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United States securities and exchange commission logo
March 12, 2024
Erik Ostrowski
Interim Chief Executive Officer
AVROBIO, Inc.
100 Technology Square
Sixth Floor
Cambridge, MA 02139
Re: AVROBIO, Inc.
Registration
Statement on Form S-4
Filed February 14,
2024
File No. 333-277048
Dear Erik Ostrowski:
We have reviewed your
registration statement and have the following comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Registration Statement on Form S-4 Filed February 14, 2024
Cover Page
1. It appears that the
shares to be sold in the Tectonic pre-closing private financings are
included in the shares
to be registered in this registration statement. The investors in the
Tectonic pre-closing
financing made their investment decision in a private offering and,
therefore, the sale
must close privately. Please remove the Tectonic pre-closing financing
shares from the
registration statement.
What are the private financings?, page 2
2. Please revise this Q&A,
the summary risks and risk factors, and elsewhere as appropriate
to highlight that the
closing of the merger is not conditioned upon the closing of the
Tectonic private
financings in the anticipated aggregate amount of $130.7 million. We
note your disclosure to
this effect on page 27. Discuss risks and uncertainties if
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AVROBIO,LastNameErik Ostrowski
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stockholders are asked to make voting decisions without knowing
whether the private
financings will close in timely manner, or at all. Discuss the
combined company s
liquidity position and related risks in the event that the merger
closes without the private
financings in place.
Why are the two companies proposing to merge?, page 2
3. Please revise your disclosure to clarify the combined company's plans
with respect to
AVROBIO's legacy business. In this regard, we note your disclosure on
page 13 and
elsewhere throughout that on July 12, 2023, AVROBIO halted development
of its clinical
and research programs to explore strategic alternatives which may
include, but are not
limited to, a divestiture of its legacy business.
What are contingent value rights (CVRs)?, page 5
4. We note that you disclose here and elsewhere that AVROBIO stockholders
of record "as
of immediately prior to the effective time" will receive one
non-transferable CVR for each
outstanding share of AVROBIO common stock held by such stockholder on
such
date. However, disclosure following the first bullet on page 190
states that a record date
will be agreed to by AVROBIO and Tectonic prior to the effective time,
and disclosure on
page 237 states that the record date for the CVR distribution will be
the "close of business
on the business day immediately prior to the day on which the
effective time
occurs." Please revise throughout to reconcile your disclosures and
clarify the record date
for the issuance of CVRs to AVROBIO stockholders.
Will the common stock of the combined company trade on an exchange?, page 7
5. You disclose that AVROBIO intends to file an initial listing
application for the combined
company s common stock with Nasdaq and that it is expected that such
common stock
will trade on the exchange. We also note Section 6.10 of the Merger
Agreement provides
that the approval of the listing of the additional shares of AVROBIO's
common stock on
Nasdaq shall have been conditionally approved prior to the Effective
Time.
Please revise the Letter to Stockholders, Q&A, and elsewhere
throughout as
appropriate to clarify that the closing of the merger is
conditioned upon Nasdaq s
approval of the listing application.
Disclose whether this condition is waivable and if so, by which
party or parties.
Indicate whether or not Nasdaq s determination will be known at
the time that
stockholders are asked to vote to approve the merger.
Please also include a cross-reference to risk factor disclosure
stating that the potential
reverse stock split may not result in an increase in the combined
company s stock
price necessary to satisfy Nasdaq s initial or continued
listing requirements for the
combined company.
What are the material U.S. federal income tax consequences of the merger to
U.S. Holders of
Tectonic common stock?, page 11
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AVROBIO,LastNameErik Ostrowski
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6. We note your representation here and beginning on page 219 that the
parties intend the
merger to qualify as a reorganization within the meaning of Section
368(a) of the U.S.
