SecProbe.io

CORRESP
1
filename1.htm

CORRESP

 Goodwin Procter LLP

 100 Northern Ave.,

Boston, MA 02110

goodwinlaw.com

 +1 (617)
570-1000

 August 6, 2024

 VIA
EDGAR

 Division of Corporation Finance

 Office of
Life Sciences

 Securities and Exchange Commission

 100 F
Street, NE

 Washington, DC 20549

Attention:
 Ms. Mary Mast

Ms. Ibolya Ignat

Re:
 Repligen Corporation

 
 Form 10-K for the fiscal year ended December 31, 2023

 
 Filed February 22, 2024

 
 File No. 000-14656

Dear Ms. Mast and Ms. Ignat:

 This letter is submitted
on behalf of Repligen Corporation (the “Company”) in response to the comments of the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) regarding
the Company’s Form 10-K for the fiscal year ended December 31, 2023 (File No. 000-14656), filed on February 22, 2024 (the “Form 10-K”), as set forth in the Staff’s letter dated July 24, 2024 (the “Comment Letter”).

 For
reference purposes, the text of the Comment Letter has been reproduced herein with responses below the numbered comment. For your convenience, we have italicized the Staff’s comments from the Comment Letter. Unless otherwise indicated,
page references in the descriptions of the Staff’s comments refer to the Form 10-K. All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Form 10-K.

 The responses provided herein are based upon information provided to Goodwin Procter LLP by the Company.

Form 10-K for the year ended December 31, 2023

Notes to the Financial Statements

 14. Convertible
Senior Notes, page 114

1.
 We note that your Convertible Notes are convertible at the option of the holder and that the make-whole
fundamental change provision may trigger an increase in the conversion rate. Please explain to us how you evaluated the Notes to determine whether each conversion feature was required to be bifurcated and accounted for as a derivative under ASC 815.
In your response, please specifically address whether each conversion option contingency meets the definition of a derivative and, if so, whether it qualifies for the scope exception for contracts involving an entity’s own equity as set forth
in ASC 815- 10-15-74(a). Specifically address the steps in ASC 815-40-15-7A through
15-7H, the conditions beginning in ASC 815-40-25-7, and if the make-whole provision
violates the condition in ASC 815-40-25-39. Please also revise your accounting policy disclosure accordingly in your future
filings.

  Page
 2

 RESPONSE:

The Company notes that while the discussion below is focused on the 2023 Notes, the same analysis is applicable to the 2019 Notes which have equivalent terms.

 The Company assessed the embedded conversion feature to determine if bifurcation from the 2023 Notes and derivative accounting pursuant to ASC 815-15-25-1 is required. As part of the analysis, the embedded conversion feature was assessed to determine if it meets the definition
of a derivative and qualifies for a derivative scope exception. This analysis included evaluating all contingent exercise provisions and settlement provisions of the 2023 Notes.

The 2023 Notes may be converted in multiple different situations related to (i) trading price of the 2023 Notes, (ii) the Company’s issuance of
certain securities or rights, (iii) upon the occurrence of defined corporate events (which includes a make-whole fundamental change), (iv) common stock price target trigger, (v) in connection with the Company’s redemption option, and (vi) non-contingently after the free convertibility period. Because of the commonality of the underlying (i.e., settlement price is always based on the value of equity) irrespective of the triggering events
(and corresponding settlement provisions), the Company determined the conversion feature represents a single option with multiple exercise triggers. Thus, the conversion feature represents a single unit of analysis for accounting purposes.

Additionally, if a holder converts upon a make-whole fundamental change (representing one of the defined corporate event exercise triggers described above) or
in connection with the Company’s redemption option, the holder may be eligible to receive a make-whole premium through an increase to the conversion rate. The make-whole premium was designed to compensate the holder for lost
“time-value” of the conversion option (i.e., the difference between the conversion option’s fair value and intrinsic value) by using a standard option pricing tool. There were no inputs to the construction of the make-whole table
other than standard, permitted option pricing inputs.

 As discussed in further detail, the Company respectfully advises that the conversion feature meets
the scope exception to the derivative accounting guidance in ASC 815-10-15-74(a) and does not meet the bifurcation criteria in
ASC 815-15-25-1(c). Therefore, the Company concluded that the conversion feature should not be accounted for as a derivative.

 Accounting Analysis – 2023 Notes

 The
Company first concluded the conversion feature meets the definition of a derivative instrument consistent with ASC 815-10-15-83,
as the feature has an underlying, notional or payment provision, no initial net investment and provide for net settlement.

