UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 10-Q
 
(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended March 31, 2016
OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the transition period from                     to                    
Commission File Number: 001-35966
 
bluebird bio, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware	 	13-3680878	
(State or Other Jurisdiction of
Incorporation or Organization)	 	(IRS Employer
Identification No.)	
 
150 Second Street
Cambridge, Massachusetts	 	02141	
(Address of Principal Executive Offices)	 	(Zip Code)	
(339) 499-9300
(Registrant’s Telephone Number, Including Area Code)
 
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) has been subject to such filing requirements for the past 90 days.     Yes   x     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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes   x     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer	 	x  	  	Accelerated filer	 	¨	
 	 	 	 	
Non-accelerated filer	 	¨  (Do not check if a smaller reporting company)	  	Smaller reporting company	 	¨	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   ¨     No    x
As of April 30, 2016, there were 36,943,048 shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.

 

 
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
 	·	the initiation, timing, progress and results of our preclinical and clinical studies, and our research and development programs;	

 	·	our ability to advance product candidates into, and successfully complete, clinical studies;	

 	·	our ability to advance our viral vector and drug product manufacturing capabilities;	

 	·	the timing or likelihood of regulatory filings and approvals for our product candidates;	

 	·	the timing or success of commercialization of our product candidates, if approved;	

 	·	the pricing and reimbursement of our product candidates, if approved;	

 	·	the implementation of our business model, strategic plans for our business, product candidates and technology;	

 	·	the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;	

 	·	estimates of our expenses, future revenues, capital requirements and our needs for additional financing;	

 	·	the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;	

 	·	our ability to maintain and establish collaborations and licenses;	

 	·	developments relating to our competitors and our industry; and	

 	·	other risks and uncertainties, including those listed under Part II, Item 1A. Risk Factors.	
Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

 

 
bluebird bio, Inc.
Form 10-Q
For the three months ended March 31, 2016
TABLE OF CONTENTS
 
 	 	 	 	Page	
PART I. FINANCIAL INFORMATION	 	2	
Item 1.	 	Financial Statements (unaudited)	 	2	
 	 	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	 	2	
 	 	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2016 and 2015	 	3	
 	 	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015	 	4	
 	 	Notes to Condensed Consolidated Financial Statements (unaudited)	 	5	
Item 2.	 	Management’s Discussion and Analysis of Financial Condition and Results of Operations	 	16	
Item 3.	 	Quantitative and Qualitative Disclosures About Market Risk	 	23	
Item 4.	 	Controls and Procedures	 	23	
 	 	 	
PART II. OTHER INFORMATION	 	24	
Item 1.	 	Legal Proceedings	 	24	
Item 1A.	 	Risk Factors	 	24	
Item 5.	 	Other Information	 	52	
Item 6.	 	Exhibits	 	52	
 	 	 	 	 	
SIGNATURES	 	53	
 	 	 	 	 	
CERTIFICATIONS	 	 	 	 	

 

 
PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements
bluebird bio, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except par value amounts)
 
 	March 31,	 	 	December 31,	 	
 	2016	 	 	2015	 	
Assets	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	$	192,588	 	 	$	164,269	 	
Marketable securities	 	360,515	 	 	 	353,680	 	
Prepaid expenses and other current assets	 	7,871	 	 	 	6,016	 	
Total current assets	 	560,974	 	 	 	523,965	 	
Marketable securities	 	273,762	 	 	 	347,814	 	
Property and equipment, net	 	96,638	 	 	 	82,614	 	
Intangible assets, net	 	23,516	 	 	 	24,456	 	
Goodwill	 	13,128	 	 	 	13,128	 	
Restricted cash and other non-current assets	 	10,686	 	 	 	10,360	 	
Total assets	$	978,704	 	 	$	1,002,337	 	
Liabilities and stockholders’ equity	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable	$	3,136	 	 	$	6,334	 	
Accrued expenses and other current liabilities	 	29,623	 	 	 	28,145	 	
Deferred revenue, current portion	 	6,209	 	 	 	5,889	 	
Total current liabilities	 	38,968	 	 	 	40,368	 	
Deferred rent, net of current portion	 	8,498	 	 	 	8,294	 	
Deferred revenue, net of current portion	 	44,861	 	 	 	35,959	 	
Contingent consideration, net of current portion	 	5,248	 	 	 	5,082	 	
Construction financing lease obligation	 	74,414	 	 	 	61,901	 	
Other non-current liabilities	 	208	 	 	 	237	 	
Total liabilities	 	172,197	 	 	 	151,841	 	
Commitments and contingencies (Note 7)	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	
Preferred stock, $0.01 par value, 5,000 shares authorized;
   0 shares issued and outstanding at March 31, 2016
   and December 31, 2015	 	—	 	 	 	—	 	
Common stock, $0.01 par value, 125,000 shares authorized;
   36,937 and 36,894 shares issued and outstanding at
   March 31, 2016 and December 31, 2015, respectively	 	369	 	 	 	369	 	
Additional paid-in capital	 	1,177,551	 	 	 	1,166,585	 	
Accumulated other comprehensive loss	 	(972	)	 	 	(2,291	)	
Accumulated deficit	 	(370,441	)	 	 	(314,167	)	
Total stockholders’ equity	 	806,507	 	 	 	850,496	 	
Total liabilities and stockholders’ equity	$	978,704	 	 	$	1,002,337	 	
 
See accompanying notes to unaudited condensed consolidated financial statements.

 
2

 
bluebird bio, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
(in thousands, except per share data)
 
 	Three months ended March 31,	 	
 	 	2016	 	 	 	2015	 	
Revenue:	 	 	 	 	 	 	 	
Collaboration revenue	$	1,499	 	 	$	6,344	 	
Total revenue	 	1,499	 	 	 	6,344	 	
Operating expenses:	 	 	 	 	 	 	 	
Research and development	 	41,911	 	 	 	23,719	 	
General and administrative	 	15,955	 	 	 	7,336	 	
Change in fair value of contingent consideration	 	1,013	 	 	 	215	 	
Total operating expenses	 	58,879	 	 	 	31,270	 	
Loss from operations	 	(57,380	)	 	 	(24,926	)	
Other income, net	 	961	 	 	 	139	 	
Loss before income taxes	 	(56,419	)	 	 	(24,787	)	
Income tax benefit	 	145	 	 	 	—	 	
Net loss	$	(56,274	)	 	$	(24,787	)	
Net loss per share - basic and diluted:	$	(1.52	)	 	$	(0.76	)	
Weighted-average number of common shares used in computing net loss
   per share - basic and diluted:	 	36,920	 	 	 	32,558	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	
Unrealized gain (loss) on available-for-sale securities, net of tax of $0.7 million
   for the three months ended March 31, 2016	 	1,319	 	 	 	(52	)	
Comprehensive loss	$	(54,955	)	 	$	(24,839	)	
 
See accompanying notes to unaudited condensed consolidated financial statements.

 
3

 
bluebird bio, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
 
 	March 31,	 	
 	 	2016	 	 	 	2015	 	
Operating activities	 	 	 	 	 	 	 	
Net loss	$	(56,274	)	 	$	(24,787	)	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	
Change in fair value of contingent consideration	 	1,013	 	 	 	215	 	
Depreciation and amortization	 	2,283	 	 	 	1,710	 	
Stock-based compensation expense	 	10,143	 	 	 	5,432	 	
Other non-cash items	 	868	 	 	 	130	 	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	
Prepaid expenses and other assets	 	(2,271	)	 	 	(2	)	
Accounts payable	 	(2,195	)	 	 	(331	)	
Accrued expenses and other liabilities	 	211	 	 	 	88	 	
Deferred revenue	 	9,222	 	 	 	(6,344	)	
Deferred rent	 	234	 	 	 	(270	)	
Net cash used in operating activities	 	(36,766	)	 	 	(24,159	)	
Investing activities	 	 	 	 	 	 	 	
Purchase of property and equipment	 	(3,894	)	 	 	(1,156	)	
Purchases of marketable securities	 	(28,175	)	 	 	(223,020	)	
Proceeds from maturities of marketable securities	 	96,515	 	 	 	31,200	 	
Net cash provided by (used in) investing activities	 	64,446	 	 	 	(192,976	)	
Financing activities	 	 	 	 	 	 	 	
Proceeds from issuance of common stock	 	639	 	 	 	2,464	 	
Net cash provided by financing activities	 	639	 	 	 	2,464	 	
Increase (decrease) in cash and cash equivalents	 	28,319	 	 	 	(214,671	)	
Cash and cash equivalents at beginning of period	 	164,269	 	 	 	347,845	 	
Cash and cash equivalents at end of period	$	192,588	 	 	$	133,174	 	
Non-cash investing and financing activities:	 	 	 	 	 	 	 	
Construction financing lease obligation	$	12,513	 	 	$	—	 	
Purchases of property and equipment included in accounts payable and accrued expenses	$	1,086	 	 	$	1,125	 	
 
See accompanying notes to unaudited condensed consolidated financial statements.

 
4

 
bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
1. Description of the business
bluebird bio, Inc. (the “Company” or “bluebird”) was incorporated in Delaware on April 16, 1992, and is headquartered in Cambridge, Massachusetts. The Company researches, develops, manufactures and plans to commercialize gene therapies for the treatment of severe genetic and rare diseases and in the field of T cell-based immunotherapy. Since its inception, the Company has devoted substantially all of its resources to its research and development efforts relating to its product candidates, including activities to manufacture product candidates, conduct clinical studies of its product candidates, perform preclinical research to identify new product candidates and provide general and administrative support for these operations.

2. Summary of significant accounting policies and basis of presentation
Basis of presentation and principles of consolidation
The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended March 31, 2016 and 2015.
The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2015, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2016.
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Precision Genome Engineering, Inc. (“Pregenen”), bluebird bio France – SARL, bluebird bio Australia Pty Ltd., bluebird bio (UK) Ltd., bluebird bio (Bermuda) Ltd. and bluebird bio Securities Corporation. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the United States.
Summary of accounting policies
The significant accounting policies and estimates used in the preparation of the condensed consolidated financial statements are described in the Company’s audited financial statements as of and for the year ended December 31, 2015, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K. There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2016.
Net income (loss) per share
Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common stock equivalent shares outstanding for the period, including any dilutive effect from outstanding stock options, unvested restricted stock, restricted stock units, employee stock purchase plan, warrants, and acquisition holdback shares using the treasury stock method.
5

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Estimates are used in the following areas, among others: fair value estimates used to assess potential impairment of long-lived assets, construction financing lease obligations, contingent consideration, stock-based compensation expense, accrued expenses, revenue and income taxes. Actual results could materially differ from those estimates.
Recently issued accounting pronouncements
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard will be effective on January 1, 2018 and earlier application is permitted only for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the potential impact that Topic 606 may have on its financial position and results of operations.
In February 2016, the FASB issued ASU 2016-02, Leases, (“ASU 2016-02”), which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard will be effective beginning January 1, 2019, and early adoption is permitted for public entities. The Company is currently evaluating the potential impact ASU 2016-02 may have on its financial position.
In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU No. 2016-09”), which simplifies share-based payment accounting through a variety of amendments. The standard will be effective for annual reporting periods and interim periods within those annual periods, beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating the potential impact ASU 2016-09 may have on its financial position.

3. Marketable securities
The following table summarizes the available-for-sale securities held at March 31, 2016 and December 31, 2015 (in thousands):
 
Description	 	Amortized Cost	 	 	Unrealized Gains	 	 	Unrealized Losses	 	 	Fair Value	 	
March 31, 2016	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. government agency securities and treasuries	 	$	625,903	 	 	$	91	 	 	$	(370	)	 	$	625,624	 	
Certificates of deposit	 	 	8,640	 	 	 	13	 	 	 	—	 	 	 	8,653	 	
Total	 	$	634,543	 	 	$	104	 	 	$	(370	)	 	$	634,277	 	
December 31, 2015	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. government agency securities and treasuries	 	$	689,425	 	 	$	22	 	 	$	(2,300	)	 	$	687,147	 	
Certificates of deposit	 	 	14,360	 	 	 	—	 	 	 	(13	)	 	 	14,347	 	
Total	 	$	703,785	 	 	$	22	 	 	$	(2,313	)	 	$	701,494	 	
 
No available-for-sale securities held as of March 31, 2016 or December 31, 2015 had remaining maturities greater than three years.
 
6

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
4. Fair value measurements
The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 (in thousands):
 
Description	 	Total	 	 	Quoted
prices in
active
markets
(Level 1)	 	 	Significant
other
observable
inputs
(Level 2)	 	 	Significant
unobservable
inputs
(Level 3)	 	
March 31, 2016	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	192,588	 	 	$	187,588	 	 	$	5,000	 	 	$	—	 	
Marketable securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. government agency securities and treasuries	 	 	625,624	 	 	 	—	 	 	 	625,624	 	 	 	—	 	
Certificates of deposit	 	 	8,653	 	 	 	—	 	 	 	8,653	 	 	 	—	 	
Total assets	 	$	826,865	 	 	$	187,588	 	 	$	639,277	 	 	$	—	 	
Liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingent consideration	 	$	9,678	 	 	$	—	 	 	$	—	 	 	$	9,678	 	
Total liabilities	 	$	9,678	 	 	$	—	 	 	$	—	 	 	$	9,678	 	
December 31, 2015	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	164,269	 	 	$	158,269	 	 	$	6,000	 	 	$	—	 	
Marketable securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. government agency securities and treasuries	 	 	687,147	 	 	 	—	 	 	 	687,147	 	 	 	—	 	
Certificates of deposit	 	 	14,347	 	 	 	—	 	 	 	14,347	 	 	 	—	 	
Total assets	 	$	865,763	 	 	$	158,269	 	 	$	707,494	 	 	$	—	 	
Liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingent consideration	 	$	8,665	 	 	$	—	 	 	$	—	 	 	$	8,665	 	
Total liabilities	 	$	8,665	 	 	$	—	 	 	$	—	 	 	$	8,665	 	
 
Cash and cash equivalents
The Company considers all highly liquid securities with original final maturities of three months or less from the date of purchase to be cash equivalents. As of March 31, 2016 and December 31, 2015, cash and cash equivalents comprise funds in cash, money market accounts, U.S. government agency securities, and federally insured deposits.
Marketable securities
The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. At March 31, 2016 and December 31, 2015, the balance in the Company’s accumulated other comprehensive loss was composed solely of activity related to the Company’s available-for-sale marketable securities. There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the three months ended March 31, 2016, and as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss for the same period.
The aggregate fair value of securities held by the Company in an unrealized loss position for less than twelve months as of March 31, 2016 and December 31, 2015 was $411.7 million and $638.1 million, respectively. The aggregate fair value of securities held by the Company in an unrealized loss position for more than twelve months as of March 31, 2016 was $43.3 million. The aggregate unrealized loss for those securities in an unrealized loss position for more than twelve months is less than $0.1 million. The Company has the intent and ability to hold such securities until recovery. The Company determined that there was no material change in the credit risk of the above investments. As a result, the Company determined it did not hold any investments with any other-than-temporary impairment as of March 31, 2016 and December 31, 2015.
7

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
Contingent consideration
On June 30, 2014, the Company acquired Pregenen. The Company may be required to make up to $134.0 million in future contingent cash payments to the former equityholders of Pregenen upon the achievement of certain preclinical, clinical and commercial milestones related to the Pregenen technology, of which $14.0 million relates to preclinical milestones, $20.1 million relates to clinical milestones and $99.9 million relates to commercial milestones.
In connection with the acquisition, the Company recorded contingent consideration pertaining to the amounts potentially payable to Pregenen’s former equityholders pursuant to the Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among the Company, Pregenen and Pregenen’s former equityholders. Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates on an on-going basis as additional data impacting the assumptions is obtained. Future changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the condensed consolidated statements of operations and comprehensive loss.
Contingent consideration may change significantly as development progresses and additional data are obtained, impacting the Company’s assumptions regarding probabilities of successful achievement of related milestones used to estimate the fair value of the liability and the timing in which they are expected to be achieved. In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques could result in materially different fair value estimates.
The significant unobservable inputs used in the measurement of fair value of the Company’s contingent consideration are probabilities of successful achievement of preclinical, clinical and commercial milestones, the period in which these milestones are expected to be achieved ranging from 2016 to 2026 and discount rates ranging from 9.7% to 13.4%. Significant increases or decreases in any of the probabilities of success would result in a significantly higher or lower fair value measurement, respectively. Significant increases or decreases in these other inputs would result in a significantly lower or higher fair value measurement, respectively.
The table below provides a roll-forward of fair value of the Company’s contingent consideration obligations, which include Level 3 inputs (in thousands):
 
 	Three Months Ended	 	
 	March 31, 2016	 	
Beginning balance	$	8,665	 	
Additions	 	—	 	
Changes in fair value	 	1,013	 	
Payments	 	—	 	
Ending balance	$	9,678	 	
 
As of March 31, 2016, $4.4 million of the fair value of the Company’s total contingent consideration obligations was reflected as a component of accrued expenses and other current liabilities within the condensed consolidated balance sheets, with the remaining balance of $5.2 million reflected as a non-current liability.

8

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
5. Property and equipment, net
Property and equipment, net, consists of the following (in thousands):
 
 	March 31, 2016	 	 	December 31, 2015	 	
Computer equipment and software	$	1,292	 	 	$	1,259	 	
Office equipment	 	1,347	 	 	 	1,104	 	
Laboratory equipment	 	12,513	 	 	 	10,520	 	
Leasehold improvements	 	13,925	 	 	 	11,010	 	
Construction-in-progress	 	75,719	 	 	 	65,542	 	
Total property and equipment, gross	 	104,796	 	 	 	89,435	 	
Less accumulated depreciation and amortization	 	(8,158	)	 	 	(6,821	)	
Total Property and equipment, net	$	96,638	 	 	$	82,614	 	
 
Construction-in-progress as of March 31, 2016 includes $74.7 million related to construction costs incurred by the landlord at 60 Binney Street in Cambridge, Massachusetts. Please refer to Note 7, "Commitments and contingencies," for further information.

6. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
 
 	March 31, 2016	 	 	December 31, 2015	 	
Employee compensation	$	4,394	 	 	$	5,935	 	
Accrued goods and services	 	18,012	 	 	 	16,153	 	
Accrued professional fees	 	914	 	 	 	1,014	 	
Deferred rent, current portion	 	994	 	 	 	964	 	
Contingent consideration, current portion	 	4,431	 	 	 	3,584	 	
Other	 	878	 	 	 	495	 	
Total accrued expenses and other current liabilities	$	29,623	 	 	$	28,145	 	

7. Commitments and contingencies
The Company is party to various agreements, principally relating to licensed technology, that require future payments relating to milestones not met at March 31, 2016 and December 31, 2015 or royalties on future sales of specified products.
The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with claims by any third party with respect to the Company’s products or business activities. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.
The Company’s wholly-owned subsidiary bluebird bio France – SARL participates in the French Crédit d’Impôt Recherche (“CIR”) program, which allows companies to monetize up to 30% of eligible research expenses. The Company received aggregate reimbursement of €1.6 million related to years 2012 through 2014.  The Company has applied for €1.0 million related to the year ended December 31, 2015, and has not yet applied for the €0.4 million related to the three months ended March 31, 2016. The €1.0 million is classified as a short term receivable within the condensed consolidated balance sheets as of March 31, 2016.  The years 2012 through 2016 are open and subject to examination.
9

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
Operating Lease Commitments
On June 3, 2013, the Company entered into a nine-year building lease for approximately 43,600 square feet of space located at 150 Second Street, Cambridge, Massachusetts, which commenced in December 2013. This lease was amended in June 2014 to add approximately 9,900 square feet. The lease originally had monthly lease payments of $0.2 million for the first 12 months, which increased to $0.3 million per month beginning in December 2014 due to the lease amendment, with annual rent escalations thereafter. Rent expense is recognized on a straight-line basis over the term of the lease. The Company has the option to extend this lease by an additional five years. The lease provided a contribution from the landlord towards the initial build-out of the space of up to $7.8 million. The Company capitalizes the leasehold improvements as property and equipment and records the landlord incentive payments received as deferred rent and amortizes these amounts as reductions to rent expense over the lease term. In addition, in accordance with the lease, the Company entered into a cash-collateralized irrevocable standby letter of credit in the amount of $1.3 million, naming the landlord as beneficiary. This may be reduced to $0.6 million upon the second anniversary of the rent commencement date in the second quarter of 2016.  
On June 29, 2015, the Company entered into a lease agreement for additional office space located at 215 First Street, Cambridge, Massachusetts.  Under the terms of the lease, the Company leased approximately 15,120 square feet starting on July 13, 2015 for $0.5 million per year in base rent, which is subject to a 3% annual rent increase plus certain operating expenses and taxes. The lease will continue until the end of the 60 th  full calendar month following the date the landlord delivers the premises to the Company, and includes early termination provisions that could allow the Company to terminate the lease at the end of the 20 th  full calendar month following the delivery of the premises if the Company meets certain conditions specified within the lease.  Under the terms of the lease, the Company has also leased an additional 8,075 square feet of office space in the same premises starting on January 1, 2016 for an additional $0.3 million per year in base rent, which is subject to a 3% annual rent increase plus certain operating expenses and taxes.
60 Binney Street Lease Commitments
On September 21, 2015, the Company entered into a lease agreement for additional office and laboratory space located in a building (the “Building”) under construction at 60 Binney Street, Cambridge, Massachusetts (the “60 Binney Lease”).  Under the terms of the 60 Binney Lease, starting on October 1, 2016, the Company will lease approximately 253,108 square feet of office and laboratory space at $72.50 per square foot per year, or $18.4 million per year in base rent, which is subject to scheduled annual rent increases of 1.75% plus certain operating expenses and taxes. The Company also executed a $9.2 million letter of credit upon signing the 60 Binney Lease, which was required to be collateralized with a bank account at a financial institution in accordance with the 60 Binney Lease agreement. This $9.2 million is subject to increase to $13.8 million when the Company first requests reimbursement of tenant improvement costs from the landlord. Subject to the terms of the lease and certain reduction requirements specified therein, including market capitalization requirements, this amount may decrease back to $9.2 million over time. The 60 Binney Lease will continue until the end of the 120 th  full calendar month following April 2017 or the earlier the date the Company occupies the Building or other conditions specified in the 60 Binney Lease occur.  Pursuant to a work letter entered into in connection with the 60 Binney Lease, the landlord will contribute an aggregate of $42.4 million toward the cost of construction and tenant improvements for the Building. The purpose of the 60 Binney Lease is to supplement and eventually replace the Company’s current leased premises at 150 Second Street and 215 First Street in Cambridge, Massachusetts and the Company intends to move its corporate headquarters to 60 Binney Street in mid-2017. The Company has the option to extend the 60 Binney Lease for two successive five-year terms.
Because the Company is involved in the construction project, including having responsibility to pay for a portion of the costs of finish work and mechanical, electrical, and plumbing elements of the Building, the Company is deemed for accounting purposes to be the owner of the Building during the construction period. Accordingly, the Company has recorded project construction costs incurred by the landlord as an asset in “Property and equipment, net” and a related financing obligation in “Construction financing lease obligation” on the Company’s condensed consolidated balance sheet.
The Company bifurcates its future lease payments pursuant to the 60 Binney Lease into (i) a portion that is allocated to the Building and (ii) a portion that is allocated to the land on which the Building is being constructed, which is recorded as rental expense. Although the Company estimates that the Company will not begin making lease payments pursuant to the 60 Binney Lease until April 2017, the portion of the lease obligation allocated to the land is treated for accounting purposes as an operating lease that commenced upon execution of the 60 Binney Lease in September 2015. During the three months ended March 31, 2016, the Company recognized $0.5 million of non-cash rental expense attributable to the land.
10

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
As of March 31, 2016, Property and equipment, net, includes $74.7 million related to construction costs for the Building. The construction financing lease obligation related to the Building was $74.4 million. No cash has been paid to the landlord to date.
Once the landlord completes the construction of the Building, the Company will evaluate the 60 Binney Lease in order to determine whether or not the 60 Binney Lease meets the criteria for “sale-leaseback” treatment. If the 60 Binney Lease meets the “sale-leaseback” criteria, the Company will remove the asset and the related liability from its consolidated balance sheet and treat the 60 Binney Lease as either an operating or a capital lease based on the Company’s assessment of the accounting guidance.  The Company expects that upon completion of construction of the Building the 60 Binney Lease will not meet the “sale-leaseback” criteria. If the 60 Binney Lease does not meet “sale-leaseback” criteria, the Company will treat the 60 Binney Lease as a financing obligation and will depreciate the asset in accordance with the Company’s accounting policy.

8. Significant agreements
Celgene Corporation
Original Collaboration Agreement
On March 19, 2013, the Company entered into a Master Collaboration Agreement (the “Collaboration Agreement”) with Celgene Corporation (“Celgene”) to discover, develop and commercialize potentially disease-altering gene therapies in oncology. The collaboration is focused on applying gene therapy technology to genetically modify a patient’s own T cells, known as chimeric antigen receptor, or CAR T cells, to target and destroy cancer cells. Additionally, on March 19, 2013, the Company entered into a Platform Technology Sublicense Agreement (the “Sublicense Agreement”) with Celgene pursuant to which the Company obtained a sublicense to certain intellectual property from Celgene, originating under Celgene’s license from Baylor College of Medicine, for use in the collaboration.
Under the terms of the Collaboration Agreement, the Company received a $75.0 million up-front, non-refundable cash payment. The Company was responsible for conducting discovery, research and development activities through completion of Phase I clinical studies, if any, during the initial term of the Collaboration Agreement, or three years. The collaboration is governed by a joint steering committee (“JSC”) formed by an equal number of representatives from the Company and Celgene. The JSC, among other activities, reviews the collaboration program, reviews and evaluates product candidates and approves regulatory plans. In addition to the JSC, the Collaboration Agreement provides that the Company and Celgene each appoint representatives to a patent committee, which is responsible for managing the intellectual property developed and used during the collaboration.
Amended Collaboration Agreement
On June 3, 2015, the Company and Celgene amended and restated the Collaboration Agreement (the “Amended Collaboration Agreement”).  Under the Amended Collaboration Agreement, the parties will now focus the collaboration exclusively on anti- B-cell maturation antigen (“BCMA”) product candidates for a new three-year term. In connection with the Amended Collaboration Agreement, the Company received an upfront, one-time, non-refundable, non-creditable payment of $25.0 million to fund research and development under the collaboration. The collaboration will continue to be governed by the JSC. 
Under the terms of the Amended Collaboration Agreement, for up to two product candidates selected for development under the collaboration, the Company is responsible for conducting and funding all research and development activities performed up through completion of the initial Phase I clinical study of such product candidate.
On a product candidate-by-product candidate basis, up through a specified period following enrollment of the first patient in an initial Phase I clinical study for such product candidate (the “Option Period”), the Company has granted Celgene an option to obtain an exclusive worldwide license to develop and commercialize such product candidate pursuant to a written agreement, the form of which the Company has already agreed upon. In the event that Celgene exercises its option with respect to any product candidate, the Company may elect to co-develop and co-promote the product candidate in the United States, provided that, if the Company does not exercise its option co-develop and co-promote the first product candidate in-licensed by Celgene under the Amended Collaboration Agreement, then the Company will not be permitted to exercise its option to co-develop and co-promote any future product candidates under the Amended Collaboration Agreement. If Celgene elects to exercise its option to exclusively in-license a product candidate, it must pay the Company an option fee in the amount of $10.0 million for the first product candidate and $15.0 million for any additional product candidates.
11

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
On February 10, 2016, Celgene exercised its option to obtain an exclusive worldwide license to develop and commercialize bb2121, the first product candidate under the Amended Collaboration Agreement, pursuant to an executed license agreement entered into by the parties on February 16, 2016 and paid the associated $10.0 million option fee. The Company may now elect to co-develop and co-promote the product candidate in the United States and will receive an additional fee in the amount of $10.0 million in the event the Company does not exercise its option to co-develop and co-promote bb2121 with Celgene. On February 17, 2016, the parties further amended the Amended Collaboration Agreement to update the timing of certain deliverables in connection with Celgene’s option exercise for the license of the bb2121 product candidate.
Accounting Analysis
The Company’s Amended Collaboration Agreement with Celgene contains the following deliverables: (i) research and development services, (ii) participation on the JSC, (iii) participation on the patent committee, (iv) a license to the first product candidate, (v) manufacture of vectors and associated payload for incorporation into the first optioned product candidate under the license, and (vi) participation on the JGC under the co-development and co-promotion agreement for the first optioned product candidate under the license.
The license to the first product candidate was considered a deliverable at the inception of the arrangement and therefore the associated option fee was included in allocable arrangement consideration as the Company believed there was minimal risk with regard to whether Celgene will exercise the option based on the successful completion of preclinical activities and proximity of enrollment of the first patient in an initial Phase I clinical study for this product candidate. The Company determined that the obligation within the license to manufacture or have manufactured supplies of vectors and associated payloads for incorporation into the first optioned product candidate is a deliverable, consistent with the option to license the first product candidate.
However, the Company determined that the options to license any additional product candidates are substantive options and therefore were not considered deliverables at execution of the Amended Collaboration Agreement. Celgene is not contractually obligated to exercise the options. Additionally, as a result of the uncertain outcome of the discovery, research and development activities, the Company is at risk with regard to whether Celgene will exercise the options to license additional product candidates. Moreover, the Company determined that the options are not priced at a significant and incremental discount. Accordingly, the options to other product candidates are not considered deliverables and the associated option fees are not included in allocable arrangement consideration.
Upon execution of the Amended Collaboration Agreement in June 2015, the Company concluded that each of the three delivered elements at the inception of the agreement (research and development services, participation on the JSC and participation on the patent committee) had standalone value from the other undelivered elements. Additionally, the Amended Collaboration Agreement does not include return rights related to the collaboration term. Accordingly, each deliverable qualified as a separate unit of accounting.
The Company determined that each of the delivered elements had the same period of performance (the three year term through projected initial Phase I clinical study substantial completion) and the same pattern of revenue recognition, ratably over the period of performance as there was no other discernible pattern of recognition. The Company identified the allocable arrangement consideration as the $25.0 million up-front research and development funding payment, $10.0 million option fee for the first product candidate, $20.0 million related to remaining deferred revenue from the original Collaboration Agreement, and $54.1 million of contingent revenue related to the estimated amounts that will be received from Celgene for manufacturing services. The $109.0 million total allocable arrangement consideration was allocated based on the relative estimated selling price of the separate units of accounting at the inception of the amended agreement, resulting in $17.3 million allocated to the three delivered elements at the inception of the agreement, which will be recognized over an initial three year term. This initial term will be revisited as the development plan timing changes or as a result of other events that impact the period over which the Company’s obligations relate.
The Company is required to reassess its conclusions on standalone value of deliverables upon delivery, and therefore, upon Celgene’s exercise of its option to obtain an exclusive worldwide license to develop and commercialize bb2121 in February 2016, the Company updated its assessment. The Company determined that there were no changes in standalone value of the research and development services as the option was previously determined to be non-substantive, the Company continues to have an obligation to provide research and development services for bb2121 and other product candidates, and this obligation is separate and unrelated to the execution of the license agreement.  Participation on the JSC and participation on the patent committee also continue to have standalone value from the other undelivered elements as there has been no change in facts that would change this conclusion. Accordingly, each of these three deliverables continues to qualify as a separate unit of accounting.
12

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
The Company determined that each of the identified deliverables that qualify as a separate unit of accounting continue to have the same period of performance (the three year term through projected initial Phase I clinical study substantial completion) and the same pattern of revenue recognition, ratably over the period of performance as there is no other discernible pattern of recognition, and therefore there is no change in the recognition of $17.3 million allocated to these three elements. This will continue to be recognized over a three year term that began in June 2015.
However, the Company concluded that the license to bb2121 does not have standalone value from one of the undelivered elements, the manufacture of vectors and associated payload for bb2121 under the license, because the manufacturing is essential to the license agreement and will not begin until the substantial completion of the initial Phase I clinical study of bb2121. Accordingly, these two deliverables qualify as a single combined unit of accounting.
The single combined unit of accounting comprised of the license to bb2121 and the manufacture of vectors and associated payload for bb2121 were allocated consideration of $91.7 million, which will begin to be recognized upon the commencement of manufacturing services for bb2121 for Celgene post-initial Phase I, not in excess of the fixed consideration and assuming other revenue recognition criteria have been met. The Company currently expects this to commence in the second half of 2017 or first half of 2018. Revenue for the combined unit of account will be recognized on a proportional performance method or ratably over the period of performance if there is no other discernible pattern of recognition. This period of performance and recognition pattern will be revisited as the development plan changes or if other events impacting the deliverables occur.
The Company evaluated all of the milestones that may be received in connection with Celgene’s option to license a product candidate resulting from the collaboration. In evaluating if a milestone is substantive, the Company assesses whether: (i) the consideration is commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone, (ii) the consideration relates solely to past performance and (iii) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. All clinical and regulatory milestones that may be received under the option to the license agreement are considered substantive on the basis of the contingent nature of the milestone, specifically reviewing factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the milestone as well as the level of effort and investment required. Accordingly, such amounts will be recognized as revenue in full in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met. All commercial milestones will be accounted for in the same manner as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met.
During the three months ended March 31, 2016 and 2015 the Company recognized $1.5 million and $6.3 million, respectively, of revenue associated with its collaboration with Celgene related to the recognition of discovery, research and development services. As of March 31, 2016 and December 31, 2015, there was $51.1 million and $41.8 million, respectively, of total deferred revenue related to the Company’s collaboration with Celgene, which is classified as current or non-current in the condensed consolidated balance sheets, $13.5 million of which is currently expected to be recognized through the first half of 2018 with the remaining amount deferred until a later date, as described above.

9. Stock-based compensation
In January 2016, the number of shares of common stock available for issuance under the 2013 Stock Option and Incentive Plan (“2013 Plan”) was increased by approximately 1.5 million shares as a result of the automatic increase provision of the 2013 Plan. As of March 31, 2016, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 1.3 million.
13

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
Stock-based compensation expense
Stock-based compensation expense by award type was as follows (in thousands):
 
 	Three months ended March 31,	 	
 	 	2016	 	 	 	2015	 	
Stock options	$	8,926	 	 	$	4,755	 	
Restricted stock units	 	1,127	 	 	 	617	 	
Employee stock purchase plan	 	90	 	 	 	60	 	
 	$	10,143	 	 	$	5,432	 	
 
Of the $10.1 million of stock-based compensation expense incurred during the first quarter of 2016, $4.7 million is classified as research and development expense and $5.4 million is classified as general and administrative expense in the condensed consolidated statement of operations and comprehensive loss. Of the $5.4 million of stock-based compensation expense incurred during the first quarter of 2015, $3.2 million is classified as research and development expense and $2.2 million is classified as general and administrative expense in the condensed consolidated statement of operations and comprehensive loss. As of March 31, 2016, the Company had $105.3 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to unvested stock options, restricted stock units and the employee stock purchase plan, which is expected to be recognized over a weighted-average period of 3.0 years.
In the first quarter of 2016, the Company modified the vesting conditions of stock option awards held by an employee immediately following their separation from the Company. As a result of the modification, the Company recognized $0.3 million of stock-based compensation expense during the three months ended March 31, 2016 within general and administrative expense.     
Stock options
The following table summarizes the stock option activity under the Company’s equity award plans (shares in thousands):
 
 	Shares	 	 	Weighted-average
exercise price
per share	 	
Outstanding at December 31, 2015	 	3,532	 	 	$	48.74	 	
Granted	 	713	 	 	$	50.93	 	
Exercised	 	(33	)	 	$	14.34	 	
Canceled or forfeited	 	(108	)	 	$	28.54	 	
Outstanding at March 31, 2016	 	4,104	 	 	$	49.94	 	
Exercisable at March 31, 2016	 	1,538	 	 	$	24.29	 	
Vested and expected to vest at March 31, 2016	 	4,017	 	 	$	50.48	 	
 
Options exercisable for less than 0.1 million shares of common stock were exercised during the three months ended March 31, 2016, resulting in total proceeds to the Company of $0.5 million. In accordance with the Company’s equity award plans, the shares were issued from a pool of shares reserved for issuance under the equity award plans.
 
14

bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
Restricted stock units
The following table summarizes the restricted stock unit activity under the Company’s equity award plans (shares in thousands):
 
 	Shares	 	 	Weighted-average
grant date
fair value	 	
Unvested balance at December 31, 2015	 	148	 	 	$	65.79	 	
Granted	 	178	 	 	$	50.93	 	
Vested	 	—	 	 	$	—	 	
Forfeited	 	(6	)	 	$	30.47	 	
Unvested balance at March 31, 2016	 	320	 	 	$	58.20	 	
 
Employee stock purchase plan
On June 3, 2013, the Company’s board of directors adopted its 2013 Employee Stock Purchase Plan (“2013 ESPP”), which was subsequently approved by its stockholders and became effective upon the closing of the Company’s IPO on June 24, 2013. The 2013 ESPP authorizes the initial issuance of up to a total of 238,000 shares of the Company’s common stock to participating employees. The first offering period under the 2013 ESPP opened on August 1, 2014. During the three months ended March 31, 2016 and 2015, 9,758 shares and 6,780 shares of common stock were issued under the 2013 ESPP, respectively.
 
10. Income taxes
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Due to the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, the Company has recorded a full valuation allowance against the Company’s otherwise recognizable net deferred tax assets.
For the three months ended March 31, 2016, the Company recognized an income tax benefit of $0.1 million and tax expense in other comprehensive loss of $0.7 million related to the unrealized gain on available-for-sale securities during the quarter. As of March 31, 2016, the Company recorded an accrued income tax provision of $0.6 million related to this tax benefit included within accrued expenses and other current liabilities in the condensed consolidated balance sheet, which is expected to be generated from continuing operations.

11. Net loss per share
The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect (in thousands):
 
 	March 31,	 	
 	 	2016	 	 	 	2015	 	
Warrants	 	—	 	 	 	177	 	
Outstanding stock options	 	4,104	 	 	 	4,074	 	
Restricted stock units	 	320	 	 	 	179	 	
ESPP shares	 	10	 	 	 	1	 	
Acquisition holdback	 	—	 	 	 	94	 	
 	 	4,434	 	 	 	4,525	 	

 
15

 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or the SEC, on February 25, 2016.
Except for the historical information contained herein, the matters discussed in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as “may,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements.
Our actual results and the timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods.
The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, including those risks identified under Part II, Item 1A. Risk Factors.
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Overview
We are a clinical-stage biotechnology company committed to developing potentially transformative gene therapies for severe genetic and rare diseases and in the field of T cell-based immunotherapy.  With our lentiviral-based gene therapy and gene editing capabilities, we have built an integrated product platform with broad potential application in these areas. We believe that gene therapy for severe genetic diseases has the potential to change the way these patients are treated by correcting the underlying genetic defect that is the cause of their disease, rather than offering treatments that only address their symptoms. We and our scientific collaborators have generated what we believe is human proof-of-concept data for our gene therapy platform in three underserved diseases.
We are conducting three clinical studies of our LentiGlobin product candidate: a Phase I/II study in the United States, Australia, and Thailand, called the Northstar Study, for the treatment of transfusion-dependent β-thalassemia, or TDT; a single-center Phase I/II study in France (HGB-205) for the treatment of TDT and severe sickle cell disease, or severe SCD; and a Phase I study in the United States (HGB-206) for the treatment of severe SCD. We have achieved our enrollment target of 18 patients in the Northstar Study.  Both TDT and severe SCD are rare, hereditary blood disorders that often lead to severe anemia and shortened lifespans. Our LentiGlobin product candidate has been granted Orphan Drug status by the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, for both β-thalassemia and SCD. Our LentiGlobin product candidate was granted Fast-Track designation by the FDA for the treatment of β-thalassemia major in January 2013 and for the treatment of certain patients with severe SCD in May 2014. In January 2015, the FDA granted Breakthrough Therapy designation to our LentiGlobin product candidate for the treatment of transfusion-dependent patients with β-thalassemia major. We have discussed the designs of two global Phase III clinical trials of our LentiGlobin product candidate for patients with TDT with the FDA and EMA. We expect that our HGB-207 study will enroll adult and adolescent patients with TDT who do not have the β0/β0 genotype, and once initiated, is currently expected to enroll approximately 15 patients to be evaluated for 24 months following treatment. We anticipate that the primary endpoint of this study will be 12 months of transfusion independence following treatment. In addition, we are considering initiating an additional Phase III clinical study in pediatric patients who have a diagnosis of TDT.
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We are also conducting a Phase II/III clinical study, called the Starbeam Study, of our Lenti-D product candidate, to evaluate its safety and efficacy in subjects with cerebral adrenoleukodystrophy, or CALD, a rare, hereditary neurological disorder that is often fatal. In October 2013, we announced that the first subject had been treated in this study and in May 2015 we announced the achievement of enrollment of 18 subjects in this study. We are also conducting an observational study of subjects with CALD treated by allogeneic hematopoietic stem-cell transplant referred to as the ALD-103 study. Our Lenti-D product candidate has been granted Orphan Drug status by the FDA and the EMA for the treatment of adrenoleukodystrophy.  
In March 2013, we entered into a global strategic collaboration with Celgene Corporation, or Celgene, to discover, develop and commercialize chimeric antigen receptor-modified T cells, or CAR T cells, as potentially disease-altering therapies in oncology. This collaboration had an initial term of three years, and Celgene made a $75.0 million up-front, non-refundable cash payment to us as consideration for entering into the collaboration. In June 2015, we amended and restated the collaboration agreement, or the Amended Collaboration Agreement, to focus exclusively on anti-BCMA product candidates for a new three-year term.  B-cell maturation antigen, or BCMA, is a cell surface protein that is expressed on normal plasma cells and on most multiple myeloma cells, but is absent from other normal tissues. As consideration for the Amended Collaboration Agreement, we received an upfront, non-refundable cash payment of $25.0 million to fund research and development under the collaboration. In February 2016, we treated the first subject in our Phase I clinical study of bb2121, the first anti-BCMA product candidate from this collaboration. This study will enroll up to 40 patients who have received three prior regimens for treatment of multiple myeloma. In February 2016, Celgene exercised its option to obtain an exclusive worldwide license to develop and commercialize bb2121 and as a result, has paid to us an option fee in the amount of $10.0 million in the first quarter of 2016. We may elect to co-develop and co-promote bb2121, and any other product candidates in the United States under this collaboration arrangement.
In June 2014, we acquired Precision Genome Engineering, Inc., or Pregenen, a privately-held biotechnology company headquartered in Seattle, Washington. Through the acquisition, we obtained rights to Pregenen’s gene editing and cell signaling technology. The agreement provided for up to $135.0 million in future contingent cash payments by us upon the achievement of certain preclinical, clinical and commercial milestones related to the Pregenen technology, of which $15.0 million relates to preclinical milestones, $20.1 million relates to clinical milestones and $99.9 million relates to commercial milestones. We estimate future contingent cash payments have a fair value of $9.7 million as of March 31, 2016, $4.4 million of which is classified as a current liability. We estimate that we will pay the former equityholders of Pregenen approximately $5.0 million in the second quarter of 2016 related to the achievement of two preclinical milestones in the second quarter of 2016.
As of March 31, 2016, we had cash, cash equivalents and marketable securities of approximately $826.9 million. We expect that our existing cash, cash equivalents and marketable securities will be sufficient to fund our current operations through 2018.
Since our inception in 1992, we have devoted substantially all of our resources to our development efforts relating to our product candidates, including activities to manufacture product candidates in compliance with good manufacturing practices, or GMP, to conduct clinical studies of our product candidates, to provide general and administrative support for these operations and to protect our intellectual property. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through the sale of common stock in our public offerings, private placements of preferred stock and warrants and through collaborations.
We have never been profitable and have incurred net losses in each year since inception. Our net loss was $56.3 million for the three months ended March 31, 2016 and our accumulated deficit was $370.4 million as of March 31, 2016. Substantially all our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect our expenses will increase substantially in connection with our ongoing and planned activities, as we:
 	·	conduct clinical studies for our LentiGlobin, Lenti-D, and bb2121 product candidates;	

 	·	increase research and development-related activities for the discovery and development of oncology product candidates;	

 	·	continue our research and development efforts;	

 	·	manufacture clinical study materials and develop large-scale manufacturing capabilities;	

 	·	seek regulatory approval for our product candidates; and	

 	·	add personnel to support our product development and commercialization efforts.	
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We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. We have no commercial-scale manufacturing facilities, and all of our manufacturing activities are contracted out to third parties. Additionally, we currently utilize third-party contract research organizations, or CROs, to carry out our clinical development activities; and we do not yet have a sales and marketing organization. If we seek to obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses as we prepare for product sales, marketing, manufacturing, and distribution. Accordingly, we will seek to fund our operations through public or private equity or debt financings, strategic collaborations, or other sources. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our products.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenues from the sale of our products, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.
 