Internal Revenue Code of 1986, as amended (the Code ). Please
revise your disclosure
here and throughout, including the sections addressing the tax
consequences of the
CVRs, to provide counsel s firm opinion for each material tax
consequence, including
whether the merger will qualify as a reorganization, or to explain why
such opinion cannot
be given. If the opinion is subject to uncertainty, please: (1)
provide an opinion that
reflects the degree of uncertainty (e.g., should or more
likely than not ) and explains
the facts or circumstances giving rise to the uncertainty; and (2)
provide disclosure of the
possible alternative tax consequences including risk factor and/or
other appropriate
disclosure setting forth the risks of uncertain tax treatment to
investors. Also, please file
the tax opinion as an exhibit to the registration statement. Please
refer to Item 601(b)(8) of
Regulation S-K and Section III.A. of Staff Legal Bulletin 19, Legality
and Tax Opinions
in Registered Offerings.
Prospectus Summary
The Companies
AVROBIO, page 13
7. With reference to your disclosure on pages 13 and 17, please revise
the Summary and the
Q&A to highlight, if true, that if the merger is completed, the
combined company will
focus on developing Tectonic's product candidates, and it is
anticipated that the combined
company will not continue to develop AVROBIO's legacy product
candidates. Also,
revise the Q&A on page 5 to provide context for the discussion of the
CVRs.
Tectonic, page 14
8. Please revise the Summary and Tectonic's Business section to provide
context and balance
to the discussion of Tectonic's proprietary technology platform,
GEODe. To the extent
you highlight the capabilities of the platform and Tectonic's belief
that it can "overcome
the existing challenges of GPCR-targeted drug discovery" when
engineering product
candidates, please also explain that Tectonic has limited experience
in
therapeutic discovery and development and that the platform may never
result in the
regulatory approval of a product candidate.
Interests of AVROBIO's Directors and Executive Officers in the Merger, page 20
9. Here and in the parallel sections of the registration statement
regarding the interests of
Tectonic's directors and executive officers in the merger, please
revise to quantify the
value of the interests of such parties. For example only, please
disclose on an aggregate
basis:
the value of options to purchase AVROBIO common stock that will be
subject to
accelerated vesting, and the value of RSUs that will be subject to
accelerated vesting
and settlement into shares of AVROBIO common stock, including any
necessary
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AVROBIO,LastNameErik Ostrowski
Inc.
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assumptions; and
the amount of additional cash payments or "golden parachute"
compensation to be
received in connection with the merger due to change in control
agreements,
employment contract terminations, consulting fees, etc.
10. Here and elsewhere as appropriate, please revise to explain whether
any material
payments to AVROBIO's executives, such as "golden parachute"
compensation that is
based on or otherwise relates to the merger, will be excluded from the
calculation of "net
cash" at the determination time, and if so, disclose the types and
aggregate amounts of
such payments and explain the impact to other AVROBIO stockholders. In
this regard, we
note your disclosure regarding the calculation of AVROBIO's net cash
beginning on page
216 and your disclosures throughout that under certain circumstances
the ownership
percentages in the combined company may be adjusted up or down
depending on the
amount of AVROBIO s net cash as of closing.
Risk Factors
Risks Related to the Proposed Reverse Stock Split, page 38
11. We note your disclosure that the principal purpose of the reverse
stock split is to increase
AVROBIO's common stock price so that the combined company is able to
meet initial
Nasdaq listing requirements and the shares of AVROBIO common stock
being issued in
the merger will be approved for listing. In your risk factors and
elsewhere as appropriate:
Please disclose the minimum size of the reverse split that will be
necessary for listing.
Please indicate the criteria, if any, for the ratio to be used for
the reverse stock split.
For example, indicate whether you intend to use the minimum ratio
or a larger ratio
in an attempt for a higher price per share subsequent to the
reverse stock split.
Explain the effects on the proposed transaction and/or the
combined company of a
failure to comply with the initial listing requirements of Nasdaq.
If the Nasdaq listing
approval of the combined company is a condition that can be
waived, please include a
discussion of the potential consequences to investors, including
the ability of
investors to buy and sell shares of common stock, if the Nasdaq
does not approve the
listing application of the combined company, but the election is
made to waive the
closing condition and proceed with the merger.
You state on page 39 that there can be no assurance that the stock
price of the
combined company will meet the listing requirements for any
meaningful period of
time. Please enhance your disclosure to explain the effects on the
combined company
and its shareholders of a failure to comply with the continued
listing requirements of
Nasdaq, including the potential delisting of its common stock and
its impact. Please
similarly revise your summary risk factor on page 30 to explain
the effect on
combined company if the reverse stock split does not increase the
combined
company s stock price over both the short- or long-term so as to
qualify for Nasdaq
listing.