 Under the scope exception
pursuant to ASC 815-10-15-74(a), a reporting entity is not required to treat a contract issued or held by that reporting entity
as a derivative instrument if the contract is both (1) indexed to its own stock and (2) classified in stockholders’ equity in its statement of financial position. If the conversion feature qualifies for this derivative scope
exception, bifurcation and separate derivative accounting is not required. Both criteria are evaluated below:

 (1). Indexed to reporting entity’s
common stock – ASC 815-40-15-7 requires that companies apply a two-step approach
in evaluating whether an equity-linked financial instrument or embedded feature is indexed to its own stock. The first step requires an evaluation of the instrument’s contingent exercise provisions, if any. The second step requires an
evaluation of the instrument’s settlement provisions.

  Page
 3

 Step 1: ASC 815-40-15-7(a) — Evaluate the instrument’s contingent exercise provisions, if any.

 Under
ASC 815-40-15-7A, an exercise contingency does not preclude an instrument (or embedded feature) from being considered indexed to
an entity’s own stock if it is not based on either (a) an observable market, other than the market for the issuer’s stock (if applicable) or (b) an observable index, other than an index calculated or measured solely by reference
to the issuer’s own operations.

 The conversion feature contains standard contingent exercise provisions, which include (i) trading price of the
2023 Notes, (ii) the Company’s issuance of certain securities or rights, (iii) upon the occurrence of defined corporate events (which includes a make-whole fundamental change), (iv) common stock price target trigger (v) in
connection with the Company’s redemption option, and (vi) non-contingently after the free convertibility period. The contingent exercise provisions of the 2023 Notes are not based on an observable market or index that is not based on the
Company’s operations, and thus do not preclude the conversion feature from being indexed to the Company’s own stock. Step 2 of the indexation guidance was next considered.

Step 2: ASC 815-40-15-7(b)
— Evaluate the instrument’s settlement provisions.

 The second step is evaluating whether the settlement provisions are consistent with a
fixed-for-fixed equity instrument (fixed conversion price). This includes evaluating the increase in the settlement provisions of the 2023 Notes under a make-whole
fundamental transaction. The 2023 Notes have the following settlement provisions whereby the conversion rate may be adjusted:

•

 Anti-dilution adjustment provisions to the conversion rate;

•

 Voluntary increase in the conversion rate; and

•

 Conversion rate adjustment upon occurrence of (i) a make-whole fundamental change or (ii) holder
conversion in relation to the exercise of the Company redemption option.

 The settlement provisions were evaluated under ASC 815-40-15-7C through 15-7H, as summarized below:

Anti-dilution provision. The 2023 Notes include a standard anti-dilution provision that protects the holder’s exposure to the risks arising from
certain events such as a stock split or a dividend. ASC 815-40-15-7E provides that adjustments to the conversion price as a
result of commercially reasonable anti-dilution provisions and other corporate events would not preclude the instrument from being indexed to an entity’s own stock. The 2023 Notes include standard anti-dilution provisions that adjusts the
conversion price to offset the impact of the events noted above. Each of these adjustments are consistent with the guidance for equity accounting illustrated by Example 17 of ASC
815-40-55. As such, the anti-dilution provision meets the criterion in ASC 815-40-15-7E and does not preclude the conversion feature from being considered indexed to the Company’s own stock.

Voluntary increase in the conversion rate. The 2023 Notes include a provision whereby the Company may voluntarily increase the conversion rate at the
discretion of the Company’s Board of Directors. ASC 815-40-15-7H provides that if an equity-linked financial instrument
includes terms that allow the issuer to modify the instrument at any time provided such modifications benefit the counterparty, then these terms do not preclude the instrument from being considered indexed to the entity’s own stock. The
increase in the conversion rate benefits the 2023 Notes holder (i.e., counterparty) thus, the Company concluded that such provision does not preclude the conversion feature from being considered indexed to an entity’s own stock.

  Page
 4

 Make-whole fundamental change premium. The 2023 Notes include a make-whole provision that adjusts the
conversion rate upon the occurrence of a fundamental change or upon the exercise of the Company redemption option whereby the holder may be eligible to receive a make-whole premium through an increase to the conversion rate. The Company evaluated
the make-whole provision under ASC 815-40-15-7C through 15-8 to determine whether the
equity-linked feature can be considered indexed to the Company’s own stock. Under ASC 815-40-15-7D, the make-whole feature
would still be considered indexed to the Company’s own stock if the only variables that could affect the settlement amount would be inputs to the fair value of a
fixed-for-fixed forward or option on equity shares. Under ASC
815-40-15-7F, the make-whole feature would not be considered indexed to the Company’s own stock if its settlement amount is
affected by variables that are extraneous to the pricing of a fixed-for-fixed option or forward contract on equity shares.

