Five Prime Therapeutics Inc (FPRX) 2014年年度報告「NASDAQ」.pdf

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1、FIVE PRIME THERAPEUTICS INCFORM 10-K(Annual Report)Filed 03/18/15 for the Period Ending 12/31/14 AddressTWO CORPORATE DRIVESOUTH SAN FRANCISCO,CA 94080Telephone415-365-5600CIK0001175505SymbolFPRXSIC Code2834-Pharmaceutical PreparationsFiscal Year12/31http:/www.edgar- Copyright 2015,EDGAR Online,Inc.

2、All Rights Reserved.Distribution and use of this document restricted under EDGAR Online,Inc.Terms of Use.UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON,DC 20549 FORM 10-K For the fiscal year ended December 31,2014 or For the transition period from to Commission File Number:001-36070 Fiv

3、e Prime Therapeutics,Inc.(Exact name of registrant as specified in its charter)Two Corporate Drive South San Francisco,California 94080 (415)365-5600 (Address,including zip code,and telephone number,including area code,of registrants principal executive offices)Securities registered pursuant to Sect

4、ion 12(b)of the Act:Securities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes?No Indicate by check mark if the registrant is not required to file reports pursuant to Section

5、 13 or 15(d)of the Act.Yes?No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2

6、)has been subject to such filing requirements for the past 90 days.Yes No?Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T duri

7、ng the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files):Yes No?Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of the registran

8、ts knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.?Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting compan

9、y.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes?No As of June 30,2014,the last business day of th

10、e registrants most recently completed second fiscal quarter,the aggregate market value of the registrants common stock held by non-affiliates of the registrant was approximately$310.0 million,based on the closing price of the registrants common stock on the NASDAQ Global Select Market on June 30,201

11、4 of$15.55 per share.Shares of the registrants common stock held by each officer and director and each person known to the registrant to own 10%or more of the outstanding common stock of the registrant have been excluded in that such persons may be deemed affiliates.This determination of affiliate s

12、tatus is not a determination for other purposes.As of March 11,2015,the registrant had 25,532,719 shares of common stock,par value$0.001 par value,outstanding.ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934?TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE S

13、ECURITIES EXCHANGE ACT OF 1934 Delaware 26-0038620 (State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)Title of Each Class Name of Each Exchange on Which Registered Common Stock,par value$0.001 per share Nasdaq Global Select Market Large accelerated filer?A

14、ccelerated filer?Non-accelerated filer (Do not check if a smaller reporting company)Smaller reporting company?DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement,or the Proxy Statement,for the 2015 Annual Meeting of Stockholders of the registrant are incorporated by refere

15、nce into Part III of this Annual Report on Form 10-K.The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrants fiscal year ended December 31,2014.TABLE OF CONTENTS In this report,unless otherwise stated or the context otherwise indicates,referen

16、ces to“Five Prime,”“the company,”“we,”“us,”“our”and similar references refer to Five Prime Therapeutics,Inc.The Five Prime logo and RIPPS are our registered trademarks.This report also contains registered marks,trademarks and trade names of other companies.All other trademarks,registered marks and t

17、rade names appearing in this report are the property of their respective holders.i Page SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA ii PARTI Item 1 Business 1 Item1A Risk Factors 29 Item1B Unresolved Staff Comments 53 Item 2 Properties 53 Item 3 Legal Proceedings 53 Item 4 Mi

18、ne Safety Disclosures 53 PARTII Item 5 Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 54 Item 6 Selected Financial Data 56 Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations 58 Item 7A Quantitative a

19、nd Qualitative Disclosures About Market Risk 73 Item 8 Financial Statements and Supplementary Data 73 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 73 Item9A Controls and Procedures 73 Item 9B Other Information 74 PARTIII Item 10 Directors,Executive Offi

20、cers and Corporate Governance 75 Item 11 Executive Compensation 75 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 75 Item 13 Certain Relationships and Related Transactions,and Director Independence 75 Item 14 Principal Accountant Fees and Servi

21、ces 75 PART IV Item 15 Exhibits,Financial Statement Schedules 76 Signatures Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA This Annual Report on Form 10-K contains forward-looking statements.In some cases you can identify these statements by forward-looking wor

22、ds such as“believe,”“may,”“will,”“estimate,”“continue,”“anticipate,”“intend,”“could,”“would,”“project,”“plan,”“expect,”or similar expressions,or the negative or plural of these words or expressions.These forward-looking statements include statements concerning the following:These statements are only

23、 current predictions and are subject to known and unknown risks,uncertainties,and other factors that may cause our or our industrys actual results,levels of activity,performance or achievements to be materially different from those anticipated by the forward-looking statements.We discuss many of the

24、se risks in this report in greater detail under the heading“Risk Factors”and elsewhere in this report.You should not rely upon forward-looking statements as predictions of future events.Although we believe that the expectations reflected in the forward-looking statements are reasonable,we cannot gua

25、rantee future results,levels of activity,performance,or achievements.Except as required by law,we are under no duty to update or revise any of the forward-looking statements,whether as a result of new information,future events or otherwise,after the date of this report.We obtained the industry,marke

26、t and competitive position data in this annual report from our own internal estimates and research as well as from industry and general publications and research surveys and studies conducted by third parties.While we believe that each of these studies and publications is reliable,we have not indepe

27、ndently verified market and industry data from third-party sources.While we believe our internal company research is reliable and the market definitions we use are appropriate,neither such research nor these definitions have been verified by any independent source.ii our estimates regarding our expe

28、nses,revenues,anticipated capital requirements and our needs for additional financing;our or our partners ability to advance drug candidates into,and successfully complete,clinical trials alone or in combination with other drugs;the timing of the initiation,progress and results of preclinical studie

29、s and research and development programs;our expectations regarding the potential safety,efficacy or clinical utility of our product candidates;the implementation,timing and likelihood of success of our plans to develop companion diagnostics for our product candidates;our ability to maintain and esta

30、blish collaborations;the implementation of our business model and strategic plans for our business,drug candidates and technology;the scope of protection we establish and maintain for intellectual property rights covering our drug candidates and technology;the size of patient populations targeted by

31、 products we or our partners develop and market adoption of our potential products by physicians and patients;the timing or likelihood of regulatory filings and approvals;developments relating to our competitors and our industry;and our expectations regarding licensing,acquisitions and strategic ope

32、rations.Table of Contents PART I.Item 1.Business.Our Company We are a clinical-stage biotechnology company focused on discovering and developing novel protein therapeutics to improve the lives of patients with serious diseases.We currently have three product candidates in clinical development coveri

33、ng multiple potential indications.Each of our product candidates has an innovative mechanism of action and addresses patient populations for which better therapies are still needed.We have an emphasis in immuno-oncology,an area in which we have clinical and discovery programs and pharmaceutical coll

34、aborations.We are pursuing companion diagnostics for two of our clinical programs to allow us to select patients most likely to benefit from treatment and potentially accelerate clinical development and improve patient care.Our most advanced product candidates are identified below.We have a differen

35、tiated target discovery platform and library,which we believe encompasses substantially all of the bodys medically important targets for protein therapeutics,which positions us to explore pathways in cancer and inflammation and their intersection in immuno-oncology,an area of oncology with significa

36、nt therapeutic potential and a growing focus of our research and development activities.We are applying all aspects of our biologics discovery platform,including cell-based screening,in vivo screening,receptor-ligand matching technologies and bioinformatics,in our immuno-oncology research program.We

37、 have identified novel targets that we believe could be useful in immuno-oncology and are actively validating these and looking for additional targets.We plan to generate therapeutic proteins,including antibodies or ligand traps,directed to the targets we identify and advance select candidates into

38、pre-clinical development and eventually clinical development.Our Strategy Our goal is to use our proprietary platform to maintain our leadership position in the discovery of innovative protein therapeutic targets and to develop and commercialize protein therapeutics to treat cancer and inflammatory

39、diseases.The key elements of our strategy to achieve this goal are:1 FPA008 is an antibody that inhibits colony stimulating factor-1,or CSF1,receptor,or CSF1R,that we are developing in rheumatoid arthritis and plan to clinically develop in pigmented villonodular synovitis,or PVNS,and in combination

40、with nivolumab in multiple cancers.FPA144 is an antibody that inhibits fibroblast growth factor receptor 2b,or FGFR2b,that we are developing to treat patients with gastric(stomach)cancer.FP-1039/GSK3052230 is a fusion protein that“traps”and neutralizes cancer-promoting fibroblast growth factors,or F

41、GFs,involved in cancer cell proliferation and new blood vessel formation that our partner,GlaxoSmithKline,or GSK,is developing to treat patients with squamous non-small cell lung cancer,or NSCLC,and malignant pleural mesothelioma.Focus on protein therapeutics to treat cancer and inflammatory disease

42、s.Protein therapeutics accounted for over$75 billion in global sales in 2013 for the treatment of cancer and inflammatory diseases.However,there continue to be significant medical needs for novel and effective therapies.We believe that our library includes substantially all medically important extra

43、cellular proteins involved in cancer and inflammatory diseases,and,combined with the significant experience and expertise of our scientists in these fields,we believe we are well positioned to identify new targets and to develop effective,novel protein therapeutics.Continue to advance and expand our

44、 internal pipeline.We are currently developing three product candidates,FPA008,FPA144 and FP-1039.We plan to focus our resources on the development of these product candidates and on discovering and developing new product candidates with our platform.Employ smarter drug development techniques.We wil

45、l pursue indications and specific patient populations in which activity of our product candidates can be assessed early in clinical development,potentially in Phase 1 clinical trials.We also plan to use companion diagnostics,where appropriate and feasible,to identify patients most likely to respond

46、to our product candidates,an approach we are currently pursuing in two of our clinical programs.We believe selecting patients using companion diagnostics should increase the probability of success in our clinical trials.Table of Contents Our Clinical Pipeline FPA008 FPA008 is an antibody that inhibi