Risk Factors
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AVROBIO,LastNameErik Ostrowski
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Risks Related to AVROBIO, page 43
12. You state in the risk factor on page 89 that: "In particular, AVROBIO
had in-
licensed certain intellectual property rights and know-how from the
University Health
Network ( UHN ) (relevant to AVR-RD-01 and AVROBIO s Fabry
program, which
AVROBIO deprioritized in January 2022) and affiliates of Lund
University (relevant
to AVR-RD-02 and AVROBIO s Gaucher type 1 and type 3 programs),
which license
agreement was terminated as of January 4, 2024." Please revise herein
as applicable to
more clearly disclose, if true, that the termination of the license
agreement was only with
UHN, as we note the development of AVROBIO's Gaucher disease program
with Lund
University appears to remain in effect, as indicated on page 321 and
elsewhere.
AVROBIO's HSC lentiviral-based gene therapy product candidates are based on a
novel
technology..., page 53
13. Please revise to remove or revise conclusory statements regarding
AVROBIO product
candidates' performance. In this regard, we note your reference to
"favorable preliminary
results observed to date."
Risks Related to Tectonic, page 102
14. In the risk factor on page 105, you disclose that Tectonic concluded
that its recurring
losses from operations and need for additional financing to fund
future operations raise
substantial doubt about its ability to continue as a going concern in
its financial statements
for the year ended December 31, 2022 and the nine months ended
September 30, 2023 and
that "Similarly, Tectonic s independent registered public accounting
firm included an
explanatory paragraph in its report on Tectonic s financial
statements for the year ended
December 31, 2022 and the nine months ended September 30, 2023 with
respect to this
uncertainty." Please revise this sentence to remove the implication
that a report was issued
by Tectonic's auditor for the nine months ended September 30, 2023.
The bylaws of the combined company will provide that..., page 160
15. Consistent with your risk factor disclosure on page 101, please revise
to state that there is
uncertainty as to whether a court would enforce the Federal Forum
provision in the
combined company's bylaws. In this regard, we note that Section 22 of
the Securities Act
creates concurrent jurisdiction for federal and state courts over all
suits brought to enforce
any duty or liability created by the Securities Act or the rules and
regulations thereunder.
The Merger
Background of the Merger, page 171
16. You disclose that at the July 6, 2023 meeting, the AVROBIO Board and
management
identified certain reverse merger candidate criteria ("Critera"), and
that such Critera
"continued to be discussed, expanded and/or refined at subsequent
meetings of the Board
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and Transaction Committee." Please revise your background disclosure
to explain how
and why the Criteria evolved subsequent to the July 6, 2023 meeting,
and identify who
proposed any expansion, refinement or revision of the Criteria and any
material resulting
discussion in this regard.
17. With respect to the various starting pools of potential reverse merger
transaction
candidates:
Please revise page 174 to explain how advisor TD Cowen identified
and selected the
initial 85 companies to which it began distributing process
letters on July 18, 2023,
including with respect to the Criteria identified by the AVROBIO
Board and
management at the July 6, 2023 meeting.
Revise page 179 to explain how AVROBIO management and its advisors
selected the
companies with which to engage or re-engage following the
termination of
discussions with Party O, including with respect to the
discussions of initial
impressions of quality and actionability across the Critera at the
October 23, 2023
meeting.
18. Please revise page 178 to explain Party O's relative strengths in
relation to the Criteria that
led the Transaction Committe to determine to proceed to a term sheet
with Party O.
19. Please revise the November 10, 2023 and November 17, 2023 entries on
pages 180
and 181, respectively, to:
Summarize the Transaction Committee's discussions of their
impressions of the
quality and actionability of Tectonic and Party R across the
Criteria as reverse merger
counterparties.
Additionally, please revise pages 180-182 to describe the
"uncertainties" and
"continued" concerns about Party R s ability to meet one or more
of the Criteria as
compared to Tectonic that were discussed at various meetings.
