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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on September 21, 2015.

Registration No. 333-206654


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 2
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Strongbridge Biopharma plc
(formerly known as Cortendo plc)
(Exact Name of Registrant as Specified in Its Charter)



Not Applicable
(Translation of Registrant's name into English)

Ireland
(State or Other Jurisdiction of
Incorporation or Organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

900 Northbrook Drive
Suite 200
Trevose, PA 19053
+1 610-254-9200

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)



Stephen Long, Chief Legal Officer
Strongbridge Biopharma plc
900 Northbrook Drive
Suite 200
Trevose, PA 19053
+1 610-254-9200

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)



Copies to:

Aron Izower
Reed Smith LLP
599 Lexington Avenue, 22nd Floor
New York, NY 10022

 

Divakar Gupta
Brent B. Siler
Cooley LLP
1114 Avenue of the Americas
New York, NY 10036-7798

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

                  If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

                  If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                  If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                  If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o



CALCULATION OF REGISTRATION FEE

       
 
TITLE OF EACH CLASS OF SECURITIES
TO BE REGISTERED

  PROPOSED MAXIMUM
AGGREGATE OFFERING
PRICE(1)

  AMOUNT OF
REGISTRATION FEE(2)

 

Ordinary shares, par value $0.01 per share

  $87,632,875   $10,182.95(3)

 

(1)
Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. Includes the aggregate offering price of additional ordinary shares that the underwriters have the option to purchase.
(2)
Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.
(3)
The Registrant previously paid $10,022.25 of this amount in connection with the filing of this registration statement on August 28, 2015.



                  The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated September 21, 2015

P R O S P E C T U S



4,250,000 Shares

GRAPHIC

Ordinary Shares



              This is Strongbridge Biopharma plc's initial U.S. public offering. We are selling 4,250,000 of our ordinary shares.

              Our ordinary shares are currently quoted on the Norwegian Over-The-Counter System, or NOTC A-list under the symbol "SBBP." On September 18, 2015, the last reported sale price of our ordinary shares on the NOTC was NOK 145 per share, equivalent to a price of $17.93 per share, assuming an exchange rate of NOK 8.0891 per U.S. dollar. No other public market currently exists for our ordinary shares.

              We have submitted an application to list our ordinary shares on The NASDAQ Global Market under the symbol "SBBP."

              We are an "emerging growth company," as defined by the Jumpstart Our Business Startups Act of 2012, and as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings.

              Investing in our ordinary shares involves risks. See the section titled "Risk Factors" beginning on page 13 of this prospectus.



 
  Per Share   Total

Public offering price

  $     $  

Underwriting discount(1)

  $     $  

Proceeds, before expenses, to us

  $     $  

(1)
We have agreed to reimburse the underwriters for certain expenses. See "Underwriting."

              The underwriters may also exercise their option to purchase up to an additional 637,500 ordinary shares from us, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

              Neither the Securities and Exchange Commission, any U.S. state securities commission, the Central Bank of Ireland nor any other foreign securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

              The underwriters expect to deliver the shares to purchasers in the offering on or about                , 2015.

BofA Merrill Lynch

 

Stifel



JMP Securities
Roth Capital Partners

Arctic Securities



   

The date of this prospectus is                    , 2015.


TABLE OF CONTENTS

 
  Page

PROSPECTUS SUMMARY

  1

RISK FACTORS

  13

MARKET AND INDUSTRY DATA

  52

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

  53

USE OF PROCEEDS

  55

PRICE RANGE OF ORDINARY SHARES

  57

DIVIDEND POLICY

  58

CAPITALIZATION

  59

DILUTION

  61

SELECTED CONSOLIDATED FINANCIAL INFORMATION

  63

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  65

BUSINESS

  81

MANAGEMENT

  118

EXECUTIVE COMPENSATION

  123

PRINCIPAL SHAREHOLDERS

  135

RELATED PARTY TRANSACTIONS

  137

DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION

  138

ORDINARY SHARES ELIGIBLE FOR FUTURE SALE

  177

TAXATION

  179

UNDERWRITING

  190

EXPENSES OF THE OFFERING

  198

LEGAL MATTERS

  199

EXPERTS

  199

ENFORCEMENT OF CIVIL LIABILITIES

  200

WHERE YOU CAN FIND MORE INFORMATION

  201

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

  F-1



              Neither we nor the underwriters have authorized anyone to provide you with information that is different from that contained in this prospectus, any amendment or supplement to this prospectus, or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell ordinary shares and seeking offers to subscribe for ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of ordinary shares.

              For investors outside of the United States: Neither we nor any of the underwriters have taken any action to permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.


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PROSPECTUS SUMMARY

              This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in the ordinary shares, you should read this entire prospectus carefully, including the sections titled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" and our consolidated financial statements, including the notes thereto, included elsewhere in this prospectus. Unless otherwise indicated or the context otherwise requires, all references in this prospectus to "Strongbridge" or the "Company," "we," "our," "ours," "us" or similar terms refer to Strongbridge Biopharma plc, together with its consolidated subsidiaries (including Cortendo AB, its predecessor, and current subsidiaries), and "dollar," "US$" or "$" refer to U.S. dollars. Unless otherwise indicated in this prospectus, all share amounts and per share amounts included in this prospectus have been retroactively adjusted, where applicable, to reflect (i) the exchange offer described below, which settled on September 8, 2015, pursuant to which holders of 99.582% of the outstanding shares of Cortendo AB tendered their shares in exchange for beneficial interests in ordinary shares of Strongbridge Biopharma plc in the form of depositary receipts, and (ii) immediately following the settlement of its exchange offer, a reverse stock split of the outstanding ordinary shares of Strongbridge Biopharma plc (including the beneficial interests in such shares in the form of depositary receipts) at a ratio of 1-for-11.

Overview

              We are a biopharmaceutical company focused on the development, in-licensing, acquisition and eventual commercialization of multiple complementary products and product candidates within franchises that target rare diseases. Our primary focus has been to build our rare endocrine franchise, which includes product candidates for the treatment of endogenous Cushing's syndrome and acromegaly, two rare diseases with a high unmet need for innovative treatment options. Given the well-identified and concentrated prescriber base addressing our target markets, we believe we can use a small, focused sales force to effectively market our products, if approved, in the United States, the European Union and other key global markets. We believe that our ability to execute on this strategy is enhanced by the significant clinical development and commercial experience of key members of our management team. We also intend to identify and in-license or acquire products or product candidates that would be complementary to our existing rare endocrine franchise or that would form the basis for new rare disease franchises. We believe this approach will enable us to maximize our commercial potential by further leveraging our existing resources and expertise.

              Our rare endocrine franchise includes the following product candidates:

    COR-003 (levoketoconazole), a cortisol synthesis inhibitor, in Phase 3 clinical development for the treatment of endogenous Cushing's syndrome.  Endogenous Cushing's syndrome is a rare endocrine disorder characterized by sustained elevated cortisol levels that most commonly result from a benign tumor of the pituitary gland. We believe that COR-003 has the potential to become the new standard of care for the drug therapy of endogenous Cushing's syndrome. COR-003 may provide a favorable efficacy, safety and tolerability profile compared to current drug therapies, including ketoconazole, the most commonly used drug therapy for endogenous Cushing's syndrome. COR-003 has been granted orphan drug designation by the U.S. Food and Drug Administration, or the FDA, and the European Medicines Agency, or the EMA. We are developing COR-003, a single enantiomer of ketoconazole, as a new chemical entity, or NCE, under the FDA 505(b)(2) regulatory approval pathway, and intend to reference the FDA's prior conclusions of safety and effectiveness for ketoconazole. Molecules of ketoconazole occur in two forms, which are mirror images of each other. These mirror image pairs are referred to as enantiomers. Single enantiomer drugs may offer safety and efficacy advantages because one of the enantiomer versions can have safety issues or be less effective in treatment of the disorder or disease.

 

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      The 505(b)(2) regulatory approval pathway allows companies developing drug products to rely in part on FDA conclusions of safety and effectiveness from studies that were not conducted by or for the applicant. Because approval can rest in part on data already accepted by the FDA or otherwise publicly available, an abbreviated and reduced development program may be possible. We are currently conducting a pivotal Phase 3 clinical trial for COR-003 and expect to report top-line data from this trial in the first half of 2017 and file applications for regulatory approval in the second half of 2017.

    COR-004, a second-generation antisense oligonucleotide, in Phase 2 clinical development for the treatment of acromegaly.  Acromegaly is a rare endocrine disorder that most commonly results from a benign tumor of the pituitary gland, leading to excess production of growth hormone, or GH, and insulin-like growth factor 1, or IGF-1, a key regulator of growth and metabolism. COR-004 has a novel mechanism of action targeting human GH receptor messenger RNA, or GHR mRNA, a molecule that is necessary for the synthesis of GHR protein. Currently, somatostatin analogs, or SSAs, are the most commonly used drug therapy for the treatment of patients with acromegaly. Up to one-half of treated patients do not adequately respond to SSAs and need alternative or adjunctive drug therapies. The novel mechanism of action of COR-004 may result in a differentiated safety and efficacy profile as compared to pegvisomant, the most common drug therapy used as an alternative to or in combination with SSAs. In contrast to daily administration of pegvisomant, we intend to develop COR-004 for once- or twice-weekly administration, potentially leading to improved patient compliance. In addition, we plan to develop COR-004 to be packaged in pre-filled syringes, eliminating the need for reconstitution, in contrast to most other drug therapies for acromegaly. We intend to seek orphan drug designation for COR-004 from the FDA and the EMA. Following a planned pre-Investigational New Drug, or IND, consultation with the FDA in the second half of 2015, we intend to file an IND for COR-004 in the United States and begin a multinational development program to support regulatory approval in the United States and subsequently the European Union.

    COR-005, a novel SSA, in Phase 2 clinical development for the treatment of acromegaly.  Based on the differentiated activation pattern of COR-005 to somatostatin receptor subtypes, or SSTRs, and preclinical and clinical data, we believe that COR-005 may offer an improved efficacy and safety profile relative to existing drug therapies for acromegaly. COR-005 has been granted orphan drug designation by the FDA and the EMA. Following a planned consultation with the FDA and EMA in the first half of 2016, we intend to file an IND for COR-005 in the United States and begin a multinational development program to support regulatory approval in the United States and European Union.

              Since the introduction of our new management team beginning in August 2014, we have established a rare disease, franchise-based business model focused on expansion through a disciplined in-licensing and acquisition strategy. In pursuit of our growth strategy, we have raised over $70 million since December 2014 from leading life sciences investors, including RA Capital, New Enterprise Associates, Broadfin Capital, HealthCap, Longwood Capital, TVM Capital and Granite Point Capital. Leveraging this capital and our experience in sourcing, selecting, in-licensing and acquiring product candidates, we were successful in augmenting our rare endocrine franchise by adding COR-004 and COR-005 to our product pipeline. We believe that these clinical product candidates, if successful, will benefit from significant development and commercial synergies with our lead product candidate, COR-003, because both Cushing's disease and acromegaly are typically caused by benign pituitary tumors and are mainly treated by pituitary endocrinologists. Given the concentrated specialty prescriber base for these indications, we plan to create a sales force of approximately 30 representatives in each of the United States and the European Union to market our endocrine franchise product candidates, if approved. In addition, we believe the development of two product candidates with different

 

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mechanisms of action to treat acromegaly may potentially enable us to address the broad acromegaly patient population requiring drug therapy.

Our Strategy

              Our goal is to transform the lives of patients by building a leading franchise-based, commercially oriented biopharmaceutical company addressing rare diseases with significant unmet medical needs. We are focused on developing, in-licensing, acquiring and eventually commercializing products and product candidates that target rare diseases across several complementary therapeutic areas.

              To achieve our goal, we are pursuing the following strategies:

    Focus on rare diseases.  We are developing treatments for rare diseases, initially endogenous Cushing's syndrome and acromegaly. Rare diseases typically have a high unmet need for innovative treatment options. Drug development for the treatment of rare diseases often requires smaller clinical trials and has the potential for accelerated regulatory review. Product candidates focused on rare diseases also often qualify for orphan drug designation, which in the United States provides for seven years of market exclusivity and in the European Union provides for 10 years of market exclusivity after regulatory approval has been granted. In addition, given the well-identified and concentrated prescriber base addressing our target markets, we believe we can use a small, focused sales force to effectively promote our products in key geographies. We believe these characteristics enable more efficient resource allocation.

    Independently commercialize products in the United States and the European Union.  We intend to independently commercialize our rare disease product candidates, if approved, in the United States and the European Union, and selectively in other key global markets. Given the concentrated specialty prescriber base, we plan to create a sales force of approximately 30 representatives in each of the United States and the European Union to market our rare endocrine disease product candidates, if approved. We believe that our ability to execute on this strategy is enhanced by the significant prior commercial experience of key members of our management team. Prior to joining our company, members of our management team were involved in the launch or commercialization of over 20 pharmaceutical products.

    Expand our portfolio through a disciplined in-licensing and acquisition strategy.  We plan to source new product candidates by in-licensing or acquiring them. Our management team seeks to mitigate the potential risks of this strategy by adhering to our disciplined criteria of focusing on in-licensing or acquisition opportunities of products that are already commercially available or that have human clinical data that we believe suggest a high probability of success for development progression and an attractive potential return on investment. As a result of our management team's experience in sourcing, selecting, in-licensing and acquiring product candidates, we were successful in augmenting our rare endocrine franchise by adding COR-004 and COR-005 to our product pipeline.

    Utilize a franchise model built on rare disease therapeutic areas.  We intend to build our company by creating franchises in areas where there is a significant commercial opportunity. We seek to in-license and acquire products and product candidates that target rare diseases in therapeutically aligned franchises. We believe that complementary products and product candidates will allow us to significantly leverage our expertise as well as our development and commercial infrastructure. For example, our product candidates for the treatment of

 

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      endogenous Cushing's syndrome and acromegaly, if approved, will serve as the basis for our rare endocrine franchise.

    Expand indications of products and product candidates within our franchises.  In addition to identifying products and product candidates that can form the basis of new rare disease franchises, we also intend to leverage opportunities to develop potential products and product candidates for additional indications within their respective therapeutic franchises. We believe that this approach will enable us to maximize our commercial potential by further leveraging our existing resources and expertise.

Recent Developments

              On May 13, 2015, we entered into an exclusive license agreement with Antisense Therapeutics Limited, or Antisense Therapeutics, that provides us with development and commercialization rights to Antisense Therapeutics' product candidate, ATL1103, for endocrinology applications. We refer to this product candidate as COR-004. Under the terms of the agreement, we paid Antisense Therapeutics an initial upfront license fee of $3.0 million in cash, and we also invested $2.0 million in Antisense Therapeutics equity. We may become obligated to make additional payments, contingent upon achieving specific development and commercialization milestones, of up to $105.0 million over the lifetime of the agreement. We may also be required to make royalty payments based on a percentage, ranging from the mid-single digits to the mid-teens, of net sales of COR-004, if approved. We will be responsible for the future clinical development of COR-004 in endocrinology applications and for the funding of associated future development, regulatory and drug manufacture costs. Antisense Therapeutics will retain commercialization rights for COR-004 in endocrinology applications in Australia and New Zealand as well as worldwide rights for COR-004 in indications other than endocrinology, and may utilize any new COR-004 data generated by us in pursuing these other indications, subject to specified terms and conditions set forth in our license agreement with Antisense Therapeutics.

              On June 29 and 30, 2015, we raised $33.2 million in aggregate gross proceeds in a private placement of common shares, the proceeds of which we expect to use primarily for the continued development of COR-003, along with the planned development of our two new programs, COR-004 and COR-005, and for general corporate purposes. The subscription price was $14.54 per share and we issued 2,284,414 new shares to the investors. The investors in this transaction included RA Capital, New Enterprise Associates, Broadfin Capital, HealthCap, Longwood Capital, TVM Capital and Granite Point Capital.

              On June 30, 2015, we acquired from Aspireo Pharmaceuticals Ltd., an Israeli company, its product candidate, DG3173. We refer to this product candidate as COR-005. Under the terms of the acquisition agreement, we issued to Aspireo Pharmaceuticals 2,062,677 common shares, which had a value of $33.2 million on June 30, 2015. In connection with this acquisition, we made a payment to the Office of the Chief Scientist of the Israeli Ministry of Economy, or OCS, in the amount of $3.0 million, which represents the repayment of amounts previously granted by OCS to Aspireo Pharmaceuticals, plus interest, that were used in support of research and development conducted by Aspireo Pharmaceuticals for the development of DG3173.

              On September 4, 2015, we changed our name from "Cortendo plc" to "Strongbridge Biopharma plc."

              Effective September 8, 2015, we settled a share exchange offer pursuant to which holders of 99.582% of the outstanding shares of Cortendo AB (other than non-accredited U.S. holders, who will instead receive cash) tendered their shares in exchange for beneficial interests in ordinary shares of Strongbridge Biopharma plc in the form of depositary receipts. Immediately following the settlement of

 

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the exchange offer, we effected a 1-for-11 reverse stock split of our outstanding ordinary shares (including the beneficial interests in such shares in the form of depositary receipts).

              The information contained in this prospectus gives effect to the closing of these transactions.

Risks Associated with Our Business

              Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the "Risk Factors" section of this prospectus immediately following this prospectus summary. These risks include, but are not limited to, the following:

    We are a development-stage biopharmacuetical company and have a limited operating history on which to assess our business, have incurred significant losses over the last several years, and anticipate that we will continue to incur losses for the foreseeable future.

    We have never generated any revenue from product sales and may never be profitable.

    We may not be successful in executing our growth strategy or our growth strategy may not deliver the anticipated results.

    If we acquire other businesses or in-license or acquire other product candidates and are unable to integrate them successfully, our financial performance could suffer.

    We are highly dependent on our key personnel, including our president and chief executive officer, as well as our ability to recruit, retain and motivate additional qualified personnel.

    We and our independent registered public accounting firm have identified a material weakness in our internal control over financial reporting, which could make it difficult to maintain an effective system of internal control over financial reporting, harm investor confidence in our company and affect the value of our ordinary shares.

    We depend entirely on the success of a limited number of product candidates, which are still in preclinical or clinical development. If we do not obtain regulatory approval for and successfully commercialize one or more of our product candidates, or we experience significant delays in doing so, we may never become profitable.

    Clinical trials are very expensive, time consuming, difficult to design and implement, and involve uncertain outcomes. Furthermore, results of earlier studies and trials may not be predictive of results of future trials.

    We have never commercialized a product candidate and we may lack the necessary expertise, personnel and resources to successfully commercialize any of our products that receive regulatory approval on our own or together with suitable partners.

    We operate in a highly competitive and rapidly changing industry, which may result in our competitors discovering, developing or commercializing competing products before or more successfully than we do, or our entering a market in which a competitor has commercialized an established competing product, and we may not be successful in competing with them.

    If we or our licensors are unable to obtain and maintain effective patent rights for our technologies, product candidates or any future product candidates, or if the scope of the patent rights obtained is not sufficiently broad, we may not be able to compete effectively in our markets.

    Even if one or more of our product candidates obtains regulatory approval, we will be subject to ongoing obligations and continued regulatory requirements, which may result in significant additional expense.

 

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    We expect to be classified as a passive foreign investment company for U.S. income tax purposes, and our U.S. shareholders may suffer adverse tax consequences as a result.

Corporate Information

              Strongbridge Biopharma plc, an Irish public limited company, was established on May 26, 2015 under the name Cortendo plc. On September 4, 2015, Cortendo plc changed its name to Strongbridge Biopharma plc. Our ordinary shares are currently quoted on the NOTC A-list in Norway.

              Cortendo AB, a company organized under the laws of Sweden, was established in October 1996 under the name Stefan Kronvall Medical AB and registered in Sweden in December 1996 for the purpose of developing medically innovative products for pharmaceutical diagnostics and other health care products. Stefan Kronvall Medical AB changed its name to Cortendo AB in 1997, to Cortendo Invest AB in 2003 and then to Cortendo AB (publ) in 2011. Cortendo AB has three wholly owned subsidiaries, Cortendo Invest AB, a company organized under the laws of Sweden, BioPancreate Inc., a Delaware corporation, and Cortendo Cayman Ltd., an exempted company incorporated in the Cayman Islands.

              In order to effect a corporate reorganization in connection with this offering, on September 8, 2015, we settled an exchange offer, which we refer to as the Exchange Offer, pursuant to which holders of 99.582% of the outstanding shares of Cortendo AB (other than non-accredited U.S. holders) exchanged their shares for beneficial interests in ordinary shares of Strongbridge Biopharma plc in the form of depositary receipts on a 1-for-1 basis. Non-accredited U.S. holders of ordinary shares of Cortendo AB will receive cash in an amount equivalent to the value of one ordinary share of Strongbridge Biopharma plc for each share of Cortendo AB validly exchanged. Holders of options to purchase shares of Cortendo AB, pursuant to individual agreements with such holders, exchanged their options for options to purchase an equivalent number of ordinary shares of Strongbridge Biopharma plc.

              We intend to acquire the remaining 0.418% of the outstanding shares of Cortendo AB held by shareholders who declined to participate in the Exchange Offer, pursuant to a process permitted by Swedish law. For additional information on this process, see "Risk Factors—Risks Related to the Offering and Our Ordinary Shares—The Swedish squeeze-out process is a lengthy process to complete and will result in additional costs to us. Any delay in our acquiring full ownership of Cortendo AB could result in increased administrative costs and burdens and could adversely affect our day-to-day operations and the liquidity and market value of our shares."

              Following the settlement of the Exchange Offer, Strongbridge Biopharma plc became the parent of Cortendo AB and its subsidiaries. As a result of the settlement of the Exchange Offer, the historical financial statements of Cortendo AB became, for financial reporting purposes, the historical consolidated financial statements of Strongbridge Biopharma plc and its subsidiaries as a continuation of the predecessor.

              Our principal executive offices are located at 900 Northbrook Drive, Suite 200, Trevose, Pennsylvania, 19053 and our telephone number is +1 610-254-9200. For the purposes of Irish law, our registered office is Arthur Cox Building, Earlsfort Terrace, Dublin 2, Ireland.

              Our website is www.strongbridgebio.com. The information on, or that can be accessed through, our website is not part of and should not be incorporated by reference into this prospectus. We have included our website address as an inactive textual reference only.

              Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. The

 

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trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

Implications of Being an "Emerging Growth Company"

              We qualify as an "emerging growth company," as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and regulatory requirements in contrast to those otherwise applicable generally to public companies. These provisions include:

    the requirement to have only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations disclosure; and

    exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 the Sarbanes-Oxley Act of 2002.

              We may take advantage of these reduced reporting and other regulatory requirements for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. In addition, the JOBS Act provides that an emerging growth company may delay adopting new or revised accounting standards until those standards apply to private companies. We have irrevocably elected not to avail ourselves of this delayed adoption of new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as public companies that are not emerging growth companies. If we choose to take advantage of any of these reduced reporting burdens, the information that we provide shareholders may be different than you might get from other public companies.

Implications of Being a Foreign Private Issuer

              Upon consummation of this offering, we will report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

    the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

    the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

    the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events.