47、ts colony stimulating factor-1,or CSF1,receptor,or CSF1R.CSF1R is a cell surface protein that controls the survival and function of certain immune response cells called monocytes and macrophages.Monocytes and macrophages are elevated or activated in multiple disease settings.In cancer,macrophages su

48、ppress the immune systems ability to kill cancer cells.In joint diseases,such as PVNS and RA,macrophages contribute to inflammation.FPA008 blocks the activation and survival of these cell types.In many cancers,inhibition of CSF1R reduces the number of immunosuppressive tumor-associated macrophages,o

49、r TAMs,thereby facilitating an immune response against tumors.We believe the combination of FPA008 with T cell checkpoint inhibitors,such as PD-1 inhibitors,or immune agonists may have synergistic therapeutic effects in treating cancer.In PVNS,a rare CSF1-driven tumor with considerable morbidity for

50、 which there are no currently approved therapies,inhibition of CSF1R reduces infiltration into the joint of monocytes and macrophages,which form the bulk of the tumor mass,resulting in tumor shrinkage.Inhibition of CSF1R in inflamed joints in rheumatoid arthritis,or RA,patients should block the prod

51、uction of inflammatory cytokines by macrophages and inhibit osteoclasts,monocyte-lineage cells that can cause bone erosions and joint destruction.Until now,it has been difficult to block monocytes and macrophages because the protein targets that control these cells were only partially known.Using ou

52、r library and proprietary platform,we discovered a novel protein target called interleukin-34,or IL-34,that is a key regulator of monocyte and macrophage numbers and activity and that is found in inflamed joints of RA patients.Once we discovered IL-34,we were able to use our protein library and our

53、ligand-receptor matching technology to identify its receptor,CSF1R.This receptor is known to be expressed on the surface of monocytes and macrophages.Before our discovery of IL-34,CSF1R was thought to have only one ligand called CSF1.Both CSF1 and IL-34 bind to and activate CSF1R and therefore promo

54、te the survival and activity of monocytes and macrophages.FPA008 blocks the binding of both CSF1 and IL-34 to CSF1R and thereby inhibits the activity and survival of these cells(Figure 1).2 Build a commercial enterprise by retaining rights for products in targeted specialty markets.We plan eventuall

55、y to build sales and marketing capabilities in selected specialty markets in the United States that we can adequately serve with a focused commercial organization.We have retained global rights to FPA008 and FPA144.In our collaboration with GSK for FP-1039,we have an option to co-promote the product

56、 in the United States.Establish additional product,clinical and discovery collaborations to supplement our internal development capabilities and generate funding.From time to time,we expect to establish additional product and clinical collaborations.These collaborations supplement our development,ma

57、nufacturing,regulatory and commercialization capabilities,provide us with significant funding to advance our pipeline and validate our technology.In addition,because our discovery platform is broadly applicable,we plan to opportunistically establish discovery collaborations in cancer,immuno-oncology

58、,inflammation or other disease areas if we believe that such collaborations are financially and strategically warranted.Table of Contents Figure 1:FPA008 Mechanism of Action FPA008 in Immuno-Oncology We believe that there is a strong rationale for combining FPA008 with checkpoint inhibitors in cance

59、r,including that:These points suggest that combining an anti-CSF1R antibody,such as FPA008,with an anti-PD1 antibody,such as nivolumab,may benefit cancer patients.In November 2014,we entered into a clinical trial collaboration agreement with Bristol-Myers Squibb Company,or BMS,under which we and BMS

60、 are collaborating under a development plan to evaluate the safety,tolerability and preliminary efficacy of combining nivolumab,BMSs investigational PD-1 immune checkpoint inhibitor,with FPA008.We and BMS plan to initially study the FPA008-nivolumab combination as a potential treatment for patients

61、with non-small cell lung cancer,or NSCLC,melanoma,head and neck cancer,pancreatic cancer,colorectal cancer and malignant glioma in a Phase 1a/1b trial,which we expect to commence in mid-2015.We plan to explore tumor-and blood-based biomarkers to better understand which patients are more likely to re

62、spond to this novel combination.We are responsible for conducting the trial of the FPA008-nivolumab combination under the development plan with BMS.We believe that FPA008 may have additive or synergistic therapeutic effects when combined with other T cell checkpoint inhibitors,in addition to PD-1 in

63、hibitors such as nivolumab,or immune agonists.We plan to continue to evaluate the potential clinical development of FPA008 in combination with these other checkpoint inhibitors and immune agonists.FPA008 in PVNS PVNS is a rare,locally aggressive tumor of the synovium.It is characterized by local ove

64、r-expression of CSF1,which recruits macrophages into the joints,forming the non-malignant tumor mass.It is associated with high morbidity,and there are no approved therapies for the condition.We are preparing to initiate a Phase 1/2 clinical trial of FPA008 in patients with PVNS in mid-2015.In the P

65、hase 1 component of this trial,we plan to select the optimal dose in PVNS patients for the Phase 2 portion.After identifying the optimal dose,the primary objectives of the Phase 2 portion of this trial will be to assess tumor shrinkage,and key secondary objectives include duration of response and jo

66、int function in patients with PVNS.PVNS is an orphan indication,and we believe patients with this disease will benefit from CSF1R inhibition achieved with the administration of FPA008.We expect to have preliminary efficacy data from the Phase 1 portion of this trial in patients with PVNS by the end

67、of 2015 or early 2016.3 TAMs are immunosuppressive and act by inhibiting CD8 T cell responses while enhancing recruitment and differentiation regulatory T cells,or Tregs;TAMs often correlate with poor prognosis in cancer patients;TAMs appear to be sensitive to CSF1R inhibition;and We believe that bl

68、ockade of CSF1R in combination with checkpoint inhibitors(e.g.,anti-PD1 or anti-CTLA4 antibodies)or immune agonists(e.g.,anti-CD40 antibodies)synergistically induces tumor regressions.Table of Contents FPA008 in Rheumatoid Arthritis(RA)We believe FPA008 has the potential to be more efficacious than

69、current therapies in inflammatory conditions like rheumatoid arthritis because it targets a group of important inflammatory monocytes and macrophages that are key drivers of the inflammation and joint destruction process and are not targeted by currently approved drugs.These cells depend on CSF1R fo

70、r their activity and survival.These cells secrete a variety of proteins,including tumor necrosis factor alpha,or TNF ,interleukin-6,or IL-6,and interleukin-1 beta,or IL-1,that attract and activate inflammatory cells.Derivatives of these inflammatory cells directly destroy bone tissue in joints.Until

71、 now,it has been difficult to block monocytes and macrophages because the protein targets that control these cells were only partially known.Protein therapeutics that are approved to treat RA,such as Humira,Remicade,Enbrel and Actemra,only block single factors released from monocytes and macrophages

72、,and other protein therapeutics such as Orencia (abatacept)and Rituxan (rituximab)do not directly inhibit monocytes and macrophages or their factors.FPA008 reduces the numbers and activity of monocytes and macrophages,and prevents the production and release of inflammatory factors.The advantage of t

73、his approach in comparison to,for example,Humira and Actemra,is that the production of multiple deleterious factors is inhibited simultaneously,potentially resulting in better control of inflammation.Another advantage of blocking CSF1R is that a special macrophage that breaks down bone,called an ost

74、eoclast,is inhibited.Therefore,not only could FPA008 potentially be superior in reducing inflammation,but it may also directly suppress bone destruction in the joints of patients with inflammatory diseases.Preclinical Results in RA.We and others have demonstrated that both IL-34 and CSF1 are present

75、 at increased levels in the inflamed joints of patients with RA.Biopsy samples of inflamed joints from patients with RA incubated with FPA008 ex vivo showed reduced levels of the inflammatory proteins TNF ,IL-6 and IL-1 compared with samples incubated with a control antibody(Figure 2).These studies

76、provide evidence that FPA008 can simultaneously inhibit the production of multiple cytokines that cause inflammation in RA.Figure 2:Incubation of joint tissue from patients with RA with FPA008 results in decreased TNF ,IL-6 and IL-1(1)Clinical Development of FPA008 in RA.We are currently conducting

77、a Phase I trial in which we initially tested single-and multiple-ascending doses of FPA008 in healthy volunteers,and are now testing FPA008 in RA patients.In the healthy volunteer portion of this Phase 1 trial,which concluded in 2014,we administered FPA008 in either a single dose or two doses admini

78、stered 14 days apart to 36 healthy volunteers.We also administered placebo to an additional 10 healthy volunteers during this portion of the trial.In November 2014,we presented results from the healthy volunteer cohorts of this Phase 1 trial in a poster presentation at the 2014 American College of R

79、heumatology and the Association of Rheumatology Health Professionals Annual Scientific Meeting.The preliminary results from the healthy volunteer portion of the trial demonstrated that FPA008 was well tolerated at doses up to 3 mg/kg.Additionally,at all dose levels tested,we observed pharmacodynamic

80、s,or PD,effects of suppression of non-classical CD16+monocytes(Figure 3)and a decrease of bone turnover biomarkers(CTx,Trap5),all of which we believe indicate the potential for clinical benefit in RA patients.We observed no dose-limiting toxicities during the healthy volunteer portion of this trial.