Further with respect to the November 17, 2023 entry, explain why
the Transaction
Committee determined to continue to evaluate and negotiate terms
with Company R
in light of the Committee's decision the same day to decline to
advance other
companies' proposals to the term sheet phase due to weaknesses
with respect to at
least one of the Criteria.
20. Please revise to explain the interactions between the representatives
and advisors of
AVROBIO and Party R from and after the November 17, 2023 meeting of
the AVROBIO
Transaction Committee until the November 27, 2023 meeting, at which
time it appears
that said Committee authorized AVROBIO management to communicate to
Party R that
AVROBIO would be ending its engagement with Party R toward a strategic
transaction.
21. Please revise page 183 to disclose any interaction between
representatives of AVROBIO
and Party GGG from and after submission of the Party GGG December 7,
2023 Proposal.
Describe the Transaction Committee's consideration of this proposal,
and when and why
Party GGG was eliminated from consideration as a potential reverse
merger candidate.
22. With respect to the negotiations between AVROBIO and Tectonic:
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AVROBIO,LastNameErik Ostrowski
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Please revise your disclosure throughout this section to
provide greater detail as to
how the material terms of the transaction structure and
consideration evolved during
the negotiations through proposals and counter-proposals. For
example, please revise
to explain the reason(s) for the inclusion of, and any revisions
to, the material terms
from the initial non-binding indication of interest AVROBIO
received from Tectonic
on October 23, 2023 through the Tectonic Term Sheet dated
December 13, 2023 to
the final Merger Agreement executed January 30, 2024. Explain
which party
proposed initial terms and requested revised terms, and the
reason(s) they did so.
In your revisions, please specifically include a materially complete
description of the
discussions and/or "negotiations on the economics of a potential
reverse merger with
Tectonic," particularly the structure, types, and amount of the merger
consideration,
including but not limited to:
the acceleration of AVROBIO options and RSUs;
contingent value rights to be issued to pre-merger AVROBIO
stockholders;
the valuations of the parties, including the additional $12.5
million ascribed by
Tectonic to AVROBIO in excess of its ending net cash position;
the Exchange Ratio;
the concurrent private financings with Tectonic; and
the minimum closing cash condition. In this regard, we note your
disclosure on
pages 18 and 189 that Tectonic s obligation to complete the
merger is conditioned on
AVROBIO having at least $50.0 million closing net cash.
Avrobio's Reasons for the Merger, page 187
23. You disclose that among the factors the AVROBIO Board viewed as
supporting its
decision to approve the Merger Agreement as the Board's belief that
Tectonic constituted
the "most compelling" reverse merger counterparty as it pertains to
each of the Criteria
enumerated by the Avrobio board. Please revise in the appropriate
place to explain the
basis for this belief.
Opinion of Houlihan Lokey to the AVROBIO Board
Material Financial Analyses, page 202
24. Please revise this section as follows:
Describe in more detail the underlying methodology and selection
criteria the advisor
used to select the public companies, M&A transactions, IPO
transactions, and private
financing transactions it deemed relevant. If any companies or
transactions otherwise
meeting the criteria were excluded, please briefly explain why.
Disclose the conclusions of the advisor's various analyses
relative to Tectonic,
including how the results of each analysis formed the basis for
selecting an implied
enterprise value reference range for Tectonic.
Tectonic - Selected Companies Analysis, page 203
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AVROBIO,LastNameErik Ostrowski
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25. Please revise the table on page 203 to include the number of products
in the development
pipeline for the selected companies. In this regard, we note your
disclosure that the
advisor reviewed this data in its analysis.
Nasdaq Stock Market Listing, page 222
26. Please revise this section to disclose the certain period of time
following the proposed
reverse stock split wherein the combined company must maintain a
minimum bid price of
$4.00 in order for the Nasdaq listing application to be accepted.
Conditions to the Completion of the Merger, page 243
27. Please revise this section to clarify which conditions are waivable
and by which party or
parties. As appropriate, please revise your risk factors to address
material risks associated
with waivable conditions.
