Nasdaq rules impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation-related

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provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as "say on pay" and proxy access. Recent legislation permits emerging growth companies to implement many of these requirements over a longer period and up to five years from the pricing of this offering. We intend to take advantage of this new legislation, but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition, results of operations, stock price and prospects. The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.

The trading market for our common stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business. We may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage of us, the trading price of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which, in turn, could cause our stock price to decline.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may delay or prevent an acquisition of our company or a change in our management. These provisions include a classified board of directors and the ability of our board of directors to issue preferred stock without stockholder approval. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with our company. Although we believe these provisions collectively provide for an opportunity to obtain greater value for stockholders by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer rejected by our board were considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

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We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an emerging growth company. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years following the year in which we complete this offering, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which requires the market value of our common stock that is held by non-affiliates to exceed $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance or the application of existing guidance to changes in our business could significantly affect our financial position and results of operations.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:

any derivative action or proceeding brought on our behalf;

any action asserting a breach of fiduciary duty;

any action asserting a claim against us arising under the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws; and

any action asserting a claim against us that is governed by the internal-affairs doctrine.

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Our amended and restated certificate of incorporation further provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

These exclusive-forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.

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Special note regarding forward-looking statements

This prospectus contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include, among other things:

the timing, progress, and results of preclinical studies and clinical trials for RP1 or any of our other product candidates, including the timing of initiation and completion of studies or trials and related preparatory work and the period during which the results of the trials will become available;

the timing, scope or likelihood of regulatory filings and approvals, including timing of our BLA filing for, and final FDA approval of, RP1 or any of our other product candidates;

the timing, scope, or likelihood of foreign regulatory filings and approvals;

our ability to develop our product candidates for use in combination with other checkpoint blockade therapies, including anti-PD-1;

our ability to develop and advance any future product candidates into, and successfully complete, clinical trials;

our expectations regarding the size of the patient populations for RP1 or our other product candidates if approved for commercial use;

the costs and timing of establishing, equipping, and operating our planned in-house manufacturing facility;

the implementation of our business model and our strategic plans for our business, RP1 and our other product candidates;

the rate and degree of market acceptance and clinical utility of RP1 or our other product candidates;

the potential benefits of and our ability to establish or maintain future collaborations or strategic relationships;

our ability to obtain additional funding as necessary;

our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering RP1 and our other product candidates, claims others may make regarding rights in our intellectual property, and any potential infringement, misappropriation or other violation of any third-party intellectual property rights;

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our ability to remediate our existing material weaknesses and to design and maintain an effective system of internal controls;

our competitive position, and developments and projections relating to our competitors and our industry;

negative developments in the field of immuno-oncology;

our expectations related to the use of proceeds from this offering;

our estimates regarding expenses and capital requirements;

the impact of laws and regulations;

our expectations regarding the time during which we will be an emerging growth company under the JOBS Act; and

the other risks and uncertainties described under "Risk factors."

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. Moreover, we operate in a competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent required by applicable law. You should not rely on forward-looking statements as predictions of future events. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

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Market data

This prospectus includes market and industry data and forecasts concerning our business and the markets for certain cancers, including data regarding the estimated size of those markets and the incidence and prevalence of certain medical conditions, that we have derived from independent consultant reports, publicly available information, various industry, medical and general publications, other published industry sources, government data and our internal data and estimates. Independent consultant reports, industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable.

Our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management's understanding of industry conditions.

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Use of proceeds

We estimate that the net proceeds from the sale of 6,700,000 shares of common stock in this offering will be approximately $90.8 million, or approximately $104.8 million if the underwriters exercise their option to purchase additional shares in full, based on an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We currently expect to use the net proceeds from this offering, together with our existing cash and cash equivalents and short-term investments, as follows:

approximately $20.0 million to fund the development of RP1 through the completion of the ongoing Phase 1/2 clinical trial in four solid tumor types;

approximately $15.0 million to fund our share of the costs to fully recruit our planned Phase 2 clinical trial with RP1 in CSCC;

approximately $20.0 million to fund the completion of the preclinical development and the initial clinical trials of RP2 in approximately 100 patients;

approximately $10.0 million to fund the completion of preclinical development and a Phase 1 clinical trial of RP3;

approximately $20.0 million to fund capital expenditures associated with establishing and equipping our planned manufacturing facility in Framingham, Massachusetts; and

the remainder for general corporate purposes, including working capital requirements and operating expenses.

This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds from this offering or the amounts that we will actually spend on the uses set forth above. The amount and timing of our actual expenditures depend on several factors, including the progress and results of our research and development efforts, the amount of cash used by our operations, and the other factors described under "Risk factors." Accordingly, we will retain broad discretion in the allocation of the net proceeds from this offering. However, based on our current plans, we believe that the expected net proceeds from this offering, together with our existing cash and cash equivalents and short-term investments, will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2021. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See "Management's discussion and analysis of financial condition and results of operations—Liquidity and capital resources." Pending application of the net proceeds, we intend to invest the net proceeds from this offering in short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

A $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $6.2 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $14.0 million, assuming no change in the assumed initial public offering price per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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Dividend policy

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, business prospects, general business conditions and other factors that our board of directors may deem relevant.

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Capitalization

The following table sets forth our cash and cash equivalents and short-term investments and capitalization as of March 31, 2018 on:

an actual basis;

a pro forma basis to give effect to:

    the conversion of all outstanding shares of our preferred stock into an aggregate of 19,157,360 shares of our common stock upon the completion of this offering;

    all outstanding warrants to purchase shares of series seed preferred stock becoming warrants to purchase shares of common stock upon the completion of this offering;

    all outstanding shares of our common A stock being repurchased by us and canceled immediately prior to the completion of this offering; and

    the filing and effectiveness, as of immediately prior to the completion of this offering, of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws.

on a pro forma as adjusted basis to give further effect to our issuance and sale of 6,700,000 shares of common stock in this offering at an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma and pro forma as adjusted information below assumes that this offering was completed on March 31, 2018. The pro forma as adjusted information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read the information in this table together with the information contained in this prospectus, including "Use of proceeds," "Management's

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discussion and analysis of financial condition and results of operations" and "Description of capital stock" and our consolidated financial statements and related notes appearing at the end of this prospectus.


 

 

 


 

 


 

 


 
 
  As of March 31, 2018  
 
  Actual
  Pro forma
  Pro forma
as adjusted

 
 
  (Amounts in thousands, except share
and per share data)

 

Cash and cash equivalents and short-term investments

  $ 61,551   $ 61,551   $ 152,316  

Warrant liability

  $ 1,642   $   $  

Convertible preferred stock (series seed, A and B), $0.001 par value; 1,975,968 shares authorized as of March 31, 2018; 1,925,968 shares issued and outstanding as of March 31, 2018; no shares issued or outstanding, pro forma and pro forma as adjusted as of March 31, 2018

    86,361          

Stockholders' equity (deficit):

                   

Common stock, $0.001 par value; 27,314,288 shares authorized (inclusive of 26,258 shares of common A stock) as of March 31, 2018; 5,007,485 shares issued and outstanding (inclusive of 26,258 shares of common A stock) as of March 31, 2018; 24,138,587 shares issued and outstanding, pro forma as of March 31, 2018; 30,838,587 shares issued and outstanding, pro forma as adjusted as of March 31, 2018

    5     24     31  

Additional paid-in capital

    1,097     89,081     179,839  

Accumulated deficit

    (28,932 )   (28,932 )   (28,932 )

Accumulated other comprehensive loss

    (238 )   (238 )   (238 )

Total stockholders' equity (deficit)

    (28,068 )   59,935     150,700  

Total capitalization

  $ 59,935   $ 59,935   $ 150,700  

A $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents and short-term investments, additional paid-in capital, total stockholders' equity (deficit) and total capitalization on a pro forma as adjusted basis by approximately $6.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents and short-term investments, additional paid-in capital, total stockholders' equity (deficit) and total capitalization on a pro forma as adjusted basis by approximately $14.0 million, assuming the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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The actual, pro forma and pro forma as adjusted information set forth in the table excludes:

2,520,247 shares of common stock issuable upon the exercise of stock options outstanding as of March 31, 2018 at a weighted average exercise price of $2.72 per share;

3,486,118 shares of common stock reserved for future issuance under our 2018 Plan, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part;

348,612 shares of our common stock reserved for future issuance under our ESPP, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part;

131,850 shares of our common stock reserved for future issuance as of March 31, 2018 under our 2017 Plan, which will become available for issuance under our 2018 Plan upon the effectiveness of our 2018 Plan; and

497,344 shares of common stock issuable upon the exercise of warrants outstanding as of March 31, 2018 at an exercise price of $1.01 per share.

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Dilution

If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

Our historical net tangible book value (deficit) as of March 31, 2018 was $(28.1) million, or $(5.63) per share of our common stock. Our historical net tangible book value (deficit) is the amount of our total tangible assets less our total liabilities and the carrying value of our preferred stock, which is not included within our stockholders' equity (deficit). Historical net tangible book value per share represents historical net tangible book value (deficit) divided by the number of shares of our common stock issued as of March 31, 2018.

Our pro forma net tangible book value as of March 31, 2018 was $59.9 million, or $2.48 per share of our common stock. Pro forma net tangible book value (deficit) represents the amount of our total tangible assets less our total liabilities, after giving effect to (i) the conversion of all outstanding shares of our preferred stock into an aggregate of 19,157,360 shares of common stock upon the completion of this offering and (ii) all outstanding warrants to purchase shares of series seed preferred stock becoming warrants to purchase shares of common stock upon the completion of this offering, in each case assuming that this offering was completed on March 31, 2018. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares of our common stock issued as of March 31, 2018, after giving effect to the conversion of all outstanding shares of our preferred stock into an aggregate of 19,157,360 shares of our common stock upon the completion of this offering.

After giving further effect to our sale of 6,700,000 shares of common stock in this offering at an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2018 would have been $150.7 million, or $4.89 per share. This represents an immediate increase in pro forma as adjusted net tangible book value per share of $2.41 to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value per share of $10.11 to new investors purchasing common stock in this offering. Dilution per share to new investors purchasing common stock in this offering is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the assumed initial public offering price per share paid by new investors.

The following table illustrates this dilution on a per share basis assuming the underwriters do not exercise their option to purchase additional shares of common stock:

Assumed initial public offering price per share

        $ 15.00  

Historical net tangible book value (deficit) per share as of March 31, 2018

  $ (5.63 )      

Increase per share attributable to the pro forma adjustments described above

    8.11        

Pro forma net tangible book value per share as of March 31, 2018

    2.48        

Increase in pro forma as adjusted net tangible book value per share attributable to new investors purchasing common stock in this offering

    2.41        

Pro forma as adjusted net tangible book value per share after this offering

          4.89  

Dilution per share to new investors purchasing common stock in this offering

        $ 10.11  

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The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

A $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $0.20 and dilution per share to new investors purchasing common stock in this offering by $0.80, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase the pro forma as adjusted net tangible book value per share after this offering by $0.28 and decrease the dilution per share to new investors purchasing common stock in this offering by $0.28, assuming no change in the assumed initial public offering price and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. A decrease of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would decrease the pro forma as adjusted net tangible book value per share after this offering by $0.31 and increase the dilution per share to new investors purchasing common stock in this offering by $0.31, assuming no change in the assumed initial public offering price and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares of common stock in this offering in full at the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus and assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, the pro forma as adjusted net tangible book value per share after this offering would be $5.17 per share, and the decrease in dilution in pro forma as adjusted net tangible book value per share to new investors purchasing common stock in this offering would be $0.28 per share.

The following table summarizes, as of March 31, 2018 on the same pro forma as adjusted basis as described above, the total number of shares of common stock purchased from us, the total cash consideration paid to us and the average price per share of common stock paid by our existing investors and by new investors purchasing shares of common stock in this offering at an assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. As the table shows, new investors purchasing common stock in this offering will pay an average price per share substantially higher than our existing investors paid.

 
   
   
   
   
   
 
 
  Shares of
common stock
purchased
  Total
consideration
   
 
 
  Average price
per share of
common stock

 
 
  Number
  Percent
  Amount
  Percent
 

Existing investors

    24,138,157     78.3 % $ 86,949,678     46.4 % $ 3.60  

New investors

    6,700,000     21.7     100,500,000     53.6     15.00  

Total

    30,838,587     100.0 % $ 187,449,678     100.0 %      

The table above assumes no exercise of the underwriters' option to purchase additional shares in this offering. If the underwriters' option to purchase additional shares is exercised in full, the number of shares

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of our common stock held by existing stockholders would be reduced to 75.8% of the total number of shares of our common stock outstanding after this offering, and the number of shares of common stock held by new investors participating in the offering would be increased to 24.2% of the total number of shares outstanding after this offering.

A $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $6.7 million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by 1.6 percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by 1.7 percentage points, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. An increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $15.0 million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by 3.4 percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by 4.0 percentage points, assuming no change in the assumed initial public offering price.

The table above does not include:

2,520,247 shares of common stock issuable upon the exercise of stock options outstanding as of March 31, 2018 at a weighted average exercise price of $2.72 per share;

3,486,118 shares of common stock reserved for future issuance under our 2018 Plan, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part;

348,612 shares of our common stock reserved for future issuance under our ESPP, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part;

131,850 shares of our common stock reserved for future issuance as of March 31, 2018 under our 2017 Plan, which will become available for issuance under our 2018 Plan upon the effectiveness of our 2018 Plan;

497,344 shares of common stock issuable upon the exercise of warrants outstanding as of March 31, 2018 at an exercise price of $1.01 per share; and

26,258 shares of common A stock outstanding as of March 31, 2018, all of which will be repurchased by us and canceled immediately prior to the completion of this offering.

We may choose to raise additional capital through the sale of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. New investors will experience further dilution if any of our outstanding options are exercised, new options are issued and exercised under our equity incentive plan or we issue additional shares of common stock, other equity securities or convertible debt securities in the future. See "Risk factors—If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares."

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Selected consolidated financial data

You should read the following selected consolidated financial data together with our consolidated financial statements and the related notes appearing at the end of this prospectus and the "Management's discussion and analysis of financial condition and results of operations" section of this prospectus. We have derived the consolidated statement of operations data for the years ended March 31, 2017 and 2018 and the consolidated balance sheet data as of March 31, 2017 and 2018 from our audited consolidated financial statements appearing at the end of this prospectus. Our historical results are not necessarily indicative of results that should be expected in any future period.

 
   
   
 
 
  Year ended March 31,  
 
  2017
  2018
 
 
  (Amounts in thousands, except share and per share data)
 

Consolidated statement of operations data

             

Operating expenses:

             

Research and development

  $ 6,936   $ 13,516  

General and administrative

    2,711     5,713  

Total operating expenses

    9,647     19,229  

Loss from operations

    (9,647 )   (19,229 )

Other income (expense):

             

Research and development incentives

    1,442     2,267  

Interest income

    25     288  

Change in fair value of warrant liability

    (150 )   (972 )

Other income (expense), net

    626     (2,056 )

Total other income (expense), net

    1,943     (473 )

Net loss

    (7,704 )   (19,702 )

Net loss attributable to common stockholders

  $ (7,704 ) $ (19,702 )

Net loss per share attributable to common stockholders, basic and diluted(1)

  $ (1.55 ) $ (3.96 )

Weighted average common shares outstanding, basic and diluted(1)

    4,973,439     4,978,539  

Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(1)

        $ (0.87 )

Pro forma weighted average common shares outstanding, basic and diluted (unaudited)(1)

          21,506,697  

(1)    See Note 12 to our consolidated financial statements appearing at the end of this prospectus for further details on the calculation of basic and diluted net loss per share attributable to common stockholders and unaudited basic and diluted pro forma net loss per share attributable to common stockholders.