              We intend to take advantage of these exemptions as a foreign private issuer.

 

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The Offering

Ordinary shares offered by us

  4,250,000 ordinary shares

Ordinary shares to be outstanding after this offering

 

22,955,382 ordinary shares

Option to purchase additional ordinary shares

 

We have granted the underwriters an option, exercisable within 30 days from the date of this prospectus, to purchase up to 637,500 additional ordinary shares.

Use of proceeds

 

We estimate that the net proceeds to us from this offering will be $66.9 million, assuming an initial offering price of $17.93 (NOK 145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, after deducting the estimated underwriting discount and estimated offering expenses payable by us. We intend to use the net proceeds from this offering, together with cash and cash equivalents on hand, to fund external research and development expenses for COR-003 for the treatment of endogenous Cushing's syndrome; to fund external research and development expenses for COR-004 for the treatment of acromegaly; to fund external research and development expenses for COR-005 for the treatment of acromegaly; and for working capital, general and administrative expenses, internal research and development expenses, and other general corporate purposes, including pre-commercial activities, potential in-licenses and potential acquisitions. See "Use of Proceeds."

Risk factors

 

See "Risk Factors" and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our ordinary shares.

Proposed symbol on The NASDAQ Global Market

 

We have submitted an application to list our ordinary shares on The NASDAQ Global Market under the symbol "SBBP."

              The number of our ordinary shares to be outstanding immediately following the completion of this offering is based on 18,705,382 ordinary shares outstanding as of September 18, 2015, and excludes:

    2,002,593 ordinary shares issuable upon the exercise of stock options outstanding as of June 30, 2015, with a weighted-average exercise price of $12.40 per ordinary share;

    up to 150,000 ordinary shares issuable upon the exercise of stock options we expect to award to our non-employee directors, contingent upon the pricing of this offering, under our new Non-Employee Director Equity Compensation Plan, at an exercise price equal to the higher of the initial public offering price per ordinary share and the closing price of our ordinary shares on the NOTC on September 22, 2015;

    195,454 ordinary shares reserved for future issuance under our Non-Employee Director Equity Compensation Plan; and

    1,081,818 ordinary shares reserved for future issuance under our 2015 equity incentive plan.

 

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Unless otherwise indicated, all information contained in this prospectus assumes and gives effect to:

    settlement of the Exchange Offer on September 8, 2015;

    a 1-for-11 reverse stock split of our ordinary shares that we effected on September 8, 2015 immediately following the settlement of the Exchange Offer;

    no exercise of the options described above; and

    no exercise of the underwriters' option to purchase up to 637,500 additional ordinary shares.

 

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Summary Consolidated Financial Data

              The following tables set forth a summary of our consolidated financial data. We have derived the consolidated statement of operations data for the years ended December 31, 2013 and 2014 and the balance sheet data as of December 31, 2014 from our consolidated audited financial statements. The consolidated statement of operations data for the six months ended June 30, 2014 and June 30, 2015 and the consolidated balance sheet data as of June 30, 2015 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. You should read this data together with the consolidated financial statements and related notes appearing elsewhere in this prospectus and the section in this prospectus titled "Management's Discussion and Analysis of Financial Condition and Results of Operations." The historical results are not necessarily indicative of the results to be expected for any future periods and results of interim periods are not necessarily indicative of the results for the entire year.

              We have prepared the unaudited consolidated financial information set forth below on the same basis as our audited consolidated financial statements and have included, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information as of and for the periods presented. Our audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and are presented in U.S. dollars except where otherwise indicated.

              Strongbridge Biopharma plc became the parent company of Cortendo AB pursuant to the settlement of the Exchange Offer, and for financial reporting purposes the historical consolidated financial statements of Cortendo AB became the historical consolidated financial statements of Strongbridge Biopharma plc and its subsidiaries as a continuation of the predecessor.

 

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  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2013   2014   2014   2015  
 
  (in thousands, except
share and per share data)

 

Consolidated Statement of Operations Data:

                         

Operating expenses:

                         

Research and development          

  $ 2,534   $ 5,844   $ 2,460   $ 10,218  

General and administrative

    2,658     4,588     1,298     12,620  

Total operating expenses          

    5,192     10,432     3,758     22,838  

Operating loss

    (5,192 )   (10,432 )   (3,758 )   (22,838 )

Other income (expense), net:

                         

Foreign exchange loss

    (570 )   (204 )   165     (314 )

Other income, net

    282     486     166     (543 )

Total other income (expense), net

    (288 )   282     331     (857 )

Loss before income taxes

    (5,480 )   (10,150 )   (3,427 )   (23,695 )

Income tax benefit

    93     480     225     178  

Net loss

    (5,387 )   (9,670 )   (3,202 )   (23,517 )

Net loss attributable to non-controlling interest

    92              

Net loss attributable to Strongbridge

  $ (5,295 ) $ (9,670 ) $ (3,202 ) $ (23,517 )

Net loss attributable to common shareholders, basic and diluted

  $ (5,295 ) $ (9,670 ) $ (3,202 ) $ (23,517 )

Net loss per share attributable to common shareholders, basic and diluted(1)

  $ (0.88 ) $ (1.20 ) $ (0.40 ) $ (1.75 )

Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted

    6,017,895     8,043,175     7,939,608     13,433,712  

Pro forma net loss per share attributable to common shareholders, basic and diluted(2)

        $ (0.96 )       $ (1.52 )

Weighted-average shares used in computing pro forma net loss per share attributable to common shareholders, basic and diluted(2)

          10,105,852           15,496,389  

(1)
See note 2 to our unaudited and audited consolidated financial statements included elsewhere in this prospectus for an explanation of the method used to calculate basic and diluted net loss per share attributable to common shareholders and basic and diluted weighted-average shares outstanding used to calculate the per share data.
(2)
These amounts give effect to the pro forma adjustments detailed on page 12.

 

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              The following table sets forth summary balance sheet data as of June 30, 2015:

    on an actual basis;

    on a pro forma basis to give effect to the settlement of the Exchange Offer, including the payment of cash for shares and options of Cortendo AB held by non-accredited U.S. holders; and

    on a pro forma as adjusted basis to give further effect to our issuance and sale of 4,250,000 ordinary shares in this offering at an assumed initial public offering price of $17.93 (NOK 145) per share, the closing price of our ordinary shares on the NOTC on September 18, 2015, after deducting the estimated underwriting discount and estimated offering expenses payable by us.

 
  As of June 30, 2015  
 
  Actual   Pro Forma   Pro Forma
As
Adjusted
 
 
  (in thousands)
 

Consolidated Balance Sheet Data:

                   

Cash and cash equivalents

  $ 54,387   $ 53,975   $ 120,838  

Total assets

    100,912     100,500     167,363  

Total liabilities

    13,626     13,626     13,626  

Total stockholders' equity

    87,286     86,874     153,737  

              Each $1.00 increase (decrease) in the assumed initial public offering price of $17.93 (NOK 145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, would increase (decrease) our pro forma as adjusted cash and cash equivalents, total assets and total stockholders' equity by $4.0 million, assuming that the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 in the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted cash and cash equivalents, total assets and total stockholders' equity by $16.7 million, assuming no change in the assumed initial public offering price per ordinary share.

 

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RISK FACTORS

              Investing in our ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below, as well as the other information in this prospectus, before investing in our ordinary shares. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occurs and, as a result, the market price of our ordinary shares could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may have similar adverse effects on us.

Risks Related to Our Being a Development-Stage Company

We are a development-stage biopharmaceutical company and have a limited operating history on which to assess our business, have incurred significant losses over the last several years, and anticipate that we will continue to incur losses for the foreseeable future.

              We are a development-stage biopharmaceutical company with a limited operating history. We have not yet demonstrated an ability to successfully complete a large-scale, pivotal clinical trial, obtain regulatory approval or manufacture and commercialize a product candidate. Consequently, we have no meaningful commercial operations upon which to evaluate our business and predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products.

              Since inception, we have incurred significant operating losses. Our net loss was $5.4 million and $9.7 million for the years ended December 31, 2013 and 2014, respectively and $23.5 million for the six months ended June 30, 2015. As of December 31, 2014, we had an accumulated deficit of $37.2 million and an accumulated deficit of $60.7 million for the six months ended June 30, 2015. We have devoted substantially all of our financial resources to identifying, in-licensing, acquiring and developing our product candidates, including conducting clinical trials and providing general and administrative support for these operations to build our business infrastructure.

              To date, we have financed our operations primarily through private placements of equity securities. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to obtain funding through equity or debt financings, strategic collaborations or grants. To become and remain profitable, we must develop and eventually commercialize one or more of our product candidates with significant market potential. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. It may be several years, if ever, before we receive regulatory approval and have a product candidate approved for commercialization. Even if we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of any markets in which our product candidates may receive approval and our ability to achieve market acceptance and adequate market share for our product candidates in those markets. Further, because the potential markets in which our product candidates may ultimately receive regulatory approval are very small, we may never become profitable despite obtaining such market share and acceptance of our product candidates.

              We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we:

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              Further, the net losses we incur may fluctuate significantly from quarter-to-quarter and year-to-year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. Moreover, if we incur substantial losses, we could be liquidated, and the value of our shares might be significantly reduced or the shares might be of no value.

We have never generated any revenue from product sales and may never be profitable.

              We have no products approved for commercialization and have never generated any revenue from product sales. We will not generate revenue from product sales unless and until we successfully complete the development of, obtain regulatory approval for and commercialize one or more of our product candidates. Our ability to generate future revenue from product sales depends heavily on our success in many areas, including, but not limited to:

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              Given the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Our expenses could increase beyond expectations if we are required by the FDA or the EMA, or any comparable foreign regulatory agency, to perform nonclinical and preclinical studies or clinical trials in addition to those that we currently anticipate.

              Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Further, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to obtain coverage and adequate reimbursement, and whether we own the commercial rights for that territory. If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of our product candidates. If we are not able to generate sufficient revenue from the sale of any approved products, we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to successfully execute any of the foregoing would decrease the value of our company and could impair our ability to raise capital, expand our business or continue our operations. A decline in the value of our company could cause you to lose all or part of your investment.

Even if this offering is successful, we expect that we will need substantial additional funding before we can expect to complete the development of our product candidates and become profitable from sales of our approved products, if any.

              We are currently advancing our product candidates through preclinical and clinical development. Development of our product candidates is expensive, and we expect our research and development expenses to increase in connection with our ongoing activities, particularly as we continue our ongoing trials and initiate new trials of COR-003, COR-004, COR-005 and our other product candidates. Even with the proceeds of this offering, we expect that we will require additional capital to obtain regulatory approval for, and to commercialize, our product candidates, including the making of milestone payments under the terms of our in-license agreement for COR-004.

              As of June 30, 2015, our cash and cash equivalents were $54.4 million. We currently believe that the net proceeds of this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. However, this estimate is based on assumptions that may prove to be incorrect, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future funding requirements will depend on many factors, including, but not limited to:

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              Any additional fundraising efforts may divert our management from their day-to-day activities, which may compromise our ability to develop and commercialize our product candidates, if approved. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our ordinary shares to decline.

              If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidates, if approved, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired.

Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our intellectual property or future revenue streams.

              Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, grants, and license and development agreements in connection with any collaborations. We do not have any committed external source of funds. In the event we seek additional funds, we may raise additional capital through the sale of equity or convertible debt securities. In such an event, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares. Debt financing, if available, could result in increased fixed payment obligations and may involve agreements that include restrictive covenants, such as limitations on our ability to incur additional debt, make capital expenditures, acquire, sell or license intellectual property rights or declare dividends, and other operating restrictions that could hurt our ability to conduct our business.

              Further, if we raise additional funds through collaborations, strategic alliances, or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property or future revenue streams. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

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We may not be successful in executing our growth strategy or our growth strategy may not deliver the anticipated results.

              We plan to source new product candidates that are complementary to our existing product candidates by in-licensing or acquiring them from other companies or academic institutions. If we are unable to identify, in-license or acquire and integrate product candidates in accordance with this strategy, our ability to pursue our growth strategy would be compromised.

              Research programs and business development efforts to identify new product candidates require substantial technical, financial and human resources. We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. Our research programs, business development efforts or licensing attempts may fail to yield additional complementary or successful product candidates for clinical development and commercialization for a number of reasons, including, but not limited to, the following:

              If any of these events occurs, we may not be successful in executing our growth strategy or our growth strategy may not deliver the anticipated results.

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We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

              We have limited financial and managerial resources. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

If we acquire other businesses or in-license or acquire other product candidates and are unable to integrate them successfully, our financial performance could suffer.

              If we are presented with appropriate opportunities, we may acquire other businesses. We have had limited experience integrating other businesses or product candidates, or in-licensing or acquiring other product candidates. Since our formation in 1996, we have in-licensed or acquired three product candidates: COR-004, COR-005 and BP-2001. The in-license of COR-004 and the acquisition of COR-005 occurred recently and we are still in the early stages of integrating them into our business. The integration process following these or any future transactions may produce unforeseen operating difficulties and expenditures, and may absorb significant management attention that would otherwise be directed to the ongoing development of our business. Also, in any future in-licensing or acquisition transactions, we may issue shares of stock that would result in dilution to existing shareholders, incur debt, assume contingent liabilities or create additional expenses related to amortizing intangible assets, any of which might harm our financial results and cause our stock price to decline. Any financing we might need for future transactions may be available to us only on terms that restrict our business or impose costs that reduce our net income.

We are highly dependent on our key personnel, including our president and chief executive officer, as well as our ability to recruit, retain and motivate additional qualified personnel.

              We are highly dependent on Matthew Pauls, our President and Chief Executive Officer, and Dr. Ruth Thieroff-Ekerdt, our Chief Medical Officer. Some members of our management team, including Matthew Pauls, have only been our employees since September 2014. As a result, they have limited experience working for us and working together as a team. Any member of management or employee can terminate his or her relationship with us at any time. Although we have included non-compete provisions in their respective employment or consulting agreements, as the case may be, such arrangements might not be sufficient for the purpose of preventing such key personnel from entering into agreements with any of our competitors. The inability to recruit and retain qualified personnel, or the loss of Mr. Pauls or Dr. Thieroff-Ekerdt could result in competitive harm as we could experience delays in reaching our in-licensing, acquisition, development and commercialization objectives.

              We also depend substantially on highly qualified managerial, sales and technical personnel who are difficult to hire and retain. There is currently a shortage of skilled personnel in our industry, which is likely to continue. As a result, competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill sets. In

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addition, failure to succeed in preclinical studies or clinical trials may make it more challenging to recruit and retain qualified personnel. Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will be critical to our success.

We expect to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

              As of June 30, 2015, we had 13 full-time employees. As our development, commercialization, in-licensing and acquisition plans and strategies develop, and as we advance the preclinical and clinical development of our product candidates, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of managerial, operational, sales, marketing, financial, legal and other resources. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. Due to our limited financial resources, we may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the in-licensing, acquisition and development of additional product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate or grow revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

We and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting, and our inability sufficiently to remediate this weakness may reduce the reliability of our financial reporting, harm investor confidence in our company and affect the value of our ordinary shares.

              In connection with the audits of our 2013 and 2014 financial statements, which were completed concurrently, we and our independent registered public accounting firm identified a material weakness, primarily related to the lack of sufficient and skilled resources with knowledge of U.S. GAAP and SEC reporting requirements to ensure that accurate financial statements could have been prepared and reviewed on a timely basis for annual reporting purposes. We determined that we had insufficient financial statement close processes and procedures, including with respect to account reconciliations and the resolution of complex accounting issues involving significant judgment and estimates. We may be unable to improve our internal control over financial reporting sufficiently to remediate this material weakness and, consequently, to maintain an effective system of internal control over financial reporting. This may reduce the reliability of our financial reporting, harm investor confidence in our company and affect the value of our ordinary shares.

              Under standards established by the Public Company Accounting Oversight Board, or PCAOB, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

              While we are taking steps to remediate this weakness, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating the material weakness. If we are unable to successfully remediate these material weaknesses, and if we are unable to produce accurate and timely financial statements, investor confidence in our financial statements could be reduced, our share price may be adversely affected and we may be unable to maintain compliance with applicable SEC requirements.

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              Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, Section 404 will require us to evaluate and report on our internal control over financial reporting beginning with our second Annual Report on Form 20-F expected to be for the year ending December 31, 2016. This assessment will need to include disclosure of any material weaknesses in our internal control over financial reporting identified by our management. Any weaknesses in our internal control over financial reporting may adversely affect our ability to maintain required disclosure controls and procedures. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing processes, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to conclude that our internal control over financial reporting is effective. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on the price of our ordinary shares. Our remediation efforts may not enable us to avoid a material weakness in the future.

              Our management will be required to assess the effectiveness of our internal controls and financial reporting annually. However, for as long as we are an "emerging growth company" under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. We could be an "emerging growth company" for up to five years. An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management's assessment might not. Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.

Our business and operations would suffer in the event of system failures.

              Our computer systems, as well as those of our clinical research organizations, or CROs, and other contractors and consultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, including hurricanes, terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of preclinical study or clinical trial data from completed, ongoing or planned preclinical studies or clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.

Risks Related to the Development and Preclinical and Clinical Testing of Our Product Candidates

We depend entirely on the success of a limited number of product candidates, which are still in preclinical or clinical development. If we do not obtain regulatory approval for and successfully commercialize one or more of our product candidates or we experience significant delays in doing so, we may never become profitable.

              We currently have no products approved for sale and may never be able to obtain regulatory approval of or commercialize any products. We have invested, and continue to expect to invest, a significant portion of our efforts and financial resources in the development of a limited number of product candidates: COR-003, COR-004 and COR-005, which are still in clinical development. Our ability to generate product revenues, which we do not expect will occur for at least the next several years, if ever, will depend heavily on our successful development and eventual commercialization, if approved, of one or more of our product candidates. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA, EMA or any

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comparable foreign regulatory agency, and we may never receive such regulatory approval for any of our product candidates. The success of COR-003, COR-004 and COR-005 will depend on several additional factors, including, but not limited to, the following:

              Many of these factors are beyond our control, including clinical development, the regulatory submission process, potential threats to our intellectual property rights and changes in the competitive landscape. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete clinical trials or eventually commercialize our product candidates, if approved.

Clinical trials are very expensive, time consuming and difficult to design and implement and involve uncertain outcomes. Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials.

              To obtain the requisite regulatory approvals to market and sell any of our product candidates, we must demonstrate through extensive preclinical studies and clinical trials that our products are safe and effective in humans. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. The results of preclinical studies and earlier clinical trials may not be predictive of the results of later-stage clinical trials. For example, the results generated to date in preclinical studies or clinical trials for our product candidates do not ensure that later preclinical studies or clinical trials will demonstrate similar results. Further, we have limited clinical data for each of our product candidates and have not completed Phase 3 clinical trials for any of our product candidates. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Companies in the biopharmaceutical industry may suffer setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier clinical trials. For example, COR-003 was previously studied for the treatment of type 2 diabetes. In December 2005, prior to the initiation of the first clinical trial by DiObex, our licensee, the FDA placed a clinical hold relating to a safety concern for use of a dosage above 600 mg/day. DiObex modified the clinical trial protocol to limit the highest dose to 600 mg/day, and the clinical hold was lifted by the FDA in February 2006. Furthermore, COR-003 did not demonstrate a reduction in blood glucose levels in a small Phase 2 clinical trial in patients with type 2 diabetes mellitus, the original indication for which it was being developed. We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials will begin on time, need to be redesigned, enroll an adequate number of subjects or patients on time or be completed on schedule, if at all. Clinical trials may be delayed, suspended or terminated for a variety of reasons, including delay or failure to:

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              Positive or timely results from preclinical or early stage clinical trials do not ensure positive or timely results in late stage clinical trials or regulatory approval by the FDA, EMA or any comparable foreign regulatory agency. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. Preclinical and clinical data are often susceptible to varying interpretations and analyses. Many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain regulatory approval for the product candidates. The FDA, EMA and any comparable foreign regulatory agency have substantial discretion in the approval process and in determining when or whether regulatory approval will be obtained for any of our product candidates. Even if we believe the data collected from clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA, EMA or any comparable foreign regulatory agency.

              In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the administration regimen and other clinical trial protocols, and the rate of dropout among clinical trial participants. In the case of our late stage clinical product candidates, results may differ in general on the basis of the larger number of clinical trial sites and additional countries involved in Phase 3 clinical trials. Different countries have different standards of care and different levels of access to care for patients, which in part drives the heterogeneity of the patient populations that enroll in our studies.

              We have already met with the EMA's Committee for Medicinal Products for Human Use and the FDA regarding the development pathway of COR-003. The FDA recommended, but did not require, a control group in the clinical trial design. We concluded that it was not practical to use any approved drug to serve as an active control in our Phase 3 clinical trial of COR-003. We are using an open-label, single-arm design because in the past the FDA has deemed that the concurrent use of a placebo control as monotherapy is unethical for the treatment of endogenous Cushing's syndrome. In addition, based on our analysis and feedback from experts whom we have consulted, we concluded that it was not practical to use any approved drug to serve as an active control due to the unsuitable mode of action, route of administration and side effect profile of available approved therapies. Studies lacking an active control group are more likely to be subject to unanticipated variability in study results that can potentially lead to flawed conclusions because they do not allow for discrimination of patient outcomes. As a result, even if we achieve the clinical trial's end points, the FDA or other regulatory

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authorities could view our study results as potentially biased and may ultimately require that we conduct a randomized, controlled clinical trial of COR-003 in order to obtain approval for commercialization. Unfavorable data from our clinical trials may restrict the potential development and commercialization of COR-003 or lead to the termination of its development.

              In addition, we recently in-licensed COR-004 and acquired COR-005 and were not involved in and had no control over the preclinical and clinical development of these product candidates prior to such in-license or acquisition. We may experience difficulties in the transition of these product candidates, which may result in delays in clinical trials as well as problems in our development efforts and regulatory filings, particularly if we do not receive all of the necessary products, information, reports and data for these product candidates in a timely manner. In addition, we are dependent on the prior research and development of COR-004 and COR-005 having been conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, the results of all clinical trials conducted prior to our in-license or acquisition, as the case may be, having been accurately reported and the collected and the data from these clinical trials having been correctly interpreted. These problems could result in increased costs and delays in the development of COR-004 and COR-005, which could hurt our ability to generate future revenues from these product candidates.

The regulatory approval process of the FDA, EMA or any comparable foreign regulatory agency may be lengthy, time consuming and unpredictable.

              Our future success is dependent upon our ability to successfully develop, obtain regulatory approval for and then successfully commercialize one or more of our product candidates. Although certain of our employees have prior experience with submitting marketing applications to the FDA, EMA or any comparable foreign regulatory agency, we, as a company, have not submitted such applications for our product candidates. We cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Applications for any of our product candidates could fail to receive regulatory approval for many reasons, including, but not limited to, the following:

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              Any of our current or future product candidates could take a significantly longer time to gain regulatory approval than expected or may never gain regulatory approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of our product candidates. For example, although our Phase 3 clinical program for COR-003 has an open-label, single-arm design because a concurrent placebo control as monotherapy was deemed unethical, and an approved drug to serve as active control (monotherapy) or as background therapy (adjunctive therapy) suitable for an international study population was deemed impractical, the FDA has recommended the inclusion of a control group. Therefore, even if we achieve the clinical trial's endpoints, the FDA and other regulatory authorities may ultimately require that we conduct a randomized, controlled clinical trial of COR-003 in order to obtain approval for commercialization.