Tectonic's Business, page 342
28. Revise this section to discuss the development history of Tectonic's
GEODe platform. For
instance, discuss whether it was developed internally and whether
current Tectonic
employees were responsible for such development. Clarify whether the
platform is fully
developed. Additionally, explain how Tectonic has utilized and plans
to utilize this
platform to execute its product development strategy. In light of
Tectonic's early
development stage, provide the basis for the following statements, or
revise as appropriate
to indicate if such statements are currently aspirational:
Tectonic "uses its proprietary GEODe technology platform to
overcome the existing
challenges of GPCR-targeted drug discovery..." (pages 14, 342 and
391).
Tectonic "believes that its GEODe platform holds the potential to
consistently
generate compelling pipeline assets..." (page 343).
29. We note that the descriptions of Tectonic's identified and potential
product candidates and
the related preclinical and clinical trials include conclusory
statements that such
candidates are, or are likely to be, effective. You may present a
balanced summary of the
objective pre-clinical and clinical data, including whether clinical
trials trial met primary
and secondary endpoints without including your conclusions related to
efficacy.
However, please remove or revise all statements throughout that
present speculation or
conclusions regarding the efficacy of Tectonic's product candidates,
as these
determinations are solely within the authority of the FDA and
comparable regulatory
bodies. By way of example only:
You state on page 350 that TX45 "demonstrated efficacy" in a rat
model of
pulmonary hypertension, and the statement beginning on page 354
that Tectonic's
GPCR3 antagonist "provides efficacy in a mouse model of HHT."
Numerous other statements imply the efficacy of Tectonic
candidates, such as those
drawing comparison between your product candidates or their
mechanisms of action
with other unapproved medicinal agents that have been tested for
the same
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indications. You state on page 347 that PDE5 inhibitors have
"shown some benefit"
and "shown some efficacy" in HFrEF patients with CpcPH, and you
conclude that
"the efficacy shown with PDE5 inhibitors in CpcPH suggests the
potential of success
for engineered Fc-relaxin-fusions such as TX45 in CpCPH, because
relaxin activates
the same nitric oxide signaling pathway by which PDE5 inhibitors
exert their action."
30. We note references to companion diagnostic tests on pages 131, 136 and
374. To the
extent material, please revise your description of Tectonic's business
to explain whether
Tectonic is currently developing, or plans to develop, any companion
diagnostic test(s) for
use with its therapeutic product candidates. If so, please address the
following or
otherwise advise:
Explain in the Summary and Business sections how Tectonic plans to
develop and
use companion diagnostics in its development strategy. Further
explain how, if at all,
such use may relate to the patient enrichment strategy you
reference with respect to
Tectonic's planned Phase 1b trial of TX45 on page 353. Include
balancing disclosure
regarding any material risks or challenges that the development
and/or use of
companion diagnostics might pose to Tectonic's business and/or
development
strategy.
Disclose whether Tectonic currently anticipates that any or all of
its programs will
require it to develop and obtain FDA or other regulatory approval
of a companion
diagnostic.
As appropriate, include summary risk and corresponding risk factor
disclosure
addressing the risks and challenges related to any proposed use of
companion
diagnostic tools.
As appropriate, revise your discussion of government regulation to
include a
description of the regulation of companion diagnostics.
31. While it appears that part of Tectonic's business strategy is to
perform preclinical
and/or clinical trials in various countries to generate data to be
used to seek FDA approval
in the United States, please revise your disclosure to clarify your
development strategy in
this regard.
Depending on clinical trial results, explain whether Tectonic
intends to seek approval
of any product candidates in the United States before, or
concurrently with, seeking
approval in other jurisdictions.
With respect to TX45 and any other product candidate in
development, please
disclose the location of completed, ongoing, and planned
preclinical and clinical
trials.
To the extent known or planned, disclose at what point in the
development process
Tectonic intends to seek the FDA's input or involvement in the
product development
and regulatory approval processes for TX45.
Highlight that before Tectonic can commence clinical trials for
any product candidate
in the United States, it must be able to support a future
Investigational New Drug
( IND ) applications in the United States. Disclose, as you
do on page 113,
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AVROBIO,LastNameErik Ostrowski
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that Tectonic has not interacted with or submitted any IND to the
FDA and all of its
clinical trials have, to date, been conducted in Australia.