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  March 31,
2017

  March 31,
2018

 
 
  (Amounts in thousands)
 

Consolidated balance sheet data

             

Cash and cash equivalents and short-term investments

  $ 20,594   $ 61,551  

Working capital(1)

    20,417     59,539  

Total assets

    22,819     65,151  

Warrant liability

    670     1,642  

Total liabilities

    2,725     6,858  

Convertible preferred stock

    31,609     86,361  

Total stockholders' equity (deficit)

    (11,515 )   (28,068 )

(1)    We define working capital as current assets less current liabilities.

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Management's discussion and analysis of financial condition and results of operations

You should read this discussion and analysis of our financial condition and consolidated results of operations together with the consolidated financial statements, related notes and other financial information included in this prospectus. The following discussion and other parts of this prospectus may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under "Risk factors" and elsewhere in this prospectus. These risks could cause our actual results to differ materially from any future performance suggested below. Accordingly, you should read "Special note regarding forward-looking statements" and "Risk factors."

Overview

We are a clinical-stage biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients. We use our proprietary Immulytic platform to design and develop product candidates that are intended to maximally activate the immune system against solid tumors. We are conducting a Phase 1/2 clinical trial in the United Kingdom and, pending the opening of an IND, in the United States with our lead product candidate, RP1, in approximately 150 patients with a range of solid tumors. In addition, in the first half of 2019, we plan to initiate a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with cutaneous squamous cell carcinoma, or CSCC, which we are designing to potentially support product registration. We also intend to initiate a clinical trial for our second product candidate, RP2, in the first half of 2019.

Oncolytic immunotherapy is an emerging class of cancer treatment that exploits the ability of certain viruses to selectively replicate in and directly kill tumors, as well as induce a potent, patient-specific, anti-tumor immune response. Such oncolytic, or "cancer killing," viruses have the potential to generate an immune response targeted to an individual patient's particular set of tumor antigens, including to neo-antigens that are uniquely present in tumors. Our product candidates incorporate multiple              mechanisms of action into single product candidates in a practical, "off-the-shelf" format that is intended to maximize the immune response against a patient's cancer and to offer significant advantages over personalized vaccine approaches. Our management team has worked together for more than ten years and successfully developed the first oncolytic immunotherapy, Imlygic, also known as T-Vec, which was approved by the FDA for the treatment of advanced melanoma in 2015.

The foundation of our Immulytic platform consists of a proprietary, engineered strain of herpes simplex virus 1, or HSV-1, that has been "armed" with a fusogenic therapeutic protein intended to substantially increase anti-tumor activity. Our platform enables us to design multiple product candidates that incorporate various further genes whose expression is intended to augment the inherent properties of HSV-1 to both directly destroy tumor cells and induce an anti-tumor immune response.

We believe our lead product candidate, RP1, and our other product candidates will be effective at killing tumors and inducing immunogenic, or immune-stimulating, tumor cell death and that it will be highly synergistic with immune checkpoint blockade therapies.

We began operations as Replimune Limited, an English limited company that was incorporated in 2015. On July 5, 2017, Replimune Group, Inc., a Delaware corporation, was incorporated and, on July 10, 2017, the shareholders of Replimune Limited effected a share-for-share exchange pursuant to which they exchanged their outstanding shares in Replimune Limited for shares in Replimune Group, Inc., on a one-for-one basis.

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In addition, the holders of warrants to purchase shares of series seed preferred stock and stock options to acquire Replimune Limited capital stock canceled their warrants and stock options in Replimune Limited and were issued replacement warrants and stock options to acquire Replimune Group, Inc. capital stock on a one-for-one basis. We refer to these transactions collectively as the reorganization. Upon completion of the reorganization, the historical consolidated financial statements of Replimune Limited became the historical consolidated financial statements of Replimune Group, Inc. because the reorganization was accounted for similar to a reorganization of entities under common control due to the high degree of common ownership of Replimune Limited and Replimune Group, Inc. and lack of economic substance to the transaction. We concluded that the reorganization resulted in no change in the material rights and preferences of each respective class of equity interests and no change in the fair value of each respective class of equity interests before and after the reorganization. On December 8, 2017, Replimune Limited transferred all outstanding shares of its wholly owned subsidiary, Replimune, Inc., to Replimune Group, Inc., a Delaware corporation. Replimune Group, Inc. is the sole shareholder of Replimune Limited, Replimune, Inc. and Replimune Securities Corporation, a Massachusetts corporation that was incorporated in November 2017.

Except as otherwise indicated or the context otherwise requires, all information in this prospectus is presented giving effect to the reorganization.

Financial overview

Since our inception, we have devoted substantially all of our resources to developing our Immulytic platform and our lead product candidate, RP1, building our intellectual property portfolio, conducting research and development of our product candidates, business planning, raising capital and providing general and administrative support for our operations. To date, we have financed our operations primarily with proceeds from the sale of convertible preferred stock or preferred stock. Through March 31, 2018, we had received gross proceeds of $86.9 million from our sales of preferred stock. We do not have any products approved for sale and have not generated any revenue from product sales.

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $7.7 million for the year ended March 31, 2017 and $19.7 million for the year ended March 31, 2018. As of March 31, 2018, we had an accumulated deficit of $28.9 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.

We anticipate that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates. In addition, we expect to incur additional costs associated with operating as a public company following the completion of this offering. We expect that our expenses and capital requirements will increase substantially if and as we:

conduct our current and future clinical trials with RP1;

progress the preclinical and clinical development of RP2 and RP3;

establish, equip, and operate our own in-house manufacturing facility;

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seek to identify and develop additional product candidates;

seek marketing approvals for any of our product candidates that successfully complete clinical trials, if any;

establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

maintain, expand and protect our intellectual property portfolio;

acquire or in-license other drugs and technologies;

hire and retain additional clinical, quality control, scientific and finance personnel; and

add operational, financial and management information systems and personnel, including personnel to support our research and development programs, any future commercialization efforts and our transition to operating as a public company following the completion of this offering.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for RP1 or our other product candidates. If we obtain regulatory approval for any of our product candidates and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing, and distribution. Further, upon the completion of this offering, we expect to incur additional costs associated with operating as a public company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2018, we had cash and cash equivalents and short-term investments of $61.6 million. We believe that the expected net proceeds from this offering, together with our existing cash and cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2021. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See "—Liquidity and capital resources" and "Risk factors—Risks related to our financial position and need for additional capital."

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Components of our results of operations

Revenue

To date, we have not generated any revenue from product sales as we do not have any approved products and do not expect to generate any revenue from the sale of products in the near future. If our development efforts for RP1 or any other product candidates that we may develop in the future are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from those collaboration or license agreements.

Operating expenses

Our expenses since inception have consisted solely of research and development costs and general and administrative costs.

Research and development expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of RP1 and our other product candidates, and include:

expenses incurred under agreements with third parties, including CROs that conduct research, preclinical activities and clinical trials on our behalf as well as CMOs that manufacture our product candidates for use in our preclinical and clinical trials;

salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;

costs of outside consultants, including their fees, stock-based compensation and related travel expenses;

the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;

costs related to compliance with regulatory requirements in connection with the development of RP1 and our other product candidates; and

facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid or accrued research and development expenses.

Our direct external research and development expenses are tracked on a program-by-program basis and consist of costs, such as fees paid to consultants, contractors, CMOs, and CROs in connection with our preclinical and clinical development activities. To date, we have not allocated expenses to our earlier-stage programs for RP2 and RP3. In addition, we do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.

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The table below summarizes our research and development expenses by product candidate or development program for each of the periods presented:

 
   
   
 

  Year ended March 31,   

    2017     2018  

    (Amounts in thousands)  

RP1

  $ 3,874   $ 7,250  

Unallocated research and development expenses

    3,062     6,266  

Total research and development expenses

  $ 6,936   $ 13,516  

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to increase for the foreseeable future as we initiate additional clinical trials of RP1, complete preclinical development and pursue initial stages of clinical development of RP2 and RP3 and continue to discover and develop additional product candidates. The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following:

the scope, rate of progress, expense and results of our ongoing clinical trials of RP1, as well as of any future clinical trials of RP2 and RP3 or other product candidates and other research and development activities that we may conduct;

the number and scope of preclinical and clinical programs we decide to pursue;

our ability to maintain our current research and development programs and to establish new ones;

uncertainties in clinical trial design and patient enrollment rates;

the successful completion of clinical trials with safety, tolerability, and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

the receipt of regulatory approvals from applicable regulatory authorities;

our success in establishing, equipping, and operating a manufacturing facility, or securing manufacturing supply through relationships with third parties;

our ability to obtain and maintain patents, trade secret protection, and regulatory exclusivity, both in the United States and internationally;

our ability to protect our rights in our intellectual property portfolio;

the commercialization of our product candidates, if and when approved;

the acceptance of our product candidates, if approved, by patients, the medical community, and third-party payors;

our ability to successfully develop our product candidates for use in combination with third-party products or product candidates;

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negative developments in the field of immuno-oncology;

competition with other products; and

significant and changing government regulation and regulatory guidance.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant trial delays due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development. We may never succeed in obtaining regulatory approval for any of our product candidates.

We expect to use approximately $20.0 million of the proceeds from this offering to fund the development of RP1 through the completion of the ongoing Phase 1/2 clinical trial in four solid tumor types, approximately $15.0 million to fund our share of the costs to fully recruit our planned Phase 2 clinical trial with RP1 in CSCC, approximately $20.0 million to fund the completion of the preclinical development and the initial clinical trials of RP2 in approximately 100 patients, approximately $10.0 million to fund the completion of preclinical development and a Phase 1 clinical trial of RP3, and approximately $20.0 million to fund capital expenditures associated with establishing and equipping our planned manufacturing facility in Framingham, Massachusetts. However, because the design and outcome of planned and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of RP1 or our other product candidates.

General and administrative expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development and potential commercialization of our product candidates. We also expect to incur increased expenses associated with being a public company following the completion of this offering, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements; director and officer insurance costs; and investor and public relations costs.

Other income (expense), net

Research and development incentives

Research and development incentives consists of reimbursements of research and development expenditures. We participate, through our subsidiary in the United Kingdom, in the research and development program provided by the United Kingdom tax relief program, such that a percentage of up to 14.5% of our qualifying research and development expenditures are reimbursed by the United Kingdom government, and such incentives are reflected as other income.

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Change in fair value of warrant liability

In connection with the issuance of the series seed preferred stock we issued to the series seed preferred stock holders warrants to purchase shares of series seed preferred stock. We classify the warrants as a liability on our consolidated balance sheets. We remeasure the warrant liability to fair value at each reporting date and recognize changes in the fair value of the warrant liability as a component of other income (expense), net in our consolidated statements of operations. We will continue to recognize changes in the fair value of the warrant liability until the warrants are exercised, expire or qualify for equity classification.

Upon the completion of this offering, the warrants to purchase shares of series seed preferred stock will become exercisable for shares of common stock instead of shares of preferred stock, and the warrant liability will be reclassified to additional paid-in capital. As a result, following the completion of this offering, we will no longer recognize changes in the fair value of the warrant liability as other income (expense), net in our consolidated statements of operations.

Interest income

Interest income consists of income earned on our cash and cash equivalents and short-term investments. Our interest income has not been significant due to low investment balances and low interest earned on those balances.

Other income (expense), net

Other income (expense), net consists primarily of realized and unrealized foreign currency transaction gains and losses.

Income taxes

Since our inception and through March 31, 2018, we have not recorded any income tax benefits for the net losses we incurred in each jurisdiction in which we operate, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards will not be realized.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act includes a number of changes to existing tax law, including, among other things, a permanent reduction in the federal corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018, as well as limitation of the deduction for net operating losses to 80% of annual taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be carried forward indefinitely). Under the Tax Act, our deferred tax assets and liabilities (before valuation allowance) were remeasured at the lower federal tax rate, resulting in an increase to our income tax provision with an equal and offsetting reduction in our valuation allowance. All of our recorded income tax benefits and provisions related to the Tax Act are provisional.

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Results of operations

Comparison of the years ended March 31, 2017 and 2018

The following table summarizes our results of operations for the years ended March 31, 2017 and 2018:

 
   
   
   
 
 
  Year ended
March 31,
   
 
 
  2017
  2018
  Change
 
 
  (Amounts in thousands)
 

Operating expenses:

                   

Research and development

  $ 6,936   $ 13,516   $ 6,580  

General and administrative

    2,711     5,713     3,002  

Total operating expenses

    9,647     19,229     9,582  

Loss from operations

    (9,647 )   (19,229 )   (9,582 )

Other income (expense):

                   

Research and development incentives

    1,442     2,267     825  

Interest income

    25     288     263  

Change in fair value of warrant liability

    (150 )   (972 )   (822 )

Other income (expense), net

    626     (2,056 )   (2,682 )

Total other income (expense), net

    1,943     (473 )   (2,416 )

Net loss

  $ (7,704 ) $ (19,702 ) $ (11,998 )

Research and development expenses

 
   
   
   
 
 
  Year ended
March 31,
   
 
 
  2017
  2018
  Change
 
 
  (Amounts in thousands)
 

Direct research and development expenses by program:

                   

RP1

  $ 3,874   $ 7,250   $ 3,376  

Unallocated research and development expenses:

                   

Personnel related (including stock-based compensation)

    2,121     4,120     1,999  

Other

    941     2,146     1,205  

Total research and development expenses

  $ 6,936   $ 13,516   $ 6,580  

Research and development expenses for the year ended March 31, 2017 were $6.9 million, compared to $13.5 million for the year ended March 31, 2018. The increase of $6.6 million was due primarily to an increase of approximately $3.4 million in direct research costs associated with RP1 and an approximately $3.2 million increase in our unallocated research and development costs. The increase in RP1 costs was due primarily to an increase in clinical trial costs in the year ended March 31, 2018 associated with our ongoing Phase 1/2 clinical trial, which commenced in the United Kingdom in October 2017.

The increase in unallocated research and development expenses reflected an increase of $2.0 million in personnel-related costs, including stock-based compensation, and an increase of $1.2 million in other costs. The increase in personnel-related costs was primarily due to the hiring of additional personnel in our research and development functions as we began work on our planned Phase 2 clinical trial of RP1 in patients with CSCC. Personnel-related costs for each of the years ended March 31, 2017 and 2018 included

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stock-based compensation expense of $0.2 million and $0.8 million, respectively. Other costs increased primarily due to purchases of supplies used across all of our product candidates.

General and administrative expenses

General and administrative expenses were $2.7 million for the year ended March 31, 2017, compared to $5.7 million for the year ended March 31, 2018. The increase of $3.0 million primarily reflected increases of $1.1 million in personnel related costs and $1.6 million in professional fees. The increase in personnel related costs was due to the hiring of additional personnel in our general and administrative functions as we expanded our operations in the United States.

Other income (expense), net

Other income (expense) was $1.9 million for the year ended March 31, 2017, compared to $(0.5) million for the year ended March 31, 2018. The decrease of $2.4 million was primarily attributable to a $2.7 million increase in the expense due to a change in foreign exchange rates and a $0.8 million increase in the expense due to a change in the fair value of the warrant liability, partially offset by a $0.8 million increase in expenditure reimbursements recognized under the research and development program provided by the United Kingdom government and a $0.3 million increase in interest income.

Liquidity and capital resources

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for the foreseeable future, if at all.

Sources of liquidity

To date, we have financed our operations primarily with proceeds from the sale of convertible preferred stock. Through March 31, 2018, we had received gross proceeds of $86.9 million from our sales of preferred stock. As of March 31, 2018, we had cash and cash equivalents and short-term investments of $61.6 million.

