UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2016~~2017

¨☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-35443

ARGOS THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	56-2110007
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4233 Technology Drive Durham, North Carolina	27704
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (919) 287-6300

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	~~NASDAQ~~Nasdaq ~~Global~~Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ ☐ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ ☐ No x

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~~ filing requirements for the past 90 days. Yes x No ¨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 (§232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer ¨o Accelerated filer xo Non-accelerated filer ¨x (Do not check if a smaller reporting company) Smaller reporting company ¨o Emerging growth company x

~~Indicate~~If an emerging growth company, indicate by check mark ~~whether~~if the registrant ishas aelected ~~shell~~not ~~company~~to use the extended transition period for complying with any new or revised financial ~~(as~~accounting ~~defined~~standards inprovided ~~Rule 12b-2~~pursuant to Section 13(a) of the Exchange Act). ~~Yes ¨ No~~ x

AsIndicate ofby ~~June 30,~~check ~~2016~~mark ~~(the~~whether ~~last business day of~~ the registrant’s ~~most~~is ~~recently~~a ~~completed~~shell ~~second~~company ~~fiscal~~(as ~~quarter),~~defined ~~the~~in ~~aggregate~~Rule ~~market value of the registrant’s common stock held by non~~12b-~~affiliates was~~2 ~~approximately $90.0 million based upon the closing price for shares~~ of the ~~registrant’s~~Exchange ~~common stock of $6~~Act).13 asYes ~~reported by the NASDAQ Global Market on that date.~~☐ No x

As of ~~March~~June 930, 2017, ~~there~~(the ~~were~~last 41business day of the registrant’s most recently completed second fiscal quarter),~~355,486~~ ~~shares~~the ~~outstanding~~aggregate market value of the registrant’s common stock, ~~par~~held ~~value~~by non-affiliates was approximately $07.~~001~~5 ~~per~~million ~~share~~based upon the closing price for shares of the registrant’s common stock of $7.262 as reported by The Nasdaq Global Market on that date.

~~DOCUMENTS~~As ~~INCORPORATED~~of BYFebruary ~~REFERENCE~~28, 2018, there were 7,909,765 shares outstanding of the registrant’s common stock, par value $0.001 per share.

Portions of the registrant’s definitive proxy statement for its 2017 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2016.

ARGOS THERAPEUTICS, INC.

ANNUAL REPORT ON FORM 10-K

For the Year Ended December 31, ~~2016~~2017

Table of Contents

PART I
Item 1.	Business	3
Item 1A.	Risk Factors	32
Item 1B.	Unresolved Staff Comments	60
Item 2.	Properties	60
Item 3.	Legal Proceedings	60
Item 4.	Mine Safety Disclosures	60
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	61
Item 6.	Selected Financial Data	63
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	65
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	85
Item 8.	Financial Statements and Supplementary Data	86
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	86
Item 9A.	Controls and Procedures	86
Item 9B.	Other Information	86
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	87
Item 11.	Executive Compensation	88
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	88
Item 13.	Certain Relationships and Related Transactions, and Director Independence	88
Item 14.	Principal Accountant Fees and Services	88
PART IV
Item 15.	Exhibits and Financial Statement Schedules	88
Signatures		89
Schedule II		F-35

PART I

Item 1. Business	6
Item 1A. Risk Factors	55
Item 1B. Unresolved Staff Comments	94
Item 2. Properties	94
Item 3. Legal Proceedings	94
Item 4. Mine Safety Disclosures	94
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	95
Item 6. Selected Financial Data	97
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	99
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	130
Item 8. Financial Statements and Supplementary Data.	131
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	131
Item 9A. Controls and Procedures	131
Item 9B. Other Information	131
PART III
Item 10. Directors, Executive Officers and Corporate Governance	132
Item 11. Executive Compensation	136
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	148
Item 13. Certain Relationships and Related Transactions, and Director Independence	151
Item 14. Principal Accountant Fees and Services	155
PART IV
Item 15. Exhibits and Financial Statement Schedules	156
Item 16. Form 10-K Summary	161
Signatures	162
Schedule II	F-43

Argos Therapeutics®, Argos® and Arcelis™, the Argos Therapeutics logo and other trademarks or service marks of Argos appearing in this Annual Report on Form 10-K are the property of Argos Therapeutics, Inc. The other trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners.

Unless otherwise indicated, all information in this Annual Report on Form 10-K gives effect to a 1-for-20 reverse stock split of Argos’s common stock that became effective on January 18, 2018.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about:

•

the progress and timing of our development and commercialization activities;

• ~~our determination as to~~ the ~~next~~timing ~~steps~~and ~~for~~conduct ~~the~~and ~~rocapuldencel-T~~design ~~program, following our analysis~~ of ~~the preliminary trial data set for~~ our ~~pivotal~~ Phase 3 ADAPT clinical trial of rocapuldencel-T in combination with sunitinib / standard-of-care for the treatment of metastatic renal cell carcinoma, or mRCC, including the completion of the trial and the availability of the data from the trial, and our discussions with the U.S. Food and Drug Administration regarding the ADAPT trial and the pathway to registration for rocapuldencel-T;

• the timing and conduct of our planned investigator-initiated Phase 2 clinical ~~trials~~trial of rocapuldencel-T, including the timing of the initiation, enrollment and completion of the ~~trials~~trial and the availability of data from the ~~trials~~trial;

•

the timing and conduct of the ongoing investigator-initiated Phase 2 clinical trial of AGS-004 for HIV eradication and the planned investigator-initiated Phase 2 clinical trial of AGS-004 for long-term viral control in pediatric patients, including the timing of the initiation, enrollment and the completion of the trials and the availability of data from the trials;

•

our ability to obtain U.S. and foreign marketing approval for rocapuldencel-T for the treatment of mRCC and for AGS-004 for the treatment of HIV, and the ability of these product candidates to meet existing or future regulatory standards;

•

the potential benefits of our Arcelis precision immunotherapy technology platform and our Arcelis-based product candidates;

• our ability to build out and equip a North American commercial manufacturing facility and supply on a commercial scale our Arcelis-based products;

•

our intellectual property position and strategy;

•

our expectations related to the sufficiency of our cash, cash equivalents and short-term investments;

•

the accuracy of our estimates of the size and characteristics of the markets that may be addressed by our product candidates;

•

our ability to establish and maintain collaborations for the development and commercialization of our product candidates;

•

developments relating to our competitors and our industry; and

•

the impact of government laws and regulations.

We have based these forward-looking statements largely on our current plans, intentions, expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly in “Item 1A. Risk Factors,” that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or enter into.

You should read this Annual Report on Form 10-K with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of filing of this Annual Report on Form 10-K, and we do not assume any obligation to update any forward-looking statements, except as required by applicable law.

This Annual Report on Form 10-K includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. This Annual Report on Form 10-K also includes data based on our own internal estimates. While we believe these industry publications and third party research, surveys and studies are reliable, we have not independently verified such data.

~~PART I~~5

Item 1. Business

We are an immuno-oncology company focused on the development and commercialization of individualized immunotherapies for the treatment of cancer and infectious diseases based on our proprietary precision immunotherapy technology platform called Arcelis.

Our most advanced product candidate is rocapuldencel-T (formerly referred to as AGS-003), which we are developing for the treatment of metastatic renal cell carcinoma, or mRCC, and other cancers. We are conducting a pivotal Phase 3 clinical trial of rocapuldencel-T plus sunitinib (or another targeted therapy) ~~for~~vs. ~~the~~sunitinib ~~treatment~~(or ofanother ~~newly~~targeted ~~diagnosed~~therapy) ~~mRCC~~monotherapy ~~under~~for ~~a special protocol assessment, or SPA, with~~ the ~~Food~~treatment ~~and~~of ~~Drug~~newly ~~Administration,~~diagnosed ~~or FDA~~mRCC. We refer to this trial as the ADAPT trial. We dosed the first patient in the ADAPT trial in May 2013 and completed enrollment of the trial in July 2015. In February 2017, the independent data monitoring committee, or IDMC, for the ADAPT trial recommended that the trial be discontinued for futility based on its planned interim data analysis. The IDMC concluded that the trial was unlikely to demonstrate a statistically significant improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population, the primary endpoint of the study. In conjunction with our clinical and scientific advisors, we are analyzing the preliminary ADAPT trial data set and plan to discuss the data with the FDA. We have continued to conduct the ADAPT trial while we conduct our ongoing data review and plan to have discussions with the FDA. We expect that we will make a determination as to the next steps for the rocapuldencel-T clinical program based on this review and discussions. We are also currently supporting an investigator-initiated Phase 2 trial in patients with early stage RCC. Depending upon the results of our ongoing analysis of the data from the ADAPT trial and discussions with the FDA, and subject to our obtaining financing,we plan to support an investigator-initiated Phase 2 trial in bladder cancer and a Phase 2 trial of rocapuldencel-T in combination with a checkpoint inhibitor in mRCC.

WeUnder ~~are~~the ~~developing~~protocol ~~AGS-004,~~for ~~our~~the ~~second Arcelis-based product candidate~~trial, ~~for~~a ~~the treatment~~series of ~~HIV.~~interim Weanalyses have ~~completed~~been ~~Phase~~conducted 1by ~~and~~the ~~Phase~~independent 2data ~~trials~~monitoring ~~funded~~committee, byor ~~government~~IDMC, ~~grants~~for the trial to evaluate safety, efficacy and afutility. ~~Phase~~The 2bmost ~~trial~~recent ~~that~~interim analysis was ~~funded~~conducted in ~~full~~February ~~by the~~2017 ~~National~~(data ~~Institutes~~cut-off as of ~~Health~~February 3, or2017) ~~NIH,~~after 75% ~~and~~of the ~~National~~originally ~~Institute~~targeted ofpre-specified ~~Allergy~~number ~~and~~of ~~Infectious~~290 ~~Diseases,~~events orfor ~~NIAID.~~the Weanalysis ~~are~~of ~~currently supporting~~the anoriginal ~~ongoing~~primary ~~investigator-initiated~~endpoint ~~clinical trial~~ of ~~AGS-004~~overall survival inhad ~~adult~~occurred. ~~HIV~~At ~~patients~~this ~~evaluating~~interim analysis, the ~~use~~IDMC ofconcluded ~~AGS-004~~that inthe ~~combination with~~trial awas ~~latency~~unlikely ~~reversing~~to ~~drug~~demonstrate ~~for~~a ~~HIV~~statistically significant ~~eradication,~~improvement ~~which~~in isoverall ~~being~~survival ~~funded~~in by the ~~NIH~~combination ~~and~~treatment ~~NIAID~~arm, ~~and~~utilizing ~~plan~~the intent-to-treat ~~support~~population, anthe ~~investigator-initiated~~original ~~Phase~~primary 2endpoint. ~~clinical~~The ~~trial~~IDMC oftherefore ~~AGS-004~~recommended ~~evaluating~~that ~~AGS-004~~the ~~for~~trial ~~long-term~~be ~~viral~~discontinued ~~control~~for infutility. ~~pediatric~~The ~~patients~~IDMC ~~provided~~also noted that ~~results from~~rocapuldencel-T ~~our~~had ~~ongoing~~been ~~trial~~generally well-tolerated in ~~adult~~the ~~HIV patients are favorable~~trial.

~~Our~~Notwithstanding ~~Arcelis~~the ~~Platform~~IDMC recommendation, we considered the data too immature to observe the delayed treatment effect often observed with immunotherapy and decided to continue to conduct the trial pending further review and analysis of the data and discussions with the U.S. Food and Drug Administration, or FDA. This determination was made after discussion of the results of the interim analysis with the ADAPT trial principal investigators. In determining to continue the trial, we considered, among other factors, the degree of maturity of the data set, at the time of the interim analysis, the mechanism of action of rocapuldencel-T, which involves the induction of long-term memory immune responses, and the IDMC’s assessment of the safety profile of rocapuldencel-T. This determination was also supported by the extended durability of tumor responses observed in patients treated with rocapuldencel-T plus sunitinib in the trial. At the time of the IDMC’s February 2017 interim analysis, the median duration of follow-up was 20 months and more than half the patients in both treatment groups were still alive.

~~Our~~In ~~proprietary~~May ~~Arcelis~~2017, ~~precision~~we ~~immunotherapy~~met ~~technology~~with ~~platform~~the ~~utilizes~~FDA ~~biological~~to discuss ~~components~~the ~~from~~ADAPT atrial ~~patient’s~~and ~~own~~the ~~cancer~~future ~~cells~~direction orof ~~virus~~the torocapuldencel-T ~~generate individualized immunotherapies~~program. ~~These~~Following ~~immunotherapies~~that ~~employ specialized~~meeting, ~~white~~we ~~blood~~determined ~~cells~~to ~~called~~continue ~~dendritic~~the ADAPT ~~cells~~trial tountil ~~activate~~at anleast ~~immune~~the ~~response~~pre-specified ~~specific~~number toof ~~the~~290 ~~patient’s~~events ~~own~~occurs ~~disease. Arcelis~~and isto ~~based~~submit onto the ~~work~~FDA ofa ~~Dr. Ralph~~protocol ~~Steinman,~~amendment ~~winner~~to of increase the ~~2011~~pre-specified ~~Nobel~~number ~~Prize~~of inevents ~~medicine~~ for the ~~discovery~~primary ofanalysis ~~the role~~ of ~~dendritic~~overall ~~cells~~survival in the ~~immune~~trial ~~system~~beyond 290 events. We believe that extending our ~~Arcelis-based~~evaluation ~~immunotherapies may be applicable to a wide range~~ of ~~cancers~~ ~~and~~rocapuldencel-T ~~infectious~~beyond ~~diseases~~290 ~~and~~events ~~have~~in the ~~following~~trial ~~attributes~~could ~~that~~enhance weour ~~consider~~ability ~~critical~~ to aobserve ~~successful~~rocapuldencel-T’s expected ~~immunotherapy:~~delayed treatment effect.

•We ~~target~~are acurrently ~~patient’s~~finalizing ~~disease-specific~~an ~~antigens~~amendment to the ADAPT protocol, including ~~mutated~~an ~~antigens~~amended primary endpoint analysis, orand ~~neoantigens~~plan to submit it to the FDA prior to the interim data analysis planned for the second quarter of 2018, at which time approximately 55 new events (deaths) are expected to ~~elicit~~have aoccurred subsequent ~~potent~~to ~~immune~~the ~~response~~February ~~that~~2017 isinterim ~~specific~~analysis. We are planning to include the ~~patient’s~~following ~~own~~four ~~disease;~~co-primary endpoints in the amended ADAPT protocol:

•· ~~overcome~~Overall survival for all randomized patients when approximately 375 events have occurred (under the ~~immune~~same ~~suppression~~analysis that ~~exists~~was inoriginally ~~cancer~~planned ~~and~~for ~~infectious~~290 ~~disease patients~~events);

•· ~~induce~~The ~~memory~~percentage ~~T-cells, a specialized type~~ of ~~immune~~patients ~~cell~~surviving ~~that~~at isleast ~~known~~five ~~to correlate with improved clinical outcomes for cancer and HIV patients~~years;

•· ~~have~~Overall ~~minimal~~survival ~~toxicity~~for patients who remained alive at the time of the February 2017 interim analysis, to be evaluated when approximately 155 new events have occurred; and

•· ~~can~~Overall besurvival ~~produced~~for ~~using~~all apatients ~~centralized~~for ~~manufacturing~~whom ~~process~~at least 12 months of follow-up is available (excluding patients who died or were lost to follow-up within the first 12 months after enrollment).

~~Despite~~In connection with our ~~recent~~amendment ~~setback,~~of wethe ~~continue~~ADAPT toprotocol, ~~believe~~the special ~~that~~protocol ~~our~~assessment, ~~immunotherapies~~or ~~combine~~the SPA, for the ~~advantages~~ ofADAPT ~~other~~trial ~~approaches~~ceased to ~~immunotherapy~~be in effect. Additionally, ~~including~~we ~~approaches~~are todeveloping ~~facilitate~~a ~~antigen~~protocol for ~~recognition~~a ~~and~~Phase ~~approaches~~2 toclinical ~~overcome immune~~trial ~~suppression~~of ~~such~~rocapuldencel-T asin combination with a checkpoint ~~inhibition~~inhibitor for the treatment of patients with mRCC, but ~~while~~we ~~addressing~~do ~~limitations~~not ~~that~~intend ~~these~~to ~~approaches~~initiate ~~present~~this trial unless and until we obtain financing to fund the trial.

3In addition, we are developing AGS-004, our second Arcelis-based product candidate, for the treatment of HIV. We have completed Phase 1 and Phase 2 trials funded by government grants and a Phase 2b trial that was funded in full by the National Institutes of Health, or NIH, and the National Institute of Allergy and Infectious Diseases, or NIAID. We are currently supporting an ongoing investigator-initiated clinical trial of AGS-004 in adult HIV patients evaluating the use of AGS-004 in combination with vorinostat, a latency reversing drug, for HIV eradication and plan to support an investigator-initiated Phase 2 clinical trial of AGS-004 evaluating AGS-004 for long-term viral control in pediatric patients provided that results from our investigator-initiated clinical trial in adult HIV patients are favorable and government funding is obtained.

~~Our Development Programs~~6

~~The~~Our ~~following~~Arcelis ~~table summarizes our development programs for rocapuldencel-T and AGS-004.~~Platform

Product Candidate	Primary Indication	Status
Rocapuldencel-T	mRCC	•	Ongoing ADAPT trial; enrollment completed in July 2015; IDMC recommended study discontinuation; data analysis ongoing with plans to meet with the FDA and determine the next steps for the rocapuldencel-T program
		•	Planned Phase 2 clinical trial, in combination with a checkpoint inhibitor, expected to open for enrollment in the first half of 2017 subject to the ongoing analysis of data from the ADAPT trial and discussions with the FDA, as well as obtaining financing necessary to support such trial
	Early stage RCC (neoadjuvant)	•	Ongoing investigator-initiated Phase 2 clinical trial; preliminary data expected in the second half of 2017
	Advanced solid tumors	•	Planned investigator-initiated Phase 2 clinical trial in muscle invasive bladder cancer, expected to open for enrollment in the first half of 2017 subject to the ongoing analysis of data from the ADAPT trial and discussions with the FDA, as well as obtaining financing necessary to support such trial
AGS-004	HIV	•	Ongoing second stage of investigator-initiated clinical trial in combination with vorinostat for HIV eradication
		•	Planned investigator-initiated Phase 2 clinical trial for long-term viral control in pediatric patients expected in 2017 provided that results from ongoing trial in adult HIV patients are favorable

Our proprietary Arcelis precision immunotherapy technology platform utilizes biological components from a patient’s own cancer cells or virus to generate individualized immunotherapies. These immunotherapies employ specialized white blood cells called dendritic cells to activate an immune response specific to the patient’s own disease. Arcelis is based on the work of Dr. Ralph Steinman, winner of the 2011 Nobel Prize in medicine for the discovery of the role of dendritic cells in the immune system. We believe that our Arcelis-based immunotherapies may be applicable to a wide range of cancers and infectious diseases and have the following attributes that we consider critical to a successful immunotherapy:

We• ~~hold~~target ~~all~~a ~~commercial~~patient’s ~~rights to rocapuldencel~~disease-Tspecific ~~and AGS-004 in all geographies other than rights to rocapuldencel-T in Russia and the other states comprising the Commonwealth of Independent States~~antigens, ~~which~~including wemutated ~~exclusively licensed to Pharmstandard International S.A.~~antigens, or ~~Pharmstandard~~neoantigens, ~~rights~~ to ~~rocapuldencel-T~~elicit for the treatment of mRCC in South Korea, which we exclusively licensed to Green Cross Corp., or Green Cross, and rights to rocapuldencel-T in China, Hong Kong, Taiwan and Macau, which we exclusively licensed to Lummy (Hong Kong) Co. Ltd., or Lummy HK. We have granted to MEDcell Co., Ltd., a ~~wholly-owned subsidiary~~potent ofimmune ~~Medinet~~response ~~Co.~~that ~~Ltd.,~~is ~~hereinafter~~specific ~~referred~~ to ~~together as “Medinet,” an exclusive license to manufacture rocapuldencel-T for~~ the ~~treatment~~patient’s ofown ~~mRCC in Japan.~~disease;

~~Rocapuldencel-T~~• overcome the immune suppression that exists in cancer and infectious disease patients;

We• ~~are~~induce ~~developing~~memory ~~rocapuldencel-~~T ~~for the treatment of mRCC and other cancers. We are conducting the ADAPT trial of rocapuldencel~~-T plus sunitinib / targeted therapy for the treatment of newly diagnosed mRCC under an SPA with the FDA. We dosed the first patient in the ADAPT trial in May 2013. In July 2015 we completed enrollment in the ADAPT trialcells, ~~enrolling~~a ~~462~~specialized ~~patients~~type ~~with the goal~~ of ~~generating~~immune ~~290~~cell events for the primary endpoint of overall survival. We enrolled these patients at 107 clinical sites in North America, Europe and Israel. Under the ADAPT trial protocol, these patients were randomized between the rocapuldencel-T plus sunitinib / targeted therapy combination arm and sunitinib / targeted therapy alone control arm on a two-to-one basis. In February 2017, the IDMC for the ADAPT trial recommended that ~~the~~is ~~trial~~known ~~be discontinued for futility based on its planned interim data analysis. The IDMC concluded that the study was unlikely~~ to ~~demonstrate~~correlate ~~a statistically significant improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population, the primary endpoint of the study. In conjunction~~ with ~~our~~improved clinical ~~and~~outcomes scientific advisors, we are analyzing the preliminary ADAPT trial data set and plan to discuss the data with the FDA. We have continued to conduct the ADAPT trial while we conduct our ongoing data review and plan to have discussions with the FDA. We expect that we will make a determination as to the next steps for ~~the~~cancer ~~rocapuldencel-T clinical program based on this review~~ and ~~discussions.~~HIV patients;

In• addition to the ADAPT trial, we are currently supporting an ongoing investigator-initiated Phase 2 clinical trial designed to evaluate treatment with rocapuldencel-T in patients with early stage RCC prior to nephrectomy. This trial was opened for enrollment in late 2014 and five patients were enrolled as of March 16, 2017. We expect that a total of 10 patients will be enrolled in this trial. This trial provides the opportunity to observe the impact of rocapuldencel-T on the immune response in both the peripheral blood and in the primary tumor that is removed after rocapuldencel-T treatment, the latter as evidenced by the presence of tumor infiltrating lymphocytes in the tumor. Additionally, we have ~~developed~~minimal atoxicity; protocol for a Phase 2 clinical trial of rocapuldencel-T in combination with a checkpoint inhibitor for the treatment of patients with metastatic renal cell carcinoma, but have not yet initiated this trial pending analysis of the data from the ADAPT trial and ~~discussions with the FDA and subject to our obtaining financing.~~

~~Beyond~~• ~~renal~~can cell carcinoma, we plan to support an additional investigator-initiated Phase 2 clinical trial of rocapuldencel-T in muscle invasive bladder cancer depending upon the results of our ongoing analysis of the data from the ADAPT trial and discussions with the FDA and subject to our obtaining financing. The trial would have two phases: a pre-treatment phase and a treatment phase. In the pre-treatment phase, tumor tissue will be ~~obtained~~produced ~~via~~using a ~~transurethral resection~~centralized ofmanufacturing ~~the bladder tumor, which will then be used to extract RNA for the manufacture of rocapuldencel-T~~process. In the treatment phase, rocapuldencel-T will be given before tumor resection and combined with standard-of-care cytotoxic chemotherapy. Booster doses of rocapuldencel-T will continue after tumor resection. As with the neoadjuvant renal cancer trial, we have the unique opportunity to observe any meaningful impact of rocapuldencel-T on the immune response in the peripheral blood and immune responses infiltrating the primary tumor.

4Despite our setback with respect to rocapuldencel-T, we continue to believe that our immunotherapies combine the advantages of other approaches to immunotherapy, including approaches to facilitate antigen recognition and approaches to overcome immune suppression such as checkpoint inhibition, while addressing limitations that these approaches present.

~~AGS-004~~Our Development Programs

WeThe ~~are~~following ~~developing~~table ~~AGS-004~~summarizes ~~for~~our ~~the~~development ~~treatment~~programs ~~of HIV and are focusing this program on~~for ~~the use of AGS~~rocapuldencel-~~004~~T inand ~~combination with other therapies for the eradication of HIV. We believe that by combining~~ AGS-004 ~~with therapies that are being developed to expose the virus in latently infected cells to the immune system, we can potentially eradicate the virus~~. The current standard of care, antiretroviral drug therapy, or ART, can reduce levels of HIV in a patient’s blood, increase the patient’s life expectancy and improve the patient’s quality of life. However, ART cannot eliminate the virus, which persists in latently infected cells, remains undetectable by the immune system and can recur. In addition, ART requires daily, life-long treatment and can have significant side effects.

We are supporting an investigator-initiated clinical trial of AGS-004 in up to 12 adult HIV patients to evaluate the use of AGS-004 in combination with one of these latency reversing therapies for the eradication of HIV at the University of North Carolina. This trial is being conducted in two stages. Stage 1 of this trial has been completed and was designed to study immune response kinetics to AGS-004 in patients on continuous ART. These data were used to better define the optimal dosing strategy in combination with a latency reversing therapy in the ongoing Stage 2. We expect that some patients in Stage 1 will rollover into Stage 2, which is studying AGS-004 in combination with one of the latency reversing drugs. The patient clinical costs for the first stage of this trial were funded by Collaboratory of AIDS Researchers for Eradication, or CARE. The NIH Division of AIDS has approved $6.6 million in funding for the second stage of this trial.

Product Candidate	Primary Indication	Status
Rocapuldencel-T	mRCC	•	Ongoing ADAPT trial; enrollment completed in July 2015; IDMC recommended study discontinuation for futility in February 2017; ongoing discussions with FDA regarding protocol amendment and statistical analysis plan; interim analysis planned for second quarter of 2018

		•	Planned Phase 2 clinical trial in combination with a checkpoint inhibitor expected to open for enrollment as early as the first half of 2019 subject to supportive data from the ADAPT trial and discussions with the FDA and our obtaining financing to fund the trial.

AGS-004	HIV	•	Ongoing second stage of investigator-initiated clinical trial in combination with vorinostat for HIV eradication

		•	Planned investigator-initiated Phase 2 clinical trial for long-term viral control in pediatric patients provided that results from ongoing trial in adult HIV patients are favorable and government funding and necessary approvals are obtained

We ~~also~~hold ~~plan~~all tocommercial ~~explore~~rights ~~the~~to ~~use~~rocapuldencel-T and of AGS-004 ~~monotherapy~~in toall ~~provide~~geographies ~~long-term~~other ~~control~~than ~~of HIV~~rights ~~viral~~to ~~load~~rocapuldencel-T in ~~otherwise~~Russia ~~immunologically~~and ~~healthy~~the ~~patients~~other ~~and~~states ~~eliminate~~comprising ~~their~~the ~~need~~Commonwealth of ~~for~~Independent ~~ART. Accordingly~~States, ifwhich ~~initial~~we ~~data~~exclusively ~~from Stage~~licensed 2to ofPharmstandard ~~the~~International ~~ongoing~~S.A., ~~adult~~or ~~eradication study are favorable~~Pharmstandard, werights ~~expect~~ to ~~support an investigator~~rocapuldencel-~~initiated~~T for ~~Phase~~the 2treatment ~~clinical trial~~ of ~~AGS-004~~mRCC ~~monotherapy~~ in ~~pediatric~~South ~~patients infected with HIV who have otherwise healthy immune systems and have been treated with ART since birth or shortly thereafter and~~Korea, aswhich awe ~~result,~~exclusively ~~are~~licensed ~~lacking the antiviral memory T-cells~~ to ~~combat~~Green ~~the~~Cross ~~virus~~Corp., ~~The commencement~~or ofGreen ~~this~~Cross, ~~trial~~and isrights ~~subject~~ to ~~supportive data obtained from the adult eradication trial and approval of the protocol~~rocapuldencel-T byin ~~the~~China, ~~principal~~Hong ~~investigator(s)~~Kong, ~~institutional~~Taiwan ~~review~~and ~~boards~~Macau, ~~the~~which ~~IMPAACT~~we ~~Network~~exclusively ~~leadership~~licensed ~~and the FDA and~~ to ~~the~~Lummy ~~agreement by~~(Hong ~~the~~Kong) ~~NIH~~Co. toLtd., ~~fund~~or ~~the~~Lummy ~~trial~~HK. ~~costs~~We ~~not~~have ~~related~~ granted to ~~AGS-004~~MEDcell ~~manufacturing~~Co., ~~Assuming~~Ltd., ~~the~~a ~~supportive~~wholly-owned ~~data~~subsidiary ~~and~~of ~~the~~Medinet ~~necessary~~Co. ~~approvals are obtained~~Ltd., wehereinafter ~~expect~~referred to ~~come~~together toas a“Medinet,” an ~~determination~~exclusive aslicense to ~~whether~~manufacture torocapuldencel-T ~~conduct~~for ~~this~~the ~~trial~~treatment of mRCC in ~~2017~~Japan.

~~Strategy~~7

Our goal is to become a leading biopharmaceutical company focused on discovering, developing and commercializing individualized immunotherapies for the treatment of a wide range of cancers. Key elements of our strategy are:Rocapuldencel-T

•We ~~complete~~are ~~clinical~~developing ~~development~~rocapuldencel-T for the treatment of mRCC and ~~seek~~other ~~marketing~~cancers. ~~approval~~We are conducting the ADAPT trial of rocapuldencel-T ~~for~~plus sunitinib / targeted therapy for the treatment of newly diagnosed mRCC,. ~~subject~~We todosed ~~our~~the ~~ongoing~~first ~~analysis~~patient ofin the ~~preliminary~~ ADAPT trial ~~data~~in ~~set~~May ~~and~~2013. ~~our~~In ~~discussions~~July 2015 we completed enrollment in the ADAPT trial, enrolling 462 patients with the ~~FDA~~goal of generating 290 events for the original primary endpoint of overall survival. We enrolled these patients at 107 clinical sites in North America, Europe and ~~our~~Israel. ~~obtaining~~Under ~~financing;~~the ADAPT trial protocol, these patients were randomized between the rocapuldencel-T plus sunitinib / targeted therapy combination arm and sunitinib / targeted therapy alone control arm on a two-to-one basis.

•In ~~expand~~February ~~clinical~~2017, ~~development~~the IDMC for the ADAPT trial recommended that the trial be discontinued for futility based on its planned interim data analysis. The IDMC concluded that the trial was unlikely to demonstrate a statistically significant improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population at the pre-specified number of 290 events (deaths), the original primary endpoint of the study. Notwithstanding the IDMC’s recommendation, we determined to continue to conduct the trial while we analyzed interim data from the trial. Following a meeting with the FDA, we determined to continue the ADAPT trial until at least the pre-specified number of 290 events occurs and to submit to the FDA a protocol amendment to increase the pre-specified number of events for the primary analysis of overall survival in the trial beyond 290 events. We believe that extending our evaluation of rocapuldencel-T beyond 290 events in ~~other~~the ~~cancers,~~trial ~~including~~could ~~early~~enhance ~~stage~~our ~~RCC~~ability ~~and~~to ~~advanced~~observe ~~solid~~rocapuldencel-T’s ~~tumors;~~expected delayed treatment effect.

•We ~~commercialize~~are ~~rocapuldencel-T~~currently infinalizing ~~North~~an ~~America~~amendment to ~~independently~~the ADAPT protocol, including an amended primary endpoint analysis, and ~~with~~plan ~~third~~to ~~parties~~submit ~~outside~~it ~~North~~to ~~America;~~the FDA prior to the interim data analysis planned for the second quarter of 2018, at which time approximately 55 new events (deaths) are expected to have occurred subsequent to the February 2017 interim analysis. We are planning to include the following four co-primary endpoints in the amended ADAPT protocol:

•· ~~lease,~~Overall ~~build~~survival ~~out~~for ~~and~~all ~~equip~~randomized apatients ~~facility~~when orapproximately ~~otherwise~~375 ~~arrange~~events ~~for~~have ~~the~~occurred ~~commercial~~(under ~~manufacture~~the ofsame ~~our~~analysis ~~products~~that ~~based~~was onoriginally ~~our~~planned ~~Arcelis~~for ~~platform~~290 events);

•· ~~continue~~The ~~clinical~~percentage ~~development~~ of ~~AGS-004~~patients ~~for~~surviving ~~the~~at ~~treatment~~least offive ~~HIV, potentially through government funding or other third party funding, and collaborate with third parties for commercialization on a worldwide basis~~years; ~~and~~

•· ~~pursue~~Overall ~~expansion~~survival ~~of our broad intellectual property protection~~ for ~~our~~patients ~~Arcelis~~who ~~precision~~remained ~~immunotherapy~~alive ~~technology~~at ~~platform,~~the ~~product~~time ~~candidates~~of ~~and~~the ~~proprietary~~February ~~manufacturing~~2017 ~~processes~~interim ~~through~~analysis, ~~U.S.~~to ~~and~~be ~~international~~evaluated ~~patent~~when ~~filings~~approximately ~~and~~155 ~~maintenance~~new ofevents ~~trade~~have ~~secret~~occurred; ~~confidentiality.~~and

~~Immunotherapy~~· Overall survival for all patients for whom at least 12 months of follow-up is available (excluding patients who died or were lost to ~~Treat~~follow-up ~~Cancer~~within ~~and~~the ~~Infectious~~first ~~Diseases~~12 months after enrollment).

~~Cancer~~In ~~cells~~connection ~~occur~~with ~~frequently~~our inamendment of the ADAPT ~~human body~~protocol, ~~yet are effectively controlled by T-cells in~~ the ~~immune system~~SPA, ~~which~~for ~~recognize~~the ~~proteins~~ADAPT ~~produced~~trial byceased ~~the~~to ~~cancer~~be ~~cells,~~in ~~known~~effect. ~~as antigens~~Additionally, aswe ~~abnormal~~are ~~and~~developing ~~kill~~a ~~the~~protocol ~~associated cancer~~for ~~cells.~~a ~~Two~~Phase ~~specific~~2 ~~types~~clinical trial of Trocapuldencel-T ~~cells~~in ~~are~~combination ~~necessary~~with ~~for~~a ancheckpoint ~~effective~~inhibitor ~~anti-cancer~~for ~~immune~~the ~~response:~~treatment ~~CD8+~~of ~~T-cells,~~patients ~~which~~with ~~kill cancer cells~~mRCC, ~~and~~but ~~CD4+~~we ~~T-cells,~~do ~~which~~not ~~provide~~intend to ainitiate ~~“help”~~this ~~signal~~trial ~~that~~unless ~~activates~~ and ~~directs~~until ~~the~~we ~~CD8+~~obtain ~~T-cell~~financing ~~response~~to fund the trial.

~~Cancer cells utilize several strategies to escape detection by the immune system and T~~AGS-cells. For example, cancer cells secrete factors that act systemically to prevent T-cells from responding to activation signals, resulting in the inability of T-cells to carry out their role of killing cancer cells. Chronic viral infections such as HIV or hepatitis C present the same challenges to the immune system as cancer because the immune system must overcome this disease-induced immune suppression to recognize and respond to virus-infected cells.004

5We are developing AGS-004 for the treatment of HIV and are focusing this program on the use of AGS-004 in combination with other therapies for the eradication of HIV. We believe that by combining AGS-004 with therapies that are being developed to expose the virus in latently infected cells to the immune system, we can potentially eradicate the virus. The current standard of care, antiretroviral drug therapy, or ART, can reduce levels of HIV in a patient’s blood, increase the patient’s life expectancy and improve the patient’s quality of life. However, ART cannot eliminate the virus, which persists in latently infected cells, remains undetectable by the immune system and can recur. In addition, ART requires daily, life-long treatment and can have significant side effects.

~~Immunotherapy~~We isare ~~intended~~supporting an investigator-initiated clinical trial of AGS-004 in up to ~~stimulate~~12 ~~and~~adult ~~enhance~~HIV patients to evaluate the ~~body’s~~use ~~natural~~of ~~mechanism~~AGS-004 in combination with vorinostat, a latency reversing therapy, for ~~recognizing~~the ~~and~~eradication ~~killing~~of ~~cancer~~HIV ~~cells~~at the University of North Carolina. This trial is being conducted in two stages. Stage 1 of this trial has been completed and ~~virus~~was designed to study immune response kinetics to AGS-~~infected~~004 ~~cells~~in patients on continuous ART. ~~Current~~These ~~immunotherapeutic~~data ~~approaches~~were used to ~~treat~~better ~~cancer~~define ~~can~~the ~~generally~~optimal dosing strategy in combination with the latency reversing therapy vorinostat bein ~~separated~~the ongoing Stage 2. Some patients in Stage 1 have rolled over into ~~two~~Stage ~~different~~2. ~~mechanisms~~The patient clinical costs for the first stage of ~~action:~~this ~~approaches~~trial towere ~~facilitate~~funded ~~antigen~~by ~~recognition~~Collaboratory ~~and~~of ~~approaches~~AIDS toResearchers ~~overcome~~for Eradication, or CARE. The NIH Division of AIDS has approved ~~immune~~$6.6 ~~suppression~~million in funding for the second stage of this trial.

~~Approaches~~We also plan to ~~Facilitate~~determine ~~Antigen~~whether ~~Recognition~~to explore the use of AGS-004 monotherapy to provide long-term control of HIV viral load in otherwise immunologically healthy patients and eliminate their need for ART. Accordingly, if initial data from Stage 2 of the ongoing adult eradication study are favorable and government funding and necessary approvals are obtained, we expect to support an investigator-initiated Phase 2 clinical trial of AGS-004 monotherapy in pediatric patients infected with HIV who have otherwise healthy immune systems and have been treated with ART since birth or shortly thereafter and, as a result, are lacking the antiviral memory T-cells to combat the virus. The commencement of this trial is subject to supportive data obtained from the adult eradication trial and approval of the protocol by the principal investigator(s), institutional review boards, the IMPAACT Network leadership and the FDA and to the agreement by the NIH to fund the trial costs not related to AGS-004 manufacturing.

Cancer immunotherapies that use an antigen-based approach are designed to stimulate an immune response against one or more tumor-associated antigens. In most cases, the tumor-associated antigens that are being targeted are non-mutated, or normal, antigens, which are usually well tolerated by the immune system. In the context of cancer, these normal antigens are either produced at abnormally high levels or predominantly in tumor cells, or both. The goal of antigen-based immunotherapies is to activate the patient’s own immune system to seek out and kill the cancer cells that carry the targeted antigen. Sanpower Group’s Provenge (sipuleucel-T) for metastatic castrate-resistant prostate cancer is the only antigen-based immunotherapy that has been approved by the FDA. Because these immunotherapies are designed to target specific antigens, they are less likely to have toxicity than traditional cancer therapies. However, antigen-based immunotherapies based on shared or commonly overexpressed antigens may have limited efficacy because they are only able to target one or a limited number of antigens, which may or may not be present in the patient’s cancer cells, and do not capture mutated antigens specific to that patient’s tumor that can drive tumor growth.8

~~Approaches to Overcome Immune Suppression~~Strategy

~~Immunotherapies~~Our ~~that~~goal ~~rely~~is ~~on approaches~~ to ~~overcome~~become ~~immune~~a ~~suppression~~leading ~~are designed to~~biopharmaceutical ~~overcome~~company ~~immunosuppression~~focused inon ~~patients~~discovering, bydeveloping ~~blocking signaling pathways that prevent T-cell activation~~ and ~~function.~~commercializing ~~The~~individualized ~~class of monoclonal antibody-based~~ immunotherapies ~~known~~for ~~as checkpoint inhibitors are being developed on~~ the ~~basis of this approach. For example, Bristol-Myers Squibb’s first FDA-approved immunotherapy Yervoy (ipilimumab), a~~ treatment ~~for patients with unresectable or metastatic melanoma, is designed to act by blocking the function~~ of a ~~protein~~wide ~~expressed in activated T-cells called CTLA4, which~~range ~~acts as a T-cell “off” switch. By blocking the function~~ of ~~CTLA4,~~cancers the patient’s T-cells can become activated, resulting in an immune response against tumors. Another pathway that immunotherapies are being developed to address is the PD-1/PD-L1 pathway. In this pathway, activated T-cells expressing the protein PD-1 are disabled when binding occurs between PD-1 and ~~its~~certain ~~ligand, PD-L1,~~infectious ~~which is expressed on tumor cells~~diseases. ~~Approved~~Key ~~anti-PD-1/PDL-1~~elements pathway checkpoint inhibitors and those being developed are designed to interrupt this pathway by binding to the PD-1 protein or the PD-L1 ligand to prevent them from binding with each other. Two anti-PD-1/PDL-1 pathway checkpoint inhibitors, Bristol-Myers Squibb’s nivolumab (Opdivo) and Merck’s pembrolizumab (Keytruda), are FDA approved for patients with several types of ~~cancers,~~our ~~including~~strategy, ~~in the case of nivolumab, second line therapy of patients with mRCC. However, not~~ all ~~patients~~subject ~~respond~~ to anti-PD-1/PDL-1 checkpoint inhibitors, and, in most cases, patients whose tumors predominantly express PD-L1 are most likely to respond. Immunotherapies that use checkpoint inhibition have demonstrated the ~~ability~~availability toof ~~effectively overcome immunosuppression and enable T-cells to function against tumor cells and potentially virus-infected cells. However~~financing, ~~these therapies~~ are ~~administered systemically to enable T-cells to function and are not designed to target tumor-specific differences, such~~ as ~~the unique mutations of an individual’s tumor. This lack of specificity can negatively impact healthy~~ ~~tissue and cause significant side effects.~~follows:

~~Designing~~• ~~Immunotherapies~~complete ~~Using~~clinical ~~Our~~development ~~Arcelis~~and ~~Platform~~seek marketing approval of rocapuldencel-T for the treatment of mRCC, subject to our ongoing analysis of the preliminary ADAPT trial data set and our discussions with the FDA;

We• ~~believe~~expand ~~that~~clinical ~~our~~development ~~proprietary~~of ~~Arcelis~~rocapuldencel-T ~~precision~~including ~~immunotherapy~~in ~~technology~~mRCC ~~platform~~in ~~enables us~~combination towith ~~produce~~a ~~individualized~~checkpoint ~~immunotherapies~~inhibitor ~~that can combine the advantages of these approaches to immunotherapy while addressing the limitations~~ and ~~disadvantages~~in ofother ~~these~~advanced ~~approaches.~~solid ~~We have designed our Arcelis platform to create product candidates which have attributes that we believe are critical to a successful immunotherapy:~~tumors;

• ~~Target~~commercialize ~~disease~~rocapuldencel-~~specific~~T antigens, including mutated antigens. The immunotherapy should target antigens, including unique mutated antigens, associated with the patient’s disease. We believe that immunotherapies that target only non-mutated, or commonly shared, tumor-associated antigens will be limited in ~~terms~~North ofAmerica ~~efficacy~~independently as non-mutated antigens are generally poor at stimulating immune responses. Our Arcelis precision immunotherapy technology platform uses messenger RNA, or mRNA, from the patient’s own cancer or virus to yield an individualized immunotherapy that contains the patient’s disease-specific antigens, including mutated antigens, and iswith ~~designed~~third toparties ~~elicit~~outside aNorth ~~potent immune response specific to the patient’s own disease.~~America;

• ~~Overcome~~establish ~~disease-induced~~a ~~immune~~facility ~~suppression.~~or ~~The~~otherwise ~~immunotherapy~~arrange ~~must~~for ~~be able to generate an effective immune response in patients whose immune systems are compromised by their disease. Both tumors and HIV are known to impair~~ the ~~functionality~~commercial manufacture of ~~CD4+~~our Tproducts ~~helper~~based ~~cells,~~on ~~which~~our ~~aid their escape from CD8+ T-cell attack. Our~~ Arcelis~~-based~~ immunotherapies do not require fully functioning CD4+ helper T-cells to mount an immune response with effective anti-tumor or anti- viral activity as we add the protein known as CD40 ligand, or CD40L, to provide the signaling that the CD4+ helper T-cells would otherwise provide.platform;

• ~~Induce~~continue ~~memory T-cells. The immunotherapy should be able to induce specific T-cells, such as CD8+CD28+ memory T-cells, which are known to correlate with improved~~ clinical ~~outcomes~~development ~~for~~of ~~cancer and HIV patients. These memory T~~AGS-~~cells~~004 ~~are long lived and necessary~~ for athe ~~durable~~treatment ~~immune~~of ~~response.~~HIV, ~~Our~~potentially ~~Arcelis~~through ~~process~~government ~~produces~~funding ~~dendritic~~or ~~cells~~other ~~that~~third ~~secrete~~party ~~IL-12~~funding, ~~which is necessary to induce~~ and ~~expand~~collaborate ~~patient-specific~~with ~~CD8+CD28+~~third ~~memory~~parties ~~T-cells.~~for ~~These~~commercialization ~~memory T-cells are able to seek out and kill cancer or virus-infected cells that express the antigens identical to those displayed~~ on ~~the~~a ~~surface~~worldwide ofbasis; ~~the dendritic cells.~~and

• ~~Have~~enter ~~minimal~~into ~~toxicity.~~arrangements ~~The~~with ~~immunotherapy~~third ~~should~~parties ~~have~~both ~~minimal toxicity, which would potentially enable it~~ to beassist ~~combined~~in ~~with~~the ~~other~~development ~~therapies for cancer~~ and ~~infectious~~commercialization ~~diseases. The mechanism~~ of ~~action~~our ofproduct ~~Arcelis-based~~candidates, ~~products~~particularly ~~induces~~in ~~patient-~~international markets, and ~~disease-specific~~to ~~memory T~~in-~~cells.~~license ~~The~~product ~~antigen~~candidates ~~source~~in ~~and~~order ~~the~~to ~~dendritic~~expand ~~cells~~our ~~that~~pipeline; ~~are~~and ~~both~~• ~~used~~pursue ~~for~~expansion ~~the~~of ~~therapy~~our ~~are~~broad ~~both~~intellectual ~~derived~~property ~~from~~protection ~~the~~for ~~individual~~our ~~patient.~~Arcelis ~~This~~precision ~~target~~immunotherapy ~~customization~~technology ~~and~~platform, ~~specificity is less likely to impact healthy tissue and cause toxicity. Our Arcelis-based~~ product candidates ~~have~~and ~~been~~proprietary ~~well~~manufacturing ~~tolerated~~processes inthrough ~~clinical~~U.S. ~~trials~~and ininternational ~~more~~patent ~~than~~filings ~~375~~and ~~patients~~maintenance ~~with~~of notrade ~~serious~~secret ~~adverse events attributed to our immunotherapies~~confidentiality.

6Immunotherapy to Treat Cancer and Infectious Diseases

~~Our~~Cancer ~~Arcelis precision immunotherapy technology platform is focused on dendritic~~ cells ~~which~~ ~~present~~occur ~~antigens~~frequently toin the ~~attention of the~~ human body, ~~immune~~yet ~~system,~~are ~~including,~~effectively incontrolled ~~particular,~~by T-cells, ~~and~~in ~~are critical to~~ the immune system’s, ~~recognition~~which ofrecognize proteins ~~derived~~produced ~~from~~by the cancer cells, ~~or virus-infected cells. Dendritic cells are capable of~~known ~~internalizing~~as ~~cancer or virus protein~~ antigens, ~~and displaying fragments of these protein antigens on their surface~~ as ~~small~~abnormal ~~peptides. The~~and ~~dendritic~~kill ~~cells~~the ~~then~~associated ~~present~~cancer ~~these peptide antigens to T-~~cells. ~~This~~Two ~~allows~~specific ~~the~~types of T-cells toare ~~bind~~necessary tofor ~~these~~an ~~peptide~~effective ~~antigens~~anti-cancer ~~and,~~immune inresponse: ~~the~~CD8+ ~~case of cancer~~T-cells, ~~target~~which ~~and~~ kill cancer cells, ~~expressing~~and ~~these~~CD4+ ~~antigens and~~T-cells, inwhich ~~the~~provide ~~case~~a of“help” ~~infectious~~signal ~~disease,~~that ~~target~~activates and ~~kill~~directs ~~virus-infected cells to control~~ the ~~spread~~CD8+ ofT-cell ~~infectious virus~~response.

~~The~~Cancer ~~following~~cells ~~graphic~~utilize ~~illustrates~~several strategies to escape detection by the ~~processes~~immune ~~comprising~~system ~~our~~and ~~Arcelis~~T-cells. ~~precision~~For ~~immunotherapy~~example, cancer cells secrete factors that act systemically to prevent T-cells ~~platform:~~from responding to activation signals, resulting in the inability of T-cells to carry out their role of killing cancer cells. Chronic viral infections such as HIV or hepatitis C present the same challenges to the immune system as cancer because the immune system must overcome this disease-induced immune suppression to recognize and respond to virus-infected cells.

AtImmunotherapy ~~the~~is ~~clinical~~intended ~~site. As~~to ~~shown~~stimulate and inenhance the ~~graphic~~body’s ~~above,~~natural ~~the~~mechanism ~~manufacture~~for ~~of our~~recognizing ~~Arcelis~~and killing cancer cells and virus-~~based~~infected ~~immunotherapies~~cells. ~~requires~~Current ~~two~~immunotherapeutic approaches ~~components~~to ~~derived~~treat ~~from~~cancer ~~the~~can ~~patient~~generally be separated into two different mechanisms of action: approaches to facilitate antigen recognition and approaches to overcome immune suppression.

•Approaches Ato ~~disease~~Facilitate ~~sample:~~Antigen In the case of cancer, the sample consists of tumor cells, and in the case of infectious disease, the sample consists of blood containing the virus. The disease sample is generally collected at the time of diagnosis or initial treatment.Recognition

7Cancer immunotherapies that use an antigen-based approach are designed to stimulate an immune response against one or more tumor-associated antigens. In most cases, the tumor-associated antigens that are being targeted are non-mutated, or normal, antigens, which are usually well tolerated by the immune system. In the context of cancer, these normal antigens are either produced at abnormally high levels or predominantly in tumor cells, or both. The goal of antigen-based immunotherapies is to activate the patient’s own immune system to seek out and kill the cancer cells that carry the targeted antigen. A limited number of antigen-based immunotherapies have been approved by the FDA such as Provenge (sipuleucel-T) for metastatic castrate-resistant prostate cancer, Kymriah (tisagenlecleucel) for B-cell precursor acute lymphoblastic leukemia, and Yescarta (axicabtagene ciloleucel) for certain types of large B-cell lymphomas. Because these immunotherapies are designed to target specific antigens, they are less likely to have toxicity than traditional cancer therapies. However, antigen-based immunotherapies based on shared or commonly overexpressed antigens may have limited efficacy because they are only able to target one or a limited number of antigens, which may or may not be present in the patient’s cancer cells, and do not capture mutated antigens specific to that patient’s tumor that can drive tumor growth.