              We intend to seek formal advice and guidance from the FDA and the EMA prior to advancing COR-004 and COR-005 into further studies and pivotal clinical trials. If the feedback we receive is different from what we currently anticipate, this could delay the development and regulatory approval process for these product candidates.

              We generally plan to seek regulatory approval to commercialize our product candidates in the United States, the European Union and other key global markets. To obtain regulatory approval in other countries, we must comply with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates. Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions. Failure to obtain marketing authorization for our product candidates will result in our being unable to market and sell such products. If we fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited. Similarly, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates.

If serious adverse, undesirable or unacceptable side effects are identified during the development of our product candidates or following regulatory approval, if any, we may need to abandon our development of such product candidates.

              If our product candidates are associated with serious adverse, undesirable or unacceptable side effects, we may need to abandon their development or limit development to certain uses or sub-populations in which such side effects are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in preclinical or early stage testing have later been found to cause side effects that restricted their use and prevented further development of the compound for larger indications.

              For example, in our clinical trials of COR-003 to date, adverse events have included headache, nausea, back pain, dizziness, diarrhea and liver enzyme elevations. For COR-004 and COR-005, which are both given by subcutaneous injections, adverse events have included injection site reaction such as swelling, itching and pain. In addition, transient and mild elevation of liver enzymes and transient and mild decrease of platelets were observed for COR-004, and headache and gastrointestinal effects such as nausea and diarrhea were observed for COR-005. These adverse events can be dose-dependent and may increase in frequency and severity if we increase the dose to increase efficacy. Occurrence of serious treatment-related side effects could impede clinical trial enrollment, require us to halt the clinical trial, and prevent receipt of regulatory approval from the FDA, EMA or any comparable foreign regulatory agency. They could also adversely affect physician or patient acceptance of our product candidates.

              Discovery of previously unknown problems, or increased focus on a known problem, with an approved product may result in restrictions on its permissible uses, including withdrawal of the medicine from the market. Currently, ketoconazole is required to include a "black box" warning on its

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label for use as an antifungal related to liver toxicity in the United States. Ketoconazole is the racemic mixture, meaning it contains both mirror image forms of the molecule in a 1:1 ratio, from which we draw our single enantiomer product candidate COR-003. If COR-003 is required to include a similar "black box" warning on its label, it may limit our ability to commercialize the product, if approved.

              Additionally, if one or more of our product candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such product(s), a number of potentially significant negative consequences could result, including, but not limited to:

              Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, financial condition, and results of operations.

We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseases for the treatment of which our product candidates are being studied. Difficulty in enrolling patients in our clinical trials could delay or prevent clinical trials of our product candidates.

              Successful and timely completion of clinical trials will require that we enroll a sufficient number of patient candidates. Clinical trials may be subject to delays as a result of patient enrollment taking longer than anticipated or patient withdrawal. Patient enrollment depends on many factors, including the size and nature of the patient population, eligibility criteria for the clinical trial, the proximity of patients to clinical sites, the design of the clinical protocol, the availability of competing clinical trials, the availability of new drugs approved for the indication the clinical trial is investigating, and clinicians' and patients' perceptions as to the safety and potential advantages of the product candidate being studied in relation to other available therapies.

              Because we are focused on addressing rare diseases, there are limited patient pools from which to draw in order to complete our clinical trials in a timely and cost-effective manner. Delays in the completion of any clinical trial of our product candidates will increase our costs, slow down our product candidate development and approval process, and delay or potentially jeopardize our ability to commence product sales and generate revenue. In addition, many of the factors that may lead to a

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delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims.

              We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing, and use of pharmaceutical products. We currently have no products that have been approved for commercial sale. However, the current and future use of product candidates by us in clinical trials, and the sale of any approved products in the future, may expose us to liability claims. These claims might be made by patients that use the product, healthcare providers, pharmaceutical companies, or others selling such products. Any claims against us, regardless of their merit, could be difficult and costly to defend, and could compromise the market acceptance of our product candidates or any prospects for commercialization of our product candidates, if approved.

              Although the clinical trial process is designed to identify and assess potential side effects, it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If any of our product candidates were to cause adverse side effects during clinical trials or after approval of the product candidate, we may be exposed to substantial liabilities. Physicians and patients may not comply with any warnings that identify known potential adverse effects and patients who should not use our product candidates.

              We purchase liability insurance in connection with our clinical trials. It is possible that our liabilities could exceed our insurance coverage. We intend to expand our insurance coverage to include the sale of commercial products if we obtain regulatory approval for any of our product candidates. However, we may not be able to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be impaired.

Risks Related to Commercialization of Our Product Candidates

We have never commercialized a product candidate and we may lack the necessary expertise, personnel and resources to successfully commercialize any of our products that receive regulatory approval on our own or together with suitable partners.

              We have never commercialized a product candidate. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, in-licensing or acquiring our product candidates, identifying potential product candidates and undertaking preclinical studies and clinical trials of our product candidates. We currently have no sales force or marketing or distribution capabilities. To achieve commercial success of our product candidates, if approved, we will have to develop our own sales, marketing and supply capabilities or outsource these activities to a third party.

              Factors that may affect our ability to commercialize our product candidates on our own include recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our product candidates and other unforeseen costs associated with creating an independent sales and marketing organization. Developing a sales and marketing organization requires significant investment, is time consuming and could delay the launch of our product candidates. We may not be able to build an effective sales and marketing organization in the United States, the European Union or other key global markets. If we are unable to build our own distribution and marketing capabilities or to find suitable partners for the commercialization of our product candidates, we may not generate revenues from them.

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We operate in a highly competitive and rapidly changing industry, which may result in our competitors discovering, developing or commercializing competing products before or more successfully than we do, or our entering a market in which a competitor has commercialized an established competing product, and we may not be successful in competing with them.

              The development and commercialization of new drug products is highly competitive and subject to significant and rapid technological change. Our success is highly dependent upon our ability to in-license, acquire, develop and obtain regulatory approval for new and innovative drug products on a cost-effective basis and to market them successfully. In doing so, we face and will continue to face intense competition from a variety of businesses, including large, fully integrated, well-established pharmaceutical companies who already possess a large share of the market, specialty pharmaceutical companies and biopharmaceutical companies, academic institutions, government agencies and other private and public research institutions in Europe, the United States and other jurisdictions.

              We are currently aware of various companies that are marketing existing drugs that may compete with our product candidates such as Corcept Therapeutics and Novartis. Corcept Therapeutics markets Korlym (mifepristone) in the United States. Korlym is indicated for the control of hyperglycemia secondary to hypercortisolism in patients with endogenous Cushing's syndrome who have type 2 diabetes or glucose intolerance and have failed surgery or are not candidates for surgery. The product has already received regulatory approval from the FDA and was launched in the United States in April 2012. Similarly, Novartis markets Signifor (pasireotide), a somatostatin analog approved for the treatment of adults with Cushing's disease for whom pituitary surgery is not an option or has not been curative. In 2012, Signifor was approved by the EMA for the treatment of Cushing's disease, and was approved by the FDA in December 2012. It is also an approved SSA therapy for the treatment of acromegaly. The product has been marketed in the United Kingdom, Germany and other European countries since 2012, and in the United States since the first half of 2013. Additionally, in 2014, the EMA approved ketoconazole for the treatment of endogenous Cushing's syndrome. Ketoconazole is the most commonly prescribed drug therapy for the treatment of endogenous Cushing's syndrome, even though it is not approved for this use in the United States. Regulatory approval of ketoconazole in the United States for the treatment of endogenous Cushing's syndrome could significantly increase competition for COR-003 due to their similar mechanisms of action.

              Other companies acquiring and developing or marketing drug therapies or products for rare diseases include Ipsen, Pfizer, GP Pharma, Italfarmaco, HRA and Chiasma. We anticipate this competition to increase in the future as new companies enter the endocrinology and rare diseases markets. In addition, the health care industry is characterized by rapid technological change, and new product introductions or other technological advancements could make some or all of our products obsolete.

              The highly competitive nature of and rapid technological changes in the biotechnology and pharmaceutical industries could render our product candidates or our technology obsolete or non-competitive. Our competitors may, among other things:

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The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies.

              The successful commercialization of our product candidates, if approved, will depend, in part, on the extent to which coverage and reimbursement for our products or procedures using our products will be available from government and health administration authorities, private health insurers and other third-party payors. To manage healthcare costs, many governments and third-party payors increasingly scrutinize the pricing of new technologies and require greater levels of evidence of favorable clinical outcomes and cost-effectiveness before extending coverage and adequate reimbursement to such new technologies. In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly under a new Part D and introduced a new reimbursement methodology based on average sale prices for physician-administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost-reduction initiatives and other provisions of this legislation could decrease the coverage and reimbursement that we receive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors. In light of such challenges to prices and increasing levels of evidence of the benefits and clinical outcomes of new technologies, we cannot be sure that coverage will be available for any product candidate that we commercialize, and, if available, that the reimbursement rates will be adequate. If we are unable to obtain adequate levels of coverage and reimbursement for our product candidates, our ability to generate revenue will be compromised.

              Our potential customers, including hospitals, physicians and other healthcare providers that purchase certain injectable drugs administered during a procedure, such as our product candidates, generally rely on third-party payors to pay for all or part of the costs and fees associated with the drug and the procedures administering the drug. These third-party payors may pay separately for the drug or may bundle or otherwise include the costs of the drug in the payment for the procedure. We are unable to predict at this time whether our product candidates, if approved, will be eligible for such separate payments. To the extent there is no separate payment for our product candidates, there may be further uncertainty as to the adequacy of reimbursement amounts. Nor can we predict at this time the adequacy of payments, whether made separately for the drug and procedure or with a bundled or otherwise aggregate payment amount for the drug and procedure. In addition, obtaining and maintaining adequate coverage and reimbursement status is time consuming and costly.

              Because each third-party payor individually approves coverage and reimbursement levels, obtaining coverage and adequate reimbursement is a time consuming, costly and sometimes unpredictable process. We may be required to provide scientific and clinical support, medical necessity or both for the use of any product to each third-party payor separately with no assurance that approval would be obtained, and we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness, medical necessity or both of our products. This process could delay

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the market acceptance of any product and could have a negative effect on our future revenues and operating results.

              Third-party payors may deny coverage and reimbursement status altogether of a given drug product, or cover the product, but may also establish prices at levels that are too low to enable us to realize an appropriate return on our investment in product development. Because the rules and regulations regarding coverage and reimbursement change frequently, in some cases on short notice, even when there is favorable coverage and reimbursement, future changes may occur that adversely impact such favorable coverage and reimbursement status. Further, the net reimbursement for drug products may be subject to additional reductions if there are changes to laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States.

              The unavailability or inadequacy of third-party coverage and reimbursement could negatively affect the market acceptance of our product candidates and the future revenues we may expect to receive from those products. In addition, we are unable to predict what additional legislation or regulation relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future, or what effect such legislation or regulation would have on our business.

Our products may not gain market acceptance, in which case we may not be able to generate product revenues.

              Even if the FDA, EMA or any comparable foreign regulatory agency approves the marketing of any product candidates that we develop, physicians, healthcare providers, patients or the medical community may not accept or use them. Efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may not be successful. If COR-003, COR-004, COR-005 or any other product candidate that we develop does not achieve an adequate level of acceptance, we may not generate significant product revenues or any profits from operations. The degree of market acceptance of COR-003, COR-004, COR-005 or any of our product candidates that are approved for commercial sale will depend on a variety of factors, including, but not limited to:

              In addition, the potential market opportunity for COR-003, COR-004, COR-005 or any other product candidate we may develop is difficult to estimate precisely. Our estimates of the potential market opportunity are predicated on several key assumptions such as industry knowledge and publications, third-party research reports and other surveys. While we believe that our internal assumptions are reasonable, these assumptions may be inaccurate. If any of the assumptions proves to

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be inaccurate, then the actual market for COR-003 or our other product candidates could be smaller than our estimates of the potential market opportunity. If the actual market for COR-003 or our other product candidates is smaller than we expect, or if the products fail to achieve an adequate level of acceptance by physicians, health care payors and patients, our product revenue may be limited and we may be unable to achieve or maintain profitability. Further, given the limited number of treating physicians, if we are unable to convince a significant number of such physicians of the value of our product candidates, we may be unable to achieve a sufficient market share to make our products, if approved, profitable.

Risks Related to Our Reliance on Third Parties

We rely on third parties to conduct our nonclinical and clinical trials and if these third parties perform in an unsatisfactory manner, our business could be substantially harmed.

              We have relied upon and plan to continue to rely upon third-party CROs to conduct and monitor and manage data for our ongoing nonclinical and clinical programs, and may not currently have all of the necessary contractual relationships in place to do so. Once we have established contractual relationships with such third-party CROS, we will have only limited control over their actual performance of these activities. Nevertheless, we are responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol, legal, regulatory, environmental and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.

              We and our CROs and other vendors are required to comply with current Good Manufacturing Practices, or cGMP, current Good Clinical Practices, or cGCP, and Good Laboratory Practice, or GLP, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Union and any comparable foreign regulatory agency for all of our product candidates in nonclinical and clinical development. Regulatory authorities enforce these regulations through periodic inspections of study sponsors, principal investigators, trial sites and other contractors. If we or any of our CROs or vendors fail to comply with applicable regulations, the data generated in our nonclinical and clinical trials may be deemed unreliable and the FDA, EMA or any comparable foreign regulatory agency may require us to perform additional nonclinical and clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that all of our clinical trials comply with cGCP regulations. In addition, our clinical trials must be conducted with products produced under cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.

              Our business involves the controlled use of hazardous materials, chemicals, biologicals and radioactive compounds. Substantially all such use is outsourced to third-party CRO manufacturers and clinical sites. Although we believe that our third-party CROs safety procedures for handling and disposing of such materials comply with industry standards, there will always be a risk of accidental contamination or injury. By law, radioactive materials may only be disposed of at certain approved facilities. If liable for an accident, or if it suffers an extended facility shutdown, we or our CROs could incur significant costs, damages or penalties.

              Our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing nonclinical and clinical programs. If our CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. Our CROs may also generate higher costs than anticipated. As a result, our results

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of operations and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenue could be delayed.

              If any of our relationships with these third-party CROs terminates, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms. If we are able to replace a CRO, switching or adding additional CROs involves additional cost and requires management time and focus and there is a natural transition period when a new CRO commences work. As a result, delays could occur, which could hurt our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future.

The failure of our suppliers to supply us with the agreed upon drug substance or drug product could hurt our business.

              We do not currently, and do not expect to in the future, independently conduct manufacturing activities for our product candidates. We expect to rely on third-party suppliers for the drug substance and drug product for our product candidates. The failure of these suppliers to perform as contracted, or the need to identify new suppliers, could result in a delay in the development of our product candidates. A delay in the development of our product candidates or having to enter into a new agreement with a different third party on less favorable terms than we have with our current suppliers could hurt our business.

We and our collaborators and contract manufacturers are subject to significant regulation with respect to manufacturing our product candidates. The manufacturing facilities on which we rely may not continue to meet regulatory requirements or may not be able to meet supply demands.

              All entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existing contract manufacturers for our product candidates, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured in accordance with cGMP. These regulations govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing. We, our collaborators or our contract manufacturers must supply all necessary documentation in support of an NDA or foreign equivalent on a timely basis and must adhere to GLP and cGMP regulations enforced by the FDA and other regulatory agencies through their facilities inspection program. Some of our contract manufacturers have never produced a commercially approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvals to do so. The facilities and quality systems of some or all of our collaborators and third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements. If these facilities do not pass a pre-approval plant inspection, regulatory approval of the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever.

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              The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our collaborators and third-party contractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third party to implement, and that may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a facility.

              If we, our collaborators or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA or another applicable regulatory authority could impose regulatory sanctions including, among other things, refusal to approve a pending application our product candidates, withdrawal of an approval or suspension of production.

              Additionally, if the supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified through an NDA supplement or equivalent foreign regulatory filing, which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.

              These factors could cause us to incur higher costs and could cause the delay or termination of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue.

Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

              Because we rely on third parties to develop and manufacture our product candidates, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees, and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor's discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may harm our business.

Risks Related to Our Intellectual Property

If we or our licensors are unable to obtain and maintain effective patent rights for our technologies, product candidates or any future product candidates, or if the scope of the patent rights obtained is not sufficiently broad, we may not be able to compete effectively in our markets.

              In addition to the exclusivity provided for our product candidates with regulatory orphan drug status, we rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our technologies and product candidates. Our success depends in large part on our and our licensors' ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technology and product candidates.

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              We have sought to protect our proprietary position by filing patent applications in the United States and abroad related to our novel technologies and products that are important to our business. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost, in a timely manner or in all jurisdictions. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Moreover, in some circumstances, we do not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

              The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal and factual questions for which legal principles remain unsolved. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates in the United States or in foreign countries. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions remain confidential for a period of time after filing, and some remain so until issued. Therefore, we cannot be certain that we were the first to file any patent application related to our product candidates, or whether we were the first to make the inventions claimed in our owned patents or pending patent applications, nor can we know whether those from whom we license patents were the first to make the inventions claimed or were the first to file. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. There is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if such patents cover our product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, found unenforceable or invalidated, which could allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our product candidates, prevent others from designing around our claims or provide us with a competitive advantage. Any of these outcomes could impair our ability to prevent competition from third parties.

              We and/or our licensors have filed several patent applications covering various aspects of our product candidates. We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patent, or whether any issued patents will be found invalid and unenforceable or will be challenged by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.

We may not have sufficient patent terms to effectively protect our products and business.

              Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is first filed. Although various extensions may be available, the life of a patent, and the protection it affords, is limited. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such product candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours or otherwise provide us with a

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competitive advantage. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from generic medications.

              While patent term extensions in the United States and under supplementary protection certificates in the European Union may be available to extend the patent exclusivity term for our product candidates, we cannot provide any assurances that any such patent term extension will be obtained and, if so, for how long.

Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

              Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Assuming the other requirements for patentability are met, in the United States prior to March 15, 2013, the first to invent the claimed invention is entitled to the patent, while outside the United States, the first to file a patent application is entitled to the patent. After March 15, 2013, under the Leahy-Smith America Invents Act, or the AIA, enacted on September 16, 2011, the United States has moved to a first inventor to file system. The AIA also includes a number of significant changes that affect the way patent applications will be prosecuted and may also affect patent litigation. The effects of these changes are currently unclear as the United States Patent and Trademark Office, or the USPTO, is still implementing various regulations, the courts have yet to address many of these provisions and the applicability of the act and new regulations on specific patents discussed herein have not been determined and would need to be reviewed. In general, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. In addition, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Third-party claims of intellectual property infringement may expose us to substantial liability or prevent or delay our development and commercialization efforts.

              Our commercial success depends in part on our ability to develop, manufacture, market and sell our product candidates, if approved, and use our proprietary technology without alleged or actual infringement, misappropriation or other violation of the patents and proprietary rights of third parties. There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and reexamination proceedings before the USPTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates. Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the intellectual property rights of third parties.

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              Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to compositions, formulations, methods of manufacture or methods of treatment related to the use or manufacture of our product candidates. We cannot be sure that we know of each and every patent and pending application in the United States and abroad that is relevant or necessary to the commercialization of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents upon which our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any compositions formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable. Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations, or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires or is finally determined to be invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms, or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

              Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates, if approved. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys' fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

Additional competitors could enter the market with generic versions of our products, which may result in a decline in sales of affected products.

              Under the Hatch-Waxman Act, a pharmaceutical manufacturer may file an abbreviated new drug application, or ANDA, seeking approval of a generic copy of an approved innovator product. Under the Hatch-Waxman Act, a manufacturer may also submit an NDA under section 505(b)(2) that references the FDA's prior approval of the innovator product. A 505(b)(2) NDA product may be for a new or improved version of the original innovator product. Hatch-Waxman also provides for certain periods of regulatory exclusivity, which preclude FDA approval, or, in some circumstances, FDA filing and reviewing, of an ANDA or 505(b)(2) NDA. These include, subject to certain exceptions, the period during which an FDA-approved drug is subject to orphan drug exclusivity. Although COR-003 is being developed as a new chemical entity, or NCE, we intend to rely on orphan drug exclusivity rather than NCE exclusivity for nonpatent protection of COR-003. In addition to the benefits of regulatory exclusivity, an innovator NDA holder may have patents claiming the active ingredient, product formulation or an approved use of the drug, which would be listed with the product in the FDA publication, "Approved Drug Products with Therapeutic Equivalence Evaluations," known as the "Orange Book." If there are patents listed in the Orange Book, a generic or 505(b)(2) applicant that seeks to market its product before expiration of the patents must include in the ANDA what is known as a "Paragraph IV certification," challenging the validity or enforceability of, or claiming non-infringement of, the listed patent or patents. Notice of the certification must be given to the innovator, too, and if within 45 days of receiving notice the innovator sues to protect its patents, approval of the ANDA is stayed for 30 months, or as lengthened or shortened by the court.

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              Accordingly, if COR-003 or any of our other product candidate is approved, competitors could file ANDAs for generic versions of our product candidates, or 505(b)(2) NDAs that reference our product candidates, respectively. If there are patents listed for our product candidates in the Orange Book, those ANDAs and 505(b)(2) NDAs would be required to include a certification as to each listed patent indicating whether the ANDA applicant does or does not intend to challenge the patent. We cannot predict whether any patents issuing from our pending patent applications will be eligible for listing in the Orange Book, how any generic competitor would address such patents, whether we would sue on any such patents or the outcome of any such suit.

              We may not be successful in securing or maintaining proprietary patent protection for products and technologies we develop or license. Moreover, if any patents that are granted and listed in the Orange Book are successfully challenged by way of a Paragraph IV certification and subsequent litigation, the affected product could immediately face generic competition and its sales would likely decline rapidly and materially. Should sales decline, we may have to write off a portion or all of the intangible assets associated with the affected product and our ability to generate revenue could be compromised.

Although we are not currently involved in any litigation, we may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming and unsuccessful.

              Competitors may infringe upon our patents or the patents of our licensors. Although we are not currently involved in any litigation, if we or one of our licensing partners were to initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable, or request declaratory judgment that there is no infringement. In patent litigation in the United States, defendant counterclaims alleging invalidity, noninfringement and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, nonobviousness or non-lack of enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld material relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable.

              Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms, or at all. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs, and distract our management and other employees. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development partnerships that would help us bring our product candidates to market, if approved.

              Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could hurt the market price of our ordinary shares.

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We have not yet registered a trademark and failure to secure or maintain adequate protection for our trademarks could adversely affect our business.