Financial operations overview
Revenue
To date, we have not generated any revenues from the sale of products. Our revenues have been derived from collaboration arrangements, research fees, license fees and grant revenues.
Collaboration revenue is generated exclusively from our collaboration arrangement with Celgene, which was amended in 2015. The terms of this amended arrangement contain multiple deliverables, which include: (i) research and development services, (ii) participation on the joint steering committee (iii) participation on the patent committee, (iv) a license to the first product candidate, (v) manufacture of vectors and associated payload for incorporation into the first optioned product candidate under the license, and (vi) participation on the joint governance committee under the co-development and co-promotion agreement for the first optioned product candidate under the license. We recognize arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 605,  Revenue Recognition , or ASC 605, are satisfied for that particular unit of accounting. We expect that $17.3 million of revenue from the Celgene arrangement associated with discovery, research and development services, joint steering committee services and patent committee services will be recognized ratably over the associated period of performance, which was initially estimated to be three years from the date of the agreement in June 2015. We expect that $91.7 million of revenue from the Celgene arrangement associated with the license to the first product candidate, bb2121, and the manufacture of vector and associated payload for bb2121 following the initial Phase I study will be recognized on a proportional performance method or ratably over the period of performance as there is no other discernible pattern of recognition. This period of performance and recognition pattern will be revisited as the development plan changes or if other events impacting the deliverables occur.
Research and development expenses
Research and development expenses consist primarily of costs incurred for the development of our product candidates, which include:
 	·	employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;	

 	·	expenses incurred under agreements with CROs and clinical sites that conduct our clinical studies;	

 	·	costs of acquiring, developing, and manufacturing clinical study materials;	

 	·	facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, information technology, and other supplies;	

 	·	costs associated with our research platform and preclinical activities;	

 	·	costs associated with in-licensing other product candidates or technologies for use in preclinical and clinical activities;	

 	·	costs associated with our regulatory, quality assurance and quality control operations; and	

 	·	amortization of intangible assets.	
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Research and development costs are expensed as incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites. We cannot determine with certainty the duration and completion costs of the current or future clinical studies of our product candidates or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates. The duration, costs, and timing of clinical studies and development of our product candidates will depend on a variety of factors, including:
 	·	the scope, rate of progress, and expense of our ongoing as well as any additional clinical studies and other research and development activities we undertake;	

 	·	future clinical study results;	

 	·	uncertainties in clinical study enrollment rates;	

 	·	changing standards for regulatory approval; and	

 	·	the timing and receipt of any regulatory approvals.	
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA, or another regulatory authority were to require us to conduct clinical studies beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate or if we experience significant delays in enrollment in any of our clinical studies, we could be required to expend significant additional financial resources and time on the completion of clinical development for our product candidates.
We plan to increase our research and development expenses for the foreseeable future as we continue to advance the clinical development of our Lenti-D and LentiGlobin product candidates, conduct research and development activities in the field of oncology and continue the research and development of product candidates using our gene editing technology platform. Our research and development activities include the following:
 	·	We are conducting a Phase II/III clinical study to examine the safety and efficacy of our Lenti-D product candidate in the treatment of CALD. In October 2013, we announced that the first subject had been treated in this study and in May 2015 we announced the achievement of enrollment of 18 subjects in this study. We are also conducting an observational study of subjects with CALD treated by allogeneic hematopoietic stem-cell transplant.	

 	·	We are conducting a Phase I/II clinical study in the United States, Australia and Thailand to study the safety and efficacy of our LentiGlobin product candidate in the treatment of subjects with TDT. In March 2014, we announced that the first subject had been treated in this study.	

 	·	We are conducting a Phase I/II clinical study in France to study the safety and efficacy of our LentiGlobin product candidate in the treatment of subjects with TDT and severe SCD. In December 2013, we announced that the first subject with TDT had been treated in this study and in October 2014, we announced that the first subject with severe SCD had been treated in this study.	

 	·	We are conducting a Phase I clinical study in the United States to study the safety and efficacy of our LentiGlobin product candidate in the treatment of subjects with severe SCD. In June 2015, we announced that the first patient with severe SCD had been treated in this study.	

 	·	We intend to initiate a Phase III clinical study in 2016 to study the safety and efficacy of our LentiGlobin product candidate in the treatment of patients with a diagnosis of TDT who have non-β 0 /β 0  genotypes.	

 	·	We are conducting a Phase I clinical study in the United States to study the safety and efficacy of our bb2121 product candidate in the treatment of subjects with relapsed/refractory multiple myeloma. In February 2016, we announced that the first subject with relapsed/refractory multiple myeloma had been treated in this study.	

 	·	We will continue to manufacture clinical study materials in support of our clinical studies.	
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Our direct research and development expenses consist principally of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical studies, costs to in-license product candidates and new technologies, and costs related to acquiring and manufacturing clinical study materials. We allocate salary and benefit costs directly related to specific programs. We do not allocate personnel-related discretionary bonus or stock-based compensation costs, costs associated with our general discovery platform improvements, depreciation or other indirect costs that are deployed across multiple projects under development and, as such, the costs are separately classified as personnel and other expenses in the table below:
 
 	 	Three months ended March 31,	 	
 	 	 	2016	 	 	 	2015	 	
 	 	(in thousands)	 	
LentiGlobin	 	$	15,200	 	 	$	7,090	 	
Lenti-D	 	 	2,777	 	 	 	4,453	 	
bb2121	 	 	3,403	 	 	 	—	 	
Pre-clinical programs	 	 	3,839	 	 	 	2,650	 	
Total direct research and development expense	 	 	25,219	 	 	 	14,193	 	
Employee-and contractor-related expenses	 	 	3,899	 	 	 	2,468	 	
Stock-based compensation expense	 	 	4,681	 	 	 	3,234	 	
Platform-related expenses	 	 	3,273	 	 	 	2,177	 	
Facility expenses	 	 	4,428	 	 	 	1,502	 	
Other expenses	 	 	411	 	 	 	145	 	
Unallocated personnel and other expenses	 	 	16,692	 	 	 	9,526	 	
Total research and development expense	 	$	41,911	 	 	$	23,719	 	
 
The costs associated with our bb2121 program were included in pre-clinical programs in the table shown above for the three months ended March 31, 2015, and are separately shown for the three months ended March 31, 2016, when we initiated the first clinical study for bb2121.
General and administrative expenses
General and administrative expenses consist primarily of salaries and related costs for personnel, including stock-based compensation and travel expenses for our employees in executive, operational, finance, legal, business development, commercial and human resource functions. Other general and administrative expenses include allocated facility-related information technology costs, professional fees for accounting, consulting and legal services, directors’ fees and expenses associated with obtaining and maintaining patents.
We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of our product candidates. Additionally, if and when we believe a regulatory approval of the first product candidate appears likely, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.
Other income, net
Other income, net consists primarily of interest income earned on investments.
Critical accounting policies and estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued research and development expenses, revenue, construction financing lease obligations, stock-based compensation, income taxes, contingent consideration and fair value estimates used to assess potential impairment of long-lived assets. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. During the three months ended March 31, 2016, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 25, 2016.
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Results of Operations
Comparison of the three months ended March 31, 2016 and 2015:
 
 	Three months ended March 31,	 	 	 	 	 	
 	 	2016	 	 	 	2015	 	 	Change	 	
 	(in thousands)	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	
Collaboration revenue	$	1,499	 	 	$	6,344	 	 	$	(4,845	)	
Total revenue	 	1,499	 	 	 	6,344	 	 	 	(4,845	)	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	41,911	 	 	 	23,719	 	 	 	18,192	 	
General and administrative	 	15,955	 	 	 	7,336	 	 	 	8,619	 	
Change in fair value of contingent consideration	 	1,013	 	 	 	215	 	 	 	798	 	
Total operating expenses	 	58,879	 	 	 	31,270	 	 	 	27,609	 	
Loss from operations	 	(57,380	)	 	 	(24,926	)	 	 	32,454	 	
Other income, net	 	961	 	 	 	139	 	 	 	(822	)	
Loss before income taxes	 	(56,419	)	 	 	(24,787	)	 	 	31,632	 	
Income tax benefit	 	145	 	 	 	-	 	 	 	(145	)	
Net loss	$	(56,274	)	 	$	(24,787	)	 	$	31,487	 	
 
Revenue. Total revenue was $1.5 million for the three months ended March 31, 2016 compared to $6.3 million for the three months ended March 31, 2015. The decrease of $4.8 million was primarily attributable to a reduction in collaboration revenue as a result of the amendment to our collaboration agreement with Celgene in the second quarter of 2015.
Research and development expenses. Research and development expenses were $41.9 million for the three months ended March 31, 2016, compared to $23.7 million for the three months ended March 31, 2015. The increase of $18.2 million was primarily attributable to the following:
 	·	$5.4 million of increased employee compensation and benefit expense, $1.4 million of which related to stock-based compensation expense and $2.8 million of which related to increased payroll expense.	

 	·	$3.5 million of increased manufacturing related costs, $2.1 million of increased lab expenses, and $1.4 million of increased clinical trial related costs necessary to support the advancement of our clinical and pre-clinical programs.	

 	·	$1.9 million of license and milestone fees, primarily as a result of the commencement during the first quarter of 2016 of our Phase I clinical trial for bb2121.	

 	·	$2.3 million of increased facilities and information technology expenses.	
General and administrative expenses. General and administrative expenses were $16.0 million for the three months ended March 31, 2016, compared to $7.3 million for the three months ended March 31, 2015. The increase of $8.6 million was primarily attributable to $5.6 million of increased employee compensation and benefit expense to support our overall growth, of which $3.3 million was stock-based compensation expense and $1.2 million related to increased payroll expense. It was also partly attributable to increased consulting fees of $2.1 million to support our overall growth and increased facilities costs of $0.9 million primarily related to an increase in leased office space in Cambridge, Massachusetts.
Change in fair value of contingent consideration. The change in fair value of contingent consideration of $1.0 million was primarily related to an increase in the probability of successful achievement of milestones expected to be achieved within the next twelve months. 
Change in other income (expense), net. The change in other income (expense), net was primarily related to increased interest income of $0.7 million due to increased marketable securities balances resulting from our underwritten public offering in June 2015. 

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Liquidity and Capital Resources
As of March 31, 2016, we had cash, cash equivalents and marketable securities of approximately $826.9 million. We expect cash, cash equivalents and marketable securities to fund our planned operations through 2018. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. As of March 31, 2016, our funds are held in U.S. Treasury securities, U.S. government agency securities, federally insured deposits, certificates of deposit and money market funds.
We have incurred losses and cumulative negative cash flows from operations since our inception in April 1992, and as of March 31, 2016 we had an accumulated deficit of $370.4 million. We anticipate that we will continue to incur losses for at least the next several years. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through public or private equity or debt financings, strategic collaborations, or other sources.
We have funded our operations principally from the sale of common stock, preferred stock and through the Celgene collaboration. On June 24, 2013, we completed our initial public offering, or IPO, whereby we sold 6,832,352 shares of common stock at a price of $17.00 per share for aggregate net proceeds received by us of $104.9 million. On July 14, 2014, we sold 3,450,000 shares of common stock (inclusive of 450,000 shares of common stock sold by us pursuant to the full exercise of an overallotment option granted to the underwriters in connection with the offering) through an underwritten public offering at a price of $34.00 per share for aggregate net proceeds to us of $109.8 million. On December 19, 2014, we sold 3,047,500 shares of common stock (inclusive of 397,500 shares of common stock sold by us pursuant to the full exercise of an overallotment option granted to the underwriters in connection with the offering) through an underwritten public offering at a price of $85.00 per share for aggregate net proceeds to us of $243.3 million. On June 29, 2015, we sold 2,941,176 shares of common stock through an underwritten public offering at a price of $170.00 per share for aggregate net proceeds to us of $477.2 million.
Sources of Liquidity
Cash Flows
The following table sets forth the primary sources and uses of cash for each of the periods below:
 
 	March 31,	 	
 	 	2016	 	 	 	2015	 	
 	(in thousands)	 	
Net cash provided by (used in):	 	 	 	 	 	 	 	
Operating activities	$	(36,766	)	 	$	(24,159	)	
Investing activities	 	64,446	 	 	 	(192,976	)	
Financing activities	 	639	 	 	 	2,464	 	
Net increase (decrease)  in cash and cash equivalents	$	28,319	 	 	$	(214,671	)	
 
Cash Flows from Operating Activities. The $12.6 million increase in cash used in operating activities for the three months ended March 31, 2016, compared to the three months ended March 31, 2015, was primarily due to the increase in net loss during this period which was primarily attributable to increased payroll-related expense, in-license milestones and fees, and spending on our clinical and pre-clinical stage programs.  Net loss was $56.3 million for the three months ended March 31, 2016 compared to $24.8 million for the three months ended March 31, 2015, an increase of $31.5 million.  
Cash Flows from Investing Activities. The net cash provided by investing activities was $66.4 million for the three months ended March 31, 2016 and was primarily due to $96.5 million in maturities of marketable securities offset by $28.2 million in purchases of marketable securities.
Cash Flows from Financing Activities: The net cash provided by financing activities was $0.6 million for the three months ended March 31, 2016 and was due to $0.6 million in proceeds from the exercise of stock options and ESPP contributions.
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Contractual Obligations and Commitments
We have obligations to make future payments to third parties that become due and payable on the achievement of certain development, regulatory and commercial milestones. In addition to the commitments described in our Annual Report on Form 10-K, which was filed with the SEC on February 25, 2016, the following commitments are not on our balance sheet because the achievement and timing of these milestones are not fixed and determinable:
 	·	Under a license agreement with Biogen Inc., pursuant to which we license certain patents and patent applications related to our bb2121 product candidate, we will be required to make certain payments related to certain development milestone obligations and must report on our progress in achieving these milestones on a periodic basis. We may be obligated to pay up to $24.0 million in the aggregate for a licensed product upon the achievement of these milestones. Upon commercialization of our products covered by the in-licensed intellectual property, we will be obligated to pay a percentage of net sales as a royalty in the low single digits.	

 	·	Under a license agreement with the National Institutes of Health, pursuant to which we license certain patents and patent applications related to our bb2121 product candidate, we have agreed to certain development and regulatory milestone obligations and must report on our progress in achieving these milestones on a periodic basis. We may be obligated to pay up to $9.7 million in the aggregate for a licensed product upon the achievement of these milestones. Upon commercialization of our products covered by the in-licensed intellectual property, we will be obligated to pay NIH a percentage of net sales as a royalty in the low single digits. The royalties payable under this license agreement are subject to reduction for any third party payments required to be made, with a minimum floor in the low single digits.	
There have been no other material changes to our contractual obligations during the three months ended March 31, 2016.
 
Off-Balance Sheet Arrangements
As of March 31, 2016, we did not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Item 3. Quantitative and Qualitative Disclosures about Market Risks
We are exposed to market risk related to changes in interest rates. As of March 31, 2016 and December 31, 2015, we had cash, cash equivalents and marketable securities of $826.9 million and $865.8 million, respectively, primarily invested in U.S. government agency securities, federally insured certificates of deposit and money market mutual funds invested in U.S. Treasuries or U.S. government agency securities. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term securities. Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. If market interest rates were to increase immediately and uniformly by 100 basis points, or one percentage point, from levels at March 31, 2016, the net fair value of our interest-sensitive marketable securities would have resulted in a hypothetical decline of approximately $6.1 million.
 
Item 4. Controls and Procedures
Management’s Evaluation of our Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities and Exchange Act of 1934 is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
As of March 31, 2016, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial officer have concluded based upon the evaluation described above that, as of March 31, 2016, our disclosure controls and procedures were effective at the reasonable assurance level.
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Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2016, there have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION
 
Item 1. Legal Proceedings
In the ordinary course of business, we are from time to time involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual property, commercial arrangements, employment and other matters. While the outcome of these proceedings and claims cannot be predicted with certainty, as of March 31, 2016, we were not party to any legal or arbitration proceedings that may have, or have had in the recent past, significant effects on our financial position. No governmental proceedings are pending or, to our knowledge, contemplated against us. We are not a party to any material proceedings in which any director, member of executive management or affiliate of ours is either a party adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries.
 
Item 1A. Risk Factors
An investment in shares of our common stock involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Quarterly Report on Form 10-Q, including our financial statements and related notes hereto, before deciding to invest in our common stock. The occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment.
Those risk factors below denoted with a “*” are newly added or have been materially updated from our Annual Report on 10-K filed with the Securities and Exchange Commission, or the SEC, on February 25, 2016.
Risks related to the discovery and development of our product candidates
* Our gene therapy product candidates are based on a novel technology, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval. At the moment, no gene therapy products have been approved in the United States and only one product has been approved in the European Union, or EU.
We have concentrated our therapeutic product research and development efforts on our gene therapy platform, and our future success depends on the successful development of this therapeutic approach. There can be no assurance that any development problems we experience in the future related to our gene therapy platform will not cause significant delays or unanticipated costs, or that such development problems can be solved. We may also experience delays in developing a sustainable, reproducible and commercial-scale manufacturing process or transferring that process to commercial partners, which may prevent us from completing our clinical studies or commercializing our products on a timely or profitable basis, if at all.
In addition, the clinical study requirements of the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential products. The regulatory approval process for novel product candidates such as ours can be more expensive and take longer than for other, better known or more extensively studied pharmaceutical or other product candidates. At the moment, only one gene therapy product, UniQure’s Glybera, which received marketing authorization in the EU in 2012, has been approved in the Western world. In addition, in April 2016, the Committee for Medicinal Products for Human Use of the EMA recommended GlaxoSmithKline’s gene therapy product Strimvelis for approval by the European Commission. Given the few precedents of approved gene therapy products, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, the EU or other jurisdictions. Approvals by the EMA and the European Commission may not be indicative of what the FDA may require for approval.
Regulatory requirements governing gene and cell therapy products have evolved and may continue to change in the future. For example, the FDA has established the Office of Cellular, Tissue and Gene Therapies within its Center for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review. Gene therapy clinical studies conducted at institutions that receive funding for
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recombinant DNA research from the U.S. National Institutes of Health, or NIH, are also subject to review by the NIH Office of Biotechnology Activities’ Recombinant DNA Advisory Committee, or RAC. Although the FDA decides whether individual gene therapy protocols may proceed, the RAC review process can impede the initiation of a clinical study, even if the FDA has reviewed the study and approved its initiation. For example, although we have discussed with the FDA the protocol design for a Phase III clinical study in pediatric subjects for our LentiGlobin product candidate, the RAC completed its public review in June 2015 and recommended a delay of initiation of a Phase III pediatric clinical study in the United States for an additional one to two years. We cannot predict if this recommendation may delay enrollment of such a pediatric clinical study. Clinical trial sites in the United States that receive NIH funding for research involving recombinant or synthetic nucleic acid molecules are required to follow RAC recommendations, or risk losing NIH funding for such research or needing NIH pre-approval before conducting such research. In addition, the FDA can put an investigational new drug application, or IND, on clinical hold if the information in an IND is not sufficient to assess the risks in pediatric patients. Before a clinical study can begin at any institution, that institution’s institutional review board, or IRB, and its Institutional Biosafety Committee will have to review the proposed clinical study to assess the safety of the study. Moreover, serious adverse events or developments in clinical trials of gene therapy product candidates conducted by others may cause the FDA or other regulatory bodies to initiate a clinical hold on our clinical trials or otherwise change the requirements for approval of any of our product candidates.
These regulatory review agencies, committees and advisory groups and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of these treatment candidates or lead to significant post-approval studies, limitations or restrictions. As we advance our product candidates, we will be required to consult with these regulatory and advisory groups and comply with applicable requirements and guidelines. If we fail to do so, we may be required to delay or discontinue development of our product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business.
We may find it difficult to enroll patients in our clinical studies, which could delay or prevent clinical studies of our product candidates.
Identifying and qualifying patients to participate in clinical studies of our product candidates is critical to our success. The timing of our clinical studies depends on the speed at which we can recruit eligible patients to participate in testing our product candidates. We have experienced delays in some of our clinical studies, and we may experience similar delays in the future. If patients are unwilling to participate in our gene therapy studies because of negative publicity from adverse events in the biotechnology or gene therapy industries or for other reasons, including competitive clinical studies for similar patient populations, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of potential products may be delayed. These delays could result in increased costs, delays in advancing our product development, delays in testing the effectiveness of our technology or termination of the clinical studies altogether.
We may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a study, to complete our clinical studies in a timely manner. Patient enrollment is affected by factors including:
 	·	severity of the disease under investigation;	

 	·	design of the study protocol;	

 	·	size of the patient population;	

 	·	eligibility criteria for the study in question;	

 	·	perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies;	

 	·	proximity and availability of clinical study sites for prospective patients;	

 	·	availability of competing therapies and clinical studies;	

 	·	efforts to facilitate timely enrollment in clinical studies;	

 	·	patient referral practices of physicians; and	

 	·	ability to monitor patients adequately during and after treatment.	
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In particular, each of the conditions for which we plan to evaluate our current hematopoietic stem cell, or HSC, product candidates are rare genetic disorders with limited patient pools from which to draw for clinical studies. It has been estimated that about 1.5% (80 to 90 million people) of the global population are carriers of ß-thalassemia, with about 60,000 symptomatic individuals born annually, the great majority in the developing world. According to Thalassemia International Federation, about 288,000 patients with transfusion-dependent β-thalassemia, or TDT, are alive and registered as receiving regular treatment around the world, of which we estimate that about 10,000-15,000 live in the United States and Europe. The global incidence of SCD is estimated to be 250,000-300,000 births annually with a global prevalence estimated to be about 20-25 million. The worldwide incidence rate for adrenoleukodystrophy, the superset of cerebral adrenoleukodystrophy, or CALD, is approximately one in 21,000 male births. CALD in young boys accounts for about 30-40% of patients diagnosed with adrenoleukodystrophy. Further, because newborn screening for CALD is not widely adopted, and it can be difficult to diagnose CALD in the absence of a genetic screen, we may have difficulty finding patients who are eligible to participate in our study. The eligibility criteria of our clinical studies will further limit the pool of available study participants. Additionally, the process of finding and diagnosing patients may prove costly. Finally, our treatment process requires that the procurement of autologous cells from subjects be conducted where the cells can be shipped to a transduction facility within the required timelines, as the HSCs and T cells, in the case of our oncology product candidate, have limited viability following harvest.
Our current product candidates are being developed to treat rare conditions and certain cancers. We plan to seek initial marketing approval in the United States and the European Union. We may not be able to initiate or continue clinical studies if we cannot enroll a sufficient number of eligible patients to participate in the clinical studies required by the FDA or the EMA or other regulatory agencies. Our ability to successfully initiate, enroll and complete a clinical study in any foreign country is subject to numerous risks unique to conducting business in foreign countries, including:
 	·	difficulty in establishing or managing relationships with contract research organizations, or CROs, and physicians;	

 	·	different standards for the conduct of clinical studies;	

 	·	our inability to locate qualified local consultants, physicians and partners; and	

 	·	the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment.	
If we have difficulty enrolling a sufficient number of patients to conduct our clinical studies as planned, we may need to delay, limit or terminate ongoing or planned clinical studies, any of which would have an adverse effect on our business.
We may encounter substantial delays in our clinical studies or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical studies to demonstrate the safety, purity and potency, or efficacy, of the product candidates in humans. Clinical testing is expensive, time-consuming and uncertain as to outcome. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical studies can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:
 	·	delays in reaching a consensus with regulatory agencies on study design;	

 	·	delays in obtaining required IRB or Institutional Ethics Committee approval at each clinical study site;	

 	·	delays in recruiting suitable patients to participate in our clinical studies;	

 	·	imposition of a clinical hold by regulatory agencies, after an inspection of our clinical study operations or study sites or due to unforeseen safety issues;	

 	·	failure by our CROs, other third parties or us to adhere to clinical study requirements;	

 	·	failure to perform in accordance with the FDA’s good clinical practices, or GCP, or applicable regulatory requirements in other countries;	

 	·	delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites;	

 	·	failure to obtain sufficient cells from patients to manufacture enough drug product or achieve target cell doses;	

 	·	delays in having patients complete participation in a study or return for post-treatment follow-up;	

 	·	clinical study sites or patients dropping out of a study;	
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 	·	occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; or  	

 	·	changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.	
Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties. In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional studies to demonstrate comparability of our modified product candidates to earlier versions. Clinical study delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
If the results of our clinical studies are inconclusive or if there are safety concerns or adverse events associated with our product candidates, we may:
 	·	be delayed in obtaining regulatory approval for our product candidates, if at all;	

 	·	obtain approval for indications or patient populations that are not as broad as intended or desired;	

 	·	obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;	

 	·	be required to perform additional clinical studies or clinical studies of longer duration to support approval or be subject to additional post-marketing testing requirements;	

 	·	have regulatory authorities withdraw their approval of the product or impose restrictions on its use;	

 	·	be subject to the addition of labeling statements, such as warnings or contraindications;	

 	·	be sued; or	

 	·	experience damage to our reputation.	
Treatment with our gene therapy product candidates involves chemotherapy and myeloablative treatments, which can cause side effects or adverse events that are unrelated to our product candidates, but may still impact the success of our clinical studies. Additionally, our product candidates could potentially cause other adverse events that have not yet been predicted. The inclusion of critically ill patients in our clinical studies may result in deaths or other adverse medical events due to other therapies or medications that such patients may be using, or the progression of their disease. As described above, any of these events could prevent us from achieving or maintaining market acceptance of our product candidates and impair our ability to commercialize our products.
We have not completed any clinical studies of our current viral vectors or product candidates derived from these viral vectors. Initial success in our ongoing clinical studies may not be indicative of results obtained when these studies are completed. Furthermore, success in early clinical studies may not be indicative of results obtained in later studies.
Our current viral vectors and our product candidates first initiated evaluation in human clinical studies in 2013, and we may experience unexpected results in the future. Earlier gene therapy clinical studies, which we believe serve as proof-of-concept for our product candidates, utilized lentiviral vectors similar to ours. However, these studies should not be relied upon as evidence that our ongoing or future clinical studies will succeed. Study designs and results from previous studies are not necessarily predictive of our future clinical study designs or results, and initial results may not be confirmed upon full analysis of the complete study data. There is limited data concerning long-term safety and efficacy following treatment with our gene therapy product candidates.  These data, or other positive data, may not continue or occur for these subjects or for any future subjects in our ongoing or future clinical studies, and may not be repeated or observed in ongoing or future studies involving our product candidates. For instance, while patients with TDT or severe SCD who have been treated with our LentiGlobin product candidate may experience a reduction or temporary elimination of transfusion support, there can be no assurance that they will not require transfusion support in the future. Furthermore, our product candidates may also fail to show the desired safety and efficacy in later stages of clinical development despite having successfully advanced through initial clinical studies. There can be no assurance that any of these studies will ultimately be successful or support further clinical advancement or regulatory approval of our product candidates.
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There is a high failure rate for drugs and biologics proceeding through clinical studies. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later stage clinical studies even after achieving promising results in earlier stage clinical studies. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval. In addition, regulatory delays or rejections may be encountered as a result of many factors, including changes in regulatory policy during the period of product development.
Patients with different genotypes may respond differently to treatment with our product candidates, which may result in the delay of our clinical development and commercialization plans.
Initial results from our ongoing clinical studies suggest that patients with TDT who do not have the β0/β0 genotype respond better to treatment with our LentiGlobin product candidate than patients who do have the β 0 /β 0 genotype. Consequently, we expect to seek FDA approval of our LentiGlobin product candidate initially for the treatment of TDT in patients who do not have the β 0 /β 0  genotype. These differences in responsiveness require us to engage regulatory authorities in additional discussions. In order to support an application for FDA approval of our LentiGlobin product candidate in patients who have the β 0 /β 0  genotype, we will need to conduct additional clinical studies, but we do not yet have plans regarding when these trials will commence, or when our LentiGlobin product candidate may be commercially available to all genotypes.
The results from our Starbeam Study may not be sufficiently robust to support the submission of marketing approval for our Lenti-D product candidate. Before we submit our Lenti-D product candidate for marketing approval, the FDA and the EMA may require us to enroll additional subjects, conduct additional clinical studies, or evaluate subjects for an additional follow-up period.
The FDA has advised us that our Starbeam Study, which is a single-arm, open-label study to evaluate the safety and efficacy of our Lenti-D product candidate to halt the progression of CALD, may not be deemed to be a pivotal study or may not provide sufficient support for a Biologics License Application, or BLA, submission. The FDA normally requires two pivotal clinical studies to approve a drug or biologic product, and thus the FDA may require that we conduct larger or additional clinical studies of our Lenti-D product candidate prior to a BLA submission. The FDA typically does not consider a single clinical study to be adequate to serve as a pivotal study unless it is, among other things, well-controlled and demonstrates a clinically meaningful effect on mortality, irreversible morbidity, or prevention of a disease with potentially serious outcome, and a confirmatory study would be practically or ethically impossible. Due to the nature of CALD and the limited number of patients with this condition, we believe a placebo-controlled and blinded study is not practicable for ethical and other reasons. However, it is still possible that, even if we achieve favorable results in the Starbeam Study, the FDA may require us to enroll additional subjects or conduct additional clinical studies, possibly involving a larger sample size or a different clinical study design, particularly if the FDA does not find the results from the Starbeam Study to be sufficiently persuasive to support a BLA submission. The FDA may also require that we conduct a longer follow-up period of subjects treated with our Lenti-D product candidate prior to accepting our BLA submission.
In addition, the Starbeam Study was not designed to achieve a statistically significant efficacy determination. Rather, we anticipate that the safety and efficacy of our Lenti-D product candidate will be evaluated in light of the data collected in our retrospective ALD-101 Study and our observational ALD-103 study. However, due to the retrospective nature of the ALD-101 study, and the limited number of patients with this condition, the FDA has advised us that the ALD-101 Study is not sufficiently robust to serve as a conventional historical control group and as a basis of comparison against the results of the Starbeam Study. Thus, we expect that the FDA will assess the totality of the safety and efficacy data from our CALD clinical studies in reviewing any future BLA submission for our Lenti-D product candidate. Based on this assessment, the FDA may require that we conduct additional preclinical or clinical studies prior to submitting or approving a BLA for this indication.
It is possible that the FDA or the EMA may not consider the results of this study to be sufficient for approval of our Lenti-D product candidate for this indication. If the FDA or the EMA requires additional studies, we would incur increased costs and delays in the marketing approval process, which may require us to expend more resources than we have available. In addition, it is possible that the FDA and the EMA may have divergent opinions on the elements necessary for a successful BLA and Marketing Authorization Application, or MAA, respectively, which may cause us to alter our development, regulatory and/or commercialization strategies.
We cannot be certain that our planned Phase III clinical studies of our LentiGlobin product candidate, together with data from our ongoing TDT clinical studies (Northstar and HGB-205), will be sufficient to form the basis for a BLA submission for our LentiGlobin product candidate.
In general, the FDA requires the successful completion of two pivotal trials to support approval of a BLA, but in certain circumstances, will approve a BLA based on only one pivotal trial. If successful, we believe the results from our planned Phase III clinical studies in patients with TDT who do not have the β 0 / β 0  genotype, together with data from our ongoing TDT clinical studies (Northstar and HGB-205), could be sufficient to form the basis for a BLA submission for our LentiGlobin product candidate to treat patients with TDT who do not have the β 0 / β 0  genotype. However, it should be noted that our ability to submit and obtain approval of a
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BLA is ultimately an FDA review decision, which will be dependent upon the data available at such time, and the available data may not be sufficiently robust from a safety and/or efficacy perspective to support the submission or approval of a BLA. Depending on the outcome of these planned and ongoing clinical studies, the FDA may require that we conduct additional or larger pivotal trials before we can submit or obtain approval for a BLA for our LentiGlobin product candidate for the treatment of TDT.
In June 2015, the RAC recommended that we delay the initiation of a Phase III clinical study for pediatric patients with TDT for one to two years. Any delay in the initiation or completion of such a study could similarly delay our ability to submit a BLA for our LentiGlobin product candidate or obtain full approval in Europe.
Before beginning our planned Phase III clinical studies of our LentiGlobin product candidate, the FDA must review the final protocols for the studies, along with additional information supporting the respective proposed study designs. Concurrent with starting the studies, the FDA will review certain updated chemistry, manufacturing and controls, or CMC, information that we are required to submit. If the FDA does not approve the protocols for the planned studies in the forms in which we submit them, or if the FDA is not satisfied with the additional CMC information we plan to provide, the start or continuation of these clinical studies may be delayed or the design of the studies may change.
There can be no assurance that we will ultimately receive conditional marketing approval of our LentiGlobin product candidate in the European Union, or the nature of the conditions that would be imposed on us if conditionally approved.
The EMA Adaptive Pathways program in which we are participating is intended to facilitate either an initial approval in a well-defined patient subgroup with a high medical need and subsequent widening of the indication to a larger patient population, or an early regulatory approval (e.g. conditional approval), which is prospectively planned, and where uncertainty is reduced through the collection of post-approval data on a drug’s use in patients. Based on our discussions with the EMA, we believe our LentiGlobin product candidate may be eligible for conditional approval under this program for the treatment of patients with TDT on the basis of the totality of clinical data, in particular reduction in transfusion need, from the ongoing Northstar study and supportive HGB-205 study.
However, it should be noted that the EMA Adaptive Pathways program is a pilot program, and as such there is limited information and precedent regarding the potential outcomes for sponsors that participate in this program. Whether our LentiGlobin product candidate is eligible for conditional approval will ultimately be determined at the discretion of the EMA and will be dependent upon the data available at such time, and the available data may not be sufficiently robust from a safety and/or efficacy perspective to support conditional approval. Depending on the outcome of our planned and ongoing clinical trials, the EMA may require that we conduct additional or larger clinical trials before our LentiGlobin product candidate is eligible for conditional approval. Even if conditional approval is obtained, the conditions to be imposed on us under this program are unknown and will be imposed at the time of any such conditional approval.
Changes in our manufacturing processes may cause delays in our clinical development and commercialization plans.
The manufacturing processes for our lentiviral vectors and our product candidates are complex. As we develop a commercial-scale manufacturing process for our LentiGlobin and Lenti-D product candidates, we are exploring improvements to the manufacturing process for both producing our lentiviral vectors and for our product candidates on a continual basis. In some circumstances, changes in the manufacturing process may require us to perform additional comparability studies or to collect additional data from patients prior to undertaking additional clinical studies. The FDA may also require us to file a new IND with respect to such changes in our manufacturing process. These requirements may lead to delays in our clinical development and commercialization plans.
In previous clinical studies involving viral vectors for gene therapy, some subjects experienced serious adverse events, including the development of leukemia due to vector-related insertional oncogenesis.  If our vectors demonstrate a similar effect, we may be required to halt or delay further clinical development of our product candidates.
A significant risk in any gene therapy product based on viral vectors is that the vector will insert in or near cancer-causing oncogenes leading to uncontrolled clonal proliferation of mature cancer cells in the patient.  For example, in 2003, 20 subjects treated for X-linked severe combined immunodeficiency in two gene therapy studies using a murine, or mouse-derived, gamma-retroviral vector showed correction of the disease, but the studies were terminated after five subjects developed leukemia (four of whom were subsequently cured). The cause of these adverse events was shown to be insertional oncogenesis, which is the process whereby the corrected gene inserts in or near a gene that is important in a critical cellular process like growth or division, and this insertion results in the development of a cancer (often leukemia). Using molecular diagnostic techniques, it was determined that clones from these subjects showed retrovirus insertion in proximity to the promoter of the LMO2 proto-oncogene. Earlier generation retroviruses like the one used in these two studies have been shown to preferentially integrate in regulatory regions of genes that control cell growth.
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These well-publicized adverse events led to the development of new viral vectors, such as lentiviral vectors, with improved safety profiles and also the requirement of enhanced safety monitoring in gene therapy clinical trials, including periodic analyses of the therapy’s genetic insertion sites. In published studies, lentiviral vectors have demonstrated an improved safety profile over gamma-retroviral vectors, with no disclosed events of gene therapy-related adverse events, which we believe is due to a number of factors including the tendency of these vectors to integrate within genes rather than in areas that control gene expression, as well as their lack of strong viral enhancers. However, it should be noted that in our Phase I/II study (the LG001 Study) of autologous HSCs transduced  ex vivo  using an earlier generation of our LentiGlobin vector, called HPV569, we initially observed in one subject that a disproportionate number of the cells expressing our functional gene had the same insertion site. Tests showed that this partial clonal dominance contained an insertion of the functional gene in the HMGA2 gene that persisted for a period of two to three years. Although there was some initial concern that the observed clonal dominance might represent a pre-leukemic event, there have been no adverse clinical consequences of this event, or any signs of cancer, in over seven years since the observation was made. The presence of the HMGA2 clone has steadily declined in this subject over time to the point that it is no longer the most common clone observed in this subject.
Notwithstanding the historical data regarding the potential safety improvements of lentiviral vectors, the risk of insertional oncogenesis remains a significant concern for gene therapy and we cannot assure that it will not occur in any of our ongoing or planned clinical studies. There is also the potential risk of delayed adverse events following exposure to gene therapy products due to persistent biological activity of the genetic material or other components of products used to carry the genetic material. The FDA has stated that lentiviral vectors possess characteristics that may pose high risks of delayed adverse events. If any such adverse events occur, further advancement of our clinical studies could be halted or delayed, which would have a material adverse effect on our business and operations.
In previous clinical studies involving T cell-based immunotherapies, some subjects experienced serious adverse events. Our T cell-based immunotherapy product candidates may demonstrate a similar effect or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.
Our bb2121 product candidate is a chimeric antigen receptor, or CAR, T cell-based immunotherapy. In previous clinical studies involving CAR T cell product candidates from other companies or academic researchers, some subjects experienced serious adverse events, including febrile neutropenia, chemical laboratory abnormalities, low blood counts, neurotoxicity, and significant, acute toxicities with symptoms thought to be associated with the release of cytokines. These symptoms included fever, low blood pressure and kidney dysfunction.  Some patients also experienced toxicity of the central nervous system, such as confusion, somnolence and speech impairment. There have been life threatening events related to cytokine release syndrome and toxicities of the central nervous system. Some of these events required intense medical intervention such as intubation. Several patients have died in clinical trials of these CAR T cell product candidates.
Undesirable side effects caused by our bb2121 product candidate, or our other T cell-based immunotherapy product candidates, could cause us or regulatory authorities to interrupt, delay or halt clinical studies and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities. Results of our studies could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the studies or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, as toxicities resulting from T cell-based immunotherapies are not normally encountered in the general patient population and by medical personnel. We expect to have to train medical personnel regarding our T cell-based immunotherapy product candidates to understand their side effects for both our planned clinical trials and upon any commercialization of any T cell-based immunotherapy product candidates. Inadequate training in recognizing or managing the potential side effects of T cell-based immunotherapy product candidates could result in patient deaths. Any of these occurrences may harm our business, financial condition and prospects significantly.
Even if we complete the necessary preclinical and clinical studies, we cannot predict when or if we will obtain regulatory approval to commercialize a product candidate or the approval may be for a more narrow indication than we expect.
We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate. Even if our product candidates demonstrate safety and efficacy in clinical studies, the regulatory agencies may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory advisory group or authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory agency policy during the period of product development, clinical studies and the review process. Regulatory agencies also may approve a treatment candidate for fewer or more limited indications than requested or may grant approval subject to the performance of post-marketing studies. In addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our treatment candidates. For example, the development of our product candidates for pediatric use is an important part of our current business strategy, and if we are unable to obtain regulatory approval for the desired age ranges, our business may suffer.
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Even if we obtain regulatory approval for a product candidate, our products will remain subject to regulatory scrutiny.
Even if we obtain regulatory approval in a jurisdiction, the regulatory authority may still impose significant restrictions on the indicated uses or marketing of our product candidates, or impose ongoing requirements for potentially costly post-approval studies, post-market surveillance or patient or drug restrictions. For example, the FDA typically advises that patients treated with gene therapy undergo follow-up observations for potential adverse events for a 15-year period. Additionally, the holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA. The holder of an approved BLA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.
In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with good manufacturing practices, or GMP, and adherence to commitments made in the BLA. If we or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may:
 	·	issue a warning letter asserting that we are in violation of the law;	

 	·	seek an injunction or impose civil or criminal penalties or monetary fines;	

 	·	suspend or withdraw regulatory approval;	

 	·	suspend any ongoing clinical studies;	

 	·	refuse to approve a pending marketing application, such as a BLA or supplements to a BLA submitted by us;	

 	·	seize product; or	

 	·	refuse to allow us to enter into supply contracts, including government contracts.	
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenues.
Risks related to our reliance on third parties
We expect to rely on third parties to conduct some or all aspects of our vector production, drug product manufacturing, research and preclinical and clinical testing, and these third parties may not perform satisfactorily.
We do not expect to independently conduct all aspects of our vector production, product manufacturing, research and preclinical and clinical testing. We currently rely, and expect to continue to rely, on third parties with respect to these items. In some cases these third parties are academic, research or similar institutions that may not apply the same quality control protocols utilized in certain commercial settings.
Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibility to ensure compliance with all required regulations and study protocols. For example, for product candidates that we develop and commercialize on our own, we will remain responsible for ensuring that each of our IND-enabling studies and clinical studies are conducted in accordance with the study plan and protocols.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the preclinical and clinical studies required to support future IND and BLA submissions and approval of our product candidates.
Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it could delay our product development activities.
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Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:
 	·	the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;	

 	·	reduced control as a result of using third-party manufacturers for all aspects of manufacturing activities;	

 	·	the risk that these activities are not conducted in accordance with our study plans and protocols;	

 	·	termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; and	

 	·	disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier.	
Any of these events could lead to clinical study delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize future products. Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.
We and our contract manufacturers are subject to significant regulation with respect to manufacturing our products. The manufacturing facilities on which we rely may not continue to meet regulatory requirements and have limited capacity.
We currently have relationships with a limited number of suppliers for the manufacturing of our viral vectors and product candidates. Each supplier may require licenses to manufacture such components if such processes are not owned by the supplier or in the public domain and we may be unable to transfer or sublicense the intellectual property rights we may have with respect to such activities.
All entities involved in the preparation of therapeutics for clinical studies or commercial sale, including our existing contract manufacturers for our product candidates, are subject to extensive regulation. Some components of a finished therapeutic product approved for commercial sale or used in late-stage clinical studies must be manufactured in accordance with GMP. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing. We or our contract manufacturers must supply all necessary documentation in support of a BLA or MAA on a timely basis and where required, must adhere to the FDA’s or other regulator’s good laboratory practices, or GLP, and GMP regulations enforced by the FDA or other regulator through facilities inspection programs. Some of our contract manufacturers have not produced a commercially-approved product and therefore have not obtained the requisite FDA or other regulatory approvals to do so. Our facilities and quality systems and the facilities and quality systems of some or all of our third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. If these facilities do not pass a pre-approval plant inspection, FDA or other regulatory approval of the products will not be granted.
The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our third-party contractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.
If we or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA or other regulators can impose regulatory sanctions including, among other things, refusal to approve a pending application for a biologic product, or revocation of a pre-existing approval. As a result, our business, financial condition and results of operations may be materially harmed.
Additionally, if supply from one approved manufacturer is interrupted, there could be a significant disruption in commercial supply. The number of manufacturers with the necessary manufacturing capabilities is limited. In addition, an alternative manufacturer would need to be qualified through a BLA supplement or similar regulatory submission which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.
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These factors could cause the delay of clinical studies, regulatory submissions, required approvals or commercialization of our product candidates, cause us to incur higher costs and prevent us from commercializing our products successfully. Furthermore, if our suppliers fail to meet contractual requirements, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical studies may be delayed or we could lose potential revenue.
We expect to rely on third parties to conduct, supervise and monitor our clinical studies, and if these third parties perform in an unsatisfactory manner, it may harm our business.
We expect to rely on CROs and clinical study sites to ensure our clinical studies are conducted properly and on time. While we will have agreements governing their activities, we will have limited influence over their actual performance. We will control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of our clinical studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
We and our CROs are required to comply with the FDA’s GCPs for conducting, recording and reporting the results of clinical studies to assure that the data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical study participants are protected. The FDA enforces these GCPs through periodic inspections of study sponsors, principal investigators and clinical study sites. If we or our CROs fail to comply with applicable GCPs, the clinical data generated in our future clinical studies may be deemed unreliable and the FDA may require us to perform additional clinical studies before approving any marketing applications. Upon inspection, the FDA may determine that our clinical studies did not comply with GCPs. In addition, our future clinical studies will require a sufficient number of test subjects to evaluate the safety and efficacy of our product candidates. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, we may be required to repeat such clinical studies, which would delay the regulatory approval process.
Employees of our CROs are not our employees, and we are therefore unable to directly monitor whether or not they devote sufficient time and resources to our clinical and nonclinical programs, which must be conducted in accordance with GCPs and GLPs, respectively. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development activities that could harm our competitive position. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
We also expect to rely on other third parties to store and distribute our vectors and products for any clinical studies that we may conduct. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, if approved, producing additional losses and depriving us of potential product revenue.
Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Because we rely on third parties to manufacture our vectors and our product candidates, and because we collaborate with various organizations and academic institutions on the advancement of our gene therapy platform, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.
In addition, these agreements typically restrict the ability of our collaborators, advisors, employees and consultants to publish data potentially relating to our trade secrets. Our academic collaborators typically have rights to publish data, provided that we are notified in advance and may delay publication for a specified time in order to secure our intellectual property rights arising from the collaboration. In other cases, publication rights are controlled exclusively by us, although in some cases we may share these rights with other parties. We also conduct joint research and development programs that may require us to share trade secrets under the terms
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of our research and development partnerships or similar agreements. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of these agreements, independent development or publication of information including our trade secrets in cases where we do not have proprietary or otherwise protected rights at the time of publication. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.
Risks related to our financial condition and capital requirements
We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.
We are a clinical-stage biotechnology company, and we have not yet generated significant revenues. We have incurred net losses in each year since our inception in 1992, including net losses of $56.3 million and $24.8 million for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016 and December 31, 2015, we had an accumulated deficit of $370.4 million and $314.2 million, respectively.
We have devoted most of our financial resources to research and development, including our clinical and preclinical development activities. To date, we have financed our operations primarily through the sale of equity securities and, to a lesser extent, through collaboration agreements and grants from governmental agencies and charitable foundations. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to obtain funding through equity or debt financings, strategic collaborations or additional grants. We have not completed pivotal clinical studies for any product candidate and it will be several years, if ever, before we have a product candidate ready for commercialization. Even if we obtain regulatory approval to market a product candidate, our future revenues will depend upon the size of any markets in which our product candidates have received approval, and our ability to achieve sufficient market acceptance, reimbursement from third-party payors and adequate market share for our product candidates in those markets.
We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we:
 	·	continue our research and preclinical and clinical development of our product candidates;	