81、The most common FPA008 treatment-related toxicities were pruritus,eyelid edema with or without facial swelling,fatigue and headache.These events were mild(grade 1 or 2)and reversible.Some dose-dependent elevations of CK,LDH and AST enzymes were observed,but were not associated with clinical signs or

82、 symptoms,were reversible and were expected based on FPA008s inhibition of Kupffer cells in the liver,which clear these enzymes from the blood.4 (1)Each pair of linked dots corresponds to samples from the same patient and treated with either a control that does not bind to CSF1R,or with FPA008.Table

83、 of Contents This trial has since advanced into an open-label evaluation of FPA008 at multiple dose levels in RA patients whose disease is not responsive to methotrexate therapy.The primary endpoint of this Phase 1 trial in RA is safety,with secondary endpoints including pharmacokinetics,PD,and dise

84、ase activity,as measured by American College of Rheumatology(ACR)scores and magnetic resonance imaging of affected joints.We plan to present preliminary data from part 3 of this Phase 1 trial in RA patients by the end of 2015.Figure 3:Non-classical CD16+Monocytes After a Single Dose FPA144 FPA144 is

85、 an antibody that inhibits fibroblast growth factor receptor 2b,or FGFR2b,that we are developing to treat a subset of gastric(stomach)cancer patients whose tumors have evidence of high levels of FGFR2b,as determined by a molecular diagnostic test.This subset of tumors with aberrant FGFR2 protein exp

86、ression is associated with lower overall survival.We believe that approximately 5%of gastric cancer patients have FGFR2 gene-amplified tumors that overexpress FGFR2b,and that additional gastric cancer patients have tumors that overexpress FGFR2b protein without gene amplification.Because FPA144 is a

87、 targeted agent for a selected patient population with a high unmet need,we believe there is the potential for an accelerated development path for FPA144.We believe that FPA144 acts on tumor cells in two ways:In preclinical studies,FPA144 was highly effective in blocking the growth of gastric tumors

88、 that produce abnormally high levels of FGFR2b.This is demonstrated in Figure 4,where human gastric tumors with fibroblast growth factor receptor 2,or FGFR2,gene amplification were treated with increasing doses of FPA144,resulting in significant inhibition of tumor growth and tumor shrinkage when co

89、mpared to a control antibody.Figure 4:Increasing doses of FPA144 inhibit growth of human gastric tumors that contain an amplification of the FGFR2 gene in a mouse model 5 FPA144 binds to FGFR2b and blocks certain FGFs from binding to FGFR2b stopping these FGFs from promoting the growth of the tumor

90、cells;and Once FPA144 binds to FGFR2b on the surface of the tumor cell,FPA144 engages cells of the immune system to kill the tumor cell in a process called antibody-dependent cell-mediated cytotoxicity,or ADCC.Table of Contents Clinical Development of FPA144.In December 2014,we began a Phase 1 clini

91、cal trial of FPA144.We are currently enrolling patients with any solid tumor to assess safety and tolerability and to identify the optimal dose for gastric cancer patients.For the Phase 1b part,we will enroll gastric cancer patients whose tumors show evidence of FGFR2b protein overexpression or FGFR

92、2 gene amplification,as identified through molecular diagnostic assays.Endpoints of the trial include safety and overall response rate.We expect to complete the dose escalation portion of this trial and begin the expansion portion in molecular diagnostically selected gastric cancer patients by the e

93、nd of 2015.We also plan to present preliminary safety data from this trial by the end of 2015.If FPA144 demonstrates activity in gastric cancer patients in the Phase 1 trial,we plan to conduct a pivotal trial of FPA144 as a monotherapy in gastric cancer patients and,in a separate Phase 1b trial,test

94、 FPA144 in combination with standard of care chemotherapy in newly diagnosed gastric cancer patients.We may also consider initiating a Phase 1 clinical trial in Japan for further development in that country.If we see early evidence of a therapeutic effect in patients,we intend to meet with regulator

95、y authorities to discuss the possibility of an expedited clinical development and regulatory pathway for FPA144.We intend to seek orphan drug designation with the FDA before the end of the Phase 1 clinical trial,and if eligible,expedited review and approval programs,including breakthrough therapy an

96、d fast track designations for FPA144.Market Opportunity.Globally,gastric cancer is the sixth most common malignancy with the third highest mortality.In the US,the prevalence of gastric cancer is approximately 74,000 patients,of which we believe approximately 3,700 have FGFR2 gene-amplified tumors th

97、at overexpress FGFR2b and are more likely to respond to FPA144.We believe there are additional gastric cancer patients whose tumors overexpress FGFR2b protein without gene amplification who also are more likely to respond to FPA144.Globally,the prevalence of gastric cancer is approximately 1.5 milli

98、on patients,of which we estimate that approximately 75,000 have FGFR2 gene-amplified tumors that overexpress FGFR2b and that there are additional gastric cancer patients whose tumors overexpress FGFR2b protein without gene amplification who are likely to respond to FPA144.Given the relatively small

99、population of gastric cancer patients that overexpress the FGFR2b protein in the US and the poor survival of these patients,we believe that this indication will be an orphan indication in the United States.By developing FPA144 for an orphan indication with a significant unmet medical need,we may be

100、able to accelerate the development and approval of FPA144 in the United States.We believe that our clinical development organization is well suited to conduct such a focused,capital-efficient clinical development plan for FGFR2 gene-amplified or FGFR2b over-expressing gastric cancer.We plan to devel

101、op and commercialize FPA144 ourselves in the United States.We plan to seek a collaborator to commercialize FPA144 outside of the United States.FP-1039 FP-1039 is a protein therapeutic we designed to“trap”and neutralize cancer-promoting FGFs.These FGFs act by binding to and activating FGFRs.FGFs and

102、FGFRs regulate tumor cell proliferation and the growth of new blood vessels,a process called angiogenesis.The FGF family consists of 22 known proteins called ligands that exert their physiological effect on cells by binding to four FGFRs(FGFR1,FGFR2,FGFR3 and FGFR4).Dysregulation of the FGF pathway

103、has been linked to the growth of human tumors and poor patient prognosis.There are two mechanisms by which FP-1039 may provide clinical benefit in certain tumor settings.The first,by trapping the FGF ligands that help drive tumor growth or survival in which the FGFR1 gene is amplified,and the second

104、,by trapping the ligands,such as FGF-2,that are over-expressed or over-produced by tumor cells.Certain tumors produce an excessive number of FGFR1 genes,a process known as gene amplification.This gene amplification results in excess production,or the over-expression,of FGFR1 protein on the surface o

105、f the tumor cell.This over-expression of FGFR1 leads to increased binding of FGFs,which stimulates uncontrolled proliferation of some types of tumor cells.These tumors include squamous non-small cell lung cancer,or squamous NSCLC.Patients who have squamous NSCLC with FGFR1 gene amplification have si

106、gnificantly reduced survival relative to comparable patients whose tumors do not have this amplification.In other settings,certain tumors have uncontrolled cancer cell proliferation due to over-expression of some FGFs,such as FGF-2,that promote tumor growth through angiogenesis.By triggering angioge

107、nesis,cancerous cells can fuel their metabolic needs and direct their own uncontrolled cell division.Mesothelioma is a tumor that has some of the highest over-expression levels of FGF-2 and is a tumor setting of high unmet need.6 Table of Contents Unlike other therapies directed to FGFR1 that indisc

108、riminately block all FGFs,FP-1039 is designed to only block cancer-promoting FGFs that bind to FGF receptor 1,or FGFR1,and therefore may be associated with better tolerability than other known drug candidates targeting the FGF pathway less selectively.For example,FP-1039 does not bind to an FGF call

109、ed FGF-23,which regulates phosphate levels in the blood,and therefore FP-1039 does not change phosphate levels in the blood.This is in contrast to small molecule inhibitors of FGF receptors being developed by Novartis AG,AstraZeneca plc and others,which block the activity of both cancer-associated F

110、GFs and FGF-23,and are reported to cause abnormally high phosphate levels in the blood,a condition known as hyperphosphatemia.High phosphate levels can lead to calcification in tissues,including blood vessels.In our Phase 1 clinical trial,treatment with FP-1039 in patients with solid tumors was not

111、associated with the side effects seen in the clinical trials with small molecule FGFR inhibitors,which included hyperphosphatemia and retinal detachment.We expect FP-1039 to be better tolerated by patients.We also expect that it could be used in dosages high enough to fully block cancer-promoting FG

112、Fs,and that it has the potential to be safely combined with standard of care chemotherapy.FP-1039 Preclinical Data.In preclinical testing,we observed inhibition of tumor growth with single-agent FP-1039,particularly in tumors with FGFR1 gene amplification,including squamous NSCLC(Figure 5).Figure 5:

113、Treatment with FP-1039 inhibits growth of squamous NSCLC tumors with FGFR1 gene amplification in mouse models Furthermore,when combined with standard chemotherapy,FP-1039 treatment improved anti-tumor activity in preclinical models.Figure 6 shows results in a preclinical model of squamous NSCLC with

114、 FGFR1 gene amplification in which the addition of FP-1039 to chemotherapy resulted in greater tumor growth inhibition than either FP-1039 or chemotherapy alone.Figure 6:Addition of FP-1039 to standard chemotherapy results in greater inhibition of growth of squamous NSCLC tumors with FGFR1 gene ampl

115、ification in mouse models FGF-2 ligand overexpression is highest in mesothelioma among all tumor models studied and is thought to contribute to tumor growth and angiogenesis.In preclinical testing,we observed inhibition of mesothelioma tumor growth with single-agent FP-1039(Figure 7).7 Table of Cont

116、ents Figure 7:Treatment with FP-1039 inhibits growth of mesothelioma in mouse models Clinical Development of FP-1039.We completed a Phase 1 clinical trial of FP-1039 designed to assess the safety,tolerability and pharmacokinetics of single-agent FP-1039 administered weekly to patients with metastati

117、c tumors.The 39 patients enrolled in the study had a variety of tumors,including advanced or metastatic breast cancer,lung cancer,colon/rectal cancer,prostate cancer,head and neck cancers or uterine cancer.Overall,FP-1039 was well tolerated over the dose range studied and no maximum tolerated dose w

118、as observed in this study.As a result,we believe that FP-1039 will be well tolerated in combination with standard of care chemotherapy.In the Phase 1 clinical trial,FP-1039 treatment was not associated with hyperphosphatemia or retinal detachment,both of which have been observed in patients enrolled

