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July 19, 2018
John Houston, Ph.D.
Chief Executive Officer
ARVINAS HOLDING COMPANY, LLC
5 Science Park
395 Winchester Ave.
New Haven, Connecticut 06511
Re: ARVINAS HOLDING COMPANY, LLC
Draft Registration Statement on Form S-1
Submitted on June 22, 2018
CIK No. 0001655759
Dear Dr. Houston:
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
Our Pipeline, page 3
1. Please explain why you have included ARV-110, Next generation and AR
Variants
separately in the table. Currently it is not clear if these activities
relate to separate product
candidates or if they are part of the ARV-110 development.
2. Please include columns depicting Phase 2 and Phase 3 clinical trials to
ensure that the
table depicts all remaining stages you must successfully complete before
you could seek
FDA approval. Additionally, remove the shading from columns that are
further along in
John Houston, Ph.D.
FirstName LastNameJohn Houston, Ph.D.
ARVINAS HOLDING COMPANY, LLC
Comapany NameARVINAS HOLDING COMPANY, LLC
July 19, 2018
July 19, 2018 Page 2
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FirstName LastName
the development process than your current stage of development, such
as the shading
under the Phase 1 column heading for all product candidates.
3. Please clarify the distinctions between "Discovery," "Lead
Optimization" and "IND
Enabling" and describe the activities conducted at each of these
stages.
4. Please delete the statement that your product candidates have the
potential to achieve
clinical superiority. Given the early stage of development, the
statement is not
appropriate.
Corporate Conversion, page 6
5. Please revise to clarify how many shares of common stock will be
issued for each share of
preferred stock outstanding upon the closing of your initial public
offering. Additionally,
please tell us when the board of directors will determine the
conversion price to be used to
determine the number of shares of common stock that will be issued to
holders of
incentive units in Arvinas LLC.
Implications of Being an Emerging Growth Company, page 7
6. 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.
Use of Proceeds, page 60
7. Please clarify whether you expect to complete the two contemplated
Phase 1 clinical trials
for ARV-110 and ARV-471 using the proceeds from this offering and your
cash, cash
equivalents and marketable securities on hand.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Use of Estimates
Incentive Units , page 77
8. Once you have an estimated offering price, please provide us an
analysis explaining the
reasons for the differences between recent valuations of your
membership units leading up
to the IPO 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.
Business
Our Planned Phase 1 Clinical Trial, page 102
9. We note your disclosure that you intend to measure evaluable lesions
based on RECIST
John Houston, Ph.D.
FirstName LastNameJohn Houston, Ph.D.
ARVINAS HOLDING COMPANY, LLC
Comapany NameARVINAS HOLDING COMPANY, LLC
July 19, 2018
July 19, 2018 Page 3
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FirstName LastName
criteria and expect to enroll an additional 60 patients in an
expansion cohort if you are
successful in identifying a safe dose for further development. Please
describe the RECIST
criteria and the purpose of the expansion cohort.
Intellectual Property, page 109
10. Please specify the jurisdictions covered by the issued foreign patents
for your PROTAC
platform and your PROTAC product candidates as well as for your
international patent
applications covering AR-471 and AR-110 where such information has not
already been
provided. Please also explain what a U.S. CIP application is in this
section.
11. Please identify which patents are co-owned, identify the co-owner and
clarify whether you
have any formal agreements with the c-owners relating to each parties'
rights and
obligations. To the extents that you are substantially dependent on
any of the co-owned
patents, please file any agreements relating to these ownership rights
and obligations.
Licenses and Strategic Collaborations
Yale University License Agreement, page 112
12. Please disclose when the latest to expire patent is currently schedule
to expire.
13. Please describe the written plan referenced. To the extent that the
failure to meet
specified milestone events would result in the agreement being
terminable, please disclose
the milestone events. Otherwise, disclose the consequences of failing
to meet a specified
milestone.
Genentech License Agreement, page 113
14. Please clarify whether the research and deliverables required by Stage
2 are designed to be
sufficient for purposes of applying for an IND.
15. We note your disclosure that this agreement will expire upon the
expiration of all royalty
periods for any Licensed PROTACs unless earlier terminated. Please
revise your
description of this agreement to clarify when the royalty periods
expire. If expiration is
based on the expiration of patents, please disclose when the latest to
expire patent is
scheduled to expire.