 	·	expand the scope of our current clinical studies for our product candidates;	

 	·	initiate additional preclinical, clinical or other studies for our oncology product candidates;	

 	·	further develop the manufacturing process for our vectors or our product candidates;	

 	·	change or add additional manufacturers or suppliers;	

 	·	seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies;	

 	·	seek to identify and validate additional product candidates;	

 	·	acquire or in-license other product candidates and technologies;	

 	·	make milestone or other payments under any license agreements or our stock purchase agreement with the former equityholders of Pregenen;	

 	·	maintain, protect and expand our intellectual property portfolio;	

 	·	establish a sales, marketing and distribution infrastructure in the United States and Europe to commercialize any products for which we may obtain marketing approval;	

 	·	attract and retain skilled personnel;	

 	·	build additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts; and	

 	·	experience any delays or encounter issues with any of the above.	
The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. In any particular quarter or quarters, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.
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We have never generated any revenue from product sales and may never be profitable.
Our ability to generate revenue and achieve profitability depends on our ability, alone or with strategic collaboration partners, to successfully complete the development of, and obtain the regulatory, pricing and reimbursement approvals necessary to commercialize our product candidates. We do not anticipate generating revenues from product sales for the foreseeable future, if ever. Our ability to generate future revenues from product sales depends heavily on our success in:
 	·	completing research and preclinical and clinical development of our product candidates;	

 	·	seeking and obtaining regulatory and marketing approvals for product candidates for which we complete clinical studies;	

 	·	developing a sustainable, commercial-scale, reproducible, and transferable manufacturing process for our vectors and product candidates;	

 	·	establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support clinical development and the market demand for our product candidates, if approved;	

 	·	launching and commercializing product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales force, marketing and distribution infrastructure;	

 	·	obtaining sufficient pricing and  reimbursement for our product candidates from third-party and governmental payors;	

 	·	obtaining market acceptance of our product candidates and gene therapy as a viable treatment option;	

 	·	addressing any competing technological and market developments;	

 	·	identifying and validating new gene therapy product candidates;	

 	·	negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; and	

 	·	maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how.	
Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Our expenses could increase beyond expectations if we are required by the FDA, the EMA, or other regulatory agencies, domestic or foreign, to perform clinical and other studies in addition to those that we currently anticipate. Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.
From time to time, we will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
We are currently advancing our LentiGlobin, Lenti-D and bb2121 product candidates through clinical development and other product candidates through preclinical development. Developing gene therapy products is expensive, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance our product candidates in clinical studies.
As of March 31, 2016, our cash, cash equivalents and marketable securities were $826.9 million. We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our current operations through 2018. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, our product candidates. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic objectives.
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of
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our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
Risks related to commercialization of our product candidates
We intend to rely on third-party manufacturers to produce our vector, product candidates and other key materials, but we have not entered into binding agreements with any such manufacturers to support commercialization. Additionally, these manufacturers do not have experience producing our vectors and product candidates at commercial levels and may not achieve the necessary regulatory approvals or produce our vectors and products at the quality, quantities, locations and timing needed to support commercialization.
We have not yet secured manufacturing capabilities for commercial quantities of our viral vectors or established transduction facilities in all of the desired commercialization regions to support commercialization of our products. Although we intend to rely on third-party manufacturers for commercialization, we have only entered into agreements with such manufacturers to support our clinical studies. We may be unable to negotiate binding agreements with the manufacturers to support our commercialization activities at commercially reasonable terms.
No manufacturer currently has the experience or ability to produce our vectors and product candidates at commercial levels. We are currently developing a commercial-scale manufacturing process for our LentiGlobin and Lenti-D product candidates, which we are transferring to one or more contract manufacturers. We may run into technical or scientific issues related to manufacturing or development that we may be unable to resolve in a timely manner or with available funds. Although we have been able to produce our Lenti-D vector at commercial scale, we have not completed the characterization and validation activities necessary for commercial and regulatory approvals. If our manufacturing partners do not obtain such regulatory approvals, our commercialization efforts will be harmed.
Additionally, since the HSCs and T cells have a limited window of stability following procurement from the subject, we must set up transduction facilities in the regions where we wish to commercialize our product. Currently, we rely on third-party contract manufacturers in the United States and Europe to produce our product candidates for our clinical studies. Since a portion of our target patient populations will be outside the United States and Europe, we will need to set up additional transduction facilities that can replicate our transduction process. Establishment of such facilities may be financially impractical or impeded by technical, quality, or regulatory issues related to these new sites and we may also run into technical or scientific issues related to transfer of our transduction process or other developmental issues that we may be unable to resolve in a timely manner or with available funds.
Even if we timely develop a manufacturing process and successfully transfer it to the third-party vector and product manufacturers, if such third-party manufacturers are unable to produce the necessary quantities of viral vectors and our product candidates, or in compliance with GMP or other pertinent regulatory requirements, and within our planned time frame and cost parameters, the development and sales of our products, if approved, may be materially harmed.
In addition, any significant disruption in our supplier relationships could harm our business. We source key materials from third parties, either directly through agreements with suppliers or indirectly through our manufacturers who have agreements with suppliers. There are a small number of suppliers for certain key materials that are used to manufacture our product candidates. Such suppliers may not sell these key materials to our manufacturers at the times we need them or on commercially reasonable terms. We do not have any control over the process or timing of the acquisition of these key materials by our manufacturers. Moreover, we currently do not have any agreements for the commercial production of these key materials.
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If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues.
We have no experience selling and marketing our product candidates. To successfully commercialize any products that may result from our development programs, we will need to develop these capabilities in the United States, Europe and other regions, either on our own or with others. We may enter into collaborations with other entities to utilize their mature marketing and distribution capabilities, but we may be unable to enter into marketing agreements on favorable terms, if at all. If our future collaborative partners do not commit sufficient resources to commercialize our future products, if any, and we are unable to develop the necessary marketing capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We will be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without a significant internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.
We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product candidates.
We are engaged in gene therapy for severe genetic and rare diseases and in the field of T cell-based immunotherapy, both of which are competitive and rapidly changing fields. We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions. Some of the pharmaceutical and biotechnology companies we expect to compete with include GlaxoSmithKline plc through their collaboration with TIGET/MolMed, Sangamo BioSciences Inc. through their collaboration with Biogen Idec, Bellicum Pharmaceuticals, Inc., Global Blood Therapeutics, Inc., Novartis AG through their collaboration with the University of Pennsylvania, GlycoMimetics Inc., Acceleron Pharma, Inc., Kite Pharma, Inc., Pfizer Inc. through their collaboration with Cellectis SA, Adaptimmune Inc. and Juno Therapeutics, Inc. through their collaboration with Celgene Corporation. In addition, many universities and private and public research institutes are active in our target disease areas.
Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff, manufacturing capabilities, experienced marketing and manufacturing organizations. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, products that are more effective or less costly than any product candidate that we may develop, or achieve earlier patent protection, regulatory approval, product commercialization and market penetration than us. Additionally, technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors.
Even if we are successful in achieving regulatory approval to commercialize a product candidate faster than our competitors, we may face competition from biosimilars due to the changing regulatory environment. In the United States, the Biologics Price Competition and Innovation Act of 2009 created an abbreviated approval pathway for biological products that are demonstrated to be “highly similar,” or biosimilar, to or “interchangeable” with an FDA-approved biological product. This pathway could allow competitors to reference data from biological products already approved after 12 years from the time of approval. In Europe, the European Commission has granted marketing authorizations for several biosimilars pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In Europe, a competitor may reference data from biological products already approved, but will not be able to get on the market until 10 years after the time of approval. This 10-year period will be extended to 11 years if, during the first eight of those 10 years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical benefits compared with existing therapies. In addition, companies may be developing biosimilars in other countries that could compete with our products. If competitors are able to obtain marketing approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. Expiration or successful challenge of our applicable patent rights could also trigger competition from other products, assuming any relevant exclusivity period has expired.
In addition, although our product candidates have been granted orphan drug status by the FDA and EMA, there are limitations to the exclusivity. In the United States, the exclusivity period for orphan drugs is seven years, while pediatric exclusivity adds six months to any existing patents or exclusivity periods. In Europe, orphan drugs may be able to obtain 10 years of marketing exclusivity and up to an additional two years on the basis of qualifying pediatric studies. However, orphan exclusivity may be reduced to six years if the drug no longer satisfies the original designation criteria. Additionally, a marketing authorization holder may lose its orphan exclusivity if it consents to a second orphan drug application or cannot supply enough drug. Orphan drug exclusivity also can be lost when a second applicant demonstrates its drug is “clinically superior” to the original orphan drug.
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Finally, as a result of the expiration or successful challenge of our patent rights, we could face more litigation with respect to the validity and/or scope of patents relating to our competitors’ products. The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any products that we may develop and commercialize.
The commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community.
Ethical, social and legal concerns about gene therapy and genetic research could result in additional regulations restricting or prohibiting the products and processes we may use. Even with the requisite approvals, the commercial success of our product candidates will depend in part on the medical community, patients, and third-party or governmental payors accepting gene therapy products in general, and our product candidates in particular, as medically useful, cost-effective, and safe. Any product that we bring to the market may not gain market acceptance by physicians, patients, third-party payors and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. The degree of market acceptance of these product candidates, if approved for commercial sale, will depend on a number of factors, including:
 	·	the potential efficacy and potential advantages over alternative treatments;	

 	·	the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;	

 	·	the prevalence and severity of any side effects resulting from the chemotherapy and myeloablative treatments associated with the procedure by which our product candidates are administered;	

 	·	relative convenience and ease of administration;	

 	·	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;	

 	·	the strength of marketing and distribution support and timing of market introduction of competitive products;	

 	·	the pricing of our products;	

 	·	publicity concerning our products or competing products and treatments; and	

 	·	sufficient third-party insurance coverage or reimbursement.	
Even if a potential product displays a favorable efficacy and safety profile in preclinical and clinical studies, market acceptance of the product will not be known until after it is launched. Our efforts to educate the medical community and third-party payors on the benefits of the product candidates may require significant resources and may never be successful. Such efforts to educate the marketplace may require more resources than are required by the conventional technologies marketed by our competitors.
If we obtain approval to commercialize our product candidates outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.
If any of our product candidates are approved for commercialization, we may enter into agreements with third parties to market them on a worldwide basis or in more limited geographical regions. We expect that we will be subject to additional risks related to entering into international business relationships, including:
 	·	different regulatory requirements for approval of drugs and biologics in foreign countries;	

 	·	reduced protection for intellectual property rights;	

 	·	economic weakness, including inflation, or political instability in particular foreign economies and markets; and	

 	·	foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country.	
The insurance coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.
The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford expensive treatments, such as stem cell transplants or gene therapy. In addition, because our CAR and TCR T cell product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue. Sales of our product
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candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.
There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products, including gene therapies. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have been approved for reimbursement in the United States and have not been approved for reimbursement in certain European countries. In addition, costs or difficulties associated with the reimbursement of Glybera could create an adverse environment for reimbursement of other gene therapies.
Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue to put pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In general, the prices of medicines under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for medicines, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues and profits.
Moreover, increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.
Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or the Health Care Reform Law, was passed, which substantially changes the way health care is financed by both governmental and private insurers, and significantly impacts the U.S. pharmaceutical industry. The Health Care Reform Law, among other things, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and promoted a new Medicare Part D coverage gap discount program.
In addition, other legislative changes have been proposed and adopted in the United States since the Health Care Reform Law was enacted. On August 2, 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, delayed for another two months the budget cuts mandated by these sequestration provisions of the Budget Control Act of 2011. On March 1, 2013, the President signed an executive order implementing sequestration, and on April 1, 2013, the 2% Medicare payment reductions went into effect. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. For each state that does not choose to expand its Medicaid program, there may be fewer insured patients overall, which could impact the sales, business and financial condition of manufacturers of branded prescription drugs or other therapies. Where patients receive insurance coverage under any of the new options made available through the Affordable Care Act, the possibility exists that manufacturers may be required to pay Medicaid rebates on that
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resulting drug utilization, a decision that could impact manufacturer revenues. The U.S. federal government also has announced delays in the implementation of key provisions of the Affordable Care Act. The implications of these delays for our and our partners’ business and financial condition, if any, are not yet clear.
The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to commercialize any products for which we obtain marketing approval.
We cannot predict what healthcare reform initiatives may be adopted in the future. Further federal, state and foreign legislative and regulatory developments are likely, and we expect ongoing initiatives to increase pressure on drug pricing. Such reforms could have an adverse effect on anticipated revenues from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates.
Due to the novel nature of our technology and the potential for our product candidates to offer therapeutic benefit in a single administration, we face uncertainty related to pricing and reimbursement for these product candidates.
Our target patient populations are relatively small, as a result, the pricing and reimbursement of our product candidates, if approved, must be adequate to support commercial infrastructure. If we are unable to obtain adequate levels of reimbursement, our ability to successfully market and sell our product candidates will be adversely affected. The manner and level at which reimbursement is provided for services related to our product candidates (e.g., for administration of our product to patients) is also important. Inadequate reimbursement for such services may lead to physician resistance and adversely affect our ability to market or sell our products.
If the market opportunities for our product candidates are smaller than we believe they are, our revenues may be adversely affected and our business may suffer. Because the target patient populations of our product candidates are small, we must be able to successfully identify patients and achieve a significant market share to maintain profitability and growth.
We focus our research and product development on treatments for severe genetic and rare diseases. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on estimates. These estimates may prove to be incorrect and new studies may change the estimated incidence or prevalence of these diseases. The number of patients in the United States, Europe and elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.
The market opportunities for our T cell-based immunotherapy product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small.
Our first clinical study of bb2121, our lead T cell-based immunotherapy product candidate, will be conducted with patients who have been diagnosed with relapsed/refractory multiple myeloma. The FDA often approves new therapies initially only for use in patients with relapsed or refractory advanced disease. We expect to initially seek approval of our T cell-based immunotherapy product candidates in this setting. Subsequently, for those products that prove to be sufficiently beneficial, if any, we would expect to seek approval in earlier lines of treatment and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved, would be approved for earlier lines of therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.
Our projections of both the number of people who have the cancers we may be targeting, as well as the subset of people with these cancers in a position to receive second or third line therapy, and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers. The number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. Even if we obtain significant market share for our product candidates, because the potential target populations are small, we may never achieve profitability without obtaining regulatory approval for additional indications.
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Risks related to our business operations
If we undertake business combinations, collaborations or similar strategic transactions, they may disrupt our business, divert management’s attention, dilute stockholder value or be difficult to integrate.
On a regular basis, we consider various business combination transactions, collaborations, license agreements and strategic transactions with third parties, including transactions which may result in us acquiring, or being acquired by, a third party. The consummation or performance of any future business combination, collaboration or strategic transaction may involve risks, such as:
 	·	diversion of managerial resources from day-to-day operations;	

 	·	challenges associated with integrating acquired technologies and operations of acquired companies;	

 	·	exposure to unforeseen liabilities;	

 	·	difficulties in the assimilation of different cultures and practices, as well as in the assimilation and retention of broad and geographically dispersed personnel and operations;	

 	·	misjudgment with respect to value, return on investment or strategic fit;	

 	·	higher than expected transaction costs; and	

 	·	additional dilution to our existing stockholders if we issue equity securities as consideration for any acquisitions.	
As a result of these risks, we may not be able to achieve the expected benefits of any such transaction. If we are unsuccessful in completing or integrating any acquisition, we may be required to reevaluate that component of our strategy only after we have incurred substantial expenses and devoted significant management time and resources in seeking to complete and integrate the acquisition.
Future business combinations could involve the acquisition of significant intangible assets. We may need to record write-downs from future impairments of identified intangible assets and goodwill. These accounting charges would increase a reported loss or reduce any future reported earnings. In addition, we could use substantial portions of our available cash to pay the purchase price for company or product candidate acquisitions. Subject to the limitations under our existing indebtedness, it is possible that we could incur additional debt or issue additional equity securities as consideration for these acquisitions, which could cause our stockholders to suffer significant dilution.
The failure to successfully integrate Precision Genome Engineering, Inc.’s business and operations or fully realize the benefits of this acquisition may adversely affect our future results.
On June 30, 2014, we acquired all of the outstanding capital stock of Precision Genome Engineering, Inc., or Pregenen. Based in Seattle, Washington, Pregenen was focused on the development of gene editing and cell signaling technologies. The success of our acquisition of Pregenen depends, in part, on our ability to successfully integrate Pregenen’s business and operations and fully realize the anticipated benefits and synergies from combining our business with Pregenen’s business, in particular our ability to advance Pregenen’s gene editing and cell signaling technologies to the stage where they can be incorporated into our existing or new product candidates. However, to realize these anticipated benefits, we must successfully combine these businesses and continue the research and development activities previously undertaken by Pregenen as a stand-alone company. If we are unable to achieve these objectives, the anticipated benefits of our acquisition of Pregenen may not be realized fully or at all or may take longer to realize than expected. Any failure to timely realize these anticipated benefits could have a material adverse effect on our development programs, expenses and operating results.
Negative public opinion and increased regulatory scrutiny of gene therapy and genetic research may damage public perception of our product candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.
Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community. In particular, our success will depend upon physicians specializing in the treatment of those diseases that our product candidates target prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments they are already familiar with and for which greater clinical data may be available. More restrictive government regulations or negative public opinion would have a negative effect on our business or financial condition and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop. For example, in 2003, 20 subjects treated for X-linked severe combined immunodeficiency in two gene therapy studies using a murine gamma-retroviral vector showed correction of the disease, but the studies were terminated after five subjects developed leukemia (four of whom were
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subsequently cured). Although none of our current product candidates utilize these gamma-retroviruses, our product candidates use a viral delivery system. Adverse events in our clinical studies, even if not ultimately attributable to our product candidates (such as the many adverse events that typically arise from the transplant process) and the resulting publicity could result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our potential product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates.
Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.
We are highly dependent on principal members of our executive team and key employees, the loss of whose services may adversely impact the achievement of our objectives. While we have entered into employment agreements with each of our executive officers, any of them could leave our employment at any time, as all of our employees are “at will” employees. Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled executives in our industry, which is likely to continue. As a result, competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill sets. In addition, failure to succeed in preclinical or clinical studies may make it more challenging to recruit and retain qualified personnel. The inability to recruit or loss of the services of any executive, key employee, consultant or advisor may impede the progress of our research, development and commercialization objectives.
* We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations.
As of March 31, 2016, we had 267 full-time employees. As our business activities expand, we expect to expand our full-time employee base and to hire more consultants and contractors. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we may not be able to implement our business strategy.
Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures to comply with the regulations of the FDA and non-U.S. regulators, provide accurate information to the FDA and non-U.S. regulators, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct could also involve the improper use of information obtained in the course of clinical studies, which could result in regulatory sanctions and cause serious harm to our reputation or could cause regulatory agencies not to approve our product candidates. We have adopted a code of conduct applicable to all of our employees, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.
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We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs. If the use of our product candidates harms patients, or is perceived to harm patients even when such harm is unrelated to our product candidates, our regulatory approvals could be revoked or otherwise negatively impacted and we could be subject to costly and damaging product liability claims.
The use of our product candidates in clinical studies and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims. Product liability claims might be brought against us by subjects participating in clinical trials, consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our products. There is a risk that our product candidates may induce adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in:
 	·	impairment of our business reputation;	

 	·	withdrawal of clinical study participants;	

 	·	costs due to related litigation;	

 	·	distraction of management’s attention from our primary business;	

 	·	substantial monetary awards to patients or other claimants;	

 	·	the inability to commercialize our product candidates; and	

 	·	decreased demand for our product candidates, if approved for commercial sale.	
We carry product liability insurance and we believe our product liability insurance coverage is sufficient in light of our current clinical programs; however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If and when we obtain marketing approval for product candidates, we intend to expand our insurance coverage to include the sale of commercial products; however, we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. On occasion, large judgments have been awarded in class action lawsuits based on drugs or medical treatments that had unanticipated adverse effects. A successful product liability claim or series of claims brought against us could cause our stock price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business.
Patients with the diseases targeted by our product candidates are often already in severe and advanced stages of disease and have both known and unknown significant pre-existing and potentially life-threatening health risks. During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to our product candidates. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our products, the investigation into the circumstance may be time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process in other countries, or impact and limit the type of regulatory approvals our product candidates receive or maintain. As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
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We may not be successful in our efforts to identify or discover additional product candidates.
The success of our business depends primarily upon our ability to identify, develop and commercialize products based on our gene therapy and gene editing platforms.  Although our LentiGlobin, Lenti-D and bb2121 product candidates are currently in clinical development, our research programs, including our oncology research programs, may fail to identify other potential product candidates for clinical development for a number of reasons. Our research methodology may be unsuccessful in identifying potential product candidates or our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval.
If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect on our business and could potentially cause us to cease operations. Research programs to identify new product candidates require substantial technical, financial and human resources. We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful.
We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.
Because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or product candidates or for indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs for product candidates may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
We incur significant costs as a result of operating as a public company, and our management devotes substantial time to new compliance initiatives.
As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, and The NASDAQ Global Select Market have imposed various requirements on public companies. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted, resulting in significant corporate governance and executive compensation-related regulations. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain our current levels of such coverage.
Risks related to our intellectual property
If we are unable to obtain or protect intellectual property rights related to our product candidates, we may not be able to compete effectively in our markets.
We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our product candidates. The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue and even if such patents cover our product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our product candidates or prevent others from designing around our claims. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.
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If the patent applications we hold or have in-licensed with respect to our programs or product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize, future products. Several patent applications covering our product candidates have been filed recently. We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to file any patent application related to a product candidate. Furthermore, if third parties have filed such patent applications, an interference proceeding in the United States can be initiated by a third party to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. In addition, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available however the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from generic medications.
In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.
Although we expect all of our employees and consultants to assign their inventions to us, and all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.
Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.
Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions,  ex part e reexaminations, post-grant review, and  inter partes  review proceedings before the U.S. Patent and Trademark Office, or U.S. PTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are pursuing development candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.
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Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
We may not be successful in obtaining or maintaining necessary rights to gene therapy product components and processes for our development pipeline through acquisitions and in-licenses.
Presently we have rights to the intellectual property, through licenses from third parties and under patents that we own, to develop our gene therapy product candidates. Because our programs may involve additional product candidates that may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights. In addition, our product candidates may require specific formulations to work effectively and efficiently and these rights may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.
For example, we sometimes collaborate with U.S. and foreign academic institutions to accelerate our preclinical research or development under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.
In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain rights to required third-party intellectual property rights, our business, financial condition and prospects for growth could suffer.
If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
We are a party to a number of intellectual property license agreements that are important to our business and expect to enter into additional license agreements in the future. Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty and other obligations on us. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.
We may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done so from time to time. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we may be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could harm our business
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significantly. We cannot provide any assurances that third-party patents do not exist which might be enforced against our current product candidates or future products, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties  and/or other forms of compensation to third parties.
In many cases, patent prosecution of our licensed technology is controlled solely by the licensor. If our licensors fail to obtain and maintain patent or other protection for the proprietary intellectual property we license from them, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, and our competitors could market competing products using the intellectual property. In certain cases, we control the prosecution of patents resulting from licensed technology. In the event we breach any of our obligations related to such prosecution, we may incur significant liability to our licensing partners. Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues and is complicated by the rapid pace of scientific discovery in our industry. Disputes may arise regarding intellectual property subject to a licensing agreement, including:
 	·	the scope of rights granted under the license agreement and other interpretation-related issues;	

 	·	the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;	

 	·	the sublicensing of patent and other rights under our collaborative development relationships;	

 	·	our diligence obligations under the license agreement and what activities satisfy those diligence obligations;	

 	·	the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and	

 	·	the priority of invention of patented technology.	
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.
We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.
Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid, is unenforceable and/or is not infringed, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.
Interference proceedings provoked by third parties or brought by us may be necessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law, including provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. The U.S. PTO is currently developing regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, were enacted March 16, 2013. However, it is not clear what, if any, impact the Leahy-Smith
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Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
We employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents or other intellectual property. We have had in the past, and we may also have to in the future, ownership disputes arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the U.S. PTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patent agencies. The U.S. PTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.
Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court.
If we or one of our licensing partners initiated legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including patent eligible subject matter, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the U.S. PTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection would have a material adverse impact on our business.
48

 
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
As is the case with other biotechnology companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biotechnology industry involve both technological and legal complexity, and is therefore obtaining and enforcing biotechnology patents is costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the U.S. PTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Risks related to ownership of our common stock
The market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above the price at which you purchase them.
Companies trading in the stock market in general, and the NASDAQ Global Select Market in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and biotechnology and pharmaceutical industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
The market price of our common stock may be volatile. Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following:
 	·	adverse results or delays in preclinical or clinical studies;	

 	·	reports of adverse events in other gene therapy products or clinical studies of such products;	

 	·	inability to obtain additional funding;	

 	·	any delay in filing an IND or BLA for any of our product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or BLA;	

 	·	failure to develop successfully and commercialize our product candidates;	

 	·	failure to maintain our existing strategic collaborations or enter into new collaborations;	
49

 
 	·	failure by us or our licensors and strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights;  	

 	·	changes in laws or regulations applicable to future products;	

 	·	inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices;	

 	·	adverse regulatory decisions;	

 	·	introduction of new products, services or technologies by our competitors;	

 	·	failure to meet or exceed financial projections we may provide to the public;	

 	·	failure to meet or exceed the financial projections of the investment community;	

 	·	the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;	

 	·	announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partner or our competitors;	

 	·	disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;	

 	·	additions or departures of key scientific or management personnel;	

 	·	significant lawsuits, including patent or stockholder litigation;	

 	·	changes in the market valuations of similar companies;	

 	·	sales of our common stock by us or our stockholders in the future; and	

 	·	trading volume of our common stock.	
Actual or potential sales of our common stock by our employees, including our executive officers, pursuant to pre-arranged stock trading plans could cause our stock price to fall or prevent it from increasing for numerous reasons, and actual or potential sales by such persons could be viewed negatively by other investors.
In accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and our policies regarding stock transactions, a number of our employees, including executive officers and members of our board of directors, have adopted and may continue to adopt stock trading plans pursuant to which they have arranged to sell shares of our common stock from time to time in the future. Generally, sales under such plans by our executive officers and directors require public filings. Actual or potential sales of our common stock by such persons could cause the price of our common stock to fall or prevent it from increasing for numerous reasons.
Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
Additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.
Pursuant to our 2013 Stock Option and Incentive Plan, or the 2013 Plan, our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants. The number of shares available for future grant under the 2013 Plan automatically increases each year by up to 4% of all shares of our capital stock outstanding as of December 31 of the prior calendar year, subject to the ability of our board of directors or compensation committee to take action to reduce the size of the increase in any given year. Currently, we plan to register the increased number of shares available for issuance under the 2013 Plan each year. If our board of directors or compensation committee elects to increase the number of shares available for future grant by the maximum amount each year, our stockholders may experience additional dilution, which could cause our stock price to fall. We also have an Employee Stock Purchase Plan and any shares of common stock purchased pursuant to that plan will also cause dilution.
50

 
We could be subject to securities class action litigation.
In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because biotechnology and pharmaceutical companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. We have completed several financings since our inception which we believe have resulted in a change in control as defined by IRC Section 382. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.
We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock.
Provisions in our amended and restated certificate of incorporation and by-laws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders or remove our current management.
Our amended and restated certificate of incorporation, amended and restated by-laws and Delaware law contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. Our amended and restated certificate of incorporation and by-laws, include provisions that:
 	·	authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;	

 	·	create a classified board of directors whose members serve staggered three-year terms;	

 	·	specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, our chief executive officer or our president;	

 	·	prohibit stockholder action by written consent;	

 	·	establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;	

 	·	provide that our directors may be removed only for cause;	

 	·	provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;	

 	·	specify that no stockholder is permitted to cumulate votes at any election of directors;	

 	·	expressly authorize our board of directors to modify, alter or repeal our amended and restated by-laws; and	

 	·	require supermajority votes of the holders of our common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated by-laws.	
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.
51

 
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us.
Any provision of our amended and restated certificate of incorporation or amended and restated by-laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Item 5. Other Information
Our policy governing transactions in our securities by our directors, officers, and employees permits our officers, directors and certain other persons to enter into trading plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. We have been advised that certain of our officers (including Jeffrey Walsh, Chief Financial and Strategy Officer, David Davidson, Chief Medical Officer, Jason Cole, Chief Legal Officer and Eric Sullivan, VP Finance and Principal Accounting Officer) and certain of our directors (including Daniel Lynch and James Mandell) have entered into trading plans covering periods after the date of this quarterly report on Form 10-Q in accordance with Rule 10b5-1 and our policy governing transactions in our securities. Generally, under these trading plans, the individual relinquishes control over the transactions once the trading plan is put into place. Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately after significant events involving our company. We do not undertake to report Rule 10b5-1 trading plans that may be adopted by any officers or directors in the future, or to report any modifications or termination of any publicly announced trading plan, except to the extent required by law.
Item 6. Exhibits
The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which is incorporated herein by reference.

 
52

 
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 	 	 	 	bluebird bio, Inc.	
 	 	 	 	
Date: May 4, 2016	 	 	 	By:	 	/s/ Nick Leschly	
 	 	 	 	 	 	Nick Leschly
President, Chief Executive Officer and Director (Principal Executive Officer and Duly Authorized Officer)	
 	 	 	 	
Date: May 4, 2016	 	 	 	By:	 	/s/ Jeffrey Walsh	
 	 	 	 	 	 	Jeffrey Walsh
Chief Financial and Strategy Officer (Principal Financial Officer and Duly Authorized Officer)	

 

 
Exhibit Index
 
  	  	 	  	Incorporated by Reference	
Exhibit
Number	  	Exhibit Title	  	Form	  	File no.	 	  	Exhibit	 	  	Filing Date	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2.1	  	Stock Purchase Agreement by and between the Registrant and Precision Genome Engineering, Inc.	  	8-K	  	 	001-35966	  	  	 	2.1	  	  	June 30, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
3.1	  	Amended and Restated Certificate of Incorporation of the Registrant	  	8-K	  	 	001-35966	  	  	 	3.1	  	  	June 24, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
3.2	  	Amended and Restated By-laws of the Registrant	  	8-K	  	 	001-35966	  	  	 	3.2	  	  	June 24, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
3.3	 	Amendment No. 1 to Amended and Restated By-laws of the Registrant	 	8-K	 	 	001-35966	 	 	 	3.1	 	 	February 11, 2016	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
4.1	  	Specimen Common Stock Certificate	  	S-1/A	  	 	333-188605	  	  	 	4.1	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
4.2	  	Amended and Restated Investors’ Rights Agreement, dated as of July 23, 2012, by and among the Registrant and the Investors listed therein.	  	S-1/A	  	 	333-188605	  	  	 	4.5	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
4.3	  	Amendment to Amended and Restated Investors’ Rights Agreement, dated as of July 8, 2014, by and among the Registrant and the Investors listed therein.	  	10-Q	  	 	001-35966	  	  	 	4.6	  	  	August 12, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.1#	  	Second Amended and Restated 2002 Employee, Director and Consultant Plan, as amended, and forms of award agreement thereunder	  	S-1/A	  	 	333-188605	  	  	 	10.1	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.2#	  	2010 Stock Option and Grant Plan, as amended, and forms of award agreement thereunder	  	S-1/A	  	 	333-188605	  	  	 	10.2	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.3#	  	2013 Stock Option and Incentive Plan and forms of award agreement thereunder	  	S-1/A	  	 	333-188605	  	  	 	10.3	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.4	  	Form of Indemnification Agreement between the Registrant and each of its Executive Officers and Directors	  	S-1/A	  	 	333-188605	  	  	 	10.4	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.5	  	Amended and Restated Lease Agreement, dated May 18, 2007, by and between the Registrant and Rivertech Associates II, LLC, as amended	  	10-Q	  	 	001-35966	  	  	 	10.1	  	  	November 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.6†	  	Patent License Agreement, dated December 11, 1996, by and between the Registrant (formerly known as Genetix Pharmaceuticals Inc., successor-in-interest to Innogene Pharmaceuticals Inc.) and Massachusetts Institute of Technology, as amended	  	S-1/A	  	 	333-188605	  	  	 	10.6	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.7†	  	Patent and Know-How License Agreement No. 07554F30, dated May 14, 2009, by and between the Registrant (formerly known as Genetix Pharmaceuticals Inc.) and INSERM-TRANSFERT, as amended	  	S-1/A	  	 	333-188605	  	  	 	10.7	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.8†	  	License Agreement, dated September 13, 2011, by and between the Registrant and Institut Pasteur, as amended	  	S-1/A	  	 	333-188605	  	  	 	10.8	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.9†	  	Amendment No. 3 to License Agreement, dated September 10, 2013, by and between the Registrant and Institut Pasteur	  	10-Q	  	 	001-35966	  	  	 	10.2	  	  	November 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.10†	 	Amendment No. 4 to License Agreement, dated April 1, 2015, by and between the Registrant and Institut Pasteur	 	10-Q	 	 	001-35966	 	 	 	10.10	 	 	May 6, 2015	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.11†	  	License Agreement, dated December 7, 2011, by and between the Registrant and Research Development Foundation	  	S-1/A	  	 	333-188605	  	  	 	10.9	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.12†	  	Novation Agreement, dated April 2, 2012, by and between the Registrant and The Board of Trustees of the Leland Stanford Junior University	  	S-1/A	  	 	333-188605	  	  	 	10.10	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.13†	  	Master Collaboration Agreement by and between the Registrant and Celgene Corporation, dated March 19, 2013	  	S-1/A	  	 	333-188605	  	  	 	10.11	  	  	May 14, 2013	

 
  	  	 	  	Incorporated by Reference	
Exhibit
Number	  	Exhibit Title	  	Form	  	File no.	 	  	Exhibit	 	  	Filing Date	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.14†	 	Amended and Restated Master Collaboration Agreement by and between the Registrant and Celgene Corporation, dated June 3, 2015	 	10-Q	 	 	001-35966	 	 	 	10.14	 	 	August 6, 2015	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.15	 	Amendment No. 1 to Amended and Restated Master Collaboration Agreement by and between the Registrant and Celgene Corporation, dated February 17, 2016	 	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.16†	 	Amended and Restated License Agreement by and between the Registrant and Celgene Corporation, dated February 16, 2016	 	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.17†	 	License Agreement by and between the Registrant and Biogen Idec MA Inc., dated August 13, 2014	 	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.18†	 	Exclusive Patent License Agreement by and between the Registrant and the National Institutes of Health, dated August 31, 2015	 	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.19#	  	Amended and Restated Employment Agreement by and between the Registrant and Nick Leschly	  	S-1/A	  	 	333-188605	  	  	 	10.12	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.20#	  	Amended and Restated Employment Agreement by and between the Registrant and Jeffrey T. Walsh	  	S-1/A	  	 	333-188605	  	  	 	10.13	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.21#	  	Amended and Restated Employment Agreement by and between the Registrant and Mitch Finer	  	S-1/A	  	 	333-188605	  	  	 	10.14	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.22#	 	Transitional Services and Separation Agreement by and between the Registrant and Mitch Finer	 	10-Q	 	 	001-35966	 	 	 	10.17	 	 	May 6, 2015	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.23#	  	Amended and Restated Employment Agreement by and between the Registrant and David M. Davidson, M.D.	  	S-1/A	  	 	333-188605	  	  	 	10.15	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.24#	  	Employment Agreement, dated February 3, 2014, by and between the Registrant and Jason F. Cole	  	10-Q	  	 	001-35966	  	  	 	10.18	  	  	May 13, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.25#	  	Amendment to Employment Agreement, dated March 7, 2016, by and between the Registrant and Jason F. Cole	  	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.26#	  	Employment Agreement, dated October 20, 2014, by and between the Registrant and James DeTore	  	8-K	  	 	001-35966	  	  	 	10.1	  	  	November 10, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.27#	  	Separation Agreement, dated February 24, 2016, by and between the Registrant and James DeTore	  	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.28#	 	Employment Agreement, dated May 30, 2015, by and between the Registrant and Philip D. Gregory	 	10-Q	 	 	001-35966	 	 	 	10.21	 	 	August 6, 2015	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.29#	  	Offer Letter, dated October 14, 2013, by and between the Registrant and Eric Sullivan	  	10-Q	  	 	001-35966	  	  	 	10.19	  	  	May 13, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.30#	  	2013 Employee Stock Purchase Plan	  	S-1/A	  	 	333-188605	  	  	 	10.17	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.31#	  	Executive Cash Incentive Bonus Plan	  	S-1/A	  	 	333-188605	  	  	 	10.18	  	  	May 14, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.32	  	Lease, dated June 3, 2013, by and between the Registrant and 150 Second Street, LLC, as amended	  	S-1/A	  	 	333-188605	  	  	 	10.19	  	  	June 4, 2013	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.33	  	Lease Amendment, dated November 15, 2013, by and between the Registrant and 150 Second Street, LLC, as amended	  	10-K	  	 	001-35966	  	  	 	10.19	  	  	March 5, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.34	  	Lease Amendment, dated June 9, 2014, by and between the Registrant and 150 Second Street, LLC, as amended	  	10-Q	  	 	001-35966	  	  	 	10.24	  	  	August 12, 2014	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10.35	 	Lease, dated June 29, 2015, by and between the Registrant and ARE-MA Region No. 38, LLC	 	10-Q	 	 	001-35966	 	 	 	10.29	 	 	August 6, 2015	

 
  	  	 	  	Incorporated by Reference	
Exhibit
Number	  	Exhibit Title	  	Form	  	File no.	 	  	Exhibit	 	  	Filing Date	
10.36†	 	Lease, dated September 21, 2015, by and between the Registrant and ARE-MA Region No. 40 LLC	 	10-Q	 	 	001-35966	 	 	 	10.30	 	 	November 5, 2015	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31.1	  	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	  	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31.2	  	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	  	—	  	 	—	  	  	 	—	  	  	Filed herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
32.1	  	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	  	—	  	 	—	  	  	 	—	  	  	Furnished herewith	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
101	  	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit), (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements.	  	—	  	 	—	  	  	 	—	  	  	Filed herewith	

†	Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibit has been submitted separately to the SEC.	

#	Indicates a management contract or any compensatory plan, contract or arrangement.	

Exhibit 10.15
Amendment No. 1
to
Amended and Restated Master Collaboration Agreement
This Amendment No. 1 to Amended and Restated Master Collaboration Agreement (this “Amendment No. 1”) is made as of February 17, 2016 (“Amendment No. 1 Effective Date”), by and between bluebird bio, Inc. (“Bluebird”), a Delaware corporation, and Celgene Corporation, a Delaware corporation (“Celgene Corp.”), and Celgene European Investment Company LLC (“Celgene Europe”), a Delaware limited liability company (Celgene Europe and Celgene Corp., together, “Celgene”). Each of Bluebird and Celgene may be referred to herein as a “Party” or together as the “Parties”. Reference is hereby made to that certain Amended and Restated Master Collaboration Agreement, by and between Bluebird, Celgene Corp. and Celgene Europe, dated June 3, 2015 (the “Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1.The third sentence of Section 5.1 of the Agreement is hereby amended and restated to read in its entirety as follows:
“Celgene may exercise such option by providing to Bluebird, prior to the expiration of the Celgene Option Period, (a) written notice that a Product Candidate is selected by Celgene to be an Optioned Candidate hereunder, and (b) the additional information set forth in  Exhibit G (collectively, the “ Celgene Option Notice ”); provided, however, in the case of Celgene’s exercise of such option with respect to the Lead Product Candidate, in lieu of providing the additional information set forth in  Exhibit G  otherwise required to be included in the Celgene Option Notice at the time of exercise, Celgene shall be permitted to (I) provide to Bluebird by March 31, 2016, the clinical Development plan of the Lead Product Candidate that Celgene is contemplating to achieve Regulatory Approval for the Lead Product Candidate, together with the cost estimates for such a clinical program, and (II) provide to Bluebird the additional information set forth on  Exhibit G  with respect to the Lead Product Candidate at the earlier of (A) thirty (30) days following the completion of the Phase 1 Clinical Study of the Lead Product Candidate, and (B) December 31, 2016.
2.Section 5.4 of the Agreement is hereby amended and restated to read in its entirety as follows:
“5.4Non-Co-Promotion/Co-Development Option Exercise. If Bluebird does not exercise the option set forth above in Section 5.3, Celgene will pay to Bluebird the Additional Option Fee as set forth in Section 6.3, subject to Section 5.5.”

3.This Amendment No. 1 is binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. This Amendment No. 1 is the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. Except as expressly modified by this Amendment No. 1, all terms and provisions of the Agreement remain in full force and effect. In the event of a conflict between the terms and provisions of this Amendment No. 1 and the Agreement, the terms and provisions of this Amendment No. 1 shall control. This Amendment No. 1 may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.
[Remainder of the page is intentionally left blank]

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to Amended and Restated Master Collaboration Agreement to be executed by their respective duly authorized officers as of the Amendment No. I Effective Date.
 
BLUEBIRD BIO, INC.	
 	 	 	
By:	 	/s/ Jason F. Cole	
 	 	 	
Name:	 	Jason F. Cole	
Title:  	 	SVP, and General Counsel	
Date:	 	2/17/2016	
 
By:	 	/s/ Robert Hugin	
 	 	 	
Name:	 	Robert Hugin	
Title:	 	Chairman & CEO	
Date:  	 	2/17/16	
 
CELGENE EUROPEAN INVESTMENT COMPANY LLC (CEICQ)
 
By:	 	/s/ Robert Hugin	
 	 	 	
Name:	 	Robert Hugin	
Title:	 	Chairman & CEO	
Date:	 	2/17/16	
 
By:	 	/s/ Jonathan Biller	
 	 	 	
Name:	 	Jonathan Biller	
Title:	 	SVP,  Tax & Treasury	
Date:	 	2/17/16	

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Execution Copy
Exhibit 10.16

 

Amended and Restated License Agreement
 
by and between
 
bluebird bio, Inc.
 
and
 
Celgene Corporation
 
and
 
Celgene European Investment Company LLC

 
 
February 16, 2016

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
Table of Contents
 
 	 	 	Page	
 	 	 	 	
1.	 	Definitions.	1	
 	 	 	 	
2.	 	Development and Commercialization.	8	
 	 	 	 	
3.	 	License Grants.	12	
 	 	 	 	
4.	 	Payments and Royalties.	15	
 	 	 	 	
5.	 	Ownership and Inventorship of IP.	19	
 	 	 	 	
6.	 	Patent Prosecution and Maintenance.	20	
 	 	 	 	
7.	 	Patent Enforcement and Defense.	22	
 	 	 	 	
8.	 	Confidentiality.	23	
 	 	 	 	
9.	 	Warranties; Limitations of Liability; Indemnification.	23	
 	 	 	 	
10.	 	Term and Termination.	29	
 	 	 	 	
11.	 	General Provisions.	33	

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
List of Appendices
Appendix AAdditional Definitions
Appendix BApplicable New In-Licenses
Appendix CApplicable Pre-Existing In-Licenses
Appendix DTarget Antigen
Appendix EPress Release
Appendix FCertain Patents Within the Licensed IP as of the License Agreement Effective Date
Appendix GBluebird Agreements
Appendix HCertain Manufacturing Definitions
Appendix IManufacturing and Supply Agreement Terms
Schedule 9.2Exceptions to Bluebird’s Representations and Warranties

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
Amended and Restated License Agreement
This Amended and Restated License Agreement (this “License Agreement”), dated as of February 16, 2016 (the “ License Agreement Effective Date ”), is made by and between bluebird bio, Inc., a Delaware corporation (“ Bluebird ”), and Celgene Corporation, a Delaware Corporation (“ Celgene Corp ”), with respect to all rights and obligations under this License Agreement in the United States (subject to Section 11.18), and Celgene European Investment Company LLC, a Delaware limited liability company, with respect to all rights and obligations under this License Agreement outside of the United States (subject to Section 11.18) (“ Celgene Europe ” and together with Celgene Corp, “ Celgene ”).  Each of Bluebird and Celgene may be referred to herein as a “ Party ” or together as the “ Parties .”
WHEREAS, Bluebird has developed and owns or has rights to certain Patents and technology relating to developing innovative gene therapies for genetic disorders;
WHEREAS, Celgene is a biopharmaceutical company focused on acquiring, Developing and Commercializing innovative anti-cancer agents; and
WHEREAS, Bluebird and Celgene are parties to that certain Master Collaboration Agreement, dated as of March 19, 2013, pursuant to which the Parties entered into a global strategic collaboration to research, develop and commercialize therapeutic products in the Field (the “ Original MCA ”);
WHEREAS, the Parties entered into an Amended and Restated Collaboration Agreement, dated as of June 3, 2015 (the “ Master Collaboration Agreement ”), pursuant to which the Parties amended and restated the Original MCA in order to continue the research and development of the Product Candidates pursuant to the terms set forth therein;
WHEREAS, pursuant to the terms of the Master Collaboration Agreement, Celgene has exercised its option to select a Product Candidate to be an Optioned Candidate by delivering to Bluebird a Celgene Option Notice and payment of the applicable Initial Option Fee and Additional Option Fee (such Optioned Candidate, as defined more fully in  Appendix A , the “ Elected Candidate ”); and
WHEREAS, the Parties now wish to enter into an exclusive licensing arrangement whereby Celgene will have exclusive rights to Develop Elected Candidate and Commercialize Licensed Product, all on the terms and conditions set forth here.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1.Definitions.
The following terms and their correlatives will have the meanings set forth below.  Capitalized terms used, but not defined, herein will have the meanings ascribed to such terms in the Master Collaboration Agreement.