              We have filed a U.S., Canadian and International (Madrid Protocol) trademark application designating Australia, China, European Community, India, Israel, Japan, Mexico and Turkey for the mark, "Strongbridge Biopharma." If the U.S. or any foreign trademark offices raise any objections, we may be unable to overcome such objections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Oppositions or cancellation proceedings have been filed and may in the future be filed against our trademarks, and our trademarks may not survive such proceedings.

              Furthermore, third parties may allege in the future, that a trademark or trade name that we elect to use for our product candidates may cause confusion in the marketplace. We evaluate such potential allegations in the course of our business, and such evaluations may cause us to change our commercialization or branding strategy for our product candidates, which may require us to incur additional costs. Moreover, any name we propose to use with our product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

              At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, domain names or copyrights may be ineffective and could result in substantial costs and diversion of resources.

              In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks alleging that the use of a corporate name or logo, product names or other signs by which we distinguish our products and services are infringing their trademark rights. The outcome of such claims is uncertain and may adversely affect our freedom to use our corporate name or other relevant signs. If litigation arises in this area, it may lead to significant costs and diversion of management and employee attention.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

              We may employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, and we are not currently subject to any claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties, we may in the future be subject to such claims. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

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We may be subject to claims challenging the inventorship of our patents and other intellectual property.

              Although we are not currently experiencing any claims challenging the inventorship of our patents or ownership of our intellectual property, we may in the future be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

We may not be able to protect our intellectual property rights throughout the world.

              Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility of later obtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

              Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Risks Related to Government and Regulation

Even if one or more of our product candidates obtains regulatory approval, we will be subject to ongoing obligations and continued regulatory requirements, which may result in significant additional expense.

              If regulatory approval is obtained for any of our product candidates, the product will remain subject to continual regulatory review. Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing

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testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate. In addition, if the FDA, the EMA or any comparable foreign regulatory authority approves any of our product candidates, we will be subject to ongoing regulatory obligations and oversight by regulatory authorities, including with respect to the manufacturing processes, labeling, packing, distribution, adverse event reporting, storage, advertising and marketing restrictions, and recordkeeping and, potentially, other post-marketing obligations, all of which may result in significant expense and limit our ability to commercialize such products. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and cGCPs for any clinical trials that we conduct post-regulatory approval. Because our Phase 3 clinical trial of COR-003 will collect safety data for only 90 patients, we currently expect that we would be required by the FDA and the EMA to collect additional safety data post-approval.

              In addition, approved products, manufacturers and manufacturers' facilities are subject to continual review and periodic inspections. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

              If any of these events occurs, our ability to sell such product may be impaired, and we may incur substantial additional expense to comply with regulatory requirements. The policies of the FDA, the EMA or any comparable foreign regulatory agency may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any regulatory approval that we may have obtained, which would compromise our ability to achieve or sustain profitability.

If we obtain orphan drug designation for our product candidates from the FDA and/or the EMA, orphan drug designation may not ensure that we will enjoy market exclusivity in a particular market, and if we fail to obtain or maintain orphan drug exclusivity for our product candidates, we may be subject to earlier competition and our potential revenue will be reduced.

              Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan drug if it is intended to treat an orphan disease or condition, defined as a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the European Union, the EMA's Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the European Union. Additionally, designation is granted for

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products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biological product or where there is no satisfactory method of diagnosis, prevention or treatment, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition.

              In the United States, orphan drug designation entitles a party to financial incentives, such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. In addition, if a product receives the first FDA approval for the indication for which it has orphan drug designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity. In the European Union, orphan drug designation entitles a party to financial incentives such as a reduction of fees or fee waivers and ten years of market exclusivity following drug or biological product approval. This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

              COR-003 has been granted orphan drug designation for the treatment of endogenous Cushing's syndrome in the United States and Europe. COR-005 has been granted orphan drug designation for the treatment of acromegaly in the United States and the European Union. Even if we obtain orphan drug designation for our other product candidates, we may not be the first to obtain regulatory approval for any particular orphan indication due to the uncertainties associated with developing biopharmaceutical products. Further, even if we obtain orphan drug designation for a product candidate, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

Enacted and future legislation may increase the difficulty and cost for us to obtain regulatory approval of and commercialize our product candidates, and may affect the prices we may set.

              In the United States and the European Union, there have been a number of legislative, regulatory and proposed changes regarding the healthcare system. These changes could prevent or delay regulatory approval of our product candidates, restrict or regulate post-approval activities, and affect our ability to sell profitably any products for which we obtain regulatory approval and begin to commercialize.

              As a result of legislative proposals and the trend toward managed health care in the United States, third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new drugs. In the United States, the Medicare Modernization Act changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly under a new Part D and introduced a new reimbursement methodology based on average sale prices for physician-administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost-reduction initiatives and other provisions of this legislation could decrease the coverage and reimbursement that we receive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow the Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors.

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              In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, PPACA, a sweeping law intended, among other things, to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry, and impose additional health policy reforms. PPACA, among other things: increased the statutory minimum Medicaid rebates a manufacturer must pay under the Medicaid Drug Rebate Program; addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; and established a new Medicare Part D coverage gap discount program in which manufacturers must provide 50% point-of-sale discounts on negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer's outpatient drugs to be covered under Part D and implemented payment system reforms, including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models. Further, the PPACA imposed a significant annual nondeductible fee on entities that manufacture or import specified branded prescription drug products and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs. We expect that additional healthcare reform measures will likely be adopted in the future, any of which may increase our regulatory burdens and operating costs and limit the amounts that federal, state and foreign governments will reimburse for healthcare products and services, which could result in reduced demand for our products, if approved, or additional pricing pressures.

              Moreover, other legislative changes have also been proposed and adopted in the United States since PPACA was enacted. On August 2, 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021 was unable to reach required goals, thereby triggering the legislation's automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013 and will stay in effect through 2024 unless additional Congressional action is taken. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other health care funding, which could compromise the ability of patients and third-party payors to purchase our product candidates.

              In the European Union, proposed new clinical trial regulations will centralize clinical trial approval, which eliminates redundancy, but in some cases this may extend timelines for clinical trial approvals due to potentially longer wait times. Proposals to require specific consents for use of data in research, among other measures, may increase the costs and timelines for our product development efforts. Austerity measures in certain European nations may also affect the prices we are able to seek if our products are approved, as discussed below.

              Both in the United States and in the European Union, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We do not know whether additional legislative changes will be enacted, whether the regulations, guidance or interpretations will be changed, or what the impact of such changes on the regulatory approvals of our product candidates, if any, may be.

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Our relationships with customers, consultants and payors will be subject to applicable fraud and abuse, privacy and security, transparency and other healthcare laws and regulations, which, if violated, could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm and diminished profits and future earnings.

              Healthcare providers, physicians and others play a primary role in the recommendation and prescription of any products for which we may in the future obtain regulatory approval and commercialize. Our current and future arrangements with third-party payors, consultants, customers, physicians and others may expose us to broadly applicable fraud and abuse and other healthcare federal and state laws and regulations, including in the United States, that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain regulatory approval. Potentially applicable healthcare laws and regulations include, but are not limited to, the following:

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              Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under the U.S. federal Anti-Kickback Statute and analogous state laws, it is possible that some of our current and future business activities could be subject to challenge under one or more of such laws. In addition, recent health care reform legislation has strengthened these laws. For example, PPACA, among other things, amends the intent requirement of the U.S. federal Anti-Kickback Statute and criminal healthcare fraud statutes. A person or entity no longer needs to have actual knowledge of these statutes or specific intent to violate them in order to be in violation. Moreover, PPACA provides that the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act.

              Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations, agency guidance or case law involving applicable healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to, without limitation, significant civil, criminal and administrative penalties, damages, fines, exclusion from U.S. government funded healthcare programs, such as Medicare and Medicaid, imprisonment, disgorgement, enhanced government reporting and oversight, contractual damages, reputational harm, diminished profits and future earnings and/or the curtailment or restructuring of our operations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses or divert our management's attention from the operations of our business. If any of the physicians or other providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to similar penalties, including, without limitation, criminal, civil or administrative sanctions, including exclusions from government-funded healthcare programs.

We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations which can harm our business.

              We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. Treasury Department's Office of Foreign Assets Controls, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other partners from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. We may engage third parties for clinical trials outside of the United States, to sell our products abroad once we enter a commercialization phase and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals. We have direct or indirect interactions with officials and employees of

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government agencies or government-affiliated hospitals, universities and other organizations. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors and other partners, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.

Risks Related to the Offering and Our Ordinary Shares

The price of our ordinary shares is likely to be volatile and may fluctuate due to factors beyond our control.

              The market price of our ordinary shares is likely to be highly volatile and subject to wide fluctuations in response to a variety of factors, many of which are beyond our control, including:

              The share price of publicly traded emerging biopharmaceutical and drug discovery and development companies has been highly volatile and is likely to remain highly volatile in the future. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of individual companies. Broad market and industry factors may hurt the market price of companies' stock, including ours, regardless of actual operating performance. The market price of our ordinary shares may decline below the initial public offering price in this offering, and investors may lose some or all of their investment. Shares of our stock have been quoted on the Norwegian over-the-counter market. Continued quotation in this market could contribute to volatility in our share price.

An active market in our ordinary shares may not develop or be liquid enough for investors to resell our ordinary shares.

              We cannot predict the extent to which an active market for our ordinary shares will develop or be sustained after this offering, or how the development of such a market might affect the market price for our ordinary shares. The public offering price of our ordinary shares in this offering will be determined by negotiations between us and the underwriters based on a number of factors, including

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market conditions in effect at the time of this offering, and may not be indicative of the price at which our ordinary shares will trade following completion of this offering. Investors may not be able to sell their ordinary shares at or above the initial public offering price in this offering.

Future sales, or the possibility of future sales, of a substantial number of our ordinary shares could adversely affect the price of our ordinary shares.

              Future sales of a substantial number of our ordinary shares, or the perception that such sales will occur, could cause a decline in the market price of our ordinary shares. Following the completion of this offering, we will have 22,955,382 ordinary shares outstanding, assuming the underwriters do not exercise their option to purchase additional ordinary shares, based on 18,705,382 ordinary shares outstanding as of September 18, 2015. This includes the ordinary shares in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Approximately 81% of the ordinary shares outstanding are expected to be held by existing shareholders. A significant portion of these ordinary shares will be subject to the lock-up agreements described in the "Underwriting" section of this prospectus. If, after the end of such lock-up agreements, these shareholders sell substantial amounts of ordinary shares in the public market, or the market perceives that such sales may occur, the market price of our ordinary shares and our ability to raise capital through an issue of equity securities in the future could be adversely affected. We also intend to enter into a registration rights agreement upon consummation of this offering pursuant to which we will agree under certain circumstances to file a registration statement to register the resale of the ordinary shares held by certain of our existing shareholders, as well as to cooperate in certain public offerings of such ordinary shares. In addition, following the completion of this offering, we intend to adopt a new omnibus equity incentive plan under which we would have the discretion to grant a broad range of equity-based awards to eligible participants. We intend to register all ordinary shares that we may issue under this equity compensation plan. Once we register these ordinary shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the "Underwriting" section of this prospectus. If a large number of our ordinary shares or securities convertible into our ordinary shares are sold in the public market after they become eligible for sale, the sales could reduce the trading price of our ordinary shares and impede our ability to raise future capital.

We expect to be classified a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ordinary shares.

              A non-U.S. corporation generally will be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year if either (1) 75% or more of its gross income for such year consists of certain types of "passive" income or (2) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. For this purpose, "passive income" generally includes, among other items of income, dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income, and a non-U.S. corporation is treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which such non-U.S. corporation owns, directly or indirectly, more than 25% of the value of such other corporation's stock. Based on our projected income, assets and activities, we expect that we will be treated as a PFIC for the current taxable year and for the foreseeable future. Accordingly, a U.S. Holder, as defined under the section "Taxation—Material U.S. Federal Income Tax Considerations for U.S. Holders," would be subject to substantially increased U.S. federal income tax liability, including upon the receipt of any "excess distributions" from us and upon the sale or other disposition of our ordinary shares. Although certain elections may be available to mitigate the adverse impact of the PFIC rules, such elections may result in a current U.S. federal tax liability prior to any distribution on or disposition of our ordinary shares. Further, there can be no

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assurances that we will supply U.S. Holders with information that such U.S. Holders are required to report under the rules governing such elections. Accordingly, the acquisition of our ordinary shares may not be an appropriate investment for certain holders that are not tax-exempt organizations. U.S. Holders should consult their tax advisers regarding the application of the PFIC rules to an investment in our ordinary shares.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our ordinary shares and our trading volume could decline.

              The trading market for our ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. If no or too few securities or industry analysts commence coverage of our company, the trading price for our ordinary shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our ordinary shares or publish inaccurate or unfavorable research about our business, the price of our ordinary shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our ordinary shares could decrease, which might cause the price of our ordinary shares and trading volume to decline.

If you purchase ordinary shares in this offering, you will suffer immediate dilution of your investment.

              The initial public offering price of our ordinary shares is substantially higher than the as adjusted net tangible book value per ordinary share. Therefore, if you purchase ordinary shares in this offering, you will pay a price per ordinary share that substantially exceeds our as adjusted net tangible book value per ordinary share after this offering. To the extent outstanding options are exercised, you will incur further dilution. Based on the assumed initial public offering price of $17.93 (NOK 145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, you will experience immediate dilution of $9.32 per ordinary share, representing the difference between our as adjusted net tangible book value per ordinary share after giving effect to this offering and the assumed initial public offering price. In addition, purchasers of ordinary shares in this offering will have contributed approximately 40% of the aggregate price paid by all purchasers of our ordinary shares but will own only approximately 19% of our ordinary shares outstanding after this offering. See "Dilution."

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

              Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our ordinary shares. The failure by our management to apply these funds effectively could result in financial losses, cause the market price of our ordinary shares to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We have never paid cash dividends, do not expect to pay dividends in the foreseeable future and our ability to pay dividends, or repurchase or redeem our ordinary shares, is limited by law.

              We have not paid any dividends since our inception and do not anticipate paying any dividends on our ordinary shares in the foreseeable future. Even if future operations lead to significant levels of distributable profits, we currently intend that any earnings will be reinvested in our business and that dividends will not be paid until we have an established revenue stream to support continuing dividends. The proposal to pay future dividends to shareholders will in addition effectively be at the sole discretion of our board of directors after taking into account various factors our board of directors deems relevant, including our business prospects, capital requirements, financial performance and new product development. In addition, payment of future dividends is subject to certain limitations under

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the Irish Companies Act 2014, or the Irish Companies Act. The Irish Companies Act, among other requirements, require Irish companies to have distributable reserves available for distribution equal to or greater than the amount of the proposed dividend. See "Description of Share Capital and Articles of Association." Accordingly, investors cannot rely on dividend income from our ordinary shares and any returns on an investment in our ordinary shares will likely depend entirely upon any future appreciation in the price of our ordinary shares.

We will be a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

              Upon consummation of this offering, we will report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act and although we are subject to Irish laws and regulations with regard to such matters and intend to furnish quarterly financial information to the Securities and Exchange Commission, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Exchange Act; (2) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each financial year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

As a foreign private issuer and as permitted by the listing requirements of NASDAQ, we will rely on certain home country governance practices rather than the corporate governance requirements of NASDAQ.

              We will be a foreign private issuer as of the effective date of this registration statement. As a result, in accordance with NASDAQ Listing Rule 5615(a)(3), we will comply with home country governance requirements and certain exemptions thereunder rather than complying with certain of the corporate governance requirements of NASDAQ.

              Irish law does not require that a majority of our board of directors consist of independent directors. Our board of directors therefore may include fewer independent directors than would be required if we were subject to NASDAQ Listing Rule 5605(b)(1). In addition, we will not be subject to NASDAQ Listing Rule 5605(b)(2), which requires that independent directors must regularly have scheduled meetings at which only independent directors are present.

              Our articles of association (hereinafter referred to as our Articles) provide that at any meeting of shareholders, a shareholder may designate another person to attend, speak and vote at the meeting on their behalf by proxy, but no such proxy shall be voted or acted upon at any subsequent meeting, unless the proxy expressly provides for this. Irish law does not require shareholder approval for the issuance of securities in connection with the establishment of or amendments to equity-based compensation plans for employees. To this extent, our practice varies from the requirements of NASDAQ Listing Rule 5635, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events.

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              For an overview of our corporate governance principles, see "Description of Share Capital and Articles of Association." As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act's domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

              We are a foreign private issuer and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. Losing our status as a foreign private issuer would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our current status as a foreign private issuer, either (1) a majority of our ordinary shares must be either directly or indirectly owned of record by non-residents of the United States or (2)(A) a majority of our executive officers or directors may not be United States citizens or residents, (B) more than 50% of our assets cannot be located in the United States and (C) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

Your rights as a shareholder will be governed by Irish law and differ from the rights of shareholders under U.S. law.

              We are a public limited company incorporated under the laws of Ireland. Therefore, the rights of holders of ordinary shares are governed by Irish law and by our memorandum of association and Articles. These rights differ from the typical rights of shareholders in U.S. corporations. In certain cases, facts that, under U.S. law, would entitle a shareholder in a U.S. corporation to claim damages may not give rise to a cause of action under Irish law entitling a shareholder in an Irish company to claim damages. For example, the rights of shareholders to bring proceedings against us or against our directors or officers in relation to public statements are more limited under Irish law than under the civil liability provisions of the U.S. securities laws.

              You may have difficulties enforcing, in actions brought in courts in jurisdictions located outside the United States, judgments obtained in the U.S. courts under the U.S. securities laws. In particular, if you sought to bring proceedings in Ireland based on U.S. securities laws, the Irish court might consider that:

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              You should also be aware that Irish law does not allow for any form of legal proceedings directly equivalent to the class action available in the United States. For further information with respect to your rights as a holder of our ordinary shares, see the section of this prospectus titled "Description of Share Capital and Articles of Association."

After the settlement of the Exchange Offer, to the extent our financial statements will be audited by a registered public accounting firm in Ireland, because the PCAOB is not currently permitted to inspect registered public accounting firms in the Republic of Ireland, including our independent registered public accounting firm, you may not benefit from such inspections.

              Auditors of U.S. public companies, including our independent registered public accounting firm, are required by the laws of the United States to undergo periodic PCAOB inspections to assess their compliance with U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC. The laws of certain European Union countries, including the Republic of Ireland, do not currently permit the PCAOB to conduct inspections of accounting firms established and operating in such European Union countries. Accordingly, to the extent our financial statements will be audited by a registered public accounting firm in Ireland, the PCAOB would be prevented from fully evaluating the effectiveness of our independent registered public accounting firm's audit procedures or quality control procedures. Unlike shareholders or potential shareholders of most U.S. public companies, our shareholders would be deprived of the possible benefits of such PCAOB inspections.

A future transfer of your ordinary shares, other than one effected by means of the transfer of book-entry interests in DTC, may be subject to Irish stamp duty.

              The rate of stamp duty, when applicable, on the transfer of shares in an Irish-incorporated company is 1% of the price paid, or the market value of the shares acquired, whichever is greater. Payment of Irish stamp duty is generally a legal obligation of the transferee. We expect that most of our ordinary shares will be traded through the Depositary Trust Company, or DTC, or through brokers who hold such shares on behalf of customers through DTC. As such, the transfer of ordinary shares should be exempt from Irish stamp duty based on established practice of the Irish Revenue Commissioners. We received written confirmation from the Irish Revenue Commissioners on June 22, 2015 that a transfer of our ordinary shares held through DTC and transferred by means of a book-entry interest would be exempt from Irish stamp duty. However, if you hold your ordinary shares directly of record, rather than beneficially through DTC, or through a broker that holds your ordinary shares through DTC, any transfer of your ordinary shares may be subject to Irish stamp duty. The potential for stamp duty to arise could adversely affect the price and liquidity of our ordinary shares. In addition, the terms of our eligibility agreement with DTC will require us to provide certain indemnities relating to Irish stamp duty to third parties. If liability were to arise as a result of the indemnities provided under the terms of the eligibility agreement, we may face significant unexpected costs.

The Swedish squeeze-out process is a lengthy process to complete and may cause us to incur unanticipated costs. The delay in our acquiring full ownership of Cortendo AB could result in increased administrative costs and burdens and could adversely affect our day-to-day operations and the liquidity and market value of our shares.

              This process and any delays may cause us to incur unexpected costs or result in unanticipated structuring or tax costs. Further, the act of redomiciling may impair our ability to utilize our NOLs.

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              As the holder of more than 90% of Cortendo AB's shares following the settlement of the Exchange Offer, we will pursue a squeeze-out process permitted under Swedish law, which will allow us to acquire the remaining shares of Cortendo AB that were not exchanged as part of the Exchange Offer. This process will be conducted by arbitration proceedings. The final arbitration award in which the squeeze-out price is determined will likely not be rendered until 12 to 18 months or more from initiation of the proceedings. We will have the possibility to request advance title to the remaining Cortendo AB shares before such time, which normally can be obtained within six to nine months from initiation of the proceedings, provided that we provide sufficient security for the final squeeze-out price and interest thereon. In such case, we would receive title to such shares and would also be required to pay a preliminary per-share squeeze-out price for the remaining Cortendo AB shares that corresponds to the value of the per-share Exchange Offer consideration, together with interest thereon. Until advance title is granted, Cortendo AB shareholders who did not participate in the Exchange Offer will hold a minority interest in Cortendo AB. After advance title has been granted, the former Cortendo AB shareholders will merely have a claim for the final squeeze-out price, reduced by the preliminary amount we paid in connection with the advance title.

              The existence of minority shareholders in Cortendo AB may, among other things, make it more difficult or delay our ability to implement changes to our legal structure and interfere with our day-to-day business operations and corporate governance. For example, intra-group transfers of entities and transactions between us and our subsidiaries and affiliates, or among our subsidiaries and affiliates, will need to be carried out on market terms and on an arm's-length basis, which may impair the efficiency of our day-to-day operations. As a matter of Swedish law, minority Cortendo AB shareholders will also have the ability to request special investigations, convene general meetings of shareholders and propose agenda items for our annual general meetings. Each of these circumstances, along with other measures we may need to take to recognize the continuing legal rights of the remaining minority Cortendo AB shareholders, may result in increased costs and administrative burden.

              In addition, holders of Cortendo AB shares who have chosen not to exchange their shares pursuant to the Exchange Offer will have a pro rata claim upon any dividends or other distributions payable by Cortendo AB and will be entitled to receive a proportionate share of any dividend payments or other distributions made by Cortendo AB, consequently reducing the amount of any dividend payments or other distributions that we might make to holders of our shares.

              As long as these minority Cortendo AB shareholders remain after settlement of the Exchange Offer, there will be fewer of our shares outstanding than there were Cortendo AB shares outstanding prior to the settlement of the Exchange Offer. As a result, the market for and the liquidity and market value of our shares could be adversely affected.

We expect to expend cash in connection with the squeeze-out proceedings.

