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September 5, 2018
Mark Rothera
President, Chief Executive Officer and Director
Orchard Rx Ltd
108 Cannon Street
London EC4N 6EU
United Kingdom
Re: Orchard Rx Ltd
Draft Registration Statement on Form F-1
Submitted August 6, 2018
CIK No. 0001748907
Dear Mr. Rothera:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1 Filed August 6, 2018
Prospectus Summary
Overview, page 1
1. We not your statement on page 21 that you may not have access to the
most recent clinical
data or the most recent clinical data may be limited or incomplete. For
each your clinical
stage product candidates, clarify whether the trail is still ongoing,
the date of the most
recent clinical data and whether you are aware of any limitation of the
data.
2. Please further revise the discussion of OTL-103 to replace the statement
that patients have
Mark Rothera
FirstName LastNameMark Rothera
Orchard Rx Ltd
Comapany 5, 2018
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experienced a clinically meaningful reduction in bleeding and
infection to present the data
you used to draw this conclusion.
3. We note that you provide the maximum survival follow-up data for each
of your
commercial and development stage products and product candidates in
your tables on
pages 4 and 136. To put these figures in context, please also provide
for each product or
product candidate the range of treatment duration of all patients in
the studies and the
average survival rate of untreated patients.
4. Please revise this section to disclose that you purchased rights to
Strimvelis, OTL-200 for
MLD, OTL-103 for WAS and OTL-300 for TDBT from GSK in April 2018.
5. We note your disclosure on page 3 regarding your plans to submit
OTL-101, OTL-200
and OTL-103 for regulatory approval in the next three years. Please
revise your
disclosure to discuss any additional steps you must take prior to
submitting each product
candidate for regulatory approval. Additionally, discuss any
differences between your
clinical trials and the FDA /EMA requirements and the possibility that
the FDA/EMA
may require additional clinical trials, a different trial design or a
longer follow up period.
6. Revise the description of OTL-200 on page 3 to replace your statement
that patients
experienced sustained expression of the ARSA enzyme and significant
long-term motor
and cognitive improvements in most patients to describe the clinical
trial endpoints related
to the expression of ARSA enzyme and the motor and cognitive
improvements and a
summary of your observations. To the extent any statistical analyses
were performed,
these should be discussed in the business section.
7. We note your statement on page 3 that OTL-103 has achieved am overall
survival rate of
100% in eight patients with a follow up of up to eight years post
treatment. Are the
additional seven patients included in the table on page 4
compassionate use patients? If
any of these additional seven patients were trial participants, please
explain why they are
not counted in your statement about the results of the trial. If they
are compassionate use
patients, please explain whether you have data about their results. If
you do not, please
explain why.
8. We note your disclosure on page 144 that the EMA approved Strimvelis
in May 2016 for
treatment of children with ADA-SCID with no suitable HLA-matched stem
cell donor.
Please specify in your description of Strimvelis in this section that
EMA approval is
limited to the treatment of children with ADA-SCID with no suitable
HLA-matched stem
cell donor.
9. Please expand your disclosure on page 3 to discuss all serious adverse
events observed in
your ongoing trials for OTL-101, OTL-200 and OTL-103.
10. Throughout your document you make conclusory statements regarding the
safety and
efficacy of your product candidates. For example:
On page 1: "...clinical stage product candidates have accumulated
compelling durable
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FirstName LastNameMark Rothera
Orchard Rx Ltd
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efficacy and safety data."
On page 2; "our long term clinical follow up across multiple
diseases and vectors
carrying different genes supports the safety of out autologous ex
vivo gene therapy
approach."
on page 3: "OTL-200 has evidenced sustained expression of the
deficient ARSA
enzyme, with significant long term motor and cognitive
improvements in most
patients. These results exhibit the ability of our approach to
target complex diseases
which involve the central nervous system;" OTL-103 "clinically
meaningful
reductions in bleeding events and infections observed;""our
clinical stage
programs...continue to generate favorable safety and efficacy data
in initial clinical
trials."
On page 135: "Three of our clinical-stage product candidates are
currently in
registrational trials and have shown compelling efficacy and
safety data...;"
On page 140: "Durable and sustained clinical benefit has been
observed..."
Statements regarding efficacy and safety are determinations that only
the FDA or a
foreign government equivalent has the authority to make. Please revise
your disclosure
throughout your document, including but not limited to the statements
noted, to eliminate
your conclusions or any suggestions that your product candidates have
been or will
ultimately be determined safe and/or effective or have demonstrated
safety and/or efficacy
for purposes of granting approval by the FDA or comparable agency. You
may present
the objective data from the clinical trials without drawing a
conclusion from the results.
