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April 2, 2020
Yuan Xu, Ph.D.
Chief Executive Officer
Legend Biotech Corporation
2101 Cottontail Lane
Somerset, NJ 08873
Re: Legend Biotech Corporation
Draft Registration Statement on Form S-1
Submitted March 9, 2020
CIK No. 0001801198
Dear Dr. Xu:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1 submitted March 9, 2020
Prospectus Summary
Overview, page 1
1. Please delete references to your product candidates as potentially
"best-in-class." This
statement implies an expectation of regulatory approval and is
inappropriate given the
length of time and uncertainty with respect to securing marketing
approval. If your use of
this term was intended to convey your belief that the products are based
on a novel
technology or approach, you may discuss how your technology differs from
existing
antibodies.
Yuan Xu, Ph.D.
FirstName LastNameYuan Xu, Ph.D.
Legend Biotech Corporation
Comapany NameLegend Biotech Corporation
April 2, 2020
Page 2,
April 2 2020 Page 2
FirstName LastName
2. We note your use of "manageable safety profile" here and throughout
the prospectus.
Please revise your disclosure to explain what constitutes a
"manageable safety profile."
Please also discuss the specific experiences of your subjects which
led you to reach this
conclusion.
3. We note you describe here in the Summary and elsewhere favorable
results observed in
LCAR-B38M/JNJ-4528. Please expand to provide fuller context for these
statements by
providing the specific details and parameters of these trials,
including the statistical
significance of the observed results.
4. We note that you anticipate that a BLA will be submitted to the FDA
and a MAA will be
submitted to the EMA for JNJ-4528 for the treatment of RRMM in the
second half of
2020. However, we note that CARTITUTE-1/2 are in the midst of Phase II
and your
Phase III trial, CARTITUDE-4, has not started enrollment. Please
supplementally tell us
why you believe you will be in a position to submit BLA/MAA for
JNJ-4528 in the
second half of 2020.
Our Pipeline, page 2
5. The table of your product candidate pipeline on pages 2 and 111 should
reflect the actual,
and not the anticipated, status of your pipeline candidates as of the
latest practicable date.
The table currently suggests that CARTITUDE-4 trial is in the midst of
Phase 3 but your
disclosure indicates that you have not started enrollment. Please
revise to show the actual
status.
Risk Factors
Adverse side effects or other safety risks associated with our product
candidates could delay or
preclude approval..., page 24
6. We note the deaths reported in your LEGEND-2 clinical trial. Please
revise to clarify
whether the deaths were treatment related.
Use of Proceeds, page 90
7. We note your statement that the net proceeds from this offering,
together with your
existing cash and cash equivalents, may be insufficient to fund any of
your product
candidates through regulatory approval, and you anticipate needing to
raise additional
capital. Please revise your use of proceeds to clarify how far along
in the development
process of LCAR-B38M/JNJ-4528 you expect the proceeds from this
offering, together
with your existing cash and cash equivalents, will take you.
Yuan Xu, Ph.D.
FirstName LastNameYuan Xu, Ph.D.
Legend Biotech Corporation
Comapany NameLegend Biotech Corporation
April 2, 2020
Page 2,
April 3 2020 Page 3
FirstName LastName
Research and Development Expenses, page 99
8. You state on page 100 "We track outsourced development costs by
product candidate or
preclinical program, but we do not allocate personnel costs, other
internal costs or external
consultant costs to specific product candidates or preclinical
programs." Please disclose
costs by product candidate for each period presented or direct us to
that disclosure.
Critical Accounting Policies, page 105
Shared-Based Compensation, page 107
9. Please revise to disclose the extent to which any stock-based
compensation has been
awarded during 2019 and provide the fair valuations of each award.
Once you have an
estimated offering price or range, please explain to us how you
determined the fair value
of the common stock underlying your equity issuances and the reasons
for any differences
between the recent valuations of your common stock leading up to the
initial public
offering and the estimated offering price. This information will help
facilitate our review
of your accounting for equity issuances including stock compensation
and beneficial
conversion features.
Our Programs, page 116
10. Please describe the International Myeloma Working Group criteria and
explain how it is
used to measure patient response.
11. We note that your disclosures throughout this section references
"overall response rate,"
"partial response," "very good partial response," "stable disease,"
and "objective
response." For your completed clinical trials, please revise your
document to describe the
clinical endpoints and clarify what constitutes an overall response
rate, objective response,
partial response, and very good partial response. Additionally clarify
how you have
measured or concluded that the disease is stable.