              The actual price per share purchased pursuant to the Swedish squeeze-out proceedings will be determined by the arbitration tribunal. As a result of the squeeze-out proceedings, we may ultimately have to pay, in the aggregate, a higher price per share in order to purchase the remaining 865,026 Cortendo AB shares that are outstanding following the completion of the Exchange Offer. Such price will also under Swedish law have to be paid in cash, which will have an impact on our liquidity and cash reserves, and therefore may have an adverse effect on our financial and operational flexibility.

Anti-takeover provisions in our Articles and under Irish law could make an acquisition of us more difficult, limit attempts by our shareholders to replace or remove our current directors and management team, and limit the market price of our ordinary shares.

              Our Articles contain provisions that may delay or prevent a change of control, discourage bids at a premium over the market price of our ordinary shares and adversely affect the market price of our

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ordinary shares and the voting and other rights of the holders of our ordinary shares. These provisions include:

              These provisions do not make us immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some shareholders. In addition, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management team by making it more difficult for shareholders to replace members of our board of directors, which is responsible for appointing the members of our management.

Irish law differs from the laws in effect in the United States with respect to defending unwanted takeover proposals and may give our board of directors less ability to control negotiations with hostile offerors.

              We are subject to the Irish Takeover Rules. Under the Irish Takeover Rules, our board of directors is not permitted to take any action that might frustrate an offer for our ordinary shares once our board of directors has received an approach that may lead to an offer or has reason to believe that such an offer is or may be imminent, subject to certain exceptions. Potentially frustrating actions such as (1) the issue of shares, options, restricted share units or convertible securities, (2) material acquisitions or disposals, (3) entering into contracts other than in the ordinary course of business or (4) any action, other than seeking alternative offers, which may result in frustration of an offer, are prohibited during the course of an offer or at any earlier time during which our board of directors has reason to believe an offer is or may be imminent. These provisions may give our board of directors less ability to control negotiations with hostile offerors than would be the case for a corporation incorporated in the United States. We discuss these differences in the section titled "Description of Share Capital and Articles of Association."

We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to "emerging growth companies" will make our ordinary shares less attractive to investors.

              We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an "emerging growth company," we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As an "emerging growth company," in our initial registration statement, we are required to report only two years of financial results and selected financial data compared to three and five years, respectively, for comparable data reported by other public companies. We could be an "emerging growth company" for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an "emerging growth company" as of the following December 31, our fiscal year end. We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the price of our ordinary shares may be more volatile.

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MARKET AND INDUSTRY DATA

              In this prospectus, we have used industry and market data obtained from our own internal estimates and research as well as from industry publications and research, surveys and studies conducted by third parties. We have compiled, extracted and reproduced industry and market data from external sources that we believe to be reliable. We caution prospective investors not to place undue reliance on the above mentioned data. Unless otherwise indicated in the prospectus, the basis for any statements regarding our competitive position is based on our own assessment and knowledge of the market in which we operate. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled "Risk Factors." These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

              Although the industry and market data is inherently imprecise, we confirm that where information has been sourced from a third party, such information has been accurately reproduced and that as far as we are aware and are able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Where information sourced from third parties has been presented, the source of such information has been identified.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

              This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections of this prospectus titled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." All statements, other than statements of historical facts, contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, plans and objectives of management for future operations, and future results of current and anticipated products, are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The words "anticipate," "assume," "believe," "contemplate," "continue," "could," "estimate," "expect," "goal," "intend," "may," "might," "objective," "plan," "potential," "predict," "project," "positioned," "seek," "should," "target," "will," "would," or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management's beliefs and assumptions, are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors. These forward-looking statements include statements regarding:

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              Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. As a result, any or all of our forward-looking statements in this prospectus may turn out to be inaccurate. We have included important factors in the cautionary statements included in this prospectus, particularly in the section of this prospectus titled "Risk Factors," that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. 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. Moreover, we operate in a highly competitive and rapidly changing environment in which new risks often emerge. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

              You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this prospectus are made as of the date of this prospectus, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.

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USE OF PROCEEDS

              We estimate that the net proceeds to us from the offering will be approximately $66.9 million, assuming an initial public offering price of $17.93 (NOK 145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, after deducting the estimated underwriting discount and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional ordinary shares in full, we estimate that the net proceeds from this offering will be approximately $77.5 million.

              As June 30, 2015, we had cash and cash equivalents of $54.4 million. We intend to use the net proceeds from this offering, together with our cash and cash equivalents, as follows:

              We believe opportunities may exist from time to time to expand our current business through the in-license or acquisition of complementary product candidates. While we have no current agreements or commitments for any specific in-licenses or acquisitions at this time, we may use a portion of the net proceeds for these purposes.

              Each $1.00 increase (decrease) in the assumed initial public offering price of $17.93 (NOK 145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, after deducting the estimated underwriting discount and estimated offering expenses payable by us, would increase (decrease) net proceeds to us from this offering by approximately $4.0 million, assuming that the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of ordinary shares we are offering. Each increase (decrease) of 1,000,000 in the number of ordinary shares we are offering would increase (decrease) the net proceeds to us from this offering by approximately $16.7 million, assuming no change in the assumed initial public offering price per ordinary share.

              Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors, including the relative success and cost of our research, preclinical and clinical development programs, our ability to obtain additional financing, the status of and results from clinical trials, and whether regulatory authorities require us to perform additional clinical trials in order to obtain regulatory approvals. As a result, our management will have broad discretion in the application of the net proceeds of this offering, and investors will be relying on our judgment regarding the application of the net proceeds. In addition, we

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might decide to postpone or not pursue certain preclinical activities or clinical trials if the net proceeds from this offering and our other sources of cash are less than expected.

              Based on our planned use of the net proceeds of this offering and our current cash and cash equivalents described above, we estimate that such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

              Pending their use, we plan to invest the net proceeds of this offering in short- and intermediate-term interest-bearing investments.

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PRICE RANGE OF ORDINARY SHARES

              Our ordinary shares have been quoted on the NOTC since May 2, 2002 and on the NOTC A-list since August 1, 2011 under the symbol "CORT." Effective September 9, 2015, beneficial interests in our shares (in the form of depositary receipts) began trading on the NOTC on a split-adjusted basis under the symbol "SBBP."

              The following table sets forth the high and low prices for our ordinary shares for the calendar periods listed below. This information has been adjusted for the reverse stock split.

              Share prices on the NOTC A-list are presented in Norwegian Kroner. Such over-the-counter market quotations reflect inter-dealer prices, without markup, markdown or commissions and, particularly because our ordinary shares are traded infrequently, may not necessarily represent actual transactions or a liquid trading market.

 
  High
(NOK)
  Low
(NOK)
  Average
Daily Trading
Volume
 

Fiscal 2015

                   

January

    81.40     46.20     29,894  

February

    88.00     71.50     5,916  

March

    101.20     90.20     12,769  

April

    107.25     93.50     23,238  

May

    132.00     103.95     18,273  

June

    129.80     111.10     4,788  

July

    155.10     123.20     9,912  

August

    154.00     121.00     14,510  

September (through September 18, 2015)

    160.00     132.00     6,877  

Fiscal 2015

   
 
   
 
   
 
 

Third Quarter (through September 18, 2015)

    160.00     121.00     11,153  

Second Quarter

    132.00     93.50     15,053  

First Quarter

    101.20     46.20     15,961  

Fiscal 2014

   
 
   
 
   
 
 

Fourth Quarter

    55.00     44.55     3,320  

Third Quarter

    58.30     42.90     3,604  

Second Quarter

    60.50     46.20     2,329  

First Quarter

    60.50     42.90     8,172  

Fiscal 2013

   
 
   
 
   
 
 

Fourth Quarter

    53.90     42.90     8,142  

Third Quarter

    60.50     42.90     8,236  

Second Quarter

    48.40     24.20     15,723  

First Quarter

    30.80     26.40     2,569  

Fiscal 2014

   
60.50
   
42.90
   
4,655
 

Fiscal 2013

    60.50     24.20     9,791  

Fiscal 2012

    45.65     16.50     1,872  

Fiscal 2011

    53.90     9.90     1,767  

Fiscal 2010

    16.50     2.20     6,648  

              On September 18, 2015, the exchange rate between the Norwegian Kroner and the U.S. dollar was NOK 8.0891 to one U.S. dollar based on the published rate by the Norwegian central bank in effect on that date. As of September 18, 2015, the closing price of our ordinary shares on the NOTC A-list was NOK 145.

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DIVIDEND POLICY

              Since our inception, we have never declared or paid any cash dividends on our ordinary shares and do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. As a result, investors in our ordinary shares will benefit in the foreseeable future only if our ordinary shares appreciate in value.

              Any determination to pay dividends in the future would be subject to compliance with applicable laws, including the Irish Companies Act, which requires Irish companies to have profits available for distribution equal to or greater than the amount of the proposed dividend.

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CAPITALIZATION

              The following table sets forth our cash and cash equivalents and our capitalization as of June 30, 2015:

 
  As of June 30, 2015  
 
  Actual   Pro Forma   Pro Forma
As Adjusted
 
 
  (in thousands, except
share and per share data)

 

Cash and cash equivalents

  $ 54,387   $ 53,975   $ 120,838  

Stockholders' equity (deficit):

                   

Common stock, par value $0.01 per share: 600,000,000 shares authorized, 18,808,958 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted

  $ 188   $   $  

Ordinary shares, par value $0.01 per share: no shares authorized, issued or outstanding, actual; 600,000,000 shares authorized, pro forma and pro forma as adjusted; 18,705,382 shares issued and outstanding, pro forma, and 22,955,382 shares issued and outstanding, pro forma as adjusted

        187     230  

Additional paid-in capital

   
147,838
   
146,812
   
213,632
 

Accumulated deficit

    (60,740 )   (60,740 )   (60,740 )

Non-controlling interest

        615     615  

Total stockholders' equity

    87,286     86,874     153,737  

Total capitalization

  $ 87,286   $ 86,874   $ 153,737  

              Our capitalization following the closing of this offering will depend on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with our financial statements and the related notes appearing at the end of this prospectus and the sections of this prospectus titled "Selected Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

              Each $1.00 increase (decrease) in the assumed initial public offering price of $17.93 (NOK145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, would increase (decrease) our pro forma as adjusted cash and cash equivalents, total assets and total stockholders' equity by $4.0 million, assuming that the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares in the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted cash and cash equivalents, total assets and total stockholders' equity by $16.7 million, assuming no change in the assumed initial public offering price per ordinary share.

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              The table above does not include:

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DILUTION

              If you invest in our ordinary shares, your interest will be diluted to the extent of the difference between the initial public offering price per ordinary share and the pro forma as adjusted net tangible book value per ordinary share after this offering.

              At June 30, 2015, we had a net tangible book value of $131.1 million, corresponding to a net tangible book value of $6.97 per ordinary share. Net tangible book value per share represents the amount of our total assets less our total liabilities, excluding intangible assets, divided by the total number of our ordinary shares outstanding at such date.

              At June 30, 2015, we had a pro forma net tangible book value of $130.7 million, corresponding to a pro forma net tangible book value of $6.99 per ordinary share. Pro forma net tangible book value per share represents the amount of our total assets less our total liabilities, excluding intangible assets, divided by the total pro forma number of our ordinary shares outstanding at such date, after giving effect to the settlement of the Exchange Offer.

              After giving further effect to our issuance and sale of 4,250,000 ordinary shares in this offering at an assumed initial public offering price of $17.93 (NOK145) per share, the closing price of our ordinary shares on the NOTC on September 18, 2015, after deducting the estimated underwriting discount and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2015 would have been $197.5 million, or $8.61 per ordinary share. This represents an immediate increase of $1.62 in pro forma as adjusted net tangible book value per share to existing stockholders and immediate dilution of $9.32 in pro forma as adjusted net tangible book value per ordinary share to new investors purchasing ordinary shares in this offering.

              The following table illustrates this dilution to new investors purchasing ordinary shares in the offering.

Assumed initial public offering price per ordinary share

        $ 17.93  

Net tangible book value per ordinary share at June 30, 2015

  $ 6.97        

Increase in net tangible book value per ordinary share attributable to pro forma adjustments

    .02        

Pro forma net tangible book value per ordinary share at June 30, 2015

    6.99        

Increase in net tangible book value per ordinary share attributable to new investors

    1.62        

Pro forma as adjusted net tangible book value per ordinary share after the offering

          8.61  

Dilution per ordinary share to new investors

        $ 9.32  

              Each $1.00 increase (decrease) in the assumed initial offering price of $17.93 (NOK145) per ordinary share, the closing price of our ordinary shares on the NOTC on September 18, 2015, would increase (decrease) the pro forma as adjusted net tangible book value after this offering by $0.17 per ordinary share and the dilution per ordinary share to new investors in the offering by $0.83 per ordinary share, assuming that the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same. An increase (decrease) of 1,000,000 shares in the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net book value per after this offering by $0.34 per ordinary share and the dilution per ordinary share to new investors in the offering by $0.34, assuming no change in the assumed initial public offering price per ordinary share.

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              If the underwriters were to exercise their option to purchase additional ordinary shares in full, the pro forma as adjusted net tangible book value per ordinary share after the offering would be $8.82 per ordinary share, and the dilution per ordinary share to new investors would be $9.11 per ordinary share.

              The following table summarizes, on the pro forma as adjusted basis described above as of June 30, 2015, the differences between the number of ordinary shares purchased from us, the total consideration and the average price per ordinary share paid by existing shareholders and by investors participating in this offering, before deducting the estimated underwriting discount and estimated offering expenses, at an assumed public offering price of $17.93 (NOK 145) per share, the closing price of our ordinary shares on the NOTC on September 18, 2015.

 
  Ordinary Shares
Purchased
  Total
Consideration (mill)
   
 
 
  Average Price
Per Share
 
 
  Number   %   Amount   %  

Existing shareholders

    18,705,382     81 % $ 114.1     60 % $ 6.10  

New investors

    4,250,000     19     76.2     40     17.93  

Total

    22,955,382     100 % $ 190.3     100 %      

              If the underwriters exercise their option to purchase additional ordinary shares in full, the following will occur:

              The above discussion and tables are based on our actual ordinary shares outstanding as of June 30, 2015 and exclude:

              To the extent that outstanding options are exercised, you will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further dilution to our shareholders.

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SELECTED CONSOLIDATED FINANCIAL INFORMATION

              The following tables set forth selected consolidated historical financial data as of, and for the periods ended on, the dates indicated. We have derived the consolidated statements of operations data for the years ended December 31, 2013 and 2014 and the consolidated balance sheet data as of December 31, 2013 and 2014 from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2014 and 2015 and the consolidated balance sheet data as of June 30, 2015 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. In the opinion of our management, the unaudited data reflects all adjustments, consisting of normal and recurring adjustments, necessary for the fair statement of results as of and for these periods. You should read this data together with our audited consolidated financial statements and the related notes included elsewhere in this prospectus and the sections in this prospectus entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our historical results for any prior period are not indicative of our future results and results of interim periods are not necessarily indicative of the results for the entire year.

              We have prepared the unaudited consolidated financial information set forth below on the same basis as our audited consolidated financial statements. Our audited consolidated financial statements have been prepared in accordance with U.S. GAAP and are presented in U.S. dollars except where otherwise indicated.

              Strongbridge Biopharma plc became the parent company of Cortendo AB following the settlement of the Exchange Offer, and for financial reporting purposes the historical consolidated financial statements of Cortendo AB became the historical consolidated financial statements of Strongbridge Biopharma plc and its subsidiaries as a continuation of the predecessor.

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  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2013   2014   2014   2015  
 
  (in thousands, except
share and per share data)

 

Consolidated Statement of Operations Data:

                         

Operating expenses:

                         

Research and development

  $ 2,534   $ 5,844   $ 2,460   $ 10,218  

General and administrative

    2,658     4,588     1,298     12,620  

Total operating expenses

    5,192     10,432     3,758     22,838  

Operating loss

    (5,192 )   (10,432 )   (3,758 )   (22,838 )

Other income (expense), net:

                         

Foreign exchange loss

    (570 )   (204 )   165     (314 )

Other income, net

    282     486     166     (543 )

Total other income (expense), net

    (288 )   282     331     (857 )

Loss before income taxes

    (5,480 )   (10,150 )   (3,427 )   (23,695 )

Income tax benefit

    93     480     225     178  

Net loss

    (5,387 )   (9,670 )   (3,202 )   (23,517 )

Net loss attributable to non-controlling interest

    92              

Net loss attributable to Strongbridge

  $ (5,295 ) $ (9,670 ) $ (3,202 ) $ (23,517 )

Net loss attributable to common shareholders, basic and diluted

  $ (5,295 ) $ (9,670 ) $ (3,202 ) $ (23,517 )

Net loss per share attributable to common shareholders, basic and diluted(1)

  $ (0.88 ) $ (1.20 ) $ (0.40 ) $ (1.75 )

Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted

    6,017,895     8,043,175     7,939,608     13,433,712  

(1)
See note 2 to our unaudited and audited consolidated financial statements included elsewhere in this prospectus for an explanation of the method used to calculate basic and diluted net loss per share attributable to common shareholders and basic and diluted weighted-average shares outstanding used to calculate the per share data.

 
  As of December 31,   As of June 30,  
 
  2013   2014   2015  
 
  (in thousands)
 

Consolidated Balance Sheet Data:

                   

Cash and cash equivalents

  $ 14,897   $ 15,632   $ 54,387  

Total assets

    22,569     23,689     100,912  

Total liabilities

    4,746     4,868     13,626  

Total stockholders' equity

    17,823     18,821     87,286  

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

              The following discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with "Selected Consolidated Financial Information" and the financial statements and the related notes thereto included elsewhere in this prospectus. All share amounts and per share amounts have been retroactively adjusted, where applicable, to reflect the Exchange Offer, which settled on September 8, 2015, and the 1-for-11 reverse stock split of our ordinary shares, which was effected on September 8, 2015, immediately following the settlement of the Exchange Offer. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and all other non-historical statements in this discussion are forward-looking statements and are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly in the section titled "Risk Factors."

Overview

              We are a biopharmaceutical company focused on the development, in-licensing, acquisition and eventual commercialization of multiple complementary products and product candidates within franchises that target rare diseases. Our primary focus has been to build our rare endocrine franchise, which includes COR-003 for the treatment of endogenous Cushing's syndrome, and COR-004 and COR-005 for the treatment of acromegaly. Endogenous Cushing's syndrome and acromegaly are two rare diseases with a high unmet need for innovative treatment options. Given the well-identified and concentrated prescriber base addressing our target markets, we believe we can use a small, focused sales force to effectively market our products, if approved, in the United States, the European Union and other key global markets. We believe that our ability to execute on this strategy is enhanced by the significant clinical development and commercial experience of key members of our management team. We also intend to identify and in-license or acquire products or product candidates that would be complementary to our existing rare endocrine franchise or that would form the basis for new rare disease franchises. We believe this approach will enable us to maximize our commercial potential by further leveraging our existing resources and expertise.

              We have never been profitable and have incurred net losses since our inception in 1996. Our operations to date have been focused on identifying, in-licensing, acquiring and developing our product candidates, organizing and staffing our company, business planning and raising capital. We have funded our operations primarily through equity offerings. We incurred a net loss of $5.3 million and $9.7 million for the years ended December 31, 2013 and 2014, respectively, and $3.2 million and $23.5 million for the six months ended June 30, 2014 and 2015, respectively. At June 30, 2015, our accumulated deficit was $60.7 million.

              On February 10, 2015, following shareholder approval of the share purchase agreement which we entered into on January 12, 2015, we entered into a share purchase agreement with investors whereby we issued 4,761,078 common shares for $25.8 million, net of transaction costs.

              On May 13, 2015, we entered into an exclusive license agreement with Antisense Therapeutics Limited, or Antisense Therapeutics, that provides us with development and commercialization rights to Antisense Therapeutics' product candidate, ATL1103, for endocrinology applications. We refer to this product candidate as COR-004. Under the terms of the agreement, we provided Antisense Therapeutics with an initial upfront license payment of $3.0 million in cash, and we also invested $2.0 million in Antisense Therapeutics equity. We may become obligated to make additional payments, contingent upon achieving specific development and commercialization milestones, of up to $105.0 million over the

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lifetime of the agreement. We may also be required to make royalty payments based on a percentage, ranging from the mid-single digits to the mid-teens, of net sales of COR-004 during the period that we are selling COR-004, if approved. We will be responsible for the future clinical development of COR-004 in endocrinology applications and for the funding of associated future development, regulatory and drug manufacture costs. Antisense Therapeutics will retain commercialization rights for COR-004 in endocrinology applications in Australia and New Zealand as well as worldwide rights for COR-004 in indications other than endocrinology, and may utilize any new COR-004 data generated by us in pursuing these other indications, subject to specified terms and conditions set forth in our license agreement with Antisense Therapeutics.

              On June 29 and 30, 2015, we raised $33.2 million in aggregate gross proceeds in a private placement of common shares, the proceeds of which we expect to use primarily for the continued development of COR-003, along with the planned development of our two new programs, COR-004 and COR-005, and for general corporate purposes. The subscription price was $14.54 per share and we issued 2,284,414 new shares to the investors.

              On June 30, 2015, we acquired from Aspireo Pharmaceuticals Ltd., an Israeli company, its product candidate, DG3173. We refer to this product candidate as COR-005. Under the terms of the acquisition agreement, we issued to Aspireo Pharmaceuticals 2,062,677 common shares, which had a value of $33.2 million on June 30, 2015. In connection with this acquisition, we made a payment to the Office of the Chief Scientist of the Israeli Ministry of Economy, or OCS, in the amount of $3.0 million, which represents the repayment of amounts previously granted by OCS to Aspireo Pharmaceuticals, plus interest, that were used in support of research and development conducted by Aspireo Pharmaceuticals for the development of DG3173.

Financial Operations Overview

              The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.

Revenues

              We have not generated any revenue during the periods presented. Our ability to generate product revenue and become profitable depends upon our ability to obtain regulatory approval for and to successfully commercialize our product candidates.

Research and Development Expenses

              Our research and development expenses consist primarily of costs incurred in connection with the development of our product candidates, including:

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              We expense all research and development costs as incurred. Clinical development expenses for our product candidates are a significant component of our current research and development expenses as we progress our product candidates into and through clinical trials. Product candidates in later stage clinical development generally have higher research and development costs than those in earlier stages of development, primarily due to increased size and duration of the clinical trials. We recognize costs for each grant project, preclinical study or clinical trial that we conduct based on our evaluation of the progress to completion, using information and data provided to us by our external research and development vendors and clinical sites.

              We have received funding from research and development grants from the U.S. federal Small Business Innovation Research/Small Business Technology Transfer program. We record such funding as a reduction to our research and development expenses.

              Through the first half of 2014, we were focused on product candidates that are now outside the scope of our strategic focus, specifically the development of Crespine, an osteoarthritis program, and a next generation cortisol inhibitor, or NGCI, program. By the end of 2014, we changed our strategic focus to rare endocrine diseases and other rare diseases, specifically the development of COR-003. As a result, we significantly reduced activities to develop the Crespine and NGCI programs. We returned our commercial rights to Crespine to the originator in the first half of 2014. We expect to spend only such amounts as are necessary to maintain our intellectual property on the NGCI program.

