SEC Company Response from Wave Life Sciences, Inc. (WVE) (CIK 0001631574) (WVE) — Oct 23, 2015
Wave Life Sciences, Inc. (WVE) (CIK 0001631574)
Date: Oct. 23, 2015 · CIK: 0001631574 · Accession: 0001193125-15-352269
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-207379
Referenced dates: October 2, 2015, October 20, 2015
Letter
VIA EDGAR Securities and Exchange Commission Division of Corporation Finance Attention: Lisa Vanjoske Joel Parker Re: Wave Life Sciences Pte. Ltd. Registration Statement on Form S-1 (File No. 333-207379)
Dear Ladies and Gentlemen:
We are submitting this letter on behalf of Wave Life Sciences Pte. Ltd. (the “Company”) in response to comments received from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated October 2, 2015 (the “Comment Letter”) relating to the Staff’s review of the Company’s registration statement on Form S-1 submitted confidentially to the Commission on September 4, 2015, which was subsequently amended in response to the Comment Letter and filed publicly with the Commission on October 9, 2015 (the “Registration Statement”). In this letter, we are responding only to comment number 6 in the Comment Letter, the text of which we have incorporated into this response letter for convenience.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
BOSTON | LONDON | LOS ANGELES | NEW YORK | SAN DIEGO | SAN FRANCISCO | STAMFORD | WASHINGTON
FOIA CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO 17 C.F.R. § 200.83
BY WAVE LIFE SCIENCES PTE. LTD.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
October 23, 2015
Page
As an overview, the Company is filing today Amendment No. 1 to the Registration Statement in response to the Staff’s second comment letter dated October 20, 2015. Subject to resolving any outstanding Staff comments and market conditions, the Company would like to (i) prepare over the weekend of October 31 to November 1, 2015 a preliminary prospectus reflecting the Share Split based on the bona fide price range for the Company’s initial public offering (“IPO”), which the Company and its investment bankers have determined, each as discussed further below, (ii) file Amendment No. 2 with the Commission, which will include this bona fide IPO price range and reflect the Share Split, on Monday, November 2, 2015 and (iii) complete printing of the preliminary prospectus and commence a road show later that same day. Subject to market conditions, the Company’s goal would be to obtain the effectiveness of the Registration Statement and price the offering by no later than November 12, 2015, the date after which financial statements for the period ended June 30, 2015 would be stale.
Accordingly, the purpose of this letter is to preview with the Staff this bona fide IPO range and the Company’s analysis of how that range compares to the valuations the Company has used (or will use), for financial reporting purposes, for equity grants in March, July and October 2015. Because the Registration Statement contains financial statements no later than June 30, 2015, the only grants presented therein for financial reporting purposes are the March grants; the presentation of the July and October 2015 equity grants would appear in the financial statements for subsequent periods (i.e., the third quarter ended September 30, 2015 and the fourth quarter ending December 31, 2015).
Confidential Treatment Request
Due to the commercially sensitive nature of information contained herein, the Company hereby requests, pursuant to 17 C.F.R. § 200.83, that certain portions of this letter be maintained in confidence, not be made part of any public record and not be disclosed to any person as they contain confidential information. The Company has filed a separate copy of this letter, marked to show the portions redacted from the version filed via EDGAR and for which the Company is requesting confidential treatment. In accordance with 17 C.F.R. § 200.83(d)(1), if any person (including any governmental employee who is not an employee of the Commission) should request access to or an opportunity to inspect this letter, we request that we be immediately notified of any such request, be furnished with a copy of all written materials pertaining to such request (including, but not limited to, the request itself) and be given at least ten business days advance notice of any intended release so that the Company may, if deemed necessary or appropriate, pursue any remedies available to it. In such an event, we request that you telephone the undersigned rather than rely upon the U.S. mail for such notice. The address and telephone number for Matthew Gardella, the responsible representative, is c/o Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, MA 02111, telephone number (617) 542-6000.