119、 in trials with the small molecule FGFR inhibitors.We also studied blood levels of FGF-2,one of the most important cancer-promoting FGFs,and observed a significant decrease of FGF-2 in all patients tested.Our partner,GSK,is conducting a Phase 1b clinical trial of FP-1039 in combination with several

120、chemotherapies in patients with FGFR1 gene-amplified or FGF-2 over-expressing tumors.The trial is designed as a three-arm,multicenter,non-randomized,parallel-group,uncontrolled,open-label Phase 1b clinical trial with up to 120 patients at approximately 40 clinical sites.This Phase 1b clinical trial

121、is designed to evaluate the safety,tolerability,dosage and overall response rate of FP-1039:GSK has completed the planned dose escalation portion in one of the three arms and has begun the expansion portion of that arm.All arms continue to enroll patients.We expect GSK to present data from this tria

122、l at a scientific meeting by the end of 2015.GSK is responsible for the development and commercialization of FP-1039 in the United States,the European Union and Canada.We have an option to co-promote FP-1039 in the United States.Clinical development of FP-1039 in patients with FGFR1 gene-amplified t

123、umors will be accompanied by a diagnostic test designed to identify the selected patient population we believe to be the most likely to benefit from FP-1039 and to enable streamlined clinical development.Patients with FGFR1 gene-amplified tumors are identified by staining tests performed on tumor sa

124、mples.In the current Phase 1b trial of FP-1039,GSK is using a third party central lab to test tumor samples from prospective subjects to identify those with FGFR1 gene-amplified tumors.Neither we nor GSK have yet engaged a third party to develop any companion diagnostic that would be used in any fut

125、ure clinical trials of FP-1039 or required for the registration and approval of FP-1039.In Arm C,enrolled patients with mesothelioma will have their tumors analyzed retrospectively for over-expression of FGF-2.Market Opportunity.We believe there are currently no approved therapies that specifically

126、block FGFs or FGFRs.We and our partner GSK are currently focusing development of FP-1039 in cancers with FGF pathway dysregulation,which has been linked to the growth of human tumors and poor patient prognosis.We believe the selected patients with FGF pathway dysregulation would be most likely to be

127、nefit from treatment with FP-1039.Based on literature reports and our own data,we estimate that between 10 to 20%of squamous NSCLCs have FGFR1 gene amplification,which would translate to a prevalence of 5,000 to 10,000 squamous NSCLC patients in the US and approximately 23,000 to 46,000 squamous NSC

128、LC patients outside the US with FGFR1 gene amplification.Mesothelioma has the highest FGF-2 levels among various cancers that we have evaluated and a majority of mesothelioma patients have tumors with abnormally high levels of FGF-2.Mesothelioma is an orphan indication in the United States with a pr

129、evalence of about 4,000 patients and incidence of about 3,000 patients.Worldwide,there are a total of approximately 14,000 cases of mesothelioma diagnosed each year.8 in combination with paclitaxel and carboplatin in previously untreated metastatic squamous NSCLC(Arm A);in combination with docetaxel

130、 in metastatic squamous NSCLC that has progressed after previous therapy(Arm B);or in combination with pemetrexed and cisplatin in mesothelioma(Arm C).Table of Contents In March 2011,we entered into a license and collaboration agreement with GSK,or the FP-1039 license,pursuant to which we granted to

131、 GSK an exclusive license to develop and commercialize FP-1039 and other FGFR1 fusion proteins in the United States,the European Union and Canada.GSK controls the development of FP-1039,which GSK refers to as GSK3052230,in these territories.We retain rights to develop and commercialize FP-1039 in te

132、rritories outside the United States,the European Union and Canada and we have a co-promotion option in the United States.Immuno-Oncology Drug Discovery Program Overview.We are currently focusing our internal research efforts in the area of immuno-oncology.Cancers grow and spread because tumor cells

133、have developed ways to evade elimination by the immune system.For example,cancer cells make proteins which apply the“brakes”to immune cells and prevent the immune cells from killing the tumor cells.One of the most exciting recent discoveries in cancer therapy has been the identification of ways to r

134、elease these“brakes”and allow the immune cells to once again kill tumor cells.This new approach has the potential of not only reducing tumor growth like traditional therapies,but potentially eliminating the cancer entirely in some patients.New targets for immuno-oncology are needed to address those

135、patients that do respond to or cannot tolerate agents currently in development.We believe we are well positioned to identify new targets and protein drugs in immuno-oncology because:We are applying all aspects of our biologics discovery platform,described below,including cell-based screening,in vivo

136、 screening,receptor-ligand matching technologies and bioinformatics in our immuno-oncology research program.We have identified promising new antibody targets and ligand traps and are actively screening for and validating additional targets.We plan to advance select antibody and ligand trap candidate

137、s into pre-clinical development and eventually clinical development.Our Biologics Discovery Platform.Targets for protein therapeutics are proteins in the body that when inappropriately produced or altered can result in human diseases.Protein therapeutics can be designed to reverse these disease-caus

138、ing mechanisms.Traditional ways to discover new targets for protein therapeutics have relied on a slow“trial-and-error”approach studying a single or a small number of proteins at a time.There are more than 5,700 proteins in the body that represent potential protein therapeutic targets,but only about

139、 30 are targeted by currently marketed protein drugs in cancer and inflammatory diseases.We spent seven years successfully developing a platform to improve the traditionally difficult and slow process of discovering new protein therapeutics.The platform is based on two components:We believe our plat

140、form improves and accelerates the discovery of new protein targets and protein therapeutics because it can:9 Protein drugs will be the best therapeutic strategy in immuno-oncology.Anti-tumor immunity often involves interactions between extracellular proteins that are not easily modulated with small

141、molecule drugs.We are focused on discovering and developing novel protein therapeutics.There are likely many new targets yet to be discovered.For example,the protein partners are not known for several of the proteins thought to have a role in modulating anti-tumor immunity,such as TIM-3,VISTA,B7-H3

142、and B7-H4.There are likely many additional proteins that regulate the immune response to tumors that have not yet been described or characterized.Our biologics discovery platform is designed to identify targets such as those involved in immuno-oncology.Our proprietary library of more than 5,700 huma

143、n extracellular proteins contains many proteins that are candidate immunomodulators.We are using our discovery platform to discover novel pathways and to identify protein partners for molecules known to be involved in the anti-tumor immune response.a proprietary library of more than 5,700 human extr

144、acellular proteins that we believe is the most comprehensive collection of fully functional extracellular proteins and is an abundant source of medically relevant novel targets for protein therapeutics;and proprietary and new technologies for producing and testing thousands of proteins at a time.ide

145、ntify novel medically relevant protein targets and protein therapeutics that have little or no previously known biological function or are not in the public domain and cannot easily be discovered by other methods;determine the best protein target among many alternatives for a particular disease by s

146、creening and comparing nearly all possible medically important targets simultaneously;and identify new targets more quickly and efficiently than previously possible because it can produce and test thousands of proteins at a time rather than one or just a few at a time.Table of Contents We have used

147、our platform to identify dozens of targets validated in rodent models,including in collaboration with our partners,and to build a growing pipeline of drug candidates.We believe our platform is particularly well positioned to explore new pathways in cancer,inflammation and their intersection in immun

148、o-oncology,a growing focus of our discovery and clinical activities.Novel Technologies to Produce and Screen Our Library in High Throughput.We have developed a suite of technologies for producing and screening the proteins in our library that addresses the limitations of traditional drug screening m

149、ethods when applied to proteins.These technologies are composed of a combination of our own proprietary technology along with other publicly available technologies,including technologies we have in-licensed on a non-exclusive basis from third parties.Generally,we protect these proprietary biologics

150、discovery platform technologies as trade secrets or know-how and do not seek to obtain patents to cover the biologics discovery platform technologies we develop.High-Throughput Protein Production.The difficulty of producing large numbers of new proteins in a functional form often presents a limitati

151、on in the discovery of new protein drugs.Our high-throughput protein production system includes proprietary technologies developed over several years that allow us to produce more than 5,700 proteins per week at therapeutically relevant amounts and with a high level of consistency.We produce the pro

152、teins for our cell-based screening system using human cells to best ensure proteins are made in the same correct,functional form in which they are made in the human body.Our technologies enable us to reliably produce our entire protein library in less than three weeks.In contrast,typical methods pro

153、ducing one or a few proteins at a time would take years to produce a library of this size and would have to be repeated for each target discovery screen.Cell-Based Screens to Identify Protein Therapeutic Targets.We design complex cell-based screens that better model the fundamental biological proces

154、ses underlying the disease of interest and adapt them to be compatible with our protein library.We have undertaken what we believe to be some of the most complex cell-based screens in high throughput with protein libraries,including screens with rare stem cells and combinations of diseased primary h

155、uman cell types.We execute these screens on automated,state-of-the-art screening systems designed and built in-house and analyzed using software developed by us.To date,we have screened each of the proteins in our protein library in screens using approximately 50 different cell types.Rapid In Vivo P

156、rotein Production System.Our rapid in vivo protein production system,or RIPPS ,enables us to produce and test the proteins in our library directly in vivo in virtually any rodent model of disease and in high throughput.RIPPS technology identifies new targets that cannot be easily identified in other

157、 ways.Further,RIPPS not only identifies novel targets for protein therapeuticsfor example,targets for therapeutic antibodiesit can also identify proteins that are new therapeutics themselves because each protein in the library is tested for its ability to affect a disease in a rodent model.RIPPS avo

158、ids the costly and time-consuming process required for conventional in vivo testing of efficacy and safety that includes expression,scale up,purification,characterization and formulation of each protein one at a time.Receptor-Ligand Matching.Some proteins are referred to as ligands and exert their a

159、ctions by binding to a receptor on a cell surface.In order to optimally treat some diseases,one must know the identity of both the receptor and the ligand.Our comprehensive collection of protein ligands and extracellular domains of cell surface receptors provides us with the ability to identify liga

160、nd and receptor pairs.Historically,this information has led to new therapeutic targets by identifying the best target in a disease pathway and has increased the probability of success of drug development by enhancing understanding of the mechanism of action of a therapeutic candidate.Growing Databas

161、e of Protein Function.We have tested each of the proteins in our library in numerous screens on different cell types.This provides us with an extensive database of how each protein performs in different screens and whether it is specific to a given disease process or has a broader set of activities.