              We incurred research and development expenses of $2.5 million and $5.8 million for the years ended December 31, 2013 and 2014, respectively, and $2.5 and $10.2 for the six months ended June 30, 2014 and 2015, respectively.

              We expect our research and development expenses to increase in absolute dollars in the future as we continue to in-license or acquire product candidates and as we advance our existing and any future product candidates into and through clinical trials and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical research to obtain regulatory approval of a product candidate is costly and time consuming. The probability that any of our product candidates receives regulatory approval and eventually is able to generate revenue depends on a variety of factors, including the quality of our product candidates, early clinical data, investment in our clinical program, competition, manufacturing capability and commercial viability. As a result of these uncertainties, we are unable to determine the duration and completion costs of our research and development projects or if, when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates, if approved. We may never succeed in achieving regulatory approval for any of our product candidates.

              We do not allocate personnel-related research and development costs, including stock-based compensation or other indirect costs, to specific programs, as they are deployed across multiple projects under development.

General and Administrative Expenses

              General and administrative expenses include personnel costs, costs for outside professional services and other allocated expenses. Personnel costs consist of salaries, bonuses, benefits, travel and stock-based compensation. Outside professional services consist of legal, accounting and audit services, commercial evaluation and strategy services, and other consulting services. We expect to incur additional general and administrative costs as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities and other administrative and professional services. We also expect to incur additional expenses

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related to in-licenses, acquisitions or similar transactions that we may pursue as part of our strategy, including legal, accounting and audit services and other consulting fees.

Other Income (Expense), Net

              Other income (expense), net, consists of interest income generated from our cash and cash equivalents, gains from the revaluation of foreign currency forward contracts and foreign exchange gains and losses.

              Our consolidated financial statements are reported in U.S. dollars, which is also our functional currency. Transactions in foreign currencies are translated into our functional currency at the rate of exchange prevailing at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into our functional currency at exchange rates prevailing at the balance sheet date or on settlement. Resulting gains and losses are recorded in foreign currency gain (loss) in other income (expense) in our consolidated statements of operations.

              Historically, our cash and cash equivalents have been held primarily in foreign currencies. However, most of our expenses have been U.S. dollar denominated. To reduce our currency exposure, we used a hedging program from the fourth quarter of 2013 through the second quarter of 2015. The foreign currency forward contracts used in our hedging program were not entered into for speculative purposes and, although we believe they served as effective economic hedges, we did not seek to qualify for hedging accounting. In 2014, our operations continued to shift to the United States, but a large portion of our cash and cash equivalents were still held in foreign currencies. As of June 30, 2015, all of our forward contracts have expired.

Critical Accounting Policies and Significant Judgments and Estimates

              This management's discussion and analysis of our financial condition and results of operations is based on our interim consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these interim consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The consolidated statements of operations data for the six months ended June 30, 2014 and 2015 are unaudited interim consolidated financial statements. You should also read this data together with the expanded information about our critical accounting policies and estimates provided in "Management's Discussion and Analysis of Financial Condition and Results of Operations," for the year ended December 31, 2014 included elsewhere in this prospectus. There have been no material changes to our critical accounting policies and estimates from the information provided in our audited consolidated financial statements for the year ended December 31, 2014.

Business Combinations

              When acquiring new enterprises over which we obtain control, the acquisition method is applied. Under this method, we identify assets and liabilities of these enterprises and measure them at fair value at the acquisition date. Allowance is made for the tax effect of the adjustments made.

              The excess of the consideration transferred, the amount of the non-controlling interest in the acquiree and the acquisition date fair value of previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill.

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In-Process Research and Development

              Purchased identifiable intangible assets with indefinite lives, such as our in-process research and development, are evaluated for impairment annually in accordance with our policy and whenever events or changes in circumstances indicate that it is more likely than not that the fair value of these assets has been reduced. To test these assets for impairment, we compare the fair value of the asset to its carrying value. The method we use to estimate the fair value measurements of indefinite-lived intangible assets is based on the income approach. For the impairment analysis for the year ended December 31, 2014, significant unobservable inputs used in the income approach valuation method included a discount rate of 15.5%, a royalty rate of 10% and various probabilities of product candidate advancement from one clinical trial phase to the next. The probabilities of product candidate advancement we used were based on standalone statistical analysis on a phase-by-phase basis. There is no correlation between the probabilities of advancement in one phase to the probability of advancement in the prior phase. For purposes of our analysis for the year ended December 31, 2014, we applied the following approximate probabilities of product candidate advancement by phase: 67% probability of advancing from Phase 1 to Phase 2, 37% probability of advancing from Phase 2 to Phase 3, and 64% probability of advancing from Phase 3 to regulatory approval. An increase (decrease) in the estimated royalty rate of 2% assuming no change in discount rates or probability of success rates would result in a significantly higher (lower) fair value measurement. Significant increases in the discount rate up to 31%, assuming no changes in royalty rates and probability of success rates, would result in a significantly lower fair value measurement.

              During the first half of 2015, as a result of our acquisition of Aspireo Pharmaceuticals Ltd.'s product candidate DG3173, our in-process research and development increased by $31.3 million.

              As of June 30, 2015, there were no events or changes in circumstances indicating possible impairment.

Goodwill

              We test goodwill for impairment on an annual basis or whenever events occur that may indicate possible impairment. This analysis requires us to make a series of critical assumptions to (1) evaluate whether any impairment exists and (2) measure the amount of impairment.

              Because we have one operating segment, when testing for a potential impairment of goodwill, we are required to estimate the fair value of our business as a whole and determine the carrying value. If the estimated fair value is less than the carrying value of our business, then we are required to estimate the fair value of all identifiable assets and liabilities in a manner similar to a purchase price allocation for an acquired business. Only after this process is completed can the goodwill impairment be determined, if any.

              To estimate the fair value of the business, a market-based approach is applied, utilizing our share price on the NOTC A-list as well as the price of shares issued in private placements, such as those completed in September 2013 and in October 2014. We did not record a charge for impairment for the years ended December 31, 2013 and 2014.

              During the first half of 2015, as a result of our acquisition of Aspireo Pharmaceuticals Ltd.'s product candidate DG3173, our goodwill increased by $5.1 million.

              As of June 30, 2015, there were no events or changes in circumstances indicating possible impairment.

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Research and Development Costs and Expenses

              Research and development costs are expensed as incurred. We recognize costs for certain development activities based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites. We determine accrual estimates through financial models that take into account discussion with applicable personnel and service providers as to the progress or state of completion of clinical trials. Our preclinical study and clinical trial accrued liabilities and prepaid assets are dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. Although we do not expect our estimates to differ materially from amounts we actually incur, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in our reporting amounts that are too high or too low for any particular period. When contracts for outside research products or testing require advance payment, they are recorded on our consolidated balance sheets as prepaid items and expensed when the service is provided or reaches a specific milestone outlined in the contract.

Stock-Based Compensation

              We account for stock-based compensation awards in accordance with the Financial Accounting Standards Board, or FASB, ASC Topic 718, Compensation—Stock Compensation (ASC 718). ASC 718 requires all stock-based payments, including grants of stock options and restricted stock and modifications to existing stock options, to be recognized in the consolidated statements of operations based on their fair values. The exercise price of stock options is determined by management by taking into account the trading price of our ordinary shares on the NOTC A-list, as well as other factors, including any private placements of our ordinary shares, but in no event has the exercise price of any stock option been less than the market price on the NOTC A-list on the date of grant.

              Our stock-based awards are subject to either service-based or performance-based vesting conditions. Vesting of certain awards could also be accelerated upon achievement of defined market-based vesting conditions. We measure employee stock-based awards at grant-date fair value. We measure non-employee stock-based awards at the date the performance is complete. We have also issued several stock options with exercise prices denominated in a foreign currency that are required to be accounted for as liabilities. These options are measured at the date they are settled (exercised). We account for non-employee and liability-classified stock-based awards based on the then-current fair values at each financial reporting date until the relevant measurement date occurs.

              We record compensation expense for service-based awards over the vesting period of the award on a straight-line basis. Compensation expense related to awards with performance-based vesting conditions is recognized over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable. Compensation expense for awards with service-and market-based vesting conditions is recognized using the accelerated attribution method over the shorter of the requisite service period or the implied period associated with achievement of the market-based vesting provisions.

              We estimate the fair value of our option awards using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including:

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              We are also required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from our estimates. We record stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from our estimates, the differences are recorded as a cumulative adjustment in the period the estimates were revised. Historical forfeitures have been insignificant.

Income Taxes

              We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We assess the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

              We have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets. Based on our history of operating losses, we have concluded that it is more likely than not that the benefit of our deferred tax assets, other than those attributable to BioPancreate, will not be realized. The deferred tax assets primarily comprised of Swedish and U.S. federal and state tax net operating losses and tax credit carryforwards. Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to historical or future ownership percentage change rules provided by the Internal Review Code of 1986, as amended, and similar state and Swedish provisions. The annual limitation may result in the expiration of net operating loss and tax credit carryforwards before their utilization.

The JOBS Act

              As an "emerging growth company" under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an "emerging growth company" to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies

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              We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an "emerging growth company," we intend to rely on certain of these exemption including, without limitation, the exemptions from providing an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. We will remain an "emerging growth company" until the earliest of: (1) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (2) the last day of the fiscal year following the fifth anniversary of the date of the completion of this offering; (3) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; and (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

              In connection with the audits of our 2013 and 2014 financial statements, which were completed concurrently, our independent registered public accounting firm identified a material weakness, primarily related to the lack of sufficient and skilled resources with U.S. GAAP and SEC reporting knowledge for the purpose of timely and reliable financial reporting. We are working to remediate the material weakness and are taking numerous steps and plan to take additional steps to remediate the underlying causes of the material weakness. We have recently hired a new full-time chief financial officer, and plan to develop and implement formal policies, processes and documentation procedures relating to our financial reporting of the company. The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight.

Results of Operations

Comparison of the Six Months Ended June 30, 2014 and 2015

              The following table sets forth our results of operations for the six months ended June 30, 2014 and 2015:

 
  Six Months Ended
June 30,
  Change  
 
  2014   2015   $  
 
  (in thousands)
 

Operating expenses:

                   

Research and development

  $ 2,460   $ 10,218   $ 7,758  

General and administrative

    1,298     12,620     11,322  

Total operating expenses

    3,758     22,838     19,080  

Operating loss

    (3,758 )   (22,838 )   (19,080 )

Other income (expense), net

    331     (857 )   (1,188 )

Loss before income taxes

    (3,427 )   (23,695 )   (20,268 )

Income tax benefit

    225     178     (47 )

Net loss attributable to Strongbridge

  $ (3,202 ) $ (23,517 ) $ (20,315 )

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Research and Development Expenses

              The following table summarizes our research and development expenses during the six months ended June 30, 2014 and 2015:

 
  Six Months Ended
June 30,
  Change  
 
  2014   2015   $  
 
  (in thousands)
 

Clinical development

  $ 1,515   $ 3,694   $ 2,179  

Preclinical development

    512     258     (254 )

License fee

        3,898     3,898  

Compensation and related personnel costs

        1,548     1,548  

Outside professional services and other

    433     820     387  

Total research and development expenses

  $ 2,460   $ 10,218   $ 7,758  

              Research and development expenses were $10.2 million for the six months ended June 30, 2015, an increase of $7.8 million compared to the six months ended June 30, 2014. The increase was attributed to a $3.9 million increase related to the Antisense Therapecutics license fee, $2.2 million increase in clinical development expenses mainly associated with ongoing clinical trials for COR-003, and a $0.3 million decrease in preclinical costs primarily related to the reduction in activities related to the Crespine and NGCI programs in mid-2014. Compensation and related personnel costs increased by $1.5 million for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014, due to the hiring of research and development personnel. Outside professional services expense increased by $0.4 million due to an increase in the use of consultants in 2015 used for increased research and development activities.

General and Administrative Expenses

              The following table summarizes our general and administrative expenses during the six months ended June 30, 2014 and 2015:

 
  Six Months Ended
June 30,
  Change  
 
  2014   2015   $  
 
  (in thousands)
 

Outside professional services

  $ 957   $ 9,055   $ 8,098  

Compensation and related personnel costs

    60     2,956     2,896  

Facility costs

    33     126     93  

Travel and other

    248     483     235  

Total general and administrative expenses

  $ 1,298   $ 12,620   $ 11,322  

              General and administrative expenses were $12.6 million for the six months ended June 30, 2015, an increase of $11.3 million compared to the six months ended June 30, 2014. The increase was primarily due to a $8.1 million increase in outside professional services, which consisted of mostly legal, accounting and consulting fees, related to the redomicle of the Company, due diligence expenses for the Asperio asset acquisition and other business development activities, activities related to this offering, general corporate matters, including market analysis, communications and investor relations efforts, as well an increase in other legal and accounting costs. Compensation and related personnel costs increased by $2.9 million for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014, due to increased hiring of administrative personnel. Facility costs, travel and other general and administrative costs increased by $0.3 million for the six months ended June 30, 2015 as

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compared to the six months ended June 30, 2014, primarily as a result of the Trevose, Pennsylvania facility sublease and the hiring of additional personnel.

Other Income (Expense), Net

              The following table summarizes our other income (expense), net, during the six months ended June 30, 2014 and 2015:

 
  Six Months Ended
June 30,
  Change  
 
  2014   2015   $  
 
  (in thousands)
 

Foreign exchange gain (loss)

  $ 165   $ (314 ) $ (479 )

Other income, net

    166     (543 )   (709 )

Total other income (expense), net

  $ 331   $ (857 ) $ (1,188 )

              Other income (expense), net, changed from income of $0.3 million in 2014 to expense of $0.9 million in 2015. The change was primarily due to fluctuations in foreign exchange rates against the U.S. dollar, together with losses from expired forward currency contracts. In addition, other income (expense), net included a $0.1 million charge for the impairment of the leased Radnor, Pennsylvania facility.

Income Tax Benefit

              We recorded income tax benefit of $0.2 million for the six months ended June 30, 2014 and 2015, due to the generation of U.S. state and federal net operating loss carryforwards and federal tax credit carryforwards. The income tax benefit for U.S. state and federal net operating loss carryforwards and federal tax credit carryforwards has been recognized to the extent it is supported by the deferred tax liability recorded in connection with the acquisition of BioPancreate.

Comparison of the Years Ended December 31, 2013 and 2014

              The following table sets forth our results of operations for the years ended December 31, 2013 and 2014.

 
  Year Ended
December 31,
  Change  
 
  2013   2014   $  
 
  (in thousands)
 

Operating expenses:

                   

Research and development

  $ 2,534   $ 5,844   $ 3,310  

General and administrative

    2,658     4,588     1,930  

Total operating expenses

    5,192     10,432     5,240  

Operating loss

    (5,192 )   (10,432 )   (5,240 )

Other (expense) income, net

    (288 )   282     570  

Loss before income taxes

    (5,480 )   (10,150 )   (4,670 )

Income tax benefit

    93     480     387  

Net loss

    (5,387 )   (9,670 )   (4,283 )

Net loss attributable to non-controlling interest

    92         (92 )

Net loss attributable to Strongbridge

  $ (5,295 ) $ (9,670 ) $ (4,375 )

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Research and Development Expenses

              The following table summarizes our research and development expenses during the years ended December 31, 2013 and 2014:

 
  Year Ended
December 31,
  Change  
 
  2013   2014   $  
 
  (in thousands)
 

Clinical development

  $ 975   $ 4,023   $ 3,048  

Preclinical development

    541     894     353  

Compensation and related personnel costs

    117     164     47  

Outside professional services and other

    901     763     (138 )

Total research and development expenses

  $ 2,534   $ 5,844   $ 3,310  

              Research and development expenses were $5.8 million for the year ended December 31, 2014, an increase of $3.3 million compared to the year ended December 31, 2013. The increase was primarily attributed to a $3.0 million increase in clinical development expenses mainly associated with ongoing clinical trials for COR-003, and a $0.8 million increase in preclinical costs. The increase in preclinical development costs was offset in part by a decrease of $0.4 million related to the reduction in activities related to the Crespine and NGCI programs in 2014 and a reduction in the use of consultants in 2014 due to the hiring of additional internal research and development personnel.

              In 2013 and 2014, we recognized $0.2 million and $0, respectively, from U.S. federal government grants to support our research and development activities of BioPancreate as a reduction to our preclinical development expenses.

General and Administrative Expenses

              The following table summarizes our general and administrative expenses during the years ended December 31, 2013 and 2014:

 
  Year Ended
December 31,
  Change  
 
  2013   2014   $  
 
  (in thousands)
 

Outside professional services

  $ 2,134   $ 3,122   $ 988  

Compensation and related personnel costs

    268     904     636  

Facility costs

    60     105     45  

Travel and other

    196     457     261  

Total general and administrative expenses

  $ 2,658   $ 4,588   $ 1,930  

              General and administrative expenses were $4.6 million for the year ended December 31, 2014, an increase of $1.9 million compared to the year ended December 31, 2013. The increase was primarily due to a $1.0 million increase in outside professional services, which consisted of mostly legal fees, related to the planned listing of our ordinary shares on the Oslo exchange, general corporate matters, including market analysis, communications and investor relations efforts, as well an increase in other legal and accounting costs. We discontinued our planned listing on the Oslo exchange in 2014. Compensation and related personnel costs increased by $0.6 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013, due to increased hiring of administrative personnel. Travel and other general and administrative costs increased by $0.3 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013 primarily as a result of the hiring of additional personnel.

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Other Income (Expense), Net

              The following table summarizes our other income (expense), net, during the years ended December 31, 2013 and 2014:

 
  Year Ended
December 31,
  Change  
 
  2013   2014   $  
 
  (in thousands)
 

Foreign exchange loss

  $ (570 ) $ (204 ) $ 366  

Other income, net

    282     486     204  

Total other income (expense), net

  $ (288 ) $ 282   $ 570  

              Other income (expense), net, changed from expense of $0.3 million in 2013 to income of $0.3 million in 2014. The change was primarily due to the strength of the U.S. dollar and the positive impact on the revaluation of our U.S. dollar based currency derivative contracts and interest income earned on deposits, partially offset by foreign exchange loss.

Income Tax Benefit

              We recorded income tax benefit of $0.1 million and $0.5 million for the years ended December 31, 2013 and 2014, respectively, due to the generation of U.S. state and federal net operating loss carry forwards and federal tax credit carry forwards. The income tax benefit for U.S. state and federal net operating loss carry forwards and the federal tax credit carry forwards has been recognized to the extent it is supported by the deferred tax liabilities recorded in connection with the acquisition of BioPancreate.

       Net Loss Attributable to Non-Controlling Interest

              Until October 2013, we held 49% of the equity interests in BioPancreate Inc., which was developing biological therapeutics, including BP-2001 for the treatment of diabetes. For 2013, we consolidated BioPancreate's financial results with our own because we controlled BioPancreate, but we attributed a portion of our consolidated net loss in the amount of $92,000 to the other, non-controlling equity holders of BioPancreate. We acquired the remaining equity interests in BioPancreate in October 2013 and January 2014. Accordingly, in 2014 there was no attribution of any of our net loss to a non-controlling interest.

Liquidity and Capital Resources

              We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize our current or any future product candidates. We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of and seek regulatory approvals for our product candidates and begin to commercialize any approved products. We are subject to all of the risks applicable to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business. Upon the closing of this offering, we expect to incur additional costs associated with operating as a public company and we anticipate that we will need substantial additional funding in connection with our continuing operations.

              Our operations have been financed primarily by net proceeds from the issuance of ordinary shares. Our primary uses of capital are, and we expect will continue to be, third-party expenses associated with the planning and conduct of clinical trials, costs of process development services and manufacturing of our product candidates, and compensation-related expenses. We also expect our cash

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needs to increase to fund potential in-licenses, acquisitions or similar transactions as we pursue our strategy.

              Cash used to fund operating expenses is affected by the timing of when we pay expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. We believe that our existing cash and cash equivalents, which include net proceeds from the private placements completed in 2015, together with the proceeds we expect to receive from this offering, will be sufficient to meet our projected operating requirements through at least the next 12 months.

              Our future funding requirements will depend on many factors, including the following:

              We expect to continue to incur losses. Our ability to achieve and maintain profitability is dependent upon the successful development, regulatory approval and commercialization of our product candidates and achieving a level of revenues adequate to support our cost structure. We may never achieve profitability, and unless and until we do, we will continue to need to raise additional capital. If we need to raise additional capital to fund our operations and complete our ongoing and planned clinical trials, funding may not be available to us on acceptable terms, or at all.

              We plan to continue to fund our operations and capital funding needs through equity or debt financing. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible or suspend or curtail planned programs. In addition, lack of funding would limit any strategic initiatives to in-license or acquire additional product candidates or programs.

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Cash Flows

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2015

 
  Six Months Ended
June 30,
 
 
  2014   2015  
 
  (in thousands)
 

Net cash (used in) provided by:

             

Operating activities

  $ (3,724 ) $ (15,665 )

Investing activities

    (5 )   (3,193 )

Financing activities

        58,298  

    (3,729 )   39,440  

Effect of exchange rate changes on cash and cash equivalents

    (10 )   (685 )

Net (decrease) increase in cash and cash equivalents

  $ (3,739 ) $ 38,755  

              Net cash used in operating activities was $15.7 million for the six months ended June 30, 2015, compared to $3.7 million for the six months ended June 30, 2014. The increase in net cash used was primarily due to increased operating expenses due to additional headcount, increase in professional fees related to this offering, redomicile to Ireland, business development activities, increased clinical trial activities and other research activities.

              Net cash used in investing activities was $3.2 million due to the Asperio asset purchase and the result of the purchase of office equipment and furniture.

              Net cash provided by financing activities of $58.3 million for the six months ended June 30, 2015 was the result of private placement equity financings.

Year Ended December 31, 2013 Compared to Year Ended December 31, 2014

 
  Year Ended
December 31,
 
 
  2013   2014  
 
  (in thousands)
 

Net cash (used in) provided by:

             

Operating activities

  $ (3,475 ) $ (9,504 )

Investing activities

    (2 )   (24 )

Financing activities

    14,924     10,193  

    11,447     665  

Effect of exchange rate changes on cash and cash equivalents

    (455 )   70  

Net increase in cash and cash equivalents

  $ 10,992   $ 735  

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              Net cash used in operating activities was $9.5 million for the year ended December 31, 2014, compared to $3.5 million for the year ended December 31, 2013. The increase in net cash used was primarily due to increased operating expenses due to additional headcount, increased clinical trial activities and other research activities.

              Net cash used in investing activities for 2013 and 2014 was the result of the purchase of office equipment and furniture.

              Net cash provided by financing activities was $10.2 million for the year ended December 31, 2014, compared to $14.9 million for the year ended December 31, 2013, which in both years was the result of private placement equity financings.