Further, disclose as you do
on page 364, that when a foreign clinical trial is not conducted
under an IND, the
sponsor must ensure that the trial complies with certain
regulatory requirements of
the FDA in order to use the trial as support for an IND or
application for marketing
approval. Also highlight that the clinical data Tectonic
generates abroad may not be
accepted by the FDA or comparable foreign regulatory authorities
and if so, may
result in the need to conduct additional trials.
32. In light of your disclosure that Tectonic is very early in its
development efforts, and that
Tectonic currently has only identified lead asset TX45 for clinical
development and that
candidate is still in Phase 1 clinical trials, please review this
section and revise statements
such as those in the non-exhaustive list below to provide context for
your beliefs and
expectations regarding Tectonic's business and the potential
performance of the Tectonic
product candidates under development. Where appropriate, qualify such
statements, or
revise to clarify those that are currently aspirational.
Tectonic has elected to prioritize development of TX45 in Group 2
PH/HfpEF in part
because the physiological actions of relaxin "will likely address
the key
pathophysiology of the disease" (page 343).
Tectonic's single-chain engineering "streamlines the scale-up
manufacturing process"
(page 345).
Tectonic has also identified an indication, Group 2 PH / HFpEF,
that "appears to be
the ideal setting in which to fully realize the therapeutic
potential of relaxin" (page
345).
"GEODeTM has overcome the challenges of GPCR targeted
biologics..." (page 356).
Testing of Group 1 PH (PAH) Drugs as Treatments for Group 2 PH - Implications
of PDE5i
Results, page 347
33. Please review and revise throughout where appropriate to remove
premature conclusory
references, such as to results that "should" or "would" occur in
prelinical or clinical testing
of Tectonic product candidates. In this regard, refer to the following
non-exhaustive list
of examples:
TX45, a single-chain relaxin-Fc fusion protein, "should be
compatible with chronic
administration via intermitted subcutaneous injection" (page
345).
Relaxin's pulmonary and systemic vasodilatory activity "should
unload the
left ventricle, while relaxin s anti-fibrotic and
anti-inflammatory activities should
promote reverse remodeling of the left ventricle in HFpEF" (page
347).
Relaxin s ability to relax the heart muscle "should improve
diastolic filling in
HFpEf..." (page 347); and
These benefits would also extend to IpcPH patients and thus to the
entire Group 2
PH/HFpEF population" (page 347).
34. We note that Figure 3 on page 347, as well as numerous other figures
throughout the
Tectonic Business section, includes text that is too small to be read.
Please review and
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AVROBIO,LastNameErik Ostrowski
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revise your figures and graphics throughout to ensure that the text in
each, including
subscript or other notations, are clearly legible.
Background on TX45, page 349
35. We note that Figure 5 on page 349 purports to compare the
pharmacokinetic profile of
TX45 with an earlier TX parent compound and a "different Fc-relaxin
fusion described in
the literature." Please revise to clarify whether the comparison of
Tectonic compounds
and the comparator was conducted on a head-to-head basis. If you did
not conduct a head-
to-head trial, please revise to clearly disclose that fact. If you
intend to retain disclosure
regarding the comparator relaxin therapeutic, please expand your
disclosure to include a
citation or citations to the scientific literature to which you refer,
and provide the
underlying data regarding the comparator.
36. Please remove all claims or conclusions related to efficacy and focus
your disclosure on
the objective data resulting from preclinical studies and clinical
trials. With respect to
any trials with TX45, you may compare the objective results without
concluding the trials
demonstrated your candidate is "superior." In this regard, please
remove or revise your
references to TX45's "superior PK profile" and "superior tissue
penetration" in Figure 5
and Figure 7, respectively.
TX45 Pharmacology Studies, page 350
37. Please expand your discussion of your preclinical animal studies as
follows:
Briefly describe the number of animal models used, the number of
tests conducted,
the number of animals tested, the range of results or effects
observed in these tests
and how such results were measured.
Disclose whether or not the data from any preclinical model was
found to be
statistically significant. Include the p-value, and at first use,
please provide a brief
explanation regarding how p-values are used to measure statistical
significance and
the p-value that you have to achieve to conclude a statistically
significant result.
State whether you have published the data for any of your
preclinical studies.