• Monocytes: Monocytes are a type of white blood cell, which are obtained through a laboratory procedure called leukapheresis that occurs after diagnosis and at least three weeks prior to initiating treatment with our immunotherapy.9

AtApproaches ~~the manufacturing facility. The tumor cells or the blood sample and the leukapheresis product are shipped~~ to ~~the~~Overcome ~~manufacturing~~Immune ~~facility following collection at the clinical site. After receipt of these components at the facility, we take the following steps:~~Suppression

•Immunotherapies Wethat ~~isolate~~rely on approaches to overcome immune suppression are designed to block signaling pathways that prevent T-cell activation and function. The class of monoclonal antibody-based immunotherapies known as checkpoint inhibitors are being developed on the ~~patient~~basis of this approach. For example, Bristol-Myers Squibb’s ~~disease~~first ~~mRNA~~FDA-approved immunotherapy Yervoy (ipilimumab), ~~which~~a ~~carries~~treatment ~~the~~for ~~genetic~~patients ~~information~~with unresectable or metastatic melanoma, is designed to ~~recreate~~act by blocking the function of a protein expressed in activated T-cells called CTLA4, which acts as a T-cell “off” switch. By blocking the function of CTLA4, the patient’s ~~disease~~T-cells ~~antigens~~can become activated, resulting ~~from~~in an immune response against tumors. Another pathway that immunotherapies are being developed to address is the ~~disease~~PD-1/PD-L1 pathway. ~~sample~~In this pathway, activated T-cells expressing the protein PD-1 are disabled when binding occurs between PD-1 and ~~amplify~~its ligand, PD-L1, which is expressed on tumor cells. Approved anti-PD-1/PDL-1 pathway checkpoint inhibitors and those being developed are designed to interrupt this pathway by binding to the ~~mRNA~~PD-1 soprotein ~~that~~or ~~only~~the PD-L1 ligand to prevent them from binding with each other. Two anti-PD-1/PDL-1 pathway checkpoint inhibitors, Bristol-Myers Squibb’s nivolumab (Opdivo) and Merck’s pembrolizumab (Keytruda), are FDA approved for patients with several types of cancers, including, in the case of nivolumab, second line therapy of patients with mRCC. Positive results of a ~~small~~Phase ~~disease~~3 ~~sample~~trial iscombining ~~required~~nivolumab and ipilumumab in front-line treatment of metastatic renal carcinoma have also been recently reported. However, not all patients respond to ~~manufacture~~anti-PD-1/PDL-1 checkpoint inhibitors, and, in most cases, patients whose tumors predominantly express PD-L1 are most likely to respond. Immunotherapies that use checkpoint inhibition have demonstrated the ~~immunotherapy~~ability to effectively overcome immunosuppression and enable T-cells to function against tumor cells and potentially virus-infected cells. However, these therapies are administered systemically to enable T-cells to function and are not designed to target tumor-specific differences, such as the unique mutations of an individual’s tumor. This lack of specificity can negatively impact healthy tissue and cause significant side effects.

•Designing ~~Separately,~~Immunotherapies weUsing ~~extract~~Our ~~the~~Arcelis ~~monocytes from the leukapheresis product and culture them using a proprietary process to produce matured dendritic cells.~~Platform

• We ~~then~~believe ~~combine~~that ~~the~~our ~~matured~~proprietary ~~dendritic~~Arcelis precision ~~cells~~immunotherapy ~~with~~technology aplatform ~~solution~~enables ofus ~~the~~to ~~patient’s~~produce ~~isolated~~individualized ~~mRNA~~immunotherapies ~~and~~that acan ~~proprietary~~combine ~~synthetic CD40L RNA. We apply a brief electric pulse to~~ the ~~solution~~advantages of inthese aapproaches ~~process referred~~ to asimmunotherapy ~~electroporation,~~while ~~which~~addressing ~~enables~~ the ~~patient’s~~limitations ~~mRNA~~ and ~~the~~disadvantages ~~CD40L~~of ~~RNA~~these toapproaches. ~~pass~~We ~~into,~~have ordesigned ~~load,~~our Arcelis ~~the~~platform ~~dendritic~~to ~~cells.~~create ~~The~~product ~~dendritic~~candidates ~~cells~~which ~~process~~have ~~the~~attributes ~~CD40L~~that ~~RNA~~we ~~into~~believe ~~CD40L~~are ~~protein,~~critical ~~enabling the dendritic cells~~ to ~~secrete IL-12,~~ a ~~cytokine~~successful ~~required to induce and expand CD8+CD28+ memory T-cells.~~immunotherapy:

• WeTarget ~~then~~disease-specific ~~further~~antigens, ~~culture~~including ~~the~~mutated ~~mRNA-loaded~~antigens. ~~dendritic~~The ~~cells~~immunotherapy soshould ~~that~~target ~~these~~antigens, ~~cells~~including ~~allow~~unique ~~for~~mutated ~~antigen~~antigens, ~~expression~~associated ~~from~~with the patient’s ~~mRNA~~disease. ~~and~~We ~~presentation~~believe that immunotherapies that target only non-mutated, or commonly shared, tumor-associated antigens will, in ~~the~~many ~~form~~cases, be limited in terms of ~~peptides~~efficacy onas ~~the~~non-mutated ~~surface~~antigens ofare ~~the~~generally ~~dendritic~~poor ~~cells~~at stimulating immune responses. ~~These~~Our ~~mature,~~Arcelis ~~loaded~~precision ~~dendritic~~immunotherapy ~~cells~~technology ~~are~~platform ~~formulated~~uses ~~using~~messenger RNA, or mRNA, from the patient’s ~~plasma~~own ~~that~~cancer ~~was~~or ~~collected~~virus ~~during~~to ~~the~~yield ~~leukapheresis~~an toindividualized ~~become~~immunotherapy that contains the ~~Arcelis~~patient’s disease-~~based~~specific ~~product.~~antigens, ~~Typically~~including mutated antigens, ~~several~~and ~~years~~is ofdesigned ~~doses~~to ~~are~~elicit ~~produced~~a ~~for~~potent ~~each~~immune response specific to the patient’s own disease.

• After verifying the quality of the product, we vial, cryogenically freeze and then ship individual patient doses to the clinic, where each is thawed and administered by intradermal injection.

	•	Overcome disease-induced immune suppression. The immunotherapy must be able to generate an effective immune response in patients whose immune systems are compromised by their disease. Both tumors and HIV are known to impair the functionality of CD4+ T helper cells, which aid their escape from CD8+ T-cell attack. Our Arcelis-based immunotherapies do not require fully functioning CD4+ helper T-cells to mount an immune response with effective anti-tumor or anti-viral activity as we add the protein known as CD40 ligand, or CD40L, to provide the signaling that the CD4+ helper T-cells would otherwise provide.

	•	Induce memory T-cells. The immunotherapy should be able to induce specific T-cells, such as CD8+CD28+ memory T-cells, which are known to correlate with improved clinical outcomes for cancer and HIV patients. These memory T-cells are long lived and necessary for a durable immune response. Our Arcelis process produces dendritic cells that secrete IL-12, which is necessary to induce and expand patient-specific CD8+CD28+ memory T-cells. These memory T-cells are able to seek out and kill cancer or virus-infected cells that express the antigens identical to those displayed on the surface of the dendritic cells.

Patient treatment. Upon injection into the skin of the patient, the mature, loaded dendritic cells are intended to migrate to the lymph nodes near the site of the injection. It is at these lymph nodes that the dendritic cells come into contact with T-cells. This interaction with the loaded dendritic cells is intended to cause a measurable increase in patient- and disease-specific memory T-cells.10

We• ~~believe~~Have ~~that~~minimal ~~our~~toxicity. ~~Arcelis~~The ~~precision~~ immunotherapy ~~technology platform~~should ~~allows~~have usminimal totoxicity, ~~create~~which ~~individualized~~would ~~immunotherapies~~potentially ~~that~~enable ~~may~~it to be ~~capable~~combined ofwith ~~treating~~other atherapies ~~wide~~for ~~range~~cancer and infectious diseases. The mechanism of ~~cancers~~action of Arcelis-based products induces patient- and ~~infectious diseases~~disease-specific ~~using~~memory aT-cells. ~~centralized~~The ~~manufacturing~~antigen ~~process~~source and the dendritic cells that are both used for the therapy are both derived from the individual patient. ~~Specifically,~~This ~~our~~target customization and specificity is less likely to impact healthy tissue and cause toxicity. Our Arcelis-based ~~platform~~product ~~typically~~candidates ~~allows~~have usbeen well tolerated in clinical trials in more than 375 patients with no serious adverse events attributed to: our immunotherapies.

•Our ~~produce~~Arcelis ~~several~~precision ~~years~~immunotherapy oftechnology platform ~~customized~~is ~~therapy~~focused on ~~average~~dendritic ~~for~~cells awhich ~~patient~~present antigens to the attention of the human immune system, including, in particular, T-cells, and are critical to the immune system’s recognition of proteins derived from acancer cells or virus-infected cells. Dendritic cells are capable of internalizing cancer or virus protein antigens and displaying fragments of these protein antigens on their surface as small peptides. The dendritic cells then present these peptide antigens to T-cells. This allows the T-cells to bind to these peptide antigens and, in the case of cancer, target and kill cancer cells expressing these antigens and, in the case of infectious disease, ~~sample~~target and akill ~~single~~virus-infected ~~leukapheresis~~cells ~~from~~to ~~that~~control ~~patient;~~the spread of infectious virus.

• produce additional years of therapy for a patient at a later date with an additional leukapheresis enabling the collection of additional monocytes, but without requiring an additional disease sample from the patient;11

•The ~~use~~following agraphic ~~single~~illustrates ~~manufacturing~~the ~~facility~~processes ~~for~~comprising ~~North America, which is possible because~~ our Arcelis ~~process~~precision ~~can~~immunotherapy utilize monocytes obtained through leukapheresis within four days of the procedure, and doses of our immunotherapies can be shipped frozen in a cryoshipper that can maintain the target temperature for at least ten days;platform:

•At ~~cryopreserve~~ the ~~multiple~~clinical ~~doses~~site. As ~~generated~~shown in ~~from~~ the ~~single~~graphic ~~manufacturing~~above, ~~process~~the ~~for~~manufacture ~~each~~of ~~patient~~our inArcelis-based aimmunotherapies ~~direct~~requires ~~injectable~~two ~~formulation~~components ~~that~~derived ~~allows~~from the ~~doses to remain stable and usable for up to five years; and~~patient:

• ~~produce~~A ~~immunotherapies~~disease ~~that~~sample: ~~can~~In bethe ~~administered~~case byof ~~intradermal~~cancer, ~~injection~~the sample consists of tumor cells, and in anthe ~~outpatient~~case ~~procedure~~of infectious disease, the sample consists of blood containing the virus. The disease sample is generally collected at the time of diagnosis or initial treatment.

~~Rocapuldencel-T~~• ~~for~~Monocytes: ~~the~~Monocytes ~~Treatment~~are a type of ~~Metastatic~~white ~~Renal~~blood ~~Cell~~cell, ~~Carcinoma~~which are obtained through a laboratory procedure called leukapheresis that occurs after diagnosis and ~~Other~~at ~~Cancers~~least three weeks prior to initiating treatment with our immunotherapy.

WeAt ~~are~~the ~~developing~~manufacturing ~~rocapuldencel-T~~facility. The tumor ~~for~~cells ~~use~~or inthe ~~combination~~blood ~~with~~sample ~~sunitinib~~ and ~~other therapies for~~ the ~~treatment~~leukapheresis ofproduct ~~mRCC.~~are ~~Sunitinib~~shipped isto ~~an oral small molecule drug sold under~~ the ~~trade~~manufacturing ~~name~~facility ~~Sutent~~following ~~and~~collection is at the ~~current~~clinical ~~standard of~~site. ~~care~~After ~~for~~receipt ~~initial treatment, or first-line treatment,~~ of ~~mRCC~~these ~~following~~components ~~diagnosis.~~at Inthe ~~April 2012~~facility, ~~the FDA notified us that~~ we ~~have~~ ~~obtained~~take ~~fast track designation for rocapuldencel-T for~~ the ~~treatment~~following ~~of mRCC.~~steps:

• We ~~are~~isolate ~~conducting~~ the ~~ADAPT~~patient’s ~~trial~~disease of rocapuldencel-T plus sunitinib / targeted therapy compared to sunitinib / targeted therapy monotherapy for the treatment of newly diagnosed mRCC under an SPA with the FDA. In July 2015 we completed enrollment in the ADAPT trialmRNA, ~~enrolling~~which ~~462~~carries ~~patients with~~ the ~~goal~~genetic ofinformation generating 290 events for the primary endpoint of overall survival. In February 2017, the IDMC for the ADAPT trial recommended that the trial be discontinued for futility based on its planned interim data analysis. The IDMC concluded that the study was unlikely to ~~demonstrate~~recreate ~~a statistically significant improvement in overall survival in~~ the ~~combination~~patient’s ~~treatment~~disease ~~arm~~antigens, ~~utilizing~~from the ~~intent-to-treat~~disease ~~population,~~sample ~~the primary endpoint of the study. In conjunction with our clinical~~ and ~~scientific~~amplify ~~advisors, we are analyzing~~ the ~~preliminary~~mRNA ~~ADAPT~~so ~~trial data set and plan to discuss the data with the FDA. We have continued to conduct the ADAPT trial while we conduct our ongoing data review and have discussions with FDA. We expect~~ that weonly ~~will make~~ a ~~determination~~small asdisease tosample ~~the~~is ~~next~~required ~~steps~~to ~~for~~manufacture the ~~rocapuldencel-T clinical program based on this review and discussions~~immunotherapy.

8• Separately, we extract the monocytes from the leukapheresis product and culture them using a proprietary process to produce matured dendritic cells.

We are supporting investigator initiated Phase 2 clinical trials designed to evaluate treatment with rocapuldencel-T in patients with early stage RCC prior to nephrectomy and plan to support investigator initiated Phase 2 clinical trials of rocapuldencel-T in mRCC and muscle invasive bladder cancer, depending upon the results of our ongoing analysis of the data from the ADAPT trial and discussions with the FDA, and subject to our obtaining financing.12

~~Renal~~• ~~Cell~~We ~~Carcinoma~~then combine the matured dendritic cells with a solution of the patient’s isolated mRNA and a proprietary synthetic CD40L RNA. We apply a brief electric pulse to the solution in a process referred to as electroporation, which enables the patient’s mRNA and the CD40L RNA to pass into, or load, the dendritic cells. The dendritic cells process the CD40L RNA into CD40L protein, enabling the dendritic cells to secrete IL-12, a cytokine required to induce and expand CD8+CD28+ memory T-cells.

~~RCC~~• isWe ~~the~~then ~~most~~further ~~common~~culture ~~type~~the ofmRNA-loaded ~~kidney~~dendritic ~~cancer.~~cells ~~The~~so ~~American~~that ~~Cancer~~these ~~Society,~~cells orallow ~~ACS~~for ~~estimates that~~antigen ~~there~~expression ~~were~~from ~~approximately~~the ~~63,000~~patient’s ~~new~~mRNA ~~cases~~and ofpresentation ~~kidney~~in ~~cancer~~the ~~and~~form ~~approximately~~of ~~14,000~~peptides ~~deaths~~on ~~from~~the ~~this~~surface ~~disease~~of in the ~~United States~~dendritic ~~in 2016~~cells. ~~The~~These ~~National Comprehensive Cancer Network~~mature, orloaded ~~NCCN~~dendritic ~~estimates~~cells ~~that 90% of kidney cancer cases~~ are ~~RCC.~~formulated ~~For~~using ~~patients with~~the ~~RCC~~patient’s plasma that ~~had~~was ~~metastasized~~collected byduring the ~~time~~leukapheresis ~~RCC was first diagnosed, a condition referred~~ to asbecome ~~newly~~the ~~diagnosed~~Arcelis-based ~~mRCC~~product. Typically, ~~the~~several ~~five-year survival~~years ~~rate~~of ~~has~~doses ~~historically~~are ~~been~~produced ~~approximately~~for ~~12%~~each patient.

~~ACS~~• ~~statistics~~After ~~indicate~~verifying ~~that approximately 25% of newly diagnosed RCC patients present with mRCC in~~ the ~~United~~quality ~~States. Additional patients who were initially diagnosed with earlier stage RCC may also progress to mRCC as these patients suffer relapses. The NCCN estimates between 20% to 30%~~ of ~~patients with early stage RCC will relapse within three years of surgical excision of~~ the ~~primary tumor. Although the National Cancer Institute~~product, orwe ~~NCI~~vial, ~~does~~cryogenically ~~not~~freeze ~~provide~~and ~~prevalence of~~then ~~RCC~~ship byindividual ~~stage,~~patient ~~based~~doses ~~on the NCCN’s three-year relapse rate, we estimate that there may be up~~ to ~~an additional 10,000 to 15,000 cases of mRCC identified annually in~~ the ~~United States. Combining newly diagnosed mRCC patients with patients who relapse~~clinic, we ~~estimate~~where ~~that there may be between 20,000 to 25,000 new cases of mRCC in the United States~~ each ~~year.~~is Wethawed ~~estimate, based on publicly available information, including 2013 quarterly~~ and ~~annual~~administered ~~reports~~by ofintradermal ~~companies that market other therapies approved for mRCC, that the current worldwide mRCC market for these other therapies exceeds $2 billion~~injection.

~~Physicians~~Patient ~~generally diagnose mRCC by examining a tumor biopsy under a microscope~~treatment. Upon injection ~~evaluation~~into of the ~~visual~~skin ~~appearance~~ of the ~~tumor cells~~patient, ~~a pathologist will classify~~ the ~~mRCC~~mature, ~~into~~loaded ~~clear~~dendritic ~~cell~~cells orare ~~non-clear~~intended ~~cell types.~~to ~~According~~migrate to the ~~NCCN,~~lymph ~~approximately~~nodes ~~80%~~near ~~of all RCC diagnoses are clear cell RCC. Because clear cell types are~~ the ~~most common~~site ~~type~~ of ~~tumor cell, most of~~ the injection. ~~more~~It ~~recently~~is ~~approved~~at ~~therapies~~these ~~for~~lymph ~~mRCC~~nodes ~~have~~that ~~limited their clinical trials to patients with~~ the ~~clear~~dendritic ~~cell~~cells ~~type~~come ofinto ~~tumor~~contact ~~cell~~with T-cells. ~~However,~~This ~~the~~interaction ~~FDA~~with ~~has not limited~~ the ~~approval~~loaded dendritic ofcells ~~these~~is ~~therapies~~intended to ~~clear~~cause ~~cell~~a ~~types~~measurable ~~of mRCC,~~increase soin ~~they~~patient- ~~may be used for both clear cell~~ and ~~non~~disease-~~clear~~specific ~~cell~~memory ~~types~~T-cells.

~~mRCC~~We ~~Patient~~believe ~~Classification~~that our Arcelis precision immunotherapy technology platform allows us to create individualized immunotherapies that may be capable of treating a wide range of cancers and infectious diseases using a centralized manufacturing process. Specifically, our Arcelis platform typically allows us to:

~~Upon~~• ~~diagnosis,~~produce ~~the~~several ~~prognosis~~years ~~for~~of ~~patients~~customized ~~with~~therapy ~~mRCC~~on isaverage ~~classified~~for ~~into~~a ~~three~~patient overall disease risk profiles — favorable, intermediate and poor — using objective prognostic risk factors. These risk factors were originally developed by researchers at Memorial Sloane Kettering Cancer Center and subsequently revised by Dr. Daniel Heng from ~~the~~a ~~University~~small ofdisease ~~Calgary’s~~sample ~~Baker Cancer Center~~ and ~~contributors~~a ~~from~~single ~~the~~leukapheresis ~~International Metastatic Renal Cell Carcinoma Database Consortium, or the Consortium, based on clinical data~~ from ~~patients~~that ~~treated with sunitinib and other therapies. These risk factors, which we refer to as the Heng risk factors, have been correlated to adverse overall survival in mRCC and include:~~patient;

• ~~time~~produce ~~from~~additional ~~diagnosis~~years toof ~~the~~therapy ~~initiation~~for ofa ~~systemic~~patient ~~therapeutic~~at ~~treatment~~a oflater ~~less~~date ~~than~~with ~~one~~an ~~year,~~additional ~~which~~leukapheresis isenabling ~~indicative~~the collection of ~~more~~additional ~~aggressive~~monocytes, ~~disease.~~but Wewithout ~~refer~~requiring toan ~~this~~additional ~~risk~~disease ~~factor~~sample asfrom the ~~less than one year to treatment risk factor~~patient;

• ~~low~~use ~~levels~~a single manufacturing facility for North America, which is possible because our Arcelis process can utilize monocytes obtained through leukapheresis within four days of ~~hemoglobin~~the procedure, aand ~~protein~~doses of our immunotherapies can be shipped frozen in ~~the~~a ~~blood~~cryoshipper that ~~carries~~can ~~oxygen~~maintain the target temperature for at least ten days;

• ~~elevated~~cryopreserve ~~corrected~~the ~~calcium~~multiple ~~levels~~doses generated from the single manufacturing process for each patient in a direct injectable formulation that allows the doses to remain stable and usable for up to five years; and

• ~~diminished~~produce ~~overall~~immunotherapies ~~patient~~that ~~performance~~can ~~status~~be oradministered ~~physical~~by ~~functioning;~~intradermal injection in an outpatient procedure.

•Rocapuldencel-T ~~elevated~~for ~~levels~~the Treatment of ~~neutrophils,~~Metastatic aRenal ~~type~~Cell Carcinoma ofand ~~white~~Other ~~blood~~Cancers ~~cell; and~~

•We ~~elevated~~are ~~platelet~~developing ~~count~~rocapuldencel-T for use in combination with sunitinib (or another targeted therapy) for the treatment of mRCC. Sunitinib is an oral small molecule drug sold under the trade name Sutent and is the current standard of care for initial treatment, or first-line treatment, of mRCC following diagnosis. In April 2012, the FDA notified us that we have obtained fast track designation for rocapuldencel-T for the treatment of mRCC.

~~Patients~~We ~~exhibiting~~are ~~zero~~conducting ~~risk~~the ~~factors~~ADAPT atPhase ~~the~~3 ~~time~~ trial of ~~treatment~~rocapuldencel-T ~~are~~plus ~~included~~sunitinib in(or ~~the~~another ~~favorable risk~~targeted ~~group;~~therapy) ~~patients~~compared ~~exhibiting~~to ~~one~~sunitinib (or ~~two~~another ~~risk~~targeted ~~factors~~therapy) ~~are~~monotherapy for ~~included~~the treatment of newly diagnosed mRCC. In July 2015 we completed enrollment in the ~~intermediate~~ADAPT ~~risk~~trial, ~~group;~~enrolling ~~and~~462 patients ~~exhibiting three~~with orthe ~~more~~goal ~~risk~~of ~~factors~~generating ~~are~~290 ~~included~~events infor the ~~poor~~original ~~risk~~primary ~~group.~~endpoint ~~Even~~of ~~when~~overall ~~treated~~survival. ~~with~~In ~~standard~~February of2017, ~~care~~the ~~therapies~~IDMC ~~such~~for asthe ~~sunitinib,~~ADAPT ~~patients~~trial inrecommended that the ~~intermediate~~trial ~~risk~~be ~~group~~discontinued ~~have~~for anfutility ~~expected~~based ~~survival~~on ofits ~~less~~planned ~~than~~interim ~~two~~data ~~years,~~analysis. ~~and~~The ~~patients~~IDMC inconcluded that the ~~poor~~trial ~~risk~~was ~~group have~~unlikely anto ~~expected~~demonstrate ~~survival~~a ofstatistically ~~less~~significant ~~than~~improvement ~~one~~in ~~year.~~overall Insurvival ~~January~~in ~~2013~~the combination treatment arm, ~~Dr. Heng~~utilizing ~~published~~the inintent-to-treat ~~Lancet~~population ~~Oncology~~at the ~~following data~~pre-specified ~~from~~number ~~the~~of ~~Consortium~~290 ~~database~~events ~~regarding~~(deaths), ~~overall~~the ~~survival~~original primary endpoint of ~~mRCC~~the ~~patients~~study. inNotwithstanding ~~these~~the ~~three~~IDMC’s ~~risk~~recommendation, ~~groups~~we ~~treated~~determined ~~with~~to ~~sunitinib~~continue to conduct the trial while we analyzed ~~and~~interim ~~other~~data ~~therapies:~~from the trial.

~~• in 157 favorable risk patients, the median overall survival was 43.2 months;~~13

•In inMay ~~440~~2017, ~~intermediate~~we ~~risk~~met ~~patients~~with the FDA to discuss the ADAPT trial and the future direction of the rocapuldencel-T program. Following that meeting, we determined to continue the ADAPT ~~median~~trial until at least the pre-specified number of 290 events occurs and to submit to the FDA a protocol amendment to increase the pre-specified number of events for the primary analysis of overall survival ~~was~~in 22the trial beyond 290 events.5 ~~months;~~We ~~and~~believe that extending our evaluation of rocapuldencel-T beyond 290 events in the trial could enhance our ability to observe rocapuldencel-T’s expected delayed treatment effect.

•We inare ~~252~~currently ~~poor~~finalizing ~~risk~~an ~~patients~~amendment to the ADAPT protocol, including an amended primary endpoint analysis, and plan to submit it to the ~~median~~FDA ~~overall~~prior ~~survival~~to ~~was~~the ~~7.8~~interim ~~months~~data analysis planned for the second quarter of 2018, at which time approximately 55 new events (deaths) are expected to have occurred subsequent to the February 2017 interim analysis. We are planning to include the following four co-primary endpoints in the amended ADAPT protocol:

9· Overall survival for all randomized patients when approximately 375 events have occurred (under the same analysis that was originally planned for 290 events);

~~Current~~· ~~Treatment~~The percentage of patients surviving at least five years;

~~The~~· ~~initial~~Overall ~~treatment~~survival for ~~most mRCC~~ patients ~~when~~who ~~the~~remained ~~primary~~alive ~~tumor~~at isthe ~~intact~~time ~~is surgical removal~~ of the ~~tumor,~~February ~~usually~~2017 ~~requiring~~interim ~~partial or complete removal of the affected kidney~~analysis, ~~referred~~ to asbe ~~nephrectomy.~~evaluated ~~The~~when ~~NCCN generally~~approximately ~~recommends~~155 ~~systemic~~new ~~treatment~~events ~~with approved therapies for mRCC patients following nephrectomy for patients whose tumors~~ have ~~metastasized~~occurred; ~~or for patients who present with mRCC upon diagnosis or as a result of a relapse from an earlier stage of RCC.~~and

~~Historically,~~· ~~mRCC~~Overall ~~has~~survival ~~been~~for ~~treated~~all ~~with~~patients ~~non-specific,~~for ~~cytokine-based~~whom ~~immunotherapies such~~at asleast ~~interferon~~12 amonths ~~and~~of ILfollow-2,up ~~which~~is ~~have~~available ~~demonstrated~~(excluding ~~a clinical benefit in a small percentage of mRCC~~ patients. ~~However,~~who ~~these~~died ~~therapies~~or ~~lack~~were ~~specificity~~lost ~~and have been demonstrated~~ to ~~have severe toxicities, which can lead to cardiopulmonary, neuropsychiatric, dermatologic, renal, hepatic and hematologic side effects and limits their use. For example, although high~~follow-~~dose~~up ~~IL-2~~within is the ~~only~~first ~~therapy~~12 tomonths ~~have~~after ~~demonstrated durable complete mRCC remissions, its toxicity restricts its use to a small minority of patients and for a short duration~~enrollment).

~~Several~~In ~~targeted~~connection ~~therapies,~~with ~~such~~our asamendment ~~Sutent~~of ~~(sunitinib), Votrient (pazopanib), Torisel~~the ~~(temsirolimus),~~ADAPT ~~Nexavar (sorafenib)~~protocol, ~~Avastin~~the ~~(bevacizumab) plus interferon- a~~SPA, ~~Afinitor (everolimus), Inlyta (axitinib), Opdivo (nivolumab) and Cabometyx (cabozantinib) are approved~~ for the ~~treatment~~ADAPT oftrial ~~mRCC.~~ceased ~~While most~~to ofbe ~~these targeted therapies have been evaluated~~ in ~~first-line~~effect. ~~treatment of mRCC~~Additionally, ~~Sutent~~we ~~demonstrated~~are developing a ~~higher~~protocol ~~rate~~for ofa ~~progression free survival and overall survival in its pivotal~~ Phase 32 clinical trial ~~than~~of ~~that~~rocapuldencel-T ~~shown by the other targeted therapies~~ in ~~their pivotal~~combination ~~Phase~~with 3a ~~clinical~~checkpoint ~~trials.~~inhibitor ~~According~~for ~~to an independent market research survey conducted during~~ the ~~second~~treatment ~~half~~ of ~~2014~~patients ~~of 87~~with ~~US-based medical oncologists and new prescription data (IMS)~~mRCC, ~~Sutent~~but ~~was~~we ~~the~~do ~~first-line~~not ~~drug of choice for approximately half~~intend ofto ~~newly~~initiate ~~treated~~this ~~advanced~~trial ~~RCC~~unless ~~patients.~~and Inuntil ~~addition,~~we ~~the~~obtain ~~data~~financing ~~showed~~to ~~that~~fund the ~~use of Votrient was increasing as initial therapy for advanced RCC~~trial.

~~Although~~Renal ~~most~~Cell of these targeted therapies have demonstrated prolonged progression free survival as compared to interferon- a, they are rarely associated with durable remissions or enhanced long-term survival, particularly in patients who are classified as intermediate or poor risk at the time of treatment. In addition, each of these targeted therapies has shortcomings that limit their use in the treatment of mRCC, including significant toxicities, such as neutropenia and other hematologic toxicities, fatigue, diarrhea, hand-foot syndrome, hypertension and other cardiovascular effects. The overlapping and combined toxicities of the targeted therapies have prevented their use in combination therapies. For instance, researchers conducting a Phase 1 clinical trial of the combination of sunitinib and temsirolimus discontinued the trial due to toxicities. We believe that the inability to date to combine these therapies without additive toxicity and the absence of durable remissions and prolonged survival in patients with intermediate and poor risk disease indicates there is an unmet need for novel therapeutic approaches for mRCC that can improve efficacy without adding any appreciable toxicity. We determined to conduct the ADAPT trial based on our earlier belief that the combination of rocapuldencel-T with sunitinib or other therapies had the potential to address this unmet need.Carcinoma

~~Development~~RCC ~~Status~~is the most common type of kidney cancer. The American Cancer Society, or ACS estimates that there were approximately 63,000 new cases of kidney cancer and approximately 14,000 deaths from this disease in the United States in 2016. The National Comprehensive Cancer Network, or NCCN estimates that 90% of kidney cancer cases are RCC. For patients with RCC that had metastasized by the time RCC was first diagnosed, a condition referred to as newly diagnosed mRCC, the five-year survival rate has historically been approximately 12%.

WeACS ~~are~~statistics ~~conducting~~indicate ~~our~~that ~~pivotal~~approximately 25% ~~Phase~~of 3newly ~~ADAPT~~diagnosed ~~trial~~RCC ofpatients ~~rocapuldencel-T~~present with mRCC in the United States. WeAdditional ~~have~~patients ~~previously~~who were initially diagnosed with ~~conducted~~earlier stage RCC may also progress to mRCC as these patients suffer relapses. The NCCN estimates between 20% to 30% of patients with early stage RCC will relapse within three ~~clinical~~years ~~trials~~of surgical excision of ~~rocapuldencel~~the primary tumor. Although the National Cancer Institute, or NCI, does not provide prevalence of RCC by stage, based on the NCCN’s three-Tyear ~~and~~relapse ~~its~~rate, ~~predecessor~~we ~~product~~estimate that there may be up to an additional 10,000 ~~including~~to a15,000 ~~Phase~~cases 2of ~~trial~~mRCC ~~and~~identified ~~two~~annually ~~Phase~~in 1the ~~trials~~United States. Combining newly diagnosed mRCC Topatients ~~date~~with patients who relapse, we ~~have~~estimate ~~administered~~that ~~rocapuldencel-T~~there may be between 20,000 to ~~over~~25,000 ~~300~~new ~~patients~~cases of mRCC in ~~these~~the ~~trials~~United States each year. We ~~submitted~~estimate, tobased ~~the~~on ~~FDA~~publicly anavailable ~~investigational~~information, including 2013 quarterly and annual reports of companies that ~~new~~market ~~drug~~other ~~application,~~therapies orapproved ~~IND~~for mRCC, that the current worldwide mRCC market for ~~rocapuldencel-T~~these inother ~~March~~therapies ~~2003~~exceeds $2 billion.

~~Pivotal~~Physicians ~~Phase~~generally 3diagnose ~~ADAPT~~mRCC ~~Trial~~by ofexamining a ~~rocapuldencel-T~~tumor biopsy under a microscope. We ~~are~~Upon ~~conducting~~evaluation of the ~~pivotal~~visual appearance of the tumor cells, a pathologist will classify the ~~Phase~~mRCC 3into ~~ADAPT~~clear ~~clinical~~cell ~~trial~~or non-clear cell types. According to the NCCN, approximately 80% of ~~rocapuldencel-T~~all ~~plus~~RCC ~~sunitinib/~~diagnoses ~~targeted~~are ~~therapy~~clear ~~for~~cell RCC. Because clear cell types are the ~~treatment~~most common type of ~~newly~~tumor ~~diagnosed~~cell, most of the more recently approved therapies for mRCC ~~under~~have limited antheir ~~SPA~~clinical trials to patients with the ~~FDA.~~clear Wecell ~~dosed~~type of tumor cell. However, the ~~first~~FDA ~~patient~~has innot ~~May~~limited ~~2013~~the ~~and~~approval ~~completed~~of ~~enrollment~~these therapies to clear cell types of ~~the~~mRCC, ~~trial~~so inthey ~~July~~may ~~2015~~be used for both clear cell and non-clear cell types.

~~The~~mRCC ~~ADAPT~~Patient trial is a randomized, multicenter, open label trial of rocapuldencel-T in combination with sunitinib / targeted therapy compared to sunitinib / another therapy monotherapy. We enrolled 462 patients with the goal of generating 290 events for the primary endpoint of overall survival. We enrolled these patients at 107 clinical sites in North America, Europe and Israel. Under the ADAPT trial protocol, these patients were randomized between the rocapuldencel-T plus sunitinib / targeted therapy combination arm and the sunitinib / targeted monotherapy control arm on a two-to-one basis. The primary endpoint of the ADAPT trial is overall survival. Secondary endpoints include progression free survival, overall response rate and safety. In February 2017, the IDMC for the ADAPT trial recommended that the trial be discontinued for futility based on its planned interim data analysis. The IDMC concluded that the study was unlikely to demonstrate a statistically significant improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population, the primary endpoint of the study. In conjunction with our clinical and scientific advisors, we are analyzing the preliminary ADAPT trial data set and plan to discuss the data with the FDA. We have continued to conduct the ADAPT trial while we conduct our ongoing data review and have discussions with FDA. We expect that we will make a determination as to the next steps for the rocapuldencel-T clinical program based on this review and discussions. .Classification

~~Our~~Upon ~~design~~diagnosis, ~~for~~ the ~~ADAPT~~prognosis ~~trial~~for ~~required enrollment of adult~~ patients ~~who have been newly~~ ~~diagnosed~~ with mRCC ~~with~~is ~~primary~~classified ~~tumor~~into ~~intact~~three ~~and~~overall ~~metastatic~~ disease ~~following~~risk ~~nephrectomy,~~profiles ~~who~~— ~~have predominantly clear cell RCC based upon the tumor collected at nephrectomy~~favorable, intermediate and ~~who~~poor ~~have~~— ~~not~~using ~~received~~objective prognostic ~~any~~risk ~~prior~~factors. ~~therapies~~These ~~for~~risk ~~RCC.~~factors ~~Participating~~were ~~patients~~originally ~~were required~~developed toby beresearchers ~~suitable~~at ~~candidates~~Memorial ~~for~~Sloane ~~sunitinib~~Kettering ~~therapy~~Cancer Center and ~~have~~subsequently ~~either~~revised ~~poor~~by ~~risk~~Dr. Daniel orHeng ~~intermediate~~from ~~risk disease at presentation, with~~ the ~~less~~University ~~than~~of ~~one~~Calgary’s ~~year~~Baker toCancer ~~treatment~~Center ~~risk factor~~ and ~~not~~contributors ~~more~~from the ~~than~~International ~~four~~Metastatic ~~Heng~~Renal ~~risk~~Cell ~~factors~~Carcinoma inDatabase ~~total.~~Consortium, Asor ~~part of~~ the ~~ADAPT trial design~~Consortium, ~~the~~based ~~two~~on ~~arms~~clinical ofdata ~~the~~from ~~trial~~patients treated ~~weree~~with ~~balanced~~sunitinib ~~based~~and ~~upon~~other ~~known prognostic risk factors~~therapies. ~~Patients~~These ~~were stratified by number of~~ risk factors (1, 2,which 3we orrefer 4)to as ~~well as whether they had measurable versus non-measurable metastatic disease following nephrectomy. The patient population in~~ the ~~ADAPT~~Heng ~~trial~~risk isfactors, ~~generally~~have ~~comparable~~been correlated to ~~the~~adverse ~~patient~~overall ~~population~~survival ~~treated~~ in ~~our~~mRCC ~~Phase 2 combination therapy clinical trial. Approximately 77% of the patients enrolled in the ADAPT trial are intermediate risk patients (1-2 risk factors)~~ and ~~23% are poor risk (3-4 risk factors).~~include:

10• time from diagnosis to the initiation of systemic therapeutic treatment of less than one year, which is indicative of more aggressive disease. We refer to this risk factor as the less than one year to treatment risk factor;

~~Under~~• ~~the~~low ~~ADAPT~~levels ~~trial~~of ~~protocol~~hemoglobin, ~~patients in the rocapuldencel-T plus sunitinib/ targeted therapy arm are dosed with rocapuldencel-T once every three weeks for five doses, followed by~~ a ~~booster~~protein ~~dose every three months. In accordance with its label, sunitinib dosing is administered~~ in ~~six-week cycles, consisting of four weeks on drug and two weeks on drug holiday. Rocapuldencel-T dosing is initiated at~~ the ~~end~~blood of the initial six-week sunitinib cycle. The first dose of rocapuldencel-T is administered prior to the start of sunitinib dosing in the second sunitinib cycle. This dosing regimen is identical to the dosing regimen used in our Phase 2 combination therapy clinical trial of rocapuldencel-T and sunitinib, except that ~~the~~carries start of the sixth dose is scheduled for week 24 to better provide patients the opportunity to receive a total of eight doses across 48 weeks. Patients in the sunitinib monotherapy control arm receive sunitinib on the same dosing schedule as patients receive sunitinib in the rocapuldencel-T-sunitinib combination arm.oxygen;

Under the ADAPT trial protocol, rocapuldencel-T is administered for at least 48 weeks so that patients receive at least eight doses of rocapuldencel-T. Dosing will cease prior to 48 weeks if two events of disease progression or unacceptable toxicity occur or upon the joint decision of the patient and the investigator. If after 48 weeks of dosing of rocapuldencel-T a patient has stable disease or is responding to treatment, dosing will continue once every three months until disease progression. If an investigator determines to discontinue sunitinib, either due to disease progression or toxicity, the investigator can, at any time during the ADAPT trial after the first six-week cycle of sunitinib, initiate second-line therapy with one of the other approved therapies, including pazopanib, axitinib, everolimus or temsirolimus. In the event of discontinuation of sunitinib for patients in the combination therapy arm, such patients would continue with rocapuldencel-T dosing in combination with the second-line therapy. In our Phase 2 combination therapy clinical trial, dosing ceased upon the first event of disease progression and second-line therapy was not permitted.14

A• ~~graphic~~elevated ofcorrected ~~the~~calcium ~~trial design is shown below.~~levels;

~~Other~~• ~~Development~~diminished ~~Activities. We~~overall ~~believe~~patient ~~that~~performance ~~rocapuldencel-T~~status ~~may be capable of treating a wide range of cancers and we are evaluating~~ or ~~plan~~physical to evaluate rocapuldencel-T in clinical trials in additional cancer indications. Development of rocapuldencel-T in these other indications will in part depend upon our ongoing review of the ADAPT study data and discussions with the FDA, and subject to us obtaining the financing necessary to support such trials.functioning;

• Weelevated ~~are~~levels supporting an investigator-initiated Phase 2 clinical trial designed to evaluate treatment with rocapuldencel-T in patients with early stage RCC prior to nephrectomy. This trial was opened for enrollment of ~~patients in late 2014. Five patients have been enrolled in the trial as of March 16~~neutrophils, ~~2017, with~~ a ~~total~~type ~~enrollment~~of ~~targeted~~white ~~for~~blood 10cell; ~~patients. We expect that preliminary data for this study will be available in the second half of 2017.~~and

• Weelevated ~~plan~~platelet to support an investigator-initiated Phase 2 clinical trial of rocapuldencel-T in muscle invasive bladder cancer that was opened in the fourth quarter of 2016 subject to ongoing analysis of the data from the ADAPT trial and discussions with the FDA, as well as us obtaining financing necessary to support such trialcount.

•Patients Weexhibiting ~~also~~zero ~~plan~~risk tofactors ~~conduct~~at the atime ~~Phase~~of 2treatment ~~clinical~~are ~~trial~~included ofin ~~rocapuldencel-T~~the favorable risk group; patients exhibiting one or two risk factors are included in ~~combination~~the intermediate ~~with~~risk agroup; ~~checkpoint~~and ~~inhibitor~~patients exhibiting three or more risk factors are included in ~~mRCC,~~the ~~which~~poor werisk ~~expect~~group. toEven ~~open~~when ~~for~~treated with ~~enrollment~~standard of care therapies such as sunitinib, patients in the ~~first~~intermediate ~~half~~risk group have an expected survival of ~~2017~~less ~~subject~~than two toyears, and patients in the ~~ongoing~~poor ~~analysis~~risk group have an expected survival of less than one year. In January 2013, Dr. Heng published in Lancet Oncology the following data from the ~~ADAPT~~Consortium ~~trial~~database ~~and~~regarding ~~discussions~~overall ~~with~~survival ~~the~~of ~~FDA,~~mRCC aspatients in ~~well~~these asthree usrisk ~~obtaining~~groups ~~financing~~treated ~~necessary~~with tosunitinib ~~support~~and ~~such~~other ~~trial.~~therapies:

11• in 157 favorable risk patients, the median overall survival was 43.2 months;

~~Phase~~• ~~2 Combination Therapy Clinical Trial. From July 2008 to October 2009, we enrolled 21 newly diagnosed mRCC patients~~ in a440 ~~single~~intermediate ~~arm,~~risk multicenter, open label Phase 2 clinical trial of rocapuldencel-T in combination with sunitinib. We conducted this clinical trial at nine clinical sites in the United States and Canada. Our design for the trial required adult patients ~~with previously untreated mRCC~~, ~~no prior nephrectomy or at least one accessible lesion for biopsy, a histologically confirmed predominantly clear cell tumor, and suitability for sunitinib therapy. The primary endpoint of~~ the ~~trial~~median ~~was complete response rate. Secondary endpoints included progression free survival,~~ overall survival, ~~safety,~~was ~~clinical benefit~~22.5 ~~rate~~months; and ~~immune response.~~

~~Patients~~• in ~~the~~252 ~~trial~~poor ~~generally~~risk ~~received one initial six-week cycle of sunitinib~~patients, ~~consisting of four weeks on drug and two weeks on drug holiday, prior to initiating~~ the ~~combined~~median ~~treatment~~overall ~~with~~survival ~~rocapuldencel-T.~~was ~~Patients then received a dose of rocapuldencel-T every three weeks for a total of five doses, while also continuing three additional six-week cycles of sunitinib~~7.8 ~~This 24-week induction phase was followed by a booster phase during which patients received a dose of rocapuldencel-T once every three~~ months ~~and continued to receive sunitinib in six-week cycles until disease progression~~.

~~The~~Current ~~following table summarizes certain key data from the 11 intermediate risk and 10 poor risk patients enrolled in the Phase 2 combination therapy clinical trial.~~Treatment

Outcome			(N=21)
Median OS (1)			30.2 months
Median PFS (2)			11.2 months
Complete response (3)			0 patients
Partial response (4)			9 patients
Stable disease (5)			4 patients
Immune response			CD8+ CD28+ memory T-cells correlated with OS, PFS and reduced metastatic tumor burden; IL-2 and interferon- g (IFN- g ) recovery

The initial treatment for most mRCC patients when the primary tumor is intact is surgical removal of the tumor, usually requiring partial or complete removal of the affected kidney, referred to as nephrectomy. The NCCN generally recommends systemic treatment with approved therapies for mRCC patients following nephrectomy for patients whose tumors have metastasized or for patients who present with mRCC upon diagnosis or as a result of a relapse from an earlier stage of RCC.

~~_________________~~Historically, mRCC has been treated with non-specific, cytokine-based immunotherapies such as interferon a and IL-2, which have demonstrated a clinical benefit in a small percentage of mRCC patients. However, these therapies lack specificity and have been demonstrated to have severe toxicities, which can lead to cardiopulmonary, neuropsychiatric, dermatologic, renal, hepatic and hematologic side effects and limits their use. For example, although high-dose IL-2 is the only therapy to have demonstrated durable complete mRCC remissions, its toxicity restricts its use to a small minority of patients and for a short duration.

(1)	Overall survival, or OS, is the length of time from the initiation of treatment to the patient’s death.
(2)	Progression free survival, or PFS, is the length of time from treatment initiation to the worsening of the patient’s disease or the patient’s death.
(3)	Complete response is the disappearance of all measurable target lesions and non-target lesions.
(4)	Partial response is the overall tumor regression based on a decrease of at least 30% in the overall amount of measurable tumor mass in the body and improvement or no change in non-target lesions.
(5)	Stable disease is neither sufficient decrease in tumor size to qualify as a partial response nor sufficient increase in tumor size to qualify as disease progression.

Several targeted therapies, such as Sutent (sunitinib), Votrient (pazopanib), Torisel (temsirolimus), Nexavar (sorafenib), Avastin (bevacizumab) plus interferon- a, Afinitor (everolimus), Inlyta (axitinib), Opdivo (nivolumab) and Cabometyx (cabozantinib) are approved for the treatment of mRCC. While most of these targeted therapies have been evaluated in first-line treatment of mRCC, Sutent demonstrated a higher rate of progression free survival and overall survival in its pivotal Phase 3 clinical trial than that shown by the other targeted therapies in their pivotal Phase 3 clinical trials. According to an independent market research survey conducted during the second half of 2014 of 87 US-based medical oncologists and new prescription data (IMS), Sutent was the first-line drug of choice for approximately half of newly treated advanced RCC patients. In addition, the data showed that the use of Votrient was increasing as initial therapy for advanced RCC.

~~Particular~~Although ~~observations~~most ~~from~~of these ~~data~~targeted ~~and~~therapies have demonstrated prolonged progression free survival as compared to interferon- a, they are rarely associated with durable remissions or enhanced long-term survival, particularly in patients who are classified as intermediate or poor risk at the ~~trial~~time of treatment. In addition, ~~which~~each ~~have~~of ~~informed~~these ~~our~~targeted ~~further~~therapies has shortcomings that limit their use in the treatment of mRCC, including significant toxicities, such as neutropenia and other hematologic toxicities, fatigue, diarrhea, hand-foot syndrome, hypertension and other cardiovascular effects. The overlapping and combined toxicities of the targeted therapies have prevented their use in combination therapies. For instance, researchers conducting a Phase 1 clinical ~~development~~trial of the combination of sunitinib and temsirolimus discontinued the trial due to toxicities. We believe that the inability to date to combine these therapies without additive toxicity and the absence of durable remissions and prolonged survival in patients with intermediate and poor risk disease indicates there is an unmet need for novel therapeutic approaches for mRCC that can improve efficacy without adding any appreciable toxicity. We determined to conduct the ADAPT trial based on our earlier belief that the combination of rocapuldencel-T, with ~~include:~~sunitinib or other therapies had the potential to address this unmet need.

~~Efficacy Analysis~~15

•Development Seven patients survived for more than 4.5 years following enrollment in this trial. Two of these patients remained alive as of December 31, 2016 and both have had a sustained clinical response spanning nearly eight years and remain on rocapuldencel-T in combination with continued targeted therapy.Status

•We ~~Five~~are ~~poor~~conducting ~~risk~~our ~~patients~~pivotal ~~did~~Phase ~~not~~3 ~~receive~~ADAPT trial ~~five~~of ~~doses~~rocapuldencel-T. We have previously conducted three clinical trials of rocapuldencel-T ~~due~~and toits ~~early~~predecessor ~~disease~~product, ~~progression~~including a Phase 2 trial and two Phase 1 trials. ~~Median~~To ~~overall~~date, ~~survival~~we have administered rocapuldencel-T to over 300 patients in these trials. We submitted to the 16FDA ~~patients~~an ~~who~~investigational ~~received~~new atdrug ~~least~~application, ~~five~~or ~~doses~~IND, offor rocapuldencel-T ~~was~~in 36March 2003.0 ~~months~~Additionally, we are developing a protocol for a Phase 2 clinical trial of rocapuldencel-T in combination with a checkpoint inhibitor for the treatment of patients with mRCC, but we do not intend to initiate this trial unless and until we obtain financing to fund the trial.

•Phase ~~Median~~3 ~~overall~~ADAPT ~~survival~~Trial inof ~~the 11 intermediate risk patients was 61.9 months. Median overall survival in the 10 poor risk patients was 9.1 months.~~rocapuldencel-T

~~• The following graphic shows data and follow-up as of December 31, 2015, the number of months that each patient in the Phase 2 clinical trial survived from the time of enrollment in the trial.~~Overview

12The ADAPT trial is a randomized, multicenter, open label trial comparing combination therapy with rocapuldencel-T and sunitinib (or another targeted therapy) to monotherapy with sunitinib (or another targeted therapy) for the treatment of newly diagnosed metastatic renal cell carcinoma (mRCC). A total of 462 previously untreated patients were enrolled in the ADAPT trial and randomized 2:1 between combination treatment with rocapuldencel-T and sunitinib (combination arm) vs. sunitinib monotherapy (control arm) after undergoing cytoreductive nephrectomy. For both arms, the protocol permits switching to other standard-of-care treatments for mRCC for reasons such as intolerance to therapy or disease progression. The original primary efficacy endpoint for the study is a statistically significant improvement in overall survival in the combination treatment utilizing the intent to treat population at the pre-specified number of 290 events (deaths). Secondary efficacy endpoints include progression-free survival, objective response rate and disease control rate, and an exploratory efficacy endpoint of immune response. We dosed the first patient in May 2013 and completed enrollment in July 2015 at 107 sites across North America, Europe and Israel.