Pfizer License Agreement, page 114
16. We note your disclosure that this agreement will expire upon the
expiration of all royalty
obligations thereunder. Please revise your description of this
agreement to clarify when
the royalty obligations expire or how the royalty period is
determined.
17. Please expand your disclosure to describe your obligations under the
research plan.
Principal Stockholders, page 167
John Houston, Ph.D.
FirstName LastNameJohn Houston, Ph.D.
ARVINAS HOLDING COMPANY, LLC
Comapany NameARVINAS HOLDING COMPANY, LLC
July 19, 2018
July 19, 2018 Page 4
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FirstName LastName
18. We note your disclosure in footnote 3 that Professor Crews disclaims
beneficial
ownership of the securities listed in the footnote. Please provide us
the basis for
disclaiming beneficial ownership of the securities Professor Crews
holds directly or revise
this statement accordingly.
2. Summary of Significant Accounting Policies
Revenue, page F-9
19. You state "The Company's contracts may also call for certain
sales-based royalty
payments upon successful commercialization of a target. In accordance
with ASC 606-10-
55-65, the Company recognizes revenues from sales-based royalty
payments at the later of
a) the occurrence of the subsequent sale; or b) the performance
obligation to which some
or all of the sales-based royalty has been allocated has been
satisfied (or partially
satisfied)." Please explain to us how the royalty relates only or
predominantly to the
license of intellectual property given the research and development
performance
obligations under your agreements.
20. You state "The research collaboration and license agreements typically
include contingent
milestone payments related to specified preclinical and clinical
development milestones
and regulatory and commercialization/sales milestones. These
milestones represent
variable consideration that are not initially recognized within the
transaction price as they
are fully constrained under the guidance in ASC 606." Please explain
to us why the
commercialization/sales milestones should not be accounted for as
sales-based or usage-
based royalties in accordance with ASC 606-10-55-65 consistent with
how you intend to
treat sales-based royalty payments.
4. Research Collaboration and License Agreements, page F-14
21. Please tell us how you believe you have met the disclosure requirement
of ASC 606-10-
50-13b which requires disclosure of when the entity expects to
recognize as revenue the
amount recognized as deferred revenue.
22. You indicate that the company is eligible to receive up to an
additional $805 million in
potential option and development and sales-based milestones for all
designated targets
under the Pfizer agreement. As it would seem the different milestones
have substantially
different characteristics please disaggregate the $805 million and to
describe the
particular characteristics associated with disaggregation so as to
provide useful
information.
10. Incentive Unit Plan, page F-19
23. We note your disclosure on page 78 that you use a Black-Scholes option
pricing model to
determine fair value of your incentive units, due to the existence of
a participation
threshold. Please explain to us what you used for an input to the
Black-Scholes option
pricing model for exercise price and explain your consideration of
disclosing the exercise
John Houston, Ph.D.
ARVINAS HOLDING COMPANY, LLC
July 19, 2018
Page 5
price. Also explain how you used the participation threshold as
disclosed on page 79 in
the Black-Scholes model.
24. You state "there was $317,235 of compensation expense that remains to
be amortized over
the vesting period." Revise to disclose the weighted-average period
over which the
compensation is expected to be recognized as required by ASC
718-10-50-2i.
13. Net Loss Per Common Unit, page F-23
25. You state on page 79 that incentive units in Arvinas LLC will be
exchanged for common
stock and restricted common stock in Arvinas Inc. Please tell us why
you do not include
vested incentive units when computing basic loss per share. Refer to
ASC 260-10-45-13.
General
26. Please provide us proofs of all graphics, visual, or photographic
information you will
provide in the printed prospectus prior to its use, for example in a
preliminary prospectus.
Please note that we may have comments regarding this material.
You may contact Ibolya Ignat at 202-551-3636 or Lisa Vanjoske at
202-551-3614 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Ada Sarmento at 202-551-3798 or Suzanne Hayes at 202-551-3675 with any
other
questions.
FirstName LastNameJohn Houston, Ph.D.
Comapany NameARVINAS HOLDING COMPANY, LLC
Division of Corporation Finance
July 19, 2018 Page 5 Office of Healthcare & Insurance
FirstName LastName