162、The cumulative data from all the screens allows us to identify the most appropriate target.Collaborations A part of our strategy is to establish product,clinical and discovery collaborations.These collaborations supplement our development,manufacturing,regulatory and commercialization capabilities,p

163、rovide us with significant funding to advance our pipeline and validate our technology.Our discovery collaborations also have demonstrated the breadth of our discovery platform and validated our discovery capabilities.Because our discovery platform is broadly applicable,we plan to opportunistically

164、establish additional discovery collaborations in cancer,immuno-oncology,inflammation or other disease areas if we believe that such collaborations are financially and strategically warranted.A summary of our key product,clinical and discovery collaborations is set forth below.10 Table of Contents Cl

165、inical Trial Collaboration with BMS In November 2014,we entered into a clinical trial collaboration agreement,referred to as the clinical trial collaboration,with BMS,pursuant to which we are collaborating with BMS under a development plan to evaluate the safety,tolerability and preliminary efficacy

166、 of combining our FPA008 antibody with nivolumab,BMSs investigational PD-1 immune checkpoint inhibitor,which we refer to together as the combined therapy.Under the development plan,BMS and we plan to initially study the combined therapy as a potential treatment for patients with non-small cell lung

167、cancer,or NSCLC,melanoma,head and neck cancer,pancreatic cancer,colorectal cancer and malignant glioma in a Phase 1a/1b study,which we expect to commence by the second half of 2015.BMS and we may,by mutual agreement,expand the scope of the development plan to study the combined therapy in clinical s

168、tudies in additional tumor types under the clinical trial collaboration.We are responsible for conducting the clinical study of the combined therapy under the development plan.The clinical trial collaboration provides for exclusivity with respect to the development,with a collaborative partner,of co

169、mbination regimens of an anti-PD-1 or PD-L1 antagonist together with an anti-CSF1R antagonist,any of which we refer to as a restricted combination.If either party would like to conduct a clinical trial to study a restricted combination in a particular tumor type that the parties are not then develop

170、ing or preparing to develop under the development plan,or a proposed new tumor type,then that party may propose that the parties conduct the clinical trial to study the combined therapy under the development plan under the clinical trial collaboration.The non-proposing party will have the right to r

171、eview such proposed clinical trial and a limited period of time to elect to conduct the clinical trial under the clinical trial collaboration,which election period will not begin in any event until after(i)certain dose escalation and pharmacodynamic conditions are met in the planned Phase 1a portion

172、 of the first clinical study of the combined therapy;or(ii)the first subject is dosed in the Phase 1b portion of the first clinical study of the combined therapy,whichever is earlier,and which date we refer to as the initial results date.If the non-proposing party does not elect to conduct the clini

173、cal trial under the clinical trial collaboration within the limited review and election period,the original proposing party may thereafter conduct such clinical trial to study a restricted combination in the proposed tumor type and such proposed tumor type would thereafter no longer be exclusive und

174、er the clinical trial collaboration.Under the terms of the agreement,BMS paid us a one-time fee of$30.0 million in December 2014.If a change of control of FivePrime closes prior to the Initial Results Date,defined as the earlier date of(i)certain dose escalation and pharmacodynamics conditions are m

175、et in the planned Phase 1a portion of the first clinical study of the combined therapy;or(ii)the first subject is dosed in the Phase 1b portion of the first clinical study of the combined therapy,then if:we would be obligated to pay to BMS the lesser of(x)$30.0 million or(y)10%of the aggregate purch

176、ase price paid to us or our stockholders at the closing of such change of control(with any contingent consideration being risk-adjusted and discounted).BMS is responsible for all third party expenses that are directly attributable to the conduct of activities under the development plan,other than ma

177、nufacturing activities.For manufacturing costs related to FPA008,we are responsible for the full expense of the manufacture and supply of FPA008 for any Phase 1a clinical study under the development plan and each party will be responsible for one half of the full expense of the manufacture and suppl

178、y of FPA008 for any other clinical study under the development plan.BMS is responsible for the full expense of the manufacture and supply of nivolumab for any clinical study under the clinical trial collaboration.Each party will be responsible for its own internal costs,including internal personnel

179、costs,incurred in the conduct of activities under the development plan.If we wish to out-license the right to commercialize FPA008 in any territory at any time on or before the date that is 90 days after the initial results date,which we refer to as the ROFR offer period,then for a period of three m

180、onths BMS will have the exclusive right to negotiate an exclusive license to develop and commercialize FPA008 in such territory,which we refer to as BMSs right of first refusal.If BMS does not exercise its right of first refusal or if we do not reach an agreement with BMS for such exclusive license

181、within the three-month negotiation period,then we would be free to negotiate the out-license of such rights to FPA008 in such territory;provided that we must provide BMS 10 business days to match any offer from a third party for such rights received prior to the date that is 90 days after the end of

182、 BMSs ROFR offer period.11 immediately prior to such change of control,the acquirer in such change of control(or any of its affiliates)owns or controls an anti-PD-1 or anti-PD-L1 antagonist that is then in clinical development for use in treating cancer or is then being commercialized for use in tre

183、ating cancer;BMS is using commercially reasonable efforts in the performance and fulfillment of its activities under the clinical trial collaboration;the parties are developing or pursuing the development of the combined therapy under the clinical trial collaboration;and a change of control of BMS h

184、as not occurred,Table of Contents After BMSs ROFR offer period,if we wish to out-license the right in any territory to commercialize FPA008 for use in cancer,then BMS will have a three-month right of first negotiation to obtain exclusive rights to FPA008 for such territory.If BMS does not exercise i

185、ts right of first negotiation or if we do not reach an agreement with BMS for such rights within such three-month period,then we would be free to out-license any and all rights to FPA008 for such territory.Unless earlier terminated by either party,the clinical trial collaboration agreement will cont

186、inue until the date that is 90 days after the completion of all clinical trials under the clinical trial collaboration,the delivery of all study data by both parties and the completion of all obligations under the development plan.Either party may terminate the clinical trial collaboration with writ

187、ten notice(i)if the other party is in material breach and such breach has not been cured within the applicable cure period,(ii)if either party deems it necessary to protect the safety,health or welfare of the subjects enrolled in a clinical trial or(iii)90 days following the commencement of a clinic

188、al hold.Upon any termination of the clinical trial collaboration,depending upon the circumstances,the parties have varying rights and obligations regarding the completion of any ongoing clinical trials.FP-1039 License and Collaboration with GSK In March 2011,we entered into a license and collaborati

189、on agreement,or the FP-1039 license,with Human Genome Sciences,which was acquired by GSK in August 2012,pursuant to which we granted to GSK an exclusive license to develop and commercialize FP-1039 and other FGFR1 fusion proteins in the United States,the European Union and Canada.GSK controls the de

190、velopment of FP-1039,which GSK refers to as GSK3052230,in these territories.We retain rights to develop and commercialize FP-1039 in territories outside the United States,the European Union and Canada.GSK paid us an upfront license fee of$50 million in connection with its entry into the FP-1039 lice

191、nse.GSK is obligated to pay us contingent payments,which could total up to$435 million based upon the achievement of pre-specified development,regulatory and commercial criteria.These contingent payments are composed of up to$70 million for the pre-specified development criteria,up to$195 million fo

192、r the pre-specified regulatory criteria,and up to$170 million for the pre-specified commercial criteria.If certain manufacturing criteria are not met,these aggregate potential contingent payments could total up to$310 million instead of$435 million.We are also eligible to receive tiered royalty paym

193、ents on a country-by-country basis from the low-double digits to the high-teens based on net sales of FP-1039 for the longer of the life of certain patents covering FP-1039 in such country or 12 years after the first commercial sale of FP-1039 in such country.We cannot determine the date on which GS

194、Ks royalty payment obligations to us would expire because no commercial sales of FP-1039 have occurred and the last-to-expire relevant patent covering FP-1039 in a given country may change in the future.Currently,the last-to-expire issued patents covering FP-1039 will expire in 2031 in the United St

195、ates and in 2026 in certain European countries.Additional patents that may issue in the United States,Europe and Canada from pending patent applications would expire between 2026 and 2034.These patent expiration dates do not reflect any patent term extensions that may be available,which are not dete

196、rminable at this time.We have a minority co-promote option for FP-1039 in the United States.To exercise our right to co-promote FP-1039,we must notify GSK prior to the later of(i)five days after the filing of the first Biologic License Application,or BLA,with the FDA,for FP-1039 or(ii)six months aft

197、er GSK notifies us of the anticipated filing of the first BLA for FP-1039.If we exercise our right to co-promote FP-1039,we would receive a low single-digit increase in the royalty rate that GSK would otherwise pay us relating to net sales in the United States.GSK is responsible for conducting FP-10

198、39 related research,development and commercialization activities in the United States,the European Union and Canada,at GSKs cost and expense.We do not have any obligation to fund any of these activities.GSK is obligated to pay us for the costs of all FP-1039-related research and development activiti

199、es we undertake on behalf of GSK.At the time we entered into the FP-1039 license,we agreed to perform services for the conduct of the then-concluding FP-1039 Phase 1 clinical trial.We also elected to conduct a Phase 2 clinical trial of FP-1039 in endometrial cancer for which we were reimbursed by GS

200、K.Additionally,GSK is obligated to pay us for the costs of other FP-1039-related research and development activities we elect to undertake on behalf of GSK.GSK has paid us$3.4 million for our conduct of these activities through December 31,2014.The Phase 2 clinical trial of FP-1039 in endometrial ca