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
1.1“Applicable Bluebird In-Licenses” means the Applicable Pre-Existing In-Licenses and the Applicable New In-Licenses.
1.2“Applicable New In-Licenses” means all New In-Licenses of Bluebird or its Affiliates necessary or useful for the research, Development and/or Commercialization of Elected Candidate and Licensed Product that Celgene has elected to list on  Appendix B  as of the License Agreement Effective Date, plus any other New In-License of Bluebird or its Affiliates that Celgene has elected to include as an Applicable New In-License pursuant to Section 3.2(b).
1.3“Applicable Pre-Existing In-Licenses” means all Pre-Existing In-Licenses necessary or useful for the research, Development and/or Commercialization of Elected Candidate and Licensed Product, and any extensions or expansions of the scope of such Pre-Existing In-Licenses, including those listed on  Appendix C .
1.4“Biosimilar Product”  means, with respect to a Licensed Product in any country, any biosimilar product sold by a Third Party not authorized by or on behalf of Celgene, its Affiliates or Sublicensees, (a) that is a biosimilar biological product, as defined in 21 USC 379j-51 (or any successor or replacement thereof), a similar biological medicinal product, as defined in Annex I to Directive 2001/83/EC (or any successor or replacement thereof), or any similar biosimilar or generic product under the Laws of any country or jurisdiction, or (b) regarding which Regulatory Approval is obtained by referencing Regulatory Data of such Licensed Product.
1.5“Bluebird In-Licensed IP” means all Patents, Materials and Know-How in-licensed by Bluebird pursuant to Applicable Bluebird In-Licenses, including any extensions or expansions of the scope thereof.
1.6“Bluebird Technology” means all Bluebird Solely Owned IP and all of Bluebird’s right, title and interest in and to Joint IP.
1.7“Celgene Development & Commercialization Program” means a Development and Commercialization program for Licensed Product in the Field worldwide.
1.8“Celgene Licensed Product In-License” means any Applicable Celgene In-License or other agreement between Celgene or any of its Affiliates and a Third Party entered into under Section 4.3(d) pursuant to which Celgene or any of its Affiliates in-licenses any Know-How, Materials or Patents that directly relate to or Cover the Elected Candidate and/or Licensed Product or its Manufacture or use.
1.9“Celgene Licensed Product In-Licensed IP” means any Patents, Materials and Know-How Controlled at any time during the License Agreement Term by Celgene or any of its Affiliates pursuant to a Celgene Licensed Product In-License or Celgene Other In-License that directly relate to or Cover the Elected Candidate and/or Licensed Product or its Manufacture or use.
1.10“Celgene Licensed Product IP” means (a) Celgene Technology, (b) Collaboration IP solely owned by Celgene and Celgene’s interest in jointly owned Collaboration IP, and (c) Patents, Materials or Know-How (to the extent not included in subsection (a) or (b)) owned by Celgene or its Affiliates that are Controlled at any time during the License Agreement Term by Celgene or any of its Affiliates, in each case that directly relate to or Cover the Elected Candidate and/or Licensed Product or its Manufacture or use.
2

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
1.11“Celgene Other In-License” means any agreement between Celgene or any of its Affiliates and a Third Party, other than Applicable Celgene In-Licenses and any agreement between Celgene or any of its Affiliates and a Third Party entered into under Section 4.3(d), pursuant to which Celgene or any of its Affiliates in-licenses any Know-How, Materials or Patents that directly relate to or Cover the Elected Candidate and/or Licensed Product or its Manufacture or use.
1.12 “Celgene Regulatory Rights” means all Regulatory Data, Regulatory Filings and Regulatory Approvals for Elected Candidate and Licensed Product worldwide Controlled by Celgene or any of its Affiliates.
1.13“Celgene Technology” means all Celgene Solely Owned IP and all of Celgene’s right, title and interest in and to Joint IP.
1.14“Clinical Study” means any human clinical trial of a Product Candidate.
1.15“Commercialization” means any and all activities directed to the Manufacturing, marketing, detailing, promotion and securing of reimbursement of a product after Regulatory Approval has been obtained (including making, having made, using, importing, selling and offering for sale such product), and will include post-approval clinical studies, post-launch marketing, promoting, detailing, marketing research, distributing, customer service, administering and commercially selling such product, importing, exporting or transporting such product for commercial sale, and all regulatory compliance with respect to the foregoing.
1.16“Commercially Reasonable Efforts” means, with respect to the Development or Commercialization of Licensed Product by a Party, that level of efforts and resources that such Party would normally devote to the Development or Commercialization, as the case may be, of a product owned by it or to which it has rights of the type it has hereunder, which is of a similar commercial potential at a similar stage in its lifecycle, in each case taking into account issues of safety and efficacy, product profile, the proprietary position, the then current competitive environment for such product and the likely timing of such product’s entry into the market, the pricing and launching strategy for the respective product, the regulatory environment and status of such product, and other relevant scientific, technical and commercial factors.
1.17“Control” or “Controlled” means, with respect to any Know-How, Material,  Patent, Regulatory Data, Regulatory Filings and Regulatory Approvals, the possession (whether by ownership or license, other than by a license or sublicense granted pursuant to this License Agreement) by a Party or its Affiliates of the ability to grant to the other Party a license or access as provided herein to such item, without violating the terms of any agreement or other arrangement with any Third Party or, other than under Applicable Bluebird In-Licenses, being obligated to pay any royalties or other consideration therefor (“ Additional Payments ”).  For clarity, Other In-Licenses are not “Controlled” for purposes of this License Agreement, unless and only after such Other In-License is converted into an Applicable New In-License pursuant to Section 3.2(b).  Notwithstanding the foregoing, as provided in Section 3.2(a), if on or after the License Agreement Effective Date and for such time as the other Party agrees to pay and does in fact pay all Additional Payments with respect to such Party’s access or license to any Know-How, Material, Patent, Regulatory Data, Regulatory Filings and Regulatory Approvals (other than that in-licensed by
3

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
Bluebird pursuant to an Other In-License), such Know-How, Material,  Patent, Regulatory Data, Regulatory Filings and Regulatory Approvals will be deemed to be included in the definition of “Control”.
1.18“Covers”, with reference to (a) a Patent, means that the making, using, selling, offering for sale or importing of a product or practice of a method would infringe a Valid Claim of such Patent in the country in which such activity occurs, and (b) Materials or Know-How, means that the Manufacture, Development or Commercialization of a product incorporates, embodies or otherwise makes use of such Materials or Know-How.
1.19“EU” means the organization of member states of the European Union as it may be constituted from time to time.
1.20“EU Regulatory Event” means, with respect to a Licensed Product, the earlier to occur of [***].
1.21“Field” means the targeting of the Target Antigen by the use of (a) T-cells expressing a CAR (with or without other engineering to enhance functionality and/or safety), including virus specific genetically modified T-cells expressing a synthetic CAR, and (b) T-cells expressing native antigen receptors or engineered antigen receptors in which the T-cells are genetically modified to enhance their performance, persistence or safety, in each case under (a) and (b) for the treatment, modulation, palliation or prevention of cancer in humans.  
1.22“First Commercial Sale” means the first sale for use or consumption of any Licensed Product in a country after all required Regulatory Approvals for commercial sale of such Licensed Product have been obtained in such country.
1.23“First Indication” means the first disease condition for which a particular Licensed Product has been approved by a Regulatory Authority.
1.24“GAAP” means U.S. generally accepted accounting principles or International Financial Reporting Standards, consistently applied, as designated and used by the applicable Party.
1.25“Gene Editing” means homing endonuclease (HE) and megaTAL gene editing technologies, including HE/megaTAL-mediated homology directed recombination and Bluebird’s proprietary DARIC cell signaling technology.  
1.26“In-License Payments” means any amounts paid or payable under any Applicable Bluebird In-License that are incurred by Bluebird solely and directly as a result of the grant of a sublicense thereunder under this License Agreement to Celgene, any of Celgene’s contract Third Parties under Section 3.5, or any further Sublicensees of Celgene (including of Celgene’s Affiliates that are granted sublicenses) under this License Agreement.  Any such payments will include [***] but excluding [***].
1.27“Licensed IP” means all (a) Patents, Materials and Know-How Controlled at any time during the term of this License Agreement by Bluebird or any of its Affiliates (including any applicable Collaboration IP and Bluebird Technology), other than pursuant to an Applicable
4

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
Bluebird In-License, and (b) Bluebird In-Licensed IP, in each case to the extent necessary or useful to Develop Elected Candidate and Develop and Commercialize Licensed Product.  [***]
1.28“Licensed Product” means any product that constitutes or incorporates an Elected Candidate (including all modified and improved versions thereof), in all forms, presentations, and formulations (including manner of delivery and dosage).  A modified or improved version of an Elected Candidate constituted or incorporated in a product will be deemed a “ Modified Licensed Product ” for purposes of Section 4.2 if it is Covered by patentable technology Controlled by Bluebird that (a) is first discovered, created, conceived, developed or reduced to practice after the later of (i) the License Agreement Effective Date and (ii) the end of the Collaboration Program Term, (b) requires the submission of a new BLA with respect to such modified or improved Elected Candidate, and (c) materially contributes to the Elected Candidate being approved for a new indication or new patient population.  For clarity, “Modified Licensed Products” are Licensed Products hereunder for all purposes other than Section 4.2.
1.29“Manufacturing” means the production, manufacture, processing, filling, finishing, packaging, labeling, shipping and holding of product or any intermediate thereof, including process development, process qualification and validation, scale-up, commercial manufacture and analytic development, product characterization, stability testing, quality assurance and quality control.  With reference to Elected Candidate and Licensed Product, Manufacturing includes Vector and associated Payload supply.
1.30“Net Sales” means [***]
1.31“Pivotal Study” means (a) a Phase 3 Study that is intended by Celgene to be submitted (together with any other registration trials that are prospectively planned when such Phase 3 Study is initiated) for Regulatory Approval in the U.S. or the EU, or (b) any other clinical study that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use, and to determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, which clinical study is a registration trial intended to be sufficient for filing an application for a Regulatory Approval for the Licensed Product in the U.S. or another country or some or all of an extra-national territory, solely as evidenced by the acceptance for filing for a Regulatory Approval for such product after completion of such study.
1.32“Regulatory Exclusivity Period” means with respect to a Licensed Product in a country, the period of time during which (a) Celgene or any of its Affiliates or Sublicensees has been granted the exclusive legal right by a Regulatory Authority (or is otherwise entitled to the exclusive legal right by operation of Law) in such country to market and sell the Licensed Product, or (b) the data and information submitted by Celgene or any of its Affiliates or Sublicensees to the relevant Regulatory Authority in such country for purposes of obtaining Regulatory Approval may not be disclosed, referenced or relied upon in any way by such Regulatory Authority (including by relying upon the Regulatory Authority’s previous findings regarding the safety or effectiveness of the Licensed Product) to support the Regulatory Approval or marketing of any product by a Third Party in such country.
1.33“Second Indication” means [***].
5

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
1.34“Selling Party” means Celgene and its Sublicensees (including Celgene’s Affiliates that are granted sublicenses pursuant to Section 3.3).
1.35“Sublicensee” means any person or entity (including Affiliates of Celgene) that is granted a sublicense as permitted by Section 3.3 (or an option to take such a sublicense), either directly by Celgene or indirectly by any other Sublicensee hereunder.
1.36“Target Antigen” means the antigen designated as B-cell maturation antigen (BCMA)as further set forth on  Appendix D , and naturally occurring variants thereof.
1.37“Valid Claim” means, with respect to a particular country, (a) any claim of an issued and unexpired Patent in such country that (i) has not been held revoked, unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal and (ii) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise in such country, or (b) a claim of a pending Patent application that has not been finally abandoned or finally rejected or expired and which has been pending [***] from the date of filing of the earliest priority Patent application to which such pending Patent application is entitled to claim benefit.
1.38“Vector Supplies” means supplies of Vectors and associated Payloads Manufactured for incorporation into Elected Candidate and Licensed Product for Development or Commercialization thereof.
Definitions for each of the following terms are found in the body of this License Agreement or the Appendices hereto as indicated below:

Defined Terms	Location	
Additional IP	Section 3.2(a)	
Additional Payments	Section 1.17	
Applicable Bluebird In-License	Section 1.1	
Applicable New In-License	Section 1.2	
Applicable Pre-Existing In-License	Section 1.3	
Bankruptcy Code	Section 3.7	
Biosimilar Application	Section 7.2(f)	
Biosilimar Product	Section 1.4	
Biosimilar Product Competition	Section 4.3(e)	
Bluebird	Preamble	
Bluebird In-Licensed IP	Section 1.5	
Bluebird Indemnitees	Section 9.6(a)	
Bluebird Technology	Section 1.6	
Business Acquisition	Section 3.4(b)	
Business Party	Section 3.4(b)	
Business Program	Section 3.4(b)	
Celgene	Preamble	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
 	 	
Defined Terms	Location	
Celgene Corp	Preamble	
Celgene Development & Commercialization Program	Section 1.7	
Celgene Europe	Preamble	
Celgene Indemnitees	Section 9.6(b)	
Celgene Licensed Product In-License	Section 1.8	
Celgene Licensed Product In-Licensed IP	Section 1.9	
Celgene Licensed Product IP	Section 1.10	
Celgene Other In-License	Section 1.11	
Celgene Regulatory Rights	Section 1.12	
Celgene Technology	Section 1.13	
Clinical Study	Section 1.14	
Combination Product	Section 1.30	
Commercialization	Section 1.15	
Commercially Reasonable Efforts	Section 1.16	
Competitive Infringement	Section 7.1	
Control	Section 1.17	
Covers	Section 1.18	
Elected Candidate	Appendix A	
EU	Section 1.19	
EU Regulatory Event	Section 1.20	
Field	Section 1.21	
First Commercial Sale	Section 1.22	
First Indication	Section 1.23	
Fully Burdened Manufacturing Cost	Appendix H	
GAAP	Section 1.24	
Gene Editing	Section 1.25	
In-License Payment	Section 1.26	
Indemnification Claim Notice	Section 9.6(c)	
Indemnified Party	Section 9.6(c)	
Joint IP	Section 5.2	
License Agreement	Preamble	
License Agreement Effective Date	Preamble	
License Agreement Term	Section 10.1	
Licensed IP	Section 1.27	
Licensed Product	Section 1.28	
Litigation Conditions	Section 9.6(d)(i)	
Losses	Section 9.6(a)	
Major EU Countries	Section 1.20	
Manufacturing	Section 1.29	
Manufacturing and Supply Agreement	Section 2.4(c)(ii)	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
 	 	
Defined Terms	Location	
Master Collaboration Agreement	Preamble	
Milestone Event	Section 4.2	
Milestone Payment	Section 4.2	
Modified Licensed Product	Section 1.28	
Net Sales	Section 1.30	
Original MCA	Preamble	
Party(ies)	Preamble	
Patent Challenge	Section 10.2(b)	
PHSA	Section 7.2(f)	
Pivotal Study	Section 1.31	
Regulatory Exclusivity Period	Section 1.32	
Second Indication	Section 1.33	
Selling Party	Section 1.34	
Solely Owned IP	Section 5.1	
Specific Patent	Section 6.3	
Sublicensee	Section 1.35	
Third Party Claims	Section 9.6(a)	
Valid Claim	Section 1.37	
Vector Supplies	Section 1.38	
 
2.Development and Commercialization.
2.1Development.  As of and after the License Agreement Effective Date, Celgene will assume sole responsibility for, and control of, Developing Elected Candidate and Licensed Product in the Field worldwide, and will establish a Celgene Development & Commercialization Program for that purpose.  As of and after the License Agreement Effective Date, Celgene will have sole responsibility for all costs and expenses arising from the Development and Commercialization of Elected Candidate and Licensed Product in the Field worldwide.  Notwithstanding the foregoing, if the initial Phase 1 Study with respect to Optioned Candidate has not been completed as of the License Agreement Effective Date, Bluebird will continue to be responsible for the performance of such initial Phase 1 Study under the oversight of the JSC under the Master Collaboration Agreement until completion of such initial Phase 1 Study.  In the event Bluebird continues to be responsible for the performance of such initial Phase 1 Study, Bluebird will be responsible for the costs of performing such initial Phase 1 Study on the terms set forth in the Master Collaboration Agreement.
2.2Regulatory.  Subject to the last sentence of Section 2.1, (a) as of and after the License Agreement Effective Date, Celgene will lead and have sole control of all efforts with Regulatory Authorities regarding the Development and Commercialization of Elected Candidate and Licensed Product in the Field worldwide, including taking full responsibility for preparing and filing the relevant Regulatory Filings and seeking Regulatory Approval and (b) promptly following the License Agreement Effective Date, Bluebird will, at Celgene’s expense, assign to
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LICENSE AGREEMENT
Celgene all Regulatory Filings with respect to Elected Candidate and Licensed Product.  For clarity, in the event Bluebird continues to be responsible for the performance of an initial Phase 1 Study following the License Agreement Effective Date in accordance with Section 2.1, Bluebird will retain ownership of any Regulatory Filings (including the IND) for Optioned Candidate until completion of such initial Phase 1 Study.  In the event of failure to assign such Regulatory Filings to Celgene, Bluebird hereby consents and grants to Celgene the right to access and reference (without any further action required on the part of Bluebird, whose authorization to file this consent with any Regulatory Authority is hereby granted) any such Regulatory Filing.
2.3Technical Assistance.  During the Collaboration Program Term, Bluebird will reasonably cooperate with Celgene to provide all technical assistance, and to transfer to Celgene any additional Know-How licensed to Celgene under Section 3.1, requested by Celgene to facilitate the transfer of Development efforts related to Elected Candidate and Licensed Product.  Such cooperation will include providing Celgene with reasonable access by teleconference or in-person at Bluebird’s facilities to Bluebird personnel involved in the research and Development of Elected Candidate to provide Celgene with a reasonable level of technical assistance and consultation in connection with the transfer of such Know-How.  Following the Collaboration Program Term, Bluebird will reasonably cooperate with Celgene to provide reasonable amounts of technical assistance, including to transfer to Celgene any additional Know-How licensed to Celgene under Section 3.1, with respect to Elected Candidate or Licensed Product as reasonably requested by Celgene with reasonable advance notice to Bluebird.  Any dispute with respect to the amount and completeness of the technical assistance and cooperation to be provided by Bluebird under this Section 2.3 will be referred to and finally resolved by binding arbitration by a mutually agreeable, disinterested, conflict-of-interest-free individual not affiliated or consulting with either Party.  Any such arbitration will be conducted under the then-current rules of the American Arbitration Association.
2.4Manufacture and Supply.
(a)Manufacturing.  Subject to Section (b), Celgene will be solely responsible for, and will bear all the costs and expenses of, Manufacturing and supplying all Elected Candidate and Licensed Product for Development and Commercialization in the Field worldwide and, subject to Section 2.4(c), Celgene will purchase Vector Supply from Bluebird or its designee for such purpose.
(b)Vector Supply.  Bluebird will have the sole right to Manufacture or have Manufactured Vector Supply, and Celgene will have no rights with respect thereto except as provided in Section 2.4(c)(iv).  Except as provided in Section 2.4(c)(iv) or in the Manufacturing and Supply Agreement, neither Celgene nor any Affiliate of Celgene (nor any others on behalf of or under license or sublicense from Celgene or any of its Affiliates) will Manufacture (i) any Vector and associated Payload for Licensed Product or (ii) Licensed Product, except for the Manufacture of Licensed Product using Vector Supply supplied by or on behalf of Bluebird.  Except as provided in Section 2.4(c)(iv) or in the Manufacturing and Supply Agreement, Celgene and its Affiliates and Sublicensees will purchase all Vector Supply exclusively from Bluebird or its designee.  
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LICENSE AGREEMENT
(c)Vector Supply Terms.
(i)Except as provided otherwise in this Section 2.4(c) or in the Manufacturing and Supply Agreement, Bluebird and its Affiliates will Manufacture, or cause a Third Party to Manufacture, all Vector Supply for all Elected Candidate and Licensed Product required for clinical Development and Commercialization in the Field worldwide, and will have the right to make all necessary decisions regarding arrangements with Third Party manufacturers, provided that Bluebird will reasonably consult with Celgene with respect to all such arrangements and obtain Celgene’s prior written consent, which will not be unreasonably withheld, conditioned or delayed.  [***]
(ii)The Parties will enter into a “Manufacturing and Supply Agreement,” between each other or among the Parties and an Affiliate or a Third Party, covering Vector Supply as soon as reasonably practicable after the License Agreement Effective Date, which agreement will be consistent with and supersede the terms of this Section 2.4(c) and will otherwise be subject in all respects to the terms and conditions of this License Agreement.
(iii)The cost to Celgene of Vector Supply will equal [***] of Bluebird’s Fully Burdened Manufacturing Cost for such Manufacture, plus [***], unless otherwise agreed by the Parties in writing.
(iv)The Manufacturing and Supply Agreement will include the terms set forth in Appendix I , including terms permitting Celgene to establish “back-up” and/or “second source” rights for Vector Supply and license grants from Celgene to Bluebird under the Celgene Licensed Product IP and Celgene Licensed Product In-Licensed IP to the extent necessary or useful for Bluebird to Manufacture Vector Supply.  [***]
(v)At Celgene’s request, Bluebird will cooperate with Celgene’s reasonable requests, at Celgene’s cost and expense, to engage in a technology transfer to allow Celgene, in accordance with Section 2.4(c)(iv), to Manufacture Vector Supply (through the first commercial batch of Vector Supply) itself or by through its designated Third Party manufacturer, by transferring all Know-How, Materials, technology and trade secrets Controlled by Bluebird or its Affiliates that are necessary to Manufacture Vector Supply, thereby enabling Celgene (or such Third Party) to Manufacture the Vector Supply.
(vi)Any purchase of Vector Supply from Bluebird or its designee will expressly not include any license rights to any Know-How or Patents, but instead all licenses (implied, by exhaustion or otherwise) will arise under Section 3.1, if and as applicable.
(vii)For the purpose of this License Agreement, certain words and phrases (and their correlatives) relating to Manufacturing will have the meanings set forth on  Appendix I .
2.5Celgene Diligence.  Celgene, directly or through one or more of its Sublicensees, will use Commercially Reasonable Efforts: (a) to Develop Licensed Product in the Field and to obtain Regulatory Approvals therefor; and (b) to Commercialize Licensed Product in the Field after obtaining such Regulatory Approval, in each country worldwide where Commercializing Licensed Product would be warranted by using Commercially Reasonable Efforts.
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LICENSE AGREEMENT
2.6Annual Update Meetings.  At least once during each consecutive twelve (12)-month period from the License Agreement Effective Date until the earlier of first approval of a BLA for Licensed Product by the FDA or first approval of an MAA for Licensed Product by the EMA, within thirty (30) days of Bluebird’s written request, the Parties will meet in person at a U.S. site of Celgene for Celgene to provide Bluebird with an update on the Development of Licensed Product by Celgene and its Sublicensees.  During such meeting, Celgene will disclose to Bluebird all material information regarding such Development.
2.7Reports by Celgene.  Celgene will prepare and maintain, and will cause its Sublicensees to prepare and maintain, reasonably complete and accurate records regarding the Development of Elected Candidate and Licensed Product, and Commercialization of Licensed Product worldwide after Regulatory Approval therefor.  Celgene will provide to Bluebird a reasonably detailed report regarding such efforts at least once every twelve (12)-month period from the License Agreement Effective Date.  Such report will contain sufficient detail to enable Bluebird to assess Celgene’s compliance with its Development and Commercialization obligations in Section 2.5, including information with respect to the following:  (a) the design, status and results of any animal studies and clinical trials for Licensed Product; (b) any regulatory milestones, and any Regulatory Approvals achieved, for Licensed Product; and (c) activities with respect to selling, promoting, supporting, detailing and marketing of Licensed Product.  In addition to the foregoing, Celgene will provide Bluebird with such additional information regarding any such activities as Bluebird may reasonably request from time to time.
2.8Applicable Bluebird In-Licenses and Other IP.
(a)Maintenance of Applicable Bluebird In-Licenses.  Bluebird (i) will duly perform and observe all of its obligations under the Applicable Bluebird In-Licenses in all material respects and maintain in full force and effect the Applicable Bluebird In-Licenses, and (ii) will not, without Celgene’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), (A) amend, modify, restate, cancel, supplement or waive any provision of any Applicable Bluebird In-License, or grant any consent thereunder, or agree to do any of the foregoing, or (B) exercise any right to terminate any Applicable Bluebird In-License in each case ((A) and (B)) that would reasonably be expected to adversely affect in any respect the rights of Celgene under this License Agreement, provided that Bluebird will provide prior written notice to Celgene of all of the foregoing notwithstanding whether or not any of the foregoing would reasonably be expected to adversely affect in any respect the rights of Celgene under this License Agreement.  Bluebird will provide Celgene with written notice as promptly as practicable (and in any event within five (5) business days) after becoming aware of any of the following: (I) any material breach or default by Bluebird or any of its Affiliates of any covenant, agreement or other provision of any Applicable Bluebird In-License, (II) any notice or claim from the counterparty to any Applicable Bluebird In-License terminating or providing notice of termination of any Applicable Bluebird In-License, (III) any notice or claim alleging any breach of default under any Applicable Bluebird In-License, or (IV) the existence of any facts, circumstances or events which alone or together with other facts, circumstances or events could reasonably be expected (with or without the giving of notice or passage of time or both) to give rise to a breach of or default under or right to terminate any Applicable Bluebird In-License.  If Bluebird fails to pay any amounts due
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LICENSE AGREEMENT
under any Applicable Bluebird In-License and if such nonpayment would permit the counterparty to such Applicable Bluebird In-License to terminate or suspend the same or any rights thereunder, Celgene will have the right, but not the obligation, in its sole discretion, to pay such amounts on Bluebird’s behalf, and any amounts so paid by Celgene may be taken by Celgene as a credit against any amounts payable to Bluebird under this License Agreement.    
(b)[***]
(c)Applicable Bluebird In-License Requirements.  Celgene will abide, and will cause all its Affiliates and applicable Sublicensees to abide, by all requirements of each Applicable Bluebird In-License in all material respects (and in any case in all respects in the case that failure to so abide would result in a breach under the Applicable Bluebird In-License), to the extent applicable to Sublicensees thereunder and to the extent disclosed by Bluebird to Celgene, with the understanding that disclosure by Bluebird of any Applicable Bluebird In-License to Celgene will be deemed disclosure of such requirements of such Applicable Bluebird In-License to Celgene.  In the event of a termination of any Applicable Bluebird In-License, Bluebird agrees, to the extent requested by Celgene, to reasonably assist Celgene in securing a direct license from the applicable licensor under any Patents, Materials and Know-How that was licensed to Bluebird and sublicensed to Celgene hereunder prior to such termination. In addition, Bluebird agrees, if requested by Celgene, to reasonably assist Celgene in securing a standby license from the applicable licensor under any Patents, Materials and Know-How that are licensed to Bluebird and sublicensed to Celgene.
3.License Grants.
3.1License by Bluebird.  Subject to the terms and conditions of this License Agreement, Bluebird hereby grants to Celgene a worldwide, exclusive (even as to Bluebird) license, with the right to sublicense only as permitted by Section 3.4, under Licensed IP, to Develop Elected Candidate and to Develop and Commercialize Licensed Product.  Further, (a) the license to Commercialize granted in this Section 3.1 will cover only the sale and offer for sale of Licensed Product in finished form and not the sale or offer for sale of Vectors (other than as and to the extent incorporated in the Licensed Product), and (b) rights to Manufacture Vectors and associated Payloads are included within the scope of the license granted to Celgene under this Section 3.1, which rights are subject to the terms and conditions of Section 2.4(c).
3.2Additional IP; Other In-Licenses.
(a)Additional IP.  Except as set forth in Section 3.2(b), Celgene may, on or after the License Agreement Effective Date, elect to include within the scope of the Licensed IP any Know-How, Material, Patent, Regulatory Data, Regulatory Filings or Regulatory Approvals (“ Additional IP ”), that would be Controlled by Bluebird but for required payments of Additional Payments to a Third Party, by (i) providing notice to Bluebird of same and (ii) agreeing to pay and in fact paying all Additional Payments with respect to Celgene’s access or license to such Additional IP.  Following Bluebird’s receipt of such notice and subject to Celgene’s performance of its obligations to pay any Additional Payments with respect to Celgene’s access or license to such Additional IP, such Additional IP will be deemed Licensed IP hereunder.  For avoidance of doubt, this Section 3.2(a) does not apply to Know-How, Materials, Patents, Regulatory Data,
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LICENSE AGREEMENT
Regulatory Filings or Regulatory Approvals licensed to Bluebird under the Applicable Bluebird In-Licenses, all of which are deemed Controlled by Bluebird notwithstanding this Section 3.2(a).
(b)Other In-Licenses.  Celgene may, on or after the License Agreement Effective Date, elect to convert any Other In-License to an Applicable New In-License by providing notice to Bluebird of same.  Upon Bluebird’s receipt of such notice, such Other In-License will be an Applicable New In-License hereunder,  Appendix B  will automatically be updated to include such New In-License and the provisions of this License Agreement applicable to New In-Licenses, including Section 4.1(b), will apply with respect to such New In-License.   
3.3Sublicensing Rights.
(a)Transfer.  The licenses granted in Sections 3.1 are transferable only upon a permitted assignment of this License Agreement in accordance with Section 11.12.
(b)Celgene Sublicenses.  The license granted in Section 3.1 may be sublicensed, in full or in part, by Celgene by a written agreement to its Affiliates and Third Parties (with the right to sublicense through multiple tiers), provided, that as a condition precedent to and requirement of any such sublicense:
(i)Celgene will provide Bluebird with a copy of any sublicense agreement with a non-Affiliated Sublicensee within thirty (30) days of execution thereof, and to the extent permitted under any Applicable Bluebird In-License, such sublicense agreement may be redacted as necessary to protect commercially sensitive information;
(ii)Celgene will be responsible for any and all obligations of such Sublicensee as if such Sublicensee were “Celgene” hereunder; and
(iii)Any such Sublicensee will agree in writing to be bound by substantially identical obligations as Celgene hereunder with respect to the activities of such Sublicensee hereunder (and not with respect to the activities of any other), including Know-How disclosure obligations Celgene has to Bluebird hereunder with respect to the activities of such Sublicensee hereunder (but excluding payment obligations).
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LICENSE AGREEMENT
3.4Exclusivity.  
(a)During the License Agreement Term, neither Party nor its Affiliates (nor any others on behalf of or with, or under license (including a covenant not to sue) or sublicense from, such Party or any its Affiliates) will research, Develop, Manufacture or Commercialize any actual or potential products (including Vectors and associated Payloads) to be used in the Field (which, for the purposes of this Section 3.4, will include all indications and will not be limited to cancer) that specifically target the Target Antigen, other than pursuant to this License Agreement (which includes, for avoidance of doubt, research, Development, Manufacture and Commercialization of improved and modified versions of the Licensed Product by Celgene) or any other Development & Commercialization Agreement (which includes, for avoidance of doubt, research, Development, Manufacture and Commercialization of improved and modified versions of the Licensed Product by Celgene).  
(b)Notwithstanding Section 3.4(a), if (i) a Business Combination occurs with respect to either Party with a Third Party or (ii) a Party acquires a Third Party (including by a merger or consolidation) so that such Third Party becomes an Affiliate over which the acquiring Party has control (as defined in the definition of Affiliate), or (iii) a Party acquires all or substantially all of the assets of a Third Party (including any subsidiaries or divisions thereof) (each of (i), (ii) and (iii), a “ Business Acquisition ”; such Party, the “ Business Party ”), and, in each case, the Third Party (or any of such Third Party’s Affiliates or any successors or assigns of such Third Party or such Third Party’s Affiliates, other than the Business Party and its Affiliates as of the Business Acquisition) (A) already has, or the acquired assets contain, as applicable, a program that existed prior to, or was planned prior to and is demonstrably to be implemented shortly after, the Business Acquisition or (B) initiates and pursues a new program following such Business Acquisition, in each case that would otherwise violate Section 3.4(a) (a “ Business Program ”), then such Third Party (or any of such Third Party’s Affiliates or any successors or assigns of such Third Party or such Third Party’s Affiliates, other than the Business Party and its Affiliates as of the Business Acquisition), as applicable, will be permitted to initiate, pursue and continue such Business Program after such Business Acquisition and such initiation, pursuit and continuation will not constitute a violation of Section 3.4(a); provided however that (I) none of the Licensed IP, or other Patents, Materials or Know-How Controlled by the other Party and, in each case, licensed to the Business Party will be used in the Business Program, and (II) the research or Development activities required under this License Agreement will be conducted separately from any research or Development activities directed to such Business Program, including the maintenance of separate lab notebooks and records (password-protected to the extent kept on a computer network) and separate personnel working on each of the activities under this License Agreement and the activities covered under such Business Program.  [***]
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LICENSE AGREEMENT
3.5Contract Manufacturers.  Subject to the terms and conditions of this License Agreement, either Party will have the right to appoint by a written agreement “contract manufacturers”, meaning any Third Party or Affiliate of such Party that manufactures Licensed Product (or components therefor, including for Bluebird, Vectors and associated Payloads) for re-sale, but who itself is not a “Sublicensee” hereunder and thereby exercises “have made” rights granted by the other Party hereunder, as well as “contract research organizations” and other providers performing services on Celgene’s behalf, none of which will be deemed a “Sublicensee” hereunder.  Each Party will be responsible for any such contract manufacturer, contract research organization or service provider hereunder, and further will require any such contract manufacturer, contract research organization or service provider to agree in writing to comply with Sections 3.6 and 8.
3.6No Implied Rights.  No license, sublicense or other right is or will be created or granted hereunder by implication, estoppel or otherwise.  Any licenses, sublicenses or rights will be granted only as expressly provided in this License Agreement.  Celgene will not practice or otherwise use any Licensed IP other than in accordance with the licenses granted in Section 3.1.
3.7Section 365(n) of the Bankruptcy Code.  All rights and licenses granted pursuant to any section of this License Agreement are, and will be deemed to be, rights and licenses to “intellectual property” (as defined in Section 101(35A) of title 11 of the United States Code and of any similar provisions of applicable Laws under any other jurisdiction (the “ Bankruptcy Code ”)).  Bluebird agrees that Celgene, as a licensee of rights and licenses under this License Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against Bluebird under the Bankruptcy Code or analogous provisions of applicable Law outside the United States, Celgene will be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual property licensed to Celgene and all embodiments of such intellectual property, which, if not already in Celgene’s possession, will be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon Celgene’s written request therefor, unless Bluebird elects to continue to perform all of its obligations under this License Agreement or (b) if not delivered under clause (a), following the rejection of this License Agreement by Bluebird in the bankruptcy proceeding upon written request therefor by Celgene.
4.Payments and Royalties.
4.1Applicable Bluebird In-Licenses and Celgene Licensed Product In-Licenses.
(a)Applicable Pre-Existing In-Licenses. If any In-License Payment becomes due under any Applicable Pre-Existing In-License during the License Agreement Term, Bluebird will pay same, provided that Celgene will reimburse Bluebird for any such In-License Payment within thirty (30) days of Celgene’s receipt of Bluebird’s written invoice therefor, which In-License Payment (other than payments that are royalties) will not exceed [***], and subject to Section 6.1.  Any such reimbursement by Celgene to Bluebird (i) is in addition to and not in lieu of the other payments required by this Section 4 and (ii) will not be subject to Section 4.3(d).  
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
(b)Applicable New In-Licenses.  Celgene may elect to take a sublicense under any New In-License of Bluebird and its Affiliates and upon such election, such New In-License will be an Applicable New In-License hereunder for all purposes.  For the purposes of determining the Parties’ respective payment obligations, all Applicable New In-Licenses as of and following the License Agreement Effective Date will be listed on  Appendix B .  If any In-License Payment becomes due under any Applicable New In-License during the License Agreement Term, Bluebird will pay same and, subject to Section 6.1, Celgene will reimburse Bluebird for (i) [***] of such payment that are royalties, which royalties will be subject to Section 4.3(d), and (ii) [***] of such payment that are not royalties, in each case ((i) and (ii)) within thirty (30) days of receipt of Bluebird’s written invoice therefor.  If Celgene elects to convert an Other In-License to an Applicable New In-License pursuant to Section 3.2(b), Celgene will reimburse Bluebird for [***] of any In-License Payments that became due under such Applicable New In-License during the License Agreement Term to the same extent as if such Applicable New In-License was designated as such as of the License Agreement Effective Date, including with respect to applicable Patent Costs in accordance with Section 6.1, provided that Bluebird provides Celgene with a reasonable accounting of same.  If any In-License Payments are royalties due under any Applicable New In-License during the License Agreement Term, such royalties will be subject to Section 4.3(d).  To the extent that any grant of a sublicense by Celgene or any Sublicensees under an Applicable New In-License triggers a payment obligation under such Applicable New In-License, Bluebird will pay same and Celgene will reimburse Bluebird for [***] of such payment within thirty (30) days of receipt of Bluebird’s written invoice therefor.
(c)Celgene Licensed Product In-Licenses.  If any payments become due under any Celgene Licensed Product In-License with respect to the Licensed Product, Bluebird will be responsible for [***] of such payments as provided in Section 4.1(e) of the Master Collaboration Agreement, provided that if any such payments are royalties, such royalties will be subject to Section 4.3(d).
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LICENSE AGREEMENT
4.2Milestone Payments.  Celgene will make milestone payments (each, a “Milestone Payment ”) to Bluebird upon the occurrence of each of the milestones events (each, a “ Milestone Event ”) as set forth below in this Section 4.2.  Each of the Milestone Payments will be payable to Bluebird by Celgene within forty-five (45) days of the achievement of the specified Milestone Event, and such payments when owed or paid will be non-refundable and non-creditable, and not subject to set-off, except as otherwise set forth in Sections 2.8(a), 10.3(c) and 10.6 hereof, and Sections 4.1(e), 4.3 and 10.6 of the Master Collaboration Agreement.  Except with respect to Modified Licensed Products, each of the Milestone Payments are payable only once in total under this License Agreement, whether achieved by one or more Licensed Products.  Notwithstanding the foregoing, Bluebird will be entitled to receive [***] of the Milestone Payments below, other than the Milestone Payment for the first Milestone Event ( i.e ., [***].  