Cash flows

The following table summarizes our cash flows for each of the periods presented:

 
   
   
 
 
  Year ended
March 31,
 
 
  2017
  2018
 
 
  (Amounts in
thousands)

 

Net cash used in operating activities

  $ (7,077 ) $ (16,014 )

Net cash used in investing activities

    (238 )   (44,046 )

Net cash provided by financing activities

    15,000     54,752  

Effect of exchange rate changes on cash and cash equivalents

    (1,419 )   2,297  

Net increase (decrease) in cash and cash equivalents

  $ 6,266   $ (3,011 )

Operating activities

During the year ended March 31, 2018, net cash used in operating activities was $16.0 million, primarily resulting from our net loss of $19.7 million, partially offset by net cash provided by changes in our operating assets and liabilities of $1.9 million and non-cash charges of $1.8 million. Net cash provided by

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changes in our operating assets and liabilities for the year ended March 31, 2018 consisted primarily of a $1.6 million increase in accounts payable and a $1.4 million increase in accrued expenses and other current liabilities, partially offset by a $0.8 million increase in the research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures and a $0.3 million increase in prepaid expenses and other current assets due to CRO deposits related to the ongoing Phase 1/2 clinical trial for RP1.

During the year ended March 31, 2017, net cash used in operating activities was $7.1 million, primarily resulting from our net loss of $7.7 million, partially offset by non-cash charges of $0.5 million, and net cash provided by changes in our operating assets and liabilities of $0.1 million. Net cash used by changes in our operating assets and liabilities for the year ended March 31, 2017 consisted primarily of a $0.2 million increase in accounts payable and a $1.4 million increase in accrued expenses due to accrued RP1 clinical trial costs, accrued compensation costs and accrued audit fees, partially offset by a $1.2 million increase in the research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures and a $0.3 million increase in prepaid expenses and other current assets due to value-added tax receivables and CMO deposits for RP1 clinical trial supplies.

Investing activities

During the year ended March 31, 2018, net cash used in investing activities was $44.0 million, consisting of $52.5 million in purchases of available for sale securities and $0.1 million in purchases of property, plant and equipment, partially offset by $8.6 million in proceeds from maturities of short-term investments.

During the year ended March 31, 2017, net cash used in investing activities was $0.2 million, consisting of purchases of property, plant and equipment.

We expect that purchases of property, plant and equipment will increase over the next several years resulting from our intended establishment of our own in-house manufacturing facility.

Financing activities

During the year ended March 31, 2018, net cash provided by financing activities was $54.8 million, primarily consisting of net proceeds from our issuance of series B convertible preferred stock, or series B preferred stock.

During the year ended March 31, 2017, net cash provided by financing activities was $15.0 million, primarily consisting of proceeds from our issuance of series A convertible preferred stock, or series A preferred stock.

Funding requirements

Our plan of operation is to continue implementing our business strategy, continue research and development of RP1 and our other product candidates and continue to expand our research pipeline and our internal research and development capabilities. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates. In addition, we expect to incur additional costs associated with operating as a public company following the completion of this offering. We expect that our expenses will increase substantially if and as we:

conduct our current and future clinical trials of RP1;

progress the preclinical and clinical development of RP2 and RP3;

establish, equip, and operate our own in-house manufacturing facility;

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seek to identify and develop additional product candidates;

seek marketing approvals for any of our product candidates that successfully complete clinical trials, if any;

establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

until our planned manufacturing facility is operational, require the manufacture by third parties of larger quantities of our product candidates for clinical development and potentially commercialization;

maintain, expand and protect our intellectual property portfolio;

acquire or in-license other drugs and technologies; and

add operational, financial and management information systems and personnel, including personnel to support our research and development programs, any future commercialization efforts and our transition to operating as a public company following the completion of this offering.

As of March 31, 2018, we had cash and cash equivalents and short-term investments of $61.6 million. We believe that the anticipated net proceeds from this offering, together with our existing cash and cash equivalents and short-term investments, will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2021. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with the development of RP1 and other product candidates and programs, and because the extent to which we may enter into collaborations with third parties for development of our product candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including those described in this section and above under "—Operating expenses—Research and development expenses."

In addition, we intend to establish, equip, and operate an in-house manufacturing facility to manufacture RP1 and our other product candidates. We expect that such a facility would require capital expenditures of approximately $20.0 million to commence operations.

Developing novel biopharmaceutical products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any product candidates or generate revenue from the sale of any products for which we may obtain marketing approval. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of therapies that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.

Adequate additional funds may not be available to us on acceptable terms, or at all. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of our equity or convertible debt securities, your ownership interest may be diluted, and the terms of these securities may include liquidation or other preferences and anti-dilution protections that could adversely affect your rights as a common stockholder. Additional debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring debt, making capital expenditures or declaring dividends, which could

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adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute your ownership interest.

If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technology, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or collaborations, strategic alliances or licensing arrangements with third parties when needed, we may be required to delay, limit, reduce and/or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual obligations and commitments

The following table summarizes our contractual obligations as of March 31, 2018 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods:

 
   
   
   
   
   
 
 
  Payments due by period  
 
  Total
  Less than
1 year

  1 to 3
years

  4 to 5
years

  More than
5 years

 
 
  (Amounts in thousands)
 

Manufacturing commitments(1)

  $ 2,938   $ 2,938   $   $   $  

Operating lease commitments(2)(3)

    1,421     474     947          

Total

  $ 4,359   $ 3,412   $ 947   $   $  

(1)    Amounts in the table reflect commitments for costs associated with our external CMO, which we engaged to manufacture clinical trial materials.

(2)    Amounts in the table reflect minimum payments due under our two leases of laboratory and office space in Woburn, Massachusetts and Oxfordshire, United Kingdom, at a monthly commitment of $7 and $31, respectively. These leases are both operating leases. Our lease in Woburn expires in March 2021, and our lease in Oxfordshire expires in April 2026 and is terminable by us in April 2021.

(3)    In June 2018, we entered into an agreement to lease approximately 63,000 square feet of office, manufacturing and laboratory space within a previously occupied building with approximately 106,000 square feet of rentable space in Framingham, Massachusetts. Pursuant to the lease agreement, the lease term is estimated to commence in November 2018, subject to the landlord completing certain agreed upon landlord improvements. The rent commencement date is estimated to be eight months after the commencement of the lease term. The initial lease term is ten years from the rent commencement date and includes two optional five year extensions. As a result of the new lease agreement, our contractual obligations will increase by the following amounts over the initial ten year lease term (which are not reflected in the table above):

 
   
   
   
   
   
 
 
  Payments due by period  
 
  Total
  Less than
1 year

  1 to 3
years

  4 to 5
years

  More than
5 years

 
 
  (in thousands)
 

Operating lease commitments

    27,205         6,496     5,213     15,496  

We enter into contracts in the normal course of business with CROs, CMOs and other third parties for clinical trials and preclinical research studies and testing. Manufacturing and research commitments in the preceding table include agreements that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. For obligations with cancellation provisions, the amounts included in the preceding table are limited to the non-cancelable portion of the agreement terms or the minimum cancellation fee.

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Collaborations

BMS

On February 26, 2018, we entered into a Clinical Trial Collaboration and Supply Agreement with Bristol- Myers Squibb Company, or BMS. Pursuant to the agreement, BMS will provide to us, at no cost, nivolumab, its anti-PD-1 therapy, for use in combination with RP1 in our ongoing Phase 1/2 clinical trial. Under the agreement, we will sponsor, fund and conduct the clinical trial in accordance with an agreed-upon protocol. Under the agreement, BMS granted us a non-exclusive, non-transferrable, royalty-free license (with a right to sublicense) under its intellectual property to use nivolumab in the clinical trial and has agreed to manufacture and supply nivolumab, at its cost and for no charge to us, for use in the clinical trial. Both parties will own and study data produced in the clinical trial, other than study data related solely to nivolumab, which will belong solely to BMS or study data related solely to RP1, which will belong solely to us.

Unless earlier terminated, the agreement will remain in effect until (i) the completion of the clinical trial, (ii) all related clinical trial data have been delivered to both parties and (iii) the completion of any statistical analyses and bioanalyses contemplated by the clinical trial protocol or any analysis otherwise agreed upon by the parties. The agreement may be terminated by either party (i) in the event of an uncured material breach by the other party, (ii) in the event the other party is insolvent or in bankruptcy proceedings or (iii) for safety reasons. Upon termination, the licenses granted to us to use nivolumab in the clinical trial will terminate. The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature.

Regeneron

On May 29, 2018, we entered into a Master Clinical Trial Collaboration and Supply Agreement with Regeneron Pharmaceuticals, Inc., or Regeneron. Pursuant to the agreement we agreed to undertake one or more clinical trials with Regeneron for the administration of our product candidates in combination with cemiplimab, an anti-PD-1 therapy being developed by Regeneron, across multiple solid tumor types, the first of which is intended to be our planned Phase 2 clinical trial of RP1 in patients with CSCC. Each clinical trial will be conducted pursuant to an agreed study plan which, among other things, will identify the name of the sponsor and which party will manage the particular study, and include the protocol, the budget and a schedule of clinical obligations. The first study plan related to the Phase 2 clinical trial in CSCC has been agreed.

Pursuant to the terms of the agreement, each party granted the other party a non-exclusive license of their respective intellectual property and agreed to contribute the necessary resources needed to fulfill their respective obligations, in each case, under the terms of agreed study plans. Development costs of a particular clinical trial will be split equally. The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature. The agreement also contains certain covenants that restrict us from entering into a third-party arrangement with respect to the use of our product candidates in combination with an anti-PD-1 therapy and that restrict Regeneron from entering into a third-party arrangement with respect to the use of cemiplimab in combination with an HSV-1 virus, in each case, for the treatment of a tumor type that is the subject of a clinical trial to which the covenants apply. Unless otherwise mutually agreed in a future study plan, these covenants are only applicable to our planned Phase 2 clinical trial in CSCC, and expire upon the one-year anniversary of the commencement of the applicable study plan.

The agreement may be terminated by either party if (i) there is no active study plan for which a final study report has not been completed, (ii) the parties have not entered into a study plan for an additional

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clinical trial within a period of time after the delivery of the most recent final study report or (iii) in the event of a material breach.

Critical accounting policies and significant judgments and estimates

Our management's discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in greater detail in Note 2 to our consolidated financial statements appearing at the end of this prospectus, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Accrued research and development expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advanced payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:

CROs in connection with performing research activities and conducting preclinical studies and clinical trials on our behalf;

CMOs in connection with the production of preclinical and clinical trial materials;

investigative sites or other service providers in connection with clinical trials;

vendors in connection with preclinical and clinical development activities; and

vendors related to product manufacturing and development and distribution of preclinical and clinical supplies.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that supply, conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of

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effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Stock-based compensation

We measure stock-based awards granted to employees and directors based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. We have to date only issued stock-based awards with service-based vesting conditions and record the expense for these awards using the straight-line method. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield. See Note 10 to our consolidated financial statements appearing at the end of this prospectus for more information. Forfeitures are accounted for as they occur. The fair value of each stock-based award is estimated on the date of grant based on the fair value of our common stock on that same date.

For stock-based awards granted to consultants and non-employees, we recognize compensation expense over the period during which services are rendered by such non-employees and consultants until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of our common stock and updated assumption inputs in the Black-Scholes option pricing model.

We classify stock-based compensation expense in our consolidated statements of operations in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.

Determination of the fair value of common stock

The estimated fair value of the common stock underlying our stock options was initially determined at each grant date by our board of directors, with input from management. All options to purchase shares of our common stock are intended to be exercisable at a price per share not less than the per-share fair value of our common stock underlying those options on the date of grant.

In the absence of a public trading market for our common stock, on each grant date, our board of directors made a reasonable determination of the fair value of our common stock based on the information known to us on the date of grant, and upon a review of any recent events and their potential impact on the estimated fair value per share of the common stock. Our board of directors considered various objective and subjective factors to determine the fair value of our common stock as of each grant date, including:

the prices at which we sold preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;

the progress of our research and development programs, including the status of preclinical studies and planned clinical trials for our product candidates;

our stage of development and our business strategy;

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external market conditions affecting the biotechnology industry, and trends within the biotechnology industry;

our financial position, including cash on hand, and our historical and forecasted performance and operating results;

the lack of an active public market for our common stock and our preferred stock;

the likelihood of achieving a liquidation event, such as an initial public offering, or IPO, or a sale of our company in light of prevailing market conditions; and

the analysis of IPOs and the market performance of similar companies in the biopharmaceutical industry.

We subsequently obtained third-party valuations of our common stock as of the dates on which our board of directors had granted equity awards. See "—Options granted." These third-party valuations of common stock were prepared using the hybrid method, which used market approaches to estimate our equity value. The hybrid method is a probability-weighted expected return method, or PWERM, where the equity value in one or more of the scenarios is allocated using an option-pricing method, or OPM. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for the business, assuming various outcomes. The common stock value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock. A discount for lack of marketability of the common stock is then applied to arrive at an indication of value for the common stock. The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company's securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the preferred stock liquidation preferences at the time of the liquidation event, such as a strategic sale or a merger. These third-party valuations were performed at various dates, which resulted in valuations of our common stock of $1.26 per share as of March 10, 2016, $1.34 per share as of October 12, 2016, $1.63 per share as of March 10, 2017, $2.90 per share as of July 26, 2017 and $3.83 per share as of January 31, 2018.

The assumptions underlying these valuations represented our board of directors' best estimates at the time they were made, which involve inherent uncertainties and the application of the judgment of our board of directors. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation expense could be materially different.

Once a public trading market for our common stock has been established in connection with the completion of this offering, it will no longer be necessary for our board of directors to estimate the fair value of our common stock in connection with our accounting for granted stock options and other such awards we may grant, as the fair value of our common stock will be determined based on the quoted market price of our common stock.

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Options granted

The following table sets forth, by grant date, the number of shares subject to options granted from April 1, 2016 through July 9, 2018, the per share exercise price of the options, the fair value of common stock per share on each grant date, and the per share estimated fair value of the options:

 
   
   
   
   
 

Grant Date

    Number of
shares subject
to options
granted
    Per share
exercise
price of
options
    Fair value
per common
stock on
grant date(1)
    Per share
estimated
fair value
of options
on grant
date
 

April 1, 2016

    129,309   $ 1.75   $ 1.26   $ 0.76  

June 1, 2016

    39,787   $ 1.75   $ 1.26   $ 0.76  

October 3, 2016

    38,792   $ 1.75   $ 1.26   $ 0.76  

October 12, 2016

    34,811   $ 1.75   $ 1.34   $ 0.82  

November 7, 2016

    5,967   $ 1.75   $ 1.34   $ 0.82  

January 21, 2017

    43,169   $ 1.75   $ 1.34   $ 0.76  

January 25, 2017

    25,861   $ 1.75   $ 1.34   $ 0.83  

March 10, 2017

    64,651   $ 1.75   $ 1.63   $ 1.07  

July 26, 2017

    1,205,543   $ 3.30   $ 2.90   $ 1.86  

August 2, 2017

    9,946   $ 3.30   $ 2.90   $ 1.86  

August 4, 2017

    7,788   $ 3.30   $ 2.90   $ 2.25 (2)

September 1, 2017

    149,202   $ 3.30   $ 2.90   $ 1.86  

September 4, 2017

    4,973   $ 3.30   $ 2.90   $ 1.86  

September 12, 2017

    19,893   $ 3.30   $ 2.90   $ 1.86  

September 25, 2017

    12,433   $ 3.30   $ 2.90   $ 1.86  

October 1, 2017

    29,840   $ 3.30   $ 2.90   $ 1.87  

January 21, 2018

    68,872   $ 3.83   $ 3.83   $ 2.38  

January 31, 2018

    24,865   $ 3.83   $ 3.83   $ 2.57  

February 16, 2018

    49,734   $ 3.83   $ 3.83   $ 2.58  

February 26, 2018

    4,973   $ 3.83   $ 3.83   $ 2.58  

March 5, 2018

    9,946   $ 3.83   $ 3.83   $ 2.58  

(1)    For options granted between April 1, 2016 and March 10, 2017, our board of directors initially determined that the fair value of our common stock was $1.75 per share as of each respective grant date. For options granted between July 26, 2017 and October 1, 2017, our board of directors initially determined that the fair value of our common stock was $3.30 per share as of each respective grant date. However, as described below, the fair value of our common stock at the date of these grants was adjusted in connection with retrospective fair value assessments for accounting purposes.