•In OfFebruary 2017, the ~~nine~~IDMC ~~patients~~for ~~who~~the ~~exhibited~~ADAPT trial arecommended ~~partial~~that ~~response,~~the ~~five~~trial ~~patients~~be ~~exhibited~~discontinued ~~partial~~for ~~responses~~futility ~~during~~based ~~the~~on ~~24-week~~its ~~induction~~planned ~~phase,~~interim ~~including~~data ~~two~~analysis. ~~patients~~The ~~who~~IDMC ~~exhibited~~concluded ~~partial~~that the ~~responses~~trial ~~prior~~was unlikely to ~~initiation~~demonstrate ofa ~~treatment~~statistically ~~with~~significant ~~rocapuldencel-T.~~improvement ~~The~~in ~~other~~overall ~~three~~survival ~~patients~~in ~~exhibited~~the ~~partial~~combination ~~responses~~treatment arm, ~~after~~utilizing ~~prolonged~~the ~~dosing~~intent-to-treat ~~with~~population ~~rocapuldencel~~at the pre-Tspecified ~~during~~number of 290 events (deaths), the ~~booster~~original ~~phase~~primary endpoint of the study. WeNotwithstanding dothe ~~not~~IDMC’s ~~believe~~recommendation, ~~that~~we ~~these~~determined ~~late~~to ~~occurring~~continue ~~partial~~to ~~responses~~conduct ~~have~~the ~~been~~trial ~~observed~~while inwe ~~clinical~~analyzed interim ~~trials~~data offrom ~~sunitinib~~the ~~alone~~trial. AsFollowing a ~~result~~meeting with the FDA, we ~~believe~~determined ~~that~~to ~~these~~continue ~~late~~the ~~responses~~ADAPT ~~may~~trial ~~relate~~until at least the pre-specified number of 290 events occurs, and to submit to the ~~immunologic~~FDA ~~effects~~a protocol amendment to increase the pre-specified number of ~~prolonged~~events for the primary analysis of overall survival in the trial beyond 290 events. We believe that extending our evaluation of rocapuldencel-T beyond ~~dosing~~290 ~~and~~events in the trial could enhance our ability to observe rocapuldencel-T’s ~~effect~~expected ondelayed ~~CD8+~~treatment ~~CD28+ memory T-cells~~effect.

• We ~~observed~~are acurrently ~~statistically~~finalizing ~~significant~~an ~~correlation~~amendment to ~~between~~the ~~increased~~ADAPT ~~progression~~protocol, ~~free~~including ~~survival~~an ~~and~~amended ~~prolonged~~primary ~~survival~~endpoint ~~(p<0.001).~~analysis, ~~Statistical~~and ~~significance~~plan isto ~~determined~~submit byit ~~methods~~to ~~that~~the ~~establish~~FDA prior to the ~~p-value~~interim ofdata analysis planned for the ~~results.~~second ~~Typically~~quarter of 2018, ~~results~~at ~~are~~which ~~considered~~time ~~statistically~~approximately ~~significant~~55 ifnew ~~they~~events ~~have~~(deaths) aare ~~p-value~~expected ofto ~~0.05~~have oroccurred subsequent ~~less,~~to ~~meaning~~the ~~that~~February ~~there~~2017 isinterim ~~less~~analysis. ~~than~~We aare ~~one-in-20~~planning ~~likelihood~~to ~~that~~include the ~~observed~~following ~~results~~four ~~occurred~~co-primary byendpoints ~~chance.~~in the amended ADAPT protocol:

~~Immune~~· ~~Response~~Overall ~~Analysis~~survival for all randomized patients when approximately 375 events have occurred (under the same analysis that was originally planned for 290 events);

•· InThe ~~the~~percentage 14of patients insurviving ~~the trial who received~~ at least five doses of rocapuldencel-T and could be evaluated for memory T-cell response, we observed a statistically significant correlation between the increase in the number of CD8+ CD28+ memory T-cells over the initial five doses of rocapuldencel-T and survival (p<0.002), progression free survival (p<0.031) and reduced metastatic tumor burden (p<0.045). The following graphics show, for each of these 14 patients, the increase in their tumor-specific memory T-cells that they exhibited as measured immediately prior to their first dose of rocapuldencel-T and immediately following the patient’s fifth dose of rocapuldencel-T, or the absence of such increase, as compared to such patient’s survival.years;

13· Overall survival for patients who remained alive at the time of the February 2017 interim analysis, to be evaluated when approximately 155 new events have occurred; and

~~Phase~~· 2Overall ~~Combination~~survival ~~Therapy~~for ~~Clinical~~all ~~Trial~~patients for whom at least 12 months of ~~rocapuldencel~~follow-T:up is available (excluding patients who died or were lost to follow-up within the first 12 months after enrollment).

~~Correlation~~In connection with our amendment of ~~Immune~~the ADAPT ~~Response~~protocol, the SPA, for the ADAPT trial ceased to be in effect. Additionally, we are developing a protocol for a Phase 2 clinical trial of rocapuldencel-T in combination with a checkpoint inhibitor for the treatment of patients with mRCC, but we do not intend to initiate this trial unless and ~~Overall~~until ~~Survival~~we obtain financing to fund the trial.

•ADAPT ~~Rocapuldencel-T~~Trial ~~was found to have positive impact on immune cell function and restoration of cellular immunity in a majority of patients, including an increase in levels of IL-2 and IFN- g.~~Design

~~Safety~~Our design for the ADAPT trial required enrollment of adult patients who have been newly diagnosed with mRCC with primary tumor intact and metastatic disease following nephrectomy, who have predominantly clear cell RCC based upon the tumor collected at nephrectomy, and who have not received any prior therapies for RCC. Participating patients were required to be suitable candidates for sunitinib therapy and have either poor risk or intermediate risk disease at presentation, with the less than one year to treatment risk factor and not more than four Heng risk factors in total. As part of the ADAPT trial design, the two arms of the trial were balanced based upon known prognostic risk factors. Patients were stratified by number of Heng risk factors (1, 2, 3 or 4) as well as whether they had measurable versus non-measurable metastatic disease following nephrectomy. The patient population in the ADAPT trial is generally comparable to the patient population treated in our Phase 2 combination therapy clinical trial. Approximately 77% of the patients enrolled in the ADAPT trial are intermediate risk patients (1-2 risk factors) and 23% are poor risk (3-4 risk factors). The average age of patients in the study is 60, with approximately 74% of the patients being male and approximately 95% of the patients being caucasian.

• The adverse events in this trial associated with rocapuldencel-T were generally only mild injection site reactions, while the toxicities associated with sunitinib were consistent with those expected from treatment with sunitinib alone.16

~~The~~Under ~~original design for~~ the ~~Phase~~ADAPT ~~2 clinical~~ trial ~~called~~protocol, ~~for~~patients in the ~~recruitment~~combination ofarm 50are ~~patients to~~dosed ~~generate~~with 38rocapuldencel-T ~~fully~~once ~~evaluable~~every ~~patients.~~three ~~However,~~weeks infor ~~October~~five ~~2009~~doses, wefollowed ~~terminated~~by ~~enrollment~~a inbooster ~~this~~dose ~~trial~~every ~~early due to a lack of~~three ~~funding.~~months Asbeginning asix ~~result,~~weeks ~~only~~after 21the ~~patients~~fifth ~~were enrolled and received at least one~~ dose ~~of rocapuldencel-T~~. In ~~addition,~~accordance ~~the~~with ~~trial was~~its ~~originally~~label, ~~designed~~sunitinib todosing ~~enroll~~is ~~patients~~administered ~~with~~in ~~favorable~~six-week ~~and intermediate risk disease profiles. Instead~~cycles, consisting ~~the~~of ~~actual~~four ~~population enrolled~~weeks ~~consisted~~on ~~entirely~~drug ofand ~~patients~~two ~~with~~weeks ~~intermediate~~on ordrug ~~poor~~holiday. ~~risk~~Rocapuldencel-T ~~disease~~dosing ~~profiles~~is ~~who~~initiated ~~had~~at the ~~less~~end ~~than~~of ~~one~~the ~~year~~initial ~~to treatment~~six-week ~~risk~~sunitinib ~~factor~~cycle. ~~Because~~The ~~the~~first ~~patient~~dose ~~population~~of ~~had~~rocapuldencel-T ~~poorer~~is ~~prognoses~~administered ~~when~~prior ~~they~~to ~~entered~~ the ~~trial~~start ~~than~~of wesunitinib ~~expected~~dosing ~~and~~in wethe ~~did~~second ~~not have~~sunitinib acycle. ~~sufficient~~This ~~number~~dosing ofregimen ~~evaluable~~is ~~patients,~~identical weto ~~did not perform~~ the ~~statistical~~dosing ~~analysis~~regimen toused ~~determine~~in ~~whether~~our ~~the~~Phase ~~primary~~2 ~~endpoint of~~combination ~~complete~~therapy ~~response~~clinical ~~rate~~trial ~~was~~of ~~achieved.~~rocapuldencel-T and ~~As a result~~sunitinib, ifexcept wethat ~~submit~~the astart ~~biologics~~of ~~license~~the ~~application,~~sixth ordose ~~BLA~~is toscheduled ~~the FDA~~ for ~~rocapuldencel-T, we~~six ~~expect~~weeks following the ~~data~~fifth ~~from~~dose ~~this trial~~ to bebetter ~~considered~~provide by patients the ~~FDA~~opportunity ~~for~~to ~~the~~receive ~~purpose~~a total of ~~evaluating~~eight ~~the~~doses ~~safety~~across ~~and~~48 ~~feasibility~~weeks. ofPatients ~~rocapuldencel-T, but~~in ~~that~~the itcontrol ~~will~~arm ~~only~~receive ~~have~~sunitinib aon ~~limited~~the ~~impact~~same ondosing schedule ~~the~~as ~~FDA’s~~patients ~~ultimate~~receive ~~assessment~~sunitinib ofin the ~~efficacy~~combination ~~of rocapuldencel-T~~arm.

~~Based~~Under onthe ~~our~~ADAPT ~~experience~~trial ~~with~~protocol, ~~the~~rocapuldencel-T is ~~Phase~~administered 2for ~~clinical~~at ~~trial,~~least we48 ~~concluded~~weeks so that ~~the~~patients ~~secondary~~receive at least eight doses of rocapuldencel-T. Dosing will cease prior ~~endpoints~~to in48 weeks if two events of disease progression or unacceptable toxicity occur or upon the ~~trial~~joint decision of the patient and the investigator. If after 48 weeks of dosing of rocapuldencel-T a patient has stable disease or is responding to treatment, dosing will continue once every three months until disease progression. ~~free~~If ~~survival~~an ~~and~~investigator ~~overall~~determines ~~survival~~to discontinue sunitinib, ~~along~~either due ~~with~~to ~~immune~~disease ~~response~~progression or toxicity, ~~were~~the investigator can, at any time during the ~~appropriate~~ADAPT ~~endpoints~~trial after the first six-week cycle toof ~~consider~~sunitinib, ~~for~~initiate ~~measuring~~second-line therapy with one of the ~~efficacy~~other approved therapies, including pazopanib, axitinib, nivolumab, everolimus or temsirolimus. In the event of ~~rocapuldencel-T~~discontinuation of sunitinib for patients in the combination arm, such patients would continue with ~~sunitinib~~rocapuldencel-T dosing in ~~patients~~combination with ~~mRCC~~the insecond-line ~~our~~therapy. ~~pivotal~~In our Phase 3 2 combination therapy clinical trial, dosing ceased upon the first event of disease progression and second-line therapy was not permitted.

~~Rocapuldencel-T~~A ~~Phase~~graphic 2of ~~Combination Therapy Clinical Trial, as Compared to Independent Third Party mRCC Data. At ASCO in June 2013, Dr. Heng presented data from~~ the ~~Consortium~~trial ~~database~~design ~~regarding~~is ~~overall survival~~shown and progression free survival for intermediate and poor risk patients treated with sunitinib and other targeted therapies, including data with respect to 1,189 intermediate and poor risk patients with the less than one year to treatment risk factor.below:

14Phase 3 ADAPT Trial Design

~~Using~~1 ~~the~~Other ~~overall~~therapies ~~survival~~may ~~data~~be ~~from~~substituted ~~the~~for ~~Consortium~~Sunitinib ~~database~~for ~~presented~~intolerance in June 2013 and published in April 2014, a summary comparison of this data with our Phase 2 clinical trial of rocapuldencel-T in combination with sunitinib is set forth in the graphic below. This graphic compares the median overall survival data from the Consortium intermediate and poor risk patients with the less than one year to treatment risk factor with the median overall survival data from the 21 patients in our Phase 2 clinical trial of rocapuldencel-T in combination with sunitinib, all of whom had the less than one year to treatment risk factor. A majority of the Consortium patients and the patients in our Phase 2 clinical trial had one or ~~more additional risk factors.~~progression

~~1.1Ko~~February JJ2017 etInterim ~~al. First-, second-, third-line therapy for mRCC: Benchmarks for trial design from the IMDC. Br J Cancer. April 2014:1-6. 2. Amin et al. Journal for ImmunoTherapy of Cancer. 2015;3:14 (21 April 2015).~~Analysis

~~Progression~~As ~~free~~noted ~~survival~~above, ~~for~~following ~~intermediate~~the ~~and~~February 2017 ~~poor~~interim ~~risk~~analysis ~~patients~~the inIDMC recommended that the ~~Consortium database~~ADAPT ~~with~~trial ~~the~~be ~~less~~discontinued ~~than~~for ~~one~~futility. ~~year~~While todata ~~treatment~~on ~~risk~~the ~~factor~~original ~~was~~primary endpoint ~~5.6~~of ~~months~~the trial, asoverall ~~compared~~survival in the intent-to-treat population, did not pass the ~~11.2~~futility ~~months~~test, ofwe ~~median~~conducted ~~progression~~several ~~free~~additional ~~survival~~analyses, ~~that~~including wean ~~observed~~analysis of the overall survival in the 21first one-third of patients enrolled in ~~our~~the ~~Phase~~study 2and certain ~~clinical~~immune ~~trial~~monitoring ofdata that we believe suggest that rocapuldencel-T may potentially have a beneficial effect in ~~combination~~a ~~with~~significant number ~~sunitinib~~of patients and may be working through its intended mechanism of action. A review of the data from the February 2017 interim analysis is provided below.

Although we believe comparisons between our data and these collections of data are useful in evaluating the overall results of our Phase 2 clinical trial, the treatment of the Consortium patients was conducted at different sites, at different times and in different patient populations than the treatment in our Phase 2 combination therapy trial. The treatment also differed because certain of the Consortium patients received therapies other than sunitinib as first-line treatment. All of the patients in our Phase 2 clinical trial received sunitinib as first-line treatment. Our ongoing pivotal Phase 3 combination therapy clinical trial of rocapuldencel-T is the first trial that we have conducted that directly compares rocapuldencel-T and sunitinib or other targeted therapies as a combination therapy against sunitinib as monotherapy. Results of this head-to-head comparison in our phase 3 ADAPT trial differed significantly from the comparisons presented above and elsewhere in this Annual Report on Form 10-K.17

~~AGS-004~~Original ~~for~~Primary ~~the~~Endpoint ~~Treatment~~- Overall ofSurvival ~~Human~~in ~~Immunodeficiency~~the ~~Virus~~Intent-to-Treat Population

WeAt ~~are~~the ~~developing~~time ~~AGS-004,~~of ~~our~~the ~~second~~interim ~~Arcelis~~analysis after 75% of the targeted number of 290 events had occurred and using a data cut-~~based~~off ~~product~~of ~~candidate~~February 3, 2017, the median overall survival for the combination treatment of ~~HIV~~arm was estimated to be 27.7 Wemonths ~~have~~(95% ~~completed~~Confidence ~~three~~Interval ~~clinical~~(CI): ~~trials~~23.0, of35.9) ~~AGS-004~~compared to 32.4 ~~These~~months (95% ~~include~~CI: ~~Phase~~22.5, 1-) ~~and~~for ~~Phase~~the 2control ~~clinical~~arm ~~trials~~in ~~that~~the ~~were~~intent-to-treat ~~funded by~~population. ~~government~~The ~~grants~~hazard ~~and~~ratio awas ~~Phase~~1.10 2b(95% ~~trial~~CI: ~~that~~0.83, 1.46), which was ~~funded~~greater inthan ~~full~~the bypre-defined futility boundary for the ~~NIH~~February 2017 interim analysis of 0.98. A Kaplan-Meier plot of this data is provided below:

~~Based~~Kaplan-Meier onAnalysis ~~the clinical data that we have generated to date, we have determined to focus our development program on the use~~ of ~~AGS-004~~Overall Survival in ~~combination with other therapies to achieve complete virus eradication and the use of AGS~~Intent-~~004 monotherapy~~ to ~~provide long~~-~~term~~Treat ~~control of HIV viral load in immunologically healthy patients and eliminate their need for ART.~~Population

~~Human~~Of ~~Immunodeficiency~~note, ~~Virus~~baseline demographics and subsequent therapies were generally comparable across the two treatment arms.

~~HIV~~Overall isSurvival characterized by a chronic viral infection and an associated deterioration of immune function. Specifically, the virus disables and kills crucial human immune cells called CD4+ T-cells. CD4+ T-cells are necessary to generate and maintain antiviral T-cells, including the CD8+CD28+ memory T cells that aid in the ~~killing of virus-infected cells.~~Modified ~~Over time, this viral impact on an infected person’s immune system outpaces the body’s natural ability~~ Intent-to ~~replace CD4+ T~~-~~cells~~Treat ~~and immunodeficiency results. As a result, the longer a person has been infected with the virus, the more functionally impaired these cells become.~~Population

15There were 39 patients in the combination treatment arm and 14 patients in the control arm who did not receive treatment. These patients did not receive treatment for a variety of reasons including death before initiation of treatment, withdrawal of consent, and, in the combination arm, failure to manufacture rocapuldencel-T. We analyzed the original primary endpoint of overall survival in both treatment arms excluding these patients, which we refer to as the modified intent-to-treat population (mITT). At the time of the interim analysis and using the February 3, 2018 data cut-off date, the estimated median overall survival for the combination treatment arm was 30.4 months (95% CI: 25.8, -) compared to 32.5 months (95% CI: 23.0, -) for the control arm in the mITT population. The hazard ratio was .97 (95% CI: 0.72, 1.33) in the mITT population.

AtPost ~~the~~Hoc ~~same~~Analysis ~~time, HIV infection causes the immune cells in HIV patients, including CD4+ T-cells and CD8+ T-cells that are not killed by the virus, to be in a chronic state~~ of ~~activation.~~Survival ~~The persistent state of~~Data ~~immune~~for ~~activation in HIV patients results in chronic inflammation. We believe that this inflammation plays a role in~~ the ~~elevated rates~~First ~~of age~~One-~~related~~Third ~~comorbidities, including malignancies and cardiovascular disease observed in HIV patients. In addition, the activation~~ of ~~the~~Enrolled ~~CD4+ T-cells supports virus replication which leads to the production of new virus and increased viral load.~~Patients

~~HIV~~Subsequent isto athe ~~persistent~~IDMC ~~virus~~meeting, to explore the hypothesis that ~~can~~longer ~~rapidly~~follow-up ~~adapt~~time may provide useful information to ~~its~~identify ~~environment~~a bypotential ~~mutating~~beneficial ~~and~~effect of rocapuldencel-T, ~~creating~~we ~~HIV~~conducted ~~variants~~a ~~that~~post-hoc ~~are~~subgroup ~~drug~~analysis ~~resistant~~of ~~and~~overall ~~can~~survival ~~evade~~in ~~immune~~the ~~attack~~first one-third of patients enrolled in the study (n=154). In Asthese apatients, ~~result~~for whom generally the longest follow-up data was available, ~~there~~the ~~are~~estimated amedian ~~large~~overall ~~number~~survival offor ~~mutated~~the ~~variants~~combination ofarm ~~HIV~~was ~~existing~~30.1 inmonths ~~any~~(95% ~~one~~CI: ~~infected~~23.3, ~~individual~~-) ~~and~~compared noto ~~two~~22.2 ~~individuals~~months ~~have~~(95% ~~identical~~CI: ~~viral~~17.2, ~~sequences~~-) for the control arm. The hazard ratio in this post-hoc subgroup analysis was 0.88 (95% CI: 0.56, 1.36). A Kaplan-Meier plot of this data is provided below:

According to the World Health Organization, the number of people living with HIV in the world was approximately 35 million in 2013. The Centers for Disease Control and Prevention estimates that more than 1.2 million people are currently living with HIV in the United States and the number of new cases of HIV infection in the United States is expected to remain constant at approximately 50,000 cases per year.18

~~Current~~Kaplan-Meier ~~treatments~~Analysis ~~for HIV. In 1996, triple combinations~~ of ~~oral~~Overall ~~medications known~~Survival ~~as ART were demonstrated to substantially reduce the levels of virus~~ in the ~~blood~~First ofTertile ~~patients with HIV. Since then, the introduction~~ of ~~new~~Randomized ~~drug classes of ART and combination drug treatment strategies has enhanced treatment for HIV.~~Subjects

~~ART~~Objective inResponse ~~HIV-infected~~Rate patients can decrease levels of HIV in the blood to below the limits of detection, increase life expectancy and improve quality of life. However, there continues to be an unmet need for HIV therapies for the following reasons:Data

•As ~~ART~~of ~~can~~the ~~have~~February ~~significant~~3, ~~side~~2017 ~~effects.~~data ~~The~~cut-off date ~~most~~for ~~recent~~the ~~U.S.~~February ~~guidelines~~2017 oninterim ~~ART~~analysis, ~~treatment~~42.7% ~~contain a number~~ of ~~tables~~the of307 ~~adverse~~patients ~~effects~~in ofthe combination ~~regimens~~treatment ~~and~~arm ~~how~~demonstrated toan ~~manage~~objective response ~~them.~~by ~~Some~~RECIST ~~combinations~~criteria, ~~present~~a ~~potentially~~secondary ~~life-threatening~~endpoint ~~complications~~in ~~and~~the ~~other~~trial, ~~complications~~as ~~that~~compared ~~are~~with ~~chronic,~~39.4% ~~cumulative~~of ~~and~~the ~~overlapping,~~155 ~~and~~patients ~~sometimes~~in ~~irreversible~~the control arm.

•Duration ~~ART requires life-long daily treatment. The risks~~ of ~~long-term~~Response daily administration of ART remain unknown but are potentially significant. In addition, the requirement for life-long daily treatment has made strict adherence to the treatment regime difficult. Poor compliance has led to the development of drug resistant HIV variants that are ineffectively controlled by the available armamentarium of ART.Data

•Patients ~~ART~~in ~~cannot eradicate~~ the ~~virus~~combination ~~and,~~treatment ~~therefore,~~arm who ~~does~~demonstrated ~~not~~an ~~cure~~objective ~~HIV-infected~~response ~~patients.~~had ~~For~~a ~~example,~~median upduration toof ~~20%~~response of ~~patients~~8.4 ~~receiving~~months ~~ART~~compared ~~fail~~ to ~~achieve~~6.3 ~~normal~~months ~~CD4+~~for ~~T-cell~~patients ~~counts, resulting~~ in athe control ~~continued~~arm. ~~weakened~~Additionally, ~~immune~~16% ~~system.~~of Inthose ~~addition,~~patients ~~certain~~with ~~patients~~an ~~are~~objective ~~not~~response ~~able~~in tothe ~~achieve~~combination ~~effective~~treatment ~~control~~arm ofhad ~~the~~durable ~~virus~~responses lasting ~~using~~at ~~current~~least ~~treatment~~30 ~~regimens.~~months ~~ART~~compared ~~cannot~~to ~~eradicate~~7% ~~the~~of ~~virus~~those ~~because~~who ~~the~~had ~~virus~~an ~~persists~~objective response in ~~latently~~the ~~infected~~control ~~cells~~arm. ~~These cells~~Also, ~~which~~as ~~constitute~~of the ~~HIV~~date ~~latent~~of ~~reservoir~~the interim analysis, doall ~~not~~of ~~consistently~~the ~~express~~patients ~~HIV antigens~~ in athe ~~manner~~combination orarm awho ~~compartment~~had ~~that~~achieved ~~permits~~a ~~effective~~duration ~~control.~~of ~~Instead,~~response ~~these~~of ~~cells~~at ~~serve~~least as30 amonths ~~source~~had maintained ~~privileged~~those ~~from~~responses ~~ART~~through ~~control~~36 ~~for~~months. ~~virus~~Also ~~replication~~of ~~and~~note, ~~viral~~at ~~rebound in~~ the ~~absence~~time of ~~ART.~~the ~~Following~~data ~~discontinuation~~cut-off offor ~~treatment~~the ~~with~~February ~~ART,~~2017 ~~HIV~~interim ~~viral~~analysis, no ~~levels~~patients ~~return~~in tothe ~~levels~~control ~~observed~~arm ~~prior~~had toyet ~~treatment~~achieved ~~with~~a ~~ART~~durable ~~within~~response 12lasting ~~weeks~~36 ofmonths ~~treatment~~or ~~interruption~~longer.

~~AGS-004~~Duration ~~Opportunity~~of response data is summarized in the graph below. For each time point, the graph shows the percentage of patients with a durable response lasting at least as long as the indicated time. For example, for the 131 patients in the combination arm who had an objective response, 60 of those 131 patients (46%) had a duration of response lasting 12 months or longer, 43 of those 131 patients (33%) had a duration of response lasting 18 months or longer, 27 of those 131 patients (21%) had a duration of response lasting 24 months or longer, and 21 of those 131 patients (16%) had a duration of response lasting 36 months or longer. Note that patients who had a response of at least a certain number of months are also included in the data points for having achieved a duration of response for all previous time points indicated.

~~We believe, based on the mechanism of action of AGS-004 and the clinical data that we have generated, that AGS-004 has the potential to address this unmet need for the following reasons:~~19

•Duration ~~Potential to Eradicate HIV in Combination with Latency Reversing Drugs. A number~~ of ~~companies~~Response and academic groups are evaluating drugs that can potentially activate the latently infected cells to increase viral antigen expression and make the cells vulnerable to elimination by the immune system. We believe that treating HIV-infected patients, who are being successfully treated with ART, with a combination of AGS-004 and one of these latency reversing drugs could lead to activation of antigen expression from the latently infected cells along with a potent memory T-cell response that is specific to the patient’s own unique viral antigens. We believe that this approach could potentially result in complete eradication of the patient’s virus.Data

~~• Long~~Progression-~~Term~~Free ~~Viral~~Survival Load Control in Immunologically Healthy Patients. We believe that AGS-004 may allow for long-term virus control and eliminate the need for life-long treatment with ART in infected patients who have minimal immune suppression but no T-cell response against their virus. We have designed AGS-004 to induce CD8+ CD28+ memory T-cells that are specific to the patient’s own unique viral antigens, do not require CD4+ T-cell help to kill viral cells and do not result in CD4+ T-cell activation which typically increases viral replication and viral load. As reported in Clinical & Experimental Immunology, researchers have demonstrated that elevated levels of CD8+CD28+ memory T-cells in the blood are a statistically significant predictor of long-term non-progression in HIV-infected patients not treated with ART drugs. As a result, we believe that inducing these memory T-cells may lead to viral control. Patients with minimal immune suppression and no T-cell response include pediatric patients who have been successfully treated with ART drugs since birth or shortly thereafter and have generally healthy immune systems.Data

•At ~~Minimal~~the ~~Toxicity.~~time ~~AGS~~of the interim analysis, the median progression-~~004~~free ~~has~~survival ~~been~~for ~~well~~the ~~tolerated~~combination intreatment ~~clinical~~arm ~~trials~~was ~~with~~6.0 nomonths ~~serious~~(95% ~~adverse~~CI: ~~events~~5.8, ~~being~~6.7) ~~attributed~~compared to it7.8 Asmonths a(95% CI: ~~result~~5.9, we9.3) ~~believe~~for wethe ~~can~~control ~~combine~~arm ~~AGS-004~~in ~~with~~the ~~other~~ITT ~~HIV~~population. ~~therapies~~The ~~without~~hazard ~~additional~~ratio ~~toxicities~~was 1.15 (95% CI: 0.92, 1.44).

•Immune ~~Lack~~Response of Chronic Inflammation. We have designed AGS-004 to elicit a patient-specific and disease-specific immune response that does not cause any additional inflammation. In our clinical trials of AGS-004, AGS-004 has not induced changes in markers that are associated with chronic inflammation in HIV patients.Data

16Subsequent to the IDMC meeting, we conducted a pre-defined analysis of immune responses, an exploratory efficacy endpoint, using multi-parametric flow cytometry. To analyze immune response, blood samples were collected from patients in the combination treatment arm enrolled at sites in the United States who provided consent for immune monitoring. Of the 146 subjects tested for immune responses, the number of subjects that met the criterion for inclusion in the pre-defined subgroup of immune responders were analyzed. Comparing the measured immune responses after 3, 5 and 7 doses to the immune measurement at visit 2 (immediately before initiation of dosing), 72% met the criterion after 3 doses (n=136), 72% met the criterion after 5 doses (n=134), and 82% met the criterion after seven doses (n=98), suggesting that Rocapuldencel-T is having its intended effect of stimulating an immune response in the majority of patients. Immune responders are defined as patients who have an increase of more than two standard deviations from the patient-specific baseline in the number of memory T cells (CD8+/CD28+/CD45RA-) at one or more time points.

~~Description~~Median overall survival at the time of the February interim analysis had not yet been reached in the subgroup of immune responders (95% CI: 30.1, [-]). Additionally, consistent with the mechanism of action of rocapuldencel-T, for those subjects who received at least seven doses of rocapuldencel-T, there was a statistically significant correlation between survival and ~~Development~~the ~~Status~~change in the number of antigen-specific memory T-cells from baseline (Spearman's Rho = 0.40; p<0.0001) in patients for whom immune response data has been analyzed (including both immune responders and non-responders, n=72).

~~AGS-004~~The isrelationship anbetween ~~individualized~~the ~~immunotherapy~~immune ~~based on our Arcelis precision immunotherapy~~response, ~~technology~~as ~~platform.~~measured ~~It is produced~~ by ~~electroporating dendritic cells with mRNA encoding for patient-specific HIV antigens that have been derived from a patient’s virus-infected blood and with RNA that encodes~~ the ~~CD40L~~increase ~~protein.~~in ~~The process for producing AGS-004 is~~ the ~~same~~number ~~process~~of ~~as is used to produce rocapuldencel~~antigen-T,specific ~~with~~memory ~~the one key difference being that rocapuldencel-~~T-cells ~~contains all of the antigens~~ from abaseline ~~patient’s~~per ~~tumor~~milliliter ~~cells while AGS-004 contains potentially all variants unique to each individual patient~~ of ~~four selected HIV antigens (Gag~~blood, ~~Nef, Vpr~~ and ~~Rev). We designed AGS-004 to include these antigens because immunity~~survival, tois ~~them~~shown ~~has been observed~~ in ~~long-term~~the ~~non-progressors~~graph ~~and elite controllers, two groups of rare patients able to control virus replication without ART~~below. ~~Because~~For nothose ~~two~~25 patients ~~share~~with ~~identical~~the ~~HIV~~greatest ~~antigen~~increase ~~sequences~~in ~~and~~the ~~there are a large~~ number of ~~mutated variants~~antigen-specific ofmemory ~~HIV~~T-cells from ~~existing in each infected patient~~baseline, byno ~~using mRNA that is specific to the~~ patient’s ~~virus~~deaths ~~and~~had ~~that~~been ~~captures potentially~~recorded ~~all~~as of the ~~unique~~time ~~patient-specific variants~~ of ~~each antigen in~~ the ~~sample~~February ~~obtained,~~2017 weinterim ~~believe our immunotherapy maximizes the relevance of the immune responses induced in each patient~~analysis.

~~We have conducted three clinical trials of AGS-004, which include:~~20

·Immune aResponse ~~phase~~Data ~~2b clinical trial of AGS~~-~~004;~~ ~~· a phase 2a clinical trial of AGS-004; and · a phase 1 clinical trial of AGS-004.~~Survival

WeImportantly, ~~submitted~~the number of antigen-specific memory T-cells was found to increase only after administration of rocapuldencel-T, and in those subjects who received at least seven doses of rocapuldencel-T (n= 100) out of the ~~FDA~~146 ansubjects ~~IND~~analyzed for ~~AGS~~immune response, the average number of antigen-~~004~~specific memory inT-cells ~~August~~after ~~2008~~the seventh dose was approximately double the number observed before treatment. This increase was found to be statistically significant (p<0.0001).

We are focusing our development program for AGS-004 on the use of AGS-004 in combination with latency reversing therapies to achieve complete virus eradication. Latently infected cells differ from other infected cells in that the HIV genome is permanently integrated into the chromosomal DNA of the latently infected cells. These latently infected cells persist long-term and constitute the HIV latent reservoir, which serves as a source privileged from ART control for virus replication and viral rebound in the absence of antiretroviral therapy. As a result, demonstration that latently infected cells can be targeted by immune responses induced by AGS-004 is essential to our development strategy pertaining to virus eradication.21

~~Adult~~Immune ~~Eradication~~Response ~~Trial. We~~Data ~~are~~– ~~supporting an investigator~~Antigen-~~initiated clinical~~Specific ~~trial~~Memory ~~of AGS~~T-004 in 12 adult HIV patients who are being treated with ART to evaluate the use of AGS-004 to eradicate the virus. The trial is being conducted by co-investigator Dr. David Margolis, Professor of Medicine at the University of North Carolina. Dr. Margolis is the leader of CARE, and has been a pioneer in the research of HIV latent reservoir reversing treatments. The trial is being conducted in two stages. Stage 1 of this trial has been completed and was designed to study immune response kinetics to AGS-004 in patients on continuous ART. These data were used to better define the optimal dosing strategy in combination with a latency reversing therapy in the ongoing Stage 2. We expect that some patients in Stage 1 will rollover into Stage 2, which is studying AGS-004 in combination with one of the latency reversing drugs. The patient clinical costs for the first stage of this trial were funded by CARE. The NIH Division of AIDS has approved $6.6 million in funding for the second stage of this trial.Cells

~~Planned Pediatric Functional Cure Trial. We believe that a patient population that could benefit from AGS~~IL-~~004~~12 ~~monotherapy~~Secretion consists of 14+ year old, HIV-infected individuals who have been treated with ART since birth or shortly thereafter. These individuals are characterized by having very small HIV latent reservoirs and otherwise healthy immune systems, while lacking antiviral CD8+ CD28+ memory T-cell responses. We believe that successfully inducing antiviral CD8+ CD28+ memory T-cell responses in these patients could allow for long-term viral load control and eliminate the need for life-long antiretroviral therapy. We plan to support an investigator-initiated Phase 2 clinical trial of AGS-004 in pediatric HIV patients to evaluate the use of AGS-004 monotherapy to allow for long-term control of viral load and eliminate the need for ART. We are currently developing the clinical protocol for this trial to immunize pediatric HIV patients who were infected at birth and treated with antiretroviral therapy at or near birth. We are developing this clinical protocol in collaboration with Drs. Katherine Luzuriaga, University of Massachusetts, and Deborah Persaud, John Hopkins Medical Center, both specializing in pediatric virology. The commencement of this trial is subject to supportive data obtained from the adult eradication trial and approval of the protocol by the principal investigator(s), institutional review boards, the IMPAACT Network leadership and the FDA and to the agreement by the NIH to fund the trial costs not related to AGS-004 manufacturing. Assuming the supportive data and the necessary approvals are obtained, we expect this trial to open in 2017.Data

~~Phase~~A 2bpre-specified ~~Clinical~~analysis ~~Trial. In~~was ~~January 2015, we completed a randomized, placebo~~conducted ~~controlled,~~to ~~double~~evaluate ~~blind~~the ~~Phase~~relationship 2bbetween ~~clinical~~the ~~trial~~amount of ~~AGS~~IL-~~004~~12 insecreted ~~chronically~~by ~~infected~~each ~~patients~~patient's onspecific ~~ART~~immunotherapy and that wepatient's ~~opened for enrollment~~survival. inSamples ~~July~~from ~~2010.~~patients Wein ~~designed this trial to confirm~~ the ~~data~~combination ~~obtained~~arm inenrolled anat ~~earlier~~North ~~Phase~~American 2asites ~~clinical~~who ~~trial~~provided inconsent ~~which~~for ~~AGS-004~~immune ~~led~~monitoring to(n=179) awere ~~reduction~~divided ininto ~~virus~~two ~~replication.~~groups: Wethose ~~initially~~with ~~planned~~above tothe ~~enroll~~median 42amount ~~chronically~~of ~~infected~~IL-12, ~~patients~~and inthose with below the ~~Phase~~median 2bamount ~~trial~~of atIL-12. ~~nine~~Comparison ~~clinical~~of ~~sites~~the inKaplan-Meier ~~the~~curves ~~United~~for ~~States~~these ~~and~~two ~~Canada~~groups ~~with~~revealed ~~the~~that ~~intent~~those towith ~~generate~~higher 36than ~~events~~median ~~for~~levels ~~the~~of ~~primary~~IL-12 ~~endpoint~~generally ~~analysis~~demonstrated improved survival. ~~However~~Additionally, ~~due~~ tothere was a ~~higher~~statistically ~~than~~significant ~~anticipated~~correlation ~~dropout~~between ~~rate~~the bylevel ~~patients~~of ~~who~~IL-12 ~~were~~and ~~unable~~survival to(Spearman's Rho ~~complete~~= ~~the~~0.27; ~~full~~p<0.0002). 12There ~~week~~was ~~treatment~~also ~~interruption~~a ~~period provided~~statistically ~~for~~significant bycorrelation between the ~~trial,~~level weof ~~needed~~IL-12 toand ~~enroll~~the 53change ~~patients~~from baseline in ~~the~~antigen-specific ~~trial~~memory toT-cells ~~generate 36 events~~ for ~~the~~patients ~~primary~~who ~~endpoint~~received ~~analysis. These~~at ~~patients~~least ~~were~~seven ~~randomized~~doses ~~between~~of ~~AGS~~rocapuldencel-~~004~~T ~~treatment~~(n=95; ~~and~~Spearman's Rho a= ~~placebo~~0.43; ~~control on a two-to-one basis~~p<0.0001).

~~HIV~~Regulatory infection is classified as “chronic” or “acute” based on how long the patient has been infected prior to starting ART. Patients with chronic HIV infection are patients who have initiated ART after at least six months from the time of initial infection. Patients with acute HIV infection are patients who have initiated ART less than 45 days after initial infection. This trial enrolled adult patients with chronic HIV-1 infection and undetectable viral loads as a result of treatment with ART. Patients also had to have adequate CD4+ T-~~cell~~Cell ~~counts and a pre-ART plasma viral sample to be used to manufacture AGS-004.~~Data

17A pre-specified analysis was conducted to evaluate the relationship between the percentage of regulatory T-cells at baseline and survival for patients in both arms of the trial enrolled. Samples from patients in the combination treatment arm enrolled at North American sites who provided consent for immune monitoring (n=176) were divided into two groups: those with above median percentage of regulatory T-cells at baseline, and those with below median percentage of regulatory T-cells at baseline. Comparison of the Kaplan-Meier curves for these two groups revealed that those with higher than median percentage of regulatory T-cells at baseline demonstrated improved survival. This finding was in contrast to the control arm (n=79), where a greater percentage of regulatory T-cells at baseline was associated with poorer survival. One hypothesis that could potentially explain this result is that rocapuldencel-T may be acting to convert regulatory T-cells to effector T-cells.

InOther ~~this~~Development ~~trial,~~Activities. We are ~~patients~~developing ~~first~~a ~~received~~protocol ~~intradermal~~for ~~doses~~a ofPhase ~~AGS-004~~2 orclinical ~~placebo~~trial ~~every four weeks for a total~~ of ~~four~~rocapuldencel-T ~~doses,~~in ~~together~~combination with ~~their~~a ~~ART.~~checkpoint ~~Following~~inhibitor ~~the~~for ~~fourth~~patients with ~~dose of AGS-004 or placebo~~mRCC, ~~patients~~which ~~discontinued their~~we ~~ART~~do ~~but~~not ~~continued~~intend to ~~receive~~initiate ~~AGS-004~~unless orand ~~placebo~~until ~~every~~we ~~four~~obtain ~~weeks~~financing ~~for~~to 12fund ~~weeks~~such trial. We ~~refer~~believe tothat ~~this~~rocapuldencel-T may ~~period~~be ascapable ~~the~~of ~~treatment interruption~~treating ~~period.~~a ~~Patients~~wide ~~who~~range ~~demonstrated control~~ of ~~viral~~cancers ~~replication~~and ~~under~~we ~~10,000~~are ~~copies/ml~~evaluating ~~and~~or ~~maintained~~plan ~~CD4+~~to Tevaluate rocapuldencel-~~cell~~T in clinical trials ~~counts~~in ~~above~~additional ~~350~~cancer ~~cells/mm~~indications. 3Development ~~could~~of ~~remain~~rocapuldencel-T ~~off~~in ~~ART~~these ~~and~~other ~~continue~~indications ~~their~~will ~~treatment~~in ~~interruption~~part ~~past~~depend 12upon ~~weeks.~~our ~~Following~~ongoing ~~the~~review ~~end~~ of ~~treatment~~the ~~interruption,~~ADAPT ~~all~~study ~~patients~~data ~~were~~and ~~eligible~~discussions ~~for continued treatment~~ with the ~~combination~~FDA, ~~of AGS-004~~ and ~~ART. A~~subject ~~schematic~~to ofus obtaining the ~~trial~~financing ~~design~~necessary isto ~~shown~~support ~~below~~such trials.

~~Phase 2b Study Design for the Chronically Infected Cohort~~22

~~The~~Phase ~~primary~~2 ~~endpoint~~Combination ofTherapy ~~the~~Clinical trial was a comparison of the median viral load in the AGS-004-treated patients with the median viral load in patients receiving placebo after 12 weeks of ART treatment interruption. Under this protocol, the primary endpoint required that there was a ³ 1.1 log 10 difference in median viral load between the AGS-004-treated cohort compared to the placebo-treated cohort. A 1.1 log 10 reduction means a 92% lower virus concentration in the AGS-004-treated cohort compared to the placebo-treated cohort. Secondary endpoints included comparisons between AGS-004-treated patients and the patients receiving placebo with respect to change in viral load from pre-ART to the end of 12 weeks of treatment interruption, duration of treatment interruption, changes in CD4+ T-cell counts and safety.Trial

InFrom ~~September~~July ~~2011,~~2008 ~~we added~~ to ~~the~~October ~~trial a single arm~~2009, ~~open-label,~~we ~~unblinded cohort~~enrolled of21 upnewly todiagnosed 12mRCC patients ~~with acute HIV-1 infection and undetectable viral loads as a result of treatment with ART. We evaluated AGS-004~~ in ~~this patient population to assess AGS-004 in patients who initiated ART during the acute phase of infection and as~~ a ~~result may~~single ~~have sustained less immune damage. Patients in this cohort were dosed in the same manner as patients in the chronically infected~~ arm ~~of the clinical trial. However~~, ~~in this cohort~~multicenter, ~~patients~~open ~~had~~label toPhase ~~demonstrate~~2 aclinical ~~positive~~trial ~~CD8+~~of ~~CD28+ anti~~rocapuldencel-~~HIV memory~~ T~~-cell~~ ~~response~~ in ~~order~~combination with ~~to become eligible to enter the 12 week treatment interruption period~~sunitinib. ~~The~~We ~~primary~~conducted ~~endpoints for~~ this ~~cohort~~clinical ~~included the~~trial ~~time~~at tonine ~~detectable~~clinical ~~viral~~sites ~~load during the ART interruption period and comparison of changes~~ in ~~CD4+ T-cell counts during~~ the ~~ART~~ ~~interruption~~United ~~period~~States ~~between the acute cohort~~ and ~~the chronic cohort~~Canada. ~~Six~~Our ~~patients~~design ~~were~~for ~~enrolled~~the ~~in this cohort. All six patients~~trial ~~demonstrated~~required aadult ~~positive CD8+ CD28+ memory T-cell response and initiated treatment interruption. For the five of six~~ patients ~~that re-initiated~~with ~~ART~~previously ~~after~~untreated ~~treatment interruption~~mRCC, ~~there were~~ no ~~significant~~prior ~~declines~~nephrectomy inor ~~CD4+~~at Tleast ~~cells~~one ~~between~~accessible ~~the~~lesion ~~interruption~~for ~~date and~~biopsy, ~~the~~a ~~re-initiation date. All six patients experienced viral rebound during treatment interruption with the times to detectable~~histologically ~~viral~~confirmed ~~load~~predominantly ~~ranging~~clear ~~from~~cell ~~two~~tumor, ~~to eight weeks~~ and ~~the~~suitability ~~duration of treatment interruption~~ for ~~those~~sunitinib ~~patients who reinitiated ART ranged from approximately one month to approximately nine months~~therapy. InThe ~~addition,~~primary ~~three~~endpoint of ~~six~~the ~~patients~~trial ~~had~~was ~~a decrease in circulating CD4+~~complete Tresponse ~~cells~~rate. ~~containing~~Secondary ~~HIV~~endpoints ~~DNA~~included ofprogression ~~25%~~free survival, ~~47%~~overall ~~and 63%~~survival, ~~respectively~~safety, ~~when~~clinical ~~measured~~benefit ~~after~~rate ~~three~~and ~~doses of AGS-004 while on ART~~immune response.

InPatients in the ~~Phase 2b~~ trial, 54generally ~~patients~~ received one ~~the~~initial ~~full~~six-week ~~four~~cycle ~~doses~~of sunitinib, consisting of ~~AGS-004~~four orweeks ~~placebo during~~on ~~the~~drug ~~first~~and ~~four~~two weeks ~~together~~on ~~with~~drug ~~their~~holiday, ~~ART.~~prior Ofto ~~these~~initiating ~~patients,~~the combined 36treatment ~~patients~~with ~~continued~~rocapuldencel-T. onPatients ~~AGS~~then received a dose of rocapuldencel-~~004~~T orevery ~~placebo~~three weeks for ~~the~~a ~~full~~total of five 12doses, while also continuing three additional six-week ~~treatment~~cycles ~~interruption~~of ~~period,~~sunitinib. 23This of24-week ~~whom~~induction phase was followed by a booster phase during which patients received ~~AGS~~a dose of rocapuldencel-~~004~~T once every three months and continued to receive sunitinib in six-week cycles until disease progression.

InThe ~~January~~following ~~2015,~~table wesummarizes ~~announced~~certain key ~~top-line~~data ~~results~~ from the ~~trial.~~11 ~~The~~intermediate ~~primary~~risk ~~endpoint of~~and 10 poor risk patients enrolled in the ~~trial~~Phase ~~was~~2 ~~not~~combination ~~achieved~~therapy clinical trial.

However, we believe that data from the trial provided evidence of the ability of AGS-004 to induce memory T-cell responses which may have directly impacted the latent viral reservoir. Of the evaluated 22 patients who received AGS-004 and completed the 12-week treatment interruption period, 15 patients, or approximately 70 percent, had positive antiviral memory T-cell responses prior to beginning the treatment interruption versus zero percent of placebo patients. Within the AGS-004 treatment group, those patients that had antiviral memory T-cell responses had significantly fewer CD4+ T-cells with integrated HIV DNA when compared to non-responders. These findings relate directly to the utilization of AGS-004 in our ongoing adult eradication study and our planned pediatric study, where one of the key objectives is to decrease the latent HIV reservoir.

Outcome		(N=21)
Median OS (1)		30.2 months
Median PFS (2)		11.2 months
Complete response (3)		0 patients
Partial response (4)		9 patients
Stable disease (5)		4 patients
Immune response		CD8+ CD28+ memory T-cells correlated with OS, PFS and reduced metastatic tumor burden; IL-2 and interferon- g (IFN- g ) recovery

~~Safety analysis~~_________________

In(1) Overall survival, ~~this~~or ~~trial~~OS, ~~AGS-004~~is ~~was~~the ~~well~~length ~~tolerated.~~of Notime ~~AGS-004-related~~from ~~serious adverse events were reported. The most common adverse event was mild injection site reactions. During~~ the ~~antiretroviral~~initiation ~~treatment interruption, no notable differences in incidence~~ of ~~adverse~~treatment ~~events occurred compared~~ to ~~when~~the ~~patients~~patient’s ~~were receiving AGS-004 in combination with antiretroviral drug therapy~~death.

~~NIH and NIAID Contract. Our development of AGS-004 has received significant~~(2) Progression ~~funding~~free ~~from the U.S. federal government. In September 2006~~survival, ~~we entered into a multi-year research contract with the NIH and the National Institute of Allergy and Infectious Diseases,~~ or ~~NIAID~~PFS, tois ~~design,~~the ~~develop~~length ~~and clinically test an autologous HIV immunotherapy capable~~ of ~~eliciting~~time ~~therapeutic immune responses. We are using funds~~ from ~~this~~treatment ~~contract~~initiation to ~~develop AGS-004. Under this contract, as it has been amended,~~ the ~~NIH~~worsening ~~and the NIAID have committed to fund up to $39.8 million, including reimbursement~~ of our direct expenses and allocated overhead and general and administrative expenses of up to $38.4 million and payment of specified amounts totaling up to $1.4 million upon our achievement of specified development milestones. We have recorded total revenue of $38.1 million through December 31, 2016 under the ~~NIH~~patient’s ~~agreement.~~disease Asor ~~of December 31, 2016, there was up to $1.9 million of potential revenue remaining to be earned under~~ the ~~agreement~~patient’s death. ~~This commitment extends until July 2018.~~

18(3) Complete response is the disappearance of all measurable target lesions and non-target lesions.

~~We have agreed to a statement of work under the contract, and are obligated to furnish~~(4) Partial ~~all~~response ~~the~~is ~~services, qualified personnel, material, equipment, and facilities, not otherwise provided by~~ the ~~U.S.~~overall ~~government,~~tumor ~~needed to~~regression ~~perform~~based ~~the~~on ~~statement of work. In accordance with the laws applicable to government intellectual property rights under federal contracts, we have~~ a ~~right~~decrease ~~under~~of ~~our~~at ~~contract~~least ~~with~~30% ~~the~~in ~~NIH to elect to retain title to inventions conceived or first reduced to practice under~~ the ~~NIH~~overall ~~and~~amount ~~NIAID contract, subject to the right~~ of ~~the~~measurable ~~U.S.~~tumor ~~government~~mass ~~to a royalty-free license to practice or have practiced for or on behalf of the United States the subject invention throughout the world. The government also has special statutory “march-~~in~~” rights to license or to require us to license such inventions to third parties under limited~~ ~~circumstances. In addition, we may not grant to any person~~ the ~~exclusive~~body ~~right~~and toimprovement ~~use~~ or ~~sell~~no ~~any~~change ~~such inventions~~ in ~~the~~non-target ~~United States unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States~~lesions.

~~Manufacturing~~(5) Stable disease is neither sufficient decrease in tumor size to qualify as a partial response nor sufficient increase in tumor size to qualify as disease progression.