Contractual Obligations and Other Commitments

              The following table summarizes our future minimum commitments at June 30, 2015:

 
  Payments due by period  
 
  Less than
1 year
  1 to 3 years   3 to 5 years   More than
5 years
  Total  
 
  (in thousands)
 

Operating leases

  $ 175   $ 762   $ 551   $   $ 1,488  

Total contractual obligations

  $ 175   $ 762   $ 551   $   $ 1,488  

              The above table also excludes potential payments due to two individuals who previously served as officers of our company pursuant to consulting agreements. In connection with those agreements, each individual is entitled to a payment in the event of the sale or license by us prior to December 31, 2016 of BioPancreate or major assets derived from the BioPancreate technology. The payment amounts are based on a percentage of the acquisition price or up-front license fee, as applicable. The maximum amount payment per individual in the event of a sale or license is $2.5 million or $1.25 million, respectively. Each individual is entitled to such payments even though each is no longer serving in their respective officer roles.

              We enter into agreements in the normal course of business with CROs for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are cancelable at any time by us, generally upon 30 days prior written notice. Future payment obligations under these agreements are not included in this table of contractual obligations.

              We are obligated to make future payments to third parties under in-license agreements, including sublicense fees, royalties and payments that become due and payable upon the achievement of development and commercialization milestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on our consolidated balance sheets or in the contractual obligations table above. See footnote 6 of the consolidated financial statements for a description of our license agreements.

Off-Balance Sheet Arrangements

              We do not have variable interests in variable interest entities or any off-balance sheet arrangements.

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Quantitative and Qualitative Disclosures About Market Risk

              At June 30, 2015, we had cash and cash equivalents of $54.4 million, which consisted primarily of bank deposits in the United States, Sweden and Norway. Cash deposits in Sweden and Norway were $6.9 million as of June 30, 2015 and are subject to local banking laws and may bear higher or lower risk than cash deposited in the United States. As part of our cash and investment management processes, we perform periodic evaluations of the credit standing of the financial institutions with which we deposit our cash or purchase cash equivalents, and we have not sustained any credit losses from instruments held at these financial institutions.

Recent Accounting Pronouncements

              During the quarter ended September 30, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (ASU No. 2014-15). The new guidance addresses management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted, but we have not elected to do so. We do not expect the adoption of ASU 2014-15 to have an impact on our financial position or results of operations.

              In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting For Fees Paid In A Cloud Computing Arrangement, which provides guidance for a customer's accounting for cloud computing costs. Under ASU 2015-05, if a software cloud computing arrangement contains a software license, customers should account for the license element of the arrangement in a manner consistent with the acquisition of other software licenses. If the arrangement does not contain a software license, customers should account for the arrangement as a service contract. This standard may be applied either prospectively to all arrangements entered into or materially modified after the effective date, or retrospectively. ASU 2015-05 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

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BUSINESS

Overview

              We are a biopharmaceutical company focused on the development, in-licensing, acquisition and eventual commercialization of multiple complementary products and product candidates within franchises that target rare diseases. Our primary focus has been to build our rare endocrine franchise, which includes product candidates for the treatment of endogenous Cushing's syndrome and acromegaly, two rare diseases with a high unmet need for innovative treatment options. Given the well-identified and concentrated prescriber base addressing our target markets, we believe we can use a small, focused sales force to effectively market our products, if approved, in the United States, the European Union and other key global markets. We believe that our ability to execute on this strategy is enhanced by the significant clinical development and commercial experience of key members of our management team. We also intend to identify and in-license or acquire products or product candidates that would be complementary to our existing rare endocrine franchise or that would form the basis for new rare disease franchises. We believe this approach will enable us to maximize our commercial potential by further leveraging our existing resources and expertise.

              Our rare endocrine franchise includes the following product candidates:

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              Since the introduction of our new management team beginning in August 2014, we have established a rare disease, franchise-based business model focused on expansion through a disciplined in-licensing and acquisition strategy. In pursuit of our growth strategy, we have raised over $70 million since December 2014 from leading life sciences investors, including RA Capital, New Enterprise Associates, Broadfin Capital, HealthCap, Longwood Capital, TVM Capital and Granite Point Capital. Leveraging this capital and our experience in sourcing, selecting, in-licensing and acquiring product candidates, we were successful in augmenting our rare endocrine franchise by adding COR-004 and COR-005 to our product pipeline. We believe that these clinical product candidates, if successful, will benefit from significant development and commercial synergies with our lead product candidate, COR-003, because both Cushing's disease and acromegaly are typically caused by benign pituitary tumors and are mainly treated by pituitary endocrinologists. Given the concentrated specialty prescriber base for these indications, we plan to create a sales force of approximately 30 representatives in each of the United States and the European Union to market our endocrine franchise product candidates, if approved. In addition, we believe the development of two product candidates with different mechanisms of action to treat acromegaly may potentially enable us to address the broad acromegaly patient population requiring drug therapy.

Our Strategy

              Our goal is to transform the lives of patients by building a leading franchise-based, commercially oriented biopharmaceutical company addressing rare diseases with significant unmet medical needs. We are focused on developing, in-licensing, acquiring and eventually commercializing products and product candidates that target rare diseases across several complementary therapeutic areas.

              To achieve our goal, we are pursuing the following strategies:

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Our Product Candidate Pipeline

              The following table illustrates our product candidates by stage:

GRAPHIC

Our Rare Endocrine Franchise

              We have three product candidates within our rare endocrine franchise. Our lead product candidate, COR-003, is a cortisol synthesis inhibitor and is a single enantiomer of ketoconazole that we are developing for the treatment of endogenous Cushing's syndrome. We recently in-licensed and acquired two additional clinical-stage product candidates that we are developing for the treatment of acromegaly. COR-004 is a second-generation antisense oligonucleotide and COR-005 is a novel SSA, both of which have the potential to provide new and differentiated treatment options for patients with acromegaly. We believe that these three clinical product candidates, if successful, will benefit from significant development and commercial synergies based on the fact that both endogenous Cushing's syndrome and acromegaly are typically caused by benign pituitary tumors and are mainly treated by pituitary endocrinologists. We believe that we can address the markets for all three of these product candidates by targeting the endocrinologists that are focused on the treatment of rare pituitary disorders.

Overview of COR-003—Phase 3 Product Candidate for the Treatment of Endogenous Cushing's Syndrome

              We are developing COR-003 for the treatment of endogenous Cushing's syndrome, a rare endocrine disorder characterized by excessive cortisol levels. In endogenous Cushing's syndrome, elevated circulating cortisol levels give rise to a severe disease with variable clinical symptoms, including weight gain, characteristic changes in fat distribution, diabetes, hypertension, osteoporosis, muscle loss and depression. The active pharmaceutical ingredient in COR-003, levoketoconazole (single enantiomer of ketoconazole, 2S,4R-ketoconazole), exerts its effect by blocking the synthesis of cortisol leading to the reduction and normalization of cortisol levels. COR-003 has been granted orphan drug designation

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by the FDA and the EMA. We are currently conducting a pivotal Phase 3 clinical trial for COR-003 and expect to report top line data from this trial in the first half of 2017 and file applications for regulatory approval in the second half of 2017.

              Ketoconazole, used off-label in the United States, is the most frequently prescribed and efficacious drug therapy for endogenous Cushing's syndrome. It is used to reduce cortisol levels and ameliorate significant comorbidities. Molecules of ketoconazole occur in two forms, which are mirror images of each other. These mirror image pairs are referred to as enantiomers. Manufactured ketoconazole contains a 1:1 mixture of the two enantiomers, 2R,4S-ketoconazole and 2S,4R-ketoconazole, and is therefore referred to as a racemic mixture. COR-003 is a single-enantiomer drug, a pure form of one of the two enantiomers (2S,4R-ketoconazole) of racemic ketoconazole. Single-enantiomer drugs may offer safety and efficacy advantages because one of the enantiomer versions in the racemic mixture can have safety issues or be less effective in treatment of the disorder or disease. COR-003, like ketoconazole, is a cortisol synthesis inhibitor that inhibits the cortisol synthesis pathway at three points. In light of the shared mechanism of action with ketoconazole and the data from Phase 2 clinical trials, which were conducted in diabetes patients, we believe COR-003 may have a similar beneficial impact on the reduction of significant comorbidities of endogenous Cushing's syndrome, including those associated with cardiovascular-related mortality risk, such as diabetes, weight, hypertension and elevation in cholesterol. In addition, based on preclinical and clinical results, we believe that COR-003 may offer an improved safety profile relative to existing approved drug therapies. As a result, we believe that COR-003 has the potential to become the new standard of care for the drug therapy of endogenous Cushing's syndrome.

Overview of Cushing's Syndrome

              There are two variants of Cushing's syndrome: exogenous, which is caused by factors outside the body; and endogenous, which is caused by factors within the body. The symptoms for both are the same. The more common form is exogenous Cushing's syndrome, which is often found in people taking cortisol-like medications for long periods of time at high dosages. Cortisol-like medications are often used to treat inflammatory disorders such as asthma and rheumatoid arthritis. Unlike the endogenous variant, this type of Cushing's syndrome is temporary and clinical signs and symptoms subside in part after the patient has finished taking the cortisol-like medication.

              Endogenous Cushing's syndrome is a rare endocrine disorder characterized by sustained elevated cortisol levels. Cortisol is a hormone produced in the adrenal gland and is naturally secreted as an end product of the activity of the hypothalamic-pituitary-adrenal axis, a major part of the endocrine system. Corticotropin-releasing-hormone, or CRH, is secreted from the hypothalamus and stimulates the secretion and release of adrenocorticotropin, or ACTH, from the pituitary gland, which in turn stimulates cortisol secretion from the adrenal gland. Cortisol itself exerts negative feedback control on both CRH in the hypothalamus and ACTH in the pituitary gland, thereby reducing CRH and ACTH secretion and keeping cortisol levels in a normal range.

              The most common form of endogenous Cushing's syndrome is Cushing's disease, which is typically caused by a benign pituitary tumor that secretes ACTH. Cushing's disease represents approximately 70% to 80% of patients with endogenous Cushing's syndrome. Other less frequent causes of endogenous Cushing's syndrome include extrapituitary tumors producing ACTH, or ectopic ACTH syndrome. The source of ectopic ACTH secretion is most often small-cell carcinoma of the lung or bronchial carcinoid tumors, but can also arise with almost any endocrine tumor from many different organs. In a smaller number of cases, approximately 20%, endogenous Cushing's syndrome can be ACTH-independent, resulting from excess secretion of cortisol by unilateral adrenocortical tumors, either benign or malignant, or by non-malignant enlargement of the adrenal glands.

              In patients with endogenous Cushing's syndrome, the normal feedback mechanism of the hypothalamic-pituitary-adrenal axis for cortisol secretion is disrupted as a result of a tumor secreting ACTH, CRH or cortisol. This causes chronic exposure to high circulating cortisol levels that give rise to

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the clinical state of Cushing's syndrome. The most common signs and symptoms include: weight gain, especially in the upper body; rounded face and extra fat on the upper back and above the collarbones; high blood sugar or diabetes; high blood pressure or hypertension; thin bones or osteoporosis; muscle loss and weakness; thin, fragile skin that bruises easily; purple-red stretch marks, usually over the abdomen and under the arms; depression and difficulty thinking clearly; too much facial hair in women; irregular or absent menstrual periods and infertility; reduced sex drive; and in children, poor height growth and obesity.

              An estimated 25,000 patients in the United States and 40,000 patients in Europe are currently diagnosed with endogenous Cushing's syndrome. Patients are most commonly adults aged 20 to 50 and five times more women than men are affected. However, endogenous Cushing's syndrome is believed to be underdiagnosed due to lack of disease recognition by the treating physician, which often leads to a delay in diagnosis of six years on average. Endogenous Cushing's syndrome patients are believed to have a mortality risk up to five times that of the general population, with cardiovascular disease, venous thrombosis and infections being the primary causes of death.

Current Treatment Landscape and Limitations on Current Treatment Options

              Treatment of endogenous Cushing's syndrome varies depending on the cause of the disease. For patients with Cushing's disease, a subset representing the majority of patients with endogenous Cushing's syndrome, initial treatment is almost always the attempted surgical removal of the tumor. In anticipation of surgery and when surgery is not effective or not feasible, drug or radiation therapy, or both, is used to suppress excessive cortisol production and the accompanying clinical symptoms.

              A typical approach of drug therapy is to inhibit cortisol biosynthesis through the oral administration of an inhibitor of enzymes of adrenal cortisol synthesis. Ketoconazole is the most widely used drug therapy for endogenous Cushing's syndrome, but it is not approved for this indication in the United States. The percentage of endogenous Cushing's syndrome patients who achieve normalized levels of cortisol, assessed by measuring urinary free cortisol, or UFC, with ketoconazole has been reported from retrospective uncontrolled studies to vary between 33% and 100%. Data from one retrospective study of 200 patients in 14 French centers solely treated with ketoconazole off label for active Cushing's syndrome between 1995 and 2012 showed ketoconazole controlled cortisol secretion in approximately 50% of patients and improved clinical symptoms. Also, beneficial effects on clinical symptoms and signs that drive the morbidity and mortality of endogenous Cushing's syndrome have been reported, such as the reduction in high blood pressure, improvement of diabetes, and normalization of hypokalemia, or low potassium blood levels. However, a significant proportion of patients treated with ketoconazole experience tolerability issues and, in some cases, hepatotoxicity. As a result of the hepatotoxicity risk, including in patients without existing liver disease, the FDA has issued a black box warning concerning the use of ketoconazole to treat fungal infections, its approved indication. Although the elevations in liver function tests associated with ketoconazole are generally modest in nature, in rare cases, severe hepatotoxicity may occur (one in every 10,000 to 15,000 patients). In extremely rare cases, this adverse reaction may be irreversible and result in death or require liver transplantation. In Europe, ketoconazole was taken off the market for the treatment of fungal infections due to similar safety concerns, but was recently approved for the treatment of endogenous Cushing's syndrome without any clinical trials based on significant unmet need, well-established use in medical practice and documentation in scientific literature.

              An alternative approach to treatment is the use of drugs that target pituitary tumors that produce ACTH. This approach is only useful in the subset of patients whose endogenous Cushing's syndrome is caused by a pituitary tumor, or Cushing's disease. Among Cushing's disease patients, the dopamine agonist cabergoline, which is not approved for use in Cushing's disease, has been shown to achieve normalization of UFC levels in about 30% of patients. The SSA pasireotide, which is marketed as Signifor for the treatment of Cushing's disease, has shown normalization of UFC levels in 15% of

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patients at a 600 µg dose and in 26% of patients at a 900 µg dose. Certain SSAs, including Signifor, are known to have undesirable side effects on glucose metabolism. Forty percent of patients with Cushing's disease treated with Signifor in its Phase 3 clinical trial reported the occurrence of hyperglycemia-related adverse events.

              Another alternative, Korlym, or mifepristone, works by inhibiting the action of cortisol at the receptor level, but does not lower cortisol levels. As a result of this mechanism of action, it is not possible to monitor response by measuring UFC levels, which is the standard for physicians who treat endogenous Cushing's syndrome. Korlym has been approved in the United States to control hyperglycemia secondary to hypercortisolism in patients with endogenous Cushing's syndrome. Korlym is contra-indicated in pregnant women and in women with a history of unexplained vaginal bleeding, as its side effects include termination of pregnancy, endometrial thickening and vaginal bleeding.

              We believe that efficacy limitations and safety concerns with currently available drug therapies for endogenous Cushing's syndrome have resulted in a significant unmet medical need among endogenous Cushing's syndrome patients for alternative drug therapies. In a survey we commissioned in 2014 of 89 U.S. physicians treating patients with Cushing's syndrome, when asked, "Of your patients on medication to manage cortisol levels, what percentage are well controlled?", the physicians estimated that only approximately 37% of such patients were well controlled. Thus, we believe that our potential addressable market for COR-003 would be the one-third of all diagnosed endogenous Cushing's syndrome patients that at any one point in time are eligible for drug therapy, a figure that represents patients anticipating surgery, for whom surgery or radiation is not feasible, is contraindicated or has been unsuccessful. This unmet need may also be impacted by what we believe to be the current lack of disease awareness among physicians and patients, resulting in a low rate of diagnosis.

Our Solution—COR-003

              We believe that COR-003 has the potential to become the new standard of care for the drug therapy of endogenous Cushing's syndrome because it may provide a favorable efficacy, safety and tolerability profile compared to current drug therapies, including ketoconazole, the most commonly used drug therapy for the treatment of endogenous Cushing's syndrome. We believe COR-003, based on its similar mechanism of action to that of ketoconazole, may improve UFC levels, in contrast to Korlym, and may have an anti-diabetic effect, in contrast to Signifor. In addition, we believe COR-003 may have an improved safety profile, compared with that of ketoconazole.

              COR-003, like ketoconazole, is a cortisol synthesis inhibitor that inhibits the cortisol synthesis pathway at three points. The following graphic illustrates the cortisol synthesis pathway:

GRAPHIC

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              Our preclinical and pharmacokinetic data suggest that COR-003 may have an efficacy profile at least as favorable as ketoconazole and may have less risk for impairing liver function:

              Previously, COR-003 was studied for the treatment of type 2 diabetes. DiObex, our licensee from 2004 to 2008, initiated five clinical trials to investigate the use of COR-003 for type 2 diabetes. In December 2005, prior to the initiation of the first clinical trial by DiObex, the FDA placed a clinical hold relating to a safety concern for use of a dosage above 600 mg/day. DiObex modified the clinical trial protocol to limit the highest dose to 600 mg/day, and the clinical hold was lifted by the FDA in February 2006. In a Phase 2 clinical trial of type 2 diabetes patients, COR-003 demonstrated a significant dose response in the reduction in mean levels of C-reactive protein, or CRP, whereas for ketoconazole, an increase in CRP was found. Higher levels of CRP indicate the presence of inflammation, including in the liver and the cardiovascular system. Thus, we believe that COR-003 may be associated with a decrease in inflammatory processes compared to racemic ketoconazole. COR-003, with the same mechanism of action as ketoconazole, may also have, like ketoconazole, beneficial effects on cardiovascular risk factors, which are the leading cause of mortality for endogenous Cushing's syndrome, including weight loss, reduction in blood sugar, lowering of cholesterol and reduction in blood pressure.

Clinical and Preclinical Development of COR-003

Phase 3 Clinical Trial

              We are conducting a pivotal Phase 3 clinical trial of COR-003 investigating the safety and efficacy of COR-003 in subjects with endogenous Cushing's syndrome and expect to report top-line data from this trial in the first half of 2017. This clinical trial is being conducted pursuant to an IND we filed in April 2013. We intend to file applications for regulatory approval for COR-003 in the second half of 2017 for the treatment of patients with endogenous Cushing's syndrome for whom surgery is not feasible, is contraindicated or has been unsuccessful. COR-003 is an NCE for which we intend to pursue regulatory approval under the FDA's 505(b)(2) regulations, referencing the FDA's conclusions of safety and effectiveness in the new drug application, or NDA, for ketoconazole. The 505(b)(2) regulatory approval pathway was established to allow companies developing drug products to obtain

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approval by relying in part on agency conclusions of safety and effectiveness from studies that were not conducted by or for the applicant. Because approval can rest in part on data already accepted by the FDA or otherwise available in the public domain, an abbreviated and reduced development program may be required, thus mitigating costs and shortening development time. The FDA has acknowledged that no additional preclinical investigations will be required for COR-003. The EMA's Committee for Medical Products for Human Use, or CHMP, has requested a study of reproductive toxicity that will be completed prior to filing in Europe.

              Several elements of the clinical trial design have been informed by the clinical development pathway of currently approved drug therapies in the United States and the European Union. Additionally, we incorporated advice from the CHMP and FDA into the design of the clinical trial. In discussions we had with the FDA, they recommended, but did not require, a control group. We are using an open-label, single-arm design because in the past the FDA has deemed that the concurrent use of a placebo control as monotherapy is unethical for the treatment of endogenous Cushing's syndrome. In addition, based on our analysis and feedback from experts whom we have consulted, we concluded that it was not practical to use any approved drug to serve as an active control due to the unsuitable mode of action, route of administration and side effect profile of available approved therapies. Studies lacking an active control group are more likely to be subject to unanticipated variability in study results that can potentially lead to flawed conclusions because they do not allow for discrimination of patient outcomes. As a result, even if we achieve the clinical trial's endpoints, the FDA or other regulatory authorities could view our study results as potentially biased and may ultimately require that we conduct a randomized, controlled clinical trial of COR-003 in order to obtain approval for commercialization.

              If we can (1) demonstrate consistent and significant clinical benefit by meeting the primary endpoint of the trial, specifically the responder rate measured as normalization of UFC levels and (2) show consistent improvement of objectively quantifiable biomarkers of endogenous Cushing's syndrome comorbidities, such as blood glucose, blood lipids, blood pressure and weight, and improvement of other clinical signs and symptoms of endogenous Cushing's syndrome, we believe this would be regarded by regulators as adequate proof of efficacy in this rare disease with a high unmet medical need.

              We are conducting this clinical trial in up to 80 clinical sites in approximately 19 countries, including in the United States, Canada, the European Union and the Middle East. We enrolled our first patient in the clinical trial in August 2014. Our U.S. IND for COR-003 for the treatment of endogenous Cushing's syndrome took effect in May 2013. We plan to recruit 90 patients and collect safety and efficacy data over a treatment period of at least one year. Because our Phase 3 clinical trial will collect safety data for only 90 patients, we currently expect that we would be required by the FDA and the EMA to collect additional safety data post-approval. If we are able to confirm a favorable safety profile of COR-003 in clinical use, we plan to discuss differentiated safety and tolerability labeling from ketoconazole with regulatory authorities.

              Our Phase 3 clinical trial is being conducted, after an appropriate washout period, if required, in three phases:

              During the dose titration phase, patients will start at 150 mg twice daily dosing (300 mg total daily dose) and titrate in 150 mg increments up to a maximum 600 mg twice daily dosing (1,200 mg total daily dose). Following the dose titration phase, once the therapeutic dose has been reached, the

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patient will enter the maintenance phase, during which the dose will be fixed and cannot be changed other than for safety reasons. At the end of the six month maintenance phase, UFC levels will be measured and the responder rate, which is the primary endpoint of the clinical trial, will be determined. Patients who have completed the maintenance phase may enter the extension phase, which we expect will provide additional safety and efficacy data. Throughout the entire clinical trial, various measurements for safety and efficacy will be taken.

              Below is a diagram of our clinical trial design:

GRAPHIC

    Clinical Trials in Type 2 Diabetes

              Historically, COR-003 was studied as a treatment for type 2 diabetes. An IND was filed in 2005 for investigation of the use of COR-003 in diabetes. DiObex, our licensee at the time, initiated five clinical trials to investigate the use of COR-003 for type 2 diabetes. A total of 159 subjects were dosed in these clinical trials, including 41 healthy subjects during Phase 1 clinical trials, and 118 in patients with type 2 diabetes during Phase 2 clinical trials. Doses of COR-003 were administered over the range of 200 mg to 600 mg once a day, or QD, and 400 mg twice a day, or BID, for a single patient for up to 14 days, and 150 mg to 450 mg QD for up to four months.