(2)    For purposes of recording stock-based compensation for grants of options to a non-employee, we measure the fair value of the award on the service completion date (vesting date). At the end of each reporting period prior to completion of the services, we remeasure the value of any unvested portion of the award based on the then-current fair value of the award and adjust the expense accordingly. The amount in this column reflects only the grant-date fair value of the award to a non-employee.

In the course of preparing for this offering, in February 2018, we performed retrospective fair value assessments for accounting purposes. We applied the fair values of our common stock from our retrospective fair value assessments to determine the fair value of these awards and calculate stock-based compensation expense for accounting purposes. These reassessed values were based, in part, upon third-party valuations of our common stock prepared as of each grant date on a retrospective basis. The third-party valuations were prepared using the hybrid method and used market approaches to determine our enterprise value.

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Emerging growth company status

As an "emerging growth company," the JOBS Act permits us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to "opt out" of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

Internal control over financial reporting

During the audit of our consolidated financial statements as of and for the years ended March 31, 2017 and 2018, we identified material weaknesses in our internal control over financial reporting. A company's internal control over financial reporting is a process designed by, or under the supervision of, a company's principal executive and principal financial officers, or persons performing similar functions, and effected by a company's board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. The material weaknesses that we identified were as follows:

We did not design or maintain an effective control environment commensurate with our financial reporting requirements. We lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in our inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other things, our insufficient segregation of duties in our accounting function. This material weakness further contributed to the material weakness below.

We did not design and maintain formal accounting policies, processes and controls to analyze, account for and disclose complex transactions, including accounting for preferred stock, stock-based compensation, warrant liabilities and leases.

These material weaknesses also resulted in adjustments to preferred stock, stock compensation expense, warrant liability and deferred rent in our consolidated financial statements as of and for the year ended March 31, 2017, which were recorded prior to their issuance.

We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses, including hiring additional finance and accounting personnel and initiating design and implementation of our financial control environment, including the establishment of formal accounting policies and procedures, financial reporting controls and controls to account for and disclose complex transactions.

We, and our independent registered public accounting firm, were not required to perform an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required by reporting requirements under Section 404 after the completion of this offering. See "Risk factors—We have identified material weaknesses in our internal

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

Off-balance sheet arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recently issued accounting pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing at the end of this prospectus.

Quantitative and qualitative disclosures about market risks

Interest rate sensitivity

As of March 31, 2018, we had cash and cash equivalents and short-term investments of $61.6 million, which consisted of cash, commercial paper and commercial debt securities. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.

As of March 31, 2018, we had no debt outstanding and are therefore not subject to interest rate risk related to debt.

Foreign currency exchange risk

Our headquarters are located in the United States, where the majority of our general and administrative expenses are incurred in U.S. dollars. The majority of our research and development costs are incurred by our subsidiary in Oxfordshire, United Kingdom, whose functional currency is the British Pound. We are exposed to foreign exchange rate risk. During the years ended March 31, 2017 and 2018, we recognized foreign currency transaction gains (losses) of $0.6 million, and $(2.1) million, respectively. These gains (losses) are primarily related to unrealized and realized foreign currency gains and losses as a result of transactions entered into by our United Kingdom subsidiary in currencies other than the British Pound, primarily the Euro. These foreign currency transaction gains (losses) were recorded as a component of other income (expense), net in our consolidated statements of operations. We believe that a 10% change in the exchange rate between the British Pound and the Euro would not have a material impact on our financial position or results of operations.

As we continue to grow our business, our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could adversely impact our results of operations. To date, we have not entered into any foreign currency hedging contracts to mitigate our exposure to foreign currency exchange risk.

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Business

Overview

We are a clinical-stage biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients. We use our proprietary Immulytic platform to design and develop product candidates that are intended to maximally activate the immune system against cancer.

We are currently conducting a Phase 1/2 clinical trial with our lead product candidate, RP1, in approximately 150 patients with a range of solid tumors. We have entered into a collaboration with Bristol-Myers Squibb Company, or BMS, under which it has granted us a non-exclusive, royalty-free license to, and is supplying at no cost, its anti-PD-1 therapy, nivolumab, for use in combination with RP1 in this clinical trial. BMS has no further development-related obligations under this collaboration. The first part of this clinical trial is underway in the United Kingdom and we intend to conduct the second part of the clinical trial, which will enroll patients with four solid tumor types, in both the United Kingdom and, pending the opening of an Investigational New Drug Application, or IND, in the United States. We have also entered into a collaboration agreement with Regeneron Pharmaceuticals, Inc., or Regeneron, under which we intend to conduct clinical development of our product candidates in combination with cemiplimab, an anti-PD-1 therapy being developed by Regeneron. For each clinical trial conducted under this collaboration, Regeneron will fund one-half of the clinical trial costs, supply cemiplimab at no cost, and grant us a non-exclusive, royalty-free license to cemiplimab for use in the clinical trial. The first planned clinical trial to be conducted under this collaboration is a randomized controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with cutaneous squamous cell carcinoma, or CSCC, which we intend to initiate in the first half of 2019. If compelling clinical data are generated demonstrating the benefits of the combined treatment, we believe the data from this trial could support a filing with regulatory authorities for marketing approval. We also intend to initiate a clinical trial with our second product candidate, RP2, in additional tumor types in the first half of 2019.

Oncolytic immunotherapy is an emerging class of cancer treatment that exploits the ability of certain viruses to selectively replicate in and directly kill tumors, as well as induce a potent, patient-specific, anti-tumor immune response. Such oncolytic, or "cancer killing," viruses have the potential to generate an immune response targeted to an individual patient's particular set of tumor antigens, including neo-antigens that are uniquely present in tumors. Our product candidates incorporate multiple mechanisms of action into a practical, "off-the-shelf" approach, that is intended to maximize the immune response against a patient's cancer and to offer significant advantages over personalized vaccine approaches. We believe that the bundling of multiple approaches for the treatment of cancer into single therapies will simplify the development path of our product candidates, while also improving patient outcomes at a lower cost to the healthcare system than the use of multiple different drugs.

The foundation of our Immulytic platform consists of a proprietary, engineered strain of herpes simplex virus 1, or HSV-1, that has been "armed" with a fusogenic therapeutic protein intended to substantially increase anti-tumor activity. Our platform enables us to incorporate various genes whose expression is intended to augment the inherent properties of HSV-1 to both directly destroy tumor cells and induce an anti-tumor immune response.

We believe our lead product candidate, RP1, will be effective at killing tumors and inducing immunogenic, or immune-stimulating, tumor cell death and that it will be highly synergistic with immune checkpoint blockade therapies. In our ongoing Phase 1/2 clinical trial of RP1, we are conducting the first part of the

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trial in the United Kingdom to evaluate safety in approximately 30 patients with a range of solid tumor types both alone and in combination with nivolumab, an anti-PD-1 therapy. No serious adverse events have been reported to date that have been determined to be related to RP1. In the second part of the trial, we will test RP1 in combination with nivolumab in four different tumor types in cohorts of approximately 30 patients each. These tumor types are metastatic melanoma, metastatic bladder cancer, microsatellite instability high cancer, and non-melanoma skin cancer, all of which we have chosen because they demonstrate a level of responsiveness to single-agent anti-PD-1 therapy but for which significant unmet medical need remains. In the second part of the trial, we intend to continue to evaluate the safety and tolerability of RP1 in combination with nivolumab. This part of the clinical trial will also evaluate efficacy under the clinical trial protocol, primarily on the basis of the proportion of patients who have a response within each tumor type cohort. Responses are either defined as a partial response (a 30% or greater reduction in tumor size) or a complete response (a complete eradication of the disease). We then intend to analyze each cohort's data to determine the indications that merit progressing into further clinical development.

In addition, we are preparing to initiate in the first half of 2019 a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with CSCC. If compelling clinical data are generated demonstrating the benefits of the combined treatment, we believe the data from this trial could support a filing with regulatory authorities for marketing approval.

We are also developing additional product candidates, including RP2 and RP3, built on our Immulytic platform, that are further engineered to enhance anti-tumor immune responses and to address additional tumor types. RP2 has been engineered to express an antibody-like molecule that blocks the activity of CTLA-4, a protein that inhibits the immune response to tumors. We are engineering RP3 with the intent not only to block the activity of CTLA-4, but also to further stimulate an anti-tumor response through activation of the immune co-stimulatory pathways. We intend to file INDs and foreign equivalents and, assuming regulatory clearance, expect that RP2 will enter clinical development in the first half of 2019, and that RP3 will enter clinical development in the first half of 2020.

Our product candidates are administered by direct injection into solid tumors. We believe that direct injection maximizes virus-mediated tumor cell death, provides the most efficient delivery of virus-encoded immune activating proteins into the tumor with the goal of activating systemic immunity, and limits the systemic toxicities that could be associated with intravenous administration. Activation of systemic immunity through local administration can lead to systemic clinical benefit through the induction of tumor responses in tumors which have not themselves been injected, which is known as an "abscopal" effect.

While products and product candidates based on the oncolytic immunotherapy approach have shown single-agent activity, we believe that our product candidates will demonstrate particular synergy in combination with immune checkpoint blockade therapies, including those that target the programmed cell death protein 1, or PD-1, a tumor cell surface receptor that plays an important role in inhibiting, or shutting down, immune responses, or the receptor or ligand for PD-1, called PD-L1. A pre-existing anti-tumor immune response and the presence of T cells within tumors are key predictors of the effective treatment of cancer with immune checkpoint blockade therapies. Because most patients do not have an ongoing pre-existing anti-tumor immune response, only a minority of patients respond to treatment with immune checkpoint blockade therapies alone. We believe that oncolytic immunotherapy treatments can initiate or enhance an immune response in patients with no or minimal pre-existing anti-cancer immunity and thereby increase the effectiveness of immune checkpoint blockade therapies. We believe that this is strongly supported by the results of a randomized, controlled Phase 1/2 clinical trial conducted by Amgen in melanoma patients, in which the combination of T-Vec with ipilimumab anti-CTLA-4 immune checkpoint

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blockade therapy gave a response rate (meaning the observed measurement of the reduction in tumor size per the protocol) of 38% compared to 18% for ipilimumab therapy alone. While these results provide promising evidence of the activity of an existing oncolytic immunotherapy used in combination with checkpoint blockade therapies, we are designing our product candidates with additional mechanisms of action compared with T-Vec and other oncolytic immunotherapies in development, with the goal of maximizing both direct tumor killing and the activation of the patient's immune system against their particular cancer. We believe these additional mechanisms of action of our product candidates will increase tumor susceptibility to immune checkpoint blockade therapies and, in particular, work synergistically with antibodies targeting PD-1 or PD-L1 to enhance response rates across a range of tumor types.

Our team and investors

Our founders and core management team, including Robert Coffin, Ph.D., our President and Chief Executive Officer, Philip Astley-Sparke, our Executive Chairman, and Colin Love, Ph.D., our Chief Operating Officer, were the founder and senior management team of BioVex, where they developed T-Vec, the only oncolytic immunotherapy to receive FDA approval. BioVex was acquired by Amgen in 2011. Our Chief Medical Officer, Howard Kaufman, M.D., was the principal investigator for the pivotal study upon which T-Vec was approved and previously served as President of the Society for the Immunotherapy of Cancer. We are backed by a group of leading institutional life science investors, including affiliates of Atlas Ventures, Bain Capital Life Sciences, BVF Partners, Cormorant Capital, Forbion Capital Partners, Foresite Capital, Omega Funds and Redmile Group.

Our strategy

Our goal is to create the leading oncolytic immunotherapy company that discovers, develops and commercializes next-generation products with multiple mechanisms of action for the treatment of a broad range of solid tumor types. Key elements of our strategy include the following:

Advance the development of, and seek regulatory approval for, our lead product candidate, RP1.    We are advancing two clinical trials for RP1. In the first half of 2019, we are planning to commence a randomized, controlled Phase 2 clinical trial of RP1 in combination with cemiplimab, versus cemiplimab alone, in approximately 240 patients with CSCC. We are designing this trial to potentially support product registration. In addition, we are currently conducting a Phase 1/2 clinical trial of RP1 targeting four different tumor types in cohorts of approximately 30 patients each. We then intend to analyze each cohort's data to determine the indications that merit further clinical development.

Initiate the clinical development of and obtain regulatory approval for RP2, our next product candidate.    We have engineered RP2, which is based on RP1 but additionally expresses an anti-CTLA-4 antibody-like protein, to target tumor types that do not respond to single-agent immune checkpoint blockade therapies and patients who have not responded to or who have progressed on anti-PD-1/L1 therapy. We plan to initiate a Phase 1/2 clinical trial in the first half of 2019 of RP2 in combination with anti-PD-1 therapy in triple negative breast cancer and two further indications.

Leverage our Immulytic platform to build a portfolio of product candidates that target a range of immune mechanisms and progress these product candidates into the clinic.    We plan to utilize our Immulytic platform to develop additional products, including RP3, that express further combinations of proteins aimed at activating multiple immune mechanisms for the treatment of a broad range of solid tumor types. Our current goal in the coming years is to introduce one product candidate into the clinic each year.

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Apply our extensive expertise to establish, equip, and operate our own in-house manufacturing facility.    We intend to establish, equip, and operate our own manufacturing facility in Framingham, Massachusetts for multi-product cGMP manufacturing. We expect our facility to be ready to produce clinical-grade material during the first half of 2020 and ultimately to be able to support commercial product launch.

Retain significant economic and commercial rights to our product candidates in key geographic areas.    We intend to retain rights in the United States for our product candidates and to develop an oncology-focused commercial organization. When economically attractive, we intend to evaluate and enter into development and marketing agreements with pharmaceutical and biotechnology partners for geographic areas in which we are unlikely to pursue development and commercialization on our own.

Immuno-oncology background and limitations of existing therapies

Cancer is a broad group of diseases in which normal cells are transformed into a state of rapid and uncontrolled cell division, typically forming tumors. Cancer originates from a particular tissue in the body, such as the lung or skin, and often spreads, or metastasizes, as the disease progresses. Tumors are comprised of multiple cell types, including cancerous cells and immune cells. The composition and the type of tumor dictate the aggressiveness of a particular cancer, its susceptibility to treatment, and ultimately the outcome for the patient. A promising new approach to cancer treatment, which is the subject of significant ongoing drug development activity, is to activate the immune system against cancer.

The immune system contains many different cells types that fall into two general categories, cells of the innate immune system and cells of the adaptive immune system. The innate immune system is a first-line, ubiquitous, non-specific defense mechanism aimed at combating elements that the body views as foreign, particularly microbial pathogens and parasites, but also tumor cells. After the innate immune system is activated, an adaptive immune response is triggered that is specific to particular proteins, known as antigens. The adaptive immune system is flexible and can evolve. Importantly, it has the capacity for immune memory, or the ability to be recalled into action if the same foreign antigen is detected in the body in the future. Activation of both the innate and adaptive components of the immune system is believed to be essential for the induction of an effective anti-cancer immune response.

Immune checkpoints are key mechanisms of the adaptive immune system that function to inhibit immune responses and, in particular, to prevent the induction of autoimmunity. In the cancer setting, tumors can hijack these immune checkpoints such that the tumors become protected from the effects of anti-cancer immunity. This enables tumors to continue growing without or with reduced immune interference, even if an anti-tumor immune response had been initiated. Additional immune checkpoints inhibit the initial induction of an immune response, rather than subsequently protecting the tumor from a previously established immune response.

Checkpoint inhibitor therapies block these negative regulators of the immune system with the intent of either rendering tumors susceptible to immune attack and/or increasing the potency of the anti-tumor immune response that is generated. This approach to cancer therapy has the potential to result in long-lasting anti-cancer effects in certain patients with certain tumor types. To date, six immune checkpoint blockade products have been approved in a number of cancer indications, and there are numerous other related drug candidates in preclinical and clinical development. Market researchers forecast that immuno-oncology treatments will grow to over $25 billion a year in sales globally by 2022.