201、ncer was terminated in January 2012.We are no longer conducting any activities with respect to this trial and are not currently undertaking any other FP-1039-related research or development activities on behalf of GSK.GSK is currently conducting a Phase 1b clinical trial of FP-1039 in combination wi

202、th several chemotherapies in patients with FGFR1 gene-amplified or FGF-2 over-expressing tumors.The trial is designed as a three-arm,multicenter,non-randomized,parallel-group,uncontrolled,open-label Phase 1b clinical trial with up to 120 patients at approximately 20 clinical sites.12 Table of Conten

203、ts We and GSK agreed to disclose to each other FP-1039 preclinical and clinical data in the form of final study reports from future trials or studies conducted by either of us.We and GSK also agreed that either party may use,at no cost,any such exchanged preclinical or clinical data in regulatory fi

204、lings we or GSK make with respect to FP-1039 in our respective territories.For example,after GSK completes its Phase 1b clinical trial of FP-1039,we would be able to use the clinical data from that filing in regulatory filings we may file in Japan regarding FP-1039,which is outside of GSKs territory

205、.The FP-1039 license will terminate upon the expiration of the royalty terms of any products that result from the collaboration.In addition,GSK may terminate this agreement at any time with advance written notice,and either party may terminate this agreement for the other partys material breach if s

206、uch party fails to cure the breach or upon certain insolvency events.Either party may also terminate the agreement upon certain patent challenges made against one another.In the event that GSK terminates the agreement for convenience or if we terminate for certain material breaches or due to a paten

207、t challenge,we will have to pay GSK royalties on any net sales in the United States,the European Union or Canada for 12 years after the first commercial sale.GSK Muscle Diseases Collaboration In July 2010,we entered into a research collaboration and license agreement,referred to as the muscle diseas

208、es collaboration,with GlaxoSmithKline LLC,or GSK,to identify potential drug targets and drug candidates to treat skeletal muscle diseases.In May 2011,we amended the muscle diseases collaboration to expand the research plan in scope and duration to include an additional cell-based screen and an in vi

209、vo screen using our RIPPS technology.We conducted three customized cell-based screens and one in vivo screen of our protein library under the muscle diseases collaboration.The research term under this collaboration ended in May 2014.In September 2014,GSK exercised its option under the muscle disease

210、s collaboration to obtain an exclusive,worldwide license to an undisclosed muscle disease target we identified using our proprietary target discovery platform and paid us a$1.5 million fee.In addition,we are entitled to receive up to$122.5 million in milestone payments as well as royalties on net sa

211、les of products related to the target.The milestone payments consist of preclinical and development-related contingent payments of up to$28.5 million,regulatory-related contingent payments of up to$40.0 million and commercial-related contingent payments of up to$54.0 million.For each product that in

212、corporates or targets a licensed protein target,GSK is also obligated to pay us tiered low-to mid-single digit royalties on net sales of such product for the longer of the life of certain patents licensed to GSK covering such product or 12 years after the first commercial sale of such product.The mu

213、scle diseases collaboration agreement will terminate upon the expiration of the royalty terms of any products that incorporate or target the protein exclusively licensed under the collaboration.In addition,GSK may terminate the agreement at any time with advance written notice,and either party may t

214、erminate the agreement with written notice for the other partys material breach if such party fails to cure the breach or upon certain insolvency events.GSK Respiratory Diseases Collaboration In April 2012,we entered into a research collaboration and license agreement,referred to as the respiratory

215、diseases collaboration,with Glaxo Group Limited,or GSK,to identify new therapeutic approaches to treat refractory asthma and chronic obstructive pulmonary disease,or COPD,function with a particular focus on identifying novel protein therapeutics and antibody targets.We plan to conduct up to six cust

216、omized cell-based screens of our protein library under the respiratory diseases collaboration.The four-year research term will end in April 2016.At the inception of the respiratory diseases collaboration,GSK made an upfront payment to us of$7.5 million and purchased shares of our preferred stock for

217、$10.0 million.Through December 31,2014,we have also received$8.6 million of research funding and we are eligible to receive up to an additional$4.3 million of research funding under the respiratory diseases collaboration through the remainder of the research term,which ends in April 2016.In the cour

218、se of conducting screens of our protein library in the respiratory diseases collaboration,we expect to discover proteins that may be potential drug targets or drug candidates for treating refractory asthma or COPD.Under the respiratory diseases collaboration,GSK has the right for limited periods of

219、time to evaluate proteins identified in the screens we conduct and obtain an exclusive worldwide license to develop and commercialize products that incorporate or target the protein.Prior to the time GSK exercises its right to obtain an exclusive worldwide license to a protein target,we will discuss

220、 and agree on Track 1 Targets,over which GSK will have sole responsibility for the further development and commercialization of products that incorporate or target such protein targets,and Track 2 Targets,for which we will develop biologics that incorporate or target such protein targets through to

221、clinical proof of mechanism in either a Phase 1 clinical trial or Phase 2 clinical trial.We will take into consideration each partys available resources and capabilities at the time in deciding which protein targets will be Track 1 Targets or Track 2 Targets,but subject to each partys general right

222、to alternate in such selection and with GSK to have the right to first select.13 Table of Contents For Track 1 Targets,GSK would have sole responsibility for the further development and commercialization of products that incorporate or target the protein,including with respect to preclinical studies

223、,clinical development,manufacturing and commercialization,at GSKs cost and expense.For Track 2 Targets,we would have sole responsibility for the further development of biologic products that incorporate or target the protein,including with respect to preclinical studies,clinical development and manu

224、facturing,at our cost and expense through agreed-upon proof-of-mechanism endpoints in a Phase 1 or Phase 2 clinical trial.We are eligible to receive up to$124.3 million in potential target evaluation and selection fees and contingent payments with respect to each Track 1 Target.These potential fees

225、and payments are composed of target evaluation and selection fees of up to$1.8 million,preclinical and development-related contingent payments of up to$28.5 million,regulatory-related contingent payments of up to$40.0 million and commercial-related contingent payments of up to$54.0 million.For each

226、product that incorporates or targets a Track 1 Target,GSK is also obligated to pay us tiered low-to mid-single digit royalties on net sales of such product for the longer of the life of certain patents licensed to GSK covering such product or 10 years after the first commercial sale of such product.

227、We cannot determine the date on which GSKs potential royalty payment obligations to us would expire because GSK has not yet elected to take an exclusive license to any evaluated protein target,and therefore we cannot identify related patents to any such relevant licensed protein target.We are eligib

228、le to receive up to$193.8 million in potential target evaluation and selection fees and contingent payments with respect to each Track 2 Target.These potential fees and payments are composed of per target evaluation and selection fees of up to$1.8 million,a clinical proof of mechanism option exercis

229、e fee of up to$23.0 million,preclinical and development-related contingent payments of up to$36.5 million,regulatory-related contingent payments of up to$53.0 million and commercial-related contingent payments of up to$79.5 million.For each product that incorporates or targets a Track 2 Target,GSK i

230、s also obligated to pay us tiered high-single to low-double digit royalties on net sales of such product for the longer of the life of certain patents licensed to GSK covering such product or 10 years after the first commercial sale of such product.The respiratory diseases collaboration agreement wi

231、ll terminate upon the expiration of the royalty terms of any products that incorporate or target a protein exclusively licensed under the collaboration.In addition,GSK may terminate the agreement at any time with advance written notice,and either party may terminate the agreement with written notice

232、 for the other partys material breach if such party fails to cure the breach or immediately in the case of failure to comply with certain anti-bribery and anti-corruption policies or upon certain insolvency events.UCB Fibrosis and CNS Collaboration In March 2013,we entered into a research collaborat

233、ion and license agreement with UCB,referred to as the fibrosis and CNS collaboration,to identify innovative biologics targets and therapeutics in the areas of fibrosis-related immunologic diseases and central nervous system,or CNS,disorders.We plan to conduct up to five customized cell-based and in

234、vivo screens of our protein library under the fibrosis and CNS collaboration.We currently expect to complete our initial research activities under the fibrosis and CNS collaboration by March 2016.Upon the completion of those research activities,UCB has up to a two-year evaluation period during which

235、 we may be obligated to perform additional services at the request of UCB.At the inception of the fibrosis and CNS collaboration,UCB made payments to us of$8.2 million.Through December 31,2014,we received$5.7 million of technology access fees and research funding and we are eligible to receive up to

236、 an additional$3.2 million of technology access fees and research funding under the fibrosis and CNS collaboration through the end of the research term,which we expect to end in March 2016.In the course of conducting screens of our protein library in the fibrosis and CNS collaboration we expect to d

237、iscover proteins that may be potential drug targets or drug candidates for fibrosis-related immunologic diseases and CNS disorders.Under the fibrosis and CNS collaboration,UCB has the right for limited periods of time to evaluate proteins identified in the screens we conduct and obtain an exclusive

238、worldwide license to develop and commercialize products that incorporate or target the protein.If UCB elects to obtain an exclusive license to a protein it has evaluated,UCB would have sole responsibility for the further development and commercialization of products that incorporate or target the pr

239、otein at UCBs cost and expense.We are eligible to receive up to$92.2 million in potential evaluation and selection fees and contingent payments with respect to each protein target that UCB elects to obtain an exclusive license,comprising aggregate target evaluation and selection fees of up to$0.4 mi

240、llion,preclinical and development-related contingent payments of up to$11.8 million,regulatory-related contingent payments of up to$20.0 million and commercial-related contingent payments of up to$60.0 million.For each product that incorporates or targets a licensed protein target,UCB is also obliga

241、ted to pay us tiered low-to mid-single digit royalties on net sales of such product for the longer of the life of certain patents covering such product or 10 years after the first commercial sale of such product.We cannot determine the date on which UCBs potential royalty payment obligations to us w