Milestone Event	Milestone Payment	
[***]	[***]	
[***]	[***]	
[***]	[***]	
[***]	[***]	
[***]	[***]	
[***]	[***]	
[***]	[***]	
 
[***]
4.3Royalties.
(a)Rates.  Subject to the remainder of this Section 4.3, Celgene will pay to Bluebird running royalties, on a Licensed Product-by-Licensed Product basis, based on the total aggregate annual Net Sales worldwide by Selling Parties of such Licensed Product in a given calendar year at the following royalty rates:
 	 	
Annual Worldwide Net Sales
of each Licensed Product	Royalty Rate	
[***]	[***]	
[***]	[***]	
[***]	[***]	
[***]	[***]	
 
By way of example, in a given calendar year, if the aggregate annual worldwide Net Sales for a Licensed Product is [***], the following royalty payment would be payable for those Net Sales under this Section 4.3(a): [***].
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LICENSE AGREEMENT
(b)Royalty Term.  Royalties under Section 4.3(a) will be payable, on a Licensed Product-by-Licensed Product and country-by-country basis, on the Net Sales of any Licensed Product if at least one of the following two (2) conditions apply: [***]
(c)Royalty Reduction.  If Licensed Product is royalty-bearing only on account of Section 4.3(b)(ii), then the royalty rates set forth in Section 4.3(a) with respect to Net Sales attributable to Licensed Product will be reduced by [***].
(d)Third Party Royalty Payments.  If Celgene or its Sublicensee, in its reasonable judgment, is required to obtain a license from any Third Party under any Patent Covering Licensed Product in order to Develop or Commercialize such Licensed Product, and if Celgene (or its Sublicensee) is required to pay to such Third Party under such license any royalties, and the infringement of such Patent cannot reasonably be avoided by Celgene (or its Sublicensee), or if Celgene (or its Sublicensee) is required by a court of competent jurisdiction to pay royalties or lost profits to such a Third Party (and the infringement of such Patent cannot reasonably be avoided), then the amount of Celgene’s royalty obligations under this Section 4.3 will be reduced by [***] of the amount of such royalties paid to such Third Party, provided however, that the royalties payable under Section 4.3(a) will not be reduced in any such event below [***] of the amounts set forth in Section 4.3(a) (but as may be further reduced pursuant to Section 4.3(c) or Section 4.3(e)) for each royalty tier.  Any royalties payable under any Applicable Pre-Existing In-Licenses may not be deducted under this Section 4.3(d) from royalties owed to Bluebird.  Any royalties payable under any Applicable New In-Licenses and Celgene Licensed Product In-Licenses may be deducted under this Section 4.3(d) from royalties owed to Bluebird.  Celgene (or its Sublicensee) will use its commercially reasonable efforts to minimize the amount of any of the foregoing payments owed to Third Parties.  Prior to Celgene or its Sublicensee exercising its reasonable judgment under this Section 4.3(d), Celgene will provide Bluebird with written notice of a potential need to obtain any license from Third Parties.  The Parties will discuss the best course of action to resolve such potential license requirement(s).
(e)[***]
(f)Additional Royalty Provisions.  The royalties payable under Section 4.3(a) will be subject to the following:
(i)only one (1) royalty will be payable hereunder with respect to each Licensed Product unit;
(ii)royalties when owed or paid hereunder will, except as provided in Section 4.3(d), be non-refundable and non-creditable and not subject to set-off (except as otherwise provided in Sections 2.8(a), 10.3(c) and 10.6 hereof, Section 17.6 of any Co-Development, Co-Promote and Profit Share Agreement, and Sections 4.1(e), 4.3 and 10.6 of the Master Collaboration Agreement); and
(iii)except as expressly set forth in Sections 4.3(c), 4.3(d) and 4.3(e), no other royalty deductions are permitted hereunder.
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LICENSE AGREEMENT
4.4Payment Terms. [***]
Mutual Convenience of the Parties.  The royalty and other payment obligations set forth hereunder have been agreed to by the Parties for the purpose of reflecting and advancing their mutual convenience, including the ease of calculating and paying royalties and other amounts to Bluebird.
5.Ownership and Inventorship of IP.
5.1Solely-Owned IP. Subject to Section 5.2, as between the Parties, each Party will own and retain all right, title and interest in and to any and all Know-How and Patents arising therefrom that are discovered, created, conceived, developed or reduced to practice solely by or on behalf of such Party under or in connection with this License Agreement, including as part the Celgene Development & Commercialization Program (“ Solely Owned IP ”).  Subject to the licenses hereunder and the other terms and conditions of this License Agreement, each Party will be solely responsible for the Prosecution and Maintenance, and the enforcement and defense, of any Patents within its Solely Owned IP, and the other Party will have no rights with respect thereto.
5.2Joint IP.  The Parties will jointly own any and all Know-How and Patents arising therefrom that are discovered, created, conceived, developed or reduced to practice jointly by or on behalf of the Parties, under or in connection with this License Agreement, including as part of the Celgene Development & Commercialization Program (“ Joint IP ”).  Each Party will have an undivided one-half interest in and to Joint IP.  Each Party will exercise its ownership rights in and to such Joint IP, including the right to license and sublicense or otherwise to exploit, transfer or encumber its ownership interest, without an accounting or obligation to, or consent required from, the other Party, but subject to the licenses hereunder and the other terms and conditions of this License Agreement, including Section 3.4.  At the reasonable written request of a Party, the other Party will in writing grant such consents and confirm that no such accounting is required to effect the foregoing regarding Joint IP.  Each Party, for itself and on behalf of its Affiliates, licensees and Sublicensees, and employees, subcontractors, consultants and agents of any of the foregoing, hereby assigns (and to the extent such assignment can only be made in the future hereby agrees to assign), to the other Party a joint and undivided interest in and to all Joint IP.  The Prosecution and Maintenance, and the enforcement and defense, of any Patents within Joint IP will be jointly managed by the Parties on mutually agreeable terms to be entered into by the Parties at the time any such Patents are first filed,  provided that (a) all recoveries and Patent Costs arising from the enforcement or defense of any Patents within Joint IP, absent further agreement, will be shared by the Parties in accordance with Section 7.2(e) (provided that sufficient advance written notice of any such Patent Costs is given to the Party not incurring same) and (b) Patent Costs incurred in connection with the Prosecution and Maintenance of Patents within Joint IP will be apportioned as set forth in Sections 6.1 and 6.3, provided that in each case ((a) and (b)), if either Party elects not to pay any such Patent Costs for any such Patent, the Parties will meet and agree upon an equitable way to treat such Patent.
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LICENSE AGREEMENT
5.3Inventorship.  Inventorship determination for all Patents worldwide arising from any Know-How created, conceived or developed by or on behalf of the Parties under or in connection with this License Agreement and thus the ownership thereof will be made in accordance with applicable United States patent Laws.
5.4Allocation.  Notwithstanding Sections 5.1 – 5.3, the Patent Committee may allocate ownership of a particular item of intellectual property to improve the prospects of obtaining patent protection with respect to such item of intellectual property, even if such allocation is not in accordance with the terms of Sections 5.1 – 5.3, so long as the Parties mutually agree to such allocation.
6.Patent Prosecution and Maintenance.
6.1Generally.  Subject to Sections 6.2 and 6.3, Bluebird will have the sole right to Prosecute and Maintain Patents within the Licensed IP .   Bluebird will use commercially reasonable efforts to, where applicable and upon Celgene’s reasonable request, separate parent Patent applications within the Licensed IP into one or more separate Patent applications for Specific Patents, to the extent permitted under applicable Law, where doing so would not reasonably be expected to materially harm any Patent within the Licensed IP or other Patents owned by Bluebird or its Affiliates, provided that the foregoing limitation will not apply to Licensed IP that is Collaboration IP .  [***]
6.2Celgene Input.  Bluebird will regularly provide Celgene with copies of all applications for Patents within the Licensed IP, and all other material submissions and correspondence with any patent authorities regarding such Patents, in sufficient time to allow for review and comment by Celgene.  In addition, Bluebird will provide Celgene and its counsel with an opportunity to consult with Bluebird and its counsel regarding Prosecution and Maintenance of any such Patents in the Field, and Bluebird will consider in good faith all comments timely made by Celgene and its counsel.  In the event of any disagreement between any of Bluebird or Celgene, Bluebird will have the final decision-making authority with respect to the matter involved as long as Bluebird acts in good faith.
6.3Specific Patents.  For any Patent within the Licensed IP [***] (each “Specific Patent ”), the following will apply: upon Celgene’s written request, and provided that Bluebird reasonably agrees with Celgene that the following Prosecution and Maintenance activities would not materially harm any other Patent within the Licensed IP or other Patents owned by Bluebird or its Affiliates (other than Collaboration IP), Celgene will control the Prosecution and Maintenance of the Specific Patents, and notwithstanding anything in Section 6.1 to the contrary, Celgene will be solely responsible for the payment of all related Patent Costs.  In addition, Celgene will provide Bluebird and its counsel with an opportunity to consult with Celgene and its counsel regarding Prosecution and Maintenance of any such Specific Patents, and Celgene will include or reflect all reasonable comments timely made by Bluebird and its counsel.  Celgene acknowledges and agrees that Bluebird may grant similar rights to other exclusive Third Party licensees under any Patent within the Licensed IP that has claims Covering only a product that is not a Licensed Product (or its manufacture or use) and no other product (or its manufacture or use), other than Specific Patents.  If the Parties cannot agree whether or not any Patent within the Licensed IP is a Specific
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LICENSE AGREEMENT
Patent, or if Bluebird claims that the foregoing Prosecution and Maintenance activities would materially harm any other Patent within the Licensed IP or other Patents owned by Bluebird or any of its Affiliates, either of the Parties may refer such dispute to a mutually agreeable, disinterested, conflict-of-interest-free individual not affiliated or consulting with either Party and who has at least fifteen (15) years of patent prosecution experience in the pharmaceutical field.  Any such arbitration will be conducted under the then-current rules of the American Arbitration Association, and the decision of the arbitrator will be final.  
6.4Election Not to Prosecute or Maintain or Pay Patent Costs.  If Bluebird elects not (a) to Prosecute or Maintain any Patents within the Licensed IP in any particular country before the applicable filing deadline or continue such activities once filed in a particular country, or (b ) to pay the Patent Costs associated with Prosecution or Maintenance of any Patents within the Licensed IP, then in each such case Bluebird will so notify Celgene, promptly in writing and in good time to enable Bluebird to meet any deadlines by which an action must be taken to preserve such Patent in such country, if Celgene so requests.  Upon receipt of each such notice by Bluebird, Celgene will have the right, but not the obligation, to notify Bluebird in writing on a timely basis that Celgene will assume control of the Prosecution or Maintenance of such Patent, and bear the Patent Costs thereafter incurred by Celgene with respect thereto.  In addition, Celgene will provide Bluebird and its counsel with an opportunity to consult with Celgene and its counsel regarding Prosecution and Maintenance of any such Patents, and Celgene will include or reflect all reasonable comments timely made by Bluebird and its counsel.  If after making such election, Celgene elects not to pay the Patent Costs associated with Prosecution or Maintenance of any such Patent, then in each such case Celgene will so notify Bluebird and on the ninetieth (90 th ) day after Bluebird’s receipt of such notice such Patent will no longer be licensed to Celgene hereunder and will no longer be included within the “Licensed IP” hereunder.  
6.5Third Party Rights.  To the extent that a Third Party licensor of Bluebird has retained any right to Prosecute or Maintain any Patent within the Licensed IP licensed to Celgene hereunder (including pursuant to an Applicable Bluebird In-License), or otherwise be involved in such activities, Bluebird will use commercially reasonable efforts to cause such Third Party licensor to take the actions specified by this Section 6 (including Sections 6.6 and 6.7) in a manner consistent with the in-license applicable thereto, but Bluebird will not be deemed to be in breach of its obligations under this Section 6 if, after using such commercially reasonable efforts, it is unable to comply with such obligations because of actions taken or not taken by such Third Party licensor.
6.6Patent Extensions.  Subject to the remainder of this Section 6.6, if any election for patent term restoration or extension, supplemental protection certificate or any of their equivalents may be made with respect to any Patent within the Licensed IP, after consultation with Celgene, the Parties will discuss and seek to reach mutual agreement whether or not to take such action.  If the Parties are not able to reach mutual agreement, (a) Celgene will have the sole right to make the final decision whether or not to seek such patent term restoration or extension, supplemental protection certificate or any of their equivalents with respect to Specific Patents and Patents within the Collaboration IP licensed to Celgene hereunder and (b) Bluebird will have the sole right to make the final decision whether or not to seek such patent term restoration or extension, supplemental protection certificate or any of their equivalents with respect to all other Patents within the Licensed IP.
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LICENSE AGREEMENT
6.7Regulatory Exclusivity Periods.  With respect to any Patent listings required for any Regulatory Exclusivity Periods for Product, the Parties will mutually agree on which Patents within the Licensed IP to list, provided that if the Parties are not able to agree, Celgene will have the right to make the final decision, and provided further that the exercise of such right by Celgene will not increase or otherwise change the rights or obligations of the Parties hereunder.
6.8Cooperation.  Each Party will reasonably cooperate with the other Party in the Prosecution and Maintenance of Patents within the Licensed IP.  Such cooperation includes promptly executing all documents, or requiring inventors, subcontractors, employees and consultants and agents of Celgene and Bluebird and their respective Affiliates and Sublicensees to execute all documents, as reasonable and appropriate so as to enable the Prosecution and Maintenance of any such Patents in any country.
6.9Patent Marking.  Celgene will mark, and will cause all other Selling Parties to mark, Product with all Patents within the Licensed IP in accordance with applicable Law, which marking obligation will continue for as long as (and only for as long as) required under applicable Law.
6.10Common Interest Disclosures.  With regard to any information or opinions disclosed pursuant to this License Agreement by one Party to the other Party regarding Prosecution and Maintenance of Patent within the Licensed IP, or enforcement of intellectual property and/or technology by or against Third Parties, Bluebird and Celgene agree that they have a common legal interest in determining the ownership, scope, validity and/or enforcement of the Licensed IP, and whether, and to what extent, Third Party intellectual property rights may affect the conduct of the Development and Commercialization of any Licensed Product, and have a further common legal interest in defending against any actual or prospective Third Party claims based on allegations of misuse or infringement of intellectual property rights relating to the Development or Commercialization of any Licensed Product.  Accordingly, the Parties agree that all such information and materials obtained by the Parties from each other will be used solely for purposes of the Parties’ common legal interests with respect to the conduct of the Agreement.  All such information and materials will be treated as protected by the attorney-client privilege, the work product privilege, and any other privilege or immunity that may otherwise be applicable.  By sharing any such information and materials, neither Party intends to waive or limit any privilege or immunity that may apply to the shared information and materials.  Neither Party will have the authority to waive any privilege or immunity on behalf of the other Party without such other Party’s prior written consent, nor will the waiver of privilege or immunity resulting from the conduct of one Party be deemed to apply against any other Party.  This Section 6.10 will be subject to any right granted by either Party to any Third Party, provided that the grant of such right to such Third Party does not conflict with the other Party’s rights or the first Party’s obligations under this License Agreement.
7.Patent Enforcement and Defense.
7.1Notice.  Each Party will promptly notify, in writing, the other Party upon learning of any actual or suspected Competitive Infringement of any Patents within the Licensed IP by a Third Party, or of any claim of invalidity, unenforceability, or non-infringement of any Patents
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LICENSE AGREEMENT
within the Licensed IP, and will, along with such notice, supply the other Party with any evidence in its possession pertaining thereto.  For purposes of this License Agreement, “ Competitive Infringement ” means any allegedly infringing activity in the Field (which, for the purposes of this definition, will include all indications and will not be limited to cancer) with respect to a Patent within the Licensed IP, which activity (a) falls within the scope then in effect of the licenses granted by Bluebird to Celgene as set forth in Sections 3.1, (b) is subject to Section 7.2(f), or (c) would be competitive with a Licensed Product and targets the same Target Antigen as such Licensed Product.
7.2Enforcement and Defense. [***]
7.3Third Party Rights.  To the extent that a Third Party licensor of Bluebird has retained any right to (a) defend against a declaratory judgment action or other action challenging any Patents within the Licensed IP,  (b) seek to abate any Competitive Infringement of the Patents within the Licensed IP by a Third Party, or (c) take any other actions described in Section 7.2(f) for any Patent within the Licensed IP licensed to Celgene hereunder (including pursuant to an Applicable Bluebird In-License), or otherwise be involved in such activities, Bluebird will use commercially reasonable efforts to cause such Third Party licensor to take the actions specified by this Section 7.3 in a manner consistent with the in-license applicable thereto, but Bluebird will not be deemed to be in breach of its obligations under this Section 7.3 if, after using such commercially reasonable efforts, it is unable to comply with such obligations because of actions taken or not taken by such Third Party licensor.   
8.Confidentiality.
The Parties acknowledge and agree that terms of this License Agreement and all Materials, ideas and information of any kind, whether in written, oral, graphical, machine-readable or other form, whether or not marked as confidential or proprietary, which are transferred, disclosed or made available by a Party or at the request of a Party, including any of the foregoing of Third Parties, will be subject to the provisions of Section 10 of the Master Collaboration Agreement. The Parties agree to issue the joint press release on Appendix E  promptly following the License Agreement Effective Date.  A redacted version of this License Agreement will be agreed to by the Parties and shall be consistent with the corresponding redacted version of this License Agreement in such manner as is provided in Section 8.3 of the Master Collaboration Agreement.
9.Warranties; Limitations of Liability; Indemnification.
9.1Representations and Warranties.  Each Party represents and warrants to the other as of the License Agreement Effective Date that it has the legal right and power to enter into this License Agreement, to extend the rights and licenses granted or to be granted to the other in this License Agreement, and to fully perform its obligations hereunder.
9.2Additional Representations and Warranties of Bluebird.  Except as set forth in Schedule 9.2, Bluebird represents and warrants to Celgene that, as of the License Agreement Effective Date:
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LICENSE AGREEMENT
(a)Licensed IP.  Appendix F sets forth a complete and accurate list of all Patents included in the Licensed IP, indicating the owner, licensor and/or co-owner(s), if applicable, and, for any Elected Candidate and Licensed Product-relevant subject matter or Materials, if no Patent is specifically licensed, a list of all subject matter or Materials that are included in the Licensed IP, including those licensed under a materials use license or equivalent.  Bluebird Controls the Patents listed on  Appendix F  and the Know-How within the Licensed IP, and is entitled to grant the licenses specified herein.  Bluebird has not granted to any Third Party any rights or licenses under such Patents or Know-How within the Licensed IP that would conflict with the licenses granted to Celgene hereunder.
(b)Third Party Agreements.  The Applicable Bluebird In-Licenses are valid and binding obligations of Bluebird and, to the Knowledge of Bluebird, the applicable licensor, enforceable against Bluebird and, to the Knowledge of Bluebird, the applicable licensor, in accordance with their terms, except as may be limited by general principles of equity (regardless of whether considered in a proceeding at law or in equity) and by applicable bankruptcy, insolvency, moratorium and other similar Laws of general application relating to or affecting creditors’ rights generally.  Neither Bluebird nor any of its Affiliates has received any notice of any counterparty’s intention to terminate any Applicable Bluebird In-License in whole or in part or any notice requesting any amendment, alteration or modification of such Applicable Bluebird In-License or any sublicense or assignment thereunder.  There is no breach or default, or event which upon notice or the passage of time, or both, could give rise to any breach or default, in the performance of any Applicable Bluebird In-License by Bluebird or any of its Affiliates or, to the Knowledge of Bluebird, the counterparty thereto, and Bluebird has not received any notice of any such breach, default or event.  Except for the Applicable Bluebird In-Licenses, neither Bluebird nor any of its Affiliates is a party to any license, sublicense or other agreement pursuant to which Bluebird or such Affiliate has received a license or other rights relating to the Elected Candidate or Licensed Product.  All Patents and Know-How licensed to Bluebird under the Applicable Bluebird In-Licenses are Controlled by Bluebird for purposes of the licenses granted to Celgene under this License Agreement.
(c)Patents.  To Bluebird’s Knowledge, the Patents listed on Appendix F have been procured or are being procured from the respective patent offices in accordance with applicable Law.  None of the Patents included in the Licensed IP is or has been involved in any opposition, cancellation, interference, reissue or reexamination proceeding, and no Licensed IP is the subject of any judicial, administrative or arbitral order, award, decree, injunction, lawsuit, proceeding or stipulation.  Neither Bluebird nor any of its Affiliates has received any notice alleging that the Patents in the Licensed IP are invalid or unenforceable, or challenging Bluebird’s ownership of or right to use any such rights.
(d)No Conflicts.  The execution, delivery and performance by Bluebird of this License Agreement and the consummation of the transactions contemplated hereby will not result in any violation of, conflict with, result in a breach of or constitute a default under any understanding, contract or agreement to which Bluebird is a party or by which it is bound.  Neither Bluebird nor any of its Affiliates has entered into any agreement or otherwise licensed, granted, assigned, transferred, conveyed or otherwise encumbered or disposed of any right, title or interest in or to any of its assets, including any intellectual property rights, that would in any way conflict with or impair the scope of any rights or licenses granted to Celgene hereunder.
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LICENSE AGREEMENT
(e)Outlicenses.  Appendix G sets forth a complete and accurate list of all agreements relating to the licensing, sublicensing or other granting of rights by Bluebird to any Person with respect to the Licensed IP and the Target Antigen, and Bluebird has provided complete and accurate copies of all such agreements to Celgene.  Except for the Applicable Bluebird In-Licenses, Bluebird and its Affiliates are not subject to any payment obligations to Third Parties as a result of the execution or performance of this License Agreement.  Neither Bluebird nor any of its Affiliates has granted any liens or security interests on the Licensed IP and the Licensed IP is free and clear of any mortgage, pledge, claim, security interest, covenant, easement, encumbrance, lien or charge of any kind.
(f)No Proceedings.  There is no action, suit, proceeding or investigation pending or, to the Knowledge of Bluebird, currently threatened in writing against or affecting Bluebird that questions the validity of this License Agreement or the right of Bluebird to enter into this License Agreement or consummate the transactions contemplated hereby.
(g)No Infringement.  Neither Bluebird nor any of its Affiliates has received any notice of any claim that any Patent, Know-How or other intellectual property Controlled by a Third Party would be infringed or misappropriated by the production, use, research, Development, Manufacture or Commercialization of the Elected Candidate or Licensed Product pursuant to this License Agreement, and, to the Knowledge of Bluebird, there are no Patents, Know-How or other intellectual property owned by a Third Party and not included in the Licensed IP or In-Licensed IP that are necessary for the production, use, research, Development, Manufacture or Commercialization of Elected Candidate or Licensed Product.
9.3Disclaimers.  Without limiting the respective rights and obligations of the Parties expressly set forth herein, each Party specifically disclaims any guarantee that any Licensed Product will be successful, in whole or in part. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS LICENSE AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY PATENTS, KNOW-HOW, ELECTED CANDIDATE OR LICENSED PRODUCT, INCLUDING WARRANTIES OF VALIDITY OR ENFORCEABILITY OF ANY PATENT RIGHTS, TITLE, QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, PERFORMANCE, AND NONINFRINGEMENT OF ANY THIRD PARTY PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS.
9.4[***]
9.5Performance by Others.  The Parties recognize that each Party may perform some or all of its obligations under this License Agreement through Affiliates and permitted subcontractors provided, however, that each Party will remain responsible and liable for the performance by its Affiliates and permitted subcontractors and will cause its Affiliates and permitted subcontractors to comply with the provisions of this License Agreement in connection therewith.
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LICENSE AGREEMENT
9.6Indemnification.
(a)Indemnification by Celgene.  Celgene will indemnify Bluebird, its Affiliates and their respective directors, officers, employees, Third Party licensors and agents, and their respective successors, heirs and assigns (collectively, “ Bluebird Indemnitees ”), and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”) in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, “ Third Party Claims ”) against the Bluebird Indemnitees arising from or occurring as a result of: (i) the material breach by Celgene of any term of this License Agreement; (ii) any gross negligence or willful misconduct on the part of Celgene in performing its obligations under this License Agreement; or (iii) the Development or Commercialization by or on behalf of Celgene or any of its Affiliates or Sublicensees of Elected Candidate or Licensed Product, except in each case for those Losses for which Bluebird has an obligation to indemnify Celgene pursuant to Section 9.6(b), as to which Losses each Party will indemnify the other to the extent of their respective liability; provided, however, that Celgene will not be obligated to indemnify Bluebird Indemnitees for any Losses to the extent that such Losses arise as a result of gross negligence or willful misconduct on the part of an Bluebird Indemnitee.
(b)Indemnification by Bluebird.  Bluebird will indemnify Celgene, its Affiliates and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, “ Celgene Indemnitees ”), and defend and save each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims against Celgene Indemnitees arising from or occurring as a result of: (i) the material breach by Bluebird of any term of this License Agreement; (ii) any gross negligence or willful misconduct on the part of Bluebird in performing its obligations under this License Agreement; or (iii) the Development by or on behalf of Bluebird or any of its Affiliates or Sublicensees of Elected Candidate or Licensed Product, except in each case for those Losses for which Celgene has an obligation to indemnify Bluebird pursuant to Section 9.6(a), as to which Losses each Party will indemnify the other to the extent of their respective liability for the Losses; provided, however, that Bluebird will not be obligated to indemnify Celgene Indemnitees for any Losses to the extent that such Losses arise as a result of gross negligence or willful misconduct on the part of a Celgene Indemnitee.
(c)Notice of Claim.  All indemnification claims provided for in Sections 9.6(a) and 9.6(b) will be made solely by such Party to this License Agreement (the “ Indemnified Party ”).  The Indemnified Party will promptly notify the indemnifying Party (an “ Indemnification Claim Notice ”) of any Losses or the discovery of any fact upon which the Indemnified Party intends to base a request for indemnification under Sections 9.6(a) and 9.6(b), but in no event will the indemnifying Party be liable for any Losses that result from any delay in providing such notice.  Each Indemnification Claim Notice must contain a description of the claim and the nature and estimated amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party will furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.
(d)Defense, Settlement, Cooperation and Expenses.
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LICENSE AGREEMENT
(i)Control of Defense.  At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after the indemnifying Party’s receipt of an Indemnification Claim Notice, provided however that (A) the Third Party Claim solely seeks monetary damages and (B) the indemnifying Party expressly agrees in writing that as between the indemnifying Party and the Indemnified Party, the indemnifying Party will be solely obligated to satisfy and discharge the Third Party Claim in full and is able to reasonably demonstrate that it has sufficient financial resources (the matters described in (A) and (B), the “ Litigation Conditions ”).  The assumption of the defense of a Third Party Claim by the indemnifying Party will not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor will it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification.  Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party (the indemnifying Party will consult with the Indemnified Party with respect to a possible conflict of interest of such counsel retained by the indemnifying Party).  In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party will immediately deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim.  Should the indemnifying Party assume the defense of a Third Party Claim, except as provided in Section 9.6(d)(ii), the indemnifying Party will not be liable to the Indemnified Party for any legal costs or expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim.  The Indemnified Party may, at any time, assume the defense of a Third Party Claim if at any time the Litigation Conditions are not satisfied with respect to such Claim.  In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party will reimburse the indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of suit) and any Third Party Claims incurred by the indemnifying Party in its defense of the Third Party Claim.
(ii)Right to Participate in Defense.  Without limiting Section 9.6(d)(i), any Indemnified Party will be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however, that such employment will be at the Indemnified Party’s own cost and expense unless (A) the employment thereof has been specifically authorized by the indemnifying Party in writing, (B) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 9.6(d)(i) (in which case the Indemnified Party will control the defense), (C) the interests of the Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under applicable Law, ethical rules or equitable principles, or (D) the indemnifying Party no longer satisfies the Litigation Conditions, in which case the indemnifying Party will assume [***] percent ([***]) of any such costs and expenses of counsel for the Indemnified Party.
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LICENSE AGREEMENT
(iii)Settlement.  With respect to any Third Party Claims that relate solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnified Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the business of the Indemnified Party in any manner, and as to which the indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, and subject to the Litigation Conditions being satisfied, the indemnifying Party will have the sole right to agree to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, will deem appropriate.  With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 9.6(d)(i), the indemnifying Party will have authority to agree to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, delayed or conditioned).  The indemnifying Party will not be liable for any settlement or other disposition of a Loss by an Indemnified Party that is reached without the prior written consent of the indemnifying Party.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party will admit any liability with respect to or settle, compromise or discharge, any Third Party Claim without the prior written consent of the indemnifying Party, such consent not to be unreasonably withheld, delayed or conditioned.
(iv)Cooperation.  If the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will cause each other Indemnified Party to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith.  Such cooperation will include access during normal business hours afforded to indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket costs and expenses in connection therewith.
(v)Costs and Expenses.  Except as provided above in this Section 9.6(d), the costs and expenses, including attorneys’ fees and expenses, incurred by the Indemnified Party in connection with any claim will be reimbursed on a calendar quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.
9.7Insurance.  Each Party will maintain at its sole cost and expense, an adequate liability insurance or self-insurance program (including product liability insurance) to protect against potential liabilities and risk arising out of activities to be performed under this License Agreement, and any agreement related hereto and upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the U.S. pharmaceutical industry for the activities to be conducted by such Party under this License Agreement.  Subject to the
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LICENSE AGREEMENT
preceding sentence, such liability insurance or self-insurance program will insure against all types of liability, including personal injury, physical injury or property damage arising out of the manufacture, sale, use, distribution or marketing of Licensed Product.  The coverage limits set forth herein will not create any limitation on a Party’s liability to the other under this License Agreement.
10.Term and Termination.
10.1Term.  This License Agreement will commence as of the License Agreement Effective Date and, unless sooner terminated in accordance with the terms hereof or by mutual written consent, will continue on a country-by-country basis, until there are no more payments owed Bluebird on Licensed Product in such country (the longest such period of time for any Licensed Product hereunder, the “ License Agreement Term ”).  Upon there being no more such payments hereunder for any such Licensed Product in such country, the licenses contained in Section 3.1 for such Licensed Product will become fully paid up and will remain exclusive with respect to such Licensed Product in such country.
10.2Termination by Bluebird.
(a)Breach.  Bluebird will have the right to terminate this License Agreement in full upon delivery of written notice to Celgene in the event of any material breach by Celgene of any terms and conditions of this License Agreement in a manner that fundamentally frustrates the transactions contemplated by this License Agreement, provided that such termination will not be effective if such breach, has been cured within [***] after written notice thereof is given by Bluebird to Celgene specifying the nature of the alleged breach (or, if such default cannot be cured within such [***] period, within [***] after such notice if Celgene commences actions to cure such default within such [***] period and thereafter diligently continues such actions, but fails to cure the default by the end of such [***]); provided, however, that to the extent such material breach involves the failure to make a payment when due, such breach must be cured within [***] after written notice thereof is given by Bluebird to Celgene.
(b)[***]
10.3Termination by Celgene.
(a)Breach.  Celgene will have the right to terminate this License Agreement in full upon delivery of written notice to Bluebird in the event of any material breach by Bluebird of any terms and conditions of this License Agreement in a manner that fundamentally frustrates the transactions contemplated by this License Agreement, provided that such termination will not be effective if such breach has been cured within [***] after written notice thereof is given by Celgene to Bluebird specifying the nature of the alleged breach (or, if such default cannot be cured within such [***] period, within [***] after such notice if Bluebird commences actions to cure such default within such [***] period and thereafter diligently continues such actions, but fails to cure the default by the end of such [***].
(b)Discretionary Termination.  Beginning with the [***], Celgene will have the right to terminate this License Agreement in full at its discretion for any reason by delivering written notice to Bluebird, such termination to be effective [***] following the date of such notice.
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LICENSE AGREEMENT
(c)Alternative to Termination Under Section 10.3(a).  If Celgene has the right to terminate this License Agreement under Section 10.3(a) (including expiration of all applicable cure periods thereunder), in lieu of exercising such termination right, Celgene may elect once by written notice to Bluebird before the end of such applicable cure period to have this License Agreement continue in full force and effect and instead have, starting immediately after the end of such applicable cure period, any future Milestone Payments set forth in Section 4.2 and the royalty rates set forth in the table set forth in Section 4.3(a) be reduced by [***], provided that such reduction will not apply if such future Milestone Payments and royalty rates have already been reduced pursuant to Section 11.4(c) of the Master Collaboration Agreement.
10.4Effects of Termination.  Upon termination (but not expiration pursuant to Section 10.1) of this License Agreement for any reason:
(a)Wind Down.  Celgene will responsibly wind-down, in accordance with accepted pharmaceutical industry norms and ethical practices, any on-going clinical studies for which it has responsibility hereunder in which patient dosing has commenced or, if reasonably practicable and requested by Bluebird, allow Celgene, its Affiliates or its Sublicensees to complete such trials.  Celgene will be responsible for any costs associated with such wind-down.  Bluebird will pay all costs incurred by either Party to complete such studies should Bluebird request that such studies be completed.
(b)Sublicenses.  A termination of this License Agreement will not automatically terminate any sublicense granted by Celgene pursuant to Section 3.3 for Commercialization rights with respect to a non-Affiliated Sublicensee, provided that (i) such Sublicensee is not then (A) in material breach of any provision of this License Agreement or (B) in material breach of the applicable sublicense agreement or otherwise in breach of such sublicense agreement in a manner that would give rise to a right of termination on the part of Celgene, (ii) if Bluebird terminates this License Agreement pursuant to Section 10.2(a) for Celgene’s failure to fulfill its payment obligations hereunder, such Sublicensee agrees to and does pay to Bluebird all outstanding amounts that accrued as a result of such Sublicensee’s activities under the sublicense, (iii) Bluebird will have the right to step into the role of Celgene as sublicensor under any such sublicense executed after the License Agreement Effective Date, with all the rights that Celgene had under such sublicense, solely with respect to the Licensed IP, prior to termination of this License Agreement (including the right to receive any payments to Celgene by such Sublicensee that accrue from and after the date of the termination of this License Agreement solely with respect to the Licensed IP), (iv) such Sublicensee will pay to Bluebird all amounts that Celgene would have been obligated to pay to Bluebird hereunder with respect to such Sublicensee’s activities had this License Agreement not terminated (less any amounts received by Bluebird in clause (iii) above) and (v) the survival of such sublicense will not result in an imposition of any additional obligations on the part of Bluebird that are not included within the scope of this License Agreement.  Celgene will include in any sublicense agreement executed after the License Agreement Effective Date that relates solely to the Licensed IP a provision in which said Sublicensee acknowledges its obligations to Bluebird under this Section 10.4(b).
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LICENSE AGREEMENT
(c)Cessation of Rights.  Except as otherwise expressly provided in Section 10.4(b), all rights and licenses granted by Bluebird to Celgene in Section 3 will terminate, and Celgene and its Affiliates and Sublicensees will cease all use of Licensed IP and all Development, Manufacture and Commercialization of Elected Candidate and Licensed Product.
(d)Regulatory Approvals.  To the extent permitted by applicable Law, and subject to Bluebird paying commercially reasonable compensation to Celgene for the assets to be transferred pursuant to this Section 10.4(d) (such compensation to either be mutually agreed to or determined through arbitration as provided in Section 10.4(g) below, and such compensation to be reduced by [***] from what would be commercially reasonable compensation if this License Agreement is terminated by Bluebird pursuant to Section 10.2(a) ), all Regulatory Approvals and other regulatory filings and communications owned (in whole or in part) or otherwise Controlled by Celgene and its Affiliates and Sublicensees solely relating to the Elected Candidate and/or Licensed Product, and all other documents solely relating to and necessary to further Develop and Commercialize Elected Candidate and Licensed Product, as such items exist as of the effective date of such termination (including all solely related completed and ongoing clinical studies) will be assigned to Bluebird, and Celgene will provide to Bluebird one (1) copy of the foregoing and all documents contained in or referenced in any such items, together with the raw and summarized data for any clinical studies (and where reasonably available, electronic copies thereof).  In the event of failure to obtain assignment, subject to the Parties agreeing on commercially reasonable compensation for the right to access and reference, Celgene hereby consents and grants to Bluebird the right to access and reference (without any further action required on the part of Celgene, whose authorization to file this consent with any Regulatory Authority is hereby granted) any such item.
(e)Licenses.   Subject to Bluebird paying (i) commercially reasonable compensation to Celgene for the licenses to be granted pursuant to  subsection (A) of this Section 10.4(e) (such compensation to either be mutually agreed to or determined through arbitration as provided in Section 10.4(g) below, and such compensation to be reduced by [***] from what would be commercially reasonable compensation if this License Agreement is terminated by Bluebird pursuant to Section 10.2(a)), and (ii) amounts payable to Celgene’s applicable licensors as set forth below, Celgene will grant to Bluebird and its Affiliates (A) a worldwide, perpetual and irrevocable, nontransferable (except in connection with a permitted assignment of this License Agreement in accordance with Section 11.12), exclusive license, with the right to grant sublicenses through multiple tiers (subject to Section 3.3(b),  mutatis mutandis ), under  the Celgene Licensed Product IP, and (B) an exclusive sublicense under the Celgene Licensed Product In-Licensed IP, in each case ((A) and (B)) to the extent such Celgene Licensed Product IP and Celgene Licensed Product In-Licensed IP are used in or Cover the Licensed Product as of the effective date of termination and to the extent such Celgene Licensed Product IP and Celgene Licensed Product In-Licensed IP exist as of the effective date of such termination (including in each case any additions, divisions, continuations, continuations-in-part, invention certificates, substitutions, reissues, reexaminations, extensions, registrations, supplementary protection certificates and renewals of such Celgene Licensed Product IP and Celgene Licensed Product In-Licensed IP) solely to the extent necessary to research, Develop, Manufacture and Commercialize the Elected Candidate and Licensed Product.  With respect to grants of a
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LICENSE AGREEMENT
sublicense under subsection (B) above, Bluebird will be responsible for all amounts payable to the applicable licensor, excluding maintenance fee payments, payments that are trigged by the grant of a sublicense (but including payments triggered by further grants of sublicenses by Bluebird or its sublicensees) and Patent Costs, that are attributable to Bluebird as a sublicensee thereunder under this License Agreement and Celgene will pay same and Bluebird will reimburse Celgene for [***] of such payments within thirty (30) days of receipt of Celgene’s written invoice therefor.  Celgene will provide Bluebird with copies of all applicable Celgene Licensed Product In-Licenses promptly following the effective date of the termination of this License Agreement. The Prosecution and Maintenance and enforcement and defense rights and obligations of the Parties with respect to any Patents licensed or sublicensed to Bluebird pursuant to this Section 10.4(e) will be discussed and agreed to by the Parties, with the understanding that such Prosecution and Maintenance and enforcement and defense rights and obligations will be substantially similar to those set forth in Section 6, with the roles of Bluebird and Celgene reversed (and such other changes as are appropriate from the context, and taking into account any rights retained by a Third Party licensor of Celgene to Prosecute and Maintain or enforce and defend any Patent sublicensed to Bluebird under this Section 10.4(e)).   Bluebird will abide, and will cause all its Affiliates and applicable sublicensees to abide, by all requirements of each Celgene Licensed Product In-License under which Bluebird is sublicensed under this Section 10.4(e) in all material respects (and in any case in all respects in the case that failure to so abide would result in a breach under the Celgene Licensed Product In-License), to the extent applicable to sublicensees thereunder and to the extent disclosed by Celgene to Bluebird, with the understanding that disclosure by Celgene of any Celgene Licensed Product In-License to Bluebird will be deemed disclosure of such requirements of such Celgene Licensed Product In-License to Bluebird.  
(f)Trademarks.  Subject to Bluebird paying commercially reasonable compensation to Celgene for the license to be granted pursuant to this Section 10.4(f) (such compensation to either be mutually agreed to or determined through arbitration as provided in Section 10.4(g) below, and such compensation to be reduced by [***] from what would be commercially reasonable compensation if this License Agreement is terminated by Bluebird pursuant to Section 10.2(a)), Celgene will exclusively license to Bluebird any registered or unregistered trademarks or internet domain names that are specific to and solely used for the Licensed Product worldwide (it being understood that the foregoing will not include any trademarks or internet domain names that contain the corporate or business name(s) of Celgene).
(g)Commercially Reasonable Compensation.  If the Parties are unable to agree on the amount of commercially reasonable compensation payable by Bluebird to Celgene pursuant to Sections 10.4(d), 10.4(e) or 10.4(f) within ten (10) days of the effective date of termination of this License Agreement, [***].
(h)Country Termination.  If this License Agreement is terminated only with respect to a specific country pursuant to Section 10.2(b), the provisions of this Section 10.4 will apply only with respect to such terminated country.
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LICENSE AGREEMENT
10.5Survival.  In addition to the termination consequences set forth in Section 10.4, the following provisions will survive termination or expiration of this License Agreement: Sections 1, 3.3 (mutatis mutandis with respect to licenses granted to Bluebird under Section 10.4), 3.6, 3.7, 4.4 , 5, 8, 9.3, 9.4, 9.6, 9.7, 10.4, 10.5 and 11.  Termination or expiration of this License Agreement will not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this License Agreement nor prejudice either Party’s right to obtain performance of any obligation.  All other rights and obligations will terminate upon expiration of this License Agreement.
10.6Right to Set-off.  Notwithstanding anything to the contrary in this License Agreement, each Party has the right at all times to retain and set off against all amounts due and owing to the other Party as determined in a final judgment any damages recovered by such Party for any Losses incurred by such Party.
11.General Provisions.
11.1Cumulative Remedies and Irreparable Harm.  All rights and remedies of the Parties hereunder will be cumulative and in addition to all other rights and remedies provided hereunder or available by agreement, at law or otherwise.  Each Party acknowledges and agrees that breach of any of the terms or conditions of this License Agreement would cause irreparable harm and damage to the other and that such damage may not be ascertainable in money damages and that as a result thereof the non-breaching Party would be entitled to seek from a court equitable or injunctive relief restraining any breach or future violation of the terms contained herein by the breaching Party without the necessity of proving actual damages or posting bond.  Such right to equitable relief is in addition to whatever remedies either Party may be entitled to as a matter of law or equity, including money damages.
11.2Business Combination and IP.  
(a)Bluebird Business Combination.  Notwithstanding anything to the contrary herein, for purposes of this License Agreement, no Know-How, Materials, Patents, Regulatory Data, Regulatory Filings or Regulatory Approvals not Controlled by Bluebird or any of its Affiliates prior to a Business Combination of Bluebird will be Controlled for purposes of this License Agreement after such Business Combination of Bluebird, other than (i) Applicable Bluebird In-Licenses to the extent in effect immediately prior to such Business Combination of Bluebird, (ii) Collaboration IP, and (iii) any Patent that claims priority, directly or indirectly, to any other Patent first Controlled before such Business Combination of Bluebird will be Controlled thereafter no matter when such Patent is filed or issued.
(b)Celgene Business Combination.  Notwithstanding anything to the contrary herein, for purposes of this License Agreement, no Know-How, Materials, Patents Regulatory Data, Regulatory Filings or Regulatory Approvals not Controlled by Celgene or any of its Affiliates prior to a Business Combination of Celgene will be Controlled for purposes of this License Agreement after such Business Combination of Celgene, other than Collaboration IP, and except that any Patent that claims priority, directly or indirectly, to any other Patent first Controlled before such Business Combination of Celgene will be Controlled thereafter no matter when such Patent is filed or issued.
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LICENSE AGREEMENT
11.3Relationship of Parties.  Nothing in this License Agreement is intended or will be deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.  No Party will incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided therein.  There are no express or implied third party beneficiaries hereunder (except for Bluebird Indemnitees and Celgene Indemnitees for purposes of Section 9.6).
11.4Compliance with Law.  Each Party will perform or cause to be performed any and all of its obligations or the exercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.  Without limiting the foregoing, Bluebird will comply with comply with all applicable Laws and regulations (including U.S. Foreign Corrupt Practices Act and any other applicable anti-bribery or anti-kickback laws or regulations).
11.5Force Majeure.  Neither Party will be liable to the other for failure of or delay in performing obligations set forth in this License Agreement (other than any obligation to pay monies when due), and neither will be deemed in breach of such obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of such Party; provided that the Party affected will promptly notify the other of the force majeure condition and will exert reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.
11.6Governing Law.  This License Agreement will be governed by and construed in accordance with the Laws of the State of New York, without respect to its conflict of laws rules, provided that any dispute relating to the scope, validity, enforceability or infringement of any Patents or Know-How will be governed by, and construed and enforced in accordance with, the substantive Laws of the jurisdiction in which such Patents or Know-How apply.
11.7Counterparts; Facsimiles.  This License Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  Facsimile or PDF execution and delivery of this License Agreement by either Party will constitute a legal, valid and binding execution and delivery of this License Agreement by such Party
11.8Headings.  All headings in this License Agreement are for convenience only and will not affect the meaning of any provision hereof.
11.9Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this License Agreement.  Accordingly, the rule of construction that any ambiguity in this License Agreement will be construed against the drafting party will not apply.
11.10Interpretation.  Whenever any provision of this License Agreement uses the term “including” (or “includes”), such term will be deemed to mean “including without limitation” (or ”includes without limitations”).  “Herein,” “hereby,” “hereunder,” “hereof” and other equivalent words refer to this License Agreement as an entirety and not solely to the particular portion of this License Agreement in which any such word is used.  All definitions set forth herein will be deemed applicable whether the words defined are used herein in the singular or the plural.  Unless
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LICENSE AGREEMENT
otherwise provided, all references to Sections and Appendices in this License Agreement are to Sections and Appendices of this License Agreement.  References to any Sections include Sections and subsections that are part of the related Section (e.g., a section numbered “Section 2.1” would be part of “Section 2”, and references to “Section 2.1” would also refer to material contained in the subsection described as “Section 2.1(a)”).
11.11Binding Effect.  This License Agreement will inure to the benefit of and be binding upon the Parties, their Affiliates, and their respective lawful successors and assigns.
11.12Assignment.  This License Agreement may not be assigned by either Party, nor may either Party delegate its obligations or otherwise transfer licenses or other rights created by this License Agreement, except as expressly permitted hereunder or otherwise without the prior written consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned; provided that without consent (a) Celgene may assign this License Agreement to (i) an Affiliate or (ii) its successor in connection with the merger, consolidation, or sale of all or substantially all of its assets, and (a) Bluebird may assign this License Agreement to (i) an Affiliate or (ii) its successor in connection with the merger, consolidation, or sale of all or substantially all of its assets or that portion of its business pertaining to the subject matter of this License Agreement; provided further that, except in the case where a Party is involved in a merger or consolidation where it is the surviving entity and no assets of such Party that are subject to this License Agreement have been transferred as a result of such merger or consolidation,  (A) such assigning Party provides the other Party to this License Agreement with at least thirty (30) business days advance written notice of such assignment(s) and the assigning Party agrees in a written agreement delivered prior to such assignment(s) to the non-assigning Party (and upon which such non-assigning Party may rely) to remain fully liable for the performance of its obligations under this License Agreement by its assignee(s), (B) the assignee(s) agree in a written agreement delivered prior to such assignment(s) to the non-assigning Party (and upon which such non-assigning Party may rely) to assume performance of all such assigned obligations, (C) in the case of any assignment by Bluebird, all Licensed IP licensed to Celgene under this License Agreement will be transferred to such assignee(s) effective as of such assignment(s), (D) all of the matters referred to in clauses (A), (B) and (C), as applicable, will be set forth in documentation reasonably acceptable to the non-assigning Party prior to any such assignment(s) (and with such reasonable acceptance not to be unreasonably withheld, conditioned or delayed) and in all cases will provide the non-assigning Party with the full benefits of its rights under this License Agreement (after taking into account all risks involving applicable counter-party performance and bankruptcy and insolvency risks, including those involving contractual rejection under 11 USC §365) as if no such assignment(s) had occurred, and (E) in the case of any assignment, the assigning Party will reimburse the non-assigning Party for all of the legal fees and expenses incurred by such non-assigning Party in connection with the matters set forth in clause (D) of this sentence in an aggregate amount not to exceed [***], and provided, further, that if Bluebird wishes to assign any Licensed IP to its Affiliates, it will be permitted to do so conditioned on each such Affiliate becoming a party to this License Agreement, in the form of an amendment to this License Agreement executed by Celgene, Bluebird and such Affiliate, pursuant to which such Affiliate would agree to assume all obligations hereunder, and grant to Celgene all rights hereunder, with
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LICENSE AGREEMENT
respect to the Licensed IP.  The terms of this License Agreement will be binding upon and will inure to the benefit of the successors, heirs, administrators and permitted assigns of the Parties.  Any purported assignment in violation of this Section 11.12 will be null and void  ab initio .   
11.13Notices.  All notices, requests, demands and other communications required or permitted to be given pursuant to this License Agreement will be in writing and will be deemed to have been duly given upon the date of receipt if delivered by hand, recognized international overnight courier, confirmed facsimile transmission, or registered or certified mail, return receipt requested, postage prepaid to the applicable address or facsimile number set forth in Section 13.14 of the Master Collaboration Agreement.  Either Party may change its designated address and facsimile number by notice to the other Party in the manner provided in this Section 11.13.
11.14Amendment and Waiver.  This License Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties; provided that any unilateral undertaking or waiver made by one Party in favor of the other will be enforceable if undertaken in a writing signed by the Party to be charged with the undertaking or waiver.  Any waiver of any rights or failure to act in a specific instance will relate only to such instance and will not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.
11.15Severability.  In the event that any provision of this License Agreement will, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith to modify this License Agreement to preserve (to the extent possible) their original intent.
11.16Entire Agreement.  This License Agreement, together with the Master Collaboration Agreement, is the sole agreement with respect to the subject matter and supersedes all other agreements and understandings between the Parties with respect to same (including Confidential Agreement).  In the event of any conflict between the terms of this License Agreement and the terms of the Master Collaboration Agreement, the terms of this License Agreement will control.
11.17Force Majeure.  Neither Celgene nor Bluebird will be liable for failure of or delay in performing obligations set forth in this License Agreement (other than any obligation to pay monies when due), and neither will be deemed in breach of such obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Celgene or Bluebird and without the fault or negligence of the Party so failing or delaying; provided that the Party affected will promptly notify the other of the force majeure condition and will exert reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.
11.18Celgene Parties.  [***]
[Remainder of this Page Intentionally Left Blank]

 
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IN WITNESS WHEREOF, the Parties have caused this License Agreement to be executed by their respective duly authorized officers as of the License Agreement Effective Date.
BLUEBIRD BIO, INC.
 