TX45 Clinical Development Studies and Plans, page 352
38. With respect to the Phase 1 study of TX45 in healthy volunteers
currently ongoing in
Australia and the planned Phase 1b trials of TX45 expected to be
conducted in Moldova
and the Netherlands in 1H 2024, please disclose additional information
regarding the
scope and design of such studies, including:
the number of volunteers or patients being studied, including the
number in each
cohort;
duration of treatment;
dosage information, including the expected timing of participant
dosing as well as the
amount and frequency; and
Erik Ostrowski
FirstName
AVROBIO,LastNameErik Ostrowski
Inc.
Comapany
March NameAVROBIO, Inc.
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patient enrichment strategies or criteria, as applicable. In
this regard, we note your
disclosure on page 353 that the planned Phase 1b trial is
"designed to enrich the
CpcPH population subgroup during enrollment."
TX45 Non-clinical Toxicology Studies, page 352
39. Please revise to define the acronym "NOAEL" at first use, and explain
the relevance of the
NOAEL to the toxicology study findings discussed on page 352.
Phase 2 6-month Proof of Concept Study in Group 2 PH and HFpEF, page 353
40. We note your disclosure that Tectonic s TX45 Phase 2
proof-of-concept clinical trial in
patients with Group 2 PH and HFpEF is expected to begin in the second
half of 2024. If
true, please revise to clarify that the commencement of such Phase 2
study is dependent
upon the results of Tectonic's Phase 1 trials.
Type 2 PH Anticipated Pivotal Development Pathway, page 353
41. Please revise to qualify the first sentence of this paragraph.
Collaboration, License and Services Agreements, page 356
42. Please revise your disclosure regarding the Harvard License Agreement
as follows:
Quantify all material payment terms, including quantification of
the upfront license
fee and any installments thereof, amounts paid to date in cash or
shares of common
stock, and aggregate potential milestone payments segregated by
development and
commercial milestone payments.
With respect to applicable royalty rates to be paid, disclose such
rates within a range
of ten percentage points. In this regard, we note your reference
to a royalty rate "in
the low double digits" on page 357.
You state that this agreement expires upon the expiration of the
last-to-expire royalty
term. Please revise to clarify when the patents underlying the
royalty term are
expected to expire.
43. Please revise this section to include a discussion of the Alloy
Therapeutics License
Agreement and the Adimab Agreement as you do on page 407, or advise.
Additionally,
such discussion should conform to the prior comment. File these
agreements as exhibits to
the registration statement or tell us why you believe they are not
required to be filed.
WuXi Master Development and Manufacturing Services Agreement, page 357
44. Please revise to specify the third anniversary of the effective date
of the WuXi Biologics
Manufacturing Agreement, at which time such agreement may expire.
Intellectual Property, page 360
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AVROBIO,LastNameErik Ostrowski
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45. With respect to the second paragraph of this section:
We note that a larger number of in-licensed or wholly owned
patents are discussed in
this this paragraph as compared to the number disclosed in the
first sentence. Please
reconcile or advise.
Also clearly describe on an individual or patent family basis the
type of patent
protection granted for each product or technology (composition of
matter, use, or
process) and the jurisdiction(s) of each pending or issued foreign
patent.
AVROBIO's Management Discussion and Analysis of Financial Condition and Results
of
Operations, page 378
Consolidated Results of Operations, page 381
46. We note from page 380 that research and development (R&D) expense
attributed to the
Gaucher program nearly doubled during the nine months ended September
30, 2023 as
compared to September 30, 2022. Please revise the explanation on page
383 to
specifically address the reason(s) for this increase, when
consolidated R&D decreased
during this period.
47. Please revise AVROBIO's consolidated results of operations section to
provide an
analysis of the changes in the components of results of operations for
the year ended
December 31, 2022 as compared to the year ended December 31, 2021, as
well as
providing an analysis of cash flows for those annual periods. Refer to
Item 303(b) of
Regulation S-K and the Instructions thereto.
