United States securities and exchange commission logo
January 7, 2021
Laurence Reid, Ph.D.
President and Chief Executive Officer
Decibel Therapeutics, Inc.
1325 Boylston Street, Suite 500
Boston, MA 02215
Re: Decibel
Therapeutics, Inc.
Draft Registration
Statement on Form S-1
Submitted December
11, 2020
CIK No. 0001656536
Dear Dr. Reid:
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 S-1 submitted December 11, 2020
PROSPECTUS SUMMARY
Overview, page 1
1. Please revise the
"Overview" section on page 1 to highlight that your gene therapy
programs are
preclinical.
Gene Therapies for Congenital, Monogenic Hearing Loss, page 2
2. We note your statement
here that "DB-OTO enabled a robust restoration of hearing" as
well as similar
statements elsewhere in the prospectus where you describe your product
candidates as
"result[ing] in robust regeneration of hair cells." Given the
early stage of
development, and your statements that your results in your preclinical
Laurence Reid, Ph.D.
Decibel Therapeutics, Inc.
January 7, 2021
Page 2
studies may not be indicative of results obtained in later trials,
these statements are overly
speculative and inappropriate. Please remove these statements from the
descriptions of
your product candidates.
Collaboration with Regeneron, page 4
3. We note that you are developing DB-OTO, AAV.103 and AAV.104 with
Regeneron. We
also note your disclosure on page 92 that you potentially owe certain
royalty payments to
Regeneron with respect to DB-ATO. Please update your disclosure on
page 4 to identify
DB-ATO as a product candidate that you are developing with Regeneron
or otherwise
advise.
Our Pipeline, page 5
4. Please revise the pipeline table here and on page 113 to include
individual columns for
each of the three phases of clinical development (i.e., include
separate columns for phases
2 and 3). In addition, we note the inclusion of your Discovery program
in the pipeline
table. Given the status of development and the lack of disclosure
regarding this program
in your business section, please explain why this program is
sufficiently material to your
business to warrant inclusion in your pipeline table or remove.
Implications of Being an Emerging Growth Company, page 7
5. 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.
SUMMARY CONSOLIDATED FINANCIAL DATA, page 11
6. Please expand footnote (1) to explain how you determined the number of
common shares
included in your pro forma earnings per share related to the the
automatic conversion of
your preferred stock. In this regard, it appears that the changes made
to the conversion
terms of your Series A, B and C preferred stock subsequent to
September 30, 2020
resulted in changes to the number of common stock issuable upon
conversion as disclosed
on pages F-27 and F-52. Address this comment as it relates to footnote
(1) to your
Selected Financial Data.
RISK FACTORS
Our rights to develop and commercialize any product candidates are subject and
may in the
future be subject...,
FirstName page 40 Reid, Ph.D.
LastNameLaurence
Comapany
7. NameDecibel
Please Therapeutics,
revise to identify Inc.candidates that are or may be
subject to march-in
the product
Januaryrights.
7, 2021 Page 2
FirstName LastName
Laurence Reid, Ph.D.
FirstName LastNameLaurence Reid, Ph.D.
Decibel Therapeutics, Inc.
Comapany
January NameDecibel Therapeutics, Inc.
7, 2021
January
Page 3 7, 2021 Page 3
FirstName LastName
USE OF PROCEEDS, page 79
8. We note that you intend to use a portion of the net proceeds to fund
the development of
your various gene therapy programs and DB-020. Please revise to
specify how far in the
clinical development of the associated product candidates you expect
to reach with the net
proceeds. In this regard, we note that you have a number of clinical
trials planned for the
associated product candidates, namely DB-020, DB-OTO and DB-ATO.
MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Restructuring, page 95
9. We note that the you terminated 45 full-time employees in connection
with your
restructuring, which appears to be over half of the workforce. Please
update the disclosure
to include a description of the magnitude of the reduction in force.
In addition, please
include a brief description of the specific reason for the
restructuring
and consider including a specific risk factor discussion highlighting
the reorganization.
Critical Accounting Policies and Significant Judgement and Estimates
Stock-Based Compensation, page 105
10. 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. In this regard, we note your December
grant of stock
options to purchase 14 million shares of common stock to your
employees and
consultants appears outside of your typical option grants during prior
periods. Please
discuss with the staff how to submit your response.
BUSINESS, page 110
11. We note your disclosure of certain preclinical study results
throughout this section and
elsewhere in your draft registration statement. For example only, we
note your disclosure
that you "have evaluated in several preclinical studies, including
dose-response studies,
the dependence of OTOF expression and functional recovery on dosing
increments at one
month-post DB-OTO infusion," but do not include material details
regarding the study
specifics. Please describe additional material information about the
studies,
including, the number of participants, the method by which the product
candidates were
administered, the primary and secondary endpoints, if applicable, and
a discussion of any
adverse events for each of your material preclinical studies to date.
Laurence Reid, Ph.D.
FirstName LastNameLaurence Reid, Ph.D.
Decibel Therapeutics, Inc.
Comapany
January NameDecibel Therapeutics, Inc.
7, 2021
January
Page 4 7, 2021 Page 4
FirstName LastName
Diagnosis and Treatment of Hearing Loss, page 116
12. We note your disclosure that an independent study looked at "Word
Recognition with
Normal Hearing v. Cochlear Implants." Please disclose the source for
this information as
well as the number of individuals studied.
Preclinical Safety, page 127
13. We note your disclosure that based on pre-IND feedback from the FDA,
you are currently
conducting preclinical studies to support your planned submission.
Please provide
additional material details on the ongoing preclinical studies and
include details, such as,
type of study, number of participants, primary and secondary
endpoints, if applicable, and
anticipated completion date.
Clinical Trials, page 132
14. We note your disclosure that, "DB-020 was well-tolerated with adverse
events generally
mild to moderate." To the extent a serious adverse event has occurred,
please clearly
disclose the event and the number of affected patients.
Intellectual Property, page 134
15. We note your disclosure on the intellectual property protection you
have for DB-OTO and
DB-020. Please expand your disclosure to include a discussion on the
intellectual property
protection you have for DB-ATO.
License and Collaboration Agreement with Regeneron Pharmaceuticals, Inc., page
137
16. Please revise to disclose the amounts paid to date and when the
royalty term is currently
expected to expire. In addition, please revise your disclosure on the
royalty range to
disclose a royalty range of not more than 10 percentage points.
License Agreements with The Regents of The University of California and the
University of
Florida Research Foundation, Incorporated, page 138
17. Please disclose when the last of the patent rights licensed under the
UCSF and UCSF
Licenses are scheduled to expire.
License Agreement with The Curators of the University of Missouri, page 140
18. Please disclose the upfront fee and when the last of the patent rights
licensed under the
University of Missouri License is scheduled to expire.
Laurence Reid, Ph.D.
FirstName LastNameLaurence Reid, Ph.D.
Decibel Therapeutics, Inc.
Comapany
January NameDecibel Therapeutics, Inc.
7, 2021
January
Page 5 7, 2021 Page 5
FirstName LastName
Note 17. Subsequent Events
Amendment to the Regeneron Agreement, page F-37
19. We note that you issued 10,000,000 shares of your Series C preferred
stock to Regeneron
in consideration for its entry into the amendment to the Regeneron
Agreement. Please
explain, with reference to authoritative literature, how you accounted
for this issuance,
including the determination of fair value.
You may contact Ibolya Ignat at 202-551-3636 or Jeanne Baker at
202-551-3691 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jason Drory at 202-551-8342 or Jeffrey Gabor at 202-551-2544 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Stuart Falber, Esq.