242、ould expire because UCB has not yet elected to take an exclusive license to any evaluated protein target,and therefore we cannot identify related patents to any such relevant licensed protein target.14 Table of Contents The fibrosis and CNS collaboration agreement will terminate upon the expiration

243、of the royalty terms of any products that incorporate or target a protein exclusively licensed under the collaboration.In addition,UCB may terminate the agreement at any time with advance written notice,and either party may terminate the agreement with written notice for the other partys material br

244、each if such party fails to cure the breach or upon certain insolvency events.BMS Immuno-oncology Research Collaboration In March 2014,we entered into a research collaboration and license agreement with BMS,which we refer to as the immuno-oncology research collaboration,pursuant to which we and BMS

245、are collaborating to carry out a research program to(i)discover novel interacting proteins in two undisclosed immune checkpoint pathways,which we refer to as the checkpoint pathways,using our target discovery platform;(ii)further the understanding of target biology with respect to targets in these c

246、heckpoint pathways;and(iii)discover and pre-clinically develop compounds suitable for development for human therapeutic uses against targets in these checkpoint pathways.The initial three-year research term of the immuno-oncology research collaboration will end in March 2017.BMS has the option to ex

247、tend the research term for two additional one-year terms.In connection with entering into the immuno-oncology research collaboration,BMS made an upfront payment of$20.0 million to us.Through December 31,2014,we received$3.4 million of research funding and are eligible to receive up to an additional$

248、6.1 million of research funding under the immuno-oncology research collaboration through the end of the initial three-year research term.We will be eligible to receive up to$240.0 million per collaboration target in specified developmental,regulatory and commercialization contingent payments compris

249、ing aggregate developmental contingent payments of up to$53.0 million,aggregate regulatory contingent payments of up to$74.0 million and aggregate commercialization contingent payments of up to$113.0 million.We will also be eligible to receive up to$60.0 million in sales-based contingent payments pe

250、r collaboration product.For each commercialized product under the immuno-oncology research collaboration that is directed toward a target in the checkpoint pathways,BMS is also obligated to pay us tiered mid-single digit to low double-digit percentage royalties,subject to reduction in certain circum

251、stances,on net sales of such product for the longer of(i)12 years after the first commercial sale of such product,(ii)the life of certain patents licensed covering such product or(iii)the date on which any applicable regulatory,pediatric,orphan drug or data exclusivity with respect to such product e

252、xpires.We cannot determine the date on which BMSs potential royalty payment obligations to us would expire because BMS has not yet commercialized any products under the immuno-oncology research collaboration,and we therefore cannot identify the date of the first commercial sale or any related patent

253、s covering such product.Unless earlier terminated by either party,the immuno-oncology research collaboration will expire on a product-by-product and country-by-country basis upon the expiration of all of BMSs payment obligations under the immuno-oncology research collaboration agreement.BMS may term

254、inate the immuno-oncology research collaboration agreement in its entirety or on a collaboration target-by-collaboration target basis at any time with advance written notice.Either party may terminate the immuno-oncology research collaboration agreement in its entirety or on a collaboration target-b

255、y-collaboration target basis with written notice for the other partys material breach if such other party fails to timely cure the breach.Either party also may terminate the immuno-oncology research collaboration agreement in its entirety upon certain insolvency events involving the other party.In c

256、onnection with the immuno-oncology research collaboration agreement,BMS purchased 994,352 shares of our common stock at a price per share of$21.16,for an aggregate purchase price of$21.0 million.License Agreements License Agreement with Galaxy In December 2011,we entered into a license agreement wit

257、h Galaxy Biotech LLC,or Galaxy,pursuant to which Galaxy granted us an exclusive worldwide license to develop and commercialize FGFR2b antibodies,including FPA144.Under the license agreement,we are obligated to use commercially reasonable efforts to develop and commercialize at least one licensed pro

258、duct in at least one tumor indication.We paid Galaxy an upfront license fee of$3.0 million in connection with our entry into the license agreement,which we paid in two equal installments in January 2012 and July 2012.15 Table of Contents Through December 31,2014,we made milestone payments to Galaxy

259、totaling$2.6 million.We are obligated to pay Galaxy additional milestone payments of up to$89.9 million comprising aggregate intellectual property-related milestone payments of up to$1.4 million,development-related milestone payments of up to$17.0 million for development in two indications,aggregate

260、 regulatory-related milestone payments of up to$41.5 million for two indications and aggregate commercial-related milestone payments of up to$30.0 million.We are also obligated to pay tiered royalties on net sales of FPA144 from the high-single digits to the low-double digits.Our license agreement w

261、ith Galaxy will remain in effect until the expiration of our royalty obligations under the license agreement in all countries.For each licensed product,we are obligated to pay Galaxy royalties on net sales of such product on a country-by-country basis for the longer of the life of the licensed paten

262、ts covering such product in such country or 10 years after the first commercial sale of such product in such country.We cannot determine the date on which our royalty payment obligations to Galaxy would expire because no commercial sales of FPA144 have occurred and the last-to-expire relevant patent

263、 covering FPA144 in a given country may change in the future.Currently,Galaxy has an issued patent,which we have licensed,covering FPA144 in the United States that expires in 2029.Galaxy patents that may issue in other countries,including in Europe and Japan,from pending patent applications would ex

264、pire in 2029.These patent expiration dates do not reflect any patent term extensions that may be available,which are not determinable at this time.We may terminate the license agreement for convenience in its entirety or on a country-by-country basis upon prior written notice to Galaxy.Either party

265、may terminate the license agreement in its entirety or with respect to certain countries after the first commercial sale of a licensed product in certain circumstances in the event of an uncured material breach by the other party.Either party may terminate the license agreement in the event of the o

266、ther partys filing or institution of bankruptcy,reorganization,liquidation or receivership proceeding or upon an assignment of a substantial portion of its assets for the benefit of creditors.Galaxy may terminate the license agreement if we or any of our affiliates challenge the validity or enforcea

267、bility of any patent licensed to us by Galaxy under the license agreement or if we aid or assist any affiliate or third party in such a challenge other than as required by law.License Agreement with The Regents of the University of California In September 2006,we entered into a license agreement wit

268、h The Regents of the University of California,or the UC Regents,pursuant to which the UC Regents granted us an exclusive license under certain patents to develop and commercialize products,including FP-1039,and practice certain methods covered by the patents.Under the license agreement,we are obliga

269、ted to use commercially reasonable efforts to develop and commercialize at least one licensed product.We are obligated to pay the UC Regents milestone payments of up to$0.8 million for the development and marketing approval of FP-1039 in cancer.We are also obligated to pay the UC Regents a low singl

270、e-digit royalty on net sales of FP-1039 for the life of the relevant licensed patents.If we sublicense our rights under our license agreement with UC Regents,we would be obligated to pay the UC Regents a percentage of the total gross proceeds we receive in consideration of the grant of the sublicens

271、e,which total amount would be first reduced by the aggregate amount of certain research and development related expenses we have incurred.The portion of the total adjusted sublicense proceeds we would pay the UC Regents would be a mid-single digit percentage of the proceeds if such sublicense occurr

272、ed prior to the first Phase 2 clinical trial of a licensed product,or a low-single digit percentage of the proceeds if such sublicense occurred after the initiation of the first Phase 2 clinical trial of a licensed product.Our license agreement with the UC Regents will remain in effect until the exp

273、iration or abandonment of the last to expire of the licensed patents.We may terminate the license agreement for convenience in its entirety upon prior written notice to the UC Regents.The UC Regents may terminate the license agreement in its entirety in the event of our uncured material breach of th

274、e license agreement.The license agreement will automatically terminate upon the filing of a petition for bankruptcy relief that is not dismissed within a set period of time.Non-exclusive License with BioWa-Lonza In February 2012,we entered into a license agreement with BioWa,Inc.and Lonza Sales AG,o

275、r BioWa-Lonza,pursuant to which BioWa-Lonza granted us a non-exclusive license to use their Potelligent CHOK1SV technology,including the CHOK1SV cell line,and a non-exclusive license to related know-how and patents.This license is necessary to produce our FPA144 antibody.We are obligated to pay BioW

276、a-Lonza aggregate milestone payments of up to$25.4 million for development,regulatory and commercialization milestones achieved in our FPA144 antibody program.We are also obligated to pay BioWa-Lonza tiered royalties on net sales of FPA144 up to mid-single digit percentages of the proceeds of such s

277、ales.16 Table of Contents Our license agreement with BioWa-Lonza will remain in effect until the expiration of our royalty obligations.For each licensed product,we are obligated to pay BioWa-Lonza royalties on net sales of such product on a country-by-country basis for the longer of the life of the

278、licensed patents covering such product in such country or 10 years after the first commercial sale of such product in a major market country,which includes the United States.However,because we believe the last-to-expire patents currently licensed to us under the license agreement would expire in les

279、s than 10 years,we believe the date on which our royalty payment obligations to BioWa-Lonza would expire in any country would be 10 years after the first commercial sale of such product in a major market country.We may terminate the license agreement for convenience subject to our continuing obligat

280、ion to pay royalties.BioWa-Lonza may terminate the license agreement in the event of our uncured material breach,if we oppose or dispute the validity of patents licensed to us under the license agreement or if we are declared insolvent,make an assignment for the benefit of creditors,are the subject

281、of bankruptcy proceedings or have a receiver or trustee appointed for substantially all of our property.Non-exclusive License with Board of Trustees of the Leland Stanford Junior University In February 2006,we entered into a license agreement with the Board of Trustees of the Leland Stanford Junior

282、University,or Stanford,pursuant to which Stanford granted us a non-exclusive license to use certain biological materials and a non-exclusive license to related patents.We use the licensed materials in the production of proteins in our protein library.We are obligated to pay a non-material annual fee

283、 to maintain this license agreement.We have no milestone payment or royalty obligations under our license agreement with Stanford.The license agreement has no fixed term.We may terminate the license agreement for convenience.Stanford may terminate the license agreement in the event of our uncured ma