WeParticular ~~currently~~observations ~~manufacture~~from ~~our~~these ~~Arcelis-based products, rocapuldencel-T~~data and ~~AGS-004,~~the ~~for use in our clinical trials of those product candidates at our facilities in Durham~~trial, ~~North Carolina,~~ which ~~we refer to as our Technology Drive and Patriot Center facilities. These facilities include manufacturing suites for the production of products using our Arcelis technology platform. We~~ have ~~designed~~informed ~~these suites to comply with the FDA’s current good manufacturing practice, or cGMP, requirements. We have manufactured the product for~~ our ~~development~~further ~~and~~ clinical ~~trial~~development ~~activities~~of ~~associated with~~ rocapuldencel-T ~~and AGS-004 to date~~, ~~and are manufacturing the product for the ADAPT trial using our current processes at our current facilities.~~include:

InEfficacy January 2017, we entered into a ten-year lease agreement with two five-year renewal options for 40,000 square feet of manufacturing and office space at the Center for Technology Innovation, or CTI, on the Centennial Campus of North Carolina State University in Raleigh, North Carolina. We had intended to utilize this facility to manufacture rocapuldencel-T to support submission of a BLA to the FDA and to support initial commercialization of rocapuldencel-T.Analysis

To• ~~provide~~Seven ~~for~~patients ~~capacity~~survived ~~expansion~~for ~~beyond~~more ~~the~~than ~~initial~~4.5 ~~few~~ years following ~~potential~~ ~~launch~~enrollment ofin ~~rocapuldencel-T,~~this wetrial. ~~had~~Two ~~planned~~of ~~for~~these ~~the~~patients ~~build-out~~remained ~~and~~alive ~~equip a second facility, which we refer to~~ as ~~the~~of ~~Centerpoint facility.~~December ~~In August 2014~~31, we2016 ~~entered into a ten-year lease agreement with renewal options. Under the lease agreement, we agreed to lease certain land~~ and anboth ~~approximately~~have ~~125,000~~had ~~square-foot~~a ~~building~~sustained toclinical beresponse ~~constructed~~spanning innearly ~~Durham~~eight ~~County,~~years ~~North Carolina. We initially intended this facility to house our corporate headquarters~~ and ~~commercial~~remain ~~manufacturing before we entered into the lease for the CTI facility. The shell of the new facility was constructed~~ on ~~a build~~rocapuldencel-~~to-suit~~T ~~basis~~ in ~~accordance~~combination with ~~agreed~~continued ~~upon~~targeted ~~specifications and plans and was completed in June 2015~~therapy. ~~However, the build-out and equipping of the interior of the facility was suspended as we pursued financing arrangements.~~

Due to the recent IDMC recommendation to discontinue the ADAPT study, we are currently reassessing our manufacturing plans. We have therefore initiated discussions with the landlords of our CTI facility and our Centerpoint facility regarding these leases. We believe that our current Technology Drive and Patriot Center facilities are sufficient for the manufacture of rocapuldencel-T and AGS-004 to support our ongoing clinical trials and any likely near-term clinical trials that we may initiate.23

We• ~~have~~Five ~~granted~~poor ~~exclusive~~risk ~~manufacturing~~patients ~~rights~~did ~~for~~not ~~rocapuldencel-T~~receive tofive ~~Pharmstandard in~~doses ~~Russia and the other states comprising the Commonwealth~~ of ~~Independent~~rocapuldencel-T ~~States,~~due to ~~Green~~early ~~Cross~~disease inprogression. ~~South~~Median ~~Korea,~~overall tosurvival ~~Medinet~~ in ~~Japan~~ ~~and~~the to16 ~~Lummy~~patients HKwho inreceived ~~China,~~at ~~Hong~~least ~~Kong,~~five ~~Taiwan~~doses ~~and Macau. We have also agreed to enter into an agreement with Pharmstandard for the manufacture~~ of rocapuldencel-T inwas ~~the~~36.0 ~~European market~~months.

~~Sales~~• ~~and~~Median ~~Marketing~~overall survival in the 11 intermediate risk patients was 61.9 months. Median overall survival in the 10 poor risk patients was 9.1 months.

We• ~~hold~~The ~~exclusive~~following ~~commercial~~graphic ~~rights~~shows todata ~~all~~and ~~of our product candidates in all geographies other than rights to rocapuldencel~~follow-Tup inas ~~Russia and the other states comprising the Commonwealth~~ of ~~Independent~~December ~~States~~31, ~~which are held by Pharmstandard~~2015, ~~rights to rocapuldencel-T for~~ the ~~treatment~~number of ~~mRCC~~months inthat ~~South~~each ~~Korea,~~patient ~~which are held by Green Cross and rights to rocapuldencel-T~~ in ~~China,~~the ~~Hong~~Phase ~~Kong,~~2 ~~Taiwan~~clinical ~~and~~trial ~~Macau,~~survived ~~which~~from ~~are~~the ~~held~~time byof ~~Lummy~~enrollment ~~HK. We have granted to Medinet an exclusive license to manufacture~~ in ~~Japan rocapuldencel-T for~~ the ~~treatment of mRCC~~trial.

We• ~~currently~~Of ~~intend~~the tonine ~~retain~~patients ~~North~~who ~~American~~exhibited ~~marketing~~a ~~rights~~partial ~~for~~response, ~~rocapuldencel-T~~five ~~and any~~patients ~~future~~exhibited ~~oncology~~partial ~~products~~responses ~~that~~during ~~we may develop. To maximize~~ the ~~value~~24-week ofinduction ~~these rights~~phase, weincluding ~~would~~two ~~expect~~patients towho ~~build~~exhibited apartial ~~commercial infrastructure~~responses ~~for~~prior ~~such~~to ~~products~~initiation ~~comprised~~ of ~~medical,~~treatment ~~marketing and sales teams as well as a customer service function to manage patient access and logistics partners associated~~ with rocapuldencel-T ~~production and distribution~~. ~~Our~~The ~~commercial~~other ~~infrastructure would~~three ~~also~~patients ~~include~~exhibited ~~personnel~~partial ~~who~~responses ~~manage~~after ~~reimbursement~~prolonged ~~activities~~dosing with ~~third~~rocapuldencel-T ~~party~~during ~~payors,~~the ~~such~~booster asphase. ~~managed~~We ~~care~~do ~~organizations, group~~not ~~purchasing~~believe ~~organizations,~~that ~~oncology~~these ~~group~~late ~~networks~~occurring ~~and~~partial ~~government~~responses ~~accounts. We currently~~ have ~~limited~~been ~~commercial~~observed ~~capabilities and few~~ in~~-house~~ ~~personnel~~clinical ~~specializing~~trials inof ~~these~~sunitinib ~~functions~~alone. ~~Outside~~As ~~North~~a ~~America~~result, we ~~plan~~believe tothat ~~seek~~these tolate ~~enter~~responses ~~into~~may ~~collaboration agreements~~relate ~~with~~to ~~other~~the ~~pharmaceutical~~immunologic oreffects ~~biotechnology~~of ~~firms~~prolonged torocapuldencel-T ~~commercialize~~dosing and rocapuldencel-T’s effect on CD8+ CD28+ memory T-cells.

~~For~~• ~~AGS~~We observed a statistically significant correlation between increased progression free survival and prolonged survival (p<0.001). Statistical significance is determined by methods that establish the p-~~004~~value of the results. Typically, weresults ~~plan~~are toconsidered ~~seek~~statistically tosignificant ~~enter~~if ~~into~~they ~~collaboration~~have ~~agreements~~a ~~with~~p-value ~~other~~of ~~pharmaceutical~~ 0.05 or ~~biotechnology~~less, ~~firms~~meaning tothat ~~commercialize~~there ~~this~~is ~~product~~less ~~candidate~~than on a ~~worldwide~~one-in-20 ~~basis~~likelihood that the observed results occurred by chance.

19Immune Response Analysis

~~Competition~~• In the 14 patients in the trial who received at least five doses of rocapuldencel-T and could be evaluated for memory T-cell response, we observed a statistically significant correlation between the increase in the number of CD8+ CD28+ memory T-cells over the initial five doses of rocapuldencel-T and survival (p<0.002), progression free survival (p<0.031) and reduced metastatic tumor burden (p<0.045). The following graphics show, for each of these 14 patients, the increase in their tumor-specific memory T-cells that they exhibited as measured immediately prior to their first dose of rocapuldencel-T and immediately following the patient’s fifth dose of rocapuldencel-T, or the absence of such increase, as compared to such patient’s survival.

The biotechnology and pharmaceutical industries are highly competitive. There are many pharmaceutical companies, biotechnology companies, public and private universities and research organizations actively engaged in the research and development of products that may be similar to or competitive with our products. There are a number of multinational pharmaceutical companies and large biotechnology companies currently marketing or pursuing the development of products or product candidates targeting the same indications as our product candidates. It is probable that the number of companies seeking to develop products and therapies for the treatment of unmet needs in these indications will increase. Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approaches, and others are based on entirely different approaches.24

~~Many~~Phase of2 ~~our~~Combination ~~competitors,~~Therapy ~~either alone or with their strategic partners, have substantially~~Clinical ~~greater~~Trial ~~financial, technical and human resources than we do and significantly greater experience in the discovery and development~~ of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products. Our competitors’ drugs may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may render our product candidates obsolete or nonrocapuldencel-competitive. We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, convenience of administration and delivery, price, the level of generic competition and the availability of reimbursement from government and other third party payors.T:

~~mRCC~~Correlation of Immune Response and Overall Survival

~~Historically,~~• ~~mRCC~~Rocapuldencel-T was ~~treated~~found ~~with~~to ~~chemotherapy,~~have ~~radiation~~positive ~~and~~impact ~~hormonal~~on ~~therapies, as~~immune ~~well~~cell asfunction ~~cytokine-based therapies such as interferon- µ~~ and ~~IL-2.~~restoration ~~More~~of ~~recently, the~~cellular ~~FDA~~immunity ~~has~~in approved several targeted therapies as monotherapies for mRCC, including Nexavar (sorafenib), marketed by Bayer Healthcare Pharmaceuticals, Inc. and Onyx Pharmaceuticals, Inc.; Sutent (sunitinib) and Inlyta (axitinib), marketed by Pfizer, Inc.; Avastin (bevacizumab), marketed by Genentech, Inc., a ~~member~~majority of ~~the Roche Group; Votrient (pazopanib) and Afinitor (everolimus)~~patients, ~~marketed by~~including ~~Novartis~~an ~~Pharmaceuticals~~increase Corporation; Torisel (temsirolimus), marketed by Pfizer and most recently, Opdivo (nivolumab), marketed by Bristol-Myers Squibb and Cabometyx (cabozantinib), marketed by Exelixis, for second-line mRCC. In addition, we estimate that there are numerous therapies for mRCC in ~~clinical~~levels ~~development by many public and private biotechnology and pharmaceutical companies targeting numerous different cancer types and stages. A number~~ of ~~these are in late stage development including Opdivo (nivolumab) plus Yervoy (ipilimumab) in combination for first~~IL-~~line~~2 mRCC, which are currently being compared in a Phase 3 trial to sunitinib. In addition, if a standalone therapy for mRCC were developed that demonstrated improved efficacy over currently marketed first-line therapies with a favorable safety profile and ~~without the need for combination therapy, such a therapy might pose a significant competitive threat to rocapuldencel~~IFN-T g.

~~Other Oncology Indications~~Safety

We• ~~estimate~~The ~~that~~adverse ~~there~~events ~~are numerous other cancer immunotherapy products~~ in ~~clinical~~this ~~development by~~trial ~~many~~associated ~~public~~with ~~and private biotechnology and pharmaceutical companies targeting numerous different cancer types. A number of these product candidates are in late~~rocapuldencel-~~stage~~T ~~clinical~~were ~~development~~generally oronly ~~have~~mild ~~recently~~injection ~~been~~site ~~approved in different cancer types including two recently approved checkpoint inhibitor-based immunotherapies~~reactions, ~~Nivolumab~~while ~~which is marketed by Bristol-Myers Squibb and Pembrolizumab, which is marketed by Merck. These newer immunotherapies are in addition to~~ the ~~targeted~~toxicities ~~therapies,~~associated ~~chemotherapeutics,~~with ~~radiation therapy,~~sunitinib ~~hormonal~~were ~~therapies~~consistent ~~and~~with ~~cytokine-based~~those ~~therapies~~expected ~~used~~from ~~in the~~ treatment inwith asunitinib ~~wide range of oncology indications~~alone.

~~HIV~~The original design for the Phase 2 clinical trial called for the recruitment of 50 patients to generate 38 fully evaluable patients. However, in October 2009, we terminated enrollment in this trial early due to a lack of funding. As a result, only 21 patients were enrolled and received at least one dose of rocapuldencel-T. In addition, the trial was originally designed to enroll patients with favorable and intermediate risk disease profiles. Instead, the actual population enrolled consisted entirely of patients with intermediate or poor risk disease profiles who had the less than one year to treatment risk factor. Because the patient population had poorer prognoses when they entered the trial than we expected and we did not have a sufficient number of evaluable patients, we did not perform the statistical analysis to determine whether the primary endpoint of complete response rate was achieved. As a result, if we submit a biologics license application, or BLA to the FDA for rocapuldencel-T, we expect the data from this trial to be considered by the FDA for the purpose of evaluating the safety and feasibility of rocapuldencel-T, but that it will only have a limited impact on the FDA’s ultimate assessment of the efficacy of rocapuldencel-T.

There are numerous FDA-approved treatments for HIV, primarily antiretroviral therapies, marketed by large pharmaceutical companies. In addition, generic competition has recently developed as patent exclusivity periods for older drugs have expired, with more than 15 generic bioequivalents currently on the market. The presence of these generic drugs is resulting in price pressure in the HIV therapeutics market. Currently, there are no approved therapies for the eradication of HIV. We expect that major pharmaceutical companies that currently market antiretroviral therapy products or other companies that are developing HIV product candidates may seek to develop products for the eradication of HIV.25

~~Intellectual~~Based ~~Property~~on our experience with the Phase 2 clinical trial, we concluded that the secondary endpoints in the trial, progression free survival and overall survival, along with immune response, were the appropriate endpoints to consider for measuring the efficacy of rocapuldencel-T in combination with sunitinib in patients with mRCC in our pivotalPhase 3 clinical trial.

~~Our~~Rocapuldencel-T ~~success~~Phase ~~depends~~2 inCombination Therapy ~~part~~Clinical onTrial, ~~our~~as ~~ability~~Compared to ~~obtain~~Independent ~~and~~Third ~~maintain~~Party ~~proprietary~~mRCC ~~protection for~~Data. At ~~our~~ASCO ~~products~~in ~~and~~June ~~product candidates~~2013, ~~technology~~Dr. Heng ~~and~~presented data ~~know-how,~~from tothe ~~operate~~Consortium ~~without~~database ~~infringing~~regarding ~~the~~overall ~~proprietary~~survival ~~rights of others~~ and toprogression ~~prevent~~free ~~others~~survival ~~from~~for ~~infringing~~intermediate ~~our~~and ~~proprietary~~poor ~~rights.~~risk Wepatients treated ~~are~~with ~~seeking~~sunitinib ~~a range of patent~~ and other ~~protections~~targeted ~~for~~therapies, ~~our~~including ~~product candidates~~data ~~and~~with ~~platform~~respect ~~technology.~~to ~~We also rely on trade secrets~~1,189 ~~know-how,~~intermediate ~~continuing~~and ~~technological~~poor ~~innovation~~risk ~~and~~patients ~~in-licensing~~with ~~opportunities~~the toless ~~develop~~than ~~and~~one ~~maintain~~year ~~our~~to ~~proprietary~~treatment ~~position~~risk factor.

~~Patents~~Using the overall survival data from the Consortium database presented in June 2013 and published in April 2014, a summary comparison of this data with our Phase 2 clinical trial of rocapuldencel-T in combination with sunitinib is set forth in the graphic below. This graphic compares the median overall survival data from the Consortium intermediate and poor risk patients with the less than one year to treatment risk factor with the median overall survival data from the 21 patients in our Phase 2 clinical trial of rocapuldencel-T in combination with sunitinib, all of whom had the less than one year to treatment risk factor. A majority of the Consortium patients and the patients in our Phase 2 clinical trial had one or more additional risk factors.

~~We own or exclusively license 14 U~~1.S. ~~patents~~1Ko ~~and~~JJ ~~five~~et Ual.S. ~~patent~~First-, ~~applications~~second-, asthird-line ~~well~~therapy asfor ~~approximately~~mRCC: 60Benchmarks ~~foreign~~for ~~counterparts,~~trial ~~covering~~design ~~our~~from ~~Arcelis~~the ~~precision~~IMDC. ~~immunotherapy~~Br ~~technology~~J ~~platform~~Cancer. ~~and~~April ~~Arcelis~~2014:1-~~based product candidates~~6.

We2. ~~use~~Amin ~~our~~et ~~Arcelis precision immunotherapy technology platform to generate individualized mRNA-loaded dendritic cell immunotherapies~~al. AsJournal described above, the process of obtaining a disease sample and dendritic cells from a patient, using those materials to manufacture an individualized drug product and shipping the drug product to the clinical site for ~~use~~ImmunoTherapy ~~in the treatment~~ of ~~the patient involves many important steps~~Cancer. 2015;3:14 ~~These~~(21 ~~steps~~April ~~include:~~2015).

20Progression free survival for intermediate and poor risk patients in the Consortium database with the less than one year to treatment risk factor was 5.6 months, as compared to the 11.2 months of median progression free survival that we observed in the 21 patients in our Phase 2 clinical trial of rocapuldencel-T in combination with sunitinib.

~~• amplifying mRNA from a disease sample obtained from the patient;~~26

•Although ~~differentiating~~we ~~dendritic~~believe ~~cell~~comparisons ~~precursors~~between our ~~(monocytes)~~data ~~isolated~~and ~~from~~these collections of data are useful in evaluating the overall results of our Phase 2 clinical trial, the treatment of the Consortium patients was conducted at different sites, at different times and in different patient ~~into~~populations ~~immature~~than ~~dendritic~~the ~~cells;~~treatment in our Phase 2 combination therapy trial. The treatment also differed because certain of the Consortium patients received therapies other than sunitinib as first-line treatment. All of the patients in our Phase 2 clinical trial received sunitinib as first-line treatment. Our ongoing pivotal Phase 3 combination therapy clinical trial of rocapuldencel-T is the first trial that we have conducted that directly compares rocapuldencel-T and sunitinib or other targeted therapies as a combination therapy against sunitinib as monotherapy. Results of this head-to-head comparison in our phase 3 ADAPT trial differed significantly from the comparisons presented above and elsewhere in this Annual Report on Form 10-K.

•AGS-004 ~~maturing~~for the ~~immature~~Treatment ~~dendritic~~of ~~cells~~Human ~~in culture and loading the mature dendritic cells with the amplified mRNA and CD40L protein; and~~Immunodeficiency Virus

•We ~~formulating~~are ~~the~~developing ~~matured~~AGS-004, ~~loaded~~our ~~dendritic~~second ~~cells~~Arcelis-based product incandidate, for the ~~patient’s~~treatment ~~plasma~~of ~~with~~HIV. ~~cryoprotectants~~We tohave ~~protect~~completed ~~the~~three ~~cells~~clinical intrials ~~the~~of ~~resulting~~AGS-004. ~~drug~~These ~~product~~include ~~when~~Phase ~~the~~1 ~~drug~~and ~~product~~Phase 2 isclinical ~~frozen~~trials that were funded by government grants and ~~thawed~~a Phase 2b trial that was funded in full by the NIH.

WeBased on the clinical data that we have generated ~~sought~~to date, we have determined to ~~protect~~focus ~~these~~our ~~steps~~development orprogram on the ~~equipment~~use ~~related~~of toAGS-004 ~~carrying~~in ~~out~~combination ~~one~~with orother therapies ~~more~~to achieve complete virus eradication and the use of ~~these~~AGS-004 ~~steps~~monotherapy ~~through~~to ~~patents~~provide orlong-term ~~trade~~control ~~secrets.~~of WeHIV ~~have~~viral ~~also~~load ~~sought~~in toimmunologically healthy ~~protect~~patients ~~the~~and ~~resultant~~eliminate ~~drug~~their ~~product~~need ~~through~~for ~~patents~~ART.

~~These~~Human ~~patents~~Immunodeficiency and patent applications are directed to one or more aspects of our Arcelis precision immunotherapy technology platform or Arcelis-based products. Specifically, these patents and patent applications are collectively directed to:Virus

•HIV ~~Arcelis~~is characterized by a chronic viral infection and an associated deterioration of immune function. Specifically, the virus disables and kills crucial human immune cells called CD4+ T-~~based~~cells. ~~compositions~~CD4+ T-cells are necessary to generate and maintain antiviral T-cells, including the CD8+CD28+ memory T cells that aid in the killing of ~~matter~~virus-infected cells. Over time, this viral impact on an infected person’s immune system outpaces the body’s natural ability to replace CD4+ T-cells and ~~products;~~immunodeficiency results. As a result, the longer a person has been infected with the virus, the more functionally impaired these cells become.

•At ~~methods~~the same time, HIV infection causes the immune cells in HIV patients, including CD4+ T-cells and CD8+ T-cells that are not killed by the virus, to be in a chronic state of ~~manufacturing~~activation. ~~Arcelis~~The persistent state of immune activation in HIV patients results in chronic inflammation. We believe that this inflammation plays a role in the elevated rates of age-~~based~~related ~~products;~~comorbidities, including malignancies and cardiovascular disease observed in HIV patients. In addition, the activation of the CD4+ T-cells supports virus replication which leads to the production of new virus and increased viral load.

•HIV ~~methods~~is ofa ~~using~~persistent ~~Arcelis-based~~virus ~~products~~that ~~for~~can ~~treatment~~rapidly adapt to its environment by mutating and creating HIV variants that are drug resistant and can evade immune attack. As a result, there are a large number of ~~tumors;~~mutated variants of HIV existing in any one infected individual and no two individuals have identical viral sequences.

•According ~~compositions~~to the World Health Organization, the number of people living with HIV in the world was approximately 35 million in 2013. The Centers for Disease Control and Prevention estimates that wemore ~~use~~than 1.2 million people are currently living with HIV in the ~~manufacture~~United States and the number of new ~~Arcelis-based~~cases ~~AGS-004~~of ~~products;~~HIV ~~and~~infection in the United States is expected to remain constant at approximately 50,000 cases per year.

•Current ~~equipment~~treatments ~~would~~for beHIV. In 1996, ~~used~~triple ~~for~~combinations ~~assisting~~of oral medications known as ART were demonstrated to substantially reduce the ~~automated~~levels ~~manufacture~~of virus in the blood of ~~Arcelis-based~~patients ~~products~~with HIV. Since then, the introduction of new drug classes of ART and combination drug treatment strategies has enhanced treatment for HIV.

We believe that all of the above aspects of our Arcelis precision immunotherapy technology platform are required to successfully and efficiently produce our Arcelis-based product candidates and are covered by a combination of our patents, patent applications, trade secrets and know-how. The U.S. patents expire between 2021 and 2029, and the U.S. patent applications, if issued, would expire between 2025 and 2029, the counterpart patents in Europe and Japan expire between 2017 and 2027, and the counterpart patent applications in Europe and Japan, if issued, would expire between 2025 and 2027. Included in these patents and patent applications are:27

•ART ~~two~~in ~~European~~HIV-infected ~~patents~~patients ~~and~~can ~~two~~decrease levels ~~Japanese~~of ~~patents~~HIV ~~that~~in ~~are~~the ~~collectively~~blood ~~directed~~to ~~toward~~below the ~~composition~~limits of ~~matter~~detection, ofincrease ~~Arcelis-based~~life ~~products~~expectancy ~~(dendritic~~and ~~cells~~improve ~~loaded~~quality ~~with~~of ~~RNA~~life. ~~from tumors or pathogens)~~However, ~~and~~there continues ~~methods~~to ofbe ~~manufacture~~an ofunmet ~~these~~need ~~products.~~for ~~The~~HIV ~~patents~~therapies infor ~~Europe~~the ~~and~~following ~~Japan expire in 2017.~~reasons:

• ~~six~~ART Ucan have significant side effects.S. ~~patents,~~The ~~one~~most recent U.S. ~~patent~~guidelines ~~application~~on ~~and~~ART ~~corresponding~~treatment ~~patent~~contain ~~application~~a innumber ~~Europe~~of ~~and~~tables ~~patent~~of inadverse ~~Japan~~effects ~~collectively directed towards an automated apparatus for the manipulation~~ of ~~nucleic~~combination ~~acids~~regimens ~~in a closed container, components thereof~~ and ~~related~~how ~~methods~~to ofmanage ~~use~~them. ~~The~~Some ~~U.S.~~combinations ~~and~~present ~~Japanese~~potentially ~~patents~~life-threatening ~~expire~~complications ~~in 2027,~~ and ~~the~~other ~~patent~~complications ~~applications~~that inare ~~the~~chronic, ~~United~~cumulative ~~States~~ and ~~Europe~~overlapping, ifand ~~issued,~~sometimes ~~would expire in 2027~~irreversible.

• ~~one~~ART Urequires life-long daily treatment.S The risks of long-term daily administration of ART remain unknown but are potentially significant. ~~patent~~In ~~and~~addition, ~~corresponding~~the ~~European~~requirement ~~and~~for ~~Japanese~~life-long ~~patents~~daily ~~collectively~~treatment ~~directed~~has ~~towards~~made ~~cryoconserved~~strict ~~dendritic~~adherence ~~cells~~to ~~and~~the ~~related~~treatment ~~methods~~regime difficult. Poor compliance has led to the development of ~~manufacture.~~drug ~~The~~resistant ~~U.S.,~~HIV ~~European~~variants ~~and~~that ~~Japanese~~are ~~patents~~ineffectively ~~expire~~controlled inby ~~2021~~the available armamentarium of ART.

• ~~four~~ART ~~U.S.~~cannot ~~patents~~eradicate the virus and, ~~two~~therefore, Udoes not cure HIV-infected patients.S. ~~patent~~For ~~applications~~example, ~~two~~up ~~corresponding~~to ~~European~~20% ~~patents,~~of ~~two~~patients ~~corresponding~~receiving ~~Japanese~~ART ~~patents~~fail ~~and~~to aachieve ~~corresponding~~normal ~~patent~~CD4+ ~~application~~T-cell incounts, ~~Europe~~resulting ~~collectively~~in ~~directed~~a ~~towards~~continued ~~methods~~weakened ofimmune ~~maturing~~system. ~~dendritic~~In ~~cells~~addition, ~~and~~certain ~~the~~patients ~~composition~~are ofnot ~~matter~~able ofto ~~dendritic~~achieve ~~cells~~effective ~~that~~control ~~have~~of ~~undergone~~the ~~this~~virus ~~maturation~~using ~~process.~~current ~~The~~treatment Uregimens.S. ~~patents~~ART ~~expire~~cannot ineradicate ~~2026~~the ~~and~~virus because the Uvirus persists in latently infected cells.S. ~~applications~~These cells, ifwhich ~~issued,~~constitute ~~would~~the ~~expire~~HIV inlatent ~~2025~~reservoir, ~~the~~do ~~European~~not ~~patents~~consistently ~~expire~~express HIV antigens in ~~2025~~a ~~and~~manner ~~2027~~or a compartment that permits effective control. Instead, ~~the~~these ~~Japanese~~cells ~~patents~~serve ~~expire~~as ina ~~2025~~source ~~and~~privileged ~~2027~~from ART control for virus replication and viral rebound in the ~~patent~~absence ~~application~~of inART. ~~Europe,~~Following ifdiscontinuation ~~issued~~of treatment with ART, ~~would~~HIV ~~expire~~viral inlevels ~~2025~~return to levels observed prior to treatment with ART within 12 weeks of treatment interruption.

•AGS-004 one U.S. patent and corresponding patent application in Europe and patent in Japan collectively directed towards methods of manufacture of dendritic cells from monocytes stored for more than six hours and up to four days without freezing and the composition of matter of dendritic cells that have been manufactured from these monocytes. The U.S. patent will expire in 2029, the Japanese patent will expire in 2026 and the patent application in Europe, if issued, would expire in 2026.Opportunity

•We ~~one U.S. patent and one U.S. patent application~~believe, ~~two~~based ~~patents~~on ~~in Europe and one patent in Japan are collectively directed towards~~ the ~~composition~~mechanism of ~~matter~~ action of AGS-004 and ~~related~~the ~~methods~~clinical ofdata ~~manufacture.~~that ~~The~~we ~~U.S.~~have ~~patent expires in 2026. The U.S. patent application if issued~~generated, ~~would~~that ~~expire~~AGS-004 inhas ~~2025.~~the ~~The~~potential ~~European~~to ~~and~~address ~~Japanese~~this ~~patents~~unmet ~~will~~need ~~expire~~for inthe ~~2025.~~following reasons:

• ~~one~~Potential ~~U.S.~~to ~~patent~~Eradicate ~~and~~HIV ~~one~~in UCombination with Latency Reversing Drugs.S. ~~patent~~A ~~application~~number of companies and academic groups are ~~directed~~evaluating ~~towards~~drugs that can potentially activate the ~~composition~~latently ofinfected ~~matter~~cells to increase viral antigen expression and ~~related~~make ~~methods~~the ofcells ~~use~~vulnerable ofto ~~some~~elimination ofby the ~~primers~~immune system. We believe that wetreating ~~use~~HIV-infected inpatients, ~~the~~who ~~manufacture~~are being successfully treated with ART, with a combination of AGS-004. ~~The~~and ~~U.S.~~one ~~patent~~of ~~and~~these Ulatency reversing drugs could lead to activation of antigen expression from the latently infected cells along with a potent memory T-cell response that is specific to the patient’s own unique viral antigens.S. ~~patent~~We ~~application,~~believe ifthat ~~issued,~~this ~~will~~approach ~~expire~~could potentially result in ~~2028~~complete eradication of the patient’s virus.

21• Long-Term Viral Load Control in Immunologically Healthy Patients. We believe that AGS-004 may allow for long-term virus control and eliminate the need for life-long treatment with ART in infected patients who have minimal immune suppression but no T-cell response against their virus. We have designed AGS-004 to induce CD8+ CD28+ memory T-cells that are specific to the patient’s own unique viral antigens, do not require CD4+ T-cell help to kill viral cells and do not result in CD4+ T-cell activation which typically increases viral replication and viral load. As reported in Clinical & Experimental Immunology, researchers have demonstrated that elevated levels of CD8+CD28+ memory T-cells in the blood are a statistically significant predictor of long-term non-progression in HIV-infected patients not treated with ART drugs. As a result, we believe that inducing these memory T-cells may lead to viral control. Patients with minimal immune suppression and no T-cell response include pediatric patients who have been successfully treated with ART drugs since birth or shortly thereafter and have generally healthy immune systems.

In• ~~addition,~~Minimal ifToxicity. ~~the use of Arcelis~~AGS-~~based~~004 ~~products~~has ~~for~~been ~~the~~well ~~treatment~~tolerated ofin ~~RCC~~clinical ~~and~~trials ~~HIV~~with ~~are approved~~no byserious ~~the~~adverse ~~FDA,~~events ~~then,~~being ~~depending~~attributed ~~upon~~to ~~factors~~it. ~~such~~As asa ~~the timing and duration of FDA review and the timing and conditions of FDA approval~~result, aswe ~~well~~believe aswe ~~factors~~can ~~such~~combine asAGS-004 ~~patent~~with ~~claim~~other ~~scope,~~HIV ~~some~~therapies ofwithout ~~our~~additional ~~issued U~~toxicities.~~S. patents (or patents that may issue from our pending U.S. patent applications) may be eligible for limited patent term extension under the Hatch-Waxman Act.~~

~~Trade~~• ~~Secrets~~Lack of Chronic Inflammation. We have designed AGS-004 to elicit a patient-specific and disease-specific immune response that does not cause any additional inflammation. In our clinical trials of AGS-004, AGS-004 has not induced changes in markers that are associated with chronic inflammation in HIV patients.

In addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position. For example, significant aspects of the process by which we manufacture or plan to automate manufacturing of our Arcelis-based drug product candidates are based on unpatented trade secrets and know-how. Trade secrets and know-how can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and commercial partners. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems. Although 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. To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.28

~~Key~~Description ~~Licenses~~and Development Status

AGS-004 is an individualized immunotherapy based on our Arcelis precision immunotherapy technology platform. It is produced by electroporating dendritic cells with mRNA encoding for patient-specific HIV antigens that have been derived from a patient’s virus-infected blood and with RNA that encodes the CD40L protein. The process for producing AGS-004 is the same process as is used to produce rocapuldencel-T, with the one key difference being that rocapuldencel-T contains all of the antigens from a patient’s tumor cells while AGS-004 contains potentially all variants unique to each individual patient of four selected HIV antigens (Gag, Nef, Vpr and Rev). We ~~are~~designed ~~party~~AGS-004 to include these antigens because immunity to them has been observed in long-term non-progressors and elite controllers, two groups of rare patients able to control virus replication without ART. Because no two patients share identical HIV antigen sequences and there are a large number of ~~license~~mutated ~~agreements~~variants of HIV existing in each infected patient, by using mRNA that ~~are~~is ~~important~~specific to the patient’s virus and that captures potentially all of the unique patient-specific variants of each antigen in the sample obtained, we believe our ~~business~~immunotherapy maximizes the relevance of the immune responses induced in each patient.

~~Duke~~We ~~University. Pursuant~~have toconducted athree ~~2000~~clinical ~~agreement with Duke University, we hold~~trials anof ~~exclusive worldwide license to specified patents, patent applications and know~~AGS-~~how owned or otherwise controlled by Duke~~004, ~~including for~~which ~~use in the development, manufacture and commercialization of dendritic cells loaded with tumor or pathogen RNA. Under the agreement, we~~include:

•· ~~must~~a ~~pay~~phase ~~all~~2b ~~costs~~clinical trial of ~~prosecution~~AGS-004; ~~and~~· ~~maintenance~~a ofphase ~~the~~2a ~~licensed~~clinical ~~patent~~trial ~~rights~~of AGS-004; and · a phase 1 clinical trial of AGS-004.

•We ~~must~~submitted ~~pay an annual minimum royalty~~ to ~~Duke beginning with~~ the ~~calendar year beginning the second January 1 after first approval of a licensed product approved by the~~ FDA oran aIND ~~comparable~~for ~~regulatory authority~~ AGS-004 in aAugust ~~foreign country or any sale of a licensed product that does not require regulatory approval; and~~2008.

•We ~~must~~are ~~pay~~focusing ~~low~~our ~~single~~development program for AGS-~~digit~~004 ~~percentage~~on ~~royalties,~~the ~~subject~~use toof ~~reduction~~AGS-004 in ~~specified~~combination ~~circumstances,~~with latency reversing therapies to ~~Duke~~achieve oncomplete ~~net~~virus ~~sales~~eradication. Latently infected cells differ from other infected cells in that the HIV genome is permanently integrated into the chromosomal DNA of ~~licensed~~the latently ~~products~~infected cells. These latently infected cells persist long-term and constitute the HIV latent reservoir, which ~~are~~serves as ~~creditable~~a ~~against~~source privileged from ART control for virus replication and viral rebound in the ~~annual~~absence ~~minimum~~of ~~royalty~~antiretroviral therapy. As a result, demonstration that latently infected cells can be targeted by immune responses induced by AGS-004 is essential to our development strategy pertaining to virus eradication.

Adult Eradication Trial. We are supporting an investigator-initiated clinical trial of AGS-004 in 12 adult HIV patients who are ~~required~~being treated with ART to evaluate the use ~~reasonable~~of ~~commercial~~AGS-004 ~~diligence~~ to ~~research~~eradicate the virus. The trial is being conducted by co-investigator Dr. David Margolis, ~~develop~~Professor of Medicine at the University of North Carolina. Dr. Margolis is the leader of CARE, and ~~market~~has been a pioneer in the research of ~~licensed~~HIV ~~products,~~latent toreservoir ~~develop~~reversing ~~manufacturing~~treatments. ~~capabilities,~~The trial is being conducted in two stages. Stage 1 of this trial has been completed and was designed to ~~sublicense~~study ~~those~~immune ~~patent~~response ~~rights~~kinetics ~~for~~to ~~applications~~AGS-004 ~~which~~in wepatients ~~are not~~on ~~pursuing~~continuous ART. IfThese wedata ~~fail~~were used to ~~satisfy~~better ~~these~~define the ~~obligations~~optimal ~~and~~dosing dostrategy ~~not~~in ~~cure~~combination ~~such~~with ~~failure~~the ~~after~~latency ~~receiving~~reversing ~~written~~therapy ~~notice~~vorinostat ~~from~~in ~~Duke,~~the ~~Duke~~ongoing Stage 2. The patient clinical ~~may~~costs ~~terminate~~for ~~the~~Stage ~~agreement~~1 orof ~~convert~~this ittrial were funded by CARE. The NIH Division of AIDS has approved $6.6 million in funding to abe ~~nonexclusive~~provided directly ~~license~~to the University of North Carolina for the Stage 2 of this trial.

Planned Pediatric Functional Cure Trial. We ~~may~~believe that ~~terminate~~a ~~our~~patient ~~agreement~~population ~~with~~that ~~Duke~~could atbenefit ~~any~~from ~~time~~AGS-004 ~~upon~~monotherapy ~~three~~consists ~~months’~~of ~~written~~14+ year old, HIV-infected individuals who have ~~notice.~~been ~~The~~treated ~~agreement~~with ~~will~~ART ~~terminate~~since ~~upon~~birth ~~expiration~~or ofshortly ~~the~~thereafter. ~~last~~These toindividuals ~~expire~~are ofcharacterized ~~the~~by ~~patent~~having ~~rights~~very ~~licensed~~small ~~under~~HIV ~~the~~latent ~~agreement.~~reservoirs ~~The~~and Uotherwise healthy immune systems, while lacking antiviral CD8+ CD28+ memory T-cell responses.S. ~~patents~~We ~~licensed~~believe ~~under~~that ~~the~~successfully inducing ~~agreement~~antiviral ~~expired~~CD8+ CD28+ memory T-cell responses in ~~April~~these ~~2016~~patients could allow for long-term viral load control and eliminate the ~~patents~~need ~~licensed~~for ~~under~~life-long ~~the~~antiretroviral ~~agreement~~therapy. inWe ~~Europe~~plan ~~and~~to determine whether to support an investigator-initiated Phase 2 clinical ~~Japan~~trial ~~expire~~of ~~April~~AGS-004 ~~30,~~in ~~2017.~~pediatric ~~Either~~patients ~~party~~infected ~~may~~with ~~terminate~~HIV ~~the~~who ~~agreement~~have ~~upon~~otherwise ~~written~~healthy ~~notice~~immune ~~for~~systems ~~fraud,~~and ~~willful~~have ~~misconduct~~been ortreated ~~illegal~~with ART ~~conduct~~since ofbirth ~~the~~or ~~other~~shortly ~~party~~thereafter ~~that~~and, ~~materially~~as ~~adversely~~a ~~affects~~result, are lacking the ~~terminating~~antiviral ~~party~~memory T-cells to combat the virus. IfThe ~~either~~commencement of ~~party~~this ~~fails~~trial is subject to ~~fulfill~~supportive ~~any~~data obtained from the adult eradication trial and approval of ~~its material~~the ~~obligations~~protocol ~~under~~by the ~~agreement~~principal investigator(s), ~~subject~~institutional toreview aboards, ~~cure~~the ~~process~~IMPAACT ~~specified~~Network inleadership and the ~~agreement,~~FDA and to the ~~non-breaching~~agreement ~~party~~by ~~may~~the ~~terminate~~NIH to fund the ~~agreement.~~trial Acosts ~~party’s~~not ~~ability~~related to ~~cure~~AGS-004 amanufacturing ~~breach~~to ~~will~~evaluate ~~only~~the ~~apply~~use of AGS-004 monotherapy to allow for long-term control of viral load and eliminate the ~~first~~need ~~two~~for ~~breaches~~ART. InWe ~~addition,~~are currently developing the ~~agreement~~clinical protocol for this trial to immunize pediatric ~~will~~HIV ~~terminate~~patients ifwho wewere ~~become~~infected ~~insolvent,~~at ~~bankrupt~~birth and treated with antiretroviral therapy at or ~~placed~~near birth. We are developing this clinical protocol in ~~the~~collaboration ~~hands~~with Drs. Katherine Luzuriaga, University of aMassachusetts, ~~receiver~~and orDeborah ~~trustee~~Persaud, John Hopkins Medical Center, both specializing in pediatric virology.

~~Development and Commercialization Agreements~~29

AnPhase ~~important~~2b ~~part~~Clinical Trial. In January 2015, we completed a randomized, placebo controlled, double blind Phase 2b clinical trial of ~~our~~AGS-004 ~~business~~in ~~strategy~~chronically isinfected patients on ART that we opened for enrollment in July 2010. We designed this trial to ~~enter~~confirm ~~into~~the ~~arrangements~~data obtained in an earlier Phase 2a clinical trial in which AGS-004 led to a reduction in virus replication. We initially planned to enroll 42 chronically infected patients in the Phase 2b trial at nine clinical sites in the United States and Canada with ~~third~~the intent to generate 36 events for ~~parties~~the primary endpoint analysis. However, due to a higher than anticipated dropout rate by patients who were unable to complete the full 12 week treatment interruption period provided for by the ~~development~~trial, we needed to enroll 53 patients in the trial to generate 36 events for the primary endpoint analysis. These patients were randomized between AGS-004 treatment and ~~commercialization~~a ofplacebo ~~our~~control ~~product~~on a ~~candidates~~two-to-one basis.

~~Pharmstandard. In~~HIV ~~August~~infection ~~2013,~~is inclassified ~~connection~~as ~~with the purchase of shares~~“chronic” ofor ~~our~~“acute” ~~series~~based Eon ~~preferred~~how ~~stock~~long bythe ~~Pharmstandard,~~patient wehas ~~entered~~been ~~into~~infected anprior ~~exclusive~~to ~~royalty-bearing~~starting ~~license~~ART. ~~agreement~~Patients with ~~Pharmstandard. Under~~chronic ~~this~~HIV ~~license~~infection are ~~agreement,~~patients wewho ~~granted~~have ~~Pharmstandard~~initiated ~~and~~ART ~~its~~after ~~affiliates~~at aleast ~~license,~~six ~~with~~months from the ~~right~~time toof ~~sublicense,~~initial toinfection. ~~develop, manufacture~~Patients ~~and~~with ~~commercialize~~acute ~~rocapuldencel-T~~HIV ~~and~~infection are ~~other~~patients ~~products~~who ~~for~~have ~~the~~initiated ~~treatment~~ART ofless ~~human~~than ~~diseases,~~45 ~~which~~days ~~are~~after ~~developed~~initial byinfection. ~~Pharmstandard using~~This ~~our~~trial ~~individualized~~enrolled ~~immunotherapy~~adult ~~platform,~~patients inwith ~~the Russian Federation, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan,~~chronic ~~Kyrgyzstan,~~HIV-1 ~~Moldova,~~infection ~~Tajikistan, Turkmenistan, Ukraine~~ and ~~Uzbekistan,~~undetectable ~~which~~viral weloads ~~refer~~as toa asresult ~~the~~of ~~Pharmstandard~~treatment ~~Territory~~with ART. WePatients also ~~provided~~ ~~Pharmstandard~~had ~~with~~to ahave ~~right~~adequate ofCD4+ ~~first~~T-cell counts ~~negotiation for development~~ and ~~commercialization~~a ~~rights~~pre-ART inplasma ~~the~~viral ~~Pharmstandard~~sample ~~Territory~~ to ~~specified~~be ~~additional~~used ~~products~~to wemanufacture ~~may develop~~AGS-004.

~~Under~~In ~~the~~this ~~terms of the license agreement~~trial, ~~Pharmstandard~~patients ~~licensed~~first ~~us rights to clinical~~received ~~data~~intradermal ~~generated~~doses byof ~~Pharmstandard~~AGS-004 ~~under~~or ~~the~~placebo ~~agreement~~every ~~and~~four ~~granted~~weeks usfor ana ~~option~~total ~~to obtain an exclusive license outside~~ of ~~the~~four ~~Pharmstandard Territory~~doses, totogether ~~develop~~with ~~and~~their ~~commercialize~~ART. ~~improvements~~Following ~~to our Arcelis technology generated by Pharmstandard under~~ the ~~agreement,~~fourth adose ~~non-exclusive~~of ~~worldwide royalty~~AGS-~~free~~004 ~~license~~or toplacebo, ~~Pharmstandard~~patients ~~improvements~~discontinued totheir ~~manufacture~~ART ~~products~~but ~~using~~continued ~~our Arcelis technology and a license~~ to ~~specified~~receive ~~follow~~AGS-on004 ~~licensed~~or ~~products~~placebo ~~generated~~every byfour ~~Pharmstandard~~weeks ~~outside of the Pharmstandard Territory, each on terms to be negotiated upon our request~~ for ~~a license~~12 weeks. InWe ~~addition,~~refer ~~Pharmstandard agreed~~ to ~~pay~~this usperiod ~~pass-through~~as ~~royalties on net sales of all licensed products in~~ the ~~low~~treatment ~~single~~interruption ~~digits~~period. ~~until~~Patients itwho ~~has~~demonstrated ~~generated~~control ~~a specified amount~~ of ~~aggregate~~viral ~~net~~replication ~~sales.~~under ~~Once~~10,000 ~~the~~copies/ml ~~net~~and ~~sales~~maintained ~~threshold~~CD4+ isT-cell ~~achieved,~~counts ~~Pharmstandard~~above ~~will~~350 ~~pay~~cells/mm3 uscould ~~royalties~~remain onoff ~~net~~ART ~~sales~~and ofcontinue ~~specified~~their ~~licensed products, including~~treatment ~~rocapuldencel-T,~~interruption inpast ~~the~~12 ~~low double digits below 20%~~weeks. ~~These~~Following ~~royalty obligations last until~~ the ~~later~~end of ~~the~~treatment ~~expiration~~interruption, ofall ~~specified licensed~~patients ~~patent~~were ~~rights~~eligible infor acontinued ~~country~~treatment or with the ~~twelfth~~combination ~~anniversary~~ of ~~the~~AGS-004 ~~first commercial sale in such country on a country by country basis~~ and ~~no further royalties on specified other licensed products~~ART. ~~After~~A ~~the~~schematic ~~net sales threshold is achieved, Pharmstandard has the right to offset a portion~~ of the ~~royalties~~trial ~~Pharmstandard~~design ~~pays~~is toshown ~~third parties for licenses to necessary third party intellectual property against the royalties that Pharmstandard pays to us~~below.

22Phase 2b Study Design for the Chronically Infected Cohort

The ~~agreement~~primary ~~will~~endpoint ~~terminate upon expiration~~ of the ~~royalty~~trial ~~term,~~was ~~upon which all licenses~~a ~~will~~comparison ~~become~~of ~~fully~~the ~~paid~~median upviral ~~perpetual~~load ~~exclusive~~in ~~licenses.~~the ~~Either~~AGS-004-treated ~~party~~patients ~~may~~with ~~terminate~~ the ~~agreement~~median ~~for~~viral ~~the~~load ~~other~~in ~~party’s~~patients ~~uncured~~receiving placebo after ~~material~~12 ~~breach~~weeks orof ifART ~~specified~~treatment ~~conditions~~interruption. ~~occur~~Under ~~relating~~this toprotocol, the ~~other~~primary ~~party’s~~endpoint ~~insolvency~~required orthat ~~bankruptcy~~there ~~and~~was wea ~~may terminate~~³ ~~the~~1.1 ~~agreement~~log if10 ~~Pharmstandard~~difference ~~challenges~~in ormedian ~~assists~~viral aload ~~third~~between ~~party~~the inAGS-004-treated ~~challenging~~cohort ~~specified~~compared ~~patent~~to ~~rights~~the ofplacebo-treated ~~ours~~cohort. IfA ~~Pharmstandard~~1.1 log ~~terminates~~10 ~~the~~reduction ~~agreement~~means ~~upon~~a ~~our~~92% ~~material~~lower ~~breach~~virus orconcentration ~~bankruptcy,~~in ~~Pharmstandard~~the isAGS-004-treated ~~entitled~~cohort compared to ~~terminate~~the ~~our~~placebo-treated ~~licenses~~cohort. ~~to improvements~~Secondary ~~generated~~endpoints byincluded ~~Pharmstandard,~~comparisons ~~upon~~between ~~which~~AGS-004-treated wepatients ~~may~~and ~~come~~the topatients ~~rely~~receiving ~~for~~placebo ~~the~~with ~~development~~respect ~~and~~to ~~commercialization~~change ofin ~~rocapuldencel-T and other~~viral ~~licensed~~load ~~products~~from ~~outside~~pre-ART ofto the ~~Pharmstandard~~end ~~Territory,~~of ~~and~~12 ~~Pharmstandard~~weeks isof ~~entitled~~treatment tointerruption, ~~retain~~duration ~~its~~of ~~licenses~~treatment ~~from~~interruption, uschanges ~~and~~in toCD4+ T-cell ~~pay~~counts usand ~~substantially reduced royalty payments following such termination~~safety.

In November 2013, we entered into an agreement with Pharmstandard under which Pharmstandard purchased additional shares of our series E preferred stock. Under this agreement, we agreed to enter into a manufacturing rights agreement for the European market with Pharmstandard and that the manufacturing rights agreement would provide for the issuance of warrants to Pharmstandard to purchase 499,788 shares of our common stock at an exercise price of $5.82 per share. As of March 16, 2017, we had not entered into this manufacturing rights agreement or issued the warrants.30

~~Green Cross.~~ In ~~July~~September ~~2013~~2011, inwe ~~connection~~added ~~with~~to the ~~purchase~~trial a single arm, open-label, unblinded cohort of ~~our~~up ~~series~~to 12 patients with acute HIV-1 infection and undetectable viral loads as a result Eof ~~preferred~~treatment ~~stock~~with byART. ~~Green~~We ~~Cross,~~evaluated weAGS-004 ~~entered~~in ~~into~~this anpatient ~~exclusive~~population ~~royalty~~to assess AGS-~~bearing~~004 ~~license~~in ~~agreement~~patients ~~with~~who ~~Green~~initiated ~~Cross~~ART during the acute phase of infection and as a result may have sustained less immune damage. ~~Under~~Patients in this cohort were dosed in the same ~~agreement~~manner weas ~~granted~~patients ~~Green~~in ~~Cross~~the achronically ~~license~~infected toarm ~~develop~~of the clinical trial. However, ~~manufacture~~in ~~and~~this ~~commercialize~~cohort, ~~rocapuldencel~~patients had to demonstrate a positive CD8+ CD28+ anti-HIV memory T-cell response in order to become eligible to enter the 12 week treatment interruption period. The primary endpoints for ~~mRCC~~this cohort included the time to detectable viral load during the ART interruption period and comparison of changes in ~~South~~CD4+ ~~Korea~~T-cell counts during the ART interruption period between the acute cohort and the chronic cohort. Six patients Wewere ~~also~~enrolled ~~provided~~in ~~Green~~this ~~Cross~~cohort. ~~with~~All six patients demonstrated a ~~right~~positive ofCD8+ ~~first~~CD28+ ~~negotiation~~memory ~~for~~T-cell ~~development~~response and ~~commercialization~~initiated ~~rights~~treatment interruption. For the five of six patients that re-initiated ART after treatment interruption, there were no significant declines in ~~South~~CD4+ ~~Korea~~T cells between the interruption date and the re-initiation date. All six patients experienced viral rebound during treatment interruption with the times to detectable viral load ranging from two to eight weeks and the duration of treatment interruption ~~specified~~for ~~additional~~those ~~products~~patients wewho ~~may~~reinitiated ~~develop~~ART ranged from approximately one month to approximately nine months. In addition, three of six patients had a decrease in circulating CD4+ T cells containing HIV DNA of 25%, 47% and 63%, respectively, when measured after three doses of AGS-004 while on ART.