By:	 	/s/ Jason F. Cole	
 	 	(Signature)	
 	 	 	
Name:	 	Jason F. Cole	
 	 	 	
Title:	 	SVP, and General Counsel	
 	 	 	
Date:	 	 	
 
CELGENE  CORPORATION
 
By:	 	/s/ Peter N. Kellogg	
 	 	(Signature)	
 	 	 	
Name:	 	Peter N. Kellogg	
 	 	 	
Title:	 	EVP and CFO	
 	 	 	
Date:	 	2/8/2016	
 
CELGENE EUROPEAN INVESTMENT COMPANY LLC (CEICO)
By: Celgene International Sarl, the sole member of CEICO
 
By:	 	/s/ Jonathan Biller	
 	 	 	
Print:	 	Jonathan Biller	
 
and
 
By:	 	/s/ Jürg Oehen	
 	 	 	
Print:	 	Jürg Oehen, Director	

 

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Appendix A
Additional Defined Terms
 
“Elected Candidate” means the following Optioned Candidate selected by Celgene under the Master Collaboration Agreement that specifically targets the Target Antigen: bb2121.

 

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Appendix B
Applicable New In-Licenses
 
[***]

 

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Appendix C
Applicable Pre-Existing In-Licenses
 
[***]

 

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Appendix D
Target Antigen
 
[***]

 

 
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Appendix E
Press Release

 
bluebird bio Announces First Patient Treated with bb2121 in CRB-401 Phase 1 Study in Patients with Relapsed/Refractory Multiple Myeloma
 
Celgene has agreed to exercise its option to exclusively license bb2121 under global strategic collaboration
bluebird bio to receive $10 million option exercise payment from Celgene
Cambridge, MA, February 17, 2016 – bluebird bio, Inc. (Nasdaq: BLUE), a clinical- stage company committed to developing potentially transformative gene therapies for severe genetic diseases and T cell-based immunotherapies for cancer, announced treatment of the first patient in a Phase 1 study of its product candidate bb2121 in patients with relapsed/refractory multiple myeloma. bb2121 is a chimeric antigen receptor T cell (CAR T) therapy targeting B cell maturation antigen (BCMA), and bluebird bio is developing bb2121 in collaboration with Celgene Corporation. bluebird bio also announced today that Celgene has exercised its option to exclusively license bb2121, under the terms of the collaboration agreement between the two companies.
“bb2121 is bluebird bio’s first oncology program to enter the clinic, and the treatment of this first patient marks an important milestone for us as we build a broad, fully integrated T cell immunotherapy franchise,” said Nick Leschly, chief bluebird. “We are pleased that Celgene has exercised their option to license bb2121. We believe our combined manufacturing, development and commercial expertise will enable us to rapidly advance bb2121 through clinical trials.”
“Despite many recent advances in the field, multiple myeloma remains incurable, with almost all patients becoming refractory to therapy eventually,” said James N. Kochenderfer, M.D., National Cancer Institute, an investigator for the CRB-401 study. “BCMA is one of the most exciting targets in multiple myeloma, and we are eager to explore the potential of bb2121 to become an important new treatment option for patients living with multiple myeloma.”
bluebird bio and Celgene amended and restated their collaboration agreement in June 2015 to focus on developing product candidates targeting BCMA during a three-year collaboration term. By exercising its exclusive option under the terms of the agreement, Celgene will be responsible for worldwide development and commercialization of bb2121 after Phase 1. bluebird bio is responsible for the development of bb2121 through the completion of the CRB-401 Phase 1 study and has an option to share in the development, promotion and profits in the United States. bluebird bio will receive a $10 million option exercise payment from Celgene, and bluebird bio is also eligible to receive specified development, regulatory and commercial milestone payments and royalty payments on net sales.

 

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About the CRB-401 Study
The primary objective of the CRB-401 study is to evaluate the maximum tolerated dose of bb2121 and determine the recommended Phase 2 dose. The secondary objective is patient response, measured using the International Myeloma Working Group (IMWG) Response Criteria for Multiple Myeloma. The first portion of the study includes a dose- escalation phase in which cohorts of patients will receive ascending doses of bb2121 to determine the maximum tolerated dose and establish a recommended Phase 2 dose. The second portion of the study is a dose expansion phase where patients will receive bb2121 to further evaluate the safety, tolerability and clinical activity at the recommended Phase 2 dose.
About bluebird bio, Inc.
With its lentiviral-based gene therapies, T cell immunotherapy expertise and gene editing capabilities, bluebird bio has built an integrated product platform with broad potential application to severe genetic diseases and cancer. bluebird bio’s gene therapy clinical programs include its Lenti-D ™  product candidate, currently in a Phase 2/3 study, called the Starbeam Study, for the treatment of cerebral adrenoleukodystrophy, and its LentiGlobin ®  BB305 product candidate, currently in three clinical studies for the treatment of transfusion-dependent ß-thalassemia, also known as ß-thalassemia major, and severe sickle cell disease. bluebird bio’s oncology pipeline is built upon the company’s leadership in lentiviral gene delivery and T cell engineering, with a focus on developing novel T cell-based immunotherapies, including chimeric antigen receptor (CAR T) and T cell receptor (TCR) therapies. bluebird bio’s lead oncology program, bb2121, is an anti-BCMA CAR T program partnered with Celgene. bb2121 is currently being studied in a Phase 1 trial for the treatment of relapsed/refractory multiple myeloma. bluebird bio also has discovery research programs utilizing megaTALs/homing endonuclease gene editing technologies with the potential for use across the company’s pipeline.
bluebird bio has operations in Cambridge, Massachusetts, Seattle, Washington, and Paris, France.
LentiGlobin and Lenti-D are trademarks of bluebird bio, Inc.
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the clinical and market potential of the Company’s anti-BCMA oncology program, including its bb2121 product candidate. Any forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or

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implied by such forward-looking statements. These risks and uncertainties include, but are not limited to,  the risk that the preclinical efficacy and safety data for our bb2121 product candidate will not be observed in the CRB-401 clinical study, the risk of cessation or delay of any of the ongoing or planned clinical studies and/or our development of our product candidates, the risk of a delay in the enrollment of patients in our clinical studies, the risk that our collaboration with Celgene Corporation will not continue or will not be successful, and the risk that any one or more of our product candidates will not be successfully developed and commercialized. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in our most recent quarterly report on Form 10-Q, as well as discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and bluebird bio undertakes no duty to update this information unless required by law.
Contact:
bluebird bio, Inc.
Manisha Pai, 617-245-2107 mpai@bluebirdbio.com
or
Pure Communications, Inc. Dan Budwick, 973-271-6085

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Appendix F
Certain Patents within the Licensed IP Controlled
by Bluebird as of the License Agreement Effective Date
 
[***]

 

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Appendix G
Bluebird Agreements
 
None.

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LICENSE AGREEMENT

Appendix H
Certain Manufacturing Definitions
 
[***]

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LICENSE AGREEMENT

Appendix I
Manufacturing and Supply Agreement Terms
 
[***]

 

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Schedule 9.2
Exceptions to Bluebird’s Representations and Warranties in Section 9.2

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Execution Version
 
Exhibit 10.17
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this “Agreement”) is made effective as of the 13 day of August, 2014 (the “ Effective Date ”), by and between bluebird bio, Inc., a Delaware corporation having its principal place of business at 150 Second Street, Third Floor, Cambridge, MA 02141 (“ Bluebird ” ), and Biogen Idec MA Inc., a Massachusetts corporation having its principal place of business at 225 Binney Street, Cambridge, MA 02142 (“ Biogen ”).  Bluebird and Biogen may, from time-to-time, be individually referred to as a “ Party ” and collectively referred to as the “ Parties ”.
RECITALS
WHEREAS, Biogen Controls the Licensed Patent Rights (hereinafter defined); and
WHEREAS, Bluebird wishes to obtain, and Biogen wishes to grant, certain licenses under the Licensed Patent Rights on the terms and conditions set forth herein.
NOW, THEREFORE, the Parties, intending to be legally bound hereby, agree as follows:
1.	DEFINITIONS	

 	1.1.	“Affiliate” means, with respect to a Party, any Person that controls, is controlled by, or is under common control with that Party.  For the purpose of this definition, “control”  shall refer to: (a)  the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities, by contract or otherwise; or (b) the ownership, directly or indirectly, of fifty percent (50%) or more of the voting securities of such entity.	

 	1.2.	“Applicable Laws” means all applicable laws, statutes, rules, regulations and guidelines, including all good manufacturing practices and all applicable standards or guidelines promulgated by the appropriate Regulatory Authority.	

 	1.3.	“BCMA” means B-Cell Maturation Antigen.	

 	1.4.	“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks located in New York, New York are authorized or required by law to remain closed.	

 	1.5.	“Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.	

 	1.6.	“Calendar Year” means any twelve (12) month period commencing on January 1.	

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 	1.7.	“COM IP” means (a) the patents and patent applications listed on Schedule A attached hereto; and (b) (i) all continuations, divisionals, renewals and continuations-in-part (to the extent the claims thereof are entirely supported by one or more of the patents and patent applications listed on  Schedule A  to which it claims priority) claiming priority to the patents and patent applications described in clause (a), (ii) any other subsequent filings in any country worldwide claiming priority to the patents and patent applications described in clause (a) (to the extent the claims thereof are entirely supported by one or more of the patents and patent applications listed on  Schedule A  to which it claims priority); and (iii) all letters of patent granted with respect to any of the foregoing and patents of addition, restorations, extensions, supplementary protection certificates, registration or confirmation patents, reissues and re-examinations of any of the foregoing described in clauses (b)(i) and (b)(ii), each of the foregoing (b)(i) through (b)(iii), to the extent (x) Biogen or its Affiliates Controls such patents and patent applications and (y) such patents and patent applications have claims Covering Licensed Products then in Development or Commercialization within the Field.  	

 	1.8.	“Commercialize” or “Commercialization” means to manufacture for sale, market, promote, otherwise offer for sale, distribute, and sell.	

 	1.9.	“Commercially Reasonable Efforts” means [***].  	

 	1.10.	“Control” or “Controlled” means, with respect to any Intellectual Property Rights, the legal authority or right (whether by ownership, license or otherwise other than pursuant to this Agreement) of a Party or any of its Affiliates to grant a license or a sublicense of or under such Intellectual Property Rights to the other Party without breaching the terms of any agreement with a Third Party.  For clarity, if a Party or any of its Affiliates only can grant a license or sublicense to Intellectual Property Rights, or provide access to a material or document, of a limited scope due to an encumbrance imposed by a Third Party, “ Control ” or “ Controlled ” shall be construed to so limit the license or sublicense to such Intellectual Property Rights or the provision of, or provision of access to, such materials or documents (as applicable).  	

 	1.11.	“Cover”, “Covering” or “Covered” means, with respect to a given Licensed Product in a given country in the Territory, that, in the absence of ownership of or a license granted under a Valid Claim, the research, Development, manufacture, Commercialization, use, import, offer for sale or sale of such Licensed Product in such country would infringe such Valid Claim (or, in the case of a claim that has not yet issued, would infringe such claim if it were to issue without modification).	
-2-

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 	1.12.	“Develop” or “Development” means to conduct research and development activities (including related manufacturing activities) under conditions designed to yield data suitable for inclusion in, or otherwise necessary to support, an application for Regulatory Approval of a Licensed Product by a Regulatory Authority within the Territory.  	

 	1.13.	“Distributor” means a Third Party, other than a Third Party to which any sublicense hereunder is granted, that (a)  purchases any Licensed Products in finished form from Bluebird or any of its Affiliates or sublicensees with the intent or purpose of reselling such Licensed Products; and (b) has the right to Commercialize such Licensed Products in one or more regions.	

 	1.14.	“EMA” means the European Medicines Agency, or any successor agency thereto.	

 	1.15.	“EU” means the European Union member states as of the applicable time during the Term.	

 	1.16.	“FDA” means the United States Food and Drug Administration, or a successor federal agency thereto.	

 	1.17.	“Field” means all human diagnostic, therapeutic and prophylactic uses in [***]	

 	1.18.	“First Clinical Trial” means the first human clinical trial of a Licensed Product.	

 	1.19.	“First Commercial Sale” means with respect to a Licensed Product, the first sale for use or consumption of the Licensed Product following receipt of Regulatory Approval for such Licensed Product in a country in the Territory.	

 	1.20.	“GAAP” means the generally accepted accounting principles in the United States, consistently applied.	

 	1.21.	“IND” means: (a) an investigational new drug application filed with the FDA for authorization for the investigation of a Licensed Product; or (b) any foreign equivalents as filed with the applicable Regulatory Authorities in other countries or regulatory jurisdictions in the Territory, as applicable.	

 	1.22.	“Intellectual Property Rights” means all trade secrets, copyrights, Patent Rights, Trademarks, moral rights, know-how and any and all other intellectual property or proprietary rights now known or hereafter recognized in any jurisdiction.	

 	1.23.	“Licensed Patent Rights” means collectively, the COM IP and MOT IP.	

 	1.24.	“Licensed Product” means [***].	

 	1.25.	“MAA” means (a) a Marketing Authorization Application for a Licensed Product filed with (i) the EMA under the centralized European procedure (including	
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 	 	amendments and supplements thereto) or (ii) a Regulatory Authority in any country in the EU if the centralized European procedure is not used to obtain Regulatory Approval of such Licensed Product; or (b) any other equivalent or related Regulatory Filing, such as a Type II variation, to gain Regulatory Approval of a Licensed Product in any country in the EU.  	

 	1.26.	“MOT IP” means (a) the patents and patent applications listed on Schedule B attached hereto; and (b) (i) all continuations, divisionals, renewals and continuations-in-part (to the extent the claims thereof are entirely supported by one or more of the patents and patent applications listed on  Schedule B  to which it claims priority) claiming priority to the patents and patent applications described in clause (a), (ii) any other subsequent filings in any country worldwide claiming priority to the patents and patent applications described in clause (a) (to the extent the claims thereof are entirely supported by one or more of the patents and patent applications listed on  Schedule B  to which it claims priority); and (iii) all letters of patent granted with respect to any of the foregoing and patents of addition, restorations, extensions, supplementary protection certificates, registration or confirmation patents, reissues and re-examinations of any of the foregoing described in clauses (b)(i) and (b)(ii), each of the foregoing (b)(i) through (b)(iii), to the extent (x) Biogen or its Affiliates Controls such patents and patent applications and (y) such patents and patent applications have claims Covering Licensed Products then in Development or Commercialization within the Field.	

 	1.27.	“NDA” means: (a) a new drug application filed with the FDA for authorization for marketing the Licensed Product; or (b)  any of its foreign equivalents as filed with the applicable Regulatory Authorities in other countries or regulatory jurisdictions in the Territory, as applicable.	

 	1.28.	“Net Sales” means [***]	

 	1.29.	“Patent Rights” means the rights and interests in and to issued patents and pending patent applications in any country, jurisdiction or region (including inventor’s certificates and utility models), including all provisionals, non-provisionals, substitutions, continuations, continuations-in-part, divisionals, renewals and all patents granted thereon, and all reissues, reexaminations, extensions, confirmations, revalidations, registrations and patents of addition thereof, including supplementary protection certificates, PCTs, pediatric exclusivity periods and any foreign equivalents to any of the foregoing.	

 	1.30.	“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	1.31.	“Phase III Clinical Trial” means a human clinical trial of a Licensed Product which is intended to be a pivotal trial for obtaining Regulatory Approval , or  otherwise is designed and conducted according to 21 C.F.R. §312.21(c), as amended, or its equivalent, as appropriate, in foreign jurisdictions.  	

 	1.32.	“Regulatory Approval” means, with respect to a Licensed Product in any country or regulatory jurisdiction, any approval registration, license or authorization that is required by the applicable Regulatory Authority to market and sell such Licensed Product in such country or regulatory jurisdiction.  	

 	1.33.	“Regulatory Authority” means any governmental agency or authority responsible for granting Regulatory Approvals for a Licensed Product in the Territory.	

 	1.34.	“Regulatory Exclusivity” means any rights or protections which are recognized, afforded or granted by any Regulatory Authority in any country or region of the Territory in association with the Regulatory Approval of a Licensed Product in the Field, providing such Licensed Product: (i) a period of marketing exclusivity during which a Regulatory Authority that recognizes, affords or grants such marketing exclusivity shall refrain from either reviewing or approving a marketing authorization application or similar regulatory submission submitted by a Third Party seeking to market a product containing the same active pharmaceutical ingredient as such Licensed Product; or (ii) a period of data exclusivity during which a Third Party seeking to market a product containing the same active pharmaceutical ingredient as such Licensed Product is precluded from either referencing or relying upon, without an express right of reference from the dossier holder, such Licensed Product’s clinical dossier or relying on previous Regulatory Authority findings of safety or effectiveness with respect to such Licensed Product to support the submission, review or approval of a marketing authorization application or similar regulatory submission before the applicable Regulatory Authority.  	

 	1.35.	“Regulatory Filings” means, with respect to a Licensed Product, any submission to a Regulatory Authority of any appropriate regulatory application, including, without limitation, any IND, any NDA, any submission to a regulatory advisory board, any marketing authorization application (including any MAA), any BLA (biologics license application) and any supplement or amendment thereto.	

 	1.36.	“Related Party” means any of a Party’s Affiliates and permitted sublicensees.	

 	1.37.	“ROFO Field” means [***].	

 	1.38.	“Royalty Term” means, on a Licensed Product-by-Licensed Product and country-by country basis, the period commencing on the First Commercial Sale of such Licensed Product in such country and expiring upon the later of: [***].  	
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 	1.39.	“T-Cell” means any of the lymphocytes that mature in the thymus and have the ability to recognize specific peptide antigens presented by major histocompatibility complex antigens through the receptors on their cell surface.   	

 	1.40.	“Territory” means worldwide.	

 	1.41.	“Third Party” means any Person other than a Party or an Affiliate of a Party.	

 	1.42.	“Trademarks” means all registered and unregistered trademarks, service marks, trade dress, trade names, logos, insignias, domain names, symbols, designs, and combinations thereof.	

 	1.43.	“Valid Claim” means either: (a) a claim of an issued and unexpired patent included within the Licensed Patent Rights, which has not been permanently revoked or declared unenforceable or invalid by an unreversed and unappealable or unreversed and unappealed decision of a court or other appropriate body of competent jurisdiction and which has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise; or (b) a claim of a pending patent application included within the Licensed Patent Rights, which claim was filed in good faith and has not been cancelled, withdrawn, abandoned or finally disallowed without the possibility of appeal or refiling of such application.  	

 	1.44.	Additional Definitions.  Each of the following definitions is set forth in the Section indicated below:	

Definition	Section	
Agreement	Preamble	
Annual 5-Year Forecast	5.1.6(b)	
Bankruptcy Code	13.4	
Bankruptcy Event	13.4	
Biogen	Preamble	
Biogen Indemnitees	11.1	
Bluebird	Preamble	
Bluebird Indemnitees	11.2	
Bluebird Withholding Tax Action	5.3.2	
Cap	12.2	
CDA	17.11	
Change in Control	17.1	
Claims	11.1	
Confidential Information	9.1	
Combination Product	1.28	
Deductions	1.28	
Defense Action	8.1	
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Definition	Section	
Developed IP	7.2	
Effective Date	Preamble	
Fees	6.1.1	
Force Majeure Event	17.4	
government	10.3	
Government Official	10.3	
Gross Sales	1.28	
Indemnified Party	11.3	
Indemnifying Party	11.3	
Milestone Event	5.1.2	
Milestone Payment	5.1.2	
Party(ies)	Preamble	
Recipients	9.2	
Relevant Records	6.1.1	
Restricted Information	14.2	
ROFO Exercise Notice	4.1	
ROFO Exercise Period	4.1	
ROFO Notice	4.1	
Term	13.1	
Third Party Infringement	8.1

2.	LICENSE GRANT, Exclusivity	

 	2.1.	License Grant.  Subject to the terms and conditions of this Agreement, Biogen hereby grants to Bluebird a co-exclusive (with Biogen), sublicensable (subject to Section 2.2), royalty-bearing right and license under the Licensed Patent Rights to research, Develop, manufacture, Commercialize, use, import, offer for sale and sell the Licensed Products in the Field in the Territory.  	

 	2.2.	Bluebird Sublicense Rights.  Bluebird may sublicense the rights granted to it by Biogen under this Agreement (a) to any of its Affiliates or Celgene Corporation or any of its Affiliates, in each case without Biogen’s prior approval, or (b) to any other Third Party upon Biogen’s prior written approval, which approval shall not be unreasonably withheld or delayed.  Any and all sublicenses shall be subject to the following requirements:	

 	2.2.1.	All sublicenses shall be subject to and consistent with the terms and conditions of this Agreement and shall: (a)  preclude the assignment of such sublicense without the prior written approval of Biogen, (b)  include Biogen as an intended third party beneficiary under the sublicense with the right to enforce the terms of such sublicense, and (c) preclude the granting of further sublicenses in contravention with the terms and conditions of	
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 	 	this Agreement.  In no event shall any sublicense relieve Bluebird of any of its obligations under this Agreement.  	

 	2.2.2.	Except for any sublicenses to an Affiliate of Bluebird or Celgene Corporation, prior to the execution of any sublicense agreement (including any further sublicense by an existing sublicensee), Bluebird shall provide to Biogen a draft of the proposed sublicense agreement and Biogen shall approve, disapprove or require modifications to such proposed sublicense agreement, which approval, disapproval or required modifications shall be communicated to Bluebird within [***] by Biogen, or, if Biogen does not provide any such communication within such [***] period, such proposed sublicense agreement shall be deemed to have been approved by Biogen.	

 	2.2.3.	Bluebird shall furnish to Biogen a true and complete copy of each sublicense agreement and each amendment thereto, within [***] after the sublicense or amendment has been executed.	

 	2.3.	Retained Rights.  Bluebird acknowledges and agrees that Biogen retains, on behalf of itself and its Affiliates, all rights in the Licensed Patent Rights other than those specifically granted to Bluebird in Section 2.1, including, subject to Section 2.5, the right to practice the Licensed Patents in the Field in the Territory.  As between Biogen and Bluebird, Biogen will exclusively own the results of any use of the Licensed Patent Rights by Biogen not in violation of this Agreement and, subject to Section 4, will have no obligation under this Agreement to disclose or license to Bluebird any developments or Intellectual Property Rights that may arise with respect to such uses.	

 	2.4.	No Additional Rights.  Nothing in this Agreement shall be construed to confer any rights upon Bluebird by implication, estoppel, or otherwise as to any active pharmaceutical ingredients, compounds, products, technology or Intellectual Property Rights of Biogen or its Affiliates other than the rights under the Licensed Patent Rights expressly granted herein.  	

 	2.5.	Exclusivity.  During the Term, Biogen shall not grant any rights under the Licensed Patent Rights to a Third Party to Develop or Commercialize Licensed Products in the Field in the Territory, except that Biogen may grant any such rights to any Third Party acting on behalf of Biogen in such Development or Commercialization, including contract research organizations, contract manufacturing organizations and distributors.	
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3.	DEVELOPMENT, MANUFACTURING, REGULATORY AND COMMERCIALIZATION 	

 	3.1.	Development.  Bluebird shall itself, or through its Affiliates or sublicensees, use Commercially Reasonable Efforts to Develop Licensed Products in the Field in the Territory, and Bluebird shall undertake all Development activities at its sole expense.  Without limiting the foregoing, in connection with its efforts to Develop Licensed Products, Bluebird shall bear all responsibility and expense for filing Regulatory Filings in Bluebird’s name and obtaining Regulatory Approval for Licensed Products in the Field in the Territory.	

 	3.2.	Commercialization.  	

 	3.2.1.	Bluebird shall itself, or through its Affiliates, sublicensees or Distributors, use Commercially Reasonable Efforts to Commercialize the Licensed Products in the Field throughout the Territory in those countries in which Regulatory Approval has been obtained for the marketing of the Licensed Products, it being understood that Bluebird, in the exercise of such Commercially Reasonable Efforts, may determine to not seek Regulatory Approval for and Commercialize the Licensed Product in certain countries in the Territory.  Bluebird shall undertake such activities at its sole expense and shall have sole decision-making authority with respect to such activities.	

 	3.2.2.	Prohibition on Sales Outside of the Field.  To the extent permitted by Applicable Laws in each country in the Territory, Bluebird shall not, and shall ensure that its Related Parties agree not to, Commercialize any Licensed Product outside of the Field in the Territory or provide or sell Licensed Product for or to any Third Party if Bluebird or its Related Party knows or has reason to believe that such Third Party, either directly or indirectly, will provide or sell such Licensed Product for use outside of the Field in the Territory.  Biogen shall be a third party beneficiary of any agreements between or among Bluebird and its Related Parties with respect to such restriction, with the right to enforce such agreements.  Bluebird shall provide Biogen with a copy of the relevant sections of each such agreement promptly after the execution thereof.	

 	3.3.	Reporting.  [***]	

 	3.4.	Manufacturing.  Subject to Section 2.2, Bluebird shall have the sole right to manufacture, or have manufactured, Licensed Products for use in the Field in the Territory, and it shall be entitled to use, and to sublicense the manufacturing rights under the Licensed Patent Rights, for such purposes.  Bluebird shall be responsible for all aspects of manufacturing of Licensed Products.  	
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4.	Right of First Offer  	

 	4.1.	If at any time during the Term and [***], Biogen seeks to grant rights to a Third Party under the Licensed Patent Rights to Develop or Commercialize one or more Licensed Products for the ROFO Field in any country in the Territory, then before granting such rights, Biogen shall provide Bluebird with written notice thereof (such notice, the “ ROFO Notice ”).  In the event that Bluebird wishes to exercise its right of first offer with respect to the ROFO Field for all of the countries in the Territory, it shall do so in writing (the “ ROFO Exercise Notice ”) no later than [***] after Bluebird’s receipt of the ROFO Notice (the “ ROFO Exercise Period ”).	

 	4.2.	Upon Biogen’s receipt of the ROFO Exercise Notice, this Agreement shall be amended promptly as follows:	

 	(a)	the definition of “Field” shall be amended to include the ROFO Field;	

 	(b)	as a result of updating the definition of “Field” pursuant to the foregoing clause (a), Net Sales of Licensed Products in the ROFO Field in the Territory shall be included in the aggregate annual Net Sales of Licensed Products for royalty calculation purposes pursuant to Sections 5.1.3(a) and 5.1.3(b);	

 	(c)	a new provision shall be added pursuant to which Bluebird shall pay to Biogen an upfront payment of [***] with respect to the ROFO Exercise Notice for the ROFO Field within [***] after the effective date of the amendment;	

 	(d)	[***]; and	

 	(e)	any additional terms as may be agreed by the Parties with respect to the addition of the ROFO Field shall be included in this Agreement.  	

 	4.3.	If Bluebird notifies Biogen that it elects not to exercise such right or fails to respond during the ROFO Exercise Period, Biogen shall thereafter have no further obligation to Bluebird with respect to the ROFO Field and may enter into a definitive agreement granting a Third Party, a license or other right under the Licensed Patent Rights to Develop or Commercialize one or more Licensed Products in the ROFO Field.	
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5.	PAYMENT TERMS 	

 	5.1.	Payment Terms.	

 	5.1.1.	Upfront Payment.  In partial consideration of the licenses and rights granted to Bluebird hereunder, Bluebird shall pay to Biogen [***] within ten (10) days after the Effective Date. Such payment shall be non-refundable and non-creditable.      	

 	5.1.2.	Milestone Payments.  Bluebird shall notify Biogen as soon as practicable upon (and in any event within ten (10) days after) achievement of each of the following events by Bluebird or its Affiliates or sublicensees (each such event, a “ Milestone Event ”).  In further consideration of the licenses and rights granted to Bluebird, within [***] after achievement of each Milestone Event set forth below, Bluebird shall pay to Biogen the corresponding non-creditable and non-refundable milestone payment (each, a “ Milestone Payment ”). If any Milestone Payment has not been paid by the time that the subsequent (based on the row numbers in the table below) Milestone Event is achieved, then all unpaid earlier Milestone Payments will be due and payable on the due date for payment of the Milestone Payment for such subsequent Milestone Event, and Bluebird shall pay to Biogen all such unpaid earlier Milestone Payments in addition to the Milestone Payment for such subsequent Milestone Event on such due date.   	

 	(a)	Development Milestone Events.	

Row	Milestone  Event	Milestone Payment	
[***]	[***]	[***]	
[***]	[***]	[***]	
[***]	[***]	[***]	
[***]	[***]	[***]	
 
 	(b)	For the avoidance of doubt and except as set forth in Section 4.2(d): (i) each Milestone Payment shall be payable only once upon the first achievement of the applicable Milestone Event for a Licensed Product in the Field [***]; and (ii) satisfaction of a Milestone Event by a sublicensee or assignee of, or Third Party retained by, Bluebird or its Affiliates shall be deemed to have been satisfied by Bluebird for purposes of this Section 5.1.2.	

 	5.1.3.	Calculation of Royalties. In consideration of the licenses and rights granted to Bluebird hereunder, Bluebird shall pay to Biogen in accordance	
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 	 	with Section 5.1.4(b) the royalties set forth in Sections 5.1.3(a) and 5.1.3(b), as applicable, with respect to aggregate annual Net Sales of Licensed Products in the Field in the Territory during the applicable Royalty Term.   	

 	(a)	Royalty in countries of the Territory where there is no Valid Claim that Covers the Licensed Product.  Bluebird shall pay Biogen a royalty of [***] of aggregate annual Net Sales of Licensed Products in the Field in countries of the Territory where there is no Valid Claim included in the Licensed Patent Rights in such countries that Covers such Licensed Products.	

 	(b)	Royalty in countries of the Territory where there is a Valid Claim that Covers the Licensed Product.   Bluebird  shall pay Biogen  a royalty on Net Sales  of Licensed Products in the Field in countries of the Territory where there is a Valid Claim included in the Licensed Patent Rights in such countries that covers such Licensed Products calculated as the percentages of the applicable portion of annual Net Sales of Licensed Products in the Field in the Territory set forth in the table below.	

Annual Net Sales of Licensed Products in the Field in the Territory	Royalty Rate to be applied to Net Sales from countries where there is a Valid Claim	
[***]	[***]	
[***]	[***]	
[***]	[***]	
 
For example, if (a) annual Net Sales of Licensed Products in the Field in countries  without  a Valid Claim are $700 million and (b) annual Net Sales of Licensed Products in the Field in countries  with  a Valid Claim are $1.2 billion, the royalties under Sections 5.1.3(a) and 5.1.3(b) would be calculated as follows:
[***].
 	5.1.4.	Royalty Reports and Payments.  Commencing with the beginning of the first Royalty Term and thereafter during the Term, on a Calendar Year-by-Calendar Year basis and with respect to each Calendar Quarter of such Calendar Year, within [***] after the end of the applicable Calendar Quarter, Bluebird shall:	
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 	(a)	provide to Biogen a report of gross sales (including any foreign exchange rates used) and Net Sales of Licensed Products (detailing all Deductions) in the Field in the Territory for such Calendar Year broken down by Calendar Quarter on an aggregate and country-by-country basis, which Net Sales shall include Net Sales for such Calendar Quarter and Net Sales for each of the previous Calendar Quarters in such Calendar Year, as applicable, and including lists of countries that fall under each of Sections 5.1.3(a) and 5.1.3(b), with calculations of aggregate annual Net Sales under each of Sections 5.1.3(a) and 5.1.3(b); and  	

 	(b)	pay to Biogen the royalties due under Section 5.1.3(a) and Section 5.1.3(b) with respect to such Net Sales for such Calendar Quarter.	

 	5.1.5.	Payment Reduction in the event of [***].	
[***]  
 	5.2.	Payment Method.  	

 	5.2.1.	Currency.  With respect to Net Sales invoiced in U.S. dollars, the Net Sales and the amounts due for royalties under Section 5.1.3 will be expressed in U.S. dollars.  With respect to Net Sales invoiced in a currency other than U.S. dollars, payments will be calculated based on amounts converted to U.S. dollars using currency exchange rates for the Calendar Quarter for which remittance is made for such royalties.  [***]	

 	5.2.2.	Method of Payment.  All payments from Bluebird to Biogen shall be made by wire transfer in U.S. Dollars to the credit of such bank account as may be designated by Biogen in writing to Bluebird.  Any payment which falls due on a date which is not a Business Day may be made on the next succeeding Business Day.	

 	5.3.	Taxes.	
[***]
6.	RECORDS; AUDIT RIGHTS	

 	6.1.	Relevant Records.	

 	6.1.1.	Relevant Records.  Bluebird shall keep, and will cause each of its Affiliates or sublicensees, as applicable, to keep, accurate books and records of accounting for the purpose of calculating all payments due to  Biogen under Section 5.1 (such payments, collectively the “ Fees ” and	
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 	 	such books and records, collectively the “Relevant Records”).  For the [***] following the end of the Calendar Year to which each will pertain, such Relevant Records will be kept by Bluebird or such Affiliate or sublicensee at each of their principal place of business.  	

 	6.1.2.	Audit Request.  At the request of Biogen, Bluebird shall, and, shall cause each of its Affiliates or sublicensees to, permit Biogen and its representatives (including an independent auditor), at reasonable times and upon reasonable notice, to examine the Relevant Records.  Such examinations may not (a) be conducted for any Calendar Year more than [***]  after the end of such Calendar Year; (b) be conducted more than once in any [***]  period; or (c) be repeated for any Calendar Year.  Such audit shall be requested in writing at least [***] in advance, and shall be conducted during Bluebird’s normal business hours and otherwise in manner that minimizes any interference to Bluebird’s business operations.	

 	6.1.3.	Audit Fees and Expenses.  Biogen shall bear any and all fees and expenses incurred by it in connection with any such audit of the Relevant Records;  provided , however , in the event an audit reveals an underpayment by Bluebird of more than [***] as to the period subject to the audit, Bluebird shall reimburse Biogen for any reasonable and documented out-of-pocket costs and expenses of the audit within [***]  after receiving invoices thereof.	

7.	INTELLECTUAL PROPERTY RIGHTS	

 	7.1.	Pre-existing IP.  Subject only to the rights expressly granted to the other Party under this Agreement, each Party shall retain all rights, title and interests in and to any Intellectual Property Rights that are owned, licensed or sublicensed by such Party prior to or independent of this Agreement.	

 	7.2.	Developed IP.  Bluebird shall own all rights, title and interests in and to any Intellectual Property Rights that are conceived solely by Bluebird, its Affiliates or sublicensees following the Effective Date (collectively, “ Developed IP ”).	

 	7.3.	Patent Prosecution and Maintenance of Licensed Patent Rights.  	

 	7.3.1.	Prosecution and Maintenance of MOT IP.  	

 	(a)	Subject to the rights of any Third Party with respect to the MOT IP, Biogen shall, at its expense and discretion, be responsible for prosecuting (including in connection with any reexaminations, oppositions and the like) and maintaining the MOT IP in the Territory.  If Biogen files patent applications claiming priority to the patent listed in  Schedule B  subsequent to the Effective Date,	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	Biogen shall make a determination in good faith as to whether such applications have claims that constitute MOT IP.  If Biogen determines that such applications have claims that constitute MOT IP, then Biogen shall provide Bluebird drafts of any material filings or responses to be made to relevant patent offices which are related to such MOT IP, within a reasonable amount of time in advance of submitting such filings or responses to permit Bluebird an opportunity to review and comment thereon. Biogen shall consider in good faith the reasonable comments made by Bluebird with respect to the MOT IP,  provided that  Biogen does not reasonably determine such comments to be detrimental to the prosecution or enforcement of any Patent Rights owned or Controlled by Biogen or the rights of any Third Party with respect to the MOT IP.  	

 	(b)	If Biogen elects to abandon the prosecution or maintenance of the MOT IP in any country in the Territory or as a PCT application (and does not elect to file one or more new patent applications claiming priority to such MOT IP), then unless Biogen has a good faith reasonable basis for determining that such prosecution or maintenance not be continued by either Party, Biogen will promptly (but not less than thirty (30) days before any action is required) provide Bluebird with written notice, and will permit Bluebird, at Bluebird’s sole discretion and expense, to continue prosecution or maintenance of any such MOT IP in the applicable country of the Territory, subject to the rights of any Third Party with respect to such MOT IP and provided that  Bluebird shall consult with Biogen with respect to the prosecution or maintenance of such Patent Rights by Bluebird, including: (i) allowing Biogen a reasonable opportunity and reasonable time to review and comment regarding such drafts before any applicable filings are submitted to any relevant patent office or governmental authority, (ii) reflecting any reasonable comments offered by Biogen in any filings submitted by Bluebird to any relevant patent office or governmental authority and (iii) not taking any position with respect to such Patent Rights that would be reasonably likely to adversely affect the scope, validity or enforceability of any other Patent Rights being prosecuted or maintained by Biogen without the prior written consent of Biogen, which consent shall not be unreasonably withheld, delayed or conditioned.	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	7.3.2.	Prosecution and Maintenance of COM IP.   	

 	(a)	Biogen shall be responsible for prosecuting (including in connection with any reexaminations, oppositions and the like) and maintaining the COM IP in the Territory, and subject to Section 5.1.5, the Parties shall share equally the costs and expenses in connection with such prosecution and maintenance.  Biogen shall provide Bluebird drafts of any material filings or responses related thereto to be made to relevant patent offices, within a reasonable amount of time in advance of submitting such filings or responses to permit Bluebird an opportunity to review and comment thereon. Biogen shall reflect any such reasonable comments with respect to COM IP,  provided that  in each case Biogen does not reasonably determine such comments to be detrimental to the prosecution or enforcement of any Patent Rights owned or Controlled by Biogen.	

 	(b)	If Biogen elects to abandon the prosecution or maintenance of any COM IP in any country in the Territory or as a PCT application (and does not elect to file one or more new patent applications claiming priority to such COM IP), then unless Biogen has a good faith reasonable basis for determining that such prosecution or maintenance not be continued by either Party, Biogen will promptly (but not less than thirty (30) days before any action is required) provide Bluebird with written notice, and will permit Bluebird, at Bluebird’s sole discretion and expense, to continue prosecution or maintenance of such COM IP  in the applicable country of the Territory; provided that  Bluebird shall consult with Biogen with respect to the preparation, filing, prosecution and maintenance of such Patent Rights by Bluebird, including: (i) allowing Biogen a reasonable opportunity and reasonable time to review and comment regarding such drafts before any applicable filings are submitted to any relevant patent office or governmental authority, (ii) reflecting any reasonable comments offered by Biogen in any filings submitted by Bluebird to any relevant patent office or governmental authority and (iii) not taking any position with respect to such Patent Rights that would be reasonably likely to adversely affect the scope, validity or enforceability of any other Patent Rights being prosecuted and maintained by Biogen without the prior written consent of Biogen, which consent shall not be unreasonably withheld, delayed or conditioned.	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
8.	ACTUAL OR THREATENED INFRINGEMENT, DISCLOSURE OR MISAPPROPRIATION. 	

 	8.1.	Notification.  Each Party shall promptly notify the other Party in writing of its becoming aware of (a) any actual or threatened infringement, misappropriation or other violation or challenge to the validity, scope or enforceability by a Third Party of any Licensed Patent Rights in the Field (“ Third Party Infringement ” ); or (b) initiation by a Third Party of an opposition proceeding against any Licensed Patent Rights in the Field, or initiation by Bluebird of an opposition against a Third Party  related to the Licensed Patent Rights in the Field or any allegation by a Third Party that Intellectual Property Rights owned by it are infringed, misappropriated or violated by the Development, Commercialization or research, develop, make, have made, use, sell, offer for sale, market, distribute, import, export or otherwise exploit any Licensed Product in the Field (“ Defense Action ”).	

 	8.2.	Third Party Infringements.  	
[***]
 	8.3.	Defense Actions.  [***]	

9.	CONFIDENTIALITY	

 	9.1.	Definition.  “Confidential Information” means the terms and provisions of this Agreement and other proprietary information and data of a financial, commercial or technical nature that the disclosing Party or any of its Affiliates has supplied or otherwise made available to the other Party or its Affiliates, which are disclosed in writing or orally, including with respect to Bluebird as the disclosing Party, Restricted Information and any Bluebird proprietary information or data in proposed publications or presentations submitted to Biogen pursuant to Section 14.1.3 or reports submitted pursuant to Section 3.3.  	

 	9.2.	Obligations.  During the Term and for five (5) years thereafter, the receiving Party will (a) protect all Confidential Information of the disclosing Party against unauthorized disclosure to Third Parties and (b) not use or disclose the Confidential Information of the disclosing Party, except as permitted by or in furtherance of exercising rights or carrying out obligations hereunder or for internal legal, accounting or finance purposes, for the avoidance of doubt, Biogen may not use Restricted Information in connection with its own research, Development, manufacture, Commercialization, use, import, or sale of products covered by the Licensed Patents in the Field in the Territory.  The receiving Party shall treat all Confidential Information provided by the disclosing Party with the same degree of care as the receiving Party uses for its own similar information, but in no event less than a reasonable degree of care.  The receiving Party may disclose the Confidential Information to its Affiliates, and their respective	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	directors, officers, employees, subcontractors, sublicensees, consultants, attorneys, accountants, banks and investors (collectively, “ Recipients ”) who have a need-to-know such information for purposes related to this Agreement,  provided that  the receiving Party shall hold such Recipients to written obligations of confidentiality with terms and conditions at least as restrictive as those set forth in this Agreement.  	

 	9.3.	Exceptions to Confidentiality. The obligations under this Section 9 shall not apply to any information to the extent the receiving Party can demonstrate by competent evidence that such information:	

 	(a)	is (at the time of disclosure) or becomes (after the time of disclosure) known to the public or part of the public domain through no breach of this Agreement by the receiving Party or any Recipients to whom it disclosed such information;	

 	(b)	was known to, or was otherwise in the possession of, the receiving Party prior to the time of disclosure by the disclosing Party;	

 	(c)	is disclosed to the receiving Party on a non-confidential basis by a Third Party who is entitled to disclose it without breaching any confidentiality obligation to the disclosing Party; or	

 	(d)	is independently developed by or on behalf of the receiving Party or any of its Affiliates, as evidenced by its written records, without use or access to the Confidential Information.	

 	9.4.	Permitted Disclosures.	

 	9.4.1.	Compliance with Law.  The restrictions set forth in this Section 9 shall not apply to any Confidential Information that the receiving Party is required to disclose under Applicable Laws or a court order or other governmental order or to enforce any Licensed Patent Right under Section 8,  provided that  the receiving Party: (a) provides the disclosing Party with prompt notice of such disclosure requirement if legally permitted; (b)  affords the disclosing Party an opportunity to oppose or limit, or secure confidential treatment for such required disclosure; and (c) if the disclosing Party is unsuccessful in its efforts pursuant to Section 9.4.1(b), discloses only that portion of the Confidential Information that the receiving Party is legally required to disclose as advised by the receiving Party’s legal counsel.	

 	9.4.2.	Biogen Permitted Disclosures.  Notwithstanding the restrictions set forth in this Section 9, in the event that Biogen wishes to assign, pledge or otherwise transfer its rights to receive some or all of the Fees payable	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	hereunder, Biogen may disclose to a Third Party Confidential Information of Bluebird in connection with any such proposed assignment,  provided that  Biogen shall hold such Third Parties to written obligations of confidentiality with terms and conditions at least as restrictive as those set forth in this Agreement.  	

 	9.4.3.	Bluebird Permitted Disclosures.  Notwithstanding the restrictions set forth in this Section 9, in the event that Bluebird wishes to enter into a sublicense in accordance with Section 2.2, Bluebird may disclose to a Third Party Confidential Information of Biogen relating to the Licensed Products in the Field in connection with any such proposed sublicense,  provided that  Bluebird shall hold such Third Parties to written obligations of confidentiality with terms and conditions at least as restrictive as those set forth in this Agreement.	

 	9.4.4.	Disclosure of Agreement Terms.  Notwithstanding the restrictions set forth in this Section 9 , a Party may, without the prior consent of the other Party, disclose the terms and provisions of this Agreement to any Third Party that is (a)  performing diligence in connection with any permitted Change of Control or similar transaction or (b) a permitted sublicensee under this Agreement or a permitted assignee of this Agreement,  provided that  such Party shall hold such Third Party to written obligations of confidentiality with terms and conditions at least as restrictive as those set forth in this Agreement.	

 	9.5.	Right to Injunctive Relief.  Each Party agrees that breaches of this Section 9 may cause irreparable harm to the other Party and shall entitle such other Party, in addition to any other remedies available to it (subject to the terms of this Agreement), the right to seek injunctive relief enjoining such action.	

 	9.6.	Ongoing Obligation for Confidentiality.  Upon expiration or termination of this Agreement, the receiving Party shall, and shall cause its Recipients to, destroy, delete or return (as requested by the disclosing Party) any Confidential Information of the disclosing Party, except for one copy which may be retained in the confidential files of its legal department for archival purposes only.	

10.	REPRESENTATIONS, WARRANTIES AND COVENANTS	

 	10.1.	Representations and Warranties by Each Party.  Each Party represents and warrants to the other Party as of the Effective Date that:	

 	(a)	it is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	(b)	it has full corporate power and authority to execute, deliver, and perform under this Agreement, and has taken all corporate action required by Applicable Laws and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement;  	

 	(c)	this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms;	

 	(d)	all consents, approvals and authorizations from all governmental authorities or other Third Parties required to be obtained by such Party in connection with this Agreement have been obtained; and	

 	(e)	the execution and delivery of this Agreement and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and shall not: (i) conflict with or result in a breach of any provision of its organizational documents; (ii) result in a breach of any agreement to which it is a party that would impair the performance of its obligations hereunder; or (iii) violate any Applicable Laws.	