For example, you may note that a candidate was well tolerated, the
absence of serious
adverse events or the number of trial participants who met the
identified trial endpoints.
11. Additionally, we note your statements about the long-term safety and
efficacy appear to
contradict your statement on page 22 that there is limited data
concerning the safety and
efficacy following treatment with your product candidates. Please
revise your disclosure
to address these inconsistencies.
12. With respect to table on page 2, please explain the following:
the distinction between "Preclinical" and "Clinical proof of
concept;" and
the meaning of "registrational trial."
Additionally, revise the table to include separate columns for Phase
I, Phase II and Phase
III clinical trials and disclose the current trial phase in the
discussion
section. Alternatively, tell us why you believe that "registrational
trial" is a better
description of the current developmental stage for each of your
product candidates. This
explanation should address whether you are relying on an approval
process that differs
from your discussion on pages 169-172 and how the stage of development
and the process
compares to the competitive approaches presented on page 167.
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Orchard Rx Ltd
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13. Please explain the basis for your belief that the total addressable
market potential in the
diseases underlying your five lead programs could be greater than $2
billion annually.
Your response should include your material assumptions underlying this
prediction.
Implications of being an emerging growth company and a foreign private issuer ,
page 6
14. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Favorable results fromcompassionate use programs may not establish
proof-of-concept..., page
22
15. To the extent that any of the results presented in the Summary or
Business sections are
the results of compassionate use programs, please revise the
discussion to identify the
results as such.
Capitalization, page 106
16. You disclose on page 106 that the capitalization table on a pro forma
basis gives effect to
the conversion of all outstanding preferred shares as of December 31,
2017 into an
aggregate of 41,581,513 ordinary shares upon the closing of this
offering. You also
disclose on page 105 that the conversion ratio of each class of
preferred shares of Orchard
Therapeutics plc into ordinary shares of Orchard Therapeutics plc will
be determined
based on the final price per ADS in this offering. In this regard, it
is not clear how the
conversion of the preferred shares presented in the capitalization
table was calculated.
Please advise.
17. Please revise all pro forma balance adjustments to present them on a
gross rather than a
net basis. In this regard, we note that the adjustments to cash and
equity accounts are
comprised of multiple pro forma adjustments. Each adjustment should be
separately
presented and disclosed. This same comment also applies to pro forma
consolidated
balance sheet data on page 11 as applicable.
18. Please revise the table in this section to reflect your capitalization
as of a date no earlier
than 60 days prior to the date of your registration statement. Refer
to Item 3.B of Part I of
Form 20-F, and Item 4 of Part I of Form F-1.
Dilution, page 108
19. Please revise the dilution table to separately present the pro forma
impact of the corporate
reorganization and the offering so that readers could understand the
impact of each of
these transactions. Also disclose in the footnote the total number of
shares of common
Mark Rothera
FirstName LastNameMark Rothera
Orchard Rx Ltd
Comapany 5, 2018
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stock outstanding used to calculate each pro forma net tangible book
value. Refer to
Instruction (6) related to Item 11-02-02(b)(6) of Regulation S-X.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Recent Developments, page 113
20. We note your disclosure on page 114 that under the GSK Agreement, you
are required to
make Strimvelis commercially available in the European Union until
such time as an
alternative gene therapy, such as your OTL-101 product candidate, is
commercially
available for patients in the European Union. Please clarify in your
disclosure whether
you intend to continue to sell Strimvelis once OTL-101 is commercially
available in the
European Union.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Components of Our Results of Operations
Income Tax (Expense) Benefit, page 118
21. You disclose here that your income tax credit recognized represents
the sum of the R&D
tax credits recoverable in the United Kingdom and income tax payable
in the United
States. You also disclose on page 131 that you record U.K. R&D tax
credits as a reduction
to R&D expense in the year in which the expenditures were incurred. To
the extent you
classify part of your U.K. tax credits as R&D expenses and part as
income tax benefits,
please revise to clearly disclose the fact. In addition, disclose
whether the tax credits
depend on your generation of future taxable income or your ongoing tax
status or tax
positon, and how you determine the classification of these R&D tax
credits between R&D
expense and income tax benefits.
Share-Based Compensation, page 128
22. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price.