While immune checkpoint blockade has been a transformational treatment for many patients with cancer, the majority of patients do not currently respond to treatment. This is because checkpoint blockade

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therapies targeting PD-1, PD-L1 or CTLA-4 require a pre-existing immune response to a patient's tumor and that the tumors be "inflamed," or "hot." Because many patients do not have an ongoing pre-existing anti-tumor immune response, which is often referred to as a tumor being immunologically "cold," only a minority of patients respond to checkpoint blockade therapies alone. We therefore believe that the ability to effectively convert "cold" tumors to "hot" would substantially increase the response rates and the types of tumors which are susceptible to immune checkpoint blockade.

Our approach — Oncolytic immunotherapy

Our product candidates are designed to induce a robust immune response against a patient's cancer and turn immunologically "cold" tumors "hot." To achieve this objective, we use oncolytic immunotherapies that combine multiple mechanisms of action in a single product candidate. We believe our product candidates will initiate or enhance an immune response in patients with no or minimal pre-existing cancer immunity, including to tumor neo-antigens, and thereby increase the effectiveness of immune checkpoint blockade therapies.

Oncolytic immunotherapy is the treatment of cancer with viruses that selectively replicate in tumors, but not in normal tissue, thereby killing the virus-infected tumor cells. In addition to this direct oncolytic killing of cancer cells, the presence of the virus and the generation of immune-stimulating tumor cell death triggers both innate and adaptive immune responses that result in further tumor destruction, intended to result in the establishment of lasting antitumor immunity.

Our product candidates are intended to act at several key points in the pathways involved in the initiation of an immune response. Following direct injection into tumors, our viruses replicate in cancer cells and then lyse, or break them open, releasing tumor antigens, including neo-antigens specific to the patient, which could otherwise be hidden from the immune system. This process of necrotic cell death releases intra-cellular markers of "danger," the danger associated molecular patterns, or DAMPs, while the virus produces pathogen associated markers of danger, or PAMPs. These trigger various pathways of the innate immune system, including the STING pathway and pathways mediated through toll-like receptors, or TLRs, each resulting in the production of interferon. Innate immune activation would be expected to itself provide anti-tumor effects, as interferon activates natural killer cells which can destroy tumor cells. Innate immune activation also helps to trigger adaptive anti-cancer immunity, in which antigen presenting cells, or APCs, are attracted to the injected tumor. APCs internalize cancer antigens, including neo-antigens, and traffic back to the draining lymph nodes where they present the antigens to T cells. These are then primed to proliferate and disperse systemically to seek and destroy cancer cells with the same antigen profile throughout the body and destroy distant tumor deposits.

To further augment these intended effects, our oncolytic immunotherapies are intended to genetically encode and express multiple potent cell-killing and immune-stimulating proteins in the tumor—in other words, our oncolytic immunotherapies are "armed" with these therapeutic genes.

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We believe our product candidates act at each of the key points needed to initiate a potent antitumor immune response, as shown in the diagram below.

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We believe that our ability to incorporate multiple mechanisms of action into a practical, "off-the-shelf" approach to initiating or enhancing an anti-tumor immune response, including to neo-antigens, will offer significant advantages over the various approaches to immune activation that are currently in development, including personalized vaccine treatments. Tumor neo-antigens are uniquely present in tumors as compared to normal tissue because they result from the genetic changes that occur as cancer develops. Unlike the antigens present in normal tissue, the immune system sees neo-antigens as foreign. As a result, the immune system is able to mount an immune response to tumor neo-antigens in the same way that it would to the antigens contained in disease causing micro-organisms, which the immune system also sees as foreign. Researchers believe immune responses to tumor neo-antigens are particularly important in providing the patient's immune system the ability to combat cancer, and as a consequence various "personalized vaccine" approaches to generating immune responses to tumor neo-antigens are in development. These approaches are generally both expensive and time consuming because a vaccine cannot be designed and manufactured until a tumor biopsy is taken and analyzed in the laboratory to identify the mutated tumor antigens that will be targeted by the treatment. We believe that our approach may also offer significant advantages over other approaches to anti-cancer immune activation that only target a single pathway of the immune system, as is the case with most of the other immune-oncology therapies currently under development. Importantly, our product candidates are intended to act to maximally activate an immune response against cancer, the missing element needed to allow anti-PD-1 or anti-PD-L1 therapy to treat more patients and tumor types, unlike some other therapies such as those targeting indoleamine 2,3-dioxygenase, or IDO, which are intended to act by blocking additional defense mechanisms against an anti-tumor immune response once it has been initiated.

Our Immulytic platform

The foundation of our oncolytic immunotherapy product candidates, which we call our Immulytic platform, consists of a proprietary strain of HSV-1 that we have engineered to replicate selectively in tumors and to express a fusogenic glycoprotein, a protein that triggers the fusion of the membranes between cells. HSV-1 is both highly cell lytic and inflammatory, and also has a large carrying capacity, which makes it possible to incorporate multiple genes encoding therapeutic proteins. We believe our combination of HSV-1 with the

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expression of the fusogenic glycoprotein increases the natural ability of HSV-1 to kill tumor cells and to induce an anti-tumor immune response. The fusogenic functionality of our product candidates is intended not only to increase the number of tumor cells that are killed, but also to cause highly immunogenic death of tumor cells. We believe that these factors will increase the potency of the systemic anti-tumor immune response that is generated by our product candidates. With the intention of amplifying the anti-tumor response further, we have also engineered our product candidates to express in tumors a range of additional, potent, immune activating genes encoding therapeutic proteins. Our lead product candidate, RP1, serves as the base for the development of these additional oncolytic immunotherapies expressing further therapeutic proteins. The development process and certain advantages of our Immulytic platform are summarized below:

Selecting the virus species and the virus strain

Although a number of viral species have been developed for oncolytic use, we believe HSV-1 is the most promising for the following reasons:

HSV-1 can infect many different tumor cell types and, following infection, can destroy tumor cells through highly lytic virus replication;

HSV-1 rarely produces severe illness in humans;

The deletion of the genes encoding the HSV-1 ICP34.5 protein provides both tumor-selective virus replication and a well-characterized non-pathogenic phenotype;

HSV-1 is a highly inflammatory virus, which we believe is beneficial for triggering both innate and adaptive immune responses;

HSV-1 has a large genome, which has the packaging capacity to allow for the insertion of multiple genes expressing therapeutic proteins that are intended to enhance tumor cell killing and immune activation; and

Effective anti-viral drugs are available for HSV-1, which could be used to block virus replication if needed.

In addition, HSV-1 has a proven track record in oncolytic immunotherapy, in particular with the approval by the FDA in 2015 of T-Vec for the treatment of unresectable advanced melanoma patients with injectable non-visceral tumors.

Different isolates, or "strains," of HSV-1 have differing properties, including with respect to the ability to infect and kill human tumor cells. Standard "laboratory" strains of HSV-1 may have reduced potency due to long-term culture in the laboratory or because such strains were not selected for the purposes of tumor killing. We believe that "clinical" strains, which are strains taken from individuals who suffer from cold sores, would not have become attenuated through long-term culture and, if selected on the basis of the ability to infect and kill human tumor cells, would provide higher potency than strains that have not been selected in this way.

Based on this rationale, we tested 29 clinical strains of HSV-1 isolated from 183 volunteers. Through this process we expected to sample a broad spectrum of the natural variation among clinical strains of HSV-1, including in relation to their ability to infect and kill human tumor cells. We observed a broad range of killing activity and chose the strain with the most promising overall properties for further development. Through this process we believe we have identified a highly potent strain of HSV-1 that provides a robust foundation for the development of our Immulytic platform.

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To render the replication of the virus tumor-selective, we engineered this virus strain to delete the genes encoding the HSV-1 ICP34.5 and ICP47 proteins. This combination of deletions provides the virus with well-characterized non-pathogenic and tumor-selective properties.

To augment the underlying abilities of the virus both to kill tumor cells and to induce an anti-tumor immune response that may maximally activate the immune system against a patient's cancer, we have armed all of our product candidates with genes to express between two and four therapeutic proteins. These therapeutic proteins are expressed in the tumor as the virus replicates, and, as a result, may help to kill tumor cells and drive the initiation of an anti-tumor immune response in the tumor and draining lymph nodes. Once this anti-tumor immune response is initiated, the activated immune cells may also attack not only the injected tumors but also tumors that are distant from the injection sites.

Maximizing direct tumor killing — Expression of a fusogenic protein

To increase the natural ability of HSV-1 to directly kill tumors and to drive the immunogenicity of tumor cell death, we engineered our viruses to express a protein that causes cell-to-cell fusion intended to result in increased immune-stimulating cell death. Although there are various fusogenic proteins available for this purpose, we use the surface glycoprotein, or GP, from another virus, gibbon ape leukemia virus, or GALV, with a specific deletion of the R-peptide. The resulting protein is known as GALV-GP R(-). We believe that the higher levels of tumor antigens released through the expression of GALV-GP R(-), including tumor neo-antigens, combined with enhanced immunogenicity of cell death, increases both systemic immune-mediated anti-tumor effects and local, or injected, tumor destruction.

Enhancing the systemic anti-tumor immune response

With the aim of augmenting the potency of the anti-tumor immune response which is generated, we have also engineered our product candidates to express potent immune-stimulating proteins within tumors as replication occurs.

RP1, our lead product candidate, expresses granulocyte-macrophage colony-stimulating factor, or GM-CSF, in addition to GALV-GP R(-). GM-CSF is a potent cytokine that activates and causes the proliferation of APCs and is, therefore, attractive for expression in the tumor to augment the anti-tumor immune response. Due to its ability to enhance immune responses, a number of other oncolytic immunotherapy products and product candidates in development have been designed to express GM-CSF. These include:

T-Vec, approved in the United States, the European Union and elsewhere for the treatment of advanced melanoma;

Pexa-Vec, in Phase 3 clinical development by SillaJen, Inc. for the treatment of hepatocellular carcinoma, or HCC; and

CG0070, in development by Cold Genesys, Inc. for the treatment of bladder cancer.

We have designed our further product candidates, RP2 and RP3, to express additional genes encoding therapeutic immune-stimulating proteins.

RP2 is a version of RP1 that includes a gene encoding an anti-CTLA-4 antibody-like protein. We believe that RP2 has the potential to offer advantages over current anti-CTLA-4 approaches, including ipilimumab, an anti-CTLA-4 therapy marketed by BMS. The FDA has approved ipilimumab for intravenous administration

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for the treatment of advanced melanoma and has approved nivolumab, an anti-PD-1 therapy also marketed by BMS, for use in combination with ipilimumab, for advanced melanoma and renal cell carcinoma. Ipilimumab has also shown clinical synergy with GM-CSF. Intravenous administration of ipilimumab, however, causes significant toxicity, largely due to auto-immune side effects, particularly in combination with nivolumab. These autoimmune side effects from the systemic administration of ipilimumab appear to result from the blocking of the immune system's ability to recognize normal tissue and not attack it. Because the function of CTLA-4 is to inhibit the induction of immune responses, we believe that blockade of this effect should be needed only at the site where anti-tumor immune response induction occurs, namely at the tumor and the lymph nodes draining from the tumor site. We believe that RP2 will offer advantages compared with current CTLA-4 approaches, including ipilimumab. By expressing anti-CTLA-4 only locally in the tumor and draining lymph nodes, we believe that activity will be retained, but that toxicity will be reduced.

We are designing our RP3 product candidate to express not only GALV-GP R(-) and anti-CTLA-4, but also additional proteins that are intended to stimulate the potency of the anti-cancer T cell response through activation of the immune co-stimulatory pathways. We are studying the effects of incorporating the ligands for co-stimulatory proteins, including those known as CD40, OX40 and 4-1BB, for this purpose, and intend to finalize the version of RP3 that we will seek to progress into clinical development during the second half of 2018. We expect to introduce RP3 into clinical development in the first half of 2020. Currently, numerous antibodies are in clinical development by other companies that target these same pathways, but, as with CTLA-4, the site of action of these pathways is where the anti-tumor immune response is generated, so we believe that local intratumoral expression will be an advantageous approach.

We plan to develop product candidates beyond RP3 that will express additional genes encoding therapeutic proteins targeted at particular aspects of the anti-tumor immune response. As demonstrated by our planned development timelines, we believe that a particular advantage of our Immulytic platform is that it allows us to develop new product candidates containing genes encoding additional therapeutic proteins rapidly from conception through to the initiation of clinical trials. Our current goal in the coming years is to bring one product candidate into the clinic each year.

Synergy with immune checkpoint blockade therapies

While we believe our product candidates will be able to provide a clinical benefit as single agents, we believe their impact will be enhanced in combination with immune checkpoint blockade therapies. We currently intend for our product candidates to be used in combination with immune checkpoint blockade therapies, particularly antibodies targeting PD-1 or PD-L1. Based on a similar rationale and in support of this approach, a number of other oncolytic viruses have previously been tested in combination with immune checkpoint blockade therapies in clinical trials with promising results. In each of the completed single arm clinical trials, so far all in melanoma, a response rate that is higher than would be expected for the immune checkpoint blockade therapy alone has been observed, including a 62% response rate and 33% complete response rate having been seen with T-Vec combined with pembrolizumab. None of these clinical trials showed that oncolytic immunotherapy added significant additional toxicity relative to checkpoint blockade therapy alone.

There has been one randomized, controlled trial to date of an oncolytic immunotherapy combined with immune checkpoint blockade therapy. In that randomized Phase 2 clinical trial, T-Vec was tested in combination with ipilimumab compared to treatment with ipilimumab alone in 198 melanoma patients. The primary endpoint of the study was objective response rate. The combination of T-Vec and ipilimumab gave an objective response rate (meaning the observed measurement of the reduction in tumor size per the

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protocol) of 38% compared to 18% with ipilimumab alone (p=.002), which was concluded to be statistically significant. No significant increase in toxicity was observed.

Later-stage clinical development is now underway with T-Vec in combination with pembrolizumab in the following clinical trials:

A Phase 3 trial of T-Vec in combination with pembrolizumab, compared with pembrolizumab plus a placebo in patients with advanced melanoma; and

A controlled Phase 2 trial of T-Vec in combination with pembrolizumab in patients with liver metastases from a variety of tumor types.

We believe that the early data, including randomized, controlled data described above, provides promising clinical support for oncolytic immunotherapy in combination with immune checkpoint blockade therapy.

Administration by direct injection into tumors

Our product candidates are injected directly into tumors. We can inject tumors close to the body's surface either visually or with simple ultrasound guidance, and can inject tumors found deeper in the body with imaging guidance techniques that are routinely used to take tumor biopsies. Direct injection is intended to maximize virus-mediated tumor cell death, which is required for the optimal activation of systemic immunity. In addition, we believe that direct injection provides the most efficient delivery of genes encoding therapeutic proteins into the tumor and thereby limits systemic exposure and related toxicities. We believe that only a limited number of injections of our product candidates will be required to initiate an immune response, particularly when combined with immune checkpoint blockade therapies such as those targeting PD-1 or PD-L1. By contrast, we believe that the systemic administration of oncolytic immunotherapy product candidates increases dilution in the blood, decreases tumor targeting, and increases the likelihood of an antiviral immune response, greatly reducing the ability of the virus to reach tumors.

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Our product candidate pipeline

We are developing a pipeline of oncolytic immunotherapy product candidates that we believe have the potential to provide meaningful and long-lasting clinical benefits to cancer patients. The following table summarizes our current pipeline and expectations for development timelines:

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(1)    Two additional tumor types to be selected for Phase 2 clinical development, with clinical trials expected to commence in H2 2019, assuming in each case the opening of an IND or foreign equivalent.

We believe that our intended step-wise development approach from RP1 through RP3 reduces clinical risk, as we will be able to study the safety profile of each therapeutic protein prior to moving to the next product candidate with an additional therapeutic protein that is intended to provide more potent anti-tumor immune effects.