~~Under~~In the ~~terms~~Phase of2b ~~the license~~trial, ~~Green~~54 ~~Cross~~patients ~~has agreed to pay us $500,000 upon~~ received the ~~initial submission~~full offour andoses ~~application for regulatory approval~~ of ~~a licensed product in South Korea, $500,000 upon the initial regulatory approval of a licensed product in South Korea and royalties ranging from the mid~~AGS-~~single~~004 ~~digits~~or toplacebo ~~low~~during ~~double digits below 20% on net sales until~~ the ~~fifteenth anniversary of the~~ first ~~commercial~~four ~~sale~~weeks intogether ~~South~~with ~~Korea~~their ART. InOf ~~addition~~these patients, ~~Green~~36 ~~Cross~~patients ~~has granted us~~continued anon ~~exclusive~~AGS-004 ~~royalty~~or ~~free~~placebo ~~license~~for ~~to develop and commercialize all Green Cross improvements to our licensed intellectual property in~~ the ~~rest~~full of12-week ~~the~~treatment ~~world,~~interruption ~~excluding South Korea~~period, ~~except~~23 ~~that, as to such improvements for which Green Cross makes a significant financial investment and that generate significant commercial benefit in the rest~~ of ~~the~~whom ~~world,~~received we are required to negotiate in good faith a reasonable royalty that we will be obligated to pay to Green Cross for such license. Under the terms of the agreement, we are required to continue to develop and to use commercially reasonable efforts to obtain regulatory approval for rocapuldencelAGS-~~T in the United States~~004.

~~The~~In ~~agreement~~January ~~will terminate upon expiration of the royalty term~~2015, ~~which~~we isannounced ~~15 years~~top-line results from the ~~first commercial sale, upon which all licenses will become fully paid up perpetual non-exclusive licenses~~trial. ~~Either~~The ~~party may~~primary ~~terminate~~endpoint the agreement for the other party’s uncured material breach or if specified conditions occur relating to the other party’s insolvency or bankruptcy and we may terminate the agreement if Green Cross challenges or assists a third party in challenging specified patent rights of ~~ours. If Green Cross terminates~~ the ~~agreement~~trial ~~upon~~was ~~our~~not material breach or bankruptcy, Green Cross is entitled to terminate our licenses to improvements and retain its licenses from us and to pay us substantially reduced milestone and royalty payments following such terminationachieved.

~~Medinet. In December 2013~~However, we ~~entered~~believe ~~into~~that adata ~~license~~from ~~agreement with Medinet.~~the ~~Under~~trial ~~this~~provided ~~agreement,~~evidence weof ~~granted~~the ~~Medinet~~ability anof ~~exclusive, royalty~~AGS-~~free~~004 ~~license~~ to ~~manufacture~~induce inmemory ~~Japan rocapuldencel-~~T-cell ~~and~~responses ~~other products~~which ~~using~~may ~~our~~have ~~Arcelis~~directly ~~technology~~impacted ~~solely~~the ~~for~~latent viral reservoir. Of the ~~purpose~~evaluated of22 ~~the~~patients ~~development~~who received AGS-004 and ~~commercialization~~completed ofthe ~~rocapuldencel~~12-Tweek ~~and~~treatment ~~these~~interruption period, 15 ~~other~~patients, ~~products~~or ~~for~~approximately ~~the~~70 ~~treatment~~percent, ofhad ~~mRCC.~~positive Weantiviral ~~refer~~memory toT-cell ~~this~~responses ~~license~~prior asto beginning the ~~manufacturing~~treatment ~~license~~interruption versus zero percent of placebo patients. InWithin ~~addition,~~the ~~under~~AGS-004 ~~this~~treatment ~~agreement~~group, we ~~granted~~those ~~Medinet~~patients anthat ~~option~~had toantiviral ~~acquire~~memory aT-cell ~~nonexclusive,~~responses had ~~royalty-bearing~~significantly ~~license~~fewer ~~under~~CD4+ ~~our~~T-cells ~~Arcelis~~with ~~technology~~integrated toHIV ~~sell~~DNA inwhen ~~Japan rocapuldencel~~compared to non-Tresponders. ~~and~~These ~~other~~findings ~~products~~relate ~~for~~directly to the ~~treatment~~utilization of ~~mRCC.~~AGS-004 Wein ~~refer~~our toongoing ~~the~~adult ~~option~~eradication asstudy ~~the~~and ~~sale~~our ~~option~~planned ~~and~~pediatric ~~the~~study, ~~license~~where asone of the key objectives ~~sale~~is ~~license~~to decrease the latent HIV reservoir.

~~The~~Safety sale option expired on April 30, 2016. As a result, Medinet may only manufacture rocapuldencel-T and these other products for us or our designee. We have agreed to negotiate in good faith a supply agreement under which Medinet would supply us or our designee with rocapuldencel-T and these other products for development and sale for the treatment of mRCC in Japan. During the term of the manufacturing license, we may not manufacture rocapuldencel-T or these other products for us or any designee for development or sale for the treatment of mRCC in Japan.analysis

In ~~consideration~~this ~~for the manufacturing license~~trial, ~~Medinet~~AGS-004 ~~paid~~was uswell $1tolerated.0 No ~~million.~~AGS-004-related ~~Medinet also~~serious ~~loaned~~adverse usevents $9were reported.0 ~~million~~The inmost ~~connection~~common ~~with~~adverse usevent ~~entering~~was ~~into~~mild ~~the~~injection ~~agreement~~site reactions. WeDuring the ~~have~~antiretroviral ~~agreed~~treatment tointerruption, ~~use~~no ~~these~~notable ~~funds~~differences in ~~the~~incidence ~~development and manufacturing~~ of ~~rocapuldencel-T~~adverse ~~and~~events ~~the~~occurred ~~other~~compared ~~products. Medinet also agreed~~ to ~~pay~~when ~~us milestone payments of up to a total~~patients ofwere ~~$9.0~~receiving ~~million~~AGS-004 ~~upon~~in ~~the~~combination ~~achievement~~with ofantiretroviral ~~developmental~~drug ~~and regulatory milestones and $5~~therapy.~~0 million upon the achievement of a sales milestone related to rocapuldencel-T and these products.~~

WeNIH ~~borrowed~~and ~~the~~NIAID $9Contract.0 Our development ~~million~~of ~~pursuant~~AGS-004 tohas anreceived ~~unsecured~~significant ~~promissory~~funding ~~note~~from ~~that~~the ~~bears~~U.S. ~~interest at~~federal agovernment. ~~rate~~In ofSeptember ~~3.0 %~~2006, ~~per~~we ~~annum.~~entered ~~The~~into ~~principal~~a multi-year ~~and~~research ~~interest~~contract ~~under~~with the ~~note~~NIH ~~are due~~ and ~~payable on December 31, 2018. Under~~ the ~~terms~~National Institute of ~~the~~Allergy ~~note~~ and ~~the~~Infectious ~~manufacturing~~Diseases, ~~license~~or ~~agreement~~NIAID, ~~any milestone payments related~~ to ~~the~~design, ~~developmental~~ develop and ~~regulatory milestones~~clinically ~~that~~test ~~become~~an ~~due~~autologous ~~will~~HIV beimmunotherapy ~~applied~~capable ~~first~~of toeliciting ~~the~~therapeutic ~~repayment~~immune ~~of the loan~~responses. ~~The~~We ~~first~~are ~~milestone~~using ~~with~~funds ~~a $1.0 million payment~~from ~~was~~this ~~achieved~~contract into ~~July~~develop ~~2015 and the second milestone with a $2~~AGS-004.0 ~~million~~Under ~~payment~~this ~~was~~contract, ~~achieved~~as init ~~June~~has ~~2016~~been amended, ~~reducing~~ the ~~outstanding principal~~NIH ofand the ~~loan~~NIAID ashave ofcommitted ~~December~~to ~~31,~~fund ~~2016~~ up to $639.08 million., Weincluding ~~have~~reimbursement ~~the~~of ~~right~~our todirect ~~prepay~~expenses ~~the~~and ~~loan~~allocated atoverhead ~~any~~and ~~time.~~general Ifand weadministrative ~~have not~~expenses ~~repaid~~of ~~the~~up ~~loan~~to by$38.4 ~~December 31,~~million ~~2018,~~and ~~then~~payment weof ~~have~~specified ~~agreed~~amounts tototaling ~~grant~~up to ~~Medinet~~$1.4 amillion ~~non-exclusive,~~upon ~~royalty-bearing~~our ~~license~~achievement ~~to make~~of ~~and~~specified ~~sell~~development milestones. ~~Arcelis~~We ~~products~~have inrecorded ~~Japan~~total ~~for~~revenue ~~the treatment~~ of ~~cancer~~$38.3 Inmillion ~~such~~through ~~event~~December 31, ~~the~~2017 ~~amounts owing~~ under the ~~loan~~NIH asagreement. As of December 31, ~~2018~~2017, ~~may~~there ~~constitute~~was ~~pre-paid~~up ~~royalties~~to ~~under the license or would be due and payable~~$1.5 ~~Royalties~~million ~~under this license would be paid until the expiration~~ of ~~the~~potential ~~licensed~~revenue ~~patent~~remaining ~~rights in Japan at a rate~~ to be ~~negotiated.~~earned Ifunder wethe ~~cannot~~agreement. ~~agree~~This oncommitment ~~the~~extends ~~royalty rate,~~until weJuly ~~have agreed to submit the matter to arbitration~~2018.

~~Under~~We ~~the~~have ~~agreement,~~agreed weto ~~have~~a statement of work under the ~~right~~contract, and are obligated to ~~revoke~~furnish ~~both~~all the ~~manufacturing~~services, ~~license~~qualified personnel, material, equipment, and ~~the~~facilities, not otherwise ~~sale~~provided ~~license~~by tothe beU.S. ~~granted~~government, needed to ~~Medinet~~perform or the ~~sale~~statement ~~license~~of ~~only~~work. IfIn weaccordance ~~exercise~~with ~~this~~the ~~right,~~laws weapplicable ~~will~~to begovernment intellectual ~~obligated~~property torights ~~make~~under afederal ~~one-time payment~~contracts, towe ~~Medinet~~have ~~calculated~~a ~~based~~right onunder ~~the~~our ~~nonroyalty~~contract ~~payments~~with ~~made~~the NIH to uselect byto ~~Medinet~~retain ~~under~~title to ~~the~~inventions ~~agreement,~~conceived ~~repay~~or ~~the~~first ~~outstanding amount~~reduced ~~due~~to practice under the ~~loan~~NIH and ~~assume~~NIAID ~~certain~~contract, ~~obligations~~subject to the right of ~~Medinet,~~the ~~and~~U.S. ~~Medinet~~government to ~~will~~a beroyalty-free ~~obligated~~license to ~~assist~~practice usor inhave ~~transitioning the~~practiced ~~relevant~~for ~~rights~~or inon ~~Japan~~behalf toof usthe orUnited aStates ~~party~~the ~~that~~subject weinvention ~~designate~~throughout the world. IfThe wegovernment ~~exercise~~also ~~our~~has ~~revocation~~special ~~right~~statutory ~~with~~“march-in” ~~respect~~rights to ~~the~~license ~~sale~~or ~~license only,~~to ~~the~~require ~~one-time~~us ~~payment~~to ~~will~~license ~~equal~~such inventions ~~the~~to ~~total~~third ~~amount~~parties ofunder ~~nonroyalty~~limited ~~payments~~circumstances. IfIn addition, we ~~exercise~~may ~~our~~not ~~revocation~~grant ~~right~~to ~~with~~any ~~respect to~~person the ~~manufacturing~~exclusive ~~license~~right ~~and~~to ~~the~~use or ~~sale~~sell ~~license,~~any such inventions in the ~~one-time~~United ~~payment~~States ~~will~~unless ~~equal~~such ~~150%~~person oragrees ~~200%~~that ofany products embodying the ~~nonroyalty~~subject ~~payments~~invention ~~depending~~or onproduced through the ~~timing~~use of the ~~exercise~~subject ofinvention will be manufactured substantially in the ~~revocation~~United ~~right~~States.

2331

The agreement will terminate upon expiration of the royalty term, upon which all licenses will become fully paid up, perpetual non-exclusive licenses. Either party may terminate the agreement for the other party’s uncured material breach or if specified conditions occur relating to the other party’s insolvency or bankruptcy, and we may terminate the agreement if Medinet challenges or assists a third party in challenging specified patent rights of ours. If Medinet terminates the agreement upon our material breach or bankruptcy, Medinet is entitled to terminate our licenses to improvements and retain its royalty-bearing licenses from us.Manufacturing

~~Lummy.~~We Oncurrently ~~April~~manufacture 7our Arcelis-based products, ~~2015~~including rocapuldencel-T and AGS-004, wefor research and ~~Lummy~~development HKpurposes ~~entered~~and ~~into~~for ause ~~license agreement~~in ~~pursuant~~our toclinical ~~which~~trials weat ~~granted~~our facilities toin ~~Lummy~~Durham, HKNorth anCarolina, ~~exclusive~~which ~~license~~we ~~under~~refer ~~the~~to ~~Arcelis~~as ~~technology,~~our ~~including~~Technology ~~patents,~~Drive ~~know-how~~ and ~~improvements~~Patriot toCenter ~~manufacture,~~facilities. ~~develop~~These ~~and~~facilities include ~~commercialize~~manufacturing ~~products~~suites for the ~~treatment~~production of ~~cancer~~products inusing ~~China,~~our ~~Hong~~Arcelis ~~Kong,~~technology ~~Taiwan and Macau~~platform. ~~Lummy~~ HKWe ~~also~~have ~~has~~designed athese ~~right~~suites to ofcomply ~~first negotiation~~ with ~~respect to a license under~~ the ~~Arcelis~~FDA’s ~~technology~~current ~~for~~good ~~the~~manufacturing ~~treatment of infectious diseases in China~~practice, ~~Hong~~or ~~Kong~~cGMP, ~~Taiwan and Macau~~requirements. ~~This agreement was subsequently amended in December 2016.~~

~~Under~~In ~~the~~January ~~terms of the license agreement~~2017, ~~the parties will share relevant data, and~~ we ~~will~~entered ~~have~~into a ~~right~~ten-year tolease ~~reference~~agreement ~~Lummy HK data for purposes of its development programs under the Arcelis technology. In addition,~~with ~~Lummy~~two HKfive-year ~~has~~renewal ~~granted~~options tofor ~~us an exclusive~~40,000 ~~royalty-free~~square ~~license~~feet ~~under~~of ~~and~~manufacturing ~~to any~~ and ~~all~~office ~~Lummy~~space HKat ~~improvements~~the toCenter ~~the~~for ~~Arcelis~~Technology ~~technology~~Innovation, ~~conceived~~ or ~~reduced~~CTI, toon ~~practice~~the byCentennial ~~Lummy~~Campus HKof ~~and~~North ~~Lummy~~Carolina HKState ~~data~~University toin ~~develop and/or commercialize products outside China~~Raleigh, ~~Hong~~North ~~Kong, Taiwan~~Carolina. ~~and~~We ~~Macau,~~had anintended ~~exclusive, royalty-free license under and~~ to ~~any~~utilize ~~and all INDs and other regulatory approvals and Lummy HK~~this ~~trademarks~~facility ~~used~~to ~~for~~manufacture ~~an Arcelis~~rocapuldencel-~~Based~~T ~~Product~~ to ~~develop~~support ~~and/or~~submission ~~commercialize~~of ~~an Arcelis-Based Product outside China, Hong Kong, Taiwan and Macau and~~ a ~~non-exclusive,~~BLA ~~worldwide, royalty-free license under any Lummy HK improvements and Lummy HK data~~ to ~~manufacture Arcelis-Based Products anywhere in~~ the ~~world.~~FDA ~~Lummy~~and ~~HK has the right~~ to ~~reference~~support ~~our~~initial ~~data,~~commercialization ~~INDs and other regulatory filings and submissions for the purpose~~ of ~~developing and obtaining regulatory approval of licensed products in China, Hong Kong, Taiwan and Macau~~rocapuldencel-T.

~~Pursuant~~In ~~to the license agreement~~addition, ~~Lummy~~to HKprovide ~~will~~for ~~pay~~capacity ~~us royalties on net sales and up~~expansion tobeyond anthe ~~aggregate~~initial offew upyears tofollowing ~~$20.5~~potential ~~million~~launch ~~upon the achievement~~ of ~~manufacturing~~rocapuldencel-T, ~~regulatory~~we ~~and~~had ~~commercial~~planned ~~milestones. The license agreement will terminate upon expiration of the last~~ to ~~expire~~buildout ~~royalty~~and ~~term~~equip ~~for~~a ~~all~~second ~~Arcelis-Based Products~~facility, ~~with each royalty~~ ~~term~~which ~~being~~we ~~the~~refer ~~longer~~to ofas the ~~expiration~~Centerpoint offacility. ~~the~~In ~~last~~August ~~valid~~2014, ~~patent~~we ~~claim~~entered ~~covering~~into ~~the~~a ~~applicable Arcelis~~ten-~~Based~~year ~~Product~~lease ~~and~~agreement 10with ~~years from~~renewal ~~the first commercial sale of such Arcelis-Based Product~~options. Under ~~Either party may terminate~~ the ~~license~~lease agreement, ~~for~~we ~~the~~agreed ~~other~~to ~~party’s uncured~~lease ~~material~~certain ~~breach~~land orand ifan ~~specified~~approximately ~~conditions~~125,000 ~~occur~~square-foot ~~relating~~building to ~~the~~be ~~other~~constructed in ~~party’s~~Durham ~~insolvency~~County, orNorth ~~bankruptcy~~Carolina. We ~~may~~ ~~terminate~~initially ~~the~~intended ~~license~~this ~~agreement~~facility ifto ~~Lummy~~house HKour ~~challenges~~corporate orheadquarters ~~assists~~and acommercial ~~third~~manufacturing before ~~party~~we inentered ~~challenging~~into ~~specified~~the ~~patent~~lease ~~rights~~for ~~of ours. If Lummy HK terminates~~ the ~~license~~CTI ~~agreement~~facility. ~~upon~~The ~~our~~shell ~~material~~of ~~breach~~the ornew ~~bankruptcy,~~facility ~~Lummy~~was HKconstructed ison ~~entitled~~a build-to-suit ~~terminate~~basis ~~the~~in ~~licenses~~accordance itwith ~~granted~~agreed toupon usspecifications and ~~retain~~plans ~~its~~and ~~licenses~~was ~~from~~completed usin ~~with~~June ~~respect~~2015. toHowever, ~~Arcelis~~the build-~~Based~~out ~~Products~~and ~~then~~equipping inof ~~development~~the interior orof ~~being commercialized,~~the ~~subject~~facility towas ~~Lummy~~suspended ~~HK’s~~as ~~continued~~we ~~obligation~~pursued tofinancing ~~pay~~arrangements ~~royalties~~to ~~and~~support ~~milestones~~the ~~with~~further ~~respect~~buildout toof ~~such~~the ~~Arcelis-Based Products~~facility.

~~Invetech.~~Due Onto ~~October,~~the ~~29,~~IDMC ~~2014,~~recommendation wein ~~entered into a development agreement with Invetech~~February ~~Pty~~2017 ~~Ltd,~~to ordiscontinue ~~Invetech. The development agreement supersedes and replaces~~ the ~~development~~ADAPT ~~agreement~~trial, ~~entered~~we ~~into~~reassessed byour ~~the~~manufacturing ~~parties as of July 20, 2005~~plans. ~~Under~~ ~~the~~We ~~development~~determined ~~agreement, Invetech agreed~~ to ~~continue~~use toour ~~develop~~Technology Drive and ~~provide prototypes of the automated~~Patriot ~~production~~Center ~~system~~facilities ~~to be used~~ for the manufacture of ~~our Arcelis~~rocapuldencel-~~based~~T ~~products~~and AGS-004, orrespectively, ~~the~~to ~~Production~~support ~~Systems.~~our ~~Development~~ongoing ~~services~~clinical trials and ~~will~~any belikely ~~performed~~near-term onclinical atrials ~~proposal~~that bywe ~~proposal~~may ~~basis.~~initiate ~~Invetech~~and ~~has~~initiated ~~agreed~~discussions towith ~~defer~~the ~~30%~~landlords of ~~its~~the ~~fees,~~CTI ~~but~~facility ~~such~~and the ~~deferral~~Centerpoint ~~may~~facility ~~not~~regarding ~~exceed $5,000,000~~our leases. We ~~are~~In ~~paying~~March ~~these~~2017, ~~deferred~~the ~~fees~~landlord ~~(plus interest~~ of 7%our ~~per~~CTI ~~annum)~~facility ~~pursuant~~notified tous anthat ~~installment~~it ~~plan~~was ~~(eight installments~~terminating ~~payable~~the ~~within~~lease ~~the~~due ~~first~~to ~~two~~nonpayment ~~years~~of ~~after~~invoices ~~December~~for 31up-fit costs, ~~2016).~~effective Weimmediately, ~~are~~and ~~currently~~in ~~renegotiating~~March ~~the~~2017 ~~terms~~we ofentered ~~the~~into ~~development~~a ~~agreement~~lease termination ~~related~~agreement towith the ~~deferred~~landlord. ~~fees,~~In ~~and~~November ~~are~~2017, inwe ~~discussions~~and ~~with~~TKC ~~Invetech~~Properties, ~~regarding~~ the ~~repayment~~landlord of the ~~fees~~Centerpoint facility, ~~including~~entered ~~the~~into ~~potential~~a ~~conversion~~lease oftermination ~~some~~agreement orin ~~all~~connection ofwith the ~~outstanding~~sale ~~fees~~by ~~into~~TKC ~~equity~~ of the ~~Company~~facility to a third party.

~~The~~We ~~development~~expect ~~agreement~~that ~~requires~~we ~~the~~would ~~parties~~establish ~~to discuss in good faith Invetech’s~~both ~~supply~~manual ofand ~~Production~~automated ~~Systems~~manufacturing ~~for~~processes ~~use~~ in ~~manufacturing~~our commercial ~~product.~~manufacturing Wefacilities ~~have~~if anwe ~~obligation~~determine to ~~purchase~~build ~~$25.0~~out ~~million~~such ~~worth~~facilities. ofWe ~~Production~~had ~~Systems,~~decided ~~components,~~to ~~subsystems~~delay ~~and~~the ~~spare~~implementation ~~parts~~of ~~for~~our ~~commercial~~automated ~~use. Once~~manufacturing ~~that~~process ~~obligation~~until ~~has~~after ~~been~~initial ~~satisfied~~commercialization of rocapuldencel-T, weand ~~have~~thus ~~the~~planned ~~right~~ to ~~have~~seek amarketing ~~third~~approval ~~party~~of ~~supply~~rocapuldencel-T ~~Production~~and, ~~Systems~~if ~~for~~approved, ~~use~~to ininitially ~~manufacturing~~commercially ~~commercial~~supply ~~product, provided that Invetech~~rocapuldencel-T ~~has~~using aour ~~right~~manual ofmanufacturing ~~first~~process. ~~refusal~~Prior ~~with respect~~ to ~~any~~implementing ~~offer~~commercial bymanufacturing aof ~~third~~rocapuldencel-T, ~~party and~~ we ~~may~~would ~~not~~be ~~accept~~required to andemonstrate ~~offer from a third party unless~~ that ~~offer~~our iscommercial atmanufacturing afacility ~~price that~~ is ~~less~~constructed ~~than that offered by Invetech~~ and ~~otherwise~~operated ~~under~~in ~~substantially~~accordance ~~the~~with ~~same~~current orgood ~~better terms~~manufacturing practice. We ~~will~~ ~~own~~would ~~all~~also ~~intellectual~~be ~~property~~required ~~arising~~to ~~from~~show the ~~development~~comparability ~~services~~between ~~(with the exception of existing Invetech intellectual property incorporated therein~~rocapuldencel-~~under~~T ~~which~~that we ~~will~~produce ~~have~~using ~~a license). The term of~~ the ~~development~~manual ~~agreement~~processes in ~~will~~our ~~continue~~current ~~until the~~facility ~~completion~~and ofrocapuldencel-T ~~the~~produced ~~development~~using of the ~~Production~~manual ~~Systems. The~~process ~~development~~in ~~agreement~~our ~~can~~new ~~be terminated early by either party because of a technical failure or by us without cause~~facility.

~~Saint-Gobain.~~We Inhave ~~January~~granted ~~2015,~~exclusive wemanufacturing rights ~~entered~~for ~~into a development agreement with Saint~~rocapuldencel-~~Gobain Performance~~T ~~Plastics~~to ~~Corporation,~~Pharmstandard ~~or Saint Gobain, that was subsequently amended~~ in ~~December~~Russia ~~2015~~ and ~~2016. Under~~ the ~~agreement, Saint-Gobain~~other ~~agreed~~states tocomprising ~~develop~~the aCommonwealth ~~range~~ of ~~disposables~~Independent ~~for~~States, ~~use in our automated production systems~~ to ~~be used for the manufacture~~ ofGreen ~~our~~Cross ~~Arcelis-based~~in ~~products~~South Korea, ~~which we refer~~ to asMedinet ~~the~~in ~~Disposables.~~Japan ~~We expect total development fees~~ and ~~expenses incurred under the Saint-Gobain Agreement~~ to beLummy ~~approximately~~HK ~~$8.6~~in ~~million~~China, ofHong ~~which~~Kong, ~~$2.1~~Taiwan ~~million has been paid to date~~ and $6Macau.5 ~~million has been accrued as of December 31, 2016.~~ We have also agreed ~~separately~~ to ~~purchase $3.5 million in Disposables under the agreement during~~enter ~~2017.~~into ~~The~~an ~~Saint-Gobain~~ agreement ~~requires~~with ~~the~~Pharmstandard ~~parties to execute a commercial supply agreement under which Saint-Gobain would become the exclusive supplier of Disposables~~ for the manufacture of ~~our products treating solid tumors for no less than fifteen years by March 31, 2017. The Saint~~rocapuldencel-~~Gobain~~T agreement will continue until December 31, 2017, but can be terminated earlier by written agreement of the parties because of a material default, including the failure to execute the commercial supply agreement, or a failure to achieve a performance milestone. We are currently in ~~discussions with Saint Gobain regarding modification of~~ the ~~terms~~European ~~for the commercial supply agreement and payment of the development fees including a potential conversion of some or all of the outstanding fees into equity of the Company~~market.

2432

~~Cellscript.~~Sales ~~In December 2015, we entered into a development~~ and supply agreement with Cellscript, LLC. Under the agreement, Cellscript has agreed to develop cGMP processes for the manufacture and production of CD40L RNA, a ribonucleic acid used in the production of our Arcelis -based products, and to manufacture and produce CD40L RNA.Marketing

InWe ~~consideration~~hold ~~for~~exclusive ~~these~~commercial ~~development~~rights ~~and production services, we have agreed~~ to ~~pay~~ ~~Cellscript~~all ~~total~~of ~~fees~~our ofproduct ~~$4,600,000.~~candidates ~~Upon~~in ~~the~~all ~~execution~~geographies ofother ~~the~~than ~~agreement,~~rights weto ~~made~~rocapuldencel-T anin ~~initial~~Russia ~~payment~~and tothe ~~Cellscript~~other ofstates ~~$2,000,000~~comprising ~~through~~ the ~~issuance~~Commonwealth ~~to Cellscript~~ of ~~906~~Independent States,~~194~~ ~~shares~~which ofare ~~our~~held ~~common~~by ~~stock.~~Pharmstandard, ~~The~~rights ~~balance~~to ofrocapuldencel-T ~~these~~for ~~fees~~the ~~are~~treatment ~~payable~~of tomRCC ~~Cellscript,~~in atSouth ~~our option~~Korea, inwhich ~~cash,~~are ~~common~~held ~~stock~~by orGreen aCross ~~combination~~and ofrights ~~cash~~to ~~and~~rocapuldencel-T ~~common~~in ~~stock~~China, ~~upon~~Hong ~~the~~Kong, ~~achievement~~Taiwan ofand ~~development~~Macau, ~~milestones. Any~~which ~~shares~~are ofheld by ~~common~~Lummy ~~stock~~HK. ~~issued~~We ~~pursuant~~have granted to ~~the~~Medinet ~~agreement~~an ~~are~~exclusive ~~subject~~license to amanufacture ~~lock-up~~in ~~period~~Japan ofrocapuldencel-T ~~180~~for ~~days from~~ the ~~date~~treatment of ~~issuance of such shares to Cellscript~~mRCC.

~~Under~~We ~~the~~currently ~~terms~~intend ofto ~~the~~retain ~~agreement,~~North ~~Cellscript~~American marketing ~~shall~~rights befor rocapuldencel-T and any future oncology products that we may develop. To maximize the ~~sole~~value ~~and~~of ~~exclusive~~these ~~manufacturer~~rights, ~~and~~we ~~supplier~~would expect to usbuild ofa ~~CD40L~~commercial ~~RNA~~infrastructure for such products comprised of medical, marketing and wesales ~~will~~teams ~~make~~as ~~agreed~~well as ~~upon~~a ~~cash~~customer ~~payments~~service function to ~~Cellscript~~manage ~~for~~patient ~~CD40L~~access ~~RNA~~and ~~produced~~logistics ~~for~~partners usassociated ~~during the~~with ~~term~~rocapuldencel-T ofproduction ~~the~~and ~~Agreement~~distribution. Our ~~Under~~commercial ~~the~~infrastructure ~~agreement,~~would ~~Cellscript~~also ~~shall~~include ~~also~~personnel bewho ~~our~~manage ~~sole~~reimbursement ~~and~~activities ~~exclusive~~with ~~supplier~~third ofparty ~~enzymes~~payors, ~~and~~such ~~various~~as ~~kits~~managed ~~comprising~~care ~~enzymes~~organizations, ~~for~~group ~~transcription~~purchasing organizations, ~~capping~~oncology ~~and/or~~group ~~polyadenylation~~networks ofand ~~RNA~~government accounts. We ~~will~~currently ~~make~~do ~~agreed~~not have ~~upon~~any ~~cash~~commercial ~~payments~~capabilities or in-house personnel specializing in these functions. Outside North America, we plan to ~~Cellscript~~seek ~~amounts~~to ~~for~~enter ~~each~~into ~~kit~~collaboration ~~that~~agreements iswith ~~purchased~~other ~~under~~pharmaceutical ~~the~~or ~~agreement~~biotechnology firms to commercialize rocapuldencel-T.

~~The~~For ~~agreement~~AGS-004, ~~will~~we ~~continue~~plan ~~until~~to ~~the~~seek ~~earlier~~to ofenter ~~(i) December 31, 2017 or (ii) the effective~~into ~~date~~collaboration ofagreements awith ~~commercial~~other ~~supply~~pharmaceutical ~~agreement~~or ~~negotiated~~biotechnology infirms ~~good~~to ~~faith~~commercialize bythis ~~the~~product ~~parties,~~candidate ~~but~~on ~~can be earlier terminated by either party due to~~ a ~~material breach or upon bankruptcy of the other party~~worldwide basis.

~~Government Regulation~~Competition

~~Government~~The ~~authorities~~biotechnology inand ~~the~~pharmaceutical ~~United~~industries are ~~States,~~highly atcompetitive. ~~the~~There ~~federal,~~are ~~state~~many ~~and~~pharmaceutical ~~local~~companies, ~~level~~biotechnology companies, ~~and~~ inpublic ~~other~~and ~~countries~~private ~~extensively~~universities ~~regulate,~~and ~~among~~research organizations ~~other~~actively ~~things,~~engaged in the research, and development, ~~testing,~~of ~~manufacture,~~products ~~including~~that ~~any manufacturing~~may ~~changes,~~be ~~packaging,~~similar ~~storage,~~to ~~recordkeeping,~~or ~~labeling,~~competitive ~~advertising,~~with ~~promotion,~~our ~~distribution,~~products. There ~~marketing,~~are ~~import~~a ~~and export~~number of multinational pharmaceutical companies and ~~biological~~large biotechnology companies currently marketing or pursuing the development of products ~~such~~or asproduct ~~those~~candidates wetargeting ~~are~~the ~~developing~~same ~~and~~indications ~~may~~as ~~market.~~our ~~The~~product ~~processes~~candidates. ~~for~~It ~~obtaining~~is ~~regulatory~~probable that ~~approvals~~the innumber ~~the~~of ~~United~~companies ~~States~~seeking to develop products and intherapies ~~foreign~~for ~~countries,~~the ~~along~~treatment ~~with~~of ~~subsequent~~unmet ~~compliance~~needs ~~with~~in ~~applicable~~these ~~statutes~~indications ~~and~~will ~~regulations,~~increase. ~~require~~Some of these competitive products and therapies are based on scientific approaches that are the ~~expenditure~~same ofas ~~substantial~~or ~~time~~similar to our approaches, and ~~financial~~others ~~resources~~are based on entirely different approaches.

UMany of our competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products.S Our competitors’ drugs may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may render our product candidates obsolete or non-competitive. ~~Drug~~We anticipate that we will face intense and ~~Biological~~increasing ~~Product~~competition ~~Approval~~as ~~Process~~new drugs enter the market and advanced technologies become available. We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, convenience of administration and delivery, price, the level of generic competition and the availability of reimbursement from government and other third party payors.

In the United States, the FDA regulates drugs and biological products under the federal Food, Drug, and Cosmetic Act, or FDCA, the Public Health Service Act, or PHSA, and implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.mRCC

~~The~~Historically, ~~process~~mRCC ~~required~~was bytreated with chemotherapy, radiation and hormonal therapies, as well as cytokine-based therapies such as interferon-alpha and IL-2. More recently, the FDA has ~~before~~approved several targeted therapies as monotherapies for mRCC, including Nexavar (sorafenib), marketed by Bayer Healthcare Pharmaceuticals, Inc. and Onyx Pharmaceuticals, Inc.; Sutent (sunitinib) and Inlyta (axitinib), marketed by Pfizer, Inc.; Avastin (bevacizumab), marketed by Genentech, Inc., a ~~drug~~member orof ~~biological~~the ~~product~~Roche ~~may~~Group; beVotrient (pazopanib) and Afinitor (everolimus), marketed by Novartis Pharmaceuticals Corporation; Torisel (temsirolimus), marketed by Pfizer and most recently, Opdivo (nivolumab), marketed by Bristol-Myers Squibb and Cabometyx (cabozantinib), marketed by Exelixis, for second-line mRCC. In addition, we estimate that there are numerous therapies for mRCC in ~~the~~clinical ~~United~~development ~~States~~by ~~generally~~many ~~involves~~public and private biotechnology and pharmaceutical companies targeting numerous different cancer types and stages. A number of these are in late stage development including Opdivo (nivolumab) plus Yervoy (ipilimumab) in combination for first-line mRCC, for which favorable data have been reported in a Phase 3 trial. In addition, if a standalone therapy for mRCC were developed that demonstrated improved efficacy over currently marketed first-line therapies with a favorable safety profile and without the ~~following:~~need for combination therapy, such a therapy might pose a significant competitive threat to rocapuldencel-T.

~~• completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;~~33

•Other ~~submission~~Oncology ~~to the FDA of an IND which must become effective before human clinical trials may begin;~~Indications

•We estimate ~~approval~~that there are numerous other cancer immunotherapy products in clinical development by anmany ~~independent~~public ~~institutional~~and ~~review~~private ~~board,~~biotechnology and pharmaceutical companies targeting numerous different cancer types. A number of these product candidates are in late-stage clinical development or ~~IRB~~have recently been approved in different cancer types including two recently approved checkpoint inhibitor-based immunotherapies, atnivolumab ~~each~~which ~~clinical~~is ~~site~~marketed ~~before~~by ~~each~~Bristol-Myers Squibb ~~trial~~and ~~may~~pembrolizumab, bewhich ~~initiated;~~is marketed by Merck. These newer immunotherapies are in addition to the targeted therapies, chemotherapeutics, radiation therapy, hormonal therapies and cytokine-based therapies used in the treatment in a wide range of oncology indications.

• performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug or biological product for each indication;HIV

•There ~~submission~~are tonumerous FDA-approved treatments for HIV, primarily antiretroviral therapies, marketed by large pharmaceutical companies. In addition, generic competition has recently developed as patent exclusivity periods for older drugs have expired, with more than 15 generic bioequivalents currently on the market. ~~FDA~~The presence of athese ~~new~~generic ~~drug~~drugs ~~application,~~is orresulting ~~NDA~~in price pressure in the HIV therapeutics market. Currently, there are no approved therapies for the eradication of HIV. We expect that major pharmaceutical companies that currently market antiretroviral therapy products or aother ~~BLA;~~companies that are developing HIV product candidates may seek to develop products for the eradication of HIV.

•Intellectual ~~satisfactory completion of an FDA advisory committee review, if applicable;~~Property

•Our ~~satisfactory~~success ~~completion~~depends ofin anpart ~~FDA~~on ~~inspection~~our ofability to ~~the~~obtain ~~manufacturing~~and ~~facility~~maintain orproprietary ~~facilities~~protection atfor ~~which~~our ~~the~~products and product iscandidates, ~~produced~~technology and know-how, to ~~assess~~operate ~~compliance~~without infringing ~~with~~the ~~cGMP,~~proprietary rights of others and to ~~assure~~prevent ~~that~~others ~~the~~from ~~facilities,~~infringing ~~methods~~our ~~and~~proprietary ~~controls~~rights. We are ~~adequate~~seeking toa ~~preserve~~range of ~~the~~patent ~~drug’s~~and ~~identity~~other protections for our product candidates and platform technology. We also rely on trade secrets, ~~strength~~know-how, ~~quality~~continuing technological innovation and ~~purity;~~in-licensing opportunities to develop and maintain our proprietary position.

~~• FDA review and approval of the NDA or BLA.~~Patents

~~Preclinical~~We ~~Studies. Preclinical~~own ~~studies~~or ~~include~~exclusively ~~laboratory~~license ~~evaluation~~16 ~~of product chemistry, toxicity and formulation, as well as animal studies to assess its potential safety and efficacy~~U.S. ~~An IND sponsor~~patents ~~must submit the results of the preclinical tests, together with manufacturing information, analytical data~~ and ~~any~~three ~~available~~U.S. ~~clinical data~~patent ~~or literature~~applications, ~~among~~as ~~other~~well ~~things, to the FDA~~ as ~~part~~approximately of55 anforeign ~~IND. Some preclinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA~~counterparts, ~~unless~~covering ~~before~~our ~~that~~Arcelis ~~time~~precision ~~the FDA raises~~immunotherapy ~~concerns~~technology orplatform ~~questions related to one or more proposed clinical trials~~ and ~~places~~Arcelis-based ~~the~~product ~~clinical trial on a clinical hold~~candidates. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

25We use our Arcelis precision immunotherapy technology platform to generate individualized mRNA-loaded dendritic cell immunotherapies. As described above, the process of obtaining a disease sample and dendritic cells from a patient, using those materials to manufacture an individualized drug product and shipping the drug product to the clinical site for use in the treatment of the patient involves many important steps. These steps include:

~~Clinical~~• ~~Trials. Clinical~~amplifying ~~trials~~mRNA ~~involve~~from ~~the~~a ~~administration~~disease ofsample ~~the~~obtained ~~investigational new~~from ~~drug to human subjects under~~ the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution. Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on their ClinicalTrials.gov website.patient;

~~Human~~• ~~clinical~~differentiating ~~trials~~dendritic ~~are~~cell ~~typically~~precursors ~~conducted~~(monocytes) inisolated ~~three~~from ~~sequential~~the ~~phases,~~patient ~~which~~into ~~may overlap~~immature ordendritic ~~be combined:~~cells;

• ~~Phase~~maturing 1:the ~~The~~immature ~~drug~~dendritic orcells ~~biological~~in ~~product~~culture isand ~~initially~~loading ~~introduced~~the ~~into~~mature ~~healthy~~dendritic ~~human~~cells ~~subjects or patients~~ with the ~~target~~amplified ~~disease~~mRNA ~~or condition~~ and ~~tested~~CD40L ~~for~~protein; ~~safety, dosage tolerance, absorption, metabolism, distribution, excretion~~ and~~, if possible, to gain an early indication of its effectiveness.~~

• ~~Phase~~formulating 2:the ~~The~~matured, ~~drug~~loaded ordendritic ~~biological~~cells ~~product~~in isthe ~~administered to a limited~~ patient’s ~~population~~plasma towith ~~identify~~cryoprotectants ~~possible adverse effects and safety risks,~~ to ~~preliminarily~~protect ~~evaluate~~ the ~~efficacy~~cells ofin the ~~product~~resulting ~~for~~drug ~~specific~~product ~~targeted~~when ~~diseases~~the ~~and~~drug toproduct ~~determine~~is ~~dosage~~frozen ~~tolerance~~ and ~~optimal dosage~~thawed.

•We ~~Phase~~have 3:sought ~~The drug or biological product is administered~~ to anprotect ~~expanded~~these ~~patient~~steps ~~population,~~or the ~~generally~~equipment atrelated ~~geographically dispersed clinical trial sites, in well-controlled clinical trials~~ to ~~generate~~carrying ~~enough~~out ~~data~~one toor ~~statistically~~more ~~evaluate the efficacy and safety~~ of ~~the~~these ~~product~~steps ~~for~~through ~~approval,~~patents toor ~~establish~~trade ~~the~~secrets. ~~overall~~We ~~risk-benefit~~have ~~profile~~also ofsought ~~the product, and~~ to ~~provide adequate information for~~ protect the ~~labeling~~resultant ofdrug ~~the~~ product through patents.

~~Progress~~These ~~reports~~patents ~~detailing~~and ~~the~~patent ~~results~~applications ~~of the clinical trials must be submitted at least~~are ~~annually~~directed to ~~the~~one ~~FDA~~or ~~and~~ more ~~frequently~~aspects ifof ~~serious~~our ~~adverse~~Arcelis ~~events~~precision ~~occur.~~immunotherapy ~~Phase~~technology 1,platform ~~Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period,~~ or atArcelis-based ~~all~~products. ~~Furthermore~~Specifically, ~~the FDA or the sponsor may suspend or terminate~~ athese ~~clinical~~patents ~~trial~~and atpatent ~~any~~applications ~~time on various grounds, including a finding that the research subjects~~ are ~~being~~collectively ~~exposed~~directed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.:

~~Special~~• ~~Protocol~~Arcelis-based ~~Assessment. The~~compositions ~~SPA process is designed to facilitate the FDA’s review and approval~~ of ~~drug~~matter and ~~biological~~ products by allowing the FDA to evaluate the proposed design and size of Phase 3 clinical trials that are intended to form the primary basis for determining a drug or biological product’s efficacy. Upon specific request by a clinical trial sponsor, the FDA will evaluate the trial protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial conduct and data analysis, within 45 days of receipt of the request. The FDA ultimately assesses whether the trial protocol design and planned analysis of the trial adequately address objectives in support of a regulatory submission. All agreements and disagreements between the FDA and the sponsor regarding an SPA must be clearly documented in an SPA letter or the minutes of a meeting between the sponsor and the FDA.;

~~Even if the FDA agrees to the design, execution and analyses proposed in protocols reviewed under an SPA, the FDA may revoke or alter its agreement under the following circumstances:~~34

• ~~public~~methods ~~health concerns emerge that were unrecognized at the time~~ of ~~the~~manufacturing ~~protocol~~Arcelis-based ~~assessment~~products;

• amethods ~~sponsor~~of ~~fails~~using toArcelis-based ~~follow~~products afor ~~protocol~~treatment ~~that~~of ~~was agreed upon with the FDA~~tumors;

• ~~the~~compositions ~~relevant~~that ~~data,~~we ~~assumptions,~~use orin ~~information provided by~~ the ~~sponsor~~manufacture inof aArcelis-based ~~request~~AGS-004 ~~for SPA change are found to be false statements or misstatements or are found to omit relevant facts~~products; orand

• ~~the~~equipment ~~FDA~~would ~~and~~be ~~the~~used ~~sponsor~~for ~~agree~~assisting ~~in writing to modify~~ the ~~trial~~automated ~~protocol~~manufacture ~~and~~of ~~such~~Arcelis-based ~~modification is intended to improve the study~~products.

~~Marketing~~We ~~Approval. Assuming~~believe ~~successful~~that ~~completion~~all of the ~~required~~above ~~clinical~~aspects ~~testing,~~of ~~the~~our ~~results~~Arcelis ofprecision ~~the~~immunotherapy ~~preclinical~~technology platform are required to successfully and ~~clinical~~efficiently ~~studies,~~produce ~~together~~our ~~with~~Arcelis-based product ~~detailed~~candidates ~~information~~and ~~relating~~are tocovered ~~the~~by ~~product’s chemistry~~a combination of our patents, ~~manufacture~~patent applications, ~~controls~~trade secrets and ~~proposed~~know-how. ~~labeling,~~The ~~among~~U.S. ~~other~~patents expire ~~things,~~between ~~are~~2021 ~~submitted~~and to2029, and the ~~FDA~~U.S. aspatent ~~part~~applications, ofif anissued, ~~NDA~~would orexpire ~~BLA requesting~~between ~~approval~~2025 toand ~~market~~2028, the ~~product~~counterpart patents ~~for~~in ~~one~~Europe orand ~~more~~Japan ~~indications.~~expire Inbetween ~~most~~2021 ~~cases~~and 2027, and the ~~submission~~counterpart ofpatent anapplications ~~NDA~~in orEurope, ~~BLA~~if isissued, ~~subject~~would expire tobetween a2025 ~~substantial~~and ~~application~~2027. ~~user~~Included ~~fee.~~in these patents and patent applications are:

In• ~~addition,~~seven ~~under~~U.S. ~~the~~patents ~~Pediatric~~and ~~Research~~corresponding ~~Equity~~patent ~~Act~~application ofin ~~2003,~~Europe ~~or PREA, as amended~~ and ~~reauthorized,~~ anpatent ~~NDA,~~in ~~BLA~~Japan orcollectively ~~supplement~~directed totowards an ~~NDA~~automated orapparatus ~~BLA~~ for ~~certain types of new drug or biological products must contain data that are adequate to assess~~ the ~~safety~~manipulation ~~and effectiveness~~ of ~~the~~nucleic ~~drug~~acids ~~or biological product for the claimed indications~~ in ~~all relevant~~a ~~pediatric~~closed ~~subpopulations~~container, ~~and~~components tothereof ~~support dosing~~ and ~~administration~~related ~~for~~methods ~~each~~of ~~pediatric subpopulation for which the product is safe and effective~~use. The ~~FDA~~U.S. ~~may,~~and onJapanese ~~its~~patents ~~own~~expire ~~initiative~~in ~~or at the request of the applicant~~2027, ~~grant~~and ~~deferrals for submission of some or all pediatric data until after approval of~~ the ~~product~~patent ~~for~~application ~~use~~ in ~~adults~~Europe, orif ~~full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation~~issued, ~~the~~would ~~pediatric~~expire ~~data~~in ~~requirements do not apply to products with orphan designation~~2027.

26• one U.S. patent and corresponding European and Japanese patents collectively directed towards cryoconserved dendritic cells and related methods of manufacture. The U.S., European and Japanese patents expire in 2021.

~~The~~• ~~Food~~four ~~and~~U.S. ~~Drug~~patents ~~Administration Safety~~ and ~~Innovation~~two ~~Act,~~U.S. orpatent ~~FDASIA~~applications, ~~amended~~two ~~the~~corresponding ~~FDCA and~~European ~~requires~~patents, ~~that~~two acorresponding ~~sponsor~~Japanese ~~who~~patents isand ~~planning to submit~~ a ~~marketing~~corresponding patent application ~~for~~in aEurope ~~drug~~collectively ordirected ~~biological~~towards ~~product~~methods ~~that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route~~ of ~~administration~~maturing ~~submit~~dendritic ancells ~~initial~~and ~~Pediatric Study~~the ~~Plan,~~composition ~~or PSP, within sixty days~~ of anmatter ~~end-~~of~~-phase~~ 2dendritic ~~meeting~~cells orthat ashave ~~may~~undergone bethis ~~agreed~~maturation ~~between the sponsor and FDA~~process. The ~~initial PSP~~U.S. ~~must~~patents ~~include~~expire anin ~~outline~~2026 ofand the ~~pediatric~~U.S. ~~study or studies that the sponsor plans to conduct~~applications, ~~including~~if ~~study objectives and design~~issued, ~~age~~would ~~groups,~~expire ~~relevant~~in ~~endpoints and statistical approach~~2025, orthe aEuropean ~~justification~~patents ~~for~~expire ~~not~~in ~~including~~2025 ~~such~~and ~~detailed information~~2027, ~~and~~ ~~any request for a deferral of pediatric assessments or a full or partial waiver of~~ the ~~requirement~~Japanese topatents ~~provide~~expire ~~data~~in ~~from~~2025 ~~pediatric studies~~and ~~along~~2027 ~~with supporting information. FDA~~ and the ~~sponsor~~patent ~~must~~application ~~reach~~in ~~agreement~~Europe, ~~on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time~~ if ~~changes to the pediatric plan need to be considered based on data collected from nonclinical studies~~issued, ~~early~~would ~~phase~~expire ~~clinical~~in ~~trials, or other clinical development programs~~2025.

~~The~~• ~~FDA~~one ~~also~~U.S. ~~could~~patent ~~require~~and ~~submission~~corresponding ofpatents ain ~~risk~~Europe ~~evaluation~~ and ~~mitigation~~Japan ~~strategy, or~~collectively ~~REMS,~~directed ~~plan~~towards tomethods ~~mitigate~~of ~~any~~manufacture ~~identified~~of ordendritic ~~suspected~~cells ~~serious~~from ~~risks.~~monocytes ~~The~~stored ~~REMS~~for ~~plan~~more ~~could~~than ~~include~~six ~~medication~~hours ~~guides,~~and ~~physician communication~~up ~~plans,~~to ~~assessment~~four ~~plans,~~days without freezing and ~~elements~~the tocomposition ~~assure~~of ~~safe~~matter ~~use,~~of ~~such~~dendritic ascells ~~restricted~~that ~~distribution~~have ~~methods,~~been ~~patient~~manufactured ~~registries~~from these monocytes. The U.S. patent will expire in 2029, or ~~other~~and ~~risk~~patents ~~minimization~~in ~~tools~~Europe and Japan will expire in 2026.

~~The~~• ~~FDA~~two conducts a preliminary review of all NDAs and BLAs within the first 60 days after submission before accepting them for filing to determine whether they are sufficiently complete to permit substantive reviewU. ~~The FDA may request additional information rather than accept an NDA or BLA for filing~~S. ~~In this event~~patents, ~~the~~two ~~application~~patents ~~must~~in ~~be resubmitted~~Europe ~~with~~and ~~the~~one ~~additional~~patent ~~information.~~in ~~The~~Japan ~~resubmitted~~are ~~application~~collectively isdirected ~~also~~towards ~~subject to review before~~ the ~~FDA~~composition ~~accepts~~of itmatter ~~for filing.~~of ~~Once the submission is accepted for filing, the FDA begins an in~~AGS-~~depth~~004 ~~substantive review. The FDA reviews an NDA or BLA to determine, among other things, whether the product is safe~~ and ~~effective~~related ~~(described~~methods asof ~~safe, pure and potent for BLAs) and the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, purity and potency~~manufacture. The ~~FDA is required to refer an application for a novel drug or biological product to an advisory committee or explain why such referral was not made~~U.S. Anpatents ~~advisory~~expire ~~committee~~in is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions2026. The ~~FDA~~European isand ~~not~~Japanese ~~bound~~patents bywill ~~the~~expire ~~recommendations~~in ~~of an advisory committee, but it considers such recommendations carefully when making decisions~~2025.

