United States securities and exchange commission logo
September 2, 2022
Ying Huang, Ph.D
Chief Financial Officer
Legend Biotech Corporation
2101 Cottontail Lane
Somerset, NJ 08873
Re: Legend Biotech
Corporation
Form 20-F for
Fiscal Year Ended December 31, 2021
Filed March 31,
2022
File No. 001-39307
Dear Dr. Huang:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for Fiscal Year Ended December 31, 2021
Certain Information, page 1
1. We note that your
definition of China or PRC specifically excludes Hong Kong and
Macau. Please revise
the definition of China or the PRC to include Hong Kong and
Macau and clarify that
the only time that "PRC or China" does not include Hong Kong or
Macau is when you
reference specific laws and regulations adopted by the PRC.
Additionally, clarify
that the legal and operational risks associated with operating in
China also apply to
operations in Hong Kong and Macau. Lastly, discuss any
commensurate laws and
regulations in Hong Kong and Macau, where applicable
throughout your filing,
and the risks and consequences to you associated with those laws
and regulations.
Ying Huang, Ph.D
FirstName LastNameYing Huang, Ph.D
Legend Biotech Corporation
Comapany 2,
September NameLegend
2022 Biotech Corporation
September
Page 2 2, 2022 Page 2
FirstName LastName
D. Risk Factors
Risk Factors Summary, page 4
2. Please revise your summary of risk factors so that you disclose the
risks that your
corporate structure and being based in or having the majority of the
company s operations
in China poses to investors is prominent and upfront. In particular,
describe the significant
regulatory, liquidity, and enforcement risks. For example,
specifically discuss risks arising
from the legal system in China, including risks and uncertainties
regarding the
enforcement of laws and that rules and regulations in China can change
quickly with little
advance notice; and the risk that the Chinese government may intervene
or influence your
operations at any time, or may exert more control over offerings
conducted overseas
and/or foreign investment in China-based issuers, which could result
in a material change
in your operations and/or the value of your securities. Acknowledge
any risks that any
actions by the Chinese government to exert more oversight and control
over offerings that
are conducted overseas and/or foreign investment in China-based
issuers could
significantly limit or completely hinder your ability to offer or
continue to offer securities
to investors and cause the value of your securities to significantly
decline or be
worthless.
Part I
Item 3. Key Information, page 4
3. At the onset of Part I, please disclose prominently that you are not a
Chinese operating
company but a Cayman Islands holding company with operations conducted
by your
subsidiaries. In addition, please provide early in the Business
section a diagram of the
company s corporate structure.
4. Provide prominent disclosure about the legal and operational risks
associated with being
based in or having the majority of the company s operations in
China. Your disclosure
should make clear whether these risks could result in a material
change in your operations
and/or the value of your securities or could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless. Your disclosure
should address how
recent statements and regulatory actions by China s government, such
as those related to
data security or anti-monopoly concerns, have or may impact the
company s ability to
conduct its business, accept foreign investments, or list on a U.S. or
other foreign
exchange.
5. We note that, on May 4, 2022, the SEC conclusively listed you under
the Holding Foreign
Companies Accountable Act. Please provide prominent disclosure that
your auditor is
subject to the determinations announced by the PCAOB on December 16,
2021 and how
the Holding Foreign Companies Accountable Act and related regulations
will affect your
company. In addition, disclose that trading in your securities may be
prohibited under the
Holding Foreign Companies Accountable Act if the PCAOB determines that
it cannot
Ying Huang, Ph.D
FirstName LastNameYing Huang, Ph.D
Legend Biotech Corporation
Comapany 2,
September NameLegend
2022 Biotech Corporation
September
Page 3 2, 2022 Page 3
FirstName LastName
inspect or investigate completely your auditor, and that as a result
an exchange may
determine to delist your securities. For additional information, refer
to https://www.sec.gov/hfcaa.