284、terial breach.Non-exclusive License with National Research Council of Canada In December 2013,we entered into a license agreement with the National Research Council of Canada,or NRC,pursuant to which NRC granted us a non-exclusive license to use certain biological materials and a non-exclusive licen

285、se to related patents.We use the licensed materials in the production of proteins in our protein library.We have no milestone payment or royalty obligations under our license agreement with NRC.The initial term of the license agreement expires on December 31,2018,after which we may annually renew fo

286、r additional one-year terms for a fee.The NRC may terminate the license agreement if we become bankrupt or insolvent,have a receiver appointed to continue our operations or resolve to wind up.We may terminate at any time with written notice.Either party may terminate the license agreement in the eve

287、nt of the other partys uncured material breach.Intellectual Property Our intellectual property is critical to our business and we strive to protect it,including by obtaining and maintaining patent protection in the United States and internationally for our product candidates,novel biological discove

288、ries,including new targets and applications,and other inventions that are important to our business.For our product candidates,we generally initially pursue patent protection covering both compositions of matter and methods of use.Throughout the development of our product candidates,we seek to ident

289、ify additional means of obtaining patent protection that would potentially enhance commercial success,including through additional methods of use and biomarker and companion diagnostic related claims.We also rely on trade secrets relating to our discovery platform and product candidates and seek to

290、protect and maintain the confidentiality of proprietary information to protect aspects of our business that are not amenable to,or that we do not consider appropriate for,patent protection.Our success will also depend significantly on our ability to obtain rights to intellectual property held by thi

291、rd parties that may be necessary or useful to our business,including for the discovery,development and commercialization of our product candidates.We generally obtain rights to third-party intellectual property through exclusive or non-exclusive licenses.For example,we have entered into a non-exclus

292、ive license with BioWa-Lonza to use their Potelligent CHOK1SV technology,which is necessary to produce our FPA144 antibody,and non-exclusive licenses with each of the NRC and Stanford to use materials and technologies that we use in the production of our protein library.If we are not able to obtain

293、rights to intellectual property held by third parties that are necessary or useful to our business,our business could be harmed,possibly materially.17 Table of Contents The patent positions of biotechnology companies like ours are generally uncertain and involve complex legal,scientific and factual

294、questions.In addition,the coverage claimed in a patent application can be significantly reduced before the patent is issued,and its scope can be reinterpreted after issuance.Consequently,we may not obtain or maintain adequate patent protection for any of our product candidates.We cannot predict whet

295、her the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors.Any patents that we hold may be challenged,circumvented or invalidated by third parti

296、es.For a more comprehensive discussion of the risks related to our intellectual property,please see“Risk FactorsRisks Related to Our Intellectual Property.”The patent portfolios for our three most advanced programs are summarized below:FPA008 Our FPA008 patent portfolio is wholly owned by us and inc

297、ludes an issued U.S.patent as well as pending U.S.and foreign patent applications covering compositions of matter,methods of use and biomarkers relating to FPA008.The issued U.S.composition of matter patent expires in 2031.Patents that may issue from the pending U.S.and foreign applications would ex

298、pire between 2031 and 2033.FPA144 Our patent portfolio for FPA144 includes patents and patent applications we exclusively licensed from Galaxy,as well as a pending U.S.and foreign patent applications wholly owned by us.The patent portfolio we exclusively licensed from Galaxy includes an issued U.S.p

299、atent as well as pending U.S.and foreign patent applications covering compositions of matter and methods of use of FPA144.The issued U.S.composition of matter patent expires in 2029.Patents that may issue from these pending U.S.and foreign applications would expire in 2029.Patents that may issue fro

300、m the pending U.S.and foreign patent application wholly owned by us would expire in 2034.FP-1039 Our patent portfolio for FP-1039 includes patents and patent applications wholly owned by us,as well as patents we exclusively license from UC Regents.The FP-1039 patent portfolio that we wholly own incl

301、udes issued patents and pending patent applications covering compositions of matter,methods of use,including certain combination therapies and dosing regimens,and biomarkers relating to FP-1039.This patent portfolio includes patents issued in the United States,Europe,Japan,Hong Kong,Australia and Ne

302、w Zealand.The issued U.S.patents covering composition of matter and methods for using FP-1039 expire in 2026 and 2031,respectively.The issued patent in Japan covering composition of matter for FP-1039 expires in 2026.The issued patents in Europe,Hong Kong,Australia and New Zealand covering compositi

303、on of matter and methods of using FP-1039 expire in 2026.The FP-1039 patent portfolio that we wholly own also includes pending U.S.and foreign patent applications covering composition of matter and methods of use.Patents that may issue from these pending U.S.and foreign patent applications would exp

304、ire between 2026 and 2034.The FP-1039 patent portfolio also includes issued U.S.and foreign patents we exclusively license from the UC Regents that cover composition of matter and methods of producing FP-1039.These exclusively licensed patents include issued U.S.patents covering composition of matte

305、r and methods of producing FP-1039 that expire between 2019 and 2020.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

306、 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 as compensation for the patent term lost during the FDA regulatory review process.The Hatch-Waxman Act permits a

307、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 regulatory review.Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of pr

308、oduct 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,we expect to apply for

309、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 assessm

310、ent of whether such extensions should be granted,and if granted,the length of such extensions.18 Table of Contents We also rely on trade secret protection for our confidential and proprietary information.Although we take steps to protect our proprietary information and trade secrets,including throug

311、h contractual means with our employees and consultants,third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology.Thus,we may not be able to meaningfully protect our trade secrets.It

312、 is our policy to require our employees,consultants,outside scientific collaborators,sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.These agreements provide that all confidential information conce

313、rning our business or financial affairs developed or made known to the individual during the course of the individuals relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.Our agreements with employees also provide that all inventions co

314、nceived by the employee in the course of employment with us or from the employees use of our confidential information are our exclusive property.Manufacturing We have process development and small-scale manufacturing capabilities.We generally perform cell line and process development for our product

315、 candidates and manufacture quantities of our drug candidates necessary to conduct preclinical studies of our investigational drug candidates.We do not have and we do not currently plan to acquire or develop the facilities or capabilities to manufacture bulk drug substance or filled drug product for

316、 use in human clinical trials or commercialization.We rely on third-party manufacturers to produce bulk drug substance required for our clinical trials and expect to continue to rely on third parties to manufacture clinical trial drug supplies for the foreseeable future.GSK is responsible for the ma

317、nufacture,at its cost and expense,of FP-1039 drug substance and filled drug product used in activities GSK undertakes under the FP-1039 license.We also contract with additional third parties for the filling,labeling,packaging,storage and distribution of investigational drug products.We have personne

318、l with significant technical,manufacturing,analytical,quality and project management experience to oversee our third-party manufacturers and to manage manufacturing and quality data and information for regulatory compliance purposes.We must manufacture drug product for clinical trial use in complian

319、ce with current Good Manufacturing Practices,or cGMP.The cGMP regulations include requirements relating to organization of personnel,buildings and facilities,equipment,control of components and drug product containers and closures,production and process controls,packaging and labeling controls,holdi

320、ng and distribution,laboratory controls,records and reports,and returned or salvaged products.The manufacturing facilities for our products must meet cGMP requirements and FDA satisfaction before any product is approved and we can manufacture commercial products.Our third-party manufacturers are als

321、o subject to periodic inspections of facilities by the FDA and other authorities,including procedures and operations used in the testing and manufacture of our products to assess our compliance with applicable regulations.Failure to comply with statutory and regulatory requirements subjects a manufa

322、cturer to possible legal or regulatory action,including warning letters,the seizure or recall of products,injunctions,consent decrees placing significant restrictions on or suspending manufacturing operations and civil and criminal penalties.These actions could have a material impact on the availabi

323、lity of our products.Contract manufacturers often encounter difficulties involving production yields,quality control and quality assurance,as well as shortages of qualified personnel.Commercialization We have not yet established sales,marketing or product distribution operations because our lead can

324、didates are still in preclinical or early clinical development.We generally expect to retain some commercial rights in the United States for our product candidates in specialty markets.Pursuant to our FP-1039 collaboration,we have a co-promotion right in the United States which,if exercised by us,wi

325、ll allow us to field a minority percentage of the total United States sales force promotional effort(from GSK and us combined).If we exercise our option to co-promote FP-1039 in the United States prior to submission of a BLA,we expect to commence commercialization activities by building a focused sa

326、les and marketing organization in the United States to sell FP-1039 with GSK.We believe that such an organization will be able to address the community of oncologists who are the key specialists in treating the patient populations for which FP-1039 is being developed.19 Table of Contents Competition

327、 The biotechnology and pharmaceutical industries are characterized by continuing technological advancement and significant competition.While we believe that our product candidates,technology,knowledge,experience and scientific resources provide us with competitive advantages,we face competition from

328、 major pharmaceutical and biotechnology companies,academic institutions,governmental agencies and public and private research institutions,among others.Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become availab

329、le in the future.Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy,safety and convenience of our products and the ease of use and effectiveness of any companion diagnostics.The level of generic competition and the availability of r

330、eimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our products.Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours,which could result in our com

331、petitors establishing a strong market position before we are able to enter the market.Many of the companies against which we may compete have significantly greater financial resources and expertise in research and development,manufacturing,preclinical testing,conducting clinical trials,obtaining reg

332、ulatory approvals and marketing approved products than we do.Smaller or early-stage companies may also prove to be significant competitors,particularly through collaborative arrangements with large and established companies.These competitors also compete with us in recruiting and retaining qualified

333、 scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials,as well as in acquiring technologies complementary to,or necessary for,our programs.Government Regulation and Product Approval In the United States,the FDA regulates protein therapeutics like FPA008,FPA144,FP-1039 and our other product candidates as biological drug products,or bi