              The pharmacokinetics of COR-003 were studied in patients with type 2 diabetes and in normal volunteers in whom the effects of COR-003 on the pharmacokinetics of felodipine, a drug used to treat high blood pressure, and atorvastatin (Lipitor), a drug used to lower cholesterol, were evaluated. In the completed Phase 2 clinical trial, dose dependent reductions from baseline in lipoprotein levels, in the form of low-density lipoprotein, or LDL, and high-density lipoprotein, or HDL, and total cholesterol were observed, but no differences in measures of glycemic control relative to placebo were detected. In 2008, in light of negative safety reports for other diabetes treatments such as Avandia, DiObex made the decision to voluntarily terminate the development of COR-003 for the treatment of diabetes due to the perceived high regulatory and commercial hurdles for its approval and use in type 2 diabetes. Thereafter, the IND was closed and DiObex terminated the two ongoing Phase 2 clinical trials.

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              DiObex conducted the following five clinical trials with COR-003 in type 2 diabetes pursuant to an IND filed by them in November 2005:

Clinical Trial Number
  Clinical Trial Description
  Subjects
Enrolled

  Year and
Status

  Location
  Dose
DIO-501   Phase 1/2a, Trial of COR-003 or Placebo in Patients with Type 2 Diabetes Mellitus   37   2006/2007
Completed. Study report issued.
  United States   200-600 mg QD; 400 mg BID

DIO-502

 

Phase 2b Trial of COR-003 or Placebo in Addition to Metformin and Atorvastatin or Atorvastatin Placebo for Type 2 Diabetes Mellitus

 

129

 

2007/2008
Terminated early. Study report issued.

 

United States, Australia, New Zealand

 

150-450 mg QD

DIO-503

 

Phase 2 Open-Label Trial and Pharmacodynamic for 24-Week Study with COR-003 in Combination with Metformin and Atorvastatin in Patients with Type 2 Diabetes Mellitus

 

3

 

2007/2008
Terminated early. Study report issued.

 

United States, Australia, New Zealand

 

150-450 mg QD

AA34509

 

Phase 1 Pharmacokinetic Drug Interaction Trial of COR-003 with Felodipine in Healthy Adult Volunteers Under Fasting Conditions

 

18

 

2006/2007
Completed. Study report issued.

 

United States

 

400 mg QD

AA34510

 

Phase 1 Pharmacokinetic Drug Interaction Trial of COR-003 and Racemic Ketoconazole with Atorvastatin in Healthy Adult Volunteers Under Fasting Conditions

 

24

 

2006/2007
Completed. Study report issued.

 

United States

 

400 mg QD

    Phase 2 Clinical Trials

        DIO-501 Clinical Trial

              This clinical trial was a double-blind, placebo-controlled, parallel-group clinical trial conducted in patients aged 18 to 70 with a known diagnosis of type 2 diabetes. A total of 35 patients were treated: 21 with COR-003 (10 at 200 mg QD, six at 400 mg QD, four at 600 mg QD and one at 400 mg BID); eight with ketoconazole (400 mg QD); and six with placebo. Trial drugs were administered for 14 days.

              In this clinical trial, the mean 12-hour plasma cortisol area under the concentration-time curve, or AUC, levels were modestly reduced in the COR-003 treatment groups at day 15 compared to baseline, which is consistent with the known mechanism of action of COR-003. However, counter-regulation in diabetic patients with a normal hypothalamic pituitary adrenal axis may have limited the observed cortisol suppression. Similarly, only a small, nonsignificant effect on glycated hemoglobin, or HbA1c, and fasting glucose levels was observed. However, consistent with the known inhibitory effect of ketoconazole on cholesterol synthesis, total cholesterol, LDL, and to a lesser extent HDL levels, but not triglycerides, were significantly decreased in a dose-dependent manner by COR-003. The mean change from baseline in total cholesterol, LDL and HDL at a dose of 400 mg QD was similar to those observed in 400 mg QD ketoconazole and higher in the 600 mg QD COR-003 group. Also, for the COR-003 treatment groups, there was a statistically significant dose response in the reduction in mean levels of CRP on day 15 compared with baseline. This result was statistically significant, with a p-value of 0.027. P-value is a conventional statistical method for measuring the significance of clinical results. Typically, a p-value of 0.05 or less represents statistical significance, meaning that there is a 1-in-20 or less statistical probability that the observed results occurred by chance. In contrast, mean levels of CRP increased in the ketoconazole-treated group and less so in the placebo group. CRP is an indicator of inflammation, including vascular inflammation. The reduction in cholesterol and CRP observed in

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patients with type 2 diabetes may indicate a potential beneficial effect of COR-003 on cardiovascular risk factors observed in patients with endogenous Cushing's syndrome.

              Plasma AUCs and maximum concentration in blood, or Cmax, increased in a non-proportional manner over the dose range of 200 mg to 400 mg on days one and 14. Clearance values were similar for the 200 mg and 400 mg doses of COR-003, but significantly decreased at the 600 mg COR-003 dose, on days one and 14.

              Administration of COR-003 in this trial in patients with type 2 diabetes was observed to be well-tolerated. Headache and nausea were the most frequently reported adverse events, some of which were considered drug-related. There were no serious adverse events, and no clinically meaningful changes in hematology, blood chemistry and urinalysis were noted in any treatment group. No treatment-related changes in liver function tests, or LFTs, were detected.

        DIO-502 and DIO-503 Clinical Trials

              This clinical trial was a four-month, double-blind, randomized, placebo-controlled clinical trial of dose-ranging COR-003 with metformin and atorvastatin in 200 patients with type 2 diabetes, consisting of males and females between the ages of 18 and 70. Included patients were on concomitant metformin treatment with a minimum daily dose of 500 mg with an HbA1c level of 7% to 10%. Additionally, all patients were treated with 10 mg atorvastatin to evaluate the effect of COR-003 on lipid profiles given cholesterol-lowering drugs. Thus, patients were randomized into eight separate arms in the clinical trial: placebo or COR-003 at 150 mg; 300 mg; and 450 mg with either atorvastatin 10 mg or atorvastatin placebo.

              Clinical trial DIO-503 was an open-label, follow-on extension to DIO-502 to evaluate safety, tolerability and pharmacodynamics after 24 weeks of dosing with COR-003 in combination with metformin, and with and without atorvastatin in subjects with type 2 diabetes.

              DiObex terminated these clinical trials prior to completion. At the time of trial termination, a total of 133 patients were enrolled in the DIO-502 and DIO-503 trials, and 129 patients had been treated. Efficacy and pharmacokinetics were not analyzed due to the early termination. The frequency of adverse events reported was generally similar across treatment arms. Diarrhea was the most frequently reported adverse event overall with administration of COR-003. No serious adverse events were reported in the terminated studies.

              A safety signal of elevated liver enzymes was identified in 10 of the 129 treated patients in the DIO-502 and DIO-503 trials. Three of the treated patients were withdrawn from the clinical trials as required in the safety monitoring plan. In these three patients, LFT levels returned to normal after study drug was discontinued. In addition, three other patients had modest elevations in LFT levels. While these levels did not require termination by the trial protocol, the investigators elected to terminate these patients from the clinical trial. LFTs in these patients also returned to normal after the study drug was discontinued. Four additional patients required close monitoring per the protocol, and had resolution of their LFT abnormalities while on the study drug. The first case of elevated liver enzymes occurred in a patient who admitted to excessive alcohol consumption. The remaining cases developed over the following three months. An independent external safety review committee recommended continuation of the studies with no modifications.

              Due to the design of these clinical trials, the independent data safety monitoring board for the trials stated that it was impossible to interpret which of the two drugs, COR-003 or atorvastatin, was primarily associated with the side effect profile observed in these trials. A more detailed analysis of the liver transaminase elevations in this clinical trial showed that there was no correlation between the dose of COR-003 and abnormal liver transaminases.

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    Phase 1 Clinical Trials

        AA34509 Clinical Trial

              This clinical trial was designed primarily to evaluate the effect of COR-003 on the pharmacokinetics of concurrently administered felodipine. Subjects were administered 400 mg of COR-003 or placebo QD for eight days. On the fifth day of the trial, subjects received a single 5 mg dose of felodipine. Beginning on day five, pharmacokinetics of COR-003 were monitored for 24 hours, and pharmacokinetics of felodipine were monitored for 72 hours. The trial was a cross-over trial involving 18 subjects, 16 of whom completed the trial.

        AA34510 Clinical Trial

              This clinical trial was designed primarily to evaluate the effect of concomitant administration of COR-003 or racemic ketoconazole on the pharmacokinetics of atorvastatin. Subjects were administered 400 mg of COR-003, 400 mg of racemic ketoconazole or placebo daily for seven days. On day five, all subjects received a single 80 mg dose of atorvastatin. After administration of the racemic mixture, ketoconazole, pharmacokinetics of the two single enantiomers 2R,4S-ketoconazole and 2S,4R-ketoconazole, were evaluated for 24 hours on day five using a chiral bioanalytical method. Pharmacokinetics of atorvastatin were evaluated for 60 hours starting at the time of administration on day five. The trial was a cross-over trial involving 24 subjects, all of whom completed the clinical trial.

    Key Findings from the Clinical Trials of COR-003

        Phase 2 Efficacy and Safety Trials in Diabetic Patients:

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        Phase 1 Drug Interaction Clinical Trials in Normal Volunteers:

Overview of COR-004 and COR-005—Phase 2 Product Candidates for the Treatment of Acromegaly

              We are developing COR-004 and COR-005 for the treatment of acromegaly. We in-licensed COR-004 and acquired COR-005 in 2015 as part of our strategy to build our rare endocrine franchise. Acromegaly is a rare endocrine disorder that most commonly results from a benign tumor of the pituitary gland, leading to excess production of GH and IGF-1. The treatment goal is the normalization of IGF-1, which is the main cause of the detrimental clinical signs and symptoms of acromegaly.

              COR-004 is a second-generation antisense oligonucleotide in Phase 2 clinical development for the treatment of acromegaly patients who do not adequately respond to SSAs. COR-004, which was discovered by ISIS Pharmaceuticals, has a novel mechanism of action targeting GHR mRNA, a molecule that is necessary for the synthesis of human growth hormone receptor, or GHR, protein. Antisense oligonucleotides work by binding to mRNA, triggering its destruction by enzymes before it can be translated into the protein. COR-004 binds to GHR mRNA, thereby preventing GHR from being expressed on cell surfaces. Absence of GHR leads to reduced concentrations of circulating IGF-1, which is responsible for the disease signs and symptoms in acromegaly. COR-004 recently completed a Phase 2 clinical trial that showed a statistically significant reduction in IGF-1 levels at the twice per week 200 mg dose, and a safety profile comparable to that of other second-generation antisense drugs in late-stage development for other indications. We intend to seek orphan drug designation for COR-004 from the FDA and the EMA. We plan to initiate nonclinical animal studies during 2015 and plan to have a pre-IND meeting with the FDA in the second half of 2015 before filing an IND for COR-004 in the United States, and IND-equivalent filings in other regulatory jurisdictions. We anticipate that at least one pivotal registration clinical trial with at least six months of controlled treatment will be needed to evaluate efficacy, along with at least six additional months of treatment observation to evaluate safety. However, depending on advice from regulatory authorities, we may be required to complete an additional clinical trial prior to initiating our pivotal program.

              COR-005 is a novel SSA in Phase 2 clinical development for the treatment of acromegaly patients who have not adequately responded to surgery, or acromegaly patients for whom surgery is not appropriate. SSAs are the most commonly used drug therapy for the treatment of acromegaly and work by binding to specific subtypes of SSTRs that are expressed by the tumor. Binding of SSAs to these SSTRs leads to the beneficial inhibition of GH secretion, but also unwanted inhibition of secretion of other endocrine hormones such as insulin and glucagon in other organs. Based on the differentiated activation pattern of COR-005 to SSTR subtypes and preclinical and clinical data, we believe that it may offer an improved efficacy and safety profile relative to existing drug therapies for acromegaly. In the five clinical studies completed to date in healthy subjects and patients with acromegaly outside the United States, a beneficial reduction of GH was observed, and, when compared with octreotide, there

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was no or less reduction of insulin. COR-005 has been granted orphan drug designation by the FDA and the EMA. We plan to initiate nonclinical animal studies and formulation development activities during 2015 and plan to have a pre-IND meeting with the FDA and a Scientific Advice meeting in Europe in the first half of 2016 prior to advancing COR-005 into further studies and pivotal clinical trials. In addition to a dose-ranging clinical trial, we anticipate that our clinical program will include at least one multinational pivotal clinical trial for registration comparing COR-005 to other treatments or placebo, including at least six months of controlled treatment to evaluate efficacy and one year of observation to evaluate safety.

              We believe the development of two product candidates, each with distinct and differentiated mechanisms of action to treat acromegaly could potentially enable us to address the broad acromegaly patient population requiring drug therapy.

Overview of Acromegaly

              Acromegaly is a rare endocrine disorder that most commonly results from a benign tumor of the pituitary gland, or adenoma, leading to excess production of GH and IGF-1, key regulators of growth and metabolism. High levels of GH over-activate receptors resulting in excess IGF-1 in patients with acromegaly. A common criterion for the successful treatment of acromegaly is normalization of IGF-1 levels, since reduction of excess IGF-1 correlates closely with relief of clinical symptoms.

              The progression of acromegaly is typically slow, and acromegaly often is not clinically diagnosed for 10 years or more. As the disease advances, patients typically exhibit abnormal growth throughout the body. Acromegaly most commonly affects middle-aged patients with the mean age of onset being 40 to 45 years. In adults, the condition results in the expansion of the circumference of bones and increased density of bone, causing pain and altered appearance. This altered appearance is most apparent in the head and face, but also impacts the entire body. Patients may experience abnormal cartilage growth and pressure in joints, enlargement of visceral organs and cardiovascular disease. Upper airway obstruction with sleep apnea occurs in approximately 40% to 50% of patients, and is associated with both soft tissue laryngeal airway obstruction and central sleep dysfunction. Patients may also experience metabolic disruptions such as insulin resistance and diabetes, which is estimated to develop in 10% to 15% of patients. In addition, some patients with large tumors experience symptoms caused by the tumor itself, including headaches, vision problems, impotence, low sex drive and changes in the menstrual cycle. These problems, if left untreated, lead to disfigurement, disability, and ultimately premature death.

              We estimate the current acromegaly drug therapy market, including octreotide and lanreotide for acromegaly and total pegvisomant, to be approximately $990 million worldwide. Based on recent publications, we estimate the diagnosed prevalence of acromegaly to be approximately 24,000 in the United States, and approximately 43,000 in the European Union. Prevalence estimates vary considerably and it is believed that acromegaly is underdiagnosed. Estimates of the mortality rate in patients with acromegaly varies, with published estimates reporting values as high as 2.7 times normal.

Current Treatment Landscape and Limitations on Current Treatment Options

              Initial treatment for acromegaly is usually surgery with or without radiation therapy. An estimated 80% of patients are eligible for surgery. The initial surgical cure rate is estimated at approximately 80% to 90% for patients with microadenomas, which are tumors less than 10 mm in diameter, and less than 50% for patients with macroadenomas, which are tumors greater than 10 mm in diameter. Three percent to 10% of patients will experience a recurrence in the years following an initially successful surgery. An estimated 40% to 50% of acromegaly patients will be prescribed for drug therapy, including those for whom surgery is not feasible, is contraindicated or has been unsuccessful. This represents approximately 9,600 to 12,000 patients in the United States and 17,000 to 22,000

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patients in the European Union. The goal of drug therapy is primarily to normalize IGF-1 levels and GH levels. Currently, SSAs are the most commonly used drug therapy for the treatment of patients with acromegaly. Up to one-half of treated patients do not adequately respond to SSAs with full IGF-1 normalization and need alternative or adjunctive drug therapies.

              Somatostatin is a naturally occurring cyclic peptide, which is a biological molecule consisting of linked amino acids. Somatostatin inhibits the secretion of a broad array of hormones secreted by the pituitary gland, the pancreas and the gastrointestinal tract, or the GI tract, including GH, insulin and glucagon. It also modulates the rate of gastric emptying, the flow of bile from the gallbladder and intestinal blood flow, and inhibits the growth of normal and tumor cells. These functions are mediated primarily by the binding of somatostatin to a family of five SSTRs. There is considerable overlap between activation of these different receptors and their effects on biological functions. GH secretion is inhibited by activation of some of these receptors.

              Pituitary adenomas express various patterns of SSTRs depending on whether they produce primarily GH, ACTH or other pituitary hormones. This excessive production leads to acromegaly, Cushing's disease or other diseases, respectively. SSAs are structurally similar to somatostatins and have a therapeutic effect in pituitary adenomas, since they bind to the SSTRs on these tumors and inhibit secretion of hormones such as GH or ACTH. Currently approved SSAs used to treat acromegaly are: octreotide which is available in two formulations, one that is typically injected three times a day, or TID, subcutaneously (Sandostatin), and a second that is a long-acting intramuscular depot for monthly injection (Sandostatin LAR); lanreotide (Somatuline), a slow release or autogel formulation for deep subcutaneous injection once a month; and pasireotide available as a long-acting intramuscular depot for monthly injection (Signifor LAR).

              There is a significant unmet need in the treatment of acromegaly. Although long-acting SSAs are the most commonly used drugs, they have several limitations, including:

              While long-term monthly administration controls GH hypersecretion in two-thirds of treated patients, some patients do not respond to SSAs with full IGF-1 normalization and need to move to other drug therapies, which are used as alternatives to or in combination with SSAs. These additional drug therapies also aim to reduce IGF-1. Somavert (pegvisomant) is a human GH receptor antagonist that binds to the GH receptor, but does not activate the mediators leading to IGF-1 production and secretion, thereby acting as a functional GH receptor antagonist, or blocker. The resulting clinical effect is a dose-dependent inhibition of IGF-1. However, because it is administered as a subcutaneous injection on a daily basis, we believe patient acceptance and compliance may be reduced. Dopamine receptor agonists such as cabergoline also inhibit GH secretion by pituitary adenomas expressing the

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dopamine receptor, which leads to a moderate inhibition of IGF-1. This class of drugs is not approved by the FDA for the treatment of acromegaly.

              A number of products are currently in development for the treatment of acromegaly that may potentially compete against COR-004 and COR-005. The majority of compounds in development for the treatment of acromegaly are reformulations of octreotide acetate that potentially offer improved convenience to patients and physicians. While such compounds may mitigate gastrointestinal side effects and treatment burdens associated with existing SSAs, they are unlikely to address the market's key unmet need for drugs with an improved efficacy and safety profile. As a result, there remains a need for a safe, tolerable and effective drug therapy for acromegaly patients.

Our Solutions—COR-004 and COR-005

COR-004—A Novel Second-Generation Antisense Oligonucleotide

              COR-004 is a second-generation antisense oligonucleotide in Phase 2 clinical development for the treatment of acromegaly. Antisense technology consists of introducing an oligonucleotide, a short DNA or RNA molecule with a complementary sequence to a mRNA. mRNA molecules are an intermediate step between genes encoded by DNA and expression of functional proteins. By binding to the target mRNA for the GHR, COR-004 prevents the production of the GHR, primarily in the liver. The GHR is required for GH to bind and exert its effect, including IGF-1 production. By reducing GHRs to which GH binds in the liver, COR-004 effectively reduces IGF-1 levels. This mechanism is distinct from that of SSAs, which inhibit GH secretion in the pituitary by binding to somatostatin receptors. This mechanism is also different from that of pegvisomant, which is a human growth hormone analog that has been structurally altered to act as a GH receptor antagonist, meaning it binds to the GHR without triggering effects at the GHR.

              COR-004 has been studied in patients with acromegaly who have had an inadequate response to surgery or candidates for whom surgery is not appropriate. COR-004 may be used in a similar fashion to the current use of pegvisomant, primarily as an alternative or adjunctive drug therapy in the significant proportion of patients who do not respond adequately to SSAs. Due to its novel mechanism of action, COR-004 may have a differentiated safety and efficacy profile compared to pegvisomant. In contrast to daily administration of pegvisomant, we intend to position COR-004 to be labeled for once-or twice-weekly administration, which may be viewed as a convenience advantage, potentially leading to improved patient compliance. In addition, we plan to develop COR-004 to be packaged in pre-filled syringes, eliminating the need for reconstitution, in contrast to most other drug therapies for acromegaly. We intend to seek orphan drug designation for COR-004 from the FDA and the EMA.

Completed Clinical Trials

              COR-004 has been dosed as subcutaneous injection in 50 subjects in two clinical trials to date, including a Phase 1 safety and pharmacokinetic clinical trial in 36 healthy subjects, 12 of which received placebo, as well as a Phase 2 efficacy clinical trial in 26 patients with acromegaly. In both clinical trials, COR-004 showed a dose-dependent tolerability profile consistent with other antisense oligonucleotides. The Phase 2 clinical trial showed a statistically significant reduction in IGF-1 levels. A second Phase 2 clinical trial with a higher dose of COR-004 is currently being conducted in four patients by Antisense Therapeutics Limited, or Antisense Therapeutics, from whom we in-licensed this product candidate. All studies to date have been conducted outside of the United States. We plan to conduct Phase 3-enabling chronic toxicology studies in two animal species and in parallel to seek a pre-IND meeting with the FDA in the second half of 2015 to discuss requirements for entry into Phase 3 clinical development.

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              The following table summarizes these trials. At the time the trials described below were conducted by Antisense Therapeutics Limited, COR-004 was named 1103.

Clinical Trial
Number

  Clinical Trial Descriptions
  Subjects
Enrolled

  Year and
Status

  Location
  Dose
1103-CT03   Phase 2 Open-Label Trial of the Efficacy, Pharmacokinetics, Safety and Tolerability of COR-004 in Adult Patients with Acromegaly   4   Ongoing.   Australia   300 mg twice weekly

1103-CT02

 

Phase 2 Randomized, Open-Label Trial of the Safety, Tolerability, Pharmacokinetics and Efficacy of Two Dosing Regimens of COR-004 in Adult Patients with Acromegaly

 

26

 

2013/2014 Completed. Study report not yet issued.

 

United Kingdom, France, Spain, Australia

 

200 mg once or twice weekly

1103-CT01

 

Phase 1 Randomized, Placebo-Controlled, Double-Blind Trial of COR-004 in Healthy Male Subjects

 

36

 

2011 Completed. Study report issued.

 

Australia

 

Single and multiple ascending dose up to 400 mg

       Ongoing Phase 2 Clinical Trial

              This clinical trial, 1103-CT03, is a randomized, open-label dose ranging Phase 2 clinical trial to evaluate the efficacy, pharmacokinetics, safety and tolerability of subcutaneous doses of COR-004 in adult patients with acromegaly. This study is being conducted by Antisense Therapeutics. This clinical trial is a 13 week treatment of twice weekly subcutaneous injections of 300 mg of COR-004 in four patients with acromegaly. Patient recruitment is underway. The primary and secondary endpoints are similar to those in Study 1103-CT02.