6. Clearly disclose how you will refer to the holding company and
subsidiaries when
providing the disclosure throughout the document so that it is clear
to investors which
entity the disclosure is referencing and which subsidiaries or
entities are conducting the
business operations. For example, disclose, if true, that your
subsidiaries conduct
operations in China.
7. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings. Quantify any cash flows and
transfers of other
assets by type that have occurred between the holding company and its
subsidiaries, and
direction of transfer. Quantify any dividends or distributions that a
subsidiary have made
to the holding company and which entity made such transfer, and their
tax consequences.
Similarly quantify dividends or distributions made to U.S. investors,
the source, and their
tax consequences. Your disclosure should make clear if no transfers,
dividends, or
distributions have been made to date. Describe any restrictions on
foreign exchange and
your ability to transfer cash between entities, across borders, and to
U.S.
investors. Describe any restrictions and limitations on your ability
to distribute earnings
from the company, including your subsidiaries, to the parent company
and U.S. investors.
8. Disclose each permission or approval that you or your subsidiaries are
required to obtain
from Chinese authorities to operate your business and to offer
securities to foreign
investors. State whether you or your subsidiaries are covered by
permissions requirements
from the China Securities Regulatory Commission (CSRC), Cyberspace
Administration of
China (CAC) or any other governmental agency that is required to
approve your
operations, and state affirmatively whether you have received all
requisite permissions or
approvals and whether any permissions or approvals have been denied.
Please also
describe the consequences to you and your investors if you or your
subsidiaries: (i) do not
receive or maintain such permissions or approvals, (ii) inadvertently
conclude that such
permissions or approvals are not required, or (iii) applicable laws,
regulations, or
interpretations change and you are required to obtain such permissions
or approvals in the
future.
Risks Related to Doing Business in China, page 57
9. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your securities. Also,
given recent
statements by the Chinese government indicating an intent to exert
more oversight and
control over offerings that are conducted overseas and/or foreign
investment in China-
based issuers, acknowledge the risk that any such action could
significantly limit
Ying Huang, Ph.D
Legend Biotech Corporation
September 2, 2022
Page 4
or completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of your securities to significantly decline or be
worthless.
The audit report included in this Annual Report is prepared by an auditor who
is not inspected by
the Public Company Accounting. . ., page 69
10. Update your disclosure to reflect that the Commission adopted rules to
implement the
HFCAA and that, pursuant to the HFCAA, the PCAOB has issued its report
notifying the
Commission of its determination that it is unable to inspect or
investigate completely
accounting firms headquartered in mainland China or Hong Kong. Moreover,
please
update this risk factor to account for the fact that the SEC
conclusively identified you
under the HFCAA on May 4, 2022.
Operating And Financial Review And Prospects
Operating Results, page 153
11. Please expand in future filings to include a more robust disclosures for
your operating
result, including more disaggregated disclosures about the significant
components of
revenues or expenses and their change drivers, both quantitatively and
qualitatively. More
specifically on the research and development expenses, considering the
significant
balances, the existence of other phase 3 trials, as well as the impact
from the Janssen
agreement, please provide more disaggregated disclosures by product
(group), and or by
nature of costs. Please also disclose specifically the amount of
research and
development expenses incurred by yourself as well as the amount payable
to Janssen
under your license and collaboration agreement with Janssen. In that
regard, you disclosed
at page F-49 that you took a total of $119.7 million funding advances in
2021 by reducing
the same amount of other payables due to the collaborator. Refer to Item
303 of
Regulation S-K.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Li Xiao at 202-551-4391 or Daniel Gordon at 202-551-3486
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Dillon Hagius at 202-551-7967 or Jason Drory at 202-551-8342 with any other
questions.
Sincerely,
FirstName LastNameYing Huang, Ph.D
Division of
Corporation Finance
Comapany NameLegend Biotech Corporation
Office of Life
Sciences
September 2, 2022 Page 4
cc: Marc L. Harrison
FirstName LastName