~~Before~~• ~~approving~~one anU.S. ~~NDA~~patent orand ~~BLA,~~one ~~the~~U.S. ~~FDA~~patent ~~typically~~application ~~will~~are ~~inspect~~directed ~~the~~towards ~~facility or facilities where~~ the ~~product~~composition isof ~~manufactured.~~matter ~~The~~and ~~FDA~~related ~~will~~methods ~~not~~of ~~approve~~use anof ~~application~~some ~~unless~~of itthe ~~determines~~primers that ~~the~~we ~~manufacturing~~use ~~processes and facilities are~~ in ~~compliance~~the ~~with~~manufacture ~~cGMP requirements and adequate to assure consistent production~~ of ~~the~~AGS-004. ~~product~~The ~~within required specifications~~U.S. ~~Additionally,~~patent ~~before~~and ~~approving~~U.S. anpatent ~~NDA~~application, orif ~~BLA~~issued, ~~the FDA~~ will ~~typically~~expire ~~inspect~~in ~~one or more clinical sites to assure compliance with GCP and integrity of the clinical data submitted~~2028.

~~The~~In ~~testing~~addition, ~~and~~if ~~approval~~the ~~process~~use ~~requires~~of ~~substantial~~Arcelis-based products ~~time,~~for ~~effort~~the ~~and~~treatment ~~financial~~of ~~resources,~~ RCC and ~~each~~HIV ~~may~~are ~~take~~approved ~~several~~by ~~years~~the toFDA, ~~complete.~~then, ~~Data~~depending ~~obtained~~upon ~~from~~factors ~~clinical~~such ~~activities~~as ~~are~~the ~~not~~timing ~~always conclusive~~ and ~~may be susceptible~~duration toof ~~varying~~FDA ~~interpretations,~~review ~~which~~and ~~could~~the ~~delay,~~timing ~~limit~~and orconditions ~~prevent~~of ~~regulatory~~FDA approval., ~~The~~as ~~FDA~~well ~~may~~as ~~not~~factors ~~grant~~such ~~approval~~as onpatent aclaim ~~timely basis~~scope, orsome atof ~~all~~our issued U.S. Wepatents ~~may encounter difficulties~~ (or ~~unanticipated~~patents ~~costs~~that inmay ~~our~~issue ~~efforts~~from ~~to develop~~ our ~~product~~pending ~~candidates~~U.S. ~~and~~patent ~~secure necessary~~applications) ~~governmental~~may ~~approvals,~~be ~~which~~eligible ~~could~~for ~~delay~~limited orpatent ~~preclude~~term usextension under ~~from~~the ~~marketing~~Hatch-Waxman ~~our products~~Act.

If the FDA’s evaluation of the NDA or BLA and inspection of the manufacturing facilities and clinical trial sites are favorable, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical testing in order for FDA to reconsider the application. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug or biological product with specific prescribing information for specific indications. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.35

~~Even~~Trade if the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.Secrets

~~Special~~In ~~FDA~~addition ~~Expedited~~to ~~Review~~patents, we rely on trade secrets and ~~Approval~~know-how ~~Programs~~to develop and maintain our competitive position. ~~The~~ ~~FDA~~For ~~has~~example, ~~various~~significant aspects of the process by which ~~programs~~we manufacture or plan to automate manufacturing of our Arcelis-based drug product candidates are based on unpatented trade secrets and know-how. Trade secrets and know-how can be difficult to protect. We seek to protect our proprietary technology and processes, in ~~including~~part, ~~fast~~by ~~track~~confidentiality ~~designation~~agreements and invention assignment agreements with our employees, ~~accelerated~~consultants, ~~approval~~scientific advisors, contractors and ~~priority~~commercial ~~review~~partners. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are ~~intended~~developed tothrough ~~expedite~~a orrelationship ~~simplify~~with a third party. ~~the~~We ~~process~~also ~~for~~seek to preserve the ~~development~~integrity and ~~FDA~~confidentiality ~~review~~ of ~~drug~~our data, trade secrets and ~~biological~~know-how ~~products~~by ~~that~~maintaining ~~are~~physical ~~intended~~security of ~~for~~our ~~the~~premises ~~treatment~~and physical and electronic security of ~~serious~~our information technology systems. Although we have confidence in these orindividuals, ~~life~~organizations ~~threatening~~and ~~diseases~~systems, agreements or ~~conditions~~security measures may be breached, and ~~demonstrate~~we ~~the~~may ~~potential~~not tohave ~~address~~adequate ~~unmet~~remedies for ~~medical~~any ~~needs~~breach. ~~The~~In ~~purpose~~addition, ofour ~~these~~trade secrets may otherwise become known or be independently discovered by competitors. To the ~~programs~~extent isthat toour ~~provide~~consultants, ~~important~~contractors ~~new~~or ~~drugs~~collaborators use intellectual property owned by others in their work for us, disputes may arise as to ~~patients~~the ~~earlier~~rights ~~than~~in ~~under~~related ~~standard~~or ~~FDA~~resulting ~~review~~know-how ~~procedures~~and inventions.

ToDevelopment be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious aspect of a serious or life threatening disease or condition and ~~will fill~~Commercialization an unmet medical need. The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.Agreements

InAn ~~addition,~~important ~~the~~part ~~FDA~~of ~~may~~our ~~give~~business astrategy is ~~priority review designation~~ to ~~drugs~~enter orinto ~~biological~~arrangements ~~products that~~with ~~provide~~third ~~safe~~parties ~~and~~both ~~effective therapy where no satisfactory alternative exists or a significant improvement compared~~ to ~~marketed products~~assist in the ~~treatment,~~development ~~diagnosis~~and orcommercialization ~~prevention~~ of aour ~~disease.~~product ~~For products regulated by the Center for Biologics Evaluation~~candidates, ~~and~~particularly ~~Research,~~in orinternational ~~CBER~~markets, ~~the~~and ~~product must be intended~~ to ~~treat a serious or life~~in-license ~~threatening~~product ~~disease~~candidates orin ~~condition.~~order ~~A priority review means that the targeted time for the FDA~~ to ~~review~~expand anour ~~application is six months, rather than ten months~~pipeline. ~~Most products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review.~~

27Pharmstandard. In August 2013, in connection with the purchase of shares of our series E preferred stock by Pharmstandard, we entered into an exclusive royalty-bearing license agreement with Pharmstandard. Under this license agreement, we granted Pharmstandard and its affiliates a license, with the right to sublicense, to develop, manufacture and commercialize rocapuldencel-T and other products for the treatment of human diseases, which are developed by Pharmstandard using our individualized immunotherapy platform, in the Russian Federation, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan, which we refer to as the Pharmstandard Territory. We also provided Pharmstandard with a right of first negotiation for development and commercialization rights in the Pharmstandard Territory to specified additional products we may develop.

Under the ~~provisions~~terms of the ~~Food~~license ~~and~~agreement, Pharmstandard ~~Drug~~licensed ~~Administration~~us ~~Safety~~rights ~~and~~to ~~Innovation~~clinical ~~Act, or~~data ~~FDASIA,~~generated ~~enacted~~by inPharmstandard ~~2012,~~under athe ~~sponsor~~agreement ~~also~~and ~~can~~granted ~~request~~us ~~designation~~an option to obtain an exclusive license outside of athe ~~product~~Pharmstandard ~~candidate~~Territory asto adevelop ~~“breakthrough~~and ~~therapy.”~~commercialize improvements to our Arcelis technology Agenerated ~~breakthrough~~by ~~therapy~~Pharmstandard isunder ~~defined~~the asagreement, a ~~drug~~non-exclusive orworldwide ~~biological~~royalty-free ~~product~~license ~~that~~to isPharmstandard ~~intended,~~improvements ~~alone~~to manufacture orproducts inusing ~~combination~~our ~~with~~Arcelis ~~one~~technology orand ~~more~~a ~~other drugs~~license orto ~~biological~~specified follow-on licensed products generated by Pharmstandard outside of the Pharmstandard Territory, each on terms to ~~treat~~be negotiated upon our request for a ~~serious~~license. orIn ~~life~~addition, Pharmstandard agreed to pay us pass-~~threatening~~through ~~disease~~royalties oron ~~condition,~~net ~~and~~sales ~~preliminary~~of ~~clinical~~all ~~evidence~~licensed ~~indicates~~products in the low single digits until it has generated a ~~that~~specified amount of aggregate net sales. Once the ~~product~~net ~~may~~sales ~~demonstrate~~threshold ~~substantial~~is ~~improvement~~achieved, ~~over~~Pharmstandard ~~existing~~will ~~therapies~~pay us royalties on ~~one~~net orsales of ~~more~~specified ~~clinically~~licensed ~~significant~~products, ~~endpoints~~including rocapuldencel-T, in the low double digits below 20%. These royalty obligations last until ~~such~~the aslater ~~substantial~~of ~~treatment~~the ~~effects~~expiration ~~observed~~of ~~early~~specified licensed patent rights in ~~clinical~~a ~~development.~~country ~~Products~~or ~~designated~~the astwelfth ~~breakthrough~~anniversary ~~therapies~~of ~~are~~the first commercial ~~also~~sale ~~eligible~~in ~~for~~such ~~accelerated~~country ~~approval.~~on ~~The~~a ~~FDA~~country ~~must~~by ~~take~~country ~~certain~~basis ~~actions,~~and ~~such~~no asfurther ~~holding~~royalties ~~timely~~on ~~meetings~~specified ~~and~~other ~~providing~~licensed ~~advice,~~products. After the net ~~intended~~sales tothreshold ~~expedite~~is achieved, Pharmstandard has the ~~development~~right ~~and~~to ~~review~~offset a portion of anthe ~~application~~royalties Pharmstandard pays to third parties for ~~approval~~licenses ofto anecessary ~~breakthrough~~third ~~therapy~~party intellectual property against the royalties that Pharmstandard pays to us.

~~Even~~The ifagreement awill ~~product~~terminate ~~qualifies~~upon expiration of the royalty term, upon which all licenses will become fully paid up perpetual exclusive licenses. Either party may terminate the agreement for ~~one~~the other party’s uncured material breach or ~~more~~if ofspecified ~~these~~conditions ~~programs,~~occur relating to the ~~FDA~~other party’s insolvency or bankruptcy and we may ~~later~~terminate ~~decide~~the agreement if Pharmstandard challenges or assists a third party in challenging ~~that~~specified ~~the~~patent ~~product~~rights noof ~~longer~~ours. ~~meets~~If Pharmstandard terminates the ~~conditions~~agreement ~~for~~upon ~~qualification~~our material breach or ~~decide~~bankruptcy, ~~that~~Pharmstandard is ~~the~~entitled ~~time~~to ~~period~~terminate our licenses to improvements generated by Pharmstandard, upon which we may come to rely for ~~FDA~~the ~~review~~development and orcommercialization ~~approval~~of ~~will~~rocapuldencel-T and other licensed products outside of the Pharmstandard Territory, and Pharmstandard ~~not~~is beentitled ~~shortened~~to retain its licenses from us and to pay us substantially reduced royalty payments following such termination.

~~Post-Approval~~In ~~Requirements. Any~~November ~~drug~~2013, orwe ~~biological~~entered ~~products~~into ~~manufactured~~an agreement orwith ~~distributed~~Pharmstandard byunder uswhich ~~pursuant~~Pharmstandard topurchased ~~FDA~~additional ~~approvals~~shares ~~are~~of ~~subject~~our toseries ~~pervasive~~E ~~and~~preferred ~~continuing~~stock. ~~regulation~~Under bythis ~~the FDA~~agreement, ~~including, among~~ ~~other~~we ~~things,~~agreed ~~requirements relating~~ to ~~recordkeeping,~~enter ~~periodic~~into ~~reporting,~~a ~~product~~manufacturing ~~sampling~~rights ~~and~~agreement ~~distribution,~~for ~~advertising~~the ~~and~~European ~~promotion and~~market ~~reporting~~with ofPharmstandard ~~adverse~~and ~~experiences~~that ~~with~~ the ~~product.~~manufacturing rights ~~After~~agreement ~~approval,~~would ~~most~~provide ~~changes~~for to the ~~approved~~issuance ~~product,~~of ~~such~~warrants asto ~~adding~~Pharmstandard ~~new indications or other labeling claims are subject~~ to ~~prior~~purchase ~~FDA~~24,989 ~~review~~shares ~~and~~of ~~approval.~~our ~~There~~common ~~also~~stock ~~are~~at ~~continuing, annual user fee~~an ~~requirements~~exercise ~~for~~price ~~any~~of ~~marketed~~$116.40 ~~products~~per ~~and~~share. ~~the~~As ~~establishments~~of atFebruary ~~which~~1, ~~such products are manufactured~~2018, aswe ~~well~~had asnot ~~new~~entered ~~application fees~~into ~~for~~this ~~supplemental~~manufacturing ~~applications~~rights ~~with~~agreement ~~clinical~~or ~~data~~issued the warrants.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA or BLA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. Regulatory approval of oncology products often requires that patients in clinical trials be followed for long periods to determine the overall survival benefit of the drug or biologic.36

InPharmstandard ~~addition~~and Actigen. On February 1, ~~drug~~2018, ~~manufacturers~~we ~~and~~entered ~~other~~into ~~entities~~an ~~involved~~option inagreement ~~the~~with ~~manufacture~~Pharmstandard and ~~distribution~~Actigen Limited to evaluate, with an option to license, certain patent rights and know-how related to a group of ~~approved~~fully ~~drugs~~human PD1 monoclonal antibodies and ~~biological~~related ~~products~~technology held ~~are~~by ~~required~~Actigen. Actigen previously granted Pharmstandard an option to ~~register~~exclusively ~~their~~license ~~establishments~~these ~~with~~patent rights. Under the ~~FDA~~option agreement, ~~and~~Pharmstandard ~~state~~granted ~~agencies~~to us (i) an exclusive license for evaluation purposes only to make, have made, use and ~~are~~import ~~subject~~the PD1 monoclonal antibodies covered by these patent rights (but not offer to ~~periodic~~sell ~~unannounced~~or ~~inspections~~sell products and processes covered by or incorporating the ~~FDA~~patent rights) for a period of one year from the date of the agreement and ~~these~~(ii) ~~state~~an ~~agencies~~option ~~for~~exercisable ~~compliance~~during the one-year period to obtain an exclusive license (with ~~cGMP~~the ~~requirements.~~right ~~Changes~~ to sublicense) under the ~~manufacturing~~patent ~~process~~rights ~~are~~to ~~strictly~~make, ~~regulated~~have made, use, offer for sale, sell and ~~often~~import ~~require~~(with ~~prior~~a ~~FDA~~right ~~approval~~to ~~before~~grant ~~being~~sublicenses) ~~implemented.~~the ~~FDA~~PD1 ~~regulations~~monoclonal antibodies for all prophylactic, therapeutic ~~also~~and ~~require~~diagnostic ~~investigation~~uses and ~~correction~~for ofall ~~any~~human ~~deviations~~diseases ~~from~~and ~~cGMP~~conditions in the United States and ~~impose~~Canada. ~~reporting~~The parties have agreed that, if we exercise the option during the option exercise period, the parties will negotiate in good faith a license agreement on the terms and ~~documentation~~conditions ~~requirements~~outlined in the option agreement, including payments by us to Pharmstandard of (i) an upfront license fee of $3.6 million, payable upon execution of the license agreement in our common stock, (ii) various development and regulatory milestone uspayments totaling $8.5 million, and (iii) upper single digit percentage royalties on net sales of any ~~third~~pharmaceutical ~~party~~product ~~manufacturers~~or therapeutic regimen incorporating the licensed PD1 monoclonal antibodies that wewill ~~may~~apply ~~decide~~on toa ~~use.~~country-by-country ~~Accordingly,~~basis ~~manufacturers~~until ~~must~~the later ~~continue~~of the last to ~~expend~~expire ~~time,~~patent ~~money~~or ten years from the date of first commercial sale, ~~and~~ ~~effort~~against inwhich the ~~area~~first $5.0 million of our ~~production~~development ~~and~~expenditures ~~quality~~will ~~control~~be tocredited ~~maintain~~as ~~cGMP~~prepaid ~~compliance~~royalties.

~~Once~~In anconsideration ~~approval~~for isthe rights granted, under the ~~FDA~~option ~~may~~agreement, ~~withdraw~~we ~~the~~agreed ~~approval~~to ifissue ~~compliance~~to ~~with~~Pharmstandard, ~~regulatory requirements~~on ~~and~~or ~~standards~~before isApril ~~not~~2, ~~maintained~~2018, or169,014 ifshares ~~problems~~of ~~occur~~our ~~after~~common stock, the ~~product~~value ~~reaches~~of ~~the~~which ~~market.~~will ~~Later~~be ~~discovery~~creditable ofagainst ~~previously unknown~~the ~~problems~~upfront ~~with~~license afee ~~product,~~if ~~including~~we ~~adverse~~entered ~~events~~into ofa ~~unanticipated~~license ~~severity~~agreement. orUnless ~~frequency,~~earlier orterminated by ~~with~~any ~~manufacturing~~party ~~processes, or~~for ~~failure~~uncured tomaterial ~~comply~~breach ~~with~~or ~~regulatory~~by ~~requirements,~~us ~~may~~without ~~result~~cause inupon ~~revisions~~thirty todays ~~the~~prior ~~approved~~written ~~labeling~~notice, tothe ~~add~~option ~~new~~agreement ~~safety information;~~will ~~imposition~~terminate ofupon ~~post-market~~the ~~studies~~later orof ~~clinical~~the ~~trials~~end toof ~~assess~~the ~~new~~option ~~safety~~exercise ~~risks;~~period orif ~~imposition~~we ofdecide ~~distribution~~not orto ~~other~~exercise ~~restrictions under~~the aoption ~~REMS~~or ~~program.~~sixty ~~Other~~days ~~potential~~after ~~consequences~~we exercise ~~include,~~the ~~among other things:~~option.

•Green ~~restrictions~~Cross. In onJuly ~~the~~2013, ~~marketing~~in orconnection ~~manufacturing~~with the purchase of ~~the~~our ~~product~~series E preferred stock by Green Cross, ~~complete~~we ~~withdrawal~~entered into an exclusive royalty-bearing license agreement with Green Cross. Under this agreement we granted Green Cross a license to develop, manufacture and commercialize rocapuldencel-T for mRCC in South Korea. We also provided Green Cross with a right of ~~the~~first ~~product~~negotiation ~~from~~for ~~the~~development ~~market~~and orcommercialization rights ~~product~~in ~~recalls;~~South Korea to specified additional products we may develop.

•Under ~~fines~~the terms of the license, ~~warning~~Green ~~letters~~Cross has oragreed ~~holds~~to onpay ~~post~~us $0.5 million upon the initial submission of an application for regulatory approval of a licensed product in South Korea, $0.5 million upon the initial regulatory approval of a licensed product in South Korea and royalties ranging from the mid-single digits to low double digits below 20% on net sales until the fifteenth anniversary of the first commercial sale in South Korea. In addition, Green Cross has granted us an exclusive royalty free license to develop and commercialize all Green Cross improvements to our licensed intellectual property in the rest of the world, excluding South Korea, except that, as to such improvements for which Green Cross makes a significant financial investment and that generate significant commercial benefit in the rest of the world, we are required to negotiate in good faith a reasonable royalty that we will be obligated to pay to Green Cross for such license. Under the terms of the agreement, we are required to continue to develop and to use commercially reasonable efforts to obtain regulatory approval ~~clinical~~for ~~trials;~~rocapuldencel-T in the United States.

•The ~~refusal~~agreement will terminate upon expiration of the ~~FDA~~royalty toterm, ~~approve~~which ~~pending~~is ~~applications~~15 years from the first commercial sale, upon which all licenses will become fully paid up perpetual non-exclusive licenses. Either party may terminate the agreement for the other party’s uncured material breach or ~~supplements~~if specified conditions occur relating to ~~approved~~the ~~applications,~~other party’s insolvency or ~~suspension~~bankruptcy and we may terminate the agreement if Green Cross challenges or ~~revocation~~assists a third party in challenging specified patent rights of ~~product~~ours. ~~license~~If ~~approvals;~~Green Cross terminates the agreement upon our material breach or bankruptcy, Green Cross is entitled to terminate our licenses to improvements and retain its licenses from us and to pay us substantially reduced milestone and royalty payments following such termination.

~~• product seizure or detention, or refusal to permit the import or export of products; or~~37

•Medinet. In December ~~injunctions~~2013, orwe entered into a license agreement with Medinet. Under this agreement, we granted Medinet an exclusive, royalty-free license to manufacture in Japan rocapuldencel-T and other products using our Arcelis technology solely for the ~~imposition~~purpose of ~~civil~~the ordevelopment and ~~criminal~~commercialization ~~penalties~~of rocapuldencel-T and these other products for the treatment of mRCC. We refer to this license as the manufacturing license. In addition, under this agreement, we granted Medinet an option to acquire a nonexclusive, royalty-bearing license under our Arcelis technology to sell in Japan rocapuldencel-T and other products for the treatment of mRCC. We refer to the option as the sale option and the license as the sale license.

The ~~FDA~~sale ~~strictly~~option ~~regulates~~expired ~~marketing~~on April 30, ~~labeling~~2016. As a result, ~~advertising~~Medinet may only manufacture rocapuldencel-T and ~~promotion~~these ofother products ~~that~~ ~~are~~for ~~placed~~us onor ~~the~~our ~~market~~designee. ~~Drugs~~We ~~may~~have beagreed ~~promoted~~to ~~only~~negotiate in ~~for~~good ~~the~~faith ~~approved~~a ~~indications~~supply ~~and~~agreement inunder ~~accordance~~which ~~with~~Medinet ~~the~~would ~~provisions~~supply ~~of the~~us ~~approved~~or ~~label.~~our ~~The~~designee ~~FDA~~with rocapuldencel-T and these other ~~agencies~~products for ~~actively~~development ~~enforce~~and sale for the ~~laws~~treatment ~~and~~of ~~regulations~~mRCC ~~prohibiting~~in Japan. During the ~~promotion~~term of ~~off~~the ~~label uses~~manufacturing license, ~~and~~we amay ~~company~~not ~~that~~manufacture rocapuldencel-T isor ~~found~~these toother ~~have~~products ~~improperly~~for ~~promoted~~us ~~off~~or ~~label~~any ~~uses~~designee ~~may~~for bedevelopment ~~subject~~or tosale ~~significant~~for ~~liability~~the treatment of mRCC in Japan.

In ~~addition,~~consideration for the ~~distribution~~manufacturing license, ofMedinet ~~prescription~~paid ~~pharmaceutical~~us ~~and~~$1.0 ~~biological~~million. ~~products is~~Medinet ~~subject~~also toloaned ~~the~~us ~~Prescription~~$9.0 ~~Drug~~million ~~Marketing~~in ~~Act,~~connection orwith ~~PDMA,~~us ~~which~~entering ~~regulates~~into the ~~distribution~~agreement. ofWe have ~~drugs~~agreed ~~and~~to ~~drug~~use ~~samples~~these atfunds in the ~~federal~~ ~~level,~~development and ~~sets~~manufacturing ~~minimum~~of ~~standards~~rocapuldencel-T ~~for~~and the ~~registration~~other ~~and~~products. ~~regulation~~Medinet ofalso ~~drug~~agreed to ~~distributors~~pay byus ~~the~~milestone ~~states.~~payments ~~Both~~of ~~the~~up ~~PDMA and~~to ~~state~~a ~~laws~~total ~~limit~~of $9.0 million upon the ~~distribution~~achievement of ~~prescription~~developmental ~~pharmaceutical~~and ~~product~~regulatory ~~samples~~milestones and $5.0 ~~impose~~million ~~requirements~~upon the achievement of a sales milestone related to ~~ensure~~rocapuldencel-T ~~accountability in~~and ~~distribution~~these products.

~~Exclusivity~~We borrowed the $9.0 million pursuant to an unsecured promissory note that bears interest at a rate of 3.0 % per annum. The principal and ~~Approval~~interest under the note are due and payable on December 31, 2018. Under the terms of ~~Competing~~the ~~Products~~note and the manufacturing license agreement, any milestone payments related to the developmental and regulatory milestones that become due will be applied first to the repayment of the loan. We have achieved $5.0 in milestones. As a result, the outstanding principal of the loan has been reduced to $4.0 million as of February 1, 2018. We have the right to prepay the loan at any time. If we have not repaid the loan by December 31, 2018, then we have agreed to grant to Medinet a non-exclusive, royalty-bearing license to make and sell Arcelis products in Japan for the treatment of cancer. In such event, the amounts owing under the loan as of December 31, 2018 may constitute pre-paid royalties under the license or would be due and payable. We do not expect to pay the amounts owing under the loan by December 31, 2018. Royalties under this license would be paid until the expiration of the licensed patent rights in Japan at a rate to be negotiated. If we cannot agree on the royalty rate, we have agreed to submit the matter to arbitration.

~~Non-Patent Exclusivity.~~ Under the ~~Patient Protection and Affordable Care Act~~agreement, orwe ~~PPACA,~~had ~~newly- approved biological products may benefit from statutory periods of non-patent data and marketing exclusivity. The PPACA, among other things, permits~~ the ~~FDA~~right to ~~approve~~revoke ~~biosimilar~~both orthe ~~interchangeable versions of biological products through~~manufacturing anlicense ~~abbreviated approval pathway following periods of data~~ and ~~marketing~~the ~~exclusivity.~~sale ~~Biological~~license ~~products that are considered~~ to be ~~“reference products” are~~ granted ~~two~~to ~~overlapping~~Medinet, ~~periods~~or ofthe ~~data~~sale ~~and~~license ~~marketing~~only. ~~exclusivity:~~On aFebruary ~~four-year period during which no abbreviated biologics license application~~14, ~~or abbreviated BLA~~2018, ~~relying~~we ~~upon~~notified ~~the~~Medinet ~~reference~~that we ~~product~~irrevocably ~~may~~agreed ~~be submitted~~ to ~~the~~have ~~FDA,~~no ~~and~~further aright ~~twelve-year~~to ~~period~~exercise ~~during~~our ~~which~~right nounder ~~abbreviated BLA relying upon~~ the ~~reference~~license ~~product~~agreement ~~may~~to berevoke ~~approved~~the bymanufacturing ~~FDA.~~and ~~For purposes of~~ the ~~PPACA~~sale license, aor ~~reference product is defined as~~ the ~~single~~sale ~~biological~~license ~~product licensed under a full BLA against which a biological product is evaluated in an application submitted under an abbreviated BLA~~only.

28The agreement will terminate upon expiration of the royalty term, upon which all licenses will become fully paid up, perpetual non-exclusive licenses. Either party may terminate the agreement for the other party’s uncured material breach or if specified conditions occur relating to the other party’s insolvency or bankruptcy, and we may terminate the agreement if Medinet challenges or assists a third party in challenging specified patent rights of ours. If Medinet terminates the agreement upon our material breach or bankruptcy, Medinet is entitled to terminate our licenses to improvements and retain its royalty-bearing licenses from us.

WeLummy. ~~believe~~On ~~that~~April ~~our~~7, ~~investigational products~~2015, ifwe ~~approved~~and ~~via~~Lummy ~~full~~HK ~~BLAs,~~entered ~~will~~into a belicense ~~considered “reference~~agreement ~~products”~~pursuant ~~that~~to ~~are~~which ~~entitled~~we granted to ~~both~~Lummy ~~four-year~~HK ~~and~~an ~~twelve-year~~exclusive ~~exclusivity~~license under the ~~PPACA.~~Arcelis ~~The FDA~~technology, ~~however~~including patents, ~~has not issued any regulations or final guidance explaining~~ know-how itand ~~will~~improvements ~~implement~~to ~~the PPACA~~manufacture, ~~including~~develop ~~the~~and ~~exclusivity~~commercialize ~~provisions for reference~~ products. ~~Since~~for ~~February 2012,~~ the ~~FDA~~treatment ~~has~~of ~~issued~~cancer ~~six~~in ~~draft~~China, ~~guidance~~Hong ~~documents~~Kong, ~~that provide its preliminary thoughts~~Taiwan ~~on how to interpret~~ and ~~implement the abbreviated BLA provisions of the PPACA~~Macau. Lummy ~~The~~HK ~~FDA~~also has ~~requested~~a ~~public~~right ~~comments on these draft guidance documents, including the proper interpretation~~ of ~~PPACA~~first ~~exclusivity~~negotiation ~~provisions.~~with Itrespect ~~is thus possible that the FDA will decide~~ to ~~interpret the PPACA in such~~ a ~~way~~license ~~that~~under ~~our~~the ~~products~~Arcelis ~~are~~technology ~~not considered to be reference products~~ for ~~purposes of~~ the ~~PPACA or be entitled to any period~~ treatment of ~~data~~infectious ordiseases ~~marketing~~in ~~exclusivity. Even if our products are considered to be reference products and obtain exclusivity under the PPACA~~China, ~~another~~Hong ~~company nevertheless could also market a competing version of any of our biological products if such company can complete~~Kong, ~~and~~Taiwan ~~the FDA permits the submission of~~ and ~~approves, a full BLA~~Macau. ~~Although~~This ~~protection~~agreement ~~under PPACA~~was ~~will~~subsequently ~~not~~amended ~~prevent~~in ~~the~~December ~~submission or approval of another “full” BLA~~2016, ~~the applicant would be required to conduct~~October ~~its~~2017 ~~own preclinical~~ and ~~adequate~~March ~~and well-controlled clinical trials to demonstrate safety, purity, and potency (i~~2018.~~e., effectiveness).~~

~~Pediatric~~Under ~~Exclusivity. Pediatric~~the ~~exclusivity~~terms isof ~~another~~the ~~type~~license ~~of non-patent~~agreement, ~~marketing~~the ~~exclusivity~~parties inwill ~~the~~share ~~United~~relevant ~~States~~data, and, ifwe ~~granted,~~will ~~provides~~have a right to reference Lummy HK data for purposes of its development programs under the ~~attachment~~Arcelis oftechnology. In addition, Lummy HK has granted to us an ~~additional~~exclusive, ~~six~~royalty-free ~~months~~license ofunder ~~marketing~~and to any and all ~~protection~~Lummy HK improvements to the ~~term~~Arcelis oftechnology conceived or reduced to practice by Lummy HK and Lummy HK data to develop and/or commercialize products outside China, Hong Kong, Taiwan and Macau, an exclusive, royalty-free license under and to any ~~existing~~and all INDs and other regulatory ~~exclusivity,~~approvals ~~including~~and ~~the~~Lummy ~~four~~HK trademarks used for an Arcelis-Based Product to develop and/or 12commercialize an Arcelis-~~year~~Based Product outside China, Hong Kong, Taiwan and Macau and a non-~~patent~~exclusive, ~~exclusivity~~worldwide, ~~periods~~royalty-free license under any ~~described~~Lummy ~~above.~~HK ~~This~~improvements ~~six-month~~and ~~exclusivity~~Lummy ~~may~~HK bedata ~~granted~~to ~~based~~manufacture onArcelis-Based ~~the~~Products ~~voluntary~~anywhere ~~completion~~in ofthe aworld. ~~pediatric~~Lummy ~~study~~HK orhas ~~studies~~the inright to ~~accordance~~reference ~~with~~our andata, ~~FDA-issued~~INDs ~~“Written~~and ~~Request”~~other regulatory filings and submissions for ~~such~~the apurpose ~~study~~of ordeveloping ~~studies~~and obtaining regulatory approval of licensed products in China, Hong Kong, Taiwan and Macau.

Orphan Drug Designation and Exclusivity. Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug (including a biologic) intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.38

IfPursuant ato ~~product~~the ~~that~~license ~~has~~agreement, ~~orphan~~Lummy ~~drug~~HK ~~designation~~will ~~subsequently~~pay ~~receives~~us ~~the first FDA approval~~royalties ~~for~~on ~~the~~net ~~disease~~sales ~~for~~and ~~which~~up ~~it has such designation, the product is entitled~~ to ~~orphan~~an ~~product~~aggregate ~~exclusivity,~~of ~~which~~$22.3 ~~means~~million ~~that~~upon the ~~FDA~~ ~~may~~achievement ~~not~~of ~~approve any other applications~~manufacturing, ~~including~~regulatory aand ~~full~~commercial ~~NDA or full BLA~~milestones, $2.55 tomillion ~~market~~of ~~the~~which ~~same~~has ~~drug~~been ~~for~~earned ~~the~~as ~~same~~of ~~indication for~~March ~~seven~~31, ~~years~~2018. On ~~For~~October ~~purposes~~18, ~~of small molecule drugs~~2017, ~~the~~we ~~FDA~~entered ~~defines~~into ~~“same drug” as~~ a ~~drug~~second ~~that~~amendment ~~contains~~to the ~~same~~ ~~active~~license ~~moiety~~agreement and isLummy ~~intended~~HK ~~for~~paid ~~the~~us ~~same~~$1.5 ~~use~~million asupon the ~~previously~~achievement ~~approved orphan drug. For purposes~~ of ~~large molecule drugs, the FDA defines “same drug” as~~ a ~~drug~~manufacturing ~~that~~milestone ~~contains~~in ~~the~~October ~~same~~2017. ~~principal~~The ~~molecular~~milestone payment ~~structural~~was ~~features,~~made ~~but~~in ~~not~~consideration ~~necessarily all~~ of the ~~same~~successful ~~structural~~initiation ~~features,~~of ~~and~~transfer isof ~~intended~~technology ~~for~~related ~~the~~to ~~same use as~~ the ~~drug~~manufacturing inof ~~question~~rocapuldencel-T. On ~~Notwithstanding~~March ~~the~~23, ~~above definitions~~2018, a ~~drug~~we ~~that~~entered isinto ~~clinically~~a ~~superior~~third amendment to anthe ~~orphan~~license ~~drug~~agreement ~~will~~pursuant ~~not~~to bewhich ~~considered~~Lummy ~~the~~agreed ~~“same~~to ~~drug”~~pay ~~and~~us ~~thus~~a ~~will not be blocked~~$1.05 bymillion ~~orphan~~milestone. ~~drug exclusivity~~.

AThe ~~designated~~license ~~orphan~~agreement ~~drug~~will ~~may~~terminate ~~not~~upon ~~receive~~expiration ~~orphan~~of ~~drug~~the ~~exclusivity~~last to ifexpire itroyalty isterm ~~approved~~ for all Arcelis-Based Products, with each royalty term being the longer of the expiration of the last valid apatent ~~use~~claim ~~that~~covering isthe ~~broader~~applicable ~~than~~Arcelis-Based Product and 10 years from the ~~indication~~first ~~for~~commercial ~~which~~sale itof ~~received~~such ~~orphan~~Arcelis-Based ~~designation~~Product. Either Inparty ~~addition,~~may ~~orphan~~terminate ~~drug~~the ~~exclusive~~license ~~marketing rights~~agreement infor the ~~United~~other ~~States~~party’s ~~may~~uncured bematerial ~~lost~~breach or if specified conditions occur relating to the ~~FDA~~other ~~later~~party’s ~~determines~~insolvency ~~that~~or bankruptcy. We may terminate the ~~request~~license ~~for~~agreement ~~designation~~if ~~was~~Lummy ~~materially~~HK ~~defective~~challenges or ifassists ~~the~~a ~~manufacturer~~third isparty ~~unable~~in tochallenging ~~assure~~specified ~~sufficient~~patent ~~quantities~~rights of ours. If Lummy HK terminates the ~~drug~~license agreement upon our material breach or bankruptcy, Lummy HK is entitled to ~~meet~~terminate the ~~needs~~licenses ofit ~~patients~~granted ~~with~~to ~~the~~us ~~rare~~and ~~disease~~retain its licenses from us with respect to Arcelis-Based Products then in development or ~~condition~~being commercialized, subject to Lummy HK’s continued obligation to pay royalties and milestones with respect to such Arcelis-Based Products.

~~The~~Invetech. ~~FDA~~In ~~also~~October 2014, ~~administers~~we entered into a ~~clinical~~development ~~research~~agreement ~~grants~~with Invetech ~~program~~Pty Ltd, ~~whereby~~or ~~researchers~~Invetech. ~~may compete~~The ~~for~~development ~~funding~~agreement tosupersedes ~~conduct~~and replaces ~~clinical~~the ~~trials~~development toagreement ~~support~~entered into by the ~~approval~~parties as of ~~drugs,~~July ~~biologics,~~2005. Under ~~medical~~the ~~devices~~development agreement, ~~and~~Invetech agreed ~~medical~~to ~~foods for~~continue ~~rare~~to ~~diseases~~develop and ~~conditions.~~provide Anprototypes ~~application~~of ~~for~~the anautomated ~~orphan~~production ~~grant~~system ~~should~~to ~~propose~~be ~~one~~used ~~discrete~~for ~~clinical~~the ~~trial~~manufacture toof ~~facilitate~~our Arcelis-based ~~FDA~~products, ~~approval~~or of the ~~product~~Production ~~for~~Systems. aDevelopment ~~rare~~services ~~disease~~will orbe ~~condition.~~performed ~~The~~on ~~study~~a ~~may~~proposal ~~address~~by anproposal ~~unapproved~~basis. ~~new~~Invetech ~~product~~had oragreed to andefer ~~unapproved new~~30% ~~use~~of ~~for~~its afees, ~~product~~with ~~already~~such ondeferral ~~the~~not ~~market~~to exceed $5.0 million.

~~Foreign~~The ~~Regulation~~development agreement requires the parties to discuss in good faith Invetech’s supply of Production Systems for use in manufacturing commercial product. We have an obligation to purchase $25.0 million worth of Production Systems, components, subsystems and spare parts for commercial use. Once that obligation has been satisfied, we have the right to have a third party supply Production Systems for use in manufacturing commercial product, provided that Invetech has a right of first refusal with respect to any offer by a third party and we may not accept an offer from a third party unless that offer is at a price that is less than that offered by Invetech and otherwise under substantially the same or better terms. We will own all intellectual property arising from the development services (with the exception of existing Invetech intellectual property incorporated therein, under which we will have a license). The term of the development agreement will continue until the completion of the development of the Production Systems. The development agreement can be terminated early by either party because of a technical failure or by us without cause.

~~Although~~In weSeptember, do2017, ~~not~~we ~~currently~~entered ~~market~~into ~~any~~a ~~of our products outside the United States and~~satisfaction ~~have~~and norelease ~~current~~agreement ~~plans~~with toInvetech. ~~engage~~Under inthis ~~product commercialization outside the United States~~agreement, we ~~may~~agreed ~~decide~~ to ~~do so in the future. In order to market any product outside of the United States~~make, weissue ~~would~~and ~~need~~deliver to ~~comply~~Invetech ~~with~~(i) ~~numerous~~a ~~and~~cash ~~varying regulatory requirements~~payment of ~~other countries regarding safety and efficacy and governing~~$500, ~~among other things~~000, ~~clinical~~(ii) ~~trials~~57,142 ~~marketing~~shares ~~authorization, commercial sales and distribution~~ of our ~~products.~~common ~~Whether~~stock orand ~~not~~(iii) wean ~~obtain~~unsecured ~~FDA~~convertible ~~approval~~promissory ~~for~~note ain ~~product, we would need to obtain~~ the ~~necessary~~original ~~approvals by the comparable regulatory authorities of foreign countries before we can commence clinical trials or~~principal ~~marketing~~amount of ~~the product in those countries~~$5.2 ~~The~~million ~~approval~~on ~~process~~account ~~varies~~of ~~from country to country~~ and ~~can~~in ~~involve~~full ~~additional~~satisfaction ~~product testing~~ and ~~additional~~release ~~administrative review periods, and may be otherwise complicated by some~~ of ~~our~~all ~~products~~payment ~~and~~obligations ~~product candidates being controlled substances. The time required~~ to ~~obtain~~Invetech ~~approval~~arising inunder the ~~other~~development ~~countries~~agreement ~~might~~prior ~~differ from and be longer than that required~~ to ~~obtain~~the ~~FDA~~date ~~approval.~~of ~~Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact~~ the ~~regulatory~~satisfaction ~~process~~and inrelease ~~others~~agreement.

29Saint-Gobain. In January 2015, we entered into a development agreement with Saint-Gobain Performance Plastics Corporation, or Saint-Gobain, that was subsequently amended in 2015, 2016 and 2017. Under the agreement, Saint-Gobain agreed to develop a range of disposables for use in our automated production systems to be used for the manufacture of our Arcelis-based products. We had also agreed separately to purchase $3.5 million in disposables under the agreement during 2017. The Saint-Gobain agreement requires the parties to execute a commercial supply agreement under which Saint-Gobain would become the exclusive supplier of disposables for the manufacture of our products treating solid tumors for no less than fifteen years. The Saint-Gobain agreement will continue until December 31, 2019, but can be terminated earlier by written agreement of the parties because of a material default, including the failure to execute the commercial supply agreement, or a failure to achieve a performance milestone.

~~Pharmaceutical Coverage, Pricing and Reimbursement~~39

~~Significant~~In ~~uncertainty~~November, ~~exists~~2017, aswe toentered ~~the~~into ~~coverage~~a satisfaction and ~~reimbursement~~release ~~status~~agreement ofwith ~~any~~Saint-Gobain. ~~drug products~~Under ~~for~~this ~~which~~agreement, we ~~obtain~~agreed ~~regulatory~~to ~~approval.~~make, ~~Sales~~issue ofand ~~any~~deliver ofto ~~our~~Saint-Gobain ~~product~~(i) ~~candidates,~~a ifcash payment ~~approved,~~of ~~will depend~~$500,000, in(ii) ~~part~~34,499 ~~on the~~shares ~~extent to which the costs~~ of ~~the~~our ~~products~~common ~~will~~stock be(iii) ~~covered~~an byunsecured ~~third~~convertible ~~party~~promissory ~~payors,~~note ~~including~~in ~~government~~the ~~health~~original ~~programs such~~principal asamount ~~Medicare~~of ~~and~~$2.4 ~~Medicaid~~million, ~~commercial health insurers~~ and ~~managed~~(iv) ~~care~~certain ~~organizations.~~specified ~~The~~equipment ~~process~~originally ~~for~~provided ~~determining~~to ~~whether~~us aunder ~~payor will provide coverage for a drug product may be separate from~~ the ~~process~~development ~~for~~agreement, ~~setting~~on ~~the price or reimbursement rate that the~~account ~~payor~~of ~~will~~and ~~pay~~in ~~for~~full ~~the~~satisfaction ~~drug~~and ~~product~~release ~~once~~of ~~coverage~~all ispayment ~~approved.~~obligations ~~Third party payors may limit coverage~~ to ~~specific~~Saint-Gobain ~~drug~~arising ~~products on~~under anthe ~~approved~~development ~~list~~agreement, orincluding the ~~formulary,~~development ~~which~~fees ~~might~~and ~~not~~charges ~~include~~owed ~~all~~by ofus ~~the~~to ~~approved drugs for a particular indication~~Saint-Gobain.

Cellscript. In ~~order to secure coverage and reimbursement for any product that might be approved~~December ~~for sale~~2015, we ~~may~~entered ~~need~~into toa ~~conduct~~development ~~expensive~~and ~~pharmacoeconomic~~supply ~~studies~~agreement inwith ~~order~~Cellscript, toLLC. ~~demonstrate~~Under the ~~medical necessity and cost- effectiveness of the product~~agreement, inCellscript ~~addition~~has toagreed ~~the costs required~~ to ~~obtain FDA or other comparable regulatory approvals. Our product candidates~~develop ~~may~~cGMP ~~not~~processes befor ~~considered~~the ~~medically~~manufacture ~~necessary~~and orproduction ~~cost-effective.~~of ACD40L ~~payor’s~~RNA, ~~decision to provide coverage for~~ a ~~drug~~ribonucleic ~~product~~acid ~~does not~~used ~~imply~~in ~~that~~the anproduction ~~adequate~~of ~~reimbursement~~our ~~rate will be approved. Third party reimbursement may not be sufficient to enable us to~~Arcelis-based ~~maintain~~products, ~~price~~and ~~levels high enough~~ to ~~realize~~manufacture anand ~~appropriate~~produce ~~return~~CD40L ~~on our investment in product development~~RNA.

~~The~~In ~~containment~~consideration offor ~~healthcare~~these ~~costs has become a priority of federal, state and foreign~~development ~~governments,~~ and ~~the~~production ~~prices~~services, ofwe ~~drugs~~ have ~~been~~agreed ato ~~focus~~pay inCellscript ~~this~~total ~~effort.~~fees ~~Third~~of ~~party~~$4.6 ~~payors~~million. ~~are~~Upon ~~increasingly challenging~~ the ~~prices charged~~execution ~~for~~of ~~medical products and services and examining~~ the ~~medical~~agreement, ~~necessity~~we ~~and cost-effectiveness of medical products and services,~~made inan ~~addition~~initial payment to ~~their~~Cellscript ~~safety~~of ~~and efficacy~~$2.0 Ifmillion ~~these~~through ~~third~~the ~~party~~issuance ~~payors do not consider our products~~ to beCellscript ~~cost-effective~~of ~~compared to other available therapies~~45,309 ~~they~~shares ~~may~~of ~~not cover~~ our ~~products~~common ~~after~~stock. ~~approval~~The ~~as a benefit under their plans or, if they do, the~~balance ~~level~~ of ~~payment~~these ~~may~~fees ~~not~~are bepayable ~~sufficient~~ to ~~allow~~Cellscript, usat ~~to sell~~ our ~~products at an appropriate return on investment. The U.S. government~~option, ~~state~~ ~~legislatures and foreign governments have shown significant interest~~ in ~~implementing~~cash, ~~cost-containment~~common ~~programs~~stock toor ~~limit the~~a ~~growth~~combination of ~~government-paid~~cash ~~health~~and ~~care~~common ~~costs,~~stock ~~including~~upon ~~price controls, restrictions on reimbursement and requirements for~~the ~~substitution~~achievement of ~~generic~~development ~~products for branded prescription drugs~~milestones. ~~Adoption~~Any ofshares ~~such controls and measures, and tightening~~ of ~~restrictive policies~~common instock ~~jurisdictions~~issued ~~with~~pursuant ~~existing~~to ~~controls~~the ~~and~~agreement ~~measures,~~are ~~could~~subject ~~limit~~to ~~payments~~a ~~for~~lock-up ~~pharmaceuticals such as the drug product~~period ~~candidates~~of ~~that~~180 wedays ~~are~~from ~~developing~~the ~~and~~date ~~could~~of ~~adversely~~issuance ~~affect~~of ~~our~~such ~~net~~shares ~~revenue~~to ~~and results~~Cellscript.

~~Pricing~~Under ~~and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require~~ the ~~completion~~ terms of ~~additional studies that compare~~ the ~~cost-effectiveness~~agreement, ~~of a particular product candidate to currently available therapies.~~Cellscript ~~For~~shall ~~example,~~be the ~~European~~sole ~~Union~~and ~~provides~~exclusive ~~options~~manufacturer ~~for~~and ~~its~~supplier ~~member states~~ to ~~restrict~~us ~~the range~~ of ~~drug~~CD40L ~~products~~RNA, ~~for~~and ~~which~~we ~~their national~~will ~~health~~make ~~insurance~~agreed ~~systems~~upon ~~provide~~cash ~~reimbursement~~payments ~~and~~ to ~~control the prices of medicinal products~~ Cellscript for ~~human~~CD40L ~~use.~~RNA ~~European Union~~produced ~~member states may approve a specific price~~ for aus ~~drug~~during ~~product or it may instead adopt a system of direct or indirect controls on~~ the ~~profitability~~term of the ~~company~~Agreement. ~~placing~~Under the ~~drug~~agreement, ~~product~~Cellscript onshall ~~the~~also ~~market.~~be ~~Other~~our ~~member~~sole ~~states~~and ~~allow companies to fix their own~~exclusive ~~prices~~supplier ~~for~~of ~~drug~~enzymes ~~products, but monitor~~ and ~~control~~various ~~company~~kits ~~profits.~~comprising ~~The~~enzymes ~~downward~~for ~~pressure on health care costs in general~~transcription, ~~particularly prescription~~capping ~~drugs,~~and/or ~~has~~polyadenylation ~~become intense. As a result, increasingly high barriers are being erected to the entry~~ of ~~new products~~RNA. In ~~addition,~~We inwill ~~some countries, cross-border imports from low-priced markets exert competitive pressure that may reduce pricing~~make ~~within~~agreed aupon ~~country.~~cash ~~There~~payments ~~can~~to beCellscript nofor ~~assurance~~each ~~that~~kit ~~any country~~ that ~~has~~is ~~price~~purchased ~~controls~~under orthe ~~reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products~~agreement.

The ~~marketability~~agreement of any products for which we receive regulatory approval for commercial sale may suffer if the government and third party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue tountil ~~increase~~ the ~~pressure~~earlier onof ~~drug~~(i) ~~pricing.~~June ~~Coverage policies~~30, ~~third party reimbursement rates and drug pricing regulation may change at any time. In particular, the PPACA and a related~~2018 ~~reconciliation~~or ~~bill,~~(ii) ~~which we collectively refer to as~~ the ~~Affordable~~effective ~~Care~~date ~~Act or ACA, contain provisions that may reduce the profitability~~ of ~~drug~~a ~~products,~~commercial ~~including,~~supply ~~for~~agreement ~~example,~~negotiated ~~increased~~in ~~rebates~~good ~~for~~faith ~~covered~~by ~~outpatient~~the ~~drugs sold to Medicaid programs~~parties, ~~extension~~ ofbut ~~Medicaid~~can ~~rebates~~be toearlier ~~Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries, and~~terminated ~~annual~~by ~~fees~~either ~~based~~party ondue ~~pharmaceutical companies’ share of sales~~ to ~~federal~~a ~~health~~material ~~care~~breach ~~programs. Even if favorable coverage and reimbursement status is attained for one~~ or ~~more~~upon ~~products~~bankruptcy ~~for~~of ~~which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in~~ the ~~future~~other party.

~~New~~Government ~~Legislation and Regulations~~Regulation

~~From~~Government ~~time~~authorities toin ~~time~~the United States, ~~legislation~~at isthe ~~drafted~~federal, state ~~introduced~~ and ~~passed~~local level, and in ~~Congress~~other ~~that~~countries ~~could significantly~~and ~~change~~jurisdictions, including the ~~statutory~~EU, ~~provisions~~extensively ~~governing~~regulate, among other things, the research, development, testing, manufacture, pricing, quality control, approval, ~~manufacturing~~packaging, ~~and~~storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of ~~products~~biopharmaceutical ~~regulated~~products. byThe ~~the~~processes ~~FDA.~~for ~~For~~obtaining ~~example,~~marketing approvals in the ~~FDASIA~~United States and ~~PPACA~~in ~~provisions~~foreign ~~discussed~~countries ~~above~~and ~~were~~jurisdictions, ~~enacted~~along inwith ~~2012~~compliance with applicable statutes and ~~2010~~regulations and other regulatory authorities, ~~respectively~~require the expenditure of substantial time and financial resources.