 	10.2.	Representations and Warranties by Biogen.	
Biogen represents and warrants to Bluebird as of the Effective Date that:
 	(a)	Biogen Controls the Licensed Patent Rights, and is entitled to grant the licenses specified herein; and	

 	(b)	Biogen has not granted to any Third Party any rights or licenses under any of the Licensed Patent Rights that would conflict with the licenses granted to Bluebird hereunder.	

 	10.3.	Covenants and Representations and Warranties by Bluebird.  	
Bluebird represents and warrants as of the Effective Date and covenants thereafter to Biogen that:
 	(a)	it shall, and shall ensure all Third Parties that it engages, comply with all Applicable Laws with respect to the performance of its obligations hereunder;	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	(b)	without limiting the generality of Section 10.3(a), Bluebird shall comply with the U.S. Foreign Corrupt Practices Act of 1977 (as modified or amended);  	

 	(c)	it has not and will not directly or indirectly offer or pay, or authorize such offer or payment of, any money, or transfer anything of value, to improperly seek to influence any Government Official; and	

 	(d)	if Bluebird is itself a Government Official, Bluebird represents warrants and covenants that it has not accepted, and will not accept in the future, such a payment or transfer.  	
As used in this Section 10.3, “Government Official” means: (i) any elected or appointed government official (e.g., a member of a ministry of health); (ii) any employee or person acting for or on behalf of a government official, agency, or enterprise performing a governmental function; (iii) any political party officer, employee, or person acting for or on behalf of a political party or candidate for public office; (iv) an employee or person acting for or on behalf of a public international organization; or (v) any person otherwise categorized as a government official under local law.  For the purposes of the definition of “ Government Official ”, the terms “ government ” and the correlative term “ governmental ” are meant to include all levels and subdivisions of non-U.S. governments (i.e., local, regional, or national and administrative, legislative, or executive).
 	10.4.	No Other Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS SECTION 10, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE, NON-INFRINGEMENT, VALIDITY, ENFORCEABILITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  ANY INFORMATION PROVIDED BY BIOGEN OR ITS AFFILIATES IS MADE AVAILABLE ON AN “AS IS” BASIS WITHOUT WARRANTY WITH RESPECT TO COMPLETENESS, COMPLIANCE WITH REGULATORY STANDARDS OR REGULATIONS OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER KIND OF WARRANTY WHETHER EXPRESS OR IMPLIED.	

11.	INDEMNIFICATION	

 	11.1.	Indemnification by Bluebird.  Bluebird agrees to indemnify, hold harmless and defend Biogen and its Affiliates, and their respective officers, directors and employees (collectively, “ Biogen Indemnitees ”), from and against any Claims	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	arising or resulting from: (a) the Development of a Licensed Product by, on behalf of or under grant of rights from Bluebird, its Affiliates, subcontractors or sublicensees; (b)  the Commercialization of a Licensed Product by, on behalf of or under grant of rights from Bluebird, its Affiliates, subcontractors or sublicensees; (c)  any gross negligence or wrongful intentional acts or omissions of Bluebird, its Affiliates, subcontractors or sublicensees in connection with this Agreement; (d)  breach by Bluebird of any representation, warranty, obligation or covenant as set forth in this Agreement; or (e) breach by Bluebird of the scope of the license set forth in Section 2.1.  As used herein, “ Claims ” means collectively, any and all Third Party demands, claims, actions and proceedings (whether criminal or civil, in contract, tort or otherwise) for losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees).  	

 	11.2.	Indemnification by Biogen. Biogen agrees to indemnify, hold harmless and defend Bluebird and its Affiliates and their respective officers, directors and employees (collectively, “ Bluebird Indemnitees ” ), from and against any Claims arising or resulting from: (a)  any gross negligence or wrongful intentional acts or omissions of Biogen, its Affiliates, or subcontractors in connection with this Agreement; or (b) breach by Biogen of any representation, warranty, obligation or covenant as set forth in this Agreement.  	

 	11.3.	Indemnification Procedure.  In connection with any Claim for which a Party (the “ Indemnified Party ”) seeks indemnification from the other Party (the “ Indemnifying Party ” ) pursuant to this Agreement, the Indemnified Party shall: (a) give the Indemnifying Party prompt written notice of the Claim;  provided, however, that failure to provide such notice shall not relieve the Indemnifying Party from its liability or obligation hereunder, except to the extent of any material prejudice as a direct result of such failure; (b) cooperate with the Indemnifying Party, at the Indemnifying Party’ s expense, in connection with the defense and settlement of the Claim; and (c) permit the Indemnifying Party to control the defense and settlement of the Claim;  provided, however, that the Indemnifying Party may not settle the Claim without the Indemnified Party’s prior written consent, which shall not be unreasonably withheld or delayed, in the event such settlement materially adversely impacts the Indemnified Party’s rights or obligations.  Further, the Indemnified Party shall have the right to participate (but not control) and be represented in any suit or action by advisory counsel of its selection and at its own expense.	

12.	LIMITATION OF LIABILITY	
[***]
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
13.	TERM; TERMINATION 	

 	13.1.	Term.  The term of this Agreement (the “Term”) shall commence as of the Effective Date and, unless earlier terminated as expressly provided herein, shall expire upon the last-to-expire Royalty Term.	

 	13.2.	Termination for Cause.  Each Party shall have the right, without prejudice to any other remedies available to it at law or in equity, to terminate this Agreement in the event the other Party breaches any of its material obligations hereunder and fails to cure such breach within [***] of receiving notice thereof;  provided ,  however , that if such breach is capable of being cured, but cannot be cured within such [***] period, and the breaching Party initiates actions to cure such breach within such period and thereafter diligently pursues such actions, the breaching Party shall have such additional period as is reasonable to cure such breach, but in no event will such additional period exceed [***].  Any termination by a Party under this Section 13.2 shall be without prejudice to any damages or other legal or equitable remedies to which it may be entitled from the other Party.  For the avoidance of doubt, Bluebird’s failure to use Commercially Reasonable Efforts to Develop and Commercialize the Licensed Product shall constitute a material breach by Bluebird under this Agreement.   	

 	13.3.	Termination by Bluebird.  Bluebird may terminate this Agreement at will in its sole discretion, on not less than [***] prior written notice to Biogen.    	

 	13.4.	Termination for a Bankruptcy Event.  Each Party shall have the right to terminate this Agreement in the event of a Bankruptcy Event with respect to the other Party.  “ Bankruptcy Event ”  means the occurrence of any of the following: (a) the institution of any bankruptcy, receivership, insolvency, reorganization or other similar proceedings by or against a Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, including any section or chapter of the United States Bankruptcy Code, as amended or under any similar laws or statutes of the United States or any state thereof (the “ Bankruptcy Code ”), where in the case of involuntary proceedings such proceedings have not been dismissed or discharged within [***]  after they are instituted; (b)  the insolvency or making of an assignment for the benefit of creditors or the admittance by a Party of any involuntary debts as they mature; (c)  the institution of any reorganization, arrangement or other readjustment of debt plan of a Party not involving the Bankruptcy Code; (d) the appointment of a receiver for all or substantially all of a Party’ s assets; or (e) any corporate action taken by the board of directors of a Party in furtherance of any of the foregoing actions.	

 	13.5.	Effect of Termination or Expiration.	

 	13.5.1.	Upon termination or expiration of this Agreement, (a) Bluebird shall pay to Biogen [***] Biogen as of the effective date of termination or	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	expiration within [***] following the effective date of termination or expiration and (b) all licenses under Section 2.1 from Biogen to Bluebird shall terminate.  	

 	13.5.2.	Upon termination of this Agreement, Bluebird shall have the right to sell its remaining inventory of Licensed Products for a period of up to [***] following the termination of this Agreement so long as Bluebird has fully paid, and continues to fully pay when due, any and all Fees owed to Biogen, and Bluebird otherwise is not in material breach of this Agreement.	

 	13.5.3.	A termination of this Agreement will not automatically terminate any sublicense granted by Bluebird pursuant to Section 2.2 with respect to a Third Party,  provided that  (a)  such sublicensee is not then in breach of any provision of this Agreement or the applicable sublicense agreement; (b)  Biogen will have the right to step into the role of Bluebird as sublicensor, with all the rights that Bluebird had under such sublicense prior to termination of this Agreement (including the right to receive any payments to Bluebird by such sublicensee that accrue from and after the date of the termination of this Agreement); and (c) Biogen will only have those obligations to such sublicensee as Biogen had to Bluebird hereunder.  Bluebird shall include in any sublicense agreement a provision in which said sublicensee acknowledges its obligations to Biogen hereunder and the rights of Biogen to terminate this Agreement with respect to any sublicensee for material breaches of this Agreement by such sublicensee.	

 	13.6.	Survival.  Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing hereunder prior to such expiration or termination.  Without limiting the foregoing, the provisions of Sections 5.1.7 (Late Payments), 5.2 (Payment Method), 5.3 (Taxes), 6 (Records; Audit Rights), 7.1 (Pre-Existing IP), 7.2 (Developed IP), 9 (Confidentiality), 11 (Indemnification), 12 (Limitation of Liability), 13.5 (Effect of Termination or Expiration), 14.1.2 (Public Statements), 15 (Bluebird Insurance), 16 (Dispute Resolution), 17.3 (Governing Law) and 17.8 (Notices) shall survive expiration or termination of this Agreement.  	

14.	PUBLICITY, PUBLICATIONS and restricted access	

 	14.1.	Publicity and Publications.	

 	14.1.1.	Use of Trademarks.  Neither Party (nor any of its Affiliates or agents) shall use the Trademarks of the other Party or its Affiliates in any press release, publication or other form of promotional disclosure without the prior written consent of the other Party in each instance.	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	14.1.2.	Public Statements.  Except as expressly set forth herein, each Party agrees not to issue any press release or other public statement or any information relating to this Agreement, whether written, electronic, oral or otherwise, disclosing the existence of this Agreement or the terms hereof without the prior written consent of the other Party;  provided, however , that neither Party will be prevented from complying with any duty of disclosure it may have pursuant to Applicable Laws or the rules of any recognized stock exchange, including disclosure of the terms of this Agreement, so long as the disclosing Party provides the other Party at least [***] prior written notice to the extent practicable and only discloses information to the extent required by Applicable Laws or the rules of any recognized stock exchange.  	

 	14.1.3.	Publications.  Biogen acknowledges that Bluebird personnel may desire to publish or present data that is derived from the research, Development or Commercialization of the Licensed Products in the Field or related to the Licensed Patent Rights.  No such publication by Bluebird will be submitted and no such presentation shall be made unless a written copy of such proposed publication or presentation is submitted to Biogen no later than [***] before submission for publication or presentation.  Biogen shall provide its comments with respect to such publications and presentations within [***] after its receipt of such written copy from Bluebird.  Bluebird shall consider in good faith all comments made by Biogen, including limitations on disclosure of Bluebird confidential information requested by Biogen consistent with what Bluebird would consider normal procedure for its own development products.  Bluebird will comply with standard academic practice regarding authorship of scientific publications and recognition of contribution of other parties in any such publication.	

 	14.2.	Restricted Disclosure and Internal Access.  At any time after [***], Bluebird’s obligation to submit details of Bluebird’s research and Development activities with respect to the Licensed Products, including specific vector sequences used in the Licensed Products pursuant to clause (a) or (b) of Section 3.3 or proposed manuscripts pursuant to Section 14.1.3 (such information, the “ Restricted Information ”) shall be limited to submitting such information solely to Biogen’s intellectual property group, and Biogen shall restrict the access of any such Restricted Information to Biogen’s intellectual property group;  provided that , notwithstanding the foregoing, (i) Biogen’s intellectual property group may disclose to other employees and consultants of Biogen information derived from Restricted Information concerning whether or not Bluebird has complied with its payment obligations under Section 5.1.2 and Section 5.1.3 and (ii) the restrictions contained in this Section 14.2 shall not apply in the event of any dispute under this Agreement.	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
15.	Bluebird INSURANCE 	

 	15.1.	Insurance Requirements.  Bluebird shall maintain during the Term and until the later of: (a) [***]  after termination or expiration of this Agreement, or (b) the date that all statutes of limitation covering claims or suits that may be instituted for personal injury based on the sale or use of the Licensed Products have expired, commercial general liability insurance from a minimum “A-” AM Bests rated insurance company or insurer reasonably acceptable to Biogen, including contractual liability and product liability or clinical trials, if applicable, with coverage limits of not less than [***].  Bluebird has the right to provide the total limits required by any combination of primary and umbrella/excess coverage.  The minimum level of insurance set forth herein shall not be construed to create a limit on Bluebird’s liability hereunder.  Such policies shall name Biogen and its Affiliates as additional insured and provide a waiver of subrogation in favor of Biogen and its Affiliates.  Such insurance policies shall be primary and non-contributing with respect to any other similar insurance policies available to Biogen or its Affiliates.  Any deductibles for such insurance shall be assumed by Bluebird.	

 	15.2.	Policy Notification.  Bluebird shall provide Biogen with original certificates of insurance (which may be done through the submission of an electronic copy of such certificate) evidencing such insurance: (a)  promptly following execution by both Parties of this Agreement; and (b) prior to expiration of any one coverage.  Biogen shall be given at least thirty (30) days written notice prior to cancellation, termination or any change to restrict the coverage or reduce the limits afforded.	

16.	DISPUTE RESOLUTION  	

 	16.1.	General.  Promptly after the written request of either Party, each of the Parties shall appoint a designated representative to meet in person or by telephone to attempt in good faith to resolve any dispute that arises under this Agreement.  If the designated representatives do not resolve the dispute within [***] of such request, then a senior executive of each Party shall meet in person or by telephone to review and attempt to resolve the dispute in good faith. The senior executives shall have [***] to attempt to resolve the dispute.  If the senior executives cannot resolve such dispute within such period of time, then the Parties shall each be free to pursue any avenue available to them under law or equity to resolve the dispute.  If a Party’s legal rights would be adversely affected as a result of the passage of time that would occur by participating in the dispute resolution mechanism set forth above, including the effect of applicable statutes of limitations or time-based defenses (such as estoppels or laches), such Party may commence legal proceedings prior to or during the course of such dispute resolution mechanism.  	

 	16.2.	Injunctive Relief.  Notwithstanding the foregoing, in the event of an actual or threatened breach hereunder, the aggrieved Party may seek equitable relief	
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 	 	(including restraining orders, specific performance or other injunctive relief) in any court or other forum, without first submitting to the dispute resolution procedures set forth in Section 16.1.  	

17.	GENERAL PROVISIONS	

 	17.1.	Assignment.  [***]  	

 	17.2.	Severability.  Should one or more of the provisions of this Agreement become void or unenforceable as a matter of law, then such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement, and the Parties agree to substitute a valid and enforceable provision therefor which, as nearly as possible, achieves the desired economic effect and mutual understanding of the Parties under this Agreement.	

 	17.3.	Governing Law.  This Agreement shall be governed by and construed under the laws in effect in the Commonwealth of Massachusetts, U.S., without giving effect to any conflicts of laws provision thereof or of any other jurisdiction that would produce a contrary result.	

 	17.4.	Force Majeure.  Except with respect to delays or nonperformance caused by the negligent or intentional act or omission of a Party, any delay or nonperformance by such Party (other than payment obligations under this Agreement) will not be considered a breach of this Agreement to the extent such delay or nonperformance is caused by acts of God, natural disasters, acts of the government or civil or military authority, fire, floods, epidemics, quarantine, energy crises, war or riots or other similar cause outside of the reasonable control of such Party (each, a “ Force Majeure Event ”),  provided that  the Party affected by such Force Majeure Event will promptly begin or resume performance as soon as reasonably practicable after the event has abated.  If the Force Majeure Event prevents a Party from performing any of its obligations under this Agreement for [***] or more, then the other Party may terminate this Agreement immediately upon written notice to the non-performing Party.	

 	17.5.	Waivers and Amendments.  The failure of any Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party.  No waiver shall be effective unless it has been given in writing and signed by the Party giving such waiver.  No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party.	

 	17.6.	Relationship of the Parties.  Nothing contained in this Agreement shall be deemed to constitute a partnership, joint venture, or legal entity of any type between Biogen and Bluebird, or to constitute one Party as the agent of the other.  	
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 	 	Moreover, each Party agrees not to construe this Agreement, or any of the transactions contemplated hereby, as a partnership for any tax purposes.  Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give any Party the power or authority to act for, bind, or commit the other Party.  	

 	17.7.	Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.	

 	17.8.	Notices.  All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when: (a)  delivered by hand (with written confirmation of receipt); (b) sent by fax (with written confirmation of receipt), provided that  a copy is sent by an internationally recognized overnight delivery service (receipt requested); or (c) when received by the addressee, if sent by an internationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and fax numbers set forth below (or to such other addresses and fax numbers as a Party may designate by written notice):	
If to Biogen:
 
Biogen Idec
225 Binney Street
Cambridge, MA 02142
Attn: Executive Vice President and General Counsel
Facsimile: (866) 546-2758
 
with a copy to:
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600 U.S.A.
Attn: Marc A. Rubenstein, Esq.
Facsimile: (617) 235-0706
 
If to Bluebird:
 
bluebird bio, Inc.
150 2nd Street
Cambridge, MA 02141
Attn: General Counsel
 
with a copy to:
-28-

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Goodwin Procter LLP
53 State Street
Boston, MA 02109-2802
Attn: Michael Bison
 	17.9.	Further Assurances.  Bluebird and Biogen hereby covenant and agree without the necessity of any further consideration, to execute, acknowledge and deliver any and all such other documents and take any such other action as may be reasonably necessary or appropriate to carry out the intent and purposes of this Agreement.	

 	17.10.	No Third Party Beneficiary Rights.  Except as expressly provided in this Agreement, this Agreement is not intended to and shall not be construed to give any Third Party any interest or rights (including, without limitation, any Third Party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby, except in the case of Section 11, Biogen Indemnitees and Bluebird Indemnitees, as applicable.	

 	17.11.	Entire Agreement; Confidentiality Agreement.  This Agreement, together with its Schedules, sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other prior communications between the Parties with respect to such subject matter, including, without limitation, that certain mutual confidentiality agreement by and between Bluebird and Biogen Idec Inc., dated February 14, 2014 (the “ CDA ”).  The Parties acknowledge and agree that, as of the Effective Date, all Confidential Information (as defined in the CDA) disclosed by Biogen or its Affiliates pursuant to the CDA shall be considered Biogen’s Confidential Information and subject to the terms set forth in this Agreement.  In the event of any conflict between a material provision of this Agreement and any Schedule hereto, this Agreement shall control.	

 	17.12.	Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  An executed signature page of this Agreement delivered by electronic or facsimile transmission shall be as effective as an original executed signature page.  	

 	17.13.	Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.	

 	17.14.	Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, any rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.	
-29-

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 	17.15.	Headings.  The captions to the several sections hereof are not a part of this Agreement, but are included merely for convenience of reference only and shall not affect its meaning or interpretation.  	

 	17.16.	Construction.    Except where the context otherwise requires, the use of any gender herein shall be deemed to be  or include  the other genders, the use of the singular shall be deemed to include the plural (and vice versa) and the word  “or”  is used in the inclusive sense commonly associated with the term “ and/or”.  The words “include”,  “includes” and  “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.”   Unless the context requires otherwise, (a)  any definition of or  reference to any agreement , instrument or  other document herein  shall be construed as referring to such agreement , instrument or  other document as from time to time amended, supplemented or  otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein ), (b)  any reference herein  to any Person  shall be construed to include  the Person’ s successors and assigns, (c) the words  “herein”, “herewith”,  “hereof” and  “hereunder”, and words of similar import, shall, unless otherwise stated,  be construed to refer to this Agreement  in its entirety and not to any particular provision hereof  and (d) all references to “Section” and “Schedule”, unless otherwise specified, are intended to refer to a Section or Schedule of or to this Agreement.	
[Signatures on next page]
 
-30-

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IN WITNESS WHEREOF, the Parties intending to be bound have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.
 
Biogen Idec MA Inc.	 	bluebird bio, Inc.	
By:	/s/ Steven Holtzmann	 	By:	/s/ Jason F. Cole	
 	Name: Steven Holtzmann	 	 	Name:  Jason F. Cole	
 	Title:    EVP, Corporate Development	 	 	Title:  SVP, General Counsel	

Signature Page to License Agreement

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SCHEDULE A
COM IP
[***]

A-1

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SCHEDULE B
MOT IP
[***]
 
B-1

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Exhibit 10.18
THE National Institutes of Health
PATENT LICENSE AGREEMENT – EXCLUSIVE
COVER PAGE
For the NIH internal use only:
License Number: L-224-2015/0
License Application Number:   A-107-2014
Serial Number(s) of Licensed Patent(s) or Patent Application(s):
[***]
Licensee:    bluebird bio, Inc.
Cooperative Research and Development Agreement (CRADA) Number (if a subject invention):   n/a
Additional Remarks:   none
Public Benefit(s):
Autologous cell therapy has shown the potential to result in a significant and durable clinical benefit to patients with advanced tumors; the newest iteration of this approach uses engineered chimeric antigen receptors (CAR) to activate T cell response to the tumor. B cell maturation antigen (BCMA) is an attractive target for application of CAR technology due to its expression in different tumor types (especially hematological cancers) and lack of expression in non-transformed tissues; therefore, development of BCMA CAR products by the  Licensee , in partnership with the  NIH , has the potential to generate new, efficacious, and safe therapies for patients that have not responded to all other therapies.
This Patent License Agreement, hereinafter referred to as the “Agreement”, consists of this Cover Page, an attached  Agreement , a Signature Page, Appendix A (List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D (Benchmarks and Performance), Appendix E (Commercial Development Plan), Appendix F (Example Royalty Report), and Appendix G (Royalty Payment Options).  The Parties to this  Agreement  are:
 	1)	The National Institutes of Health (“NIH”), an agency within the Department of Health and Human Services (“ HHS ”); and	 	

 	2)	The person, corporation, or institution identified above or on the Signature Page, having offices at the address indicated on the Signature Page, hereinafter referred to as the “ Licensee ”.	 	
A-107-2014
CONFIDENTIAL
NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
The NIH and the Licensee agree as follows:
1.	BACKGROUND	

 	1.1	In the course of conducting biomedical and behavioral research, the NIH or the FDA investigators made inventions that may have commercial applicability.	

 	1.2	By assignment of rights from NIH or FDA employees and other inventors, HHS, on behalf of the Government , owns intellectual property rights claimed in any United States or foreign patent applications or patents corresponding to the assigned inventions.   HHS  also owns any tangible embodiments of these inventions actually reduced to practice by the  NIH  or the  FDA .	

 	1.3	The Secretary of HHS has delegated to the NIH the authority to enter into this Agreement for the licensing of rights to these inventions.	

 	1.4	The NIH desires to transfer these inventions to the private sector through commercialization licenses to facilitate the commercial development of products and processes for public use and benefit.	

 	1.5	The Licensee desires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, or marketable products for public use and benefit.	

2.	DEFINITIONS	

 	2.1	“Affiliate(s)” means a corporation or other business entity, which directly or indirectly is controlled by or controls, or is under common control with the  Licensee .  For this purpose, the term "control" shall mean ownership of more than fifty percent (50%) of the voting stock or other ownership interest of the corporation or other business entity, or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other business entity.	

 	2.2	“Benchmarks” mean the performance milestones that are set forth in Appendix D.	

 	2.3	“Combination Product” means a product that contains a Licensed Product(s) and at least one other active therapeutic component or device other than a  Licensed Product(s)  that is not claimed or covered by the  Licensed Patent Rights .	

 	2.4	“Commercial Development Plan” means the written commercialization plan attached as Appendix E.	

 	2.5	“CRADA” means a Cooperative Research and Development Agreement.	

 	2.6	“FDA” means the Food and Drug Administration.	

 	2.7	“First Commercial Sale” means the initial transfer by or on behalf of the Licensee, its A ffiliates  or sublicensees of the  Licensed Products  or the initial practice of a  Licensed Process  by or on behalf of the  Licensee , its  Affiliates , or sublicensees in a country or other jurisdiction, in each case, after all applicable marketing and pricing approvals (if any) have been granted by the	
A-107-2014
CONFIDENTIAL
NIH Patent License Agreement--Exclusive  

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 	 	applicable governing regulatory authority in such country or other jurisdiction, in exchange for cash or some equivalent consideration to which value can be assigned for the purpose of determining  Net Sales . 	

 	2.8	“Government” means the Government of the United States of America.	

 	2.9	“Licensed Fields of Use” means the fields of use identified in Appendix B	

 	2.10	“Licensed Patent Rights” shall mean, subject to Paragraph 6.6:	

 	(a)	Patent applications (including provisional patent applications and PCT patent applications) or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from these applications, divisions, and continuations, and any reissues, reexaminations, and extensions of these patents;	 	

 	(b)	to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.10(a):	 	

 	(i)	continuations‑in‑part of 2.10(a);	 	

 	(ii)	all divisions and continuations of these continuations‑in‑part;	 	

 	(iii)	all patents issuing from these continuations‑in‑part, divisions, and continuations;	 	

 	(iv)	priority patent application(s) of 2.10(a); and	 	

 	(v)	any reissues, reexaminations, and extensions of these patents;	 	

 	(c)	to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.10(a): all counterpart foreign and U.S. patent applications and patents to2.10(a) and 2.10(b), including those listed in Appendix A; and	 	

 	(d)	Licensed Patent Rights shall not include claims included in patents or applications identified in 2.10(b) or 2.10(c) to the extent that such claims are directed to new matter which is not the subject matter disclosed in 2.10(a).	 	

 	2.11	“Licensed Processes” means processes which, in the course of being practiced, would be within the scope of one or more claims of the  Licensed Patent Rights .	

 	2.12	“Licensed Products” means tangible materials which, in the course of manufacture, use, sale, or importation, would be within the scope of one or more claims of the  Licensed Patent Rights .	

 	2.13	“Licensed Territory” means the geographical area identified in Appendix B.	

 	2.14	(a)“Net Sales” means [***]	
A-107-2014
CONFIDENTIAL
NIH Patent License Agreement--Exclusive  

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 	2.15	“Practical Application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and in each case, under these conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law or  Government  regulations available to the public on reasonable terms. 	

 	2.16	“Research License” means a nontransferable, nonexclusive license to make and to use the Licensed Products  or the  Licensed Processes  as defined by the  Licensed Patent Rights  for purposes of research and not for purposes of commercial manufacture, sale, or distribution in lieu of purchase.	

 	2.17	[***].	

 	2.18	“Licensee’s Development Partner” means Celgene Corporation, which was identified in Licensee’s  commercial development plan included with its license application as  Licensee’s partner for developing and commercializing the  Licensed Patent Rights .	

 	2.19	“Notice” means a legal notification by Licensee to NIH that is delivered in a written format to NIH’s  official mailing address for  Agreement  notices and reports.	

 	2.20	“Collaboration and Option Agreement” means the amended and restated master collaboration agreement between  Licensee  and  Licensee’s Development Partner , dated as of June 3, 2015, focused on anti-BCMA product candidates, and as may be amended from time to time.	

3.	GRANT OF RIGHTS	

 	3.1	The NIH hereby grants and the Licensee accepts, subject to the terms and conditions of this Agreement, an exclusive license under the  Licensed Patent Rights  in the  Licensed Territory  to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import any  Licensed Products  in the  Licensed Field of Use I  and to practice and have practiced any  Licensed Process(es)  in the  Licensed Field of Use I .	

 	3.2	The NIH hereby grants and the Licensee accepts, subject to the terms and conditions of this Agreement, a non-exclusive license under the  Licensed Patent Rights  in the  Licensed Territory  to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import any  Licensed Products  in the Licensed Field of Use II  and to practice and have practiced any  Licensed Process(es)  in the  Licensed Field of Use II . [***]  	

 	3.3	This Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of the  NIH  other than the  Licensed Patent Rights  regardless of whether these patents are dominant or subordinate to the  Licensed Patent Rights .	
A-107-2014
CONFIDENTIAL
NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
4.	SUBLICENSING 	

 	4.1	Upon written approval, which shall include prior review of any sublicense agreement by the NIH and which shall not be unreasonably withheld, the  Licensee  may enter into sublicensing agreements under the  Licensed Patent Rights .  With respect to any proposed sublicense agreement, if the  NIH  does not provide the  Licensee with a written objection thereof within [***] after the date the  NIH  receives  Notice  of  Licensee’s  intent to sublicense and a copy of the proposed sublicense from the  Licensee , the  NIH  shall be deemed to have given its approval of such sublicense agreement and the  Licensee  shall have the right to enter into such sublicense agreement.  	
The NIH hereby provides written approval for the Collaboration and Option Agreement with the following stipulations:  
[***]
 	4.2	The Licensee agrees that any sublicenses granted by it shall provide that the obligations to the NIH of Paragraphs 5.1-5.4, 8.1, 10.1, 10.2, 12.5, 13.6-13.8 of this  Agreement  shall be explicitly binding to sublicensee as if it were a party to this  Agreement .  	

 	4.3	Any sublicenses granted by the Licensee shall provide for the termination of the sublicense, or the conversion to a license directly between the sublicensees and the  NIH , at the option of the sublicensee, upon termination of this  Agreement  under Article 13.  This conversion is subject to the  NIH  approval, which will not be unreasonably withheld, and contingent upon acceptance by the sublicensee of the remaining provisions of this Agreement .  	

 	4.4	The Licensee agrees to forward to the NIH a complete copy of each fully executed sublicense agreement postmarked within [***] of the execution of the agreement.  To the extent permitted by law, the  NIH  agrees to maintain each sublicense agreement in confidence.	

5.	STATUTORY AND NIH REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS	

 	5.1	(a)the NIH reserves on behalf of the Government an irrevocable, non-exclusive, non-transferable, royalty‑free license for the practice of all inventions licensed under the  Licensed Patent Rights  throughout the world by or on behalf of the  Government  and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the  Government  is a signatory; and	 	

 	(b)	in the event that the Licensed Patent Rights are Subject Inventions made under CRADA, the  Licensee  grants to the  Government , to the extent set forth in  15 U.S.C. §3710a(b)(1)(A) , a non-exclusive, non-transferable, irrevocable, paid‑up license to practice the  Licensed Patent Rights  or have the  Licensed Patent Rights practiced throughout the world by or on behalf of the  Government .  In the exercise of this license, the  Government  shall not publicly disclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of  5 U.S.C. §552(b)(4)  or which would be considered as such if it had been obtained from a non‑Federal party.  	 	
A-107-2014
CONFIDENTIAL
NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	5.2	The Licensee agrees that products used or sold in the United States embodying the Licensed Products or produced through use of the  Licensed Processes  shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from the  NIH , which written waiver will not be unreasonably withheld or denied. 	

 	5.3	The Licensee acknowledges that the NIH may enter into future CRADAs under the Federal Technology Transfer Act of 1986  that relate to the subject matter of this  Agreement .  The  Licensee  agrees not to unreasonably deny requests for a  Research License  from future collaborators with the  NIH  when acquiring these rights is necessary in order to make a  CRADA  project feasible.  The  Licensee  may request an opportunity to join as a party to the proposed  CRADA .	

 	5.4	(a)in addition to the reserved license of Paragraph 5.1, the NIH reserves the right to grant Research Licenses directly or to require the  Licensee  to grant  Research Licenses  on reasonable terms.  The purpose of these Research Licenses  is to encourage basic research, whether conducted at an academic or corporate facility.  In order to safeguard the  Licensed Patent Rights , however, the  NIH  shall consult with the  Licensee  before granting to commercial entities a  Research License  or providing to them research samples of materials made through the  Licensed Processes ; and	

 	(b)	in exceptional circumstances, and in the event that the Licensed Patent Rights are Subject Inventions made under a  CRADA , the  Government , to the extent set forth in  15 U.S.C. §3710a(b)(1)(B) , retains the right to require the  Licensee  to grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive sublicense to use the  Licensed Patent Rights  in the  Licensed Field of Use  on terms that are reasonable under the circumstances, or if the  Licensee  fails to grant this license, the  Government  retains the right to grant the license itself.  The exercise of these rights by the  Government  shall only be in exceptional circumstances and only if the  Government  determines:	 	

 	(i)	the action is necessary to meet health or safety needs that are not reasonably satisfied by the  Licensee ;	 	

 	(ii)	the action is necessary to meet requirements for public use specified by Federal regulations, and these requirements are not reasonably satisfied by the  Licensee ; or	 	

 	(iii)	the Licensee has failed to comply with an agreement containing provisions described in  15 U.S.C. §3710a(c)(4)(B) ; and	 	

 	(c)	the determination made by the Government under this Paragraph 5.4 is subject to administrative appeal and judicial review under  35 U.S.C. §203(b).	 	

 	(d)	The NIH acknowledges and agrees that a Research License or other right granted pursuant to this Paragraph 5.4 shall only pertain to the  Licensed Patent Rights  and shall not include a right or license to any patent or other intellectual property right solely owned or solely controlled by the  Licensee  or its  Affiliates	 	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	other than the Licensed Patent Rights. Without limiting the foregoing, except as expressly provided herein, nothing contained in this  Agreement  shall be construed as granting, by implication, estoppel or otherwise, any licenses or rights under any patents or other intellectual property rights other than the  Licensed Patent Rights . 	 	

 	5.5	Notwithstanding anything to the contrary set forth in this Agreement, the NIH shall not grant to any third party any rights under the  Licensed Patent Rights  within the  Licensed Field of Use I  and shall not provide any  Licensed Products  or materials made through the  Licensed Processes  to any third party for any commercial purpose within the  Licensed Field of Use I .	

6.	ROYALTIES AND REIMBURSEMENT	

 	6.1	The Licensee agrees to pay the NIH a non-creditable, non-refundable license issue royalty as set forth in Appendix C.	

 	6.2	The Licensee agrees to pay the NIH a non-refundable, fully creditable (against earned royalties due for sales made in that specific year under Paragraph 6.3 below) minimum annual royalty as set forth in Appendix C.	

 	6.3	The Licensee agrees to pay the NIH earned royalties as set forth in Appendix C.	

 	6.4	The Licensee agrees to pay the NIH benchmark royalties as set forth in Appendix C.	

 	6.5	The Licensee agrees to pay the NIH sublicensing royalties as set forth in Appendix C.	

 	6.6	A patent or patent application, in any given country or other jurisdiction, licensed under this Agreement shall cease to fall within the  Licensed Patent Rights  for the purpose of computing earned royalty payments on the earliest of the dates that, in such country or other jurisdiction:	

 	(a)	the application has lapsed or been rejected, revoked or abandoned and not continued;	 	

 	(b)	the patent expires or irrevocably lapses, or	 	

 	(c)	the patent has been held to be revoked, invalid or unenforceable by an unappealed or unappealable decision of a court of competent jurisdiction or administrative agency.	 	

 	(d)	one or more claims have been pending before the United States Patent and Trademark Office for more than [***] as of the date of  Licensee’s  signature found at the Signature Page of this  Agreement , except that such [***] period shall be extended by a period equal to the time the examination of the claim(s) has been interrupted by (i) a derivation proceeding under 35 U.S.C. Section 135 or (ii) the claim(s) are the subject of an appeal filed by the  NIH  of a decision of an patent examiner pursuant to 37 C.F.R Part 1; provided, however, that if the claim(s) issue in a form substantially similar to the form in which they were originally filed, the claim(s) shall be deemed to fall within the scope of the  Licensed Patent Rights  on which royalties on  Net Sales  are due.	 	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	6.7	No multiple royalties shall be payable because any Licensed Products or Licensed Processes are covered by more than one of the  Licensed Patent Rights . 	

 	6.8	On sales of the Licensed Products by the Licensee to its Affiliates or sublicensees or on sales made in other than an arms‑length transaction, the value of the  Net Sales  attributed under this Article 6 to this transaction shall be that which would have been received in an arms‑length transaction, based on sales of like quantity and quality products on or about the time of this transaction.	

 	6.9	With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the  Licensed Patent Rights  and paid by the  NIH  prior to the effective date of this  Agreement , an amount equal to [***], the  Licensee  shall pay the  NIH , as an additional royalty, within sixty (60) days of the  NIH’s  submission of a statement and request for payment to the  Licensee  an amount equivalent to these unreimbursed expenses previously paid by the  NIH , or a  pro rata  share thereof if there are multiple commercial licensees of the  Licensed Patent Rights  prior to the end of the sixty (60) day period for such payment by  Licensee .	

 	6.10	With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the  Licensed Patent Rights  and paid by the  NIH  on or after the effective date of this  Agreement  and during the term of this  Agreement , the  NIH , at its sole option, may require the  Licensee :	
[***]
 	6.11	The NIH agrees, upon written request, to provide the Licensee with summaries of patent prosecution invoices for which the  NIH  has requested payment from the  Licensee  under Paragraphs 6.9 and 6.10.  The  Licensee agrees that all information provided by the  NIH  related to patent prosecution costs shall be treated as confidential commercial information and shall not be released to a third party except as required by law or a court of competent jurisdiction.	

 	6.12	The Licensee may elect to surrender its rights in any country of the Licensed Territory under any of the Licensed Patent Rights  upon thirty (30) days written notice to the  NIH  and owe no payment obligation under Paragraph 6.10 for patent-related expenses paid in that country after thirty (30) days of the effective date of the written notice.	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
7.	PATENT FILING, PROSECUTION, AND MAINTENANCE 	

 	7.1	Except as otherwise provided in this Article 7, the NIH agrees to take responsibility for the Licensee in the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights  and shall, on an ongoing basis, promptly furnish copies of all relevant patent‑related documents to the  Licensee .   NIH  shall instruct the law firm prosecuting the  Licensed Patent Rights  to furnish, upon execution of this  Agreement  and on a continuous basis thereafter as long as the  Agreement  is in effect, copies of relevant patent-related documents to  Licensee , including all drafts of patent applications filings, domestic and foreign, amendments thereto, related correspondence and other related documents, sufficiently in advance to allow  Licensee  to comment thereon prior to filing or submission.   NIH shall, in good faith, take into consideration all reasonable comments provided by  Licensee  relating to the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights , provided however, that if  Licensee  has not commented prior to the relevant action deadline,  NIH  shall be free to act without consideration of  Licensee's  comments.  	

 	7.2	Upon the NIH’s written request or upon any determination by the NIH not to proceed or continue with the preparation, filing, prosecution, or maintenance (or combination thereof) of any patent application or patent included in the  Licensed Patent Rights , the  NIH  shall provide the  Licensee  with written notice of such determination at least sixty (60) days prior to the deadline for taking any action for such patent application or patent or the date on which the abandonment of any such patent or application would become effective, whichever is earlier, and the  Licensee  shall have the right but not the obligation to assume the responsibility for the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the  Licensed Patent Rights  and shall, on an ongoing basis, promptly furnish copies of all relevant patent‑related documents to the  NIH .  In this event, the  Licensee  shall select registered patent attorneys or patent agents to provide these services on behalf of the  Licensee  and the  NIH . The  NIH  shall provide appropriate powers of attorney and other documents necessary to undertake this action to the patent attorneys or patent agents providing these services. The  Licensee  and its attorneys or agents shall consult with the  NIH in all aspects of the preparation, filing, prosecution and maintenance of patent applications and patents included within the  Licensed Patent Rights  and shall provide the  NIH  sufficient opportunity to comment on any document that the  Licensee  intends to file or to cause to be filed with the relevant intellectual property or patent office. If  Licensee  notifies  NIH  that  Licensee  does not intend to pursue or pay (or both) the costs of an application, then  NIH  may file such application at its own expense and  Licensee's  rights derived from this Agreement  to that application will terminate.	

 	7.3	NIH may provide Licensee with written notice that NIH wishes to reassume control of the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the  Licensed Patent Rights  only if  NIH  determines that the  Licensee :	

 	(a)	is not executing the Commercial Development Plan submitted with Licensee’s request for a license and the  Licensee  cannot otherwise demonstrate to  NIH's  satisfaction that the  Licensee  has taken, or can be expected to take within a reasonable time, effective steps to achieve  Practical Application  of the  Licensed Products  or  Licensed Processes ;	 	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	(b)	has not achieved the Benchmarks as may be modified under Paragraph 9.2; or 	 	

 	(c)	is not fulfilling its obligations regarding diligent preparation, filing, prosecutions, and maintenance of any and all patent applications or patents included in the  Licensed Patent Rights .	 	

 	7.4	In making the determination referenced in Paragraph 7.3, NIH shall take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by  Licensee  under Paragraph 9.2. Prior to resuming control under Paragraph 7.3,  NIH  shall give written notice to  Licensee  providing  Licensee  specific notice of, and a [***] opportunity to respond to,  NIH’s  concerns as to the items referenced in 7.3(a)-7.3(c). If  Licensee  fails to initiate corrective action to  NIH’s  satisfaction,  NIH  may reassume control of the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the  Licensed Patent Rights .	

 	7.5	Each party shall promptly inform the other as to all matters that come to its attention that may affect the preparation, filing, prosecution, or maintenance of the  Licensed Patent Rights  and permit each other to provide comments and suggestions with respect to the preparation, filing, prosecution, and maintenance of the Licensed Patent Rights , which comments and suggestions shall be considered by the other party.	

8.	RECORD KEEPING	

 	8.1	The Licensee agrees to keep accurate and correct records of the Licensed Products made, used, sold, or imported and the  Licensed Processes  practiced under this  Agreement  appropriate to determine the amount of royalties due the  NIH .  These records shall be retained for at least five (5) years following a given reporting period and shall be available during normal business hours, but not more than once per year, for inspection, at the expense of the  NIH , by an accountant or other designated auditor selected by the  NIH  for the sole purpose of verifying reports and royalty payments hereunder.  The accountant or auditor shall only have the right to audit those records that have not previously been audited pursuant to this Paragraph 8.1, unless the  NIH determines that there is just cause for an additional audit, and shall only disclose to the  NIH  information relating to the accuracy of reports and royalty payments made under this  Agreement .  If an inspection shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then the Licensee  shall reimburse the  NIH  for the cost of the inspection at the time the  Licensee  pays the unreported royalties, including any additional royalties as required by Paragraph 9.8.  All royalty payments required under this Paragraph shall be due within sixty (60) days of the date the  NIH  provides to the  Licensee  notice of the payment due.  The  Licensee  shall have the right to require that any accountant or auditor, prior to conducting an audit under this Paragraph 8.1, enter into an appropriate non-disclosure agreement with the  Licensee regarding such financial information.	

9.	REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS	

 	9.1	Prior to signing this Agreement, the Licensee has provided the NIH with the Commercial Development Plan in Appendix E, under which the  Licensee  intends to bring the subject matter of the  Licensed Patent Rights  to the point of  Practical Application .  This  Commercial	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	Development Plan is hereby incorporated by reference into this Agreement.  Based on this plan, performance Benchmarks  are determined as specified in Appendix D. 	

 	9.2	[***]  	

 	9.3	The Licensee shall report to the NIH the dates for achieving Benchmarks specified in Appendix D and the First Commercial Sale  in each country in the  Licensed Territory  within [***] of such occurrences.	

 	9.4	Following First Commercial Sale, the Licensee shall submit to the NIH, within [***] after each calendar half‑year ending June 30 and December 31, a royalty report, as described in the example in Appendix F, setting forth for the preceding half‑year period the amount of the  Licensed Products  sold or  Licensed Processes  practiced by or on behalf of the  Licensee  in each country within the  Licensed Territory , the  Net Sales , and the amount of royalty accordingly due.  With each royalty report, the  Licensee  shall submit payment of earned royalties due.  If no earned royalties are due to the  NIH  for any reporting period, the written report shall so state.  The royalty report shall be certified as correct by an authorized officer of the  Licensee [***].  The royalty report shall also identify the site of manufacture for the  Licensed Product(s)  sold in the United States.	

 	9.5	The Licensee agrees to forward semi‑annually to the NIH a copy of these reports received by the Licensee  from its sublicensees during the preceding half‑year period as shall be pertinent to a royalty accounting to the  NIH  by the  Licensee  for activities under the sublicense.	

 	9.6	Royalties due under Article 6 shall be paid in U.S. dollars and payment options are listed in Appendix G.  [***]  The royalty report required by Paragraph 9.4 shall be mailed to the  NIH  at its address for Agreement  Notices indicated on the Signature Page.	

 	9.7	[***]	

 	9.8	[***]	

 	9.9	All plans and reports required by this Article 9 and marked “confidential” by the Licensee shall, to the extent permitted by law, be treated by the  NIH  as commercial and financial information obtained from a person and as privileged and confidential, and any proposed disclosure of these records by the  NIH  under the Freedom of Information Act (FOIA),  5 U.S.C. §552  shall be subject to the predisclosure notification requirements of  45 C.F.R. §5.65(d).	

10.	PERFORMANCE	

 	10.1	The Licensee shall use its reasonable commercial efforts to bring the Licensed Products and the Licensed Processes  to  Practical Application .  “Reasonable commercial efforts” for the purposes of this provision shall include reasonable efforts to adhere to the  Commercial Development Plan  in Appendix E and performance of the  Benchmarks  in Appendix D.  The efforts of a sublicensee shall be considered the efforts of the  Licensee .	

 	10.2	Upon the First Commercial Sale, until the expiration or termination of this Agreement, the Licensee  shall use its reasonable commercial efforts to make the  Licensed Products  and the	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	 	Licensed Processes reasonably accessible to the United States public.  The efforts of a sublicensee shall be considered the efforts of the  Licensee . 	

 	10.3	The Licensee agrees that, to the extent commercially reasonable or possible, after its First Commercial Sale, to make reasonable quantities of the  Licensed Products  or materials produced through the use of the  Licensed Processes  available to patient assistance programs.	

