November 21, 2018
Irene P. McCarthy
Chief Executive Officer
Stealth BioTherapeutics Corp
c/o Intertrust Corporate Services (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman
KY1-9005 Cayman Islands
Re: Stealth BioTherapeutics Corp
Draft Registration Statement on Form F-1
Submitted October 26, 2018
CIK No. 0001696396
Dear Ms. McCarthy:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form F-1 submitted October 26, 2018
Prospectus Summary
Overview, page 1
1. Please delete your reference to "first-in-class therapy" throughout your
registration
statement as it implies the product candidate's approval.
2. Please expand your discussion of LHON in the summary and throughout your
registration
statement to disclose that the Phase 2 clinical trial did not meet its
primary endpoint. To
the extent that your plans to expand the open-label portion of your
Phase 2 trial is to
Irene P. McCarthy
FirstName LastNameIrene P. McCarthy
Stealth BioTherapeutics Corp
Comapany 21, 2018
November NameStealth BioTherapeutics Corp
November 21, 2018 Page 2
Page 2
FirstName LastName
assess whether the prior Phase 2 trial results were skewed by the
unexpected variability in
the placebo group, then please provide that additional information.
Additionally, clarify
in your risk factor titled, "We are dependent on the success of
elamipretide..." that the
phase 2 clinical trial failed to meet the primary endpoint.
Additionally, expand other risk
factor discussions to which these circumstances are applicable.
Our Pipeline, page 2
3. We note you completed a Phase 1 clinical trial of elamipretide for Dry
Age-Related
Macular Degeneration and expect to initiate a Phase 2b clinical trial
in the first quarter of
2019. Unless you have conducted other Phase 2 trials related to Dry
Age-Related Macular
Degeneration, please revise your pipeline table to depict the current
status for this
indication at the end of Phase 1 or on the line between Phase 1 and 2,
rather than in the
middle of the Phase 2 column.
4. With respect to SBT-20 and SBT-272, if you have identified specific
disease indications
related to the development of these product candidates, please
disclose them in the table.
We note that your use of proceeds does not allocate any proceeds for
preclinical
development of SBT-20. Please tell us why you believe this product
candidate constitutes
a material program or delete it from your table.
5. Additionally, it appears that you have not yet begun preclinical
development of SBT-20.
Please revise the table to indicate the current status of your
development in the indication
you plan to pursue by moving the line depicting your progress to the
beginning of the
preclinical column, rather than the middle of the column.
6. Given SBT-20's current stage of development, please clarify in this
section the
circumstances under which 75 people were exposed to it systemically.
Explore potential strategic partnerships and alliances to maximize the value of
our development
programs, page 5
7. We note your statement that you hold worldwide exclusive rights for
elamipretide and
SBT-20 and have full ownership of your compound library, including
SBT-272. These
statements appear contradictory. Please explain how an investor can
distinguish something
from your compound library from something you license if SBT-272 is
the only
compound from your library referenced in your registration statement.
Implications of Being an Emerging Growth Company, page 6
8. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Irene P. McCarthy
FirstName LastNameIrene P. McCarthy
Stealth BioTherapeutics Corp
Comapany 21, 2018
November NameStealth BioTherapeutics Corp
November 21, 2018 Page 3
Page 3
FirstName LastName
Use of Proceeds, page 60
9. Please revise to clarify whether you expect the proceeds, together
with existing cash, will
be sufficient to fund each of the referenced trials through
completion. If you do not,
please indicate how far the proceeds of the offering, together with
your existing cash, will
allow you to proceed. Please also disclose the sources of other funds
needed to reach
regulatory approval and commercialization for elamipretide. Refer to
Item 3.C.1 of Form
20-F.
10. We note that as of September 30, 2018, you had $20 million of
outstanding principal
under your term loan facility with Hercules. Please advise if any net
proceeds will be
used to retire any debt. If applicable, please revise to disclose the
aggregate amount of
indebtedness that will be repaid, including the interest rate and
maturity date of the
indebtedness. Refer to Item 3.C.4 of Form 20-F.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Significant Judgments and Estimates
Determination of the Fair Value of common Stock on Grant Dates, page 77
11. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
Our Product Candidates, page 88
12. The tables on pages on page 93 and 101 include a scale indicating
"Favors Placebo"
"Favors Elamipretide." The scale appears to indicate your conclusions
about the trial
results. Please note that statements regarding efficacy are within the
sole authority of the
applicable regulator, the FDA, EMA or NMPA. We will not object to
presentation of the
trial endpoints, the extent to which the end points were met or were
not met or the
aggregate or summary data collected from your trials, but you should
not make statements
indicating your conclusions about the efficacy of the trials. Please
revise these tables to
show the results of the two groups separately without indicating which
group of
participants experienced better results.
Index to Consolidated Financial Statements
Notes to Consolidated Financial Statements
8. Convertible Preferred Shares, page F-16, page F-16
13. With respect to the automatic conversion feature afforded to the
shareholders of the Series
A preferred shares, please revise your disclosure to clarify the
stipulations of a "qualified
IPO".
Irene P. McCarthy
Stealth BioTherapeutics Corp
November 21, 2018
Page 4
Signatures, page II-7
14. Please revise your signature page to include a signature line for the
principal financial
officer and controller or principal accounting officer. To the extent
that someone has
signed in more than one capacity, indicate each capacity in which he or
she has signed.
Refer to Instructions for Signatures on Form F-1.
General
15. Please provide us proofs of all graphics, visual, or photographic
information you will
provide in the printed prospectus prior to its use, for example in a
preliminary prospectus.
You may contact Tabatha Mccullom at 202-551-3658 or Sharon Blume at
202-551-3474
if you have questions regarding comments on the financial statements and
related
matters. Please contact Irene Paik at 202-551-6553 or Suzanne Hayes at
202-551-3675 with any
other questions.
Sincerely,
FirstName LastNameIrene P. McCarthy
Division of
Corporation Finance
Comapany NameStealth BioTherapeutics Corp
Office of
Healthcare & Insurance
November 21, 2018 Page 4
cc: Rosemary G. Reilly, Esq.
FirstName LastName