Lead product candidate: RP1

Our lead product candidate, RP1, is a selectively replicating version of HSV-1 that expresses GALV-GP R(-) and human GM-CSF. RP1 has the following properties:

We have deleted the ICP34.5-encoding gene, which enables tumor-selective virus replication;

We have deleted the ICP47-encoding gene, which is intended to prevent the inhibition of the antigen presentation pathway otherwise caused by ICP47 binding to the transporter associated with antigen presentation. ICP47 deletion is also intended to result in the increased and earlier expression of the HSV-1 US11 gene by placing the HSV-1 US11 gene under the control of ICP47 promoter. This increases virus replication in tumors without reducing tumor-selectivity; and

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We have inserted the sequences for GALV-GP R(-) and human GM-CSF, which results in the expression of these therapeutic proteins with the intention of increasing both the direct tumor cell killing and the potency of the anti-tumor immune response that is induced.

We are developing RP1 for use in combination with immune checkpoint blockade therapy, particularly therapies targeting PD-1 or PD-L1. We believe that the robust release of tumor antigens and the highly immunogenic tumor cell death intended to be caused by RP1 will further increase the synergy previously seen between oncolytic viruses and immune checkpoint blockade therapy.

Preclinical results

In one of our preclinical experiments, tumors were induced in both the left and right flanks of rats. RP1 was then injected into the tumors in only the right flanks. As shown below, where each line represents an individual tumor and lines of the same color represent the tumors in the left and right flanks of the same rat, we observed destruction not only of the injected tumors in the right flanks, but also of the large un-injected tumors in the left flanks of 70% of the treated rats. As reflected in the top diagram of Figure 1 below, when formulation buffer with no RP1 was injected into "control" rats, no impact on the growth of the injected or un-injected tumors was observed. This effect of RP1 in both injected and un-injected tumors provides support for the potent systemic, or "abscopal," effect of RP1.

Figure 1: RP1 has been shown to treat large injected and un-injected tumors in rats

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Phase 1/2 clinical trial in multiple tumor types

We are conducting a Phase 1/2 clinical trial of RP1 in approximately 150 patients. The first part of our Phase 1/2 clinical trial is currently being conducted in the United Kingdom and we intend to conduct the

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second part of the clinical trial in both the United Kingdom and, pending the opening of an IND, in the United States. This is an open-label, multicenter study to investigate the safety, tolerability and efficacy of RP1. We have designed this clinical trial to study RP1 in tumor types that have been shown to have some level of responsiveness to anti-PD-1 or anti-PD-L1 therapy but where we believe there remains significant unmet medical need. In the first part of the clinical trial we are assessing the safety and tolerability of RP1, administered alone in a single tumor, in a minimum of 18 patients with advanced or metastatic solid tumors who have progressed on or cannot tolerate standard therapy. Following the dose escalation phase, up to 12 patients will be enrolled to receive RP1 administered into multiple tumors in combination with nivolumab. In the second part of the clinical trial, we will study the safety and efficacy of RP1 in combination with nivolumab in specific tumor types in four cohorts of approximately 30 patients each. These tumor types are metastatic melanoma, metastatic bladder cancer, microsatellite instability high cancer, and non-melanoma skin cancer. Depending on the tumor type, patients must be eligible to receive PD-1 directed therapy according to the product label or have exhausted, become intolerant to or refused currently available therapies. We have an agreement with BMS for the supply of nivolumab for this clinical trial.

We expect that the results from the first part of the clinical trial will help us determine the safety, tolerability and intended dose of RP1 for further development and to provide initial safety data for RP1 in combination with nivolumab. We have also designed the first part of the trial to provide insights on the effects of RP1 on tumors, including necrosis, inflammation and erythema, the biodistribution of RP1 in the blood, saliva and mucosa, and the impact of RP1 administration on anti-HSV-1 antibody responses. For the patients in the first part of the trial who also receive nivolumab, we will assess certain biomarkers indicative of immune activation in tumor biopsies. These include the infiltration of T cells, expression of PD-L1, and the presence of an "inflamed gene signature," each of which would indicate ongoing immune activation.

Of the approximately 30 patients in the first part of the clinical trial:

Approximately half will receive RP1 using direct or ultrasound guided injection to administer RP1 to tumors located on or close to the skin, or into lymph nodes located near the skin; and

Approximately half will receive RP1 using imaging guided injection to administer RP1 to tumors located deeper in the body, including in visceral organs such as the liver.

In the second part of the trial, we intend to continue to assess the safety and begin to assess the efficacy of RP1 in combination with nivolumab in four cohorts of approximately 30 patients, each with one of the different cancer types described above.

We have chosen these tumor types because they have shown that they have some level of underlying responsiveness to treatment with immune checkpoint blockade therapies but for which we believe considerable unmet medical need remains. We intend to expand the number of patients treated and/or add a control arm for each cohort where we see promising signs of efficacy, either as part of the same clinical trial or as separate trials, as a means to gather more definitive data in support of the clinical benefit of the combination of RP1 and nivolumab in these respective tumor types. We believe that the expanded clinical trials can be designed to support a filing with regulatory authorities for marketing approval.

In each of the four cohorts in the second part of the trial, we plan to assess efficacy under the clinical trial protocol by examining the rate and duration of responses, including partial responses (a 30% or greater reduction in tumor size) and complete responses (a complete eradication of the disease), as well as examining biomarkers of immune response and mechanism of action. For example, we expect that tumors

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with no or low pre-existing immune responses as evidenced by no or low T cell infiltration at baseline would not respond to anti-PD-1 therapy. Responses in these patients would therefore suggest clinical benefit of the combination of RP1 with anti-PD-1. Likewise, an increase in post-treatment T cells infiltrating into tumors and/or an increase in inflammation as evidenced by the development of an inflammatory gene signature would also support the activity of RP1.

Clinical trial status

The first part of the ongoing Phase 1/2 clinical trial of RP1 commenced in October 2017 in the United Kingdom where 16 patients have been enrolled to date, including patients with melanoma, breast cancer, colorectal cancer, CSCC and esophageal cancer. Each of these patients has advanced, high tumor burden disease and has previously failed multiple other therapies including in clinical trials. Approximately half of the patients have received one or more lines of immune checkpoint blockade therapy. As of July 9, 2018, we have administered injections into a single tumor at first doses of 1x104, 1x105 and 1x106 pfu/ml by direct injection and first doses of 1x104 and 1x105 pfu/ml by imaging guided injection into deeper lesions. Subsequent doses for direct injection have been given at up to 1x108 pfu/ml and for deeper lesions at up to 1x106 pfu/ml so far. Injections have been given up to five times in each patient. During screening and in the weeks following the injections, we have taken swabs of the tumor, biopsies, blood samples, urine samples, vital signs, photographs at various intervals and CT scans are specified at 30 days following the final dose of RP1.

The primary objectives of the first part of the trial are to provide an initial determination of the safety of RP1 alone and in combination with nivolumab and to determine the recommended dose for the second part of the trial. In addition, we intend to assess tumor size, erythema and inflammation in tumor biopsies for indications of biological activity.

The clinical trial is being conducted under the review of a safety review committee, which is responsible for reviewing safety data, deciding whether to move to the next dose cohort, determining the recommended Phase 2 dose, and identifying any safety concerns. The clinical trial is also subject to certain protocol defined safety stopping rules.

Preliminary data as of July 9, 2018 suggest that RP1 is well tolerated. We have observed the expected side effects of local inflammation and erythema combined with mild fevers and other influenza-like symptoms for several days. These side effects are consistent with the side effects previously reported for other oncolytic viruses. Although serious adverse events, or SAEs, have been observed in three of the 16 patients enrolled in the first part of our ongoing Phase 1/2 clinical trial of RP1 to date, these SAEs were determined to be related to the patients' underlying advanced cancer and not to treatment with RP1. No SAEs have been observed which were concluded to be related to RP1. One possible dose limiting toxicity, or DLT, elevated lipase levels, which did not meet the definition of an SAE, has been observed in one patient in the first deep visceral group cohort. At baseline, this patient was HSV seropositive and already had rising lipase levels. The patient received prior doses of 1x104 pfu/ml and 1x105 pfu/ml with the elevated lipase levels occurring after the patient's third dose, which was at a dose level of 1x106 pfu/ml. The elevated lipase levels then resolved without clinical signs or symptoms being observed and following which two further doses of 1x106 pfu/ml were given with no other potential DLTs occurring. The other two patients in that cohort, who were both HSV seronegative, and the first patient in the next dose level cohort in the deep visceral group, who was HSV seropositive and given doses of 1x105, 1x106 and three doses of 1x107 pfu/ml, have not experienced any DLTs. However, per protocol, because a potential DLT was observed in the first dose level cohort following review of laboratory values during trial monitoring, this first dose level cohort in the deep visceral group is being expanded to include an additional three patients. As of July 9, 2018, two of these patients have been enrolled, with the first patient having received doses of 1x104, 1x105

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and two doses of 1x106 pfu/ml so far, and the second patient having received a single dose of 1x104 pfu/ml, with no potential DLTs having been observed. While the first part of the clinical trial is being conducted in the United Kingdom, we intend to conduct the second part of the clinical trial in both the United Kingdom and, pending an opening of an IND, the United States. We may also consider additional countries for this clinical trial. We expect that data from the first part of our Phase 1/2 clinical trial of RP1 will be available in the first half of 2019.

Regulatory status

In the United Kingdom, prior to filing a Clinical Trial Authorization, or CTA, we participated in a pre-CTA meeting with the Medicines and Healthcare products Regulatory Agency, or MHRA, in February 2017. We subsequently filed our CTA with the MHRA in April 2017 and received full CTA approval from the MHRA in July 2017. In June 2018, the MHRA approved an amendment to the trial protocol to specify, among other things, that the anti-PD-1 therapy to be used is nivolumab, to specify that anti-PD-1 therapy will be included in the Phase 1 expansion cohort and to add nivolumab-specific information to the protocol.

In the United States, we participated in a pre-IND teleconference with the FDA in October 2017, during which the agency asked that we repeat one of the toxicology and biodistribution studies we previously conducted but with a longer follow-up than was used in the initial study. We filed an IND on February 23, 2018, to enable the FDA to review all other aspects of the IND, which we will update once the additional toxicology and biodistribution data are available. The FDA verbally informed us on March 23, 2018 and confirmed in writing on April 18, 2018 that, as expected, the IND was on clinical hold pending submission of the additional data and review by the FDA. The in-life phase of the toxicology and biodistribution study was completed in May 2018, and no material issues were observed. We anticipate that a draft unaudited toxicology report will be provided by the CRO by the end of July 2018, and intend to submit an amendment to the IND to the FDA in early August 2018.

Controlled Phase 2 clinical trial in CSCC

In the first half of 2019, we intend to initiate a randomized, controlled Phase 2 clinical trial of RP1 combined with cemiplimab, compared to cemiplimab alone, in approximately 240 patients with CSCC. The primary objective of this controlled Phase 2 clinical trial will be to assess the response rate of the combination therapy compared to treatment with anti-PD-1 therapy alone, with key secondary endpoints including the rate of complete response and the duration of response. If compelling clinical data are generated demonstrating the benefits of the combined treatment, we believe the data from the controlled Phase 2 clinical trial could support a filing with regulatory authorities for marketing approval.

Pipeline product candidate: RP2

We have designed our RP2 product candidate to express an anti-CTLA-4 antibody-like protein in order to block the inhibition of the immune response otherwise caused by CTLA-4. We believe that RP2 will offer advantages compared with current CTLA-4 approaches, including ipilimumab. By expressing anti-CTLA-4 only locally in the tumor and draining lymph nodes, we believe that activity will be retained, but that toxicity will be reduced. We intend that our RP2 product candidate will be used in combination with anti-PD-1 therapy, which we believe will result in both synergy with the oncolytic virus and the expression of the anti-CTLA-4 in the tumor.

We intend to administer RP2 in combination with anti-PD-1 or anti-PD-L1 therapy in tumor types that are not responsive to anti-PD-1/L1 therapy alone, and in patients who have not responded to or who have progressed on prior anti-PD-1/L1 therapy. We expect to include patients with triple negative breast cancer and two further indications in our initial clinical trial with RP2. We intend to file an IND and foreign equivalents for RP2 and we expect that we will bring RP2 into clinical development in the first half of 2019.

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Preclinical results

We are currently conducting preclinical development of RP2, including toxicology and biodistribution studies, with product already manufactured to GMP standards. Release testing is underway.

We have conducted preclinical tests comparing RP1 and RP2 to determine the effect of expressing the anti-CTLA-4 antibody-like protein, and have observed an enhanced effect with RP2. In one of these preclinical experiments, tumors were induced in both the left and right flanks of mice. Either RP1 or RP2 was then injected into the tumors in only the right flanks. As shown below in Figure 2, where each line represents an individual tumor and lines of the same color represent the tumors in the left and right flanks of the same mouse, we observed enhanced destruction of tumors with RP2 as compared to RP1, particularly of the un-injected tumors. In this experiment only a low dose of virus was used such that with RP1 un-injected tumors only partially responded to the treatment. This was to allow the potential benefits of anti-CTLA-4 expression to be observed. This experiment is illustrated in the figure below:

Figure 2: Expression of anti-CTLA-4 from RP2 showed an increased effect as compared to RP1 in mice

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In a further experiment with RP2 in combination with anti-PD-1 therapy, we assessed the durability of response in mice in which tumors had been eradicated and whether these mice were protected against

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re-challenge with tumor cells, which would demonstrate that memory immune responses had been induced. In this experiment 15 mice cured of bilateral tumors following administration of RP2 combined with an anti-PD-1 therapy were observed until day 108 following initiation of the experiment and then re-challenged with tumor cells to assess whether the mice were protected against the formation of new tumors. This demonstrated that anti-tumor effects were maintained throughout the experiment and that 14 out of the 15 mice were protected against re-challenge with tumor cells. This experiment is shown in the figure below. Treatment with anti-PD-1 alone has no anti-tumor effect in this model.

Figure 3: The treatment effect with RP2 was shown to be durable and induce memory immune responses in mice

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Planned Phase 1/2 clinical trial

We are currently beginning protocol development for a Phase 1/2 clinical trial of RP2 in combination with anti-PD-1 therapy and intend to initiate the clinical trial in the first half of 2019.

Pipeline product candidate: RP3

We are designing our RP3 product candidate to express immune-activating proteins that stimulate T cells, in addition to anti-CTLA-4 and GALV-GP R(-). These immune activating proteins are the ligands for various immune co-stimulatory pathways responsible for T cell proliferation and/or activation, including the CD40, OX40 and 4-1BB pathways. We plan to finalize the version of RP3 for clinical development during 2018. As with RP2, we intend to study RP3 in indications that have not so far responded to anti-PD-1 or anti-PD-L1 therapy. We expect to bring RP3 into clinical development in the first half of 2020.

Preclinical results

We have conducted preclinical tests to assess the benefit of expressing immune co-stimulatory pathway ligands, and have observed an enhanced effect associated with the expression of these proteins as compared to RP1. In one of these preclinical experiments, tumors were induced in both the left and right flanks of mice. Either RP1 or versions of RP1 additionally expressing the ligands which activate CD40, 4-1BB or OX40 were then injected into the tumors in only the right flanks. As shown below, where each line represents an individual tumor and lines of the same color represent the tumors in the left and right flanks of the same mouse, we observed enhanced destruction of tumors with the co-stimulatory pathway ligand expressing viruses as compared to RP1, particularly of the un-injected tumors. In this experiment

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only a low dose of virus was used such that with RP1 un-injected tumors only partially responded to the treatment. This was to allow the potential benefits of co-stimulatory pathway ligand expression to be observed. This experiment is illustrated in the figure below:

Figure 4: Comparative effects of RP1 and equivalent viruses also expressing immune co-stimulatory pathway ligands in mice

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Background on our target indications and current treatment options

Set forth below is a description of the target indications we currently intend to pursue with RP1 or RP2, as well as a summary of the existing treatment options for each target indication. When we refer to "response rates" below, we mean the observed reduction in tumor size, per the criteria set forth in the applicable clinical trial protocol; and when we refer to "complete response rate" below, we mean the observed complete eradication of disease in the patient.