 	10.4	The Licensee agrees, after its First Commercial Sale and as part of its marketing and product promotion, to develop educational materials (e.g., brochures, website, etc.) directed to patients and physicians reasonably detailing the  Licensed Products  or medical aspects of the prophylactic and therapeutic uses of the  Licensed Products .	

 	10.5	The Licensee agrees to supply to NIH, to the Mailing Address for Agreement Notices indicated on the Signature Page, the Office of Technology Transfer, samples of of the marketing brochures for the  Licensed Products  or the  Licensed Processes  for educational and display purposes only.	

11.	INFRINGEMENT AND PATENT ENFORCEMENT	

 	11.1	The NIH and the Licensee agree to notify each other promptly of each infringement or possible infringement of the  Licensed Patent Rights , as well as, any facts which may affect the validity, scope, or enforceability of the  Licensed Patent Rights  of which either party becomes aware.	
[***]
12.	NEGATION OF WARRANTIES AND INDEMNIFICATION	

 	12.1	The NIH offers no other warranties than those specified in Article 1: (i) HHS, by assignment of rights from NIH  employees, on behalf of the  Government , owns all intellectual property rights claimed in the United States and foreign patent applications and patents in the  Licensed Patent Rights , (ii)  HHS  owns tangible embodiments of inventions actually reduced to practice, and (iii)  NIH  has the authority, by delegation from the Secretary of  HHS , to enter into this  Agreement .	

 	12.2	The NIH does not warrant the validity of the Licensed Patent Rights and makes no representations whatsoever with regard to the scope of the  Licensed Patent Rights , or that the  Licensed Patent Rights  may be exploited without infringing other patents or other intellectual property rights of third parties.	

 	12.3	THE NIH MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT RIGHTS  OR TANGIBLE MATERIALS RELATED THERETO.	

 	12.4	The NIH does not represent that it shall commence legal actions against third parties infringing the Licensed Patent Rights .	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	12.5	The Licensee shall indemnify and hold the NIH, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage to the extent arising out of any suit or proceeding brought by a third party for: 	

 	(a)	the use by or on behalf of the Licensee, its sublicensees, their respective directors or employees, or third parties acting by the direction of  Licensee  of any  Licensed Patent Rights ; or	 	

 	(b)	the design, manufacture, distribution, or use of any Licensed Products, Licensed Processes  or other materials, products or processes developed by or on behalf of the Licensee  or its sublicensees in connection with or arising out of the  Licensed Patent Rights .	 	

 	12.6	Licensee shall have no obligation to indemnify hereunder with respect to any liability, demands, damages, expenses, and losses to the extent arising out of any negligence or willful misconduct of the  NIH  or its employees, students, fellows, agents or consultants, or any breach by the  NIH  of the warranty set forth in Section 12.1 above.	

 	12.7	The Licensee agrees to maintain a liability insurance program consistent with sound business practice.	

13.	TERM, TERMINATION, AND MODIFICATION OF RIGHTS	

 	13.1	This Agreement is effective when signed by all parties, unless the provisions of Paragraph 14.16 are not fulfilled, and shall extend to the expiration of the last to expire of the  Licensed Patent Rights  unless sooner terminated as provided in this Article 13.	

 	13.2	In the event that the Licensee is in default in the performance of any material obligations under this Agreement , including but not limited to the obligations listed in Paragraph 13.5, and if the default has not been remedied within [***] after the date of notice in writing of the default, the  NIH  may terminate this Agreement  by written notice and pursue outstanding royalties owed through procedures provided by the Federal Debt Collection Act .	

 	13.3	In the event that the Licensee becomes insolvent, files a petition in bankruptcy, has such a petition filed against it, or receives notice of a third party's intention to file an involuntary petition in bankruptcy, the Licensee  shall immediately notify the  NIH  in writing.	

 	13.4	The Licensee shall have a unilateral right to terminate this Agreement or any licenses in any Licensed Fields of Use  in any country or territory by giving the  NIH  [***] written notice to that effect.	
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CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	13.5	The NIH shall specifically have the right to terminate or modify, at its option, this Agreement by written notice to the  Licensee , if the  NIH  reasonably determines that the  Licensee : 	

 	(a)	is not executing the Commercial Development Plan submitted with its request for a license and the  Licensee  cannot otherwise demonstrate to the  NIH’s  satisfaction that the  Licensee  has taken, or can be expected to take within a reasonable time, effective steps to achieve the  Practical Application  of the  Licensed Products  or the  Licensed Processes ;	 	

 	(b)	has not achieved the Benchmarks as may be modified under Paragraph 9.2;	 	

 	(c)	has willfully made a false statement of, or willfully omitted a material fact in the license application or in any report required by this  Agreement ;	 	

 	(d)	has committed a material breach of a covenant or agreement contained in this Agreement that has not been remedied within the [***] period set forth in Paragraph 13.2 above;	 	

 	(e)	is not keeping the Licensed Products or the Licensed Processes reasonably available to the public after commercial use commences;	 	

 	(f)	cannot reasonably satisfy unmet health and safety needs;	 	

 	(g)	cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.2 unless waived.	 	

 	13.6	In making the determination referenced in Paragraph 13.5, the NIH shall take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by the  Licensee  under Paragraph 9.2.  Prior to invoking termination or modification of this  Agreement  under Paragraph 13.5, the  NIH  shall give written notice to the  Licensee providing the  Licensee  specific notice of, and a [***] opportunity to respond to, the  NIH’s  concerns as to the items referenced in 13.5(a)-13.5(g).  If the  Licensee  fails to alleviate the  NIH’s  concerns as to the items referenced in 13.5(a)-13.5(g) or within [***] following written notice from the  NIH  or otherwise fails to initiate corrective action to the  NIH’s  satisfaction, the  NIH  may terminate this  Agreement  upon written notice to the  Licensee .	

 	13.7	When the public health and safety so require, and after written notice to the Licensee providing the Licensee a [***] opportunity to respond, the  NIH  shall have the right to require the  Licensee  to grant sublicenses to responsible applicants, on reasonable terms, in any  Licensed Fields of Use  under the  Licensed Patent Rights , unless the  Licensee  can reasonably demonstrate that the granting of the sublicense would not materially increase the availability to the public of the subject matter of the  Licensed Patent Rights .  The  NIH  shall not require the granting of a sublicense unless the responsible applicant has first negotiated in good faith with the Licensee .	
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NIH Patent License Agreement--Exclusive  

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 	13.8	The NIH reserves the right according to 35 U.S.C. §209(d)(3) to terminate or modify this Agreement upon written notice to the  Licensee  if it is determined that this action is necessary to meet the requirements for public use specified by federal regulations issued after the date of the license and these requirements are not reasonably satisfied by the  Licensee  within [***] following written notice from the  NIH . 	

 	13.9	Within [***] of receipt of written notice of the NIH's unilateral decision to modify or terminate this Agreement , the  Licensee  may, consistent with the provisions of  37 C.F.R.  § 404.11 , appeal the decision by written submission to the designated  NIH  official. The decision of the designated  NIH  official shall be the final agency decision.  The  Licensee  may thereafter exercise any and all administrative or judicial remedies that may be available.	

 	13.10	Within [***] of expiration or termination of this Agreement under this Article 13, a final report shall be submitted by the  Licensee .  Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expenses, due to the  NIH  shall become immediately due and payable upon termination or expiration.  If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with the  NIH  pursuant to Paragraph 4.3.  Unless otherwise specifically provided for under this  Agreement , upon termination or expiration of this  Agreement , the Licensee  shall have the right to offer for sale and sell any existing inventory of  Licensed Products  for a period of [***] following the effective termination date of this  Agreement , subject to the royalty obligations as set forth in Appendix C.  The  Licensee  may not be granted additional  NIH  licenses if the final reporting requirement is not fulfilled.	

14.	GENERAL PROVISIONS	

 	14.1	Neither party may waive or release any of its rights or interests in this Agreement except in writing.  The failure of a party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement  shall not constitute a waiver of that right by that party or excuse a similar subsequent failure to perform any of these terms or conditions by the other party.	

 	14.2	This Agreement constitutes the entire agreement between the parties relating to the subject matter of the Licensed Patent Rights , the  Licensed Products  and the  Licensed Processes , and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by this  Agreement .	

 	14.3	The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, this determination shall not in any way affect the validity or enforceability of the remaining provisions of this  Agreement .	

 	14.4	If either party desires a modification to this Agreement, the parties shall, upon reasonable notice of the proposed modification by the party desiring the change, confer in good faith to determine the desirability of the modification.  No modification shall be effective until a written amendment is signed by the signatories to this Agreement  or their designees.	

 	14.5	The construction, validity, performance, and effect of this Agreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia.	
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 	14.6	All Agreement notices required or permitted by this Agreement shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other party at the address designated on the following Signature Page, or to another address as may be designated in writing by the other party.  Agreement  notices shall be considered timely if the notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier.  Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service.  Private metered postmarks shall not be acceptable as proof of timely mailing. 	
[***]
 	14.7	The Licensee agrees in its use of any NIH‑supplied materials to comply with all applicable statutes, regulations, and guidelines, including  NIH  and  HHS  regulations and guidelines.  The  Licensee  agrees not to use the materials for research involving human subjects or clinical trials in the United States without complying with  21 C.F.R. Part 50  and  45 C.F.R. Part 46 .  The  Licensee  agrees not to use the materials for research involving human subjects or clinical trials outside of the United States without notifying the  NIH , in writing, of the research or trials and complying with the applicable regulations of the appropriate national control authorities.  Written notification to the  NIH  of research involving human subjects or clinical trials outside of the United States shall be given no later than [***] prior to commencement of the research or trials.	

 	14.8	The Licensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including the  Export Administration Act of 1979  and  Arms Export Control Act ) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities.  The transfer of these items may require a license from the appropriate agency of the U.S.  Government  or written assurances by the  Licensee  that it shall not export these items to certain foreign countries without prior approval of this agency.  The  NIH  neither represents that a license is or is not required or that, if required, it shall be issued.	

 	14.9	The Licensee agrees to mark the Licensed Products or their packaging or containers in accordance with the applicable patent marking laws.  	

 	14.10	By entering into this Agreement, the NIH does not directly or indirectly endorse any product or service provided, or to be provided, by the  Licensee  whether directly or indirectly related to this  Agreement .  The Licensee  shall not state or imply that this  Agreement  is an endorsement by the  Government , the  NIH , any other  Government  organizational unit, or any  Government  employee.  Additionally, the  Licensee  shall not use the names of the  NIH , the  FDA  or the  HHS  or the  Government  or their employees in any advertising, promotional, or sales literature in connection with this  Agreement  or the  Licensed Patent Rights  without the prior written approval of the  NIH .	

 	14.11	The parties agree to attempt to settle amicably any controversy or claim arising under this Agreement or a breach of this  Agreement , except for appeals of modifications or termination decisions provided for in Article 13.  The  Licensee  agrees first to appeal any unsettled claims or controversies to the designated  NIH  official, or designee, whose decision shall be considered the final agency decision.  Thereafter, the  Licensee  may exercise any administrative or judicial remedies that may be available.  Notwithstanding anything to the contrary in this Agreement , the	
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 	 	Licensee shall have the right, without waiving any right or remedy available under this Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of the  Licensee , pending any such settlement or the determination of any such appeal. 	

 	14.12	Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to  37 C.F.R. Part 404  shall not be immunized from the operation of state or Federal law by reason of the source of the grant.	

 	14.13	Any formal recordation of this Agreement required by the laws of any Licensed Territory as a prerequisite to enforceability of the  Agreement  in the courts of any foreign jurisdiction or for other reasons shall be carried out by the  Licensee  at its expense, and appropriately verified proof of recordation shall be promptly furnished to the  NIH .	

 	14.14	Paragraphs 4.3, 8.1, 9.5-9.9, 12.1-12.5, 13.9, 13.10, 14.11 and 14.14 of this Agreement shall survive termination of this  Agreement .	

 	14.15	The terms and conditions of this Agreement shall, at the NIH’s sole option, be considered by the NIH to be withdrawn from the  Licensee’s  consideration and the terms and conditions of this  Agreement , and the  Agreement  itself to be null and void, unless this  Agreement  is executed by the  Licensee  and a fully executed original is received by the  NIH  within sixty (60) days from the date of the  NIH’s  signature found at the Signature Page.	
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SIGNATURES BEGIN ON NEXT PAGE
NIH PATENT LICENSE AGREEMENT – EXCLUSIVE
SIGNATURE PAGE
 
For the NIH:	 	 	 	 	
 	 	 	 	 	
/s/ Richard U. Rodriguez	 	 	 	8/21/2015	
Richard U. Rodriguez	 	 	 	Date	
Director, Division of Technology Development and Transfer	 	 	 	 	
Office of Technology Transfer	 	 	 	 	
National Institutes of Health	 	 	 	 	
 
Mailing Address or E-mail Address for Agreement notices and reports:
Chief, Monitoring & Enforcement Branch
Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland  20852-3804 U.S.A.
E-mail: LicenseNotices_Reports@mail.nih.gov
For the Licensee (Upon, information and belief, the undersigned expressly certifies or affirms that the contents of any statements of the  Licensee  made or referred to in this document are truthful and accurate.):
by:

/s/ Jason F. Cole	 	 	 	8/31/2015	
Signature of Authorized Official	 	 	 	Date	
 	 	 	 	 	
Jason F. Cole	 	 	 	 	
Printed Name	 	 	 	 	
 	 	 	 	 	
SVP, General Counsel	 	 	 	 	
Title	 	 	 	 	
 
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 	I.	Official and Mailing Address for Agreement notices: 	
 
Jason Cole	 	 	 	 	 	 	
Name	 	 	 	 	 	 	
 	 	 	 	 	 	 	
SVP, General Counsel	 	 	 	 	 	 	
Title	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Mailing Address	 	 	 	 	 	 	
 	 	 	 	 	 	 	
bluebird bio, Inc.	 	 	 	 	 	 	
 	 	 	 	 	 	 	
150 Second Street, Third Floor	 	 	 	 	 	 	
Cambridge, MA 02141	 	 	 	 	 	 	
 
Email Address:	jcole@bluebirdbio.com	 	 	 	 	 	
 	 	 	 	 	 	 	
Phone:	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Fax:	 	 	 	 	 	 	
 
 	II.	Official and Mailing Address for Financial notices (the Licensee’s contact person for royalty payments)	
 
Amber Casares	 	 	 	 	 	 	 	
Name	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Title	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Mailing Address:	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Accounts Payable	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
bluebirdbio, Inc.	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
150 Second Street	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Cambridge, MA 02141	 	 	 	 	 	 	 	
 
Email Address:	 	invoices@bluebirdbio.com	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Phone:	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Fax:	 	 	 	 	 	 	 	
 
Any false or misleading statements made, presented, or submitted to the Government, including any relevant omissions, under this  Agreement  and during the course of negotiation of this  Agreement  are subject to all applicable civil and criminal statutes including Federal statutes  31 U.S.C. §§3801-3812  (civil liability) and  18 U.S.C. §1001  (criminal liability including fine(s) or imprisonment).
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APPENDIX A – Patent(s) or Patent Application(s)
Patent(s) or Patent Application(s):
[***]
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APPENDIX B – Licensed Fields of Use and Territory
 	I:	Licensed Field of Use I:	
Exclusivity to the Licensed Patent Rights to make and have made, to sell, to offer for sale, to import, and to use in humans, human autologous peripheral blood T-cells modified by recombinant human immunodeficiency virus (“HIV”)-based lentiviral vectors or murine leukemia virus (“MLV”)-based gamma-retroviral vectors to express chimeric antigen receptors that recognize B-cell Maturation Antigen (“BCMA”) for the treatment or prevention of cancer and autoimmune disease [***].
 	II:  	Licensed Field of Use II:	
[***]

I.	Licensed Territory:	 	Worldwide	 	
 
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APPENDIX C – Royalties
Royalties:
I.	The Licensee agrees to pay to the NIH a non-creditable, non-refundable license issue royalty in the amount of [***] within sixty (60) days from the effective date of this  Agreement.	

II.	The Licensee agrees to pay to the NIH a non-refundable minimum annual royalty as follows:	

 	[***].	

III.	(a)The Licensee agrees to pay the NIH [***] on Net Sales by or on behalf of the Licensee and its sublicensees, as follows:	

 	[***]	

IV.	The Licensee agrees to pay the NIH Benchmark royalties for certain preclinical, clinical and commercial milestones within sixty (60) days of achieving each milestone:	
[***]
V.	The Licensee agrees to pay the NIH the following sublicensing royalties for granting each sublicense within sixty (60) days of the execution of each sublicense:	
[***]
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APPENDIX D – Benchmarks and Performance
The Licensee agrees to the following Benchmarks for its performance under this Agreement and, within thirty (30) days of achieving a  Benchmark , shall notify the  NIH  that the  Benchmark  has been achieved.
[***]
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APPENDIX E – Commercial Development Plan
[***]
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Appendix F – Example Royalty Report
[***]
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Appendix G – Royalty Payment Options
The OTT License Number MUST appear on payments, reports and correspondence.
[***]
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Exhibit 10.25
AMENDMENT TO EMPLOYMENT AGREEMENT
This is an Amendment dated March 7, 2016 (the “Amendment”) to the Employment Agreement between bluebird bio, Inc., a Delaware corporation (the “Company”), and Jason F. Cole (the “Executive”) dated February 3, 2014 (the “Employment Agreement”).
WHEREAS, this Amendment reflects changes to the Executive’s terms of employment in light of his promotion to the position of Chief Legal Officer.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend the Employment Agreement as follows:
1.In Section 1(b) of the Employment Agreement, “Senior Vice President and General Counsel” is deleted and replaced with “Chief Legal Officer.”
2.In Section 2(a) of the Employment Agreement, “During the Term, the Executive’s initial annual base salary shall be $315,000” is deleted and replaced with “Effective January 1, 2016, the Executive’s annual base salary shall be $340,000.”
3.In Section 2(b) of the Employment Agreement, “The Executive’s target annual incentive compensation shall be thirty-five percent (35%) of his Base Salary” is deleted and replaced with “Effective January 1, 2016, the Executive’s target annual incentive compensation shall be forty percent (40%) of his Base Salary.”
4.In Section 4(b)(i) of the Employment Agreement, “0.75 times” is deleted and replaced with “one times”.
5.In Sections 4(b)(ii) and 4(b)(iii) of the Employment Agreement, “9 months” is deleted and replaced with “12 months”.
6.Section 5(a) of the Employment Agreement is deleted and replaced with:
(a)Change in Control.  During the Term, if within 12 months after a Change in Control, the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates his employment for Good Reason as provided in Section 3(e), then, subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination,
(i)the Company shall pay the Executive a lump sum in cash in an amount equal to one times the Executive’s current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in Control, if higher); and
(ii)notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all stock options and other stock-based

awards granted to the Executive after the date of this Agreement shall immediately accelerate and become fully exercisable or nonforfeitable as of the Date of Termination.  The treatment of stock options and other stock-based awards held by the Executive as of the date of this Agreement shall be governed by the terms of the applicable option agreement or other stock-based award agreement; and 
(iii)if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for 12 months or the Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; and
The amounts payable under this Section 5(a) shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.
7.In Section 5, “(b) Definitions” is deleted and replaced with “(c) Definitions” to correct an incorrect Section reference.  
8.For the avoidance of doubt, except as expressly modified by this Amendment, the remainder of Section 5 of the Employment Agreement, including its first paragraph (beginning with “The provisions of this Section 5”) and Section 5(b), remains in effect.
9.All other provisions of the Employment Agreement, including the Assignment of Invention, Nondisclosure and Noncompetition Agreement attached as Exhibit A thereto, are unaffected by this Amendment and shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.
 
BLUEBIRD BIO, INC.	
 	 	 	
By:	 	/s/ Nick Leschly	
 	 	Nick Leschly	
Its:	 	Chief Executive Officer	
 	 	 	
/s/ Jason F. Cole	
Jason F. Cole	

 
Exhibit 10.27
February 24, 2016
Via Hand Delivery - Personal and Confidential
Mr. James DeTore
Dear Jim,
This letter agreement (the “Agreement”) confirms that your employment with bluebird bio, Inc. (“bluebird” or the “Company”) will be terminating without Cause under Section 3(d) of your Employment Agreement with the Company dated October 20, 2014 (the “Employment Agreement”).  You agree that this Agreement is valid notice under Section 15 of your Employment Agreement.  This Agreement establishes an amicable arrangement under which you release the Company from any claims, and, in return, you receive severance pay and medical and dental continuation benefits as provided in Section 4(b) of the Employment Agreement.
Please excuse the formality of this letter, and do not hesitate to contact me with any questions after you have had a chance to review it.
1.Employment Status; Final Payments; Benefits Cessation:
(a)  Employment Status:  Your employment from the Company shall terminate no later than March 18, 2016 (the “Separation Date”).  Between now and the Separation Date (the “Transition Period”), you agree to perform your duties in a professional and satisfactory manner, to efficiently and effectively transition your working knowledge and any current projects as directed by your current management team, and to perform any other duties as the Company may request.  During the Transition Period, you will remain subject to the Company’s employment policies and requirements, and shall remain eligible for your current base salary and standard Company benefits. You also agree to resign from any offices or directorships you hold at the Company or its subsidiaries on or before the Separation Date.
Although the Company intends to employ you through the Transition Period, you will continue to be an at-will employee.  This means that either you or the Company may elect to end your employment with or without cause prior to the Separation Date.  If you are terminated for “Cause” (as defined in your Employment Agreement), resign without Good Reason (as defined in your Employment Agreement), or if your employment is terminated due to death or disability prior to the Separation Date, you will not be entitled to the payments and benefits set forth in Section 2.  
(b)  Final Wage and Other Payments (Non-Contingent):  As of the Separation Date (unless your employment is earlier terminated, in which case the earlier termination date shall apply), your salary shall cease and you shall no longer be entitled to the payment of a base salary, bonus or any other form of compensation, except as set forth in this Agreement.  On the Separation Date (or earlier termination date, if applicable), the Company shall pay to you all earned but unpaid base salary, your 2015 bonus payment (unless previously paid on March 18, 2016), and accrued but unused vacation up to and through your last day worked.  You also will receive any vested benefits you may have under any employee benefit plan of the Company through the Separation Date. You will receive the payments described in this Section 1(b) regardless of whether you execute this Agreement.  
(c)  Expense Reimbursement:  The Company will reimburse you for appropriately documented business expenses per Company policy that you have incurred up to the Separation Date (or earlier termination date, if applicable), provided that you submit all documentation of any such expenses within five days of the Separation Date (or earlier termination date, if applicable) and in accordance with applicable Company policy.  
(d) Benefits Cessation: As of the Separation Date (or earlier termination date, if applicable), any entitlement you have or might have under a Company-provided benefit plan, program or practice shall terminate, except as required by law or as otherwise described below.  Your rights to benefits, if any, are governed by the terms
1

 
of those benefit plans and programs.  The Separation Date (or earlier termination date, if applicable) shall be the date of the “qualifying event” under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  You may, upon timely completion of the required forms, continue your medical and dental insurance coverage to the extent permitted by COBRA.  You will receive information pertaining thereto under separate cover.
(e)  Stock Options:  The terms of your option grant (the “Outstanding Option”) are subject to a Stock Option Agreement (the “Option Agreements”) and the Company’s 2013 Stock Option and Incentive Plan (the “Stock Plan”) (the Option Agreement and Stock Plan constitute the “Equity Documents”).  The terms of the Outstanding Option, including the vested portion, shall continue to be governed by the terms of the Equity Documents.  Please consult the Equity Documents for further information.
2.Severance Benefits: Consistent with Section 4(b) of the Employment Agreement, in exchange for, and in consideration of, your executing, not revoking, and complying with this Agreement (and any other agreement with the Company that survives the termination of your employment), and provided this Agreement becomes effective no later than the 30 th  day after the Separation Date, the Company will provide you with the following after the Effective Date (defined in Section 11):
(a) Severance Payments:  The Company will pay to you an amount equal to twelve (12) months of your regular salary (at the monthly rate of $27,083.33 per month, or $12,500.00 when expressed on a bi-weekly basis) (the “Severance Period”).  These payments will commence on the first regularly scheduled payday following the 30 th  day after the Separation Date and shall continue thereafter in accordance with the Company’s regularly scheduled payroll cycle.  Please note that the first severance payment will include a “catch-up” amount that will include severance pay from the first day after the Separation Date until the first payment date.
(b) Payment of COBRA Premiums:  Provided you timely and properly have elected COBRA coverage in accordance with the Company’s COBRA election procedures, the Company shall continue to pay its share of your group medical and dental insurance premiums during the Severance Period or until such earlier time as you (i) obtain alternate medical and dental insurance or (ii) become ineligible for COBRA benefits.  You remain responsible for your share of such premiums during the Severance Period, which shall be deducted from the severance payments described in Section 2(a).  Thereafter, medical and dental insurance coverage shall be continued only to the extent required by COBRA and only to the extent you timely pay the premium payments yourself.  You agree to immediately notify the Company upon starting employment with any individual or entity.  Please note that this subsection (b) is to be modified, as required, and by mutual agreement of the parties, to comply with the non-discrimination rules and other provisions and requirements of the Patient Protection and Affordable Care Act.  
(c)  Consulting Agreement:  The Company agrees to engage you as a consultant after the Separation Date, provided that such consulting activities shall not exceed 20% of your average level of services to the Company over 36 month period prior to the Separation Date.  The Consulting Agreement as Exhibit A hereto (“Consulting Agreement”) shall become effective on the Separation Date, the terms of which shall be incorporated herein.  During your engagement as a consultant, your Outstanding Option will continue to vest as a non-qualified stock option.  On the last day of your consulting engagement all vesting will cease, and the unvested portion of the Outstanding Option will expire.  Your Outstanding Option will continue to be subject to the Equity Documents in all respects.  
3.Taxes; Code Section 409A:
(a)  Except as noted herein, all payments set forth in this Agreement shall be subject to all applicable federal, state and/or local withholding and/or payroll taxes, and the Company may withhold from any amounts payable to you (including any amounts payable pursuant to this Agreement) in order to comply with such withholding obligations.  The Company shall undertake to make deductions, withholdings and tax reports with respect to the payments and benefits under this Agreement to the extent that it reasonably and in good faith determines that it is required to make such deductions, withholdings and tax reports.  Payments under this Agreement shall be in amounts net of any such deductions or withholdings.  Nothing in this Agreement shall be construed to require the Company to make any payments to compensate you for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.
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(b)  It is intended that each installment of the payments and benefits provided under Section 2 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and other guidance issued thereunder (“Section 409A”).  Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. 1   The Company makes no representation or warranty and shall have no liability to you or any other person if any provision of this Agreement is determined to constitute deferred compensation subject to Section 409A, but do not satisfy an exemption from, or the conditions of, Section 409A.
4.General Release of Claims; Accord and Satisfaction:
(a) General Release:  In exchange for the amounts described in Section 2, and other good and valuable consideration, the receipt of which you hereby acknowledge, you and your representatives, agents, estate, heirs, successors and assigns (“You”), absolutely and unconditionally hereby release, discharge, indemnify and hold harmless the Released Parties (defined in Section 4(f) below), from any and all actions or causes of action, suits, claims, complaints, contracts, liabilities, agreements, promises, torts, debts, damages, controversies, judgments, rights and demands, whether existing or contingent, known or unknown, suspected or unsuspected, arising on or before the Effective Date (the “Claims”).
This general release includes, without limitation, any and all Claims arising out of or in connection with:
(i) your employment, change in employment status, and/or termination of employment with the Company;
(ii) any federal, state or local law, constitution or regulation regarding either employment, employment benefits, or employment discrimination and/or retaliation including, without limitation, the National Labor Relations Act, as amended; Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. 2000e  et seq. ; Sections 1981 through 1988 of Title 42 of the United States Code, as amended; the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1001  et seq. ; the Workers Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101  et seq. ; the Immigration Reform and Control Act, as amended; the Americans with Disabilities Act of 1990, as amended; the Fair Labor Standards Act, as amended; the Occupational Safety and Health Act, as amended; the Family and Medical Leave Act of 1993 (“FMLA”), as amended; the Consolidated Omnibus Budget Reconciliation Act, as amended; the Age Discrimination and Employment Act of 1967, as amended (the “ADEA”) and the Older Workers Benefit Protection Act, as amended; and laws relating to workers compensation, family and medical leave, retaliation, discrimination on the basis of race, color, religion, creed, sex, sex harassment, sexual orientation, marital status, pregnancy, national origin, ancestry, handicap, disability, veteran’s status, alienage, blindness, present or past history of mental disorders or physical disability, candidacy for or activity in a general assembly or other public office, constitutionally protected acts of speech, whistleblower status, use of tobacco products outside course of employment, membership in any organization engaged in civil defense, veteran’s status, any military service, application for military service, or any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance;
(iii) any Massachusetts state or local laws respecting employment, including but not limited to, the Massachusetts Wage Payment Act, M.G.L. c. 149 §148, the Massachusetts Minimum Fair Wages Act, M.G.L. c. 151 § 1 et. seq., the Massachusetts Fair Employment Practices Act, M.G.L. c. 151B et seq., the Massachusetts Parental Leave Law, M.G.L. c. 149, §105D, the Massachusetts Civil Rights Act, M.G.L. c. 12, §11H et seq., as amended, the Massachusetts Equal Rights Act, c. 93, §102 et seq., as amended, the Massachusetts Equal Pay Act, M.G.L. c. 149 §105A et seq., as amended, the Massachusetts law against sexual harassment, M.G.L. c. 214 §1C et seq., as amended, the Massachusetts law against retaliation, M.G.L. c. 19C, §11. et seq., as amended, the Massachusetts Privacy Statute, M.G.L. c. 214 § 1B, and the Massachusetts Small Necessities Leave Act, M.G.L. c. 149, §52D;

1 	If you are a “specified employee” (as that term is used in Section 409A) on the Separation Date, any benefits payable under Section 2 that constitute non-qualified deferred compensation under Section 409A shall be delayed until the business day following the six-month anniversary of the Separation Date, but only to the extent necessary to avoid penalties under Section 409A.   If  this applies, on the business day following the six-month anniversary of the Separation Date, the Company shall pay you in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid you prior to that date under Section 2 of this Agreement.	
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(iv) breach of contract or breach of the implied covenant of good faith and fair dealing;
(v) wrongful termination, intentional or negligent infliction of emotional distress, negligent misrepresentation, intentional misrepresentation, fraud, defamation, promissory estoppel, false light invasion of privacy, conspiracy, violation of public policy; and
(vi) any other tort, statutory or common law cause of action.  
(b) No Claims Through Others:  You further agree to release and discharge the Released Parties from any and all claims which might be made by any other person or organization on your behalf and you specifically waive any right to become, and promise not to become, a member of any class in a case in which a claim or claims against the Company are made involving any matters subject to release pursuant to Section 4(a).
(c) Interpretation:  The foregoing general release-of-claims provisions shall be given the broadest possible interpretation permitted by law.  The enumeration of specific claims therein shall not be interpreted to exclude any other claims not specifically enumerated therein.
(d) Accord and Satisfaction:  The payments set forth in Sections 1 and 2 shall be complete and unconditional payment, settlement, accord and/or satisfaction with respect to all obligations and liabilities of the Released Parties to You including, without limitation, all claims for back wages, salary, vacation pay, sick pay, bonuses, commissions, bonuses or other incentive compensation, severance pay, any and all other forms of compensation or benefits, attorney's fees, or other costs or sums.
(e) Exclusion:  Excluded from the General Release set forth in Section 4(a) are any claims or rights that cannot be waived by law, including your right to file a charge with an administrative agency, including the EEOC, or assist or participate in any agency investigation, hearing or proceeding.  You, however, are waiving your right to recover money in connection with any such agency charge or investigation, hearing or proceeding.  You also are waiving your right to recover any money in connection with a charge filed by any other individual or individuals, or by the EEOC or any other federal or state agency, on your behalf.  Please also note that you are not releasing your right to enforce the terms of this Agreement, your rights to vested ERISA benefits under the Company’s 401(k) plan, your right to apply for unemployment compensation, or your right to challenge the validity or enforceability of your waiver of ADEA rights pursuant to this Agreement.
(f) Definition of Released Parties:  As used in this Agreement, “Released Parties” shall mean: (i) the Company; (ii) all of the Company’s past, present, and future subsidiaries, parents, affiliates and divisions; (iii) all of the Company’s successors and/or assigns, as well as legal representatives; (iv) all of the Company’s past, present, and future officers, directors, managers, employees, shareholders, owners, attorneys, agents, insurers, employee benefit plans (including such plans’ administrators, trustees, fiduciaries, record-keepers, and insurers), and legal representatives (all individually, in their capacity acting on the Company’s behalf, and in their official capacities); and (v) all persons acting by, through, under, or in concert with any of the entities or persons listed in subsections (i)-(iv).
5.Waiver of Rights and Claims Under the Age Discrimination in Employment Act of 1967: Because you will be 40 years of age or older as of the Separation Date, you are hereby informed that you have or might have specific rights and/or claims under the ADEA, and you agree and understand that:
(a) In consideration for the amounts described in Section 2, which you are not otherwise entitled to receive, you specifically waive such rights and/or claims under the ADEA to the extent that such rights and/or claims arose prior to or on the date this Agreement was executed. You understand that rights or claims under the ADEA which may arise after the date this Agreement is executed are not waived by you;
(b) You acknowledge that you have been advised of your right to consult with your counsel of choice prior to executing this Agreement, that you have had at least twenty-one (21) days from today to review this Agreement and consider its terms before signing it, and that you have not been subject to any undue or improper influence interfering with the exercise of your free will in deciding whether to consult with counsel;
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(c) You have carefully read and fully understands all of the provisions of this Agreement, you knowingly and voluntarily agree to all of the terms set forth in this Agreement, and you acknowledge that in entering into this Agreement, you are not relying on any representation, promise or inducement made by the Company or its attorneys with the exception of those promises contained in this document; and
(d) You may revoke this Agreement for a period of seven (7) days following your execution hereof and all rights and obligations of both parties under this Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired .   Please see  Section 11  for more details.
6.Company Property: Within five days of the Separation Date (or earlier termination date, if applicable), you agree to return to the Company all Company property and materials, including, but not limited to, laptops, cds, dvds, hard drives, portable drives, smart/mobile phones, intangible information stored on any such hardware and/or media, software programs and data compiled with the use of those programs, software passwords or codes, tangible copies of trade secrets and Confidential Information (as that term is defined in your Nondisclosure Agreement (see Section 8 below)), charge/credit cards, building keys and passes, trial information, clinical information, memoranda, business or marketing plans, reports, projections, and any and all other information or property previously or currently held or used by you that is or was related to your employment with the Company (“Property”).  You agree that if you discover any other Property, including any proprietary materials, in your possession after the Separation Date, you immediately will notify the Company and arrange for their prompt return.  In addition, you must delete and finally purge any duplicates of files or documents that may contain Company information from any non-Company computer or other device that remains in your possession after the Separation Date.  
7.No Liability or Wrongdoing: You understand and agree that the release and accord and satisfaction set forth in Sections 4 and 5 constitute a final compromise of the claims released thereby, and are not an admission by the Released Parties that any such claims exist and/or of liability by the Released Parties with respect to such claims.  Nothing in this Agreement, nor any of the proceedings connected with it, is to be construed as, offered as, received as, or deemed to be evidence of an admission by the Released Parties of any liability or unlawful conduct whatsoever, and each of the Released Parties expressly deny any such liability or wrongdoing.    
8.Future Conduct:
(a) Assignment of Invention, Nondisclosure and Noncompetition Agreement:  You confirm the existence and continued validity of the Assignment of Invention, Nondisclosure and Noncompetition Agreement (the “Nondisclosure Agreement”), a copy of which is enclosed herewith.  You agree that your obligations under the Nondisclosure Agreement expressly survive the cessation of your employment.  If you fail to abide by your obligations under the Nondisclosure Agreement, the Company immediately may terminate all severance benefits set forth in Section 2 in addition to, and not in lieu of, seeking all other legal and equitable relief.
(b) Non-disparagement:  You agree not to take any action or make any statement, written or oral, which disparages or criticizes the Released Parties, their officers, directors, investors or employees, the Released Parties’ business practices, or which disrupts or impairs their normal operations, including actions that would (i) harm the Released Parties’ reputation with their current and prospective clients, business partners, or the public; or (ii) interfere with existing contracts or employment relationships with current and prospective clients, business partners or Released Parties’ employees.  
(c) Confidentiality of this Agreement:  You shall maintain confidentiality concerning this Agreement, including the substance, terms, existence and/or any discussions relating to it.  Except as required by legal process, you will not discuss the same with anyone except your immediate family and accountants or attorneys, when such disclosure is necessary for them to render professional services.  Nothing herein (or on sub-section (b) above) shall prohibit or bar you from providing truthful testimony in any legal proceeding or in communicating with any governmental agency or representative or from making any truthful disclosure required, authorized or permitted under law;  provided, however , that in providing such testimony or making such disclosures or communications, you will use your best efforts to ensure that this Section is complied with to the maximum extent possible.  
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(d) Advance Notice: You agree to give reasonable notice to the Company of any and all attempts by third parties to compel disclosure of any confidential information (as referred to in your Nondisclosure Agreement), the terms of this Agreement, or to require you to testify in any matter concerning the Company, this Agreement and/or the Released Parties.  Please direct such notice in writing to the Company’s General Counsel at least ten business days before compliance with any subpoena or order; if the subpoena or order requires compliance within less than ten business days, however, you shall provide such written notice, or if impractical, shall provide telephonic notice, within five business days after receiving notice that an attempt will be or has been made to compel your testimony or your disclosure of the Company’s confidential information.
(e) Breach; Remedies: If you breach this Agreement or any other agreement referenced herein (including the Nondisclosure Agreement), you agree that: (i) the Company shall be relieved of its obligations to make any further payments to you under Section 2; (ii) the Company will be entitled to recover payments already made to you pursuant to Sections 2(a)-(b); and (iii) the Company shall be entitled to recover its attorneys’ fees and costs incurred in enforcing its rights under this Agreement, to the extent such recovery is not prohibited by law.  This Agreement in all other respects, including, but not limited to, the release provisions in Sections 4 and 5, shall remain in full force and effect.  The remedies in this Section shall be in addition to, and not as an alternative to, any other available remedies at law or in equity.  
9.Cooperation:  You agree to cooperate fully with bluebird’s employees and business partners in smoothly, effectively, and completely transitioning your work as the Company may designate.  You agree to make yourself available to bluebird for reasonable periods of time (at mutually convenient times, taking into account your personal and/or professional commitments), either by telephone or, if you and bluebird believe necessary, in person upon reasonable notice, to assist with matters relating to work performed by you on bluebird’s behalf.  You also agree to cooperate with bluebird and its attorneys at reasonable times and places in the prosecution and/or defense of any legal action wherein the bluebird is a party.  Such cooperation includes, but is not limited to, meeting with bluebird’s attorneys at reasonable times and places to discuss your knowledge of pertinent facts, appearing as required at deposition, arbitration, trial or other proceeding to testify as to those facts, and testifying truthfully to the best of your abilities at any such proceeding.  The Company shall reimburse you for any reasonable and approved out-of-pocket travel-related costs and expenses you incur in connection with such cooperation.
10.Representations and Governing Law:
(a) Entire Agreement; Amendment; Waiver; Construction of Agreement:  This Agreement, the Non-Disclosure Agreement, and the Equity Documents set forth the complete and sole agreement between the parties and supersede any and all other agreements or understandings, whether oral or written, express or implied.  This Agreement may not be changed or rescinded except upon the express written consent of both you and an authorized Company officer.  Any waiver of any provision of this Agreement shall not constitute a waiver of any other provision of this Agreement unless expressly so indicated otherwise.  The language of all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against either party.
(b) Governing Law; Consent to Jurisdiction:  This Agreement shall be deemed to be made and entered into in the Commonwealth of Massachusetts.  This Agreement and any claims arising out of this Agreement (or any other claims arising out of the relationship between the parties) shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts and shall in all respects be interpreted, enforced and governed under the internal and domestic laws, without giving effect to the principles of conflicts of laws of such Commonwealth.  Any claims or legal actions by one party against the other shall be commenced and maintained in any state or federal court located in such Commonwealth, and you hereby submit to the jurisdiction and venue of any such court.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANYAND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(c) Severability:  If any provision of this Agreement, or part thereof, is held invalid, void or voidable as against public policy or otherwise, the invalidity shall not affect other provisions, or parts thereof, which may be given effect without the invalid provision or part.  To this extent, the provisions, and parts thereof, of this Agreement are declared to be severable.  
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(d) Assignment:  You shall not assign this Agreement; the Company may assign this Agreement.  The benefits of this Agreement shall inure to the successors and assigns of the Company and the Released Parties and to your successors.
(e) Acknowledgment of Company’s Compliance with Applicable Law:  You represent that:
(i)  you have not been subject to any retaliation or any other form of adverse action by the Released Parties for any action taken by him or her as an employee or resulting from his or her exercise of, or attempt to exercise, any statutory rights recognized under federal, state or local law;
(ii)  you have been paid all unpaid wages and accrued unused vacation;
(iii)  the Released Parties have satisfied in full all obligations they ever had regarding leaves of absence and other time off of any kind (including, but not limited to, short-term disability leave, FMLA leave, military leave, vacations, meal and rest periods, sick and personal days, and personal leave), and you have not suffered any adverse employment action as a result of seeking or taking any such leave of absence or time off; and
(iv) you have no known workplace injuries or occupational diseases, have not sustained any disabling injury and/or occupational disease that have resulted in a loss of wage earning capacity during your employment, and have no personal injury and/or occupational disease that has been contributed to, or aggravated or accelerated in a significant manner by, your employment or separation from employment.
(f) Counterparts:  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which will be deemed one and the same instrument.  This Agreement may be executed by facsimile signature, and any such facsimile signature by any party shall be deemed to be an original signature and shall be binding on such party to the same extent as if such facsimile signature were an original signature.
11.Effective Date:  As set forth in Section 5, you will have the opportunity to consider this Agreement for at least 21 days before signing it.  For the period of seven (7) days from the date when you execute this Agreement, you have the right to revoke it by written notice.  For such a revocation to be effective, it must be delivered to our General Counsel, Jason Cole, so that he receives it at or before the expiration of the seven (7) day revocation period.  This Agreement shall become effective on the first day following the expiration of the revocation period (the “Effective Date”).
If this letter correctly states the understanding and agreement we have reached please indicate your acceptance by countersigning the enclosed copy and returning it to me by no later than  5:00 p.m. EDT on March 23, 2016 .  This offer shall  expire by its terms at 5:01 p.m. EDT on March 23, 2016 .  
Very truly yours,
 
bluebird bio, Inc.	
 	 	 	
By:	 	/s/ Jason F. Cole	
 	 	 	
Title:	 	Chief Legal Officer	

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PLEASE REVIEW CAREFULLY
THIS AGREEMENT HAS A RELEASE OF CERTAIN LEGAL RIGHTS YOU MAY HAVE.  YOU SHOULD CONSULT WITH AN ATTORNEY REGARDING THE RELEASE AND OTHER ASPECTS OF THIS AGREEMENT BEFORE SIGNING IT.
YOUR EMPLOYMENT BY THE COMPANY WILL BE TERMINATING.  SUCH TERMINATION WILL NOT BE AFFECTED BY YOUR ACCEPTANCE OR FAILURE TO ACCEPT THIS AGREEMENT.  IF YOU DO NOT ACCEPT THIS AGREEMENT, YOU WILL NOT RECEIVE THE PAYMENTS AND BENEFITS IN SECTION 2.
YOU REPRESENT THAT YOU HAVE READ THE FOREGOING AGREEMENT, FULLY UNDERSTAND ITS TERMS AND CONDITIONS, AND VOLUNTARILY ARE EXECUTING IT.  
IN ENTERING INTO THIS AGREEMENT, YOU DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE RELEASED PARTIES WITH THE EXCEPTION OF THE CONSIDERATION IN THIS DOCUMENT.
ACCEPTED:
 
/s/ James DeTore	 	Date: March 10, 2016	
James DeTore	 	 	
 
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Exhibit 31.1
CERTIFICATIONS
I, Nick Leschly, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of bluebird bio, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: May 4, 2016	 	By:	 	/s/ Nick Leschly	
 	 	 	 	Nick Leschly	
 	 	 	 	President and Chief Executive Officer
(Principal Executive Officer)	

 
Exhibit 31.2
CERTIFICATIONS
I, Jeffrey Walsh, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of bluebird bio, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: May 4, 2016	 	By:	 	/s/ Jeffrey Walsh	
 	 	 	 	Jeffrey Walsh	
 	 	 	 	Chief Financial and Strategy Officer
(Principal Financial Officer)	

Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of bluebird bio, Inc. (the “Company”) for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, that to his or her knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date: May 4, 2016	 	 	 	By:	 	/s/ Nick Leschly	
 	 	 	 	 	 	Nick Leschly
President, Chief Executive Officer and Director (Principal Executive Officer and Duly Authorized Officer)	
 	 	 	 	
Date: May 4, 2016	 	 	 	By:	 	/s/ Jeffrey Walsh	
 	 	 	 	 	 	Jeffrey Walsh
Chief Financial and Strategy Officer (Principal Financial Officer and Duly Authorized Officer)