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May 10, 2019
Praveen P. Tipirneni, M.D.
Chief Executive Officer
Morphic Holding, Inc.
35 Gatehouse Drive, A2
Waltham, MA 02451
Re: Morphic Holding, Inc.
Draft Registration Statement on Form S-1
Submitted April 12, 2019
CIK No. 0001679363
Dear Dr. Tipirneni:
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 April 12, 2019
Prospectus Summary, page 1
1. Please revise the "Overview" section on page 1 to clarify that your
operations are
preclinical in nature.
2. With reference to the second sentence of the "Overview", please revise
to clarify the
meaning of the term "validated targets".
Praveen P. Tipirneni, M.D.
FirstName LastNamePraveen P. Tipirneni, M.D.
Morphic Holding, Inc.
Comapany NameMorphic Holding, Inc.
May 10, 2019
May 10, 2019 Page 2
Page 2
FirstName LastName
3. Please revise to balance your Summary presentation by highlighting the
developmental
challenges confronting oral integrin modulators. In this regard, we
refer to your
disclosure on page 95 and your risk factor disclosures on page 17-18
indicating that (i) no
regulatory authority has granted approval for an oral small-molecule
integrin inhibitor and
(ii) you currently have only limited data regarding the oral
bioavailability of your product
candidates.
4. We refer to the table highlighting your "Lead Product Candidates".
Please revise
this table to remove the discovery-stage programs (i.e., rows 3
through 7). In this regard,
it is premature to prominently highlight each of these programs in
your Summary
presentation given that you do not identify specific molecules or
indications that you seek
to develop, and you do not discuss IND-enabling studies in the
prospectus.
Our future clinical trials..., page 21
5. We note your risk discussion indicating that preclinical results have
indicated that PML is
an adverse effect with the modulated target of A4B7. Please revise to
clarify whether
you conducted this testing and also revise the Business section to
explain this testing in
greater detail.
Management's Discussion and Analysis of Financial Condition
Critical Accounting Policies and Significant Estimates
Determination of the Fair Value of Equity-Based Awards, page 85
6. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
Development Challenges of Oral Integrin Modulators, page 95
7. We note your disclosure concerning the "conceptually similar
paradoxical exacerbation of
symptoms" observed in trials of oral non-selective inhibitor of A4B1
and A4B7. Please
revise to clarify whether this means that greater platelet aggregation
and increased rates of
adverse events occurred for the same reasons as observed in the trials
of the
AIIbB3 inhibitors.
Our Solution, page 100
8. We refer to your disclosure indicating that your A4B7 inhibitor
molecules have exhibited
good oral absorption in preclinical studies. Please revise your
Business section to discuss
these preclinical studies, or revise your disclosure on pages 100-101
to clarify how the
referenced studies support the claim.
Praveen P. Tipirneni, M.D.
Morphic Holding, Inc.
May 10, 2019
Page 3
Preclinical Data, Pharmacology and Biomarker Data, page 100
9. We refer to your disclosures on pages 100-108 concerning numerous
preclinical studies/models/assays. For each such study that you
reference, please revise to
include information about the nature, design and results of that work
so that investors have
a basis to assess the applicable observation that you present. Without
limitation, your
discussion should identify the type of cells and methods utilized in
the referenced study.
Your disclosure also should indicate whether the results were or were
not statistically
significant and you should include all p-values and n-values. In
addition, please review
your italicized disclosure in Figures 3 through 9 and consider whether
some or all of
this information should be included in the main text.
10. Please revise to include Table 1. Also revise the the last full
sentence on page 100 to
clarify whether you made the 1000-fold selectively observation and
discuss in greater
detail the testing that supports this claim.
11. Please explain why you believe that in vitro IC90 values in the cell
adhesion assays with
human serum are most predictive for in vivo efficacy. In this regard,
we refer to your
disclosure that IC50 values are commonly accepted measurements of drug
potency.
Our Integrin Approach to Fibrosis, page 103
12. Based on the disclosures for Figures 4 through 8, it is not clear
whether MORF-720 is
among the AvB6 inhibitors that produced the disclosed results. Please
revise to clarify, or
advise.
MORF-720 - Our most advanced integrin candidate product, page 107
13. Please revise to provide support for your disclosure that MORF-720 has
been observed to
be highly selective. Similarly, please discuss the preclincial data
supporting your belief
that MORF-720 will be suitable to support favorable dosing strategies.
License Agreements
AbbVie Agreement, page 110
14. We note your disclosure on page 110 that you are eligible to earn tiered
royalties from high single to "low double digits" on worldwide net sales
for each licensed
product. The upper bound of the range is very broad and therefore does
not provide
FirstName LastNamePraveen P. Tipirneni, M.D. of the potential royalty payments.
investors with a meaningful understanding
Comapany NameMorphic Holding, Inc. the range for the upper bound is discernible
within 10
Accordingly, please revise so that
percentage points.
May 10, 2019 Page 3
FirstName LastName
Praveen P. Tipirneni, M.D.
FirstName LastNamePraveen P. Tipirneni, M.D.
Morphic Holding, Inc.
Comapany NameMorphic Holding, Inc.
May 10, 2019
Page 4
May 10, 2019 Page 4
FirstName LastName
Restated Certificate of Incorporation and Restated Bylaw Provisions, page 154
15. We note that your restated certificate of incorporation, which will be
in effect upon the
completion of this offering, provides that the Court of Chancery of
the State of Delaware
will be the exclusive forum for any derivative action or proceeding
brought on your
behalf. Please revise the prospectus to include a discussion regarding
whether your
exclusive forum provision applies to actions arising under the federal
securities laws. In
this regard, we note that Section 27 of the Exchange Act creates
exclusive federal
jurisdiction over all suits brought to enforce any duty or liability
created by the Exchange
Act or the rules and regulations thereunder. Please also note that we
may have additional
comment once you file Exhibit 3.2.
General
16. 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.
17. 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 SiSi Cheng at 202-551-5004 or Jim Rosenberg at
202-551-3679 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jeffrey Gabor at 202-551-2544 or Joe McCann at 202-551-6262 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Healthcare & Insurance
cc: Rob Freedman, Esq.