AVROBIO, Inc. Financial Statements for the Nine Months ended September 30,
2023, page F-
31
48. Please clarify the interim financial statements are for AVROBIO, Inc.
Tectonic Financial Statements
Independent Auditor's Report, page F-54
49. We note that the audit of the financial statements for Tectonic for
the two
years December 31, 2022 was conducted in accordance with auditing
standards generally
accepted in the United States of America (GAAS). If AVROBIO is
considered a shell
company, please tell us what consideration the Tectonic's auditor gave
to conducting the
audit in accordance with the standards of the PCAOB given, among other
things, the fact
that Tectonic's financial statements become those of the registrant
upon consummation of
the merger. If AVROBIO is not a shell company, please confirm that the
auditor report for
the historical financial statements presented after the business
combination will comply
with the PCAOB standards.
2. Summary of Significant Accounting Policies, page F-62
Convertible Preferred Stock, page F-66
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AVROBIO,LastNameErik Ostrowski
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50. You state hereunder that Tectonic classifies convertible preferred
stock outside of
stockholders deficit on the consolidated balance sheets "as it is
redeemable upon the
occurrence of certain deemed liquidation events that are not strictly
within the Company s
control." However, we note the disclosure on pages F-79 and F-99 that
the preferred
stock "is not subject to mandatory redemption or other redemption
provisions for which
the events resulting in redemption are not within the Company s
control, other than upon
occurrence of a Deemed Liquidation Event, defined as (a) a merger or
consolidation in
which the Company is a constituent party or a subsidiary of the
Company is a constituent
party and the Company issues shares of its capital stock pursuant to
the merger or
consolidation and (b) the sale or disposition of the Company or one or
more subsidiaries
of the Company." Please advise regarding these disclosures which
appear contradictory
or revise as applicable. To the extent the classification of the
preferred stock has changed
during the periods presented, please revise to explain how you
assessed such change in
classification in accordance with ASC 480 and ASC 815-40.
General
51. We note references to Tectonic's Scientific Advisory Board ("SAB") on
page 291. If
material, please include disclosure in the appropriate section(s) of
the registration
statement that:
Describes the role or function of Tectonic's SAB;
Describes the composition of the SAB, and in light of your
disclosure at the bottom
of page 143, indicates whether any members of the SAB are or have
been clinical
investigators in any Tectonic study or trial;
Describes whether, and if so how, SAB members are compensated; and
Describes whether any SAB members are party to a consulting or
advisory contract
with the Company, including any material provisions of such
agreements.
52. With reference to your disclosures concerning the current status of
AVROBIO's
operations, the plans for those operations, and the pro forma
accounting treatment for
ABROBIO's assets and liabilities beginning on page 422, please provide
us an analysis
concerning whether AVROBIO is a shell company as defined in Rule 12b-2
of the
Exchange Act or whether it could become one prior to Closing. In this
regard, we note
references to the potential sale, license or other monetization of
AVROBIO's legacy
business prior to the merger on pages 21, 235, and B-1. For guidance,
see Use of Form S-
8, Form 8-K, and Form 20-F by Shell Companies, Release No. 33-8587
(July 15, 2005) at
n. 32 as reiterated in Special Purpose Acquisition Companies, Shell
Companies, and
Projections, Release No. 33-11048 (March 30, 2022) at n. 239 and
accompanying text.
53. We note that as of September 2023, Tectonic formed a wholly-owned
Australian
subsidiary, Tectonic Therapeutic Pty Ltd., to conduct various
preclinical studies and
clinical trials for its product candidates in Australia. Further, it
appears based upon other
disclosures on pages F-62 and F-89 that Tectonic has another
wholly-owned subsidiary,
Tectonic Therapeutic Securities Corp. Please tell us why this latter
entity does not
Erik Ostrowski
AVROBIO, Inc.
March 12, 2024
Page 15
appear in Ex 21.1 (List of Subsidiaries of Tectonic Therapeutic, Inc.),
or revise.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Please contact Jenn Do at 202-551-3743 or Mary Mast at 202-551-3613 if
you have
questions regarding comments on the financial statements and related matters.
Please contact
Lauren Hamill at 303-844-1008 or Chris Edwards at 202-551-6761 with any other
questions.
Sincerely,
FirstName LastNameErik Ostrowski
Division of
Corporation Finance
Comapany NameAVROBIO, Inc.
Office of Life
Sciences
March 12, 2024 Page 15
cc: Adam Johnson
FirstName LastName