The make-whole provision in the 2023 Notes adjusts the conversion rate to compensate the holders of the notes for lost time value as a result of an early
settlement. The number of additional shares is determined based on a table with axes of stock price and time, which would both be inputs in a fair value measurement for a
fixed-for-fixed option on equity shares. The make-whole table was designed such that the aggregate fair value of the consideration deliverable (including the cash paid
for principal and, at the Company’s option, cash or shares delivered for the conversion premium, that is, the fair value of the underlying shares per bond plus the make-whole shares) would be expected to approximate the fair value of the
convertible debt instrument at the settlement date, subject to market changes in relevant option pricing inputs, assuming no change in relevant pricing inputs (other than stock price and time) since the instrument’s inception. The make-whole
provision adjustment within the 2023 Notes is consistent with Example 19 in ASC 815-40-55-45 through 46 wherein it is concluded
that the adjustment to the settlement amount due to the make-whole adjustment does not preclude the conversion option from being deemed indexed to the Company’s own stock. As a result, the provision for adjustments based on this make-whole
table does not preclude the conversion feature from being considered indexed to the Company’s own stock.

 As the only variables that could affect the
settlement amount would be inputs to the fair value of a fixed-for-fixed forward or option on equity shares, the settlement adjustments, including the make-whole
feature, included in the 2023 Notes do not preclude the conversion feature from being considered indexed to the Company’s own stock under ASC
815-40-15-7D.

 (2).
Classified in stockholders’ equity in its statement of financial position – The Company highlights that the principal (and accrued interest) balance of the 2023 Notes is only settled in cash, and the Company has the option to settle
the conversion feature in cash, common stock shares or a combination of the two (e.g., “Instrument C’’, as defined within EITF Issue 90-19.). ASC 815-40-25 states that to determine whether the embedded conversion feature would be classified in stockholders’ equity, the reporting entity must consider who controls the settlement and whether the
settlement will be in shares or cash. ASC 815-40-25-2 states that if the contract provides the entity with the choice of net cash
settlement or settlement in shares, the settlement in shares is assumed and contracts that require settlement in shares are equity instruments.

 The
condition in ASC 815-40-25-39 states that guidance in ASC 815-40-25-7 through 25-30 would not apply if the holder may only realize the value of the conversion option by exercising the option and receiving the entire
proceeds in a fixed number of shares or the equivalent amount of cash (at the discretion of the issuer). The 2023 Notes do not meet this exception because the principal portion of the 2023 Notes is settled in cash and the make-whole provision is
designed so that the holder of such notes would receive the approximate fair value of the notes at the settlement date and the Company has the option to settle the conversion option in cash, shares or a combination of the two. Therefore, the Company
assessed the additional provisions beginning in ASC 815-40-25-7 through 25-35 and
determined that all of the criteria have been met and, as such, the conversion option should be classified in stockholders’ equity under ASC 815-40-25. The
Company’s analysis is outlined below with respect to key conditions of ASC 815-40-25:

  Page
 5

•

 There is no explicit requirement to settle the contract in cash;

•

 The Company has sufficient authorized and unissued shares;

•

 The 2023 Notes contain an explicit share limit;

•

 There is no requirement to cash settle the contract if the Company fails to make timely filings with the SEC; and

•

 There is no cash-settled top-off or make whole provision as described in
ASC 815-40-25-30.

As the conversion feature is also deemed indexed to the Company’s own stock, the scope exception available under ASC 815-10-15-74 is met and bifurcation from the 2023 Notes is not required.

Accounting Analysis – 2019 Notes

 The Company
completed a similar accounting analysis with respect to convertible notes issued on July 15, 2019 (“2019 Notes”), The Company assessed the embedded conversion feature to determine if bifurcation from the 2019 Notes and derivative
accounting pursuant to ASC 815-15-25-1 is required. As part of the analysis, the embedded conversion feature was assessed to
determine if it meets the definition of a derivative and qualifies for a derivative scope exception.

 The conversion feature and settlement provisions of
the 2019 Notes are similar to those contained in the 2023 Notes. The 2019 Notes may be converted in multiple different situations related to