Bladder cancer

According to the American Cancer Society, bladder cancer has an incidence of approximately 81,190 cases annually in the United States, with 17,240 deaths attributable to the disease in 2018. Although 77% of bladder cancer patients survive five years from diagnosis, the five-year relative survival rate for metastatic stage IV bladder cancer is just 15%.

Treatment depends on the stage of disease and may include some combination of surgery, radiation therapy, chemotherapy and immunotherapy. Surgical options may include transurethral resection, partial or complete removal of the bladder, or urinary diversion. Platinum-based chemotherapy is the standard of

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care for patients with metastatic disease. Several regimens exist, though the combined treatment of methotrexate, vinblastine, doxorubicin, and cisplatin has been the preferred one; however, patients experience high toxicity associated with these therapies. Patients who relapsed after platinum-based therapy have median survival ranging from five to seven months and no known life-prolonging treatments exist. Immune checkpoint blockade therapies have since shown utility in recurrent advanced bladder cancer. Specifically, pembrolizumab, atezolizumab, avelumab and durvalumab have all been approved in various settings. Pembrolizumab received FDA accelerated approval for first-line use based on a study of 370 patients with locally advanced or metastatic urothelial carcinoma who were not eligible for platinum-containing chemotherapy. The response rate was 29% with a 7% complete response rate. Pembrolizumab is also FDA-approved for patients who have failed platinum-containing chemotherapy based on a 542 patient randomized, controlled clinical trial of pembrolizumab compared to chemotherapy. The response rate was 21% for pembrolizumab compared to 11% for chemotherapy, with complete response rates of 7% and 3%, respectively, and a 27% reduction in the risk of death observed.

Atezolizumab, a PD-L1 inhibitor, has also been found to be active in bladder cancer, and was granted accelerated approval by the FDA in 2016 for patients with locally advanced or metastatic urothelial carcinoma, who progressed on or after platinum-based chemotherapy on the basis of a 310 patient single arm study. Atezolizumab gave a response rate of 14.8% for all patients, a 9.5% response rate for patients with low PD-L1 expression, and a 26% response rate for patients with high PD-L1 expression. Complete response rates were 5.5%, 2.4%, and 12%, respectively. Avelumab and durvalumab, additional antibodies targeting PD-L1, were also granted accelerated approval by the FDA for the treatment of locally advanced and metastatic bladder cancer in May 2017. Avelumab is approved for patients with advanced or metastatic bladder cancer who have disease progression on or following platinum-containing chemotherapy and for patients having disease progression within 12 months of pre- or post-surgery platinum-containing chemotherapy on the basis of a 242 patient single arm clinical trial. The response rate was 13.3% after 13 or more weeks of follow up and 16.1% after six months or more of follow up, with complete response rates of 4% and 5.6%, respectively. There was no clear difference in response rate based on PD-L1 expression. Durvalumab is approved in the same patients on the basis of a single arm 182 patient clinical trial which gave a 17% response rate for all patients, a 26.3% response rate for patients with high PD-L1 expression, and a 4.1% response rate for patients with low PD-L1 expression. Complete response rates were 2.7%, 3.2%, and 1.4%, respectively.

Melanoma

According to the American Cancer Society, melanoma has an incidence of approximately 87,000 cases annually in the United States with over 9,300 deaths attributable to the disease in 2018. For patients with metastatic melanoma, five-year survival rates have historically been very low. While the majority of patients have clinically localized disease at presentation, advanced melanoma spreads in an unpredictable fashion, with widespread metastasis to any organ site but often to skin, lung, brain, liver, or small bowel. Since most cases of melanoma are diagnosed at an early stage and are curable with surgery alone, the standard treatment option for Stage I to resectable Stage III disease is surgery with or without lymph node dissection. For more advanced stages, until recently, treatment options were limited to chemotherapy, which is of unproven benefit, and Interleukin 2, or IL-2. IL-2 was approved by the FDA in 1998 on the basis of a 270 patient single arm study which demonstrated a 16% response rate and 6% complete response rate. While responses with IL-2 are often of long duration, toxicity is often substantial.

Since 2011, the immunotherapies ipilimumab, pembrolizumab, nivolumab, ipilimumab in combination with nivolumab, and T-Vec have received FDA approval in the United States, as have the molecular targeted therapies vemurafenib and dabrafenib in combination with trametinib. While response rates are often high,

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they are also often of limited duration. The more recently approved immunotherapy products have generally been shown to give responses of longer duration.

Ipilimumab was approved on the basis of a 676 patient randomized, controlled trial comparing ipilimumab to a peptide vaccine. The response rate for ipilimumab was 10.9% compared to 1.5% for the peptide vaccine and the risk of death was reduced by 34%.

Pembrolizumab was approved in ipilimumab naïve patients on the basis of an 834 patient randomized, controlled Phase 3 clinical trial testing two dose regimens (every two weeks and every three weeks) of pembrolizumab versus ipilimumab. The response rates for pembrolizumab were 34% and 33%, respectively, and 12% for ipilimumab. The complete response rates were 5%, 6%, and 1%, respectively. This data included patients with both previously treated and previously untreated disease. In a separate trial, the complete response rate in previously untreated melanoma with pembrolizumab was 14% and for all patients, both previously treated and previously untreated, the complete response rate was 8%. The risk of death was reduced by 37% and 31% for pembrolizumab dosing every two weeks and every three weeks, respectively, as compared to treatment with ipilimumab. Pembrolizumab is also approved for ipilimumab refractory patients on the basis of a 540 patient Phase 3 clinical trial comparing the same two dosing regimens of pembrolizumab compared to chemotherapy. Response rates of 21% and 25% for pembrolizumab compared to 4% for chemotherapy and a 14% and 26% reduction in the risk of death, depending on the pembrolizumab dose, were observed. The complete response rate was 2% and 3% for pembrolizumab and 0% for chemotherapy.

Nivolumab was approved in patients with previously treated melanoma on the basis of a 120 patient clinical trial in which a response rate of 32% and a complete response rate of 3.3% was observed in patients treated with nivolumab. Nivolumab was also approved for previously untreated melanoma on the basis of a 418 patient clinical trial comparing nivolumab to chemotherapy in which response rates of 34% for nivolumab and 9% for chemotherapy were observed, with complete response rates of 4% for nivolumab and 1% for chemotherapy and a reduction in risk of death of 58% for nivolumab. Nivolumab was also approved in melanoma in combination with ipilimumab based on a 945 patient clinical trial in which ipilimumab naïve patients were treated with nivolumab alone, ipilimumab alone, or nivolumab together with ipilimumab. While toxicity in the combination arm of the trial was substantially increased as compared to the single agent treated patients, the response rate was 50% for the combination compared to 40% for nivolumab alone and 14% for ipilimumab alone, with complete response rates of 8.9%, 8.5% and 1.9%, respectively. There was also a reduction in the risk of death of 58% as compared to ipilimumab for the combination arm and of 43% for nivolumab compared to ipilimumab alone.

In 2015, T-Vec was approved for the local treatment of unresectable cutaneous, subcutaneous, and nodal lesions in patients with recurrent melanoma after initial surgery on the basis of a 436 patient Phase 3 clinical trial in which patients with previously treated or treatment naïve Stage IIIb to Stage IVM1c disease were randomized, two-to-one, to receive either T-Vec or subcutaneously administered GM-CSF. The primary endpoint was durable response rate, or DRR, the rate of responses lasting continuously for at least six months. The DRR was 16.3% for T-Vec compared to 2.1% for GM-CSF, the overall response rate was 26.4% for T-Vec compared to 5.7% for GM-CSF, and the complete response rate was 16.9% for T-Vec compared to 0.7% for GM-CSF. In combination with ipilimumab, in a 198 patient controlled Phase 2 clinical trial, T-Vec gave a response rate of 39%, compared to 18% for ipilimumab alone. In combination with pembrolizumab, T-VEC gave a response rate of 62% and complete response rate of 33% in a 21 patient Phase 1b clinical trial.

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Non-melanoma skin cancer

Non-melanoma skin cancer, or NMSC, is the most common cancer affecting light-skinned individuals and the incidence is increasing worldwide. Although incidence varies by geography, about 80% of all NMSC cases are basal cell carcinoma, or BCC, while CSCC represents about 20%, and other cancer types represent only 1%. Included in that 1% are primary cutaneous lymphoma, sarcomas of the skin, Merkel cell carcinoma, and appendageal carcinoma. NMSC is often not reported to cancer registries, hence accurate estimates of incidence are difficult to obtain. In 2013, the World Health Organization estimated there to be 2-3 million cases per year. NMSCs, however, are most likely to be under-reported, particularly in light of a recent study that estimated there to be 3.5 million cases each year in the United States alone.

According to the American Cancer Society, CSCC has an incidence of more than 700,000 cases annually in the United States, with approximately 4,000-9,000 deaths attributable to the disease each year, and is the second deadliest skin cancer after melanoma. Although the prognosis for patients with CSCC is generally favorable, if distant metastases occurs, the long-term prognosis is extremely poor. Most cases of CSCC can be successfully managed with a variety of simple procedures, such as cryotherapy, curettage and electro desiccation, topical treatments, or simple surgical excision. When lesions are more advanced, micrographic surgery, more extensive surgical resection, or radiation therapy are generally sufficient to control loco-regional disease. The five-year rate of cure in patients with large tumors is 70%, regardless of the treatment chosen. However, for those with metastatic disease, the long-term prognosis is reduced drastically.

Stage IV CSCC can be responsive to various chemotherapeutic agents. However, there are no standard or FDA-approved therapies. Targets being evaluated in clinical trials of CSCC include epidermal growth factor receptor inhibition with drugs such as cetuximab or erlotinib, as well as PD-1 inhibition with drugs such as cemiplimab. Cemiplimab is currently under review for approval in CSCC by the FDA based on data generated in a Phase 2 clinical trial of 82 patients with advanced CSCC in which cemiplimab demonstrated an overall response rate of 46.3%, together with data from a previous Phase 1 clinical trial in 26 patients which gave a 46.2% response rate and a compete response rate of 7.7%.

Annual rates of basal cell cancer of the skin, or BCC, in the United States have been estimated at up to 485 and up to 253 cases of BCC per 100,000 males and females, respectively. Local treatment measures fail to control disease in 10% of patients, although metastatic disease is rare.

The most frequent site of metastatic involvement is the regional lymph node in 68% of cases. Dissemination through the blood may also occur, affecting the lungs and pleura, liver, and bones. The use of systemic therapy is limited to patients with distant metastases or locally advanced disease that is not suitable for surgery or radiation. In the cases of locally advanced or metastatic disease, systemic therapy with FDA-approved hedgehog pathway inhibitors is recommended. Typical outcomes with this approach include a 43% response rate, with a 7.6 month response duration, and a 30% response rate, with a 7.6 month duration, for locally advanced and metastatic disease, respectively, after which there is no approved therapy. Other drugs, including those targeting PD-1 and PI3K, are being studied in clinical trials.

Merkel cell carcinoma, or MCC, is a rare neuroendocrine malignancy of the skin predominately affecting elderly, light-skinned individuals and may also occur earlier and more frequently in immunosuppressed patients. The incidence of MCC is very low when compared to other cutaneous malignancies, with an

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estimated 1,500 cases diagnosed annually in the United States. The typical clinical course of the disease is rapid progression of the primary tumor with early and frequent metastasis to the regional lymph nodes. In unresectable or metastatic MCC, chemotherapy achieves high remission rates. However, responses are usually short lived. In March 2017, avelumab, an anti-PD-L1 monoclonal antibody, was approved in the United States for patients with advanced MCC based upon a single-arm, open-label, Phase 2 clinical trial in 88 metastatic MCC patients who had failed at least one prior chemotherapy treatment. The response rate was 33% with a complete response rate of 11.4%.

There are many other types of rare skin malignancies that occur. As a group, these tumors are often highly aggressive and initially treated by surgical resection with or without local radiation therapy. Once these tumors recur locally or develop metastases, outcomes are usually poor and no effective systemic therapy is available. These rare tumors include dermatofibroma protuberans, angiosarcoma of the skin, non-HIV-related Kaposi's sarcoma, sebaceous cell carcinoma, and eccrine carcinoma.

Microsatellite instability high or mismatch repair deficient tumors

Microsatellite instability high, or MSI-H, or mismatch repair deficient, or dMMR, tumors are characterized by defects in DNA replication, particularly in the microsatellite regions. Typically, the nucleotide mismatches that occur during DNA replication are corrected by a proofreading system to correct these errors. Microsatellite instability describes the predisposition for mutations in the tandem repeat sequences due to uncorrected base insertion or deletion errors.

Although most microsatellites are located in noncoding regions of the genome, ill-placed uncorrected DNA replication errors can cause mutations within protein coding sequences, often resulting in the expression of functionally inactive mutant proteins that interfere with normal cell regulation and help to drive cancer. The number of mutation-associated neo-antigens resulting from mismatch-repair deficiency is more than 20 times higher than in tumors without this deficiency. The tumor microenvironment of dMMR tumors strongly expresses PD-L1, which indicates that an active response to the neo-antigens is underway.

The presence of MSI-H and dMMR tumors has been reported in diverse cancer types, including endometrial, ovarian, gastric, pancreas, ovary, prostate, central nervous system, and non-small cell lung cancers. The majority of the published data is based on studies of colorectal cancer patients. MSI-H tumors have been reported to be present in between 2% and 30% of primary colorectal tumors and 20% to 77% of metastatic lesions. Stage II colon cancers show higher rates of MSI-H than more advanced tumors, and rectal cancers and other left-sided colon cancers are noted to have lower frequencies of MSI-H tumors. The frequency of dMMR tumors in the other tumor types for which it has been reported is less well documented, and likely lower than seen in colorectal cancer.

Due to the high level of neo-antigens present, MSI-H tumors have been shown to respond to anti-PD-1 therapy. Pembrolizumab received accelerated approval by the FDA in 2017 for MSI-H solid tumors that have progressed following prior treatment, as well as in colorectal cancer that has progressed following chemotherapy. In five uncontrolled, single-arm clinical trials totaling 149 patients with diverse MSI-H tumor types, pembrolizumab gave a response rate of 39.6% and a complete response rate of 7.4%. In the 90 patient subset with MSI-H CRC, pembrolizumab gave a 36% response rate. Nivolumab was also granted accelerated approval for MSI-H colorectal cancer that has progressed following chemotherapy. In a single arm 74 patient clinical trial with nivolumab, the response rate was 32% and the complete response rate was 3%.

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Triple negative breast cancer

According to the American Cancer Society, triple negative breast cancer, or TNBC, has an incidence of approximately 37,000 cases and approximately 6,000 deaths attributable to the disease annually in the United States. Globally, TNBC accounts for approximately 12% to 17% of all breast cancers, with approximately 170,000 new cases among an estimated 1 million cases of breast cancer diagnosed annually. As a group, patients with TNBC have poor outcomes relative to other breast cancer subtypes, with reduced disease-free and overall survival rates.

TNBC refers to any breast cancer that does not express the genes for estrogen receptor, progesterone receptor or Her2/neu. The lack of tumor expression of these receptors precludes the use of targeted therapies, making chemotherapy the primary systemic treatment for patients with TNBC in both the early and advanced-stages of disease. Although responses and complete responses are achieved, they are usually short in duration. Due to the limited efficacy of systemic chemotherapy, fewer than 30% of women with metastatic TNBC survive five years after diagnosis, and virtually all women with metastatic TNBC will ultimately die of the disease.