Business
Our Strategy, page 141
23. We note your disclosure on page 141 that your programs OTL-200 for MLD
and OTL-
103 for WAS have both achieved their primary endpoints in
registrational trials. We also
note your disclosure elsewhere that your clinical trials for OTL-200
for MLD and OTL-
103 for WAS are ongoing and not complete. Please revise your
disclosure here to clarify
that you have not completed the registrational trials for these
programs.
24. Please revise the first bullet point to put into context your
statement concerning your goal
to "rapidly advance" your five clinical-stage product candidates
towards marketing
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Orchard Rx Ltd
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approval and "rapidly progress" OTL-102 and OTL-300 through clinical
development to
regulatory filing. In this regard, we note your risk factor
disclosures on pages 20 -
24 which indicates that you may need to perform additional clinical
trials and clinical
testing is expensive, time-consuming and uncertain as to outcome and
that you may find it
difficult to enroll patients in your clinical trials, which could
delay or prevent you from
proceeding with clinical trials of your product candidates.
Supportive Trial with GOSH, page 146
25. Please identify on page 147 the one SAE that was assessed as being
possibly related to
protocol treatment or procedures.
Ongoing Clinical Trial with UCLA (with Cryopreserved Formulation), page 147
26. Please revise to disclose how many patients you expect to evaluate as
part of your
comparability analysis.
License Agreements, page 164
27. Please describe the material terms of and file as exhibits the
license, development and
supply agreement with Oxford Biomedica, the UCLB/UCLA License
Agreement and
the license agreement with G n thon, or tell us why they are not
material to your business.
Refer to Item 10.C of Form 20-F and Item 601(b)(10) of Regulation S-K.
28. Please revise the description of your agreement with GSK to provide
the range of the
tiered royalties for the MLD and WAS products and provide more
specific information
about the highest royalty tier for TDBT sales, such as teens,
twenties, thirties, etc.
Related Party Transactions, page 200
29. Please file the transitional services agreement with GSK entered into
on April 11, 2018, or
tell us the basis for your belief that it is not required. Refer to
Item 601(b)(10) of
Regulation S-K.
Registration Rights, page 207
30. You disclose that upon completion of the offering, the holders of the
shares of your
ordinary share issuable upon the conversion of your preferred shares
will be entitled to
registration rights. Please disclose if you anticipate whether there
will be any maximum
cash penalties under the registration rights agreements or additional
penalties that may
result from delays in registering these securities. Refer to ASC
825-20-50-1.
Description of American Depositary Shares
Governing Law/Waiver of Jury Trial, page 236
31. We note your disclosure that as a party to the deposit agreement,
investors waive their
Mark Rothera
Orchard Rx Ltd
September 5, 2018
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rights to trial by jury in any legal proceeding arising out of the
deposit agreement or the
ADRs against the company and/or the depositary. Please provide a risk
factor regarding
the impact of this provision of the deposit agreement on the rights of
ADS holders. In
addition, address potential enforceability issues. Finally, clarify
that by agreeing to the
provision, investors will not be deemed to have waived the company's
or the depositary's
compliance with U.S. federal securities laws and the rules and
regulations promulgated
thereunder and ensure that the deposit agreement includes a specific
statement to that
effect.
Financial Statements
Consolidated Statements of Operations and Comprehensive Loss, page F-4
32. Please tell us what consideration was given to including pro forma
earnings per share
information on the face of your historical financial statements to
give effect to the
corporate reorganization. Refer to SAB Topic 4:C. In addition, please
revise to include
pro forma earnings per share in your summary selected financial data
on page 11.
2. Summary of Significant Accounting Policies
Segment Information, page F-11
33. You disclose that you operate as a single operating segment. Please
tell us and disclose
how you have assessed whether your two geographic regions, the United
Kingdom and
United States, represent operating segments under ASC 280-10-50-1.
Describe the
frequency and contents of the discreet financial information for the
geographic regions
that is regularly reviewed by the CODM to make decisions about
resources to be allocated
and assess performance. Please also revise to include entity-wide
information about
geographic areas. Refer to ASC 280-10-50-38 through 42 as applicable.
General
34. Please provide us proofs of all graphics, visual, or photographic
information you will
provide in the printed prospectus prior to its use, for example in a
preliminary prospectus.
You may contact Sisi Cheng at 202-551-5004 or Sharon Blume at
202-551-3474 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Irene Paik at 202-551-6553 or Suzanne Hayes at 202-551-3675 with any
other questions.
FirstName LastNameMark Rothera Sincerely,
Comapany NameOrchard Rx Ltd
Division of
Corporation Finance
September 5, 2018 Page 7 Office of
Healthcare & Insurance
FirstName LastName