~~Numerous statements made by President Trump and members of the~~ U.S. ~~Congress~~Drug ~~indicate that it is likely that legislation will be passed by Congress~~ and ~~signed~~Biological ~~into~~Product ~~law~~Approval by President Trump that repeals the PPACA, in whole or in part, and/or introduces a new form of health care reform. It is unclear at this point what the scope of such legislation will be and when it will become effective. Because of the uncertainty surrounding this replacement health care reform legislation, we cannot predict with any certainty the likely impact of the PPACA’s repeal or the adoption of any other health care reform legislation on our business. Whether or not there is alternative health care legislation enacted in the United States, there is likely to be significant disruption to the health care market in the coming months and years.Process

In ~~addition~~the toUnited ~~potential~~States, ~~for~~the ~~new~~FDA ~~legislation~~approves and regulates drugs under the Federal Food, ~~FDA~~Drug, ~~regulations~~and Cosmetic Act, or FDCA, and ~~policies~~implementing regulations. Biologic products are ~~often~~licensed for marketing under ~~revised~~the Public Health Service Act, or ~~interpreted~~PHSA. byThe failure to comply with the ~~agency~~applicable inU.S. ~~ways~~requirements ~~that~~at ~~may~~any ~~significantly~~time ~~affect~~during ~~our~~the ~~business~~product development ~~and~~process, ~~our~~approval ~~products.~~process Itor isafter ~~impossible~~approval, may subject an applicant to ~~predict whether~~a ~~further~~variety ~~legislative~~of ~~changes~~administrative ~~will~~or bejudicial ~~enacted~~sanctions, such oras the FDA’s ~~regulations~~refusal to approve pending applications, ~~guidance~~withdrawal of an approval, ~~policies~~imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or ~~interpretations~~partial ~~changed~~suspension of production or ~~what~~distribution, injunctions, ~~the~~fines, ~~impact~~refusals of ~~such~~government ~~changes~~contracts, ~~if any~~restitution, ~~may~~disgorgement beor civil or criminal penalties.

30The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following:

~~Segment~~• completion of preclinical laboratory tests, animal studies and ~~Geographic~~formulation ~~Information~~studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

Operating segments are defined as components of an enterprise engaging in business activities from which it may earn revenues and incur expenses, for which discrete financial information is available and whose operating results are regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We view our operations and manage our business in one operating segment and all of our operations are in North America.40

~~Employees~~• submission to the FDA of an IND which must become effective before human clinical trials may begin;

As• ofapproval ~~January 31,~~by ~~2017,~~an weindependent ~~had~~institutional ~~122~~review ~~employees, including 24 in research and development, 10 in clinical development, 66 in manufacturing and 22 in general and administrative functions. In March 2017, we announced that our~~ board ~~of directors approved a workforce action plan designed to streamline operations and reduce our operating expenses. Under this plan~~, ~~we expect to reduce our workforce by 46 employees (~~or ~~38%)~~IRB, ~~from~~at ~~122~~each ~~employees~~clinical tosite 76before ~~employees.~~each ~~None~~trial ofmay ~~our~~be ~~employees is subject to a collective bargaining agreement or represented by a labor or trade union. We believe that our relations with our employees are good.~~initiated;

~~Corporate~~• ~~Information~~performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug or biological product for each indication;

We• ~~were~~submission ~~incorporated~~to in the ~~State~~FDA of ~~Delaware~~a onnew ~~May~~drug 8application, ~~1997.~~or ~~Our principal executive offices are located at 4233 Technology Drive~~NDA, ~~Durham,~~for ~~North~~a ~~Carolina~~drug ~~27704,~~product ~~and~~or ~~our~~a ~~telephone~~BLA ~~number~~for isa ~~(919) 287-6300.~~biologic;

~~Available~~• ~~Information~~satisfactory completion of an FDA advisory committee review, if applicable;

We• ~~file~~satisfactory ~~with~~completion the Securities and Exchange Commission, or SEC, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and information statements and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) of ~~the~~an ~~Securities~~FDA ~~Exchange~~inspection ~~Act~~ of ~~1934, as amended. The public may obtain these filings at~~ the ~~SEC’s~~manufacturing ~~Public~~facility ~~Reference~~or ~~Room~~facilities at ~~100~~which ~~F Street, NE, Washington, DC 20549 or by calling~~ the ~~SEC~~product atis ~~1-800-SEC-0330. The~~produced ~~SEC~~to ~~also~~assess ~~maintains~~compliance awith ~~website at http://www.sec.gov that contains reports~~cGMP, ~~proxy~~ and ~~information~~to ~~statements~~assure ~~and~~that ~~other~~the ~~information regarding~~facilities, ~~Argos~~methods and ~~other~~controls ~~companies~~are ~~that~~adequate ~~file~~to ~~materials~~preserve ~~with~~ the ~~SEC~~drug’s ~~electronically. As soon as practicable after filing with the SEC~~identity, ~~copies of our reports on Forms 10-K~~strength, ~~Forms~~quality ~~10-Q~~ and ~~Forms 8-K may also be obtained, free of charge, electronically through the investor relations portion of our web site, www.argostherapeutics.com/investor-relations/sec-filings/default.aspx.~~purity;

We• ~~webcast~~FDA ~~our~~review ~~earnings calls on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events~~ and ~~press~~approval ~~and earnings releases, on the investor relations portion~~ of our website. Further corporate governance information, including our corporate governance guidelines, board committee charters, Code of Business Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, or persons performing similar functions, is also available on our investor relations website under the ~~heading~~NDA ~~“Corporate Governance.” The contents of our website are not intended to be incorporated by reference into this Annual Report on Form 10-K~~ or inBLA; ~~any other report or document we file with the SEC.~~and

31• compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.

~~Item~~Preclinical 1AStudies and the IND. Before ~~Risk~~an ~~Factors~~applicant begins testing a compound with potential therapeutic value in humans, the product candidate enters the preclinical testing stage. Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess its potential safety and efficacy. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. Such authorization must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved NDA. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold or partial hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

WeClinical ~~operate~~Trials. Clinical intrials ainvolve ~~dynamic~~the ~~and rapidly changing business environment that involves multiple~~administration ~~risks~~of ~~and~~the ~~substantial~~investigational ~~uncertainty.~~new ~~The~~drug ~~following discussion addresses risks and uncertainties that could cause, or contribute~~ to ~~causing,~~human ~~actual~~subjects ~~results~~under tothe ~~differ~~supervision ~~from~~of ~~expectations~~qualified investigators in ~~material~~accordance ~~ways.~~with InGCP ~~evaluating our business~~requirements, ~~investors should pay particular~~ ~~attention~~which toinclude the ~~risks~~requirement ~~and~~that ~~uncertainties~~all ~~described~~research ~~below~~subjects ~~and~~provide intheir ~~other~~informed ~~sections~~consent ofin ~~this~~writing ~~Annual~~for ~~Report~~their onparticipation ~~Form 10-K and~~ in ~~our subsequent~~any ~~filings~~clinical ~~with~~trial. ~~the~~Clinical ~~SEC.~~trials ~~These~~are ~~risks~~conducted ~~and~~under ~~uncertainties~~protocols detailing, oramong other ~~events~~things, ~~that~~the weobjectives doof ~~not~~the ~~currently~~study, ~~anticipate~~the ~~or that we currently~~parameters ~~deem~~to ~~immaterial~~be ~~also~~used ~~may~~in ~~affect~~monitoring ~~our~~safety ~~results~~and ofthe ~~operations,~~effectiveness ~~cash~~criteria ~~flows~~to ~~and~~be ~~financial condition~~evaluated. ~~The~~A ~~trading~~protocol ~~price~~for ofeach ~~our~~clinical ~~common stock~~trial ~~could~~and ~~also decline due to~~ any ofsubsequent protocol ~~these~~amendments ~~risks,~~must ~~and~~be ~~you~~submitted ~~could~~to ~~lose~~the ~~all~~FDA oras part of ~~your~~the ~~investment~~IND.

~~Risks~~In ~~Related~~addition to the ~~Development~~foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and ~~Regulatory~~approve ~~Approval~~the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or ~~Our~~an ~~Product~~institution ~~Candidates~~it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients. Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee, or DSMB.

We have depended heavily on the success of our two product candidates, rocapuldencel-T and AGS-004. Clinical trials of our product candidates may not be successful. If we are unable to commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.41

WeHuman ~~currently~~clinical ~~have~~trials noare ~~products~~typically ~~approved~~conducted ~~for sale. We have invested a significant portion of our efforts and financial resources~~ in ~~the~~three ~~development of rocapuldencel-T for the treatment of metastatic renal cell carcinoma,~~sequential ~~or mRCC~~phases, ~~and~~which ~~other~~may ~~cancers~~overlap ~~and AGS-004 for the treatment of HIV. In February 2017, we announced that the Independent Data Monitoring Committee,~~ or ~~IDMC, for our pivotal Phase 3 ADAPT clinical trial of rocapuldencel-T in combination with sunitinib / standard-of-care for the treatment of mRCC recommended that the study~~ be discontinued for futility based on its planned interim data analysis. The IDMC concluded that the study was unlikely to demonstrate a statistically significant improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population, the primary endpoint of the study. In conjunction with our clinical and scientific advisors, we are analyzing the preliminary ADAPT trial data set and plan to discuss the data with the U.S. Food and Drug Administration, or FDA. We have continued the ADAPT trial while we conduct our ongoing data review and have discussions with FDA. We expect that we will make a determination as to the next steps for the rocapuldencel-T clinical program based on this review and discussions.combined:

~~Our~~• ~~ability~~Phase to1: ~~generate~~The ~~product~~drug ~~revenues,~~or ~~which~~biological wecandidate doproduct ~~not~~is ~~expect~~initially ~~will~~introduced ~~occur~~into ~~for~~healthy athuman ~~least the~~subjects ~~next~~or ~~several~~patients ~~years,~~with ifthe ~~ever,~~target ~~will~~disease ~~depend~~or ~~heavily~~condition onand ~~the~~tested ~~successful~~for ~~development~~safety, ~~and~~dosage ~~commercialization~~tolerance, ofabsorption, ~~our~~metabolism, ~~product candidates~~distribution, ~~including~~ ~~rocapuldencel-T~~excretion and, if wepossible, ~~determine~~ to ~~proceed~~gain ~~with~~an ~~its~~early ~~development.~~indication ~~The success~~ of ~~our~~its ~~product candidates will depend on several factors, including the following:~~effectiveness.

• ~~successful~~Phase ~~completion~~2: ofThe ~~clinical~~drug ~~trials,~~or ~~including~~biological ~~clinical~~candidate ~~results~~product ~~that~~is ~~are~~administered ~~statistically~~to ~~significant~~a aslimited ~~well~~patient aspopulation ~~clinically~~to ~~meaningful~~identify inpossible adverse effects and safety risks, to preliminarily evaluate the ~~context~~efficacy of the ~~indications~~product for ~~which~~specific wetargeted ~~are~~diseases ~~developing~~and ~~our~~to ~~product~~determine ~~candidates;~~dosage tolerance and optimal dosage.

• ~~receipt~~Phase 3: The drug or biological candidate product is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of ~~marketing~~the ~~approvals~~product ~~from~~for approval, to establish the ~~FDA~~overall risk-benefit profile of the product, and ~~similar~~to ~~regulatory~~provide ~~authorities~~adequate ~~outside~~information for the ~~United~~labeling ~~States;~~of the product.

•In ~~establishing~~some ~~commercial~~cases, ~~manufacturing~~the ~~capabilities~~FDA ~~through~~may approve an NDA for a product candidate but require the ~~lease,~~sponsor ~~build-out~~to conduct additional clinical trials to further assess the product candidate’s safety and ~~equipping~~effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These studies are used to gain additional experience from the treatment of a ~~facility~~larger ~~for~~number of patients in the ~~commercial~~intended ~~manufacture~~treatment group and to further document a clinical benefit in the case of ~~products~~drugs ~~based~~approved onunder ~~our~~accelerated ~~Arcelis~~approval ~~precision~~regulations. ~~immunotherapy~~Failure ~~technology~~to ~~platform;~~exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

•Progress ~~maintaining~~reports ~~patent~~detailing the results of the clinical trials must be submitted at least annually to the FDA and ~~trade~~more ~~secret~~frequently ~~protection~~if serious adverse events occur. Phase 1, Phase 2 and ~~regulatory~~Phase 3 ~~exclusivity~~clinical ~~for~~trials ~~our~~may ~~product~~not ~~candidates~~be completed successfully within any specified period, ~~both~~or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the ~~United~~IRB’s ~~States~~requirements ~~and~~or ~~internationally;~~if the drug has been associated with unexpected serious harm to patients.

•Information ~~launching~~about ~~commercial~~certain ~~sales~~clinical oftrials ~~the~~must ~~products,~~be ifsubmitted within ~~and~~specific ~~when~~timeframes ~~approved,~~to ~~whether~~the ~~alone~~NIH orfor inpublic ~~collaboration~~dissemination ~~with~~on ~~others;~~their ClinicalTrials.gov website.

•Special ~~commercial~~Protocol ~~acceptance~~Assessment. The SPA process is designed to facilitate the FDA’s review and approval of ~~our~~drug and biological products by allowing the FDA to evaluate the proposed design and size of Phase 3 clinical trials that are intended to form the primary basis for determining a drug or biological product’s efficacy. Upon specific request by a clinical trial sponsor, ifthe FDA will evaluate the trial protocol and ~~when~~respond to ~~approved~~a sponsor’s questions regarding, byamong ~~patients~~other things, primary efficacy endpoints, trial conduct and data analysis, within 45 days of receipt of the ~~medical~~request. ~~community~~The FDA ultimately assesses whether the trial protocol design and ~~third~~planned ~~party~~analysis ~~payors;~~of the trial adequately address objectives in support of a regulatory submission. All agreements and disagreements between the FDA and the sponsor regarding an SPA must be clearly documented in an SPA letter or the minutes of a meeting between the sponsor and the FDA.

•Even ~~obtaining~~if ~~and~~the ~~maintaining~~FDA ~~healthcare~~agrees ~~coverage~~to the design, execution and ~~adequate~~analyses proposed ~~reimbursement;~~in protocols reviewed under an SPA, the FDA may revoke or alter its agreement under the following circumstances:

• ~~effectively~~public ~~competing~~health ~~with~~concerns ~~other~~emerge ~~therapies;~~that ~~and~~were unrecognized at the time of the protocol assessment;

• a ~~continued~~sponsor ~~acceptable~~fails ~~safety~~to ~~profile~~follow ofa ~~the~~protocol ~~products~~that ~~following~~was ~~any~~agreed ~~marketing~~upon ~~approval.~~with the FDA;

If• wethe dorelevant ~~not~~data, ~~achieve~~assumptions, ~~one~~ or ~~more~~information ofprovided ~~these~~by ~~factors~~the sponsor in a ~~timely~~request ~~manner~~for orSPA atchange ~~all,~~are wefound ~~could experience~~to ~~significant~~be ~~delays~~false statements or anmisstatements ~~inability~~or toare ~~successfully~~found ~~commercialize~~to ~~our~~omit ~~product~~relevant ~~candidates,~~facts; ~~which would materially harm our business.~~or

If• ~~clinical~~the ~~trials~~FDA ~~of our product candidates, such as our ADAPT trial of rocapuldencel-T, fail to demonstrate safety~~ and ~~efficacy to~~ the ~~satisfaction~~sponsor ofagree ~~the~~in ~~FDA~~writing orto ~~similar~~modify ~~regulatory authorities outside~~ the ~~United~~trial ~~States or~~protocol doand ~~not~~such ~~otherwise~~modification ~~produce~~is ~~positive~~intended ~~results, we may incur additional costs or experience delays in completing, or ultimately be unable~~ to ~~complete,~~improve the ~~development and commercialization of our product candidates~~study.

Before obtaining regulatory approval for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more of our clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.42

32Marketing Approval. Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications. Every new product must be the subject of an approved application before it may be commercialized in the United States. Under federal law, the submission of most applications is subject to an application user fee, which for federal fiscal year 2018 is $2,421,495 for an application requiring clinical data. The sponsor of an approved application is also subject to an annual program fee, which for fiscal year 2018 is $304,162. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.

ToIn ~~date~~addition, weunder ~~have~~the ~~not~~Pediatric ~~completed~~Research aEquity ~~randomized~~Act ~~clinical trial~~ of ~~rocapuldencel-T against~~2003, ~~a placebo~~ or aPREA, ~~comparator~~as ~~therapy.~~amended ~~Our~~and ~~phase~~reauthorized, 2an ~~trial~~NDA, ofBLA ~~rocapuldencel-T~~or ~~was~~supplement ato ~~single~~an ~~arm~~NDA ~~trial~~or inBLA ~~which~~for ~~only~~certain 21types ~~patients received the combination~~ of ~~rocapuldencel-T~~new ~~and~~drug ~~sunitinib.~~or ~~Our~~biological ~~ADAPT~~products must ~~trial~~contain ofdata ~~rocapuldencel-T~~that isare aadequate ~~randomized trial designed~~ to ~~compare directly~~assess the ~~combination~~safety ~~of rocapuldencel-T~~ and ~~sunitinib~~effectiveness orof ~~another~~the ~~therapy~~drug ~~to treatment with sunitinib~~ or ~~another~~biological ~~therapy~~product ~~monotherapy. Under the protocol~~ for the ~~trial,~~claimed ~~the~~indications in ~~data~~all ~~from~~relevant ~~the~~pediatric ~~trial~~subpopulations, ~~needed~~and to ~~demonstrate~~support andosing ~~increase~~and inadministration ~~median~~for ~~overall~~each ~~survival~~pediatric ofsubpopulation ~~approximately six months~~ for ~~the~~which ~~rocapuldencel-T plus sunitinib / targeted therapy arm as compared to~~ the product ~~sunitinib~~is /safe ~~targeted~~and ~~therapy~~effective. ~~monotherapy control~~The ~~arm~~FDA inmay, ~~order~~on toits ~~show~~own ~~statistical~~initiative ~~significance~~or ~~and~~at ~~achieve~~ the ~~primary~~request ~~endpoint~~ of the ~~trial.~~applicant, ~~The~~grant ~~IDMC~~deferrals ~~concluded~~for ~~that the~~submission ~~study~~of ~~was~~some ~~unlikely~~or toall ~~demonstrate~~pediatric adata ~~statistically~~until ~~significant~~after ~~improvement~~approval inof ~~overall~~the ~~survival~~product infor ~~the~~use ~~combination~~in ~~treatment arm~~adults, ~~utilizing~~ ~~the~~or ~~intent-to-treat~~full ~~population,~~or ~~the~~partial ~~primary~~waivers ~~endpoint~~from of the ~~study~~pediatric data requirements. ~~However,~~Unless ~~even~~otherwise ~~demonstration~~required ofby ~~statistical~~regulation, ~~significance and achievement of~~ the ~~primary~~pediatric ~~endpoint~~data ofrequirements ~~the~~do ~~trial would~~ not ~~assure~~apply ~~approval~~to byproducts ~~the~~with ~~FDA or similar regulatory authorities outside~~orphan ~~the United States~~designation.

InThe ~~designing~~FDCA ~~the~~requires ~~ADAPT~~that ~~trial~~a wesponsor ~~considered~~who ~~other~~is ~~reported~~planning ~~clinical~~to ~~trials~~submit ~~and~~a marketing ~~data~~application ~~from the~~for ~~International~~a ~~Metastatic~~drug ~~Renal~~or ~~Cell~~biological ~~Carcinoma~~product ~~Database~~that ~~Consortium,~~includes ora ~~the~~new ~~Consortium.~~active ~~However~~ingredient, ~~results~~new ~~from~~indication, ~~two~~new ~~different~~dosage ~~trials~~form, ornew ~~between~~dosing aregimen ~~trial~~or ~~and~~new anroute ~~analysis~~ of aadministration ~~treatment~~submit ~~database~~an ~~often~~initial ~~cannot~~Pediatric beStudy ~~reliably~~Plan, ~~compared.~~or ~~Accordingly~~PSP, ~~patients~~within insixty ~~our~~days ~~ADAPT trial~~of ~~who~~an ~~received~~end-of-phase 2 ~~treatment~~meeting ~~with~~or ~~sunitinib~~as /may ~~targeted~~be ~~therapy~~agreed ~~monotherapy~~between ~~may~~the ~~not~~sponsor ~~have~~and ~~results~~FDA. ~~similar~~The toinitial ~~patients~~PSP ~~studied~~must ~~in other~~include ~~clinical~~an ~~trials~~outline of ~~sunitinib~~the orpediatric tostudy ~~patients~~or instudies that the ~~Consortium~~sponsor ~~database~~plans ~~who~~to ~~were~~conduct, ~~treated~~including ~~with~~study ~~sunitinib~~objectives orand ~~other~~design, ~~therapies. If~~age ~~the~~groups, ~~patients~~relevant inendpoints ~~our~~and ~~ADAPT~~statistical ~~trial~~approach, or ~~who~~a ~~received~~justification ~~sunitinib~~for /not ~~targeted~~including ~~therapy~~such ~~alone~~detailed ~~have~~information, ~~results~~and ~~which~~any ~~are~~request ~~better~~for ~~than~~a ~~the~~deferral ~~results that~~of ~~occurred~~pediatric inassessments ~~other~~or ~~clinical~~a ~~trials of sunitinib~~ full or ~~the~~partial ~~results~~waiver ~~described~~of in the ~~Consortium~~requirement ~~database,~~to weprovide ~~may~~data ~~not demonstrate a sufficient clinical benefit~~ from ~~rocapuldencel-T~~pediatric instudies ~~combination~~along with ~~sunitinib~~supporting ~~and~~information. ~~other~~FDA ~~therapies~~and ~~to allow~~ the ~~FDA to approve~~sponsor ~~rocapuldencel-T~~must ~~for~~reach ~~marketing.~~agreement ~~Moreover,~~on if the ~~patients~~PSP. inA ~~our~~sponsor ~~ADAPT~~can ~~trial~~submit ~~who~~amendments ~~received~~to ~~the~~an ~~combination of rocapuldencel~~agreed-Tupon ~~and sunitinib~~initial /PSP ~~targeted~~at ~~therapy~~any ~~have~~time ~~results~~if ~~which~~changes ~~are~~to ~~worse than~~ the ~~results~~pediatric plan ~~that~~need ~~occurred~~to inbe ~~our~~considered ~~Phase~~based 2on ~~clinical~~data ~~trial,~~collected ~~we may not demonstrate a sufficient benefit~~ from ~~the~~nonclinical ~~combination~~studies, ~~therapy~~early tophase ~~allow~~clinical ~~the~~trials, ~~FDA~~or toother ~~approve~~clinical ~~rocapuldencel-T for marketing~~development programs.

~~For~~The ~~drug and biological products, the~~ FDA ~~typically~~also ~~requires~~could ~~the~~require ~~successful~~submission ~~completion~~ of ~~two adequate and well-controlled clinical trials to support marketing approval because~~ a ~~conclusion~~risk ~~based~~evaluation ~~on two such trials~~and ~~will~~mitigation bestrategy, ~~more~~or ~~reliable than a conclusion based on a single trial. In the case of rocapuldencel-T~~REMS, weplan ~~intended~~ to ~~seek~~mitigate ~~approval~~any ~~based upon~~identified ~~the~~or ~~results~~suspected ofserious ~~a single pivotal Phase 3 clinical trial, our ADAPT trial, because rocapuldencel-T is intended for life threatening disease~~risks. The ~~FDA~~REMS ~~reviewed~~plan ~~our~~could ~~plans~~include ~~to conduct our ADAPT trial under its special protocol assessment~~medication guides, orphysician ~~SPA,~~communication ~~process. In February 2013~~plans, ~~the~~assessment ~~FDA advised us in a letter that it had completed its review of our~~ plans, ~~under~~and ~~the~~elements ~~SPA process. The FDA also informed us that in order for a single trial~~ to ~~support~~assure ~~approval~~safe ~~of an indication~~use, ~~the~~such ~~trial~~as ~~must~~restricted bedistribution ~~well conducted~~methods, ~~and the results of~~ ~~the~~patient ~~trial must be internally consistent~~registries, ~~clinically~~or ~~meaningful~~other ~~and~~risk ~~statistically~~minimization ~~persuasive~~tools.

InThe ~~February~~FDA ~~2017,~~conducts wea ~~announced~~preliminary ~~that~~review ~~the~~of ~~IDMC~~all ~~for~~NDAs ~~our~~and ~~pivotal~~BLAs ~~Phase~~within the 3first ~~ADAPT~~60 ~~clinical trial~~days ofafter ~~rocapuldencel-T~~submission inbefore ~~combination~~accepting ~~with~~them ~~sunitinib/standard-of-care~~ for ~~the~~filing ~~treatment~~to ofdetermine ~~mRCC~~whether ~~recommended~~they ~~that~~are ~~the~~sufficiently ~~study be~~complete ~~discontinued~~to ~~for~~permit substantive ~~futility~~review. ~~based~~The onFDA ~~its~~may ~~planned~~request ~~interim~~additional ~~data~~information ~~analysis.~~rather Wethan ~~have~~accept ~~continued~~an ~~the~~NDA ~~ADAPT~~or ~~trial~~BLA ~~while~~for wefiling. ~~conduct our~~In ~~ongoing~~this ~~data~~event, ~~review~~the application ~~and~~must ~~have~~be ~~discussions~~resubmitted with the ~~FDA~~additional information. WeThe ~~expect~~resubmitted ~~that~~application weis ~~will~~also ~~make~~subject ato ~~determination~~review asbefore to the FDA ~~next~~accepts ~~steps~~ it for filing. Once the ~~rocapuldencel-T~~submission ~~clinical~~is ~~program~~accepted ~~based~~for onfiling, ~~this~~the ~~review~~FDA ~~and~~begins ~~discussions~~an in-depth substantive review. ~~If,~~The ~~upon~~FDA ~~the~~reviews an ~~conclusion~~NDA ofor ~~our~~BLA ~~review~~to ofdetermine, ~~the data~~among ~~for~~other things, whether the ~~ADAPT~~product ~~trial~~is safe and ~~our~~effective ~~discussions~~(described ~~with~~as ~~the FDA~~safe, wepure ~~determine~~and ~~that~~potent ~~continued~~for BLAs) ~~development~~and ofthe ~~rocapuldencel-T~~facility in which it is ~~not warranted~~manufactured, weprocessed, ~~expect~~packaged ~~that~~or weheld ~~would~~meets ~~terminate~~standards ~~the~~designed ~~ADAPT~~to ~~trial~~assure ~~and~~the ~~our~~product’s continued ~~rocapuldencel-T~~safety, ~~development~~purity ~~program~~and potency. IfThe ~~instead~~FDA ~~we decide~~is required to ~~pursue~~refer ~~the~~an ~~development~~application offor ~~rocapuldencel-T,~~a ~~one~~novel drug or ~~more~~biological ~~additional~~product ~~clinical~~to ~~trials~~an advisory committee or ~~other~~explain ~~testing~~why issuch ~~highly~~referral ~~likely to~~was benot ~~necessary~~made. ~~Such~~An ~~additional~~advisory ~~clinical~~committee ~~trials~~is a panel of independent experts, including clinicians and other ~~testing~~scientific experts, that reviews, evaluates and ~~development~~provides ~~efforts~~a ~~may~~recommendation beas ~~complicated~~to ~~and~~whether ~~expensive~~the application should ~~and~~be ~~may~~approved ~~significantly~~and ~~delay~~under ~~our~~what ~~program~~conditions. ~~Moreover,~~The weFDA weis ~~may~~ not ~~have~~bound ~~sufficient~~by ~~resources~~the torecommendations ~~complete~~of ~~such~~an ~~further~~advisory committee, but it considers such ~~development~~recommendations ofcarefully ~~rocapuldencel-T~~when making decisions.

AsBefore aapproving ~~general~~an ~~matter,~~NDA ifor weBLA, ~~are~~the ~~required~~FDA totypically ~~conduct~~will ~~additional clinical~~inspect ~~trials~~the facility or ~~other~~facilities ~~testing~~where ofthe ~~our~~ product ~~candidates~~is ~~beyond~~manufactured. ~~those~~The ~~that~~FDA wewill ~~currently~~not ~~contemplate,~~approve ifan weapplication ~~are~~unless ~~unable~~it todetermines ~~successfully~~that ~~complete~~the ~~clinical~~manufacturing ~~trials~~processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of ~~our~~the product ~~candidates~~within orrequired ~~other~~specifications. ~~testing~~Additionally, ifbefore ~~the~~approving ~~results~~an ofNDA ~~these~~or ~~trials~~BLA, orthe ~~tests~~FDA ~~are~~will ~~not~~typically ~~positive~~inspect one or ~~are~~more ~~only~~clinical ~~modestly~~sites ~~positive~~to orassure ifcompliance ~~there~~with ~~are~~GCP ~~safety~~and ~~concerns,~~integrity weof ~~may:~~the clinical data submitted.

•The testing and approval process requires substantial time, effort and financial resources, and each may take several years to complete. Data obtained from clinical activities are not always conclusive and may be ~~delayed~~susceptible into ~~obtaining~~varying ~~marketing~~interpretations, which could delay, limit or prevent regulatory approval. ~~for~~The FDA may not grant approval on a timely basis, or at all. We may encounter difficulties or unanticipated costs in our efforts to develop our product candidates; and secure necessary governmental approvals, which could delay or preclude us from marketing our products.

~~• not obtain marketing approval at all;~~43

•If ~~obtain~~the FDA’s evaluation of the NDA or BLA and inspection of the manufacturing facilities and clinical trial sites are favorable, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical testing in order for ~~indications~~FDA to reconsider the application. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug or ~~patient~~biological ~~populations~~product with specific prescribing information for specific indications. Even with submission of this additional information, the FDA ultimately may decide that ~~are~~the application does not assatisfy ~~broad~~the asregulatory ~~intended~~criteria orfor ~~desired;~~approval.

•Even ~~obtain~~if ~~approval~~the ~~with~~FDA ~~labeling~~approves ~~that~~a ~~includes~~product, ~~significant~~it may limit the approved indications for use ~~restrictions~~for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety ~~warnings~~after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including ~~boxed~~distribution ~~warnings;~~restrictions or other risk management mechanisms, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

•Special beFDA ~~subject~~Expedited toReview ~~additional~~and ~~post-marketing~~Approval ~~testing requirements;~~Programs.

•The beFDA ~~subject~~is authorized to ~~restrictions~~designate oncertain ~~how~~products for expedited review if they are intended to address an unmet medical need in the ~~product~~treatment isof ~~distributed~~a serious or ~~used;~~life-threatening disease or condition. These programs are fast track designation, breakthrough therapy designation, priority review designation and regenerative advanced therapy designation. The FDA may also approve certain products on an accelerated basis. The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

•To ~~have~~be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product ~~removed~~is ~~from~~intended to treat a serious aspect of a serious or life threatening disease or condition and will fill an unmet medical need. The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors. For fast track products, sponsors may have greater interactions with the ~~market~~FDA ~~after~~and ~~obtaining~~the ~~marketing~~FDA ~~approval~~may initiate review of sections of a fast track product’s application before the application is complete.

33Under the provisions of the Food and Drug Administration Safety and Innovation Act, or FDASIA, enacted in 2012, a sponsor also can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug or biological product that is intended, alone or in combination with one or more other drugs or biological products, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Products designated as breakthrough therapies are also eligible for accelerated approval. The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development and review of an application for approval of a breakthrough therapy.

IfIn weaddition, ~~experience~~the ~~any~~FDA ofmay give a ~~number~~priority ofreview ~~possible~~designation to ~~unforeseen~~drugs ~~events~~or biological products that provide safe and effective therapy where no satisfactory alternative exists or a significant inimprovement ~~connection~~compared ~~with~~to ~~our~~marketed ~~clinical~~products ~~trials,~~in ~~potential~~the ~~marketing~~treatment, diagnosis or ~~commercialization~~prevention of ~~our~~a ~~product~~disease. ~~candidates~~For ~~could~~products regulated by the Center for Biologics Evaluation and Research, or CBER, the product must be ~~delayed~~intended to treat a serious or life threatening disease ~~prevented~~or condition. A priority review means that the targeted time for the FDA to review an application is six months, rather than ten months. Most products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review.

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates. For example, in February 2017, we announced that the IDMC for our pivotal Phase 3 ADAPT clinical trial of rocapuldencel-T in combination with sunitinib / standard-of-care for the treatment of mRCC recommended that the study be discontinued for futility based on its planned interim data analysis. Unforeseen events that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates include:44

•With ~~regulators~~passage of the 21st Century Cures Act, or ~~institutional~~the Cures Act, in December 2016, Congress authorized the FDA to accelerate review ~~boards~~and ~~may~~approval ~~not~~of ~~authorize~~products usdesignated oras ~~our~~regenerative ~~investigators~~advanced therapies. toA ~~commence~~product is eligible for this designation if it is a ~~clinical~~regenerative ~~trial~~medicine therapy that is intended to treat, modify, reverse or ~~conduct~~cure a serious or life-threatening disease or condition and preliminary clinical ~~trial~~evidence atindicates that the product candidate has the potential to address unmet medical needs for such disease or condition. The benefits of a ~~prospective~~regenerative ~~trial~~advanced therapy ~~site;~~designation include early interactions with the FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

•Finally, wethe FDA may ~~have~~grant ~~delays~~accelerated inapproval ~~reaching~~to a product for a serious or ~~fail~~life-threatening condition that provides meaningful therapeutic advantage to ~~reach~~patients ~~agreement~~over existing treatments based upon a determination that the product has an effect on ~~acceptable~~a surrogate endpoint that is reasonably likely to predict clinical benefit. ~~trial~~The ~~contracts~~FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality and that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical ~~trial~~benefit, ~~protocols~~taking ~~with~~into ~~prospective~~account ~~trial~~the ~~sites;~~severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

•Even ~~clinical~~if ~~trials~~a product qualifies for one or more of ~~our~~these ~~product~~programs, the ~~candidates~~FDA may ~~produce~~later ~~negative~~decide orthat ~~inconclusive~~the ~~results,~~product ~~and~~no welonger ~~may~~meets ~~decide,~~the orconditions ~~regulators~~for ~~may~~qualification ~~require~~or ~~us,~~decide tothat ~~conduct~~the ~~additional~~time ~~clinical~~period ~~trials~~for FDA review or ~~abandon~~approval ~~product~~will ~~development~~not ~~programs;~~be shortened.

•Post-Approval ~~the~~Requirements. Any ~~number~~drug ofor ~~patients~~biological products ~~required~~manufactured ~~for~~or ~~clinical~~distributed ~~trials~~by ofus ~~our~~pursuant ~~product~~to ~~candidates~~FDA ~~may~~approvals beare ~~larger~~subject ~~than~~to wepervasive ~~anticipate,~~and ~~enrollment~~continuing inregulation ~~these~~by ~~clinical~~the FDA, ~~trials~~including, ~~may~~among beother ~~slower~~things, ~~than~~requirements werelating ~~anticipate~~to orrecordkeeping, ~~participants~~periodic ~~may~~reporting, ~~drop~~product ~~out~~sampling ofand ~~these clinical trials at a higher rate than we anticipate; for example~~distribution, advertising inand ~~our~~promotion ~~Phase~~and 2breporting ~~clinical trial~~ of ~~AGS-004,~~adverse weexperiences ~~experienced~~with athe ~~higher~~product. ~~dropout~~After ~~rate~~approval, ~~than~~most wechanges ~~anticipated due~~ to the ~~higher~~approved ~~than~~product, such ~~expected~~as ~~number~~adding ofnew ~~patients~~indications ~~who~~or ~~did~~other ~~not~~labeling ~~complete~~claims ~~the~~are ~~full~~subject 12to ~~week~~prior ~~antiretroviral~~FDA ~~treatment~~review ~~interruption~~and ~~required by the protocol for the trial;~~approval.

•The ~~our~~FDA ~~third~~may ~~party~~impose ~~contractors~~a ~~may~~number ~~fail~~of topost-approval ~~comply~~requirements ~~with~~as a ~~regulatory~~condition ~~requirements~~of approval of an NDA or ~~meet~~BLA. ~~their~~For ~~contractual~~example, ~~obligations~~the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to usfurther assess and monitor the product’s safety and effectiveness after commercialization. Regulatory approval of oncology products often requires that patients in aclinical ~~timely~~trials ~~manner,~~be orfollowed atfor ~~all;~~long periods to determine the overall survival benefit of the drug or biologic.

•In weaddition, ~~may~~drug ~~decide,~~manufacturers orand ~~regulators~~other orentities ~~institutional~~involved in ~~review~~the ~~boards~~manufacture ~~may~~and ~~require~~distribution usof orapproved ~~our~~drugs ~~investigators~~and biological products are required to, ~~suspend~~register ortheir ~~terminate~~establishments ~~clinical~~with the ~~research~~FDA ~~for~~and ~~various~~state ~~reasons~~agencies, ~~including~~and ~~noncompliance~~are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with ~~regulatory~~cGMP requirements. orChanges ato ~~finding~~the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the ~~participants~~area ~~are~~of ~~being~~production ~~exposed~~and quality control to ~~unacceptable~~maintain ~~health~~cGMP ~~risks;~~compliance.

•A product may also be subject to official lot release, meaning that the ~~cost~~manufacturer ofis ~~clinical~~required ~~trials~~to perform certain tests on each lot of ~~our~~the product ~~candidates~~before it is released for distribution. If the product is subject to official release, the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may bein ~~greater~~addition ~~than~~perform wecertain ~~anticipate;~~confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory research related to the safety, purity, potency and effectiveness of pharmaceutical products.

~~• the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate.~~45

InOnce ~~addition,~~an ~~the~~approval ~~patients~~is ~~recruited~~granted, ~~for~~the ~~clinical~~FDA ~~trials~~may ofwithdraw ~~our~~the ~~product candidates may~~approval ~~have~~if acompliance ~~disease~~with ~~profile~~regulatory orrequirements ~~other characteristics that are different than we expect~~ and ~~different~~standards ~~than~~is ~~the~~not ~~clinical~~maintained ~~trials~~or ~~were designed~~if ~~for,~~problems ~~which~~occur ~~could~~after ~~adversely impact~~ the ~~results~~product ofreaches the ~~clinical trials~~market. ~~For instance, our Phase 2 combination therapy clinical~~ ~~trial~~Later discovery of ~~rocapuldencel-T~~previously inunknown ~~combination~~problems with ~~sunitinib~~a ~~was~~product, ~~originally~~including ~~designed~~adverse toevents ~~enroll~~of ~~patients~~unanticipated ~~with~~severity ~~favorable~~or ~~disease risk~~frequency, ~~profiles~~or ~~and intermediate disease risk profiles and~~ with amanufacturing ~~primary endpoint of complete response rate. However~~processes, ~~the~~or ~~actual~~failure ~~trial population~~to ~~consisted~~comply ~~entirely of patients~~ with ~~intermediate~~regulatory ~~disease risk profiles and poor disease risk profiles. This is a population for which published research has shown that sunitinib alone~~requirements, asmay ~~well~~result asin ~~other~~revisions ofto the ~~therapies~~approved ~~for mRCC, rarely if ever produce~~labeling ~~complete~~to ~~responses~~add innew ~~mRCC,~~safety ~~and~~information; inimposition ~~our~~of ~~Phase~~post-market 2studies or clinical ~~trial~~trials into ~~this~~assess ~~population,~~new ~~the~~safety ~~combination~~risks; ~~therapy~~or ofimposition ~~rocapuldencel-T and~~of ~~sunitinib~~distribution ~~did~~or ~~not~~other ~~show~~restrictions under a ~~complete~~REMS ~~response~~program. ~~rate~~Other ~~that~~potential ~~met~~consequences ~~the~~include, ~~endpoint~~among ofother ~~the trial.~~things:

~~Our~~• restrictions ~~product~~on ~~development~~the ~~costs will also increase if we experience delays in testing or obtaining~~ marketing ~~approvals. We do not know whether any clinical trials will begin as planned, will need to be restructured~~ or ~~will~~manufacturing ~~be completed on schedule, or at all. For example, in response to our submission~~ of ~~an investigational~~ ~~new drug application, or IND, for AGS-004,~~ the ~~FDA raised safety concerns regarding the analytical treatment interruption contemplated by our protocol for our Phase 2 clinical trial of AGS-004~~product, ~~and~~complete ~~required~~withdrawal a one-year safety follow-up after the final dose for each patient. This resulted in the need for an amendment to the trial protocol and a four-month delay prior to initiating the Phase 2 clinical trial in the United States. In addition, the IDMC for our pivotal Phase 3 ADAPT clinical trial of ~~rocapuldencel-T in combination with sunitinib/standard-of-care for~~ the ~~treatment~~product offrom ~~mRCC recommended that~~ the ~~study be~~market discontinued for futility based on its planned interim data analysis. We plan to discuss the data with the FDA and, based on further data analysis and such discussions, expect to make a determination as to the next steps for the rocapuldencel-T clinical program. If we decide to continue to pursue the development of rocapuldencel-T, one or ~~more~~product ~~additional clinical trials or other testing is highly likely to be necessary, which may be complicated and expensive.~~recalls;

~~In addition to additional costs~~• fines, ~~significant~~warning ~~clinical~~letters ~~trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates~~ or ~~allow~~holds ~~our~~on ~~competitors~~post-approval ~~to bring~~clinical ~~products to market before we do and impair our ability to commercialize our product candidates and may harm our business and results of operations.~~trials;

~~The~~• refusal ~~FDA has reviewed the protocol for our ADAPT trial~~ of ~~rocapuldencel-T in combination with sunitinib / targeted therapy under~~ the ~~SPA process. However, agreement by the~~ FDA ~~with~~to ~~the~~approve ~~protocol~~pending ~~under the SPA process~~applications ~~would~~or ~~not~~supplements ~~guarantee~~to ~~the~~approved ~~FDA will grant marketing approval~~applications, ~~even~~or ifsuspension ~~rocapuldencel-T~~or ~~had~~revocation ~~achieved the~~of ~~primary~~product ~~endpoint~~license ~~in the ADAPT trial.~~approvals;

~~The~~• product ~~FDA~~seizure ~~has~~or ~~reviewed~~detention, ~~under~~or ~~the~~refusal ~~SPA process, the protocol for our ADAPT trial of rocapuldencel-T in combination with sunitinib / targeted therapy. The SPA process is designed~~ to ~~facilitate~~ permit the ~~FDA’s~~import ~~review~~or ~~and~~export ~~approval~~ of ~~drug and biological~~ products; ~~by allowing the FDA to evaluate the proposed design and size of Phase 3 clinical trials that are intended to form the primary basis for determining a drug candidate’s efficacy.~~or

34• injunctions or the imposition of civil or criminal penalties.

InThe ~~February 2012, we received a letter from the~~ FDA ~~advising~~strictly usregulates ~~that~~marketing, ~~the~~labeling, ~~FDA had completed~~advertising ~~its~~and ~~review~~promotion of ~~our~~products ~~protocol~~that ~~for~~are ~~the~~placed ~~ADAPT~~on ~~trial under~~ the ~~SPA process~~market. InDrugs ~~the~~may ~~letter,~~be ~~the~~promoted ~~FDA~~only ~~stated~~for ~~that it had determined that~~ the ~~protocol~~approved ~~sufficiently~~indications ~~addressed the trial’s objectives~~ and ~~that~~in accordance with the ~~trial~~provisions ~~was~~of ~~adequately designed to provide~~ the ~~necessary data~~approved ~~to support a submission for marketing approval~~label. ~~However,~~The inFDA ~~February~~and ~~2017,~~other weagencies ~~announced~~actively ~~that~~enforce the ~~IDMC~~laws ~~for~~and ~~our~~regulations ~~ADAPT~~prohibiting ~~clinical~~the ~~trial~~promotion of ~~rocapuldencel-T~~off inlabel ~~combination~~uses, ~~with~~and ~~sunitinib~~a /company ~~standard-of-care recommended~~ that ~~the~~is ~~study~~found beto ~~discontinued~~have ~~for~~improperly ~~futility based~~promoted onoff ~~its~~label ~~planned~~uses ~~interim~~may ~~data~~be ~~analysis.~~subject ~~The IDMC concluded that the study was unlikely~~ to ~~demonstrate a statistically~~ significant ~~improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population, the primary endpoint of the study~~liability.

~~However,~~If ~~even~~a ifcompany ~~rocapuldencel-T~~is ~~had~~found ~~achieved~~to ~~the~~have ~~primary~~promoted ~~endpoint~~off-label inuses, ~~the~~it ~~ADAPT trial,~~may anbecome ~~SPA~~subject ~~does~~to ~~not~~adverse ~~guarantee~~public ~~that~~relations ~~rocapuldencel-T~~and ~~would~~administrative ~~have~~and ~~received~~judicial ~~marketing~~enforcement ~~approval.~~by ~~The~~the FDA ~~may raise issues related to safety~~, ~~trial~~ ~~conduct, bias, deviation from~~ the ~~protocol,~~Department ~~statistical~~of ~~power~~Justice, ~~patient~~or the ~~completion~~Office ~~rates,~~of ~~changes~~the inInspector ~~scientific~~General orof ~~medical parameters~~the orDepartment ~~internal~~of ~~inconsistencies~~Health inand ~~the~~Human ~~data~~Services, ~~prior~~as towell ~~making~~as ~~its~~state ~~final decision~~authorities. ~~The~~This ~~FDA~~could ~~may~~subject a ~~also~~company ~~seek~~to ~~the~~a ~~guidance~~range of ~~an outside~~penalties ~~advisory~~that ~~committee~~could ~~prior~~have toa ~~making~~significant ~~its~~commercial ~~final~~impact, ~~decision.~~including ~~Many~~civil ~~companies~~and ~~which~~criminal ~~have~~fines ~~been~~and ~~granted~~agreements that ~~SPAs~~materially ~~have~~restrict ~~ultimately~~the ~~failed to~~manner ~~obtain~~in ~~final~~which ~~approval~~a tocompany ~~market~~promotes ~~their~~or distributes drug products.

In ~~its February 2012 letter~~addition, the ~~FDA~~distribution ~~informed~~of usprescription ~~that~~pharmaceutical products inis ~~order~~subject ~~for a single trial~~ to ~~support~~ ~~approval of an indication,~~ the ~~trial~~Prescription ~~must~~Drug beMarketing ~~well conducted~~Act, ~~and~~or ~~the results of the trial must be internally consistent~~PDMA, ~~clinically~~ ~~meaningful~~ and ~~statistically~~its ~~very~~implementing ~~persuasive.~~regulations, Ifas ~~the~~well ~~results~~as ~~for~~ the ~~primary~~Drug ~~endpoint~~Supply Chain ~~are~~Security ~~not robust~~Act, ~~are~~or ~~subject to confounding factors~~DSCA, orwhich ~~are~~regulate ~~not~~the ~~adequately~~distribution ~~supported~~and bytracing ~~other~~of ~~trial~~prescription ~~endpoints,~~drugs ~~the~~and ~~FDA~~prescription ~~may~~drug ~~refuse~~samples toat the ~~approve~~federal ~~our~~level, ~~BLA~~and ~~based~~set ~~upon a~~minimum ~~single~~standards ~~clinical~~for ~~trial.~~the ~~Particularly~~regulation ~~in light~~ of ~~the~~drug ~~recommendation~~distributors by the ~~IDMC~~states. ~~that~~The ~~the~~PDMA, ~~ADAPT~~its ~~trial~~implementing regulations beand ~~terminated~~state ~~for~~laws ~~futility with~~limit ~~regard to~~ the ~~primary~~distribution ~~endpoint,~~of itprescription ispharmaceutical ~~highly~~product ~~unlikely~~samples, ~~even~~and if the ~~ADAPT~~DSCA ~~trial~~imposes ~~were continued and subsequent data were more~~requirements ~~favorable,~~to ~~that~~ensure ~~the~~accountability ~~FDA~~in ~~would~~distribution ~~not~~and ~~require~~to ~~one~~identify orand ~~more~~remove ~~additional~~counterfeit ~~clinical~~and ~~trials~~other ~~before,~~illegitimate orproducts asfrom athe ~~condition for, approving rocapuldencel-T~~market.

IfBiosimilars weand ~~experience~~Non-Patent ~~delays~~Exclusivity. The 2010 Patient Protection and Affordable Care Act, which was signed into law on March 23, 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009 or ~~difficulties~~BPCIA. inThat Act established a regulatory scheme authorizing the ~~enrollment~~FDA to approve biosimilars and interchangeable biosimilars. As of ~~patients~~January in1, ~~our~~2018, ~~clinical~~the FDA has approved nine biosimilar products for use in the ~~trials~~United States. No interchangeable biosimilars, ~~our~~have ~~receipt~~been approved. The FDA has issued several guidance documents outlining an approach to review and approval of ~~necessary~~biosimilars. ~~regulatory~~Additional ~~approvals~~guidances ~~could~~are expected to be ~~delayed~~finalized orby ~~prevented~~FDA in the near term.

WeUnder ~~may~~the ~~not~~Act, bea ~~able~~manufacturer tomay ~~initiate~~submit oran ~~continue~~application ~~clinical~~for licensure ~~trials~~of ~~for~~a ~~our~~biologic product ~~candidates if~~that weis ~~are~~“biosimilar ~~unable~~ to” ~~locate~~or ~~and~~“interchangeable ~~enroll~~with” a ~~sufficient~~previously ~~number~~approved biological ofproduct ~~eligible~~or ~~patients~~“reference product.” In order for the FDA to ~~participate~~approve ina ~~these~~biosimilar ~~trials~~product, asit ~~required~~must byfind ~~the~~that ~~FDA~~there orare ~~similar~~no ~~regulatory~~clinically ~~authorities~~meaningful ~~outside~~differences between the ~~United~~reference ~~States.~~product Inand ~~particular~~proposed biosimilar product in terms of safety, purity ifand wepotency. ~~determine~~For the FDA to ~~proceed~~approve a biosimilar product as interchangeable with ~~the~~a ~~development of~~reference ~~rocapuldencel-T~~product, ~~after~~the ~~analyzing~~agency must find that the ~~preliminary~~biosimilar ~~ADAPT~~product ~~trial~~can ~~data~~be ~~set~~expected ~~and~~to ~~discussing~~produce the ~~data~~same ~~with~~clinical results as the ~~FDA~~reference product, ~~the~~and ~~recommendation~~(for products administered bymultiple times) that the ~~IDMC~~biologic ~~that~~and the ~~ADAPT~~reference ~~study~~biologic may be ~~terminated~~switched ~~for~~after ~~futility~~one ~~may~~has ~~negatively~~been ~~impact~~previously ~~our~~administered ~~ability~~without increasing tosafety ~~enroll~~risks ~~patients~~or inrisks ~~ongoing~~of ~~and future~~diminished ~~clinical~~efficacy ~~trials~~relative to exclusive use of ~~rocapuldencel-T~~the reference biologic.