Studies have shown that the presence of tumor infiltrating lymphocytes, or TILs, is associated with better outcomes for TNBC. In addition, PD-L1 expression is associated with TILs and 20% to 30% of TNBCs express PD-L1. Based upon this high incidence of expression and demonstrated responses in other tumor types, immune-based approaches are being explored using immune checkpoint blockade therapies in TNBC. In a Phase Ib clinical trial of pembrolizumab in 32 heavily pretreated PD-L1-positive patients, the response rate was 18.5% and the complete response rate was 3.7% for the 27 patients who were evaluable for efficacy. A Phase 1 clinical trial of atezolizumab, a monoclonal antibody targeting PD-L1, in 27 heavily pretreated TNBC patients gave a response rate of 19% in 21 efficacy evaluable patients and a complete response rate of 9.5%. A Phase 2 trial (KEYNOTE-082) has also tested pembrolizumab in patients previously treated with chemotherapy for metastatic disease (Cohort A, 170 patients) and patients previously untreated with chemotherapy for metastatic disease with PD-L1 positive tumors (Cohort B, 84 patients). Cohort A gave a response rate of 4.8% for PD-L1 positive patients with a complete response rate of 1% and a response rate of 4.7% for PD-L1 negative patients with a complete response rate of 0.6%. Cohort B gave a response rate of 23% with a complete response rate of 3.6%. Both pembrolizumab and atezolizumab are being tested in Phase 3 trials as single agents or in combination with other therapies.

Intellectual property

We believe our rights under issued patents, if obtained, and patent applications will provide a competitive advantage. Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing upon our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing United States and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business. We also rely on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary position.

For the core technology in each of our product candidates, patent applications are pending under the Patent Cooperation Treaty, or PCT, and are currently at the international stage. As of July 9, 2018, we own five PCT applications and four U.S. provisional applications. The applications include claims to oncolytic virus compositions of matter, including RP1, pharmaceutical compositions encompassing the oncolytic viruses, and methods of use in treating cancer, including the target indications discussed above.

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The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, the patent term of a patent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration of a portion of the patent term lost during the U.S. clinical development and FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under clinical development in the United States and the length of time the drug is under regulatory review. Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our products receive FDA approval, and if and when patents grant, we expect to apply for patent term extensions on patents covering those products. We plan to seek patent term extensions to any of our issued patents in any jurisdiction where these are available, however there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.

We may rely, in some circumstances, on trade secrets to protect our technology. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors and other contractors, as well as physical security of our premises and our information technology systems.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary rights. We compete in the highly competitive markets that address cancer and face significant competition from many sources, including pharmaceutical, biopharmaceutical and biotechnology companies, as well as universities and private and public research institutions. Many of our competitors have significantly greater financial, manufacturing, marketing and drug development resources than we do. Large biopharmaceutical companies in particular have extensive experience in clinical testing and in obtaining regulatory approvals for drugs and biologicals. These companies also have significantly greater research capabilities than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies or universities and research institutions.

Our competitors fall primarily into the following groups of treatment:

traditional cancer therapies, including chemotherapy, surgery, radiation and targeted therapies;

approved immunotherapy antibodies and immunotherapy antibodies in clinical trials;

oncolytic immunotherapies, including T-Vec, the only FDA-approved oncolytic immunotherapy for treating advanced melanoma, and other oncolytic immunotherapies in clinical trials;

therapies aimed at activating innate immunity such as those targeting STING and TLRs;

cancer vaccines including personalized vaccines and those targeting tumor neo-antigens; and

cell-based therapies, such as CAR-T, T cell receptor-based, and NK cell therapies.

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Our commercial opportunity will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, are easier to administer or are less expensive alone or in combination with other therapies than any products that we may develop alone or in combination with other therapies, especially if these get to market sooner than our products. These third parties also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies and technology licenses complementary to our programs or advantageous to our business.

Our oncolytic product candidates, if and when marketed, will compete with a number of drugs that are currently marketed or in development that also target cancer but that utilize a different mechanism of action. To compete effectively with these agents, our product candidates will need to demonstrate advantages that lead to improved clinical efficacy and safety compared with these competitors. At the same time, however, we believe that our oncolytic product candidates, if and when ultimately marketed, would likely be used principally in combination with checkpoint blockade therapies in addition to existing cancer therapies, including surgery, chemotherapy, radiation therapy and other biological therapies such as antibodies targeting particular surface receptors. We therefore believe that our product candidates, if and when marketed, would largely complement rather than compete directly with these existing treatment options.

We do, however, expect to face direct and increasing competition from a number of companies that are also seeking to develop cancer therapies based on oncolytic viruses and other ways to prime the immune system, including neo-antigen vaccination. We believe that our ability to successfully compete will depend, among other things, on our ability to:

expeditiously advance the development of our product candidates;

design, enroll patients in and successfully complete appropriate clinical trials in a timely fashion;

gain regulatory approval for our product candidates in their first indications as well as further indications;

establish collaborations and partnerships for the development and marketing of our product candidates;

commercialize our product candidates successfully, including convincing physicians, insurers and third-party payors of the safety and efficacy of our product candidates over currently approved therapies;

secure and protect intellectual property rights based on our innovations; and

manufacture or otherwise obtain and sell commercial quantities of future products to the market.

Manufacturing and suppliers

We have established an operations leadership team with extensive experience in manufacturing biologics based on viruses, including oncolytic products and gene therapy products, and in the construction, validation, approval and operation of facilities designed to manufacture biologics. Our team has already developed a robust and reproducible manufacturing process for our product candidates. We are also developing our product candidates for maximum practicality of use compared with some other oncolytic immunotherapies; in particular, our product candidates do not require refrigeration at -700 Celsius.

To date, our third-party contract manufacturer in Europe has been responsible for sourcing raw materials for use in the manufacture, in accordance with cGMP, of our product candidates for use in our planned early clinical trials. We currently use fetal bovine sera, a commonly used growth supplement, in the initial growth of the mammalian cells used in the production of our viral product candidates and a recombinant human protein to increase the stability of our drug formulation. We are in the process of developing our raw material supply chain for our product candidates as part of the process of establishing our own manufacturing facility and intend to enter into commercial supply, collaboration or similar agreements prior to conducting advanced clinical trials.

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We have signed a lease for an approximately 63,000 square-foot facility in Framingham, Massachusetts where we plan to establish, equip, and operate our own in-house manufacturing facility in order to secure supplies for pivotal studies and commercial launch. This facility is intended to give us control over the whole supply chain for our products and product candidates. The facility is intended to be both multi-product and multi-use, so that we will be able to produce two different products in parallel and several different products in the same facility.

By establishing our own manufacturing facility, we aim to minimize or eliminate our reliance on contract manufacturing organizations, which typically have limited capacity at commercial scale and quality. We believe that having control over the whole manufacturing process will allow us to reduce cycle times and cost of goods for commercial production and to shorten overall timelines for new product candidates in our development pipeline, as well as help us to develop drug formulations or presentations to simplify distribution and/or administration of future oncolytic immunotherapies. We also believe that having a dedicated manufacturing facility will allow us to optimize commercial-scale processes and to develop a suitable workforce capable of supporting market launch.

Sales and marketing

None of our product candidates has been approved for sale. If and when our product candidates receive marketing approval, we intend to commercialize them on our own in the United States and potentially with pharmaceutical or biotechnology partners in other geographies. We currently have no sales, marketing or commercialization capabilities and have no experience as a company doing such activities. However, we intend to build the necessary capabilities and infrastructure over time following the advancement of our product candidates. Clinical data, the size of the opportunity and the size of the commercial infrastructure required will influence our commercialization plans and decision making.

Collaborations

BMS

On February 26, 2018, we entered into a Clinical Trial Collaboration and Supply Agreement with BMS. Pursuant to the agreement, BMS will provide to us, at no cost, nivolumab, its anti-PD-1 therapy, for use in combination with RP1 in our ongoing Phase 1/2 clinical trial. Under the agreement, we will sponsor, fund and conduct the clinical trial in accordance with an agreed-upon protocol. Under the agreement, BMS has granted us a non-exclusive, non-transferrable, royalty-free license (with a right to sublicense) under its intellectual property to use nivolumab in the clinical trial and has agreed to manufacture and supply nivolumab, at its cost and for no charge to us, for use in the clinical trial. Both parties will own any study data produced in the clinical trial, other than study data related solely to nivolumab, which will belong solely to BMS, or study data related solely to RP1, which will belong solely to us.

Unless earlier terminated, the agreement will remain in effect until (a) the completion of the clinical trial, (b) all related clinical trial data have been delivered to both parties and (c) the completion of any statistical analyses and bioanalyses contemplated by the clinical trial protocol or any analysis otherwise agreed upon by the parties. The agreement may be terminated by either party (i) in the event of an uncured material breach by the other party, (ii) in the event the other party is insolvent or in bankruptcy proceedings or (iii) for safety reasons. Upon termination, the licenses granted to us to use nivolumab in the clinical trial will terminate. The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature.

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Regeneron

On May 29, 2018, we entered into a Master Clinical Trial Collaboration and Supply Agreement with Regeneron Pharmaceuticals, Inc., or Regeneron. Pursuant to the agreement we agreed to undertake one or more clinical trials with Regeneron for the administration of our product candidates in combination with cemiplimab, an anti-PD-1 therapy being developed by Regeneron, across multiple solid tumor types, the first of which is intended to be our planned Phase 2 clinical trial of RP1 in patients with CSCC. Each clinical trial will be conducted pursuant to an agreed study plan which, among other things, will identify the name of the sponsor and which party will manage the particular study, and include the protocol, the budget and a schedule of clinical obligations. The first study plan related to the Phase 2 clinical trial has been agreed.

Pursuant to the terms of the agreement, each party granted the other party a non-exclusive license of their respective intellectual property and agreed to contribute the necessary resources needed to fulfill their respective obligations, in each case, under the terms of the agreed study plans. Development costs of a particular clinical trial will be split equally. The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature. The agreement also contains certain covenants that restrict us from entering into a third-party arrangement with respect to the use of our product candidates in combination with an anti-PD-1 therapy and that restrict Regeneron from entering into a third-party arrangement with respect to the use of cemiplimab in combination with an HSV-1 virus, in each case, for the treatment of a tumor type that is the subject of a clinical trial to which the covenants apply. Unless otherwise mutually agreed in a future study plan, these covenants are only applicable to our planned Phase 2 clinical trial in CSCC, and expire upon the one-year anniversary of the commencement of the applicable study plan.

The agreement may be terminated by either party if (i) there is no active study plan for which a final study report has not been completed, (ii) the parties have not entered into a study plan for an additional clinical trial within a period of time after the delivery of the most recent final study report or (iii) in the event of a material breach.

Regulatory matters

Government authorities in the United States, at the federal, state, and local level, and in other countries, extensively regulate, among other things, the research, development, testing, approval, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import, and export of biopharmaceutical products such as those we are developing. In addition, manufacturers of biopharmaceutical products participating in Medicaid and Medicare are required to comply with mandatory price reporting, discount, and rebate requirements. The processes for obtaining regulatory approvals in the United States and in foreign countries, along with compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.

FDA and EU regulation

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act, or FDCA, the Public Health Services Act, or PHSA, and their implementing regulations. The process required by the FDA before product candidates may be marketed in the United States generally involves the following:

completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with GLP regulations;

submission to the FDA of an IND, which must become effective before human clinical trials may begin at United States clinical trial sites;

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approval by an IRB for each clinical site, or centrally, before each trial may be initiated;

adequate and well-controlled human clinical trials to establish the safety, purity, and potency of the proposed product candidate for its intended use, performed in accordance with GCPs;

development of manufacturing processes to ensure the product candidate's identity, strength, quality, purity, and potency;

submission to the FDA of a BLA;

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

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the products are produced to assess compliance with current cGMPs, and to assure that the facilities, methods, and controls are adequate to preserve the therapeutics' identity, strength, quality, purity, and potency as well as satisfactory completion of an FDA inspection of selected clinical sites and selected clinical investigators to determine GCP compliance; and

FDA review and approval of the BLA to permit commercial marketing for particular indications for use.

Preclinical studies and IND submission

The testing and approval process of product candidates requires substantial time, effort, and financial resources. Satisfaction of the FDA's pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease. Preclinical studies include laboratory evaluation of chemistry, pharmacology, toxicity, and product formulation, as well as animal studies to assess potential safety and efficacy. Such studies must generally be conducted in accordance with the FDA's GLPs. Prior to commencing the first clinical trial at a United States investigational site with a product candidate, an IND sponsor must submit the results of the preclinical tests and preclinical literature, together with manufacturing information, analytical data, any available clinical data or literature, and proposed clinical study protocols among other things, to the FDA as part of an IND.

An IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, notifies the applicant of safety concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during trials due to safety concerns or non-compliance. As a result, submission of an IND may not result in FDA authorization to commence a clinical trial. A separate submission to an existing IND must also be made for each successive clinical trial conducted during product development.

Clinical trials

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with federal regulations and GCP requirements, which include the requirements that all research subjects provide their informed consent in writing for their participation in any clinical trial, as well as review and approval of the study by an IRB. Investigators must also provide certain information to the clinical trial sponsors to allow the sponsors to make certain financial disclosures to the FDA. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the trial procedures, the parameters to be used in monitoring safety, the effectiveness criteria to be evaluated, and a statistical analysis plan. A protocol for each clinical trial, and

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any subsequent protocol amendments, must be submitted to the FDA as part of the IND. In addition, an IRB at each study site participating in the clinical trial or a central IRB must review and approve the plan for any clinical trial, informed consent forms, and communications to study subjects before a study commences at that site. An IRB considers, among other things, whether the risks to individuals participating in the trials are minimized and are reasonable in relation to anticipated benefits, and whether the planned human subject protections are adequate. The IRB must continue to oversee the clinical trial while it is being conducted. Once an IND is in effect, each new clinical protocol and any amendments to the protocol must be submitted to the IND for FDA review, and to the IRB for approval. If a product candidate is being investigated for multiple intended indications, separate INDs may also be required. Progress reports detailing the results of the clinical trials must also be submitted at least annually to the FDA and the IRB and more frequently if serious adverse events or other significant safety information is found.

The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB's requirements or if the trial poses an unexpected serious harm to subjects. The FDA or an IRB may also impose conditions on the conduct of a clinical trial. Clinical trial sponsors may also choose to discontinue clinical trials as a result of risks to subjects, a lack of favorable results, or changing business priorities.

Information about certain clinical trials, including a description of the study and study results, must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their clinicaltrials.gov website. Manufacturers or distributors of investigational products for the diagnosis, monitoring, or treatment of one or more serious diseases or conditions must also have a publicly available policy on evaluating and responding to requests for expanded access requests.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial that regularly reviews accumulated data and advises the study sponsor regarding the continuing safety of the trial. This group may also review interim data to assess the continuing validity and scientific merit of the clinical trial. This group receives special access to unblinded data during the clinical trial and may advise the sponsor to halt the clinical trial if it determined there is an unacceptable safety risk for subjects or on other grounds, such as no demonstration of efficacy.

The manufacture of investigational biologics for the conduct of human clinical trials is subject to current cGMP requirements. Investigational biologics and active ingredients imported into the United States are also subject to regulation by the FDA. Further, the export of investigational products outside of the United States is subject to regulatory requirements of the receiving country as well as United States export requirements under the FDCA.

In general, for purposes of BLA approval, human clinical trials are typically conducted in three sequential phases, which may overlap or be combined.

Phase 1—Trials are initially conducted in healthy human volunteers or subjects with the target disease or condition and test the product candidate for safety, dosage tolerance, structure-activity relationships, mechanism of action, absorption, metabolism, distribution, and excretion. If possible, Phase 1 trials may also be used to gain an initial indication of product effectiveness.

Phase 2—Controlled trials are conducted in limited subject populations with a specified disease or condition to evaluate the effectiveness of the product candidate for a particular indication or indications,

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Phase 3—These adequate and well-controlled clinical trials are undertaken in expanded subject populations, generally at geographically dispersed clinical trial sites, to generate enough data to provide statistically significant evidence of clinical efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. Typically, two Phase 3 trials are required by the FDA for product approval. Under some limited circumstances, however, the FDA may approve a BLA based upon a single Phase 3 clinical trials.

Additional kinds of data may also help to support a BLA, such as patient experience data.

Further, under certain circumstances, manufacturers and sponsors of investigational biopharmaceutical pro