Completed Clinical Results
LEGEND-2 (China), page 123
12. We note use of p-values on page 123. At first use, please explain how
"p-value" is used to
measure statistical significance and the relevance of statistical
significance to the FDA's
evidentiary standards for drug approval.
Company-Owned Intellectual Property, page 136
13. Please disclose the jurisdictions of your most material foreign patent
applications.
Yuan Xu, Ph.D.
FirstName LastNameYuan Xu, Ph.D.
Legend Biotech Corporation
Comapany NameLegend Biotech Corporation
April 2, 2020
Page 2,
April 4 2020 Page 4
FirstName LastName
Competition, page 138
14. Please revise your discussion of competitive conditions by describing
the current
landscape for patent protections in your industry. In this regard, we
note that across
several risk factors on pages 53 to 62 you highlight risks stemming
from existing third
party patents and patent applications. In your discussion of the
competitive landscape,
identify specific patents and patent applications, if material, as
well as their
holders/applicants
Jury Trial Waiver, page 198
15. We note your disclosure regarding the waiver of jury trial provision
on page 198. Please
include a risk factor to highlight the material risks related to this
provision, including the
possibility of less favorable outcomes, uncertainty regarding its
enforceability, the
potential for increased costs to bring a claim, whether it may
discourage or limit suits
against you or the depositary and whether the provision applies to
purchasers in secondary
transactions. Also disclose whether this provision would apply if the
ADS holder were to
withdraw the ordinary shares.
Financial Statements, page F-1
16. Please tell us why you do not include a note to the financial
statements regarding the
Janssen Agreement that:
includes disclosure of the significant judgments underlying your
conclusion that the
license granted to Janssen was distinct and represented a
right-to-use license, as
addressed in paragraph 123 and 125 of IFRS 15;
quantifies the amount allocated to each performance obligation at
inception and at
each time the transaction price was updated pursuant to paragraph
120 of IFRS 15;
describes and quantifies the methods and assumptions used to
determine standalone
selling price;
a rollforward of the contract liability account showing increases
and decreases to the
balance pursuant to paragraph 118 of IFRS 15;
discloses the amount recognized for the license at inception and how
that amount was
determined;
explains how you determined the $7,570,000 of revenue for the
license in 2018
shown in Note 5 to the financial statements;
explains how you determined the $40,534,000 of revenue for joint
steering committee
in 2018 shown in Note 5;
explains why you defer milestone payments received;
discloses how you determined that performing research and
development services for
Janssen was not a performance obligation; and
you disclose that you had contracted but not yet recognized revenue
of approximately
$322 million as of December 31, 2018 of which you expect to
recognize
approximately 12.5% over the next twelve months and the remainder
thereafter
Yuan Xu, Ph.D.
Legend Biotech Corporation
April 2, 2020
Page 5
through the remaining collaboration period. Please tell us how you
considered that
these two time bands would be the most appropriate to explain when
you expect to
recognize the revenue related to your remaining performance
obligations given the
initial band only represents 11% of a 9 year remaining estimated
collaboration period.
Refer to paragraph 120(b) of IFRS 15.
17. With regard to the $1,115 million in the Janssen agreement that may be
received for the
achievement of specified future development, regulatory and net trade
sales milestones:
we believe additional disclosure would improve information regarding
the nature,
amount, timing, and uncertainty of revenue and cash flows arising
from your
contracts. Refer to IFRS 15 paragraph 110. Provide disclosure that
further
disaggregates the aggregate amount. Given the differences in the
nature, timing, and
uncertainty between development, regulatory and net trade sales
milestones, we
believe that separate amounts should be provided for those
categories.
also, tell us your consideration of disclosing individually material
milestones.
finally, disclose the triggering event for receipt of the four
milestones that have been
received as specified in paragraph 117 of IFRS 15.
24. Reserves, page F-44
18. We note the risk factor on page 69 related to PRC restrictions that could
prevent you from
distributing dividends to your foreign subsidiaries and the amount of
restricted net assets
as of December 31, 2018 quantified herein. Please tell us how you
considered the
requirements under Item 8 of Form F-1 and Article 5-04 of Regulation S-X
to provide
condensed financial information of the registrant.
General
19. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Jenn Do at 202-551-3743 or Lisa Vanjoske at
202-551-3614 if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jeffrey Gabor at 202-551-2544 or Celeste Murphy at 202-551-3257 with any other
questions.
Sincerely,
FirstName LastNameYuan Xu, Ph.D.
Division of
Corporation Finance
Comapany NameLegend Biotech Corporation
Office of Life
Sciences
April 2, 2020 Page 5
cc: Mark Ballantyne, Esq.
FirstName LastName