~~Our~~Under ~~competitors~~the ~~may~~BPCIA, ~~have~~an ~~ongoing~~application ~~clinical~~for ~~trials~~a ~~for~~biosimilar product ~~candidates~~may not ~~that~~be ~~could~~submitted ~~be competitive~~to ~~with~~the ~~our~~FDA ~~product~~until ~~candidates,~~four ~~and~~years ~~patients~~following ~~who~~the ~~would~~date ~~otherwise~~of beapproval ~~eligible~~of ~~for~~the ~~our~~reference ~~clinical~~product. ~~trials~~The FDA may ~~instead~~not ~~enroll~~approve a inbiosimilar ~~clinical~~product ~~trials~~until of12 years ~~our~~from ~~competitors’~~the date on which the reference product ~~candidates~~was approved. ~~For~~We ~~example~~believe that our investigational products, ~~during~~if ~~the~~approved ~~Phase~~via ~~1/2~~full ~~monotherapy~~BLAs, ~~clinical~~will ~~trial of~~be ~~rocapuldencel-T~~considered ~~that~~“reference weproducts” ~~conducted,~~that ~~our~~are ~~ability~~entitled to ~~enroll~~both ~~patients~~four-year inand twelve-year exclusivity under the ~~trial~~BPCIA. ~~was~~Even ~~adversely~~if ~~affected~~a byproduct is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s ~~approval~~ ofown ~~sorafenib~~preclinical data and ~~sunitinib,~~data ~~because~~from ~~patients~~adequate ~~did~~and ~~not~~well-controlled ~~want~~clinical trials to ~~receive~~demonstrate the safety, purity and ~~physicians~~potency ~~were~~of their ~~reluctant~~product. toThe ~~administer,~~BPCIA ~~rocapuldencel-T as~~also ancreated ~~experimental~~certain ~~monotherapy~~exclusivity ~~once~~periods ~~new~~for ~~therapies~~biosimilars ~~that~~approved ~~showed~~as ~~efficacy~~interchangeable inproducts. ~~clinical~~At ~~trials~~this juncture, ~~were~~it ~~introduced~~is tounclear whether products deemed “interchangeable” by the ~~market~~FDA ~~and~~will, ~~became~~in fact, be readily substituted ~~widely~~by ~~available~~pharmacies, which are governed by state pharmacy law.

~~Patient enrollment is affected by other factors including:~~46

•Pediatric ~~severity~~Exclusivity. Pediatric exclusivity is another type of non-patent exclusivity in the ~~disease~~United ~~under~~States ~~investigation~~and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or patent protection, including the non-patent and orphan exclusivity. This six-month exclusivity may be granted if an application sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.

•Orphan ~~eligibility~~Drug ~~criteria~~Designation and Exclusivity. Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug (including a biologic) intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the ~~trial~~cost of developing and making available in ~~question;~~the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

•If ~~perceived~~a ~~risks~~product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA or full BLA, to market the same drug for the same indication for seven years. For purposes of small molecule drugs, the FDA defines “same drug” as a drug that contains the same active moiety and ~~benefits~~is intended for the same use as the previously approved orphan drug. For purposes of large molecule drugs, the ~~product~~FDA ~~candidate~~defines ~~under~~“same ~~study;~~drug” as a drug that contains the same principal molecular structural features, but not necessarily all of the same structural features, and is intended for the same use as the drug in question. Notwithstanding the above definitions, a drug that is clinically superior to an orphan drug will not be considered the “same drug” and thus will not be blocked by orphan drug exclusivity.

•Orphan ~~efforts~~exclusivity todoes ~~facilitate~~not ~~timely~~block ~~enrollment~~the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for different indications. If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity. Orphan exclusivity will also not bar approval of another product under certain circumstances, including if a subsequent product with the same product for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand. This is the case despite an earlier court opinion holding that the Orphan Drug Act unambiguously required the FDA to recognize orphan exclusivity regardless of a showing of clinical ~~trials;~~superiority.

•The ~~patient~~21st ~~referral~~Century ~~practices~~Cures Act. On December 13, 2016, the 21st Century Cures Act, or Cures Act, was enacted into law. The Cures Act is designed to modernize and personalize healthcare, spur innovation and research, and streamline the discovery and development of ~~physicians;~~new therapies through increased federal funding of particular programs. It authorizes increasing funding for the FDA to spend on innovation projects. The new law also amends the Public Health Service Act, or PHSA, to reauthorize and expand funding for the NIH. The Act establishes the NIH Innovation Fund to pay for the cost of development and implementation of a strategic plan, early stage investigators and research. It also charges the NIH with leading and coordinating expanded pediatric research. Further, the Cures Act directs the Centers for Disease Control and Prevention to expand surveillance of neurological diseases.

~~• the ability to monitor patients adequately during and after treatment; and~~47

•With ~~proximity~~amendments to the FDCA and ~~availability~~the PHSA, Title III of ~~clinical~~the ~~trial~~Cures Act ~~sites~~seeks to accelerate the discovery, development, and delivery of new medicines and medical technologies. To that end, and among other provisions, the Cures Act reauthorizes the existing priority review voucher program for ~~prospective~~certain ~~patients~~products intended to treat rare pediatric diseases until 2020; creates a new priority review voucher program for product applications determined to be material national security threat medical countermeasure applications; revises the FDCA to streamline review of combination product applications; requires the FDA to evaluate the potential use of “real world evidence” to help support approval of new indications for approved products; provides a new “limited population” approval pathway for antibiotic and antifungal products intended to treat serious or life-threatening infections; and authorizes the FDA to designate a product as a “regenerative advanced therapy,” thereby making it eligible for certain expedited review and approval designations.

~~The~~Health ~~actual~~care ~~amount~~Law of time for full enrollment of our clinical trials could be longer than planned. Enrollment delays in any of our clinical trials may result in increased development costs for our product candidates, which would cause the value of the company to decline and limit our ability to obtain additional financing. Our inability to enroll a sufficient number of patients for any of our other clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.Regulation

WeHealth ~~are~~care ~~developing~~providers and ~~AGS~~third-~~004~~party ~~for~~payors ~~use~~play ina ~~combination~~primary ~~with~~role ~~latency~~in ~~reversing~~the ~~drugs to~~recommendation ~~eradicate~~and ~~HIV.~~prescription Ifof ~~latency~~drug ~~reversing~~products ~~drugs~~that are ~~not~~granted ~~successfully~~marketing ~~developed~~approval. Arrangements ~~for~~with ~~HIV~~providers, ~~on a timely basis or at all~~consultants, ~~we will be unable to develop AGS~~third-~~004~~party ~~for~~payors ~~this~~and ~~use~~customers orare ~~will~~subject beto ~~delayed~~broadly inapplicable ~~doing~~fraud ~~so.~~and ~~In addition~~abuse, ~~because there are currently no products approved~~anti-kickback, ~~for~~false ~~HIV~~claims ~~eradication~~laws, wepatient ~~cannot~~privacy belaws ~~certain~~and ofregulations ~~the~~and ~~clinical~~other ~~trials~~health ~~that~~care welaws ~~will~~and ~~need~~regulations tothat ~~conduct~~may orconstrain ~~the regulatory requirements that~~business weand/or ~~will~~financial ~~need~~arrangements. toRestrictions ~~satisfy~~under inapplicable ~~order~~federal toand ~~obtain~~state ~~marketing~~health ~~approval~~care oflaws ~~AGS-004~~and ~~for~~regulations, ~~this~~include ~~purpose.~~the following:

We· ~~are~~the ~~focusing~~federal ~~our~~Anti-Kickback ~~development~~Statute, ~~program~~which ~~for~~prohibits, ~~AGS-004~~among onother ~~the~~things, ~~use~~persons ofand ~~AGS-004~~entities infrom ~~combination with~~knowingly ~~latency~~and ~~reversing~~willfully ~~drugs~~soliciting, ~~including~~offering, ~~Vorinostat~~paying, toreceiving ~~eradicate~~or ~~HIV.~~providing Weremuneration, ~~plan~~directly toor ~~rely~~indirectly, onin ~~these~~cash ~~latency~~or ~~reversing~~in ~~drugs~~kind, ~~because we~~to ~~recognize~~induce ~~that~~or ~~the~~reward ~~ultimate~~either ~~objective~~the referral of ~~virus~~an ~~eradication~~individual isfor, ~~unlikely~~or tothe bepurchase, ~~achieved~~order ~~with~~or ~~immunotherapy~~recommendation ~~alone~~of, ~~because~~any ~~the immune~~good ~~system~~or isservice, ~~not~~for ~~able~~which topayment ~~recognize~~may ~~the~~be ~~HIV~~made, ~~virus~~ in ~~latently~~whole ~~infected~~or ~~cells~~in ~~with~~part, under a ~~low~~federal ~~level~~health orcare ~~lack~~program ofsuch ~~expression~~as ofMedicare ~~HIV antigens.~~and Medicaid;

35· the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government.

~~Several~~· ~~companies~~the ~~and~~federal ~~academic~~Health ~~groups~~Insurance ~~are~~Portability ~~evaluating latency reversing drugs that can potentially activate latently infected cells to increase viral antigen expression~~ and ~~make~~Accountability ~~the~~Act ~~cells~~of ~~vulnerable~~1996, ~~to elimination by the immune system. We are not a party to any arrangements with these companies~~ or ~~academic~~HIPAA, ~~groups.~~which Ifcreated ~~these~~additional ~~companies~~federal orcriminal ~~academic groups~~laws ~~determine~~that ~~not~~prohibit, toamong ~~develop~~other ~~latency~~things, ~~reversing~~knowingly ~~drugs~~and ~~for~~willfully ~~this purpose because the drugs do not sufficiently increase viral antigen expression or have unacceptable toxicities~~executing, or ~~these~~attempting ~~companies or academic groups otherwise determine~~ to ~~collaborate~~execute, ~~with other developers of immunotherapies on~~ a ~~combination~~scheme ~~therapy~~to ~~for~~defraud ~~complete~~any ~~virus~~health ~~eradication,~~care webenefit ~~will not be able to complete our AGS-004 development~~ program. ~~In addition, if these companies~~ or ~~academic~~making ~~groups~~false dostatements ~~not~~relating ~~proceed~~to ~~with~~health ~~such~~care ~~development on a timely basis, our AGS-004 program correspondingly would be delayed.~~matters;

A· number of the latency reversing drugs being evaluated for use in HIV patients are currently approved in the United States and elsewhere for use in the treatment of specified cancer indications. For instanceHIPAA, ~~Vorinostat~~ isas ~~approved~~amended ~~for cutaneous T-cell lymphoma. If these drugs are not approved~~ by the ~~FDA~~Health orInformation ~~equivalent~~Technology ~~foreign regulatory authorities~~ for ~~use~~Economic ~~in HIV, the FDA~~ and ~~these~~Clinical ~~other~~Health ~~regulatory~~Act, ~~authorities may not approve AGS-004 without the latency reversing drug having received marketing approval for HIV. If the FDA~~ and ~~these~~their ~~other~~respective ~~regulatory~~implementing ~~authorities~~regulations, ~~approve~~including ~~AGS-004 without~~ the ~~approval~~ ofFinal ~~the~~Omnibus ~~latency~~Rule ~~reversing~~published ~~drug~~in ~~for~~January ~~HIV~~2013, ~~the~~which ~~use~~impose ~~of AGS-004 in combination with the latency reversing drug for virus eradication would require sales of the latency reversing drug for off-label use. In such event~~obligations, ~~the~~including ~~success~~mandatory ofcontractual ~~the combination of AGS-004 and the latency reversing drug would be subject to the willingness of physicians~~terms, ~~patients,~~with ~~healthcare~~respect ~~payors and others in the medical community~~ to ~~use~~safeguarding the ~~latency~~privacy, ~~reversing~~security ~~drug for off-label use~~ and transmission of ~~government~~individually ~~authorities~~identifiable ~~and~~health third party payors to pay for the combination therapy. In addition, we would be limited in our ability to market the combination for its intended use if the latency reversing drug were to be used off-label.information;

~~Currently,~~· ~~there are no products approved for~~ the ~~eradication~~federal offalse ~~HIV.~~statements ~~As a result~~statute, ~~we cannot~~which beprohibits ~~certain~~knowingly asand towillfully ~~the~~falsifying, ~~clinical~~concealing ~~trials~~·or wecovering ~~will~~up ~~need~~a tomaterial ~~conduct~~fact or ~~the~~making ~~regulatory~~any ~~requirements~~materially ~~that~~false westatement ~~will need to satisfy~~ in ~~order~~connection towith ~~obtain~~the ~~marketing~~delivery ~~approval~~ of ~~AGS-004~~or payment for ~~the~~health ~~eradication~~care ofbenefits, ~~HIV.~~items or services;

If· ~~serious~~the ~~adverse~~federal ortransparency ~~inappropriate~~requirements ~~side~~known ~~effects~~as ~~are~~the ~~identified~~federal ~~during~~Physician Payments Sunshine Act, under the ~~development of~~Patient ~~our~~Protection ~~product~~and ~~candidates~~Affordable Care Act, weas ~~may~~amended ~~need~~by the Health Care Education Reconciliation Act, or the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to ~~abandon~~report annually to the Centers for Medicare & Medicaid Services, or ~~limit~~CMS, ~~our~~within ~~development~~the United States Department of ~~some~~Health and Human Services, information related to payments and other transfers of ~~our~~value ~~product~~made ~~candidates.~~by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and

~~All~~· ofanalogous ~~our~~state ~~product~~and ~~candidates~~foreign ~~are~~laws ~~still~~and inregulations, ~~preclinical~~such oras ~~clinical~~state ~~development~~anti-kickback and ~~their risk~~false ofclaims failure is high. It is impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval. If our product candidates are associated with undesirable side effects or have characteristics that are unexpectedlaws, wewhich may ~~need~~apply to ~~abandon~~health ~~their~~care ~~development~~items or ~~limit~~services ~~development~~that ~~to certain uses or subpopulations in which the undesirable side effects or other characteristics~~ are ~~less~~reimbursed ~~prevalent,~~by ~~less~~non-government ~~severe or more acceptable from a risk~~third-~~benefit~~party ~~perspective. In addition~~payors, ~~such~~including ~~effects~~private or characteristics could cause an institutional review board or regulatory authorities to interrupt, delay or halt clinical trials of one or more of our product candidates, require us to conduct additional clinical trials or other tests or studies, and could result in a more restrictive label, or the delay or denial of marketing approval by the FDA or comparable foreign regulatory authoritiesinsurers.

Our Arcelis-based product candidates are immunotherapies that are based on a novel technology utilizing a patient’s own tissue. This may raise development issues that we may not have anticipated or be able to resolve, regulatory issues that could delay or prevent approval or personnel issues that may prevent us from further developing and commercializing our product candidates.48

~~Rocapuldencel-T~~ Some ~~and~~state laws ~~AGS-004~~require ~~are~~pharmaceutical ~~based~~companies onto ~~our~~comply ~~novel~~with ~~Arcelis precision immunotherapy technology platform. In~~ the ~~course~~pharmaceutical ofindustry’s ~~developing~~voluntary ~~this~~compliance ~~platform~~guidelines and ~~these product candidates, we have encountered difficulties in~~ the ~~development~~ ~~process.~~relevant ~~For~~compliance ~~example,~~guidance wepromulgated ~~terminated~~by the ~~development~~federal ofgovernment ~~MB-002,~~in ~~the~~addition ~~predecessor~~ to ~~rocapuldencel-T,~~requiring ~~when~~manufacturers ~~the~~to ~~results~~report ~~from the initial~~information ~~clinical~~related ~~trial~~to ofpayments ~~MB-002~~to ~~indicated~~physicians ~~that~~and ~~the~~other ~~product~~health ~~candidate~~care ~~only~~providers ~~corrected~~or ~~defects~~marketing inexpenditures. ~~the~~State ~~production~~and offoreign ~~one~~laws ofalso ~~two critical cytokines~~govern ~~required~~the ~~for~~privacy ~~effective~~and ~~immune~~security ~~response.~~of Inhealth ~~addition,~~information in ~~February~~some ~~2017~~circumstances, ~~the~~many ~~IDMC~~of ~~for~~which ~~our~~differ ~~ADAPT~~from ~~clinical~~each ~~trial~~other ~~of rocapuldencel-T~~ in ~~combination~~significant ~~with sunitinib / standard-of-care recommended that the study be discontinued for futility based on its planned interim~~ways ~~data~~and ~~analysis.~~often ~~There~~are ~~can be no assurance that additional development problems will~~ not ~~arise~~preempted inby ~~the~~HIPAA, ~~future~~thus ~~which~~complicating wecompliance ~~may not have anticipated or be able to resolve or which may cause significant delays in development~~efforts.

InPharmaceutical ~~addition,~~Insurance ~~regulatory approval of novel product candidates such as our Arcelis-based~~Coverage ~~product candidates manufactured using novel manufacturing processes such as ours can be more expensive~~ and ~~take~~Health ~~longer~~Care than for other, more well-known or extensively studied pharmaceutical or biopharmaceutical products, due to our and regulatory agencies’ lack of experience with them. The FDA has only approved one individualized immunotherapy product to date. This lack of experience may lengthen the regulatory review process, require us to conduct additional studies or clinical trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of these product candidates or lead to significant post-approval limitations or restrictions.Reform

~~The~~In ~~novel~~the ~~nature~~United ofStates and ~~our~~markets ~~product~~in ~~candidates~~other ~~also~~countries, ~~means~~patients ~~that~~who ~~fewer~~are ~~people~~prescribed ~~are~~treatments ~~trained~~for their conditions and providers performing the prescribed inservices generally rely on third-party payors to reimburse all or ~~experienced~~part ~~with~~of the associated health care costs. Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities. Thus, even if a product ~~candidates~~candidate is approved, sales of ~~this~~the ~~type~~product will depend, ~~which~~in ~~may~~part, ~~make~~on itthe ~~difficult~~extent to ~~find~~which third-party payors, ~~hire~~including government health programs in the United States such as Medicare and ~~retain~~Medicaid, ~~capable~~commercial ~~personnel~~health insurers and managed care organizations, provide coverage and establish adequate reimbursement levels for, ~~research~~the product. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, ~~development~~examining the medical necessity and ~~manufacturing~~reviewing ~~positions~~the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

~~Development~~In oforder ~~our~~to ~~individualized~~secure coverage ~~Arcelis-based~~and reimbursement for any product ~~candidates~~that ismight ~~subject~~be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to ~~significant~~demonstrate ~~uncertainty~~the ~~because~~medical ~~each~~necessity and cost-effectiveness of the product, ~~candidate~~in isaddition ~~derived~~to ~~from~~the ~~source~~costs ~~material~~required to ~~that~~obtain isFDA ~~inherently~~or ~~variable~~other comparable marketing approvals. ~~This~~Nonetheless, ~~variability~~product candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover a product could reduce physician utilization once the ~~effectiveness~~product is ofapproved ~~our~~and ~~Arcelis-based~~have ~~product~~a ~~candidates,~~material ~~delay~~adverse ~~any~~effect ~~FDA~~on ~~approval~~sales, results of ~~any~~operations ofand ~~our~~financial ~~Arcelis-based~~condition. ~~product~~Additionally, a payor’s ~~candidates~~decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, ~~cause~~one uspayor’s determination to ~~change~~provide ~~our~~coverage ~~manufacturing~~for ~~methods~~a ~~and~~product ~~adversely~~does ~~affect~~not assure that other payors will also provide coverage and reimbursement for the ~~commercial~~product, ~~success~~and the level of ~~any~~coverage ~~approved~~and ~~Arcelis-based products~~reimbursement can differ significantly from payor to payor.

36The containment of health care costs also has become a priority of federal, state and foreign governments and the prices of products have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

~~The~~There ~~disease~~have ~~samples from the patients to be treated with our Arcelis-based products~~been ~~vary~~a ~~from~~number ~~patient~~of tofederal ~~patient.~~and ~~This~~state ~~inherent~~proposals ~~variability~~during ~~may~~the ~~adversely~~last ~~affect~~few ~~our~~years ~~ability~~regarding tothe ~~manufacture~~pricing ~~our~~of ~~products~~pharmaceutical ~~because~~and ~~each~~biopharmaceutical ~~tumor~~products, orlimiting ~~virus~~coverage ~~sample~~and ~~that~~reimbursement wefor ~~receive~~drugs and ~~process~~biologics ~~will~~and ~~yield~~other amedical ~~different product. As a result~~products, wegovernment ~~may~~control ~~not~~and beother changes ~~able~~ to ~~consistently produce~~the ahealth ~~product~~care ~~for~~system ~~every~~in ~~patient~~the ~~and~~United weStates. ~~may~~In ~~not~~March be2010, ~~able~~the toACA ~~treat~~was ~~all~~enacted, ~~patients~~which ~~effectively.~~includes ~~Such~~measures ~~inconsistency~~that ~~could~~have ~~delay FDA~~significantly orchanged ~~other~~health ~~regulatory~~care ~~approval~~financing ofby ~~our~~both ~~Arcelis-based~~governmental ~~product~~and ~~candidates~~private ~~or,~~insurers. ifThe ~~approved,~~provisions ~~adversely~~of ~~affect~~the ~~market~~ACA ~~acceptance and use~~ of ~~our~~importance ~~Arcelis-based products. If we have~~ to ~~change~~the ~~our~~pharmaceutical and ~~manufacturing~~biotechnology ~~methods~~industry ~~to address any inconsistency~~are, weamong ~~may have to perform additional clinical trials~~others, ~~which would delay FDA or other regulatory approval of our Arcelis-based product candidates and increase~~ the ~~costs of development of our Arcelis-based product candidates.~~following:

~~The~~· ~~inherent~~an ~~variability~~annual, ofnondeductible ~~the~~fee ~~disease~~on ~~samples~~any ~~from~~entity ~~the~~that ~~patients~~manufactures toor beimports ~~treated~~certain ~~with our~~branded ~~Arcelis-based~~prescription ~~products~~drug ~~may~~agents ~~further~~or ~~adversely~~biologic ~~affect our ability to manufacture our products because variability in the source material for our product candidates~~agents, ~~such~~which asis ~~tumor~~apportioned ~~cells~~among orthese ~~viruses,~~entities ~~may~~according ~~cause~~to ~~variability~~their inmarket ~~the~~share ~~composition of other cells~~ in ~~our~~ ~~product~~certain ~~candidates.~~government ~~Such~~health ~~variability~~care in composition or purity could adversely affect our ability to establish acceptable release specifications and the development and regulatory approval processes for our product candidates may be delayed, which would increase the costs of development of our Arcelis-based product candidates.programs;

If· wean ~~are~~increase ~~not~~in ~~able~~the torebates ~~obtain,~~a ormanufacturer ifmust ~~there~~pay ~~are~~under ~~delays~~the inMedicaid ~~obtaining,~~Drug ~~required~~Rebate ~~regulatory approvals,~~Program ~~we will not be able~~ to ~~commercialize~~23.1% ~~our~~and ~~product~~13% ~~candidates,~~of ~~and~~the ~~our~~average ~~ability~~manufacturer toprice ~~generate~~for ~~revenue~~branded ~~will~~and begeneric ~~materially impaired.~~drugs, respectively;

Failure to obtain regulatory approval for either of our product candidates will prevent us from commercializing the product candidate. We have not received regulatory approval to market any of our product candidates in any jurisdiction. We have only limited experience in filing and supporting the applications necessary to gain regulatory approvals and expect to rely on third party contract research organizations to assist us in this process. Securing FDA approval requires the submission of extensive preclinical and clinical data and supporting information to the FDA for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing FDA approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the FDA. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining regulatory approval or prevent or limit commercial use.49

~~The~~· ~~process~~a ofnew ~~obtaining~~Medicare ~~regulatory~~Part ~~approvals,~~D ~~both~~coverage ingap ~~the~~discount ~~United States and abroad~~program, is ~~expensive,~~in ~~may~~which ~~take~~manufacturers ~~many~~must ~~years~~agree ifto ~~additional~~offer ~~clinical~~50% ~~trials are required, if approval is obtained at all, and can vary substantially based upon a variety~~ point-of-sale ~~factors,~~discounts ~~including~~to ~~the~~negotiated ~~type,~~prices ~~complexity and novelty~~ of ~~the~~applicable ~~product~~brand ~~candidates~~drugs ~~involved.~~to Toeligible ~~date,~~beneficiaries ~~the~~during ~~FDA has~~their ~~only~~coverage ~~approved~~gap ~~one individualized immunotherapy product. Changes in clinical guidelines or regulatory approval policies during the development~~ period, ~~changes~~as ina orcondition ~~the enactment of additional statutes or regulations, or changes in regulatory review~~ for ~~each~~ ~~submitted product application, may cause delays in~~ the ~~approval~~manufacturer's oroutpatient ~~rejection~~drugs ~~of an application. The FDA has substantial discretion in the approval process and may refuse~~ to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent regulatory approval of a product candidate. Any regulatory approval we ultimately obtain may be ~~limited~~covered orunder ~~subject~~Medicare toPart ~~restrictions or post-approval commitments that render the approved product not commercially viable.~~D;

If· weextension ~~experience~~of ~~delays~~manufacturers' inMedicaid ~~obtaining~~rebate ~~approval~~liability orto ifcovered wedrugs ~~fail~~dispensed to ~~obtain~~individuals ~~approval~~who ofare ~~our product~~enrolled ~~candidates,~~in ~~the~~Medicaid ~~commercial~~managed ~~prospects~~care ~~for~~organizations, ~~our~~unless ~~product~~the ~~candidates~~drug ~~may~~is besubject ~~harmed~~to ~~and~~discounts ~~our~~under ~~ability~~the to340B ~~generate~~drug ~~revenues~~discount ~~will be materially impaired.~~program;

~~Failure~~· toa ~~obtain~~new ~~regulatory~~methodology ~~approval~~by inwhich ~~international~~rebates ~~jurisdictions~~owed ~~would~~by ~~prevent our~~manufacturers ~~product~~under ~~candidates~~the ~~from~~Medicaid ~~being~~Drug ~~marketed~~Rebate ~~abroad.~~Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

We· ~~are~~expansion aof ~~party~~eligibility tocriteria ~~arrangements~~for ~~with~~Medicaid ~~third~~programs ~~parties~~by, ~~and~~among intend to enter into additional arrangements with third parties, under which they would market our products outside the United States. In order to market and sell our products in the European Union and many other ~~jurisdictions~~things, weallowing orstates such third parties must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to ~~obtain~~offer ~~approval~~Medicaid ~~may~~coverage ~~differ substantially from that required~~ to ~~obtain~~additional ~~FDA~~individuals ~~approval. The~~and ~~regulatory~~by ~~approval~~adding ~~process~~new ~~outside~~mandatory ~~the~~eligibility ~~United~~categories ~~States~~for ~~generally~~certain ~~includes~~individuals ~~all of the risks associated~~ with ~~obtaining~~income ~~FDA~~at ~~approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We~~ or ~~these~~below ~~third~~133% ~~parties~~of ~~may not obtain approvals from regulatory authorities outside~~ the ~~United~~federal ~~States~~poverty ~~on a timely basis~~level, ifthereby atpotentially ~~all.~~increasing ~~Approval~~manufacturers' byMedicaid ~~the~~rebate FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in any market.liability;

A· ~~fast~~expansion ~~track~~of ~~designation by~~ the ~~FDA~~entities ~~may~~eligible ~~not~~for ~~actually~~discounts ~~lead~~under tothe aPublic ~~faster~~Health ~~development, regulatory~~Service ~~review~~pharmaceutical orpricing ~~approval process.~~program;

If· anew ~~product~~requirements isunder ~~intended for~~ the ~~treatment~~federal ofPhysician aPayments ~~serious~~Sunshine orAct ~~life-threatening~~for ~~condition and~~drug ~~the~~manufacturers ~~product~~to ~~demonstrates~~report ~~the~~information ~~potential~~related to ~~address~~payments anand ~~unmet~~other ~~need~~transfers ~~for this condition, the treatment sponsor may apply for FDA fast track designation. In April 2012, the FDA notified us that we obtained fast track designation for rocapuldencel-T for the treatment~~ of ~~mRCC.~~value ~~Fast~~made ~~track~~to ~~designation~~physicians ~~does~~and ~~not~~teaching ~~ensure~~hospitals ~~that~~as wewell ~~will~~as ~~experience~~ownership ~~a faster development, regulatory review~~ or ~~approval process~~investment ~~compared~~interests toheld ~~conventional FDA procedures. Additionally, the FDA may withdraw fast track designation if it believes that the designation is no longer supported~~ by ~~data~~physicians ~~from~~and ~~our~~their ~~clinical~~immediate ~~development~~family ~~program.~~members;

~~Risks~~· ~~Related~~a new Patient-Centered Outcomes Research Institute to ~~Our~~oversee, ~~Financial~~identify ~~Position~~priorities in, and ~~Need~~conduct comparative clinical effectiveness research, along with funding for ~~Additional~~such ~~Capital~~research;

We· ~~have~~creation ~~incurred~~of ~~significant~~the ~~losses~~Independent ~~since~~Payment ~~our~~Advisory ~~inception.~~Board, Wewhich, ~~expect~~if and when impaneled, will have authority to ~~incur~~recommend ~~losses for~~certain atchanges ~~least~~to the ~~next~~Medicare ~~several~~program ~~years~~that ~~and~~could ~~may~~result ~~never~~in ~~achieve~~reduced orpayments ~~maintain~~for ~~profitability.~~prescription drugs; and

37· establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

~~Since~~Other ~~inception,~~legislative wechanges have ~~incurred~~been ~~significant~~proposed and ~~operating~~adopted ~~losses.~~since ~~Our~~the ~~net~~ACA ~~loss~~ was ~~$53~~enacted.~~3 million~~ ~~for~~These changes include the ~~year~~Budget ~~ended~~Control ~~December~~Act 31of 2011, ~~2014~~which, ~~$74.8~~among ~~million~~other ~~for~~things, ~~the~~led ~~year~~to aggregate ~~ended~~reductions ~~December~~to ~~31,~~Medicare ~~2015~~payments ~~and~~to ~~$53.0~~providers ~~million~~of ~~for~~up ~~the~~to 2% per fiscal year that started in 2013 and will stay in effect ~~ended~~through ~~December~~2024 31unless additional Congressional action is taken, ~~2016.~~and Asthe American Taxpayer Relief Act of ~~December 31~~2012, ~~2016~~which, weamong ~~had~~other things, anreduced ~~accumulated~~Medicare ~~deficit~~payments to several types of ~~$332.0~~providers ~~million.~~and Toincreased ~~date,~~the westatute ~~have~~of ~~financed~~limitations period for the government ~~our~~to ~~operations~~recover ~~primarily~~overpayments ~~through~~to ~~public~~providers ~~offerings~~from ofthree ~~common~~to ~~stock,~~five ~~private~~years. ~~placements~~These ofnew ~~common~~laws ~~stock,~~may ~~preferred~~result ~~stock~~in ~~and~~additional ~~warrants,~~reductions in Medicare and ~~convertible~~other ~~debt~~healthcare ~~financings,~~funding ~~debt~~and ~~from~~otherwise ~~financial~~affect ~~institutions,~~the ~~government~~prices ~~contracts,~~we ~~government~~may ~~and~~obtain ~~other~~for ~~third~~any ~~party~~of ~~grants~~our ~~and~~product candidates for which we may obtain ~~license~~regulatory ~~and~~approval ~~collaboration~~or ~~agreements~~the frequency with which any such product candidate is prescribed or used. WeFurther, there have ~~devoted~~been ~~substantially~~several recent ~~all~~U.S. ofcongressional ~~our~~inquiries ~~efforts~~and toproposed ~~research~~state and ~~development~~federal legislation designed to, ~~including~~among other things, bring more transparency ~~clinical~~to ~~trials.~~drug Wepricing, ~~have~~review ~~not~~the ~~completed~~relationship ~~development~~between pricing and manufacturer patient programs, reduce the costs of ~~any~~drugs ~~product~~under ~~candidates~~Medicare and reform government program reimbursement methodologies for drug products.

WeThese ~~have~~healthcare ~~devoted~~reforms, aas ~~significant~~well ~~portion~~as ofother ~~our~~healthcare ~~financial~~reform ~~resources~~measures that tomay be adopted in the ~~development~~future, ~~of rocapuldencel-T.~~may Inresult ~~conjunction~~in ~~with~~additional ~~our~~reductions ~~clinical~~in Medicare and ~~scientific~~other ~~advisors~~healthcare funding, wemore ~~are~~rigorous coverage ~~analyzing~~criteria, new payment methodologies and additional downward pressure on the ~~preliminary~~price ~~ADAPT~~for ~~trial~~any ~~data~~approved ~~set~~ product and/or ~~plan~~the level toof ~~discuss~~reimbursement ~~the~~physicians ~~data~~receive ~~with~~for ~~the~~administering ~~FDA~~any approved product. WeReductions ~~have~~in ~~continued~~reimbursement levels may negatively impact the ~~ADAPT~~prices ~~trial~~or ~~while~~the wefrequency ~~conduct~~with ~~our~~which ~~ongoing~~products ~~data~~are ~~review~~prescribed ~~and~~or ~~have~~administered. Any reduction in reimbursement from Medicare ~~discussions~~or ~~with~~other ~~FDA~~government programs may result in a similar reduction in payments from private payors. WeSince ~~expect~~enactment ~~that~~of wethe ~~will~~ACA, ~~make~~there have abeen ~~determination~~numerous aslegal challenges and Congressional actions to ~~the~~repeal ~~next~~and ~~steps~~replace ~~for~~provisions of the ~~rocapuldencel-T~~law. ~~clinical~~In ~~program~~May 2017, the U.S. ~~based~~House onof ~~this~~Representatives ~~analysis~~passed ~~and~~legislation ~~discussions~~known as the American Health Care Act of 2017. ~~Our~~In ~~determination~~the U.S., Senate legislation has been proposed to replace the ACA known as the Better Care Reconciliation, to ~~our~~repeal ~~next~~the ~~steps~~ACA ~~will~~without ~~necessarily~~companion ~~impact~~legislation to replace it, or to enact a “skinny” version of the ~~amount~~Better Care Reconciliation Act of ~~expenses~~2017. weIn addition, the Senate considered ~~incur~~proposed ~~and~~healthcare reform legislation known as the ~~size~~Graham-Cassidy bill. None of ~~our~~these ~~operating~~measures ~~losses~~was ~~for~~passed by the ~~foreseeable~~U.S. ~~future~~Senate.

In March 2017, we announced that our board of directors had approved a workforce action plan designed to streamline operations and reduce our operating expenses. Under this plan, we expect to reduce our workforce by 46 employees (or 38%) from 122 employees to 76 employees. The principal objective of the reduction is to enable us to conserve our financial resources while we conduct our ongoing review of the preliminary ADAPT trial data set and discuss the data with the FDA. We anticipate incurring approximately $1.3 million in total costs associated with the workforce reduction and that such costs will be incurred over the second and third quarters of 2017. We expect that the workforce reduction will decrease our annual operating costs by $5.7 million once the plan is fully implemented.50

IfThe weTrump ~~determine~~Administration has also taken executive actions to ~~proceed~~undermine or delay implementation of the ACA. In January 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the ~~development~~ACA to waive, defer, grant exemptions from, or delay the implementation of ~~our~~any ~~product~~provision ~~candidates~~of the ACA that would impose a fiscal or regulatory burden on states, ~~including~~individuals, healthcare providers, health ~~rocapuldencel~~insurers, or manufacturers of pharmaceuticals or medical devices. In October 2017, the President signed a second Executive Order allowing for the use of association health plans and short-Tterm health insurance, wewhich ~~anticipate~~may ~~that~~provide ~~our~~fewer ~~expenses~~health benefits than the plans sold through the ACA exchanges. At the same time, the Administration announced that it will discontinue the payment of cost-sharing reduction (CSR) payments to insurance companies until Congress approves the appropriation of funds for such CSR payments. The loss of the CSR payments is expected to increase ~~substantially~~premiums ifon ~~and~~certain aspolicies ~~we:~~issued by qualified health plans under the ACA. A bipartisan bill to appropriate funds for CSR payments was introduced in the Senate, but the future of that bill is uncertain.

•More ~~continue~~recently, ~~our~~with ~~ADAPT~~enactment ~~trial~~of the Tax Cuts and Jobs Act of ~~rocapuldencel-T~~2017 in ~~for~~December 2017, Congress repealed the ~~treatment~~“individual mandate.” The repeal of ~~mRCC~~this orprovision, ~~initiate~~which ~~other~~requires ~~clinical~~most ~~trials~~Americans to carry a minimal level of ~~rocapuldencel-T~~health ~~for~~insurance, will become effective in 2019. According to the ~~treatment~~Congressional Budget Office, the repeal of ~~mRCC~~the individual mandate will cause 13 million fewer Americans to be insured in 2027 and premiums in insurance markets may rise. Additionally, ~~following~~on ~~our~~January ~~analysis~~22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the ~~preliminary~~so-called ~~ADAPT~~“Cadillac” ~~trial~~tax ~~data~~on ~~set~~certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the ~~our~~medical ~~discussions~~device ~~with~~excise tax on non-exempt medical devices. The Congress will likely consider other legislation to replace elements of the ~~FDA;~~ACA, during the next Congressional session.

•Further, ~~continue~~there have been several recent U.S. congressional inquiries and proposed federal and proposed and enacted state legislation designed to, ~~support~~among ~~ongoing~~other ~~investigator-initiated~~things, ~~clinical~~bring more ~~trials~~transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of ~~rocapuldencel-T~~drugs under Medicare and ~~AGS-004;~~reform government program reimbursement methodologies for drug products. At the federal level, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

•Foreign ~~support investigator-initiated clinical trials of rocapuldencel-T and AGS-004;~~Regulation

•Although ~~initiate~~we do not currently market any of our products outside the United States and ~~conduct~~have ~~additional~~no ~~trials~~current plans to engage in product commercialization outside the United States, we may decide to do so in the future. In order to market any product outside of ~~rocapuldencel-T~~the United States, we would need to comply with numerous and ~~AGS-004~~varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the ~~treatment~~necessary approvals by the comparable regulatory authorities of ~~cancers~~foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country and ~~HIV;~~can involve additional product testing and additional administrative review periods, and may be otherwise complicated by some of our products and product candidates being controlled substances. The time required to obtain approval in other countries might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others.

~~• seek regulatory approvals for our product candidates that successfully complete clinical trials;~~51

•Pharmaceutical ~~lease~~Coverage, ~~build out~~ Pricing and ~~equip a facility for the commercial manufacture of products based on our Arcelis precision immunotherapy technology platform;~~Reimbursement

•Significant ~~establish~~uncertainty aexists ~~sales,~~as ~~marketing~~to the coverage and ~~distribution~~reimbursement ~~infrastructure~~status toof ~~commercialize~~any drug products for which we ~~may~~ obtain regulatory approval;. Sales of any of our product candidates, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third party payors, including government health programs such as Medicare and Medicaid, commercial health insurers and managed care organizations. The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug product once coverage is approved. Third party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the approved drugs for a particular indication.

•In ~~maintain~~order to secure coverage and reimbursement for any product that might be approved for sale, ~~expand~~we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and ~~protect~~cost- effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Third party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our ~~intellectual~~investment ~~property~~in ~~portfolio;~~product development.

•The ~~continue~~containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of drugs have been a focus in this effort. Third party payors are increasingly challenging the prices charged for medical products and services and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. If these third party payors do not consider our products to be cost-effective compared to other ~~research~~available therapies, they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products at an appropriate return on investment. The U.S. government, state legislatures and ~~development~~foreign ~~efforts;~~governments have shown significant interest in implementing cost-containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. Adoption of such controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals such as the drug product candidates that we are developing and could adversely affect our net revenue and results.

•Pricing ~~hire~~and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional ~~clinical~~studies that compare the cost-effectiveness of a particular product candidate to currently available therapies. For example, ~~quality~~the European Union provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a drug product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market. Other member states allow companies to fix their own prices for drug products, ~~scientific~~but monitor and ~~management~~control ~~personnel;~~company profits. The downward pressure on health care costs in general, particularly prescription drugs, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert competitive pressure that may reduce pricing within a country. There can be no assurance that any country that has price controls or reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products.

•The ~~add~~marketability ~~operational~~of any products for which we receive regulatory approval for commercial sale may suffer if the government and third party payors fail to provide adequate coverage and reimbursement. In addition, ~~financial~~emphasis on managed care in the United States has increased and ~~management~~we ~~information~~expect ~~systems~~will continue to increase the pressure on drug pricing. Coverage policies, third party reimbursement rates and ~~personnel~~drug pricing regulation may change at any time. In particular, the PPACA and a related reconciliation bill, which we collectively refer to as the Affordable Care Act or ACA, contain provisions that may reduce the profitability of drug products, including, ~~personnel~~for example, increased rebates for covered outpatient drugs sold to ~~support~~Medicaid ~~our~~programs, ~~product~~extension ~~development~~of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries, and ~~planned~~annual ~~commercialization~~fees ~~efforts~~based on pharmaceutical companies’ share of sales to federal health care programs. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

To become and remain profitable, we must develop and eventually commercialize a product or products with significant market potential. This development and commercialization will require us to be successful in a range of challenging activities, including successfully completing preclinical testing and clinical trials of our product candidates, obtaining regulatory approval for these product candidates, building out and equipping a commercial manufacturing facility and manufacturing, marketing and selling those products for which we may obtain regulatory approval. We are only in the preliminary stages of some of these activities. We may never succeed in these activities and may never generate revenues that are significant or large enough to achieve profitability.52

~~Even~~New ifLegislation ~~we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become~~ and remain profitable would decrease the value of the company and could impair our ability to raise capital, expand our business, maintain our research and development efforts or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.Regulations

WeFrom ~~are~~time ~~making~~to atime, ~~determination~~legislation asis todrafted, introduced and passed in Congress that could significantly change the ~~next~~statutory ~~steps~~provisions ~~for~~governing the ~~rocapuldencel-T~~testing, ~~clinical~~approval, manufacturing ~~program~~and ~~that~~marketing ~~could~~of ~~significantly~~products ~~impact~~regulated ~~our~~by ~~future~~the ~~operations~~FDA. For example, the FDASIA and ~~financial~~PPACA ~~position.~~provisions discussed above were enacted in 2012 and 2010, respectively.

WeNumerous ~~are~~statements inmade ~~the~~by ~~process~~President ofTrump and ~~making~~members aof ~~determination as to~~ the ~~next~~U.S. ~~steps~~Congress ~~for~~indicate ~~the rocapuldencel-T~~that ~~clinical~~it ~~program.~~is ~~This~~likely ~~evaluation~~that ~~may~~legislation ~~result~~will inbe ~~changes~~passed toby ~~our~~Congress ~~current~~and ~~business~~signed ~~strategy~~into ~~and~~law ~~future~~by ~~operations.~~President AsTrump ~~part~~that ofrepeals ~~this~~the ~~process~~PPACA, ~~we are reviewing alternatives with a goal of maximizing the value of our company. We could determine to engage~~ in ~~one~~whole or ~~more~~in ~~potential transactions~~part, ~~such~~and/or asintroduces ~~the~~a ~~sale~~new form of ~~our~~health ~~company,~~care areform. ~~strategic~~It ~~partnership~~is ~~with one~~unclear orat ~~more~~this ~~parties~~point orwhat the ~~licensing,~~scope ~~sale or divestiture~~ of ~~some~~such oflegislation ~~our~~will ~~assets~~be orand ~~proprietary~~when ~~technologies,~~it orwill tobecome ~~continue to operate our business in accordance with our existing business strategy~~effective. ~~Pending~~Because ~~any~~of ~~decision~~the touncertainty ~~change strategic direction,~~surrounding wethis ~~are~~replacement ~~continuing~~health tocare ~~conduct~~reform ~~our~~legislation, ~~ongoing~~we ~~clinical trials while managing our cash position. We~~ cannot ~~provide~~predict with any ~~commitment as~~certainty to the ~~timing~~likely impact of ~~our~~the ~~determination~~PPACA’s repeal or the ~~strategy~~adoption weof ~~may~~any ~~adopt.~~other Ifhealth wecare ~~determine~~reform tolegislation ~~change~~on our business. ~~strategy~~Whether or ~~to seek~~not tothere ~~engage~~is inalternative ahealth ~~strategic~~care ~~transaction,~~legislation enacted ~~our~~in ~~future~~the ~~business,~~United ~~prospects~~States, ~~financial~~there ~~position~~is ~~and~~likely ~~operating~~to ~~results could~~ be ~~significantly~~ ~~different than those in historical periods or projected by our management. Because of the~~ significant ~~uncertainty~~ ~~regarding~~disruption ~~our future plans, we are not able~~ to ~~accurately predict~~ the ~~impact~~health ofcare amarket ~~potential~~in ~~change~~the incoming ~~our existing~~months ~~business~~and ~~strategy~~years.

38In addition to potential for new legislation, FDA regulations and policies are often revised or interpreted by the agency in ways that may significantly affect our business and our products. It is impossible to predict whether further legislative changes will be enacted, or FDA regulations, guidance, policies or interpretations changed or what the impact of such changes, if any, may be.

WeSegment will need substantial additional funding. If we are unable to raise capital when needed, we would be forced to delay, reduce, terminate or eliminate our product development programs, including plans to lease, build out and ~~equip~~Geographic ~~a commercial manufacturing facility or our commercialization efforts and to take other actions to reduce our operating expenses.~~Information

WeOperating ~~have~~segments noare ~~external~~defined ~~sources~~as ~~of funds other than our contract~~components ~~with the NIH and NIAID for the development~~ of ~~AGS-004,~~an ~~and~~enterprise weengaging ~~expect our expenses to increase~~ in ~~connection~~business ~~with our ongoing~~ activities~~, particularly~~ iffrom wewhich ~~decide~~it tomay ~~continue~~earn ~~our~~revenues ~~ADAPT~~and ~~trial~~incur ~~of rocapuldencel-T for the treatment of mRCC~~expenses, ~~initiate other clinical trials of rocapuldencel-T~~ for ~~mRCC,~~which ~~support~~discrete ~~ongoing investigator-initiated clinical trials of rocapuldencel-T and AGS-004, support planned~~financial ~~investigator-initiated~~information ~~clinical~~is ~~trials~~available ~~of rocapuldencel-T~~ and ~~AGS-004,~~whose ~~initiate~~operating ~~and~~results ~~conduct~~are ~~additional~~regularly ~~clinical~~reviewed ~~trials~~by ~~of rocapuldencel-T and AGS-004 for~~ the ~~treatment~~chief ofoperating ~~cancers~~decision ~~and~~maker ~~HIV~~in ~~and~~deciding ~~seek regulatory approval for our product candidates. In addition, if we obtain~~how ~~regulatory approval of any of our product candidates, we expect~~ to ~~incur~~allocate ~~significant~~resources ~~commercialization expenses for product sales, marketing, manufacturing~~ and ~~distribution.~~in ~~Furthermore,~~assessing ~~we expect to continue to incur additional costs associated with operating as a public company~~performance. ~~Accordingly,~~We weview ~~will need to obtain substantial additional funding if we wish to continue~~ our operations~~. If~~ weand ~~are~~manage ~~unable~~our tobusiness ~~raise~~in ~~capital~~one ~~when~~operating ~~needed~~segment ~~or on attractive terms, we would be forced to delay, reduce, terminate or eliminate~~and ~~our~~all ~~product~~of ~~development programs or~~ our ~~commercialization~~operations ~~efforts~~are ~~and~~in toNorth ~~take other actions to reduce our operating expenses~~America.

As of December 31, 2016, we had cash and cash equivalents of $53.0 million and working capital of $24.9 million. We do not currently have sufficient cash resources to pay our obligations as they become due. In March 2017, we entered into a payoff letter with Horizon Technology Finance Corporation and Fortress Credit Co LLC, the lenders under our venture loan and security agreement, pursuant to which we paid a total of $23.1 million to the lenders, representing the principal balance and accrued interest outstanding under the loan agreement in repayment of our outstanding obligations under the loan agreement. In addition, in March 2017, we announced that our board of directors approved a workforce action plan designed to streamline operations and reduce our operating expenses. We anticipate incurring approximately $1.3 million in total costs associated with the workforce reduction contemplated by the plan and that such costs will be incurred over the second and third quarters of 2017. We expect that the workforce reduction will decrease our annual operating costs by $5.7 million once the plan is fully implemented. We have also initiated discussions with Saint Gobain Performance Plastics Corporation, or Saint Gobain, and Invetech Pty Ltd, or Invetech, regarding the fees that we owe them, including potentially the conversion by them of some or all of the outstanding fees into equity of the Company. However, even taking these measures into account, we do not have sufficient cash resources to pay all of our accrued obligations in full or to continue our business operations beyond April 2017. Therefore, we will need to raise additional capital by April 2017 in order to continue to operate our business beyond that time. Alternatively, we may seek to engage in one or more potential transactions, such as the sale of our company, a strategic partnership with one or more parties or the licensing, sale or divestiture of some of our assets or proprietary technologies, but there can be no assurance that we will be able to enter into such a transaction or transactions on a timely basis or on terms that are favorable to us. Under these circumstances, we may instead determine to dissolve and liquidate our assets or seek protection under the bankruptcy laws. If we decide to dissolve and liquidate our assets or to seek protection under the bankruptcy laws, it is unclear to what extent we will be able to pay our debts, and, accordingly, it is further unclear whether and to what extent any resources will be available for distributions to stockholders.Employees

~~Our~~As ~~future~~of ~~capital~~February ~~requirements~~28, ~~will~~2018, ~~depend~~we onhad ~~many~~39 ~~factors~~employees, including: 11 in research and development, 1 in clinical development, 16 in manufacturing and 11 in general and administrative functions. None of our employees is subject to a collective bargaining agreement or represented by a labor or trade union. We believe that our relations with our employees are good.

•Corporate our determination as to the next steps for the rocapuldencel-T clinical program, following our analysis of the preliminary ADAPT trial data set and our discussions with the FDA regarding our pivotal Phase 3 ADAPT clinical trial;Information

•We ~~the~~were ~~progress~~incorporated ~~and~~in ~~results~~the State of ~~our~~Delaware on ~~ongoing~~May ~~and~~8, ~~planned~~1997. ~~investigator~~Our ~~initiated~~principal ~~clinical~~executive ~~trials~~offices ofare ~~rocapuldencel-T~~located ~~that~~at we4233 ~~support;~~Technology Drive, Durham, North Carolina 27704, and our telephone number is (919) 287-6300.

•Available ~~the~~Information progress and results of the ongoing investigator-initiated clinical trial of AGS-004 in combination with vorinostat for HIV eradication and the planned investigator-initiated clinical trial of AGS-004 that we support and our ability to obtain additional funding under our NIH and NIAID contract for our AGS-004 program;

•We file with the ~~development~~Securities and Exchange Commission, ~~initiation~~or SEC, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and ~~support~~information statements and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) of ~~additional~~the ~~clinical~~Securities ~~trials~~Exchange Act of ~~rocapuldencel~~1934, as amended. The public may obtain these filings at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-T800-SEC-0330. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy and ~~AGS-004~~information instatements ~~mRCC~~and orother information regarding Argos and other ~~indications;~~companies that file materials with the SEC electronically. As soon as practicable after filing with the SEC, copies of our reports on Forms 10-K, Forms 10-Q and Forms 8-K may also be obtained, free of charge, electronically through the investor relations portion of our web site, www.argostherapeutics.com/investor-relations/sec-filings/default.aspx.

~~• the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates;~~53

•We ~~the~~webcast ~~costs~~any ~~and~~earnings ~~timing~~calls we have on our investor relations website. Additionally, we provide notifications of news or announcements regarding our ~~leasing~~financial performance, including ~~build-out~~SEC filings, investor events and ~~equipping~~press ofand aearnings ~~commercial~~releases, ~~manufacturing~~on ~~facility~~the orinvestor relations portion of ~~alternative~~our ~~arrangements~~website. ~~for~~Further corporate ~~commercial~~governance ~~manufacturing~~information, including our corporate governance guidelines, board committee charters, Code of Business Conduct and ~~any~~Ethics ~~costs~~that applies to our directors, officers and ~~liabilities~~employees, ~~associated~~including ~~with~~our ~~financing~~principal ~~arrangements~~executive ~~entered~~officer, ~~into~~principal tofinancial officer, ~~fund~~or persons performing similar functions, is also available on our investor relations website under <

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