FOIA CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO 17 C.F.R. § 200.83
BY WAVE LIFE SCIENCES PTE. LTD.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
October 23, 2015
Page
Comment from the Staff:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Policies and Significant Judgments and Estimates
Share-Based Compensation, page 66
6. We may have additional comments on your accounting for equity issuances including stock compensation and beneficial conversion features. Once you have an estimated offering price, please provide us an analysis explaining the reasons for the differences between recent valuations of your common stock leading up to the IPO and the estimated offering price.
Response:
The Company supplementally advises the Staff that on October 23, 2015, representatives of the lead book-running managers of its IPO advised the Company that, based on then-current market conditions, they anticipated that the underwriters currently anticipate recommending to the Company a preliminary estimated IPO price range of $[***] to $[***] per share (the “Preliminary IPO Price Range”). The share numbers, as well as all option exercise prices and estimated fair values of ordinary shares referred to in this letter, have been adjusted to reflect an estimated 4.683373-to-1.0 share split of the Company’s capital shares (the “Share Split”), which the Company plans to reflect in a subsequent pre-effective amendment to the Registration Statement.
The Preliminary IPO Price Range and the related Share Split are based on existing conditions in the public capital markets for biotechnology companies, the Company’s financial position and prospects (assuming the completion of the IPO), the market valuations of comparable publicly traded companies and preliminary discussions with the underwriters regarding potential valuations for the Company. Until such time as the Company revises the Registration Statement through a pre-effective amendment to include the price range and other details of the IPO and to commence the road show, the Preliminary IPO Price Range and the Share Split remain subject to adjustment based on factors outside the Company’s control, such as changes in market conditions, the Company’s business and prospects and the valuation of comparable publicly traded companies.
Historically, the fair value of the ordinary shares underlying the Company’s share-based awards has been determined on each grant date by the Company’s board of directors (the “Board”), with input from management. All options to purchase the Company’s ordinary shares were intended to be granted with an exercise price per share no less than the fair market value per share of the
FOIA CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO 17 C.F.R. § 200.83
BY WAVE LIFE SCIENCES PTE. LTD.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
October 23, 2015
Page
Company’s ordinary shares underlying those options on the date of grant, as determined by the Board in good faith and based on the information known to the Board on the date of grant. In the absence of a public trading market for the Company’s ordinary shares, on each grant date, the Board considered various objective and subjective factors described in detail in the Registration Statement to determine fair value, including contemporaneous valuations from third-party valuation specialists using methodologies, approaches and assumptions consistent with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “Practice Aid”).
In connection with its preparation for the IPO, the Company completed retrospective valuations for March 2015 and June 2015, using methodologies, approaches and assumptions consistent with the Practice Aid.
The following table summarizes share awards granted since January 1, 2015, giving effect to the Share Split.
Date of Grant
Number of Instruments Granted (#)
Per Share Exercise Price ($)
Fair Value Per Share of Ordinary Shares ($)
Type of Valuation Methodology
3/10/15
1,997,220
2.14
3.81
Retrospective
3/10/15
221,163
N/A (1)
3.81
Retrospective
3/22/15
140,501
2.14
3.81
Retrospective
7/9/15
114,274
5.17
7.59
Retrospective
10/7/15
82,662
8.82
8.82
Contemporaneous
(1) Not applicable since the award was for fully vested ordinary shares.
A discussion of each valuation and related award is as follows:
March 2015 Awards
On March 10, 2015 and March 22, 2015, the Board granted options to purchase an aggregate of 1,997,220 and 140,501 ordinary shares, respectively. Additionally, on March 10, 2015, the Board granted 221,163 fully vested ordinary shares to an executive of the Company.
FOIA CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO 17 C.F.R. § 200.83
BY WAVE LIFE SCIENCES PTE. LTD.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
October 23, 2015
Page
March 2015 Retrospective Valuation
In accordance with the Practice Aid, the March 10, 2015 valuation used the Market Approach to determine an enterprise value. The valuation then used the Probability-Weighted Expected Return Method (“PWERM”) to allocate and value the ordinary shares.
The valuation utilized the market data from recent IPOs of companies in the biopharmaceutical industry to determine the enterprise value under a short-term and long-term IPO scenario.
•
Under the short-term IPO scenario, the Company estimated it would be approximately 0.8 years until this transaction. The Company selected an enterprise value between the 50th and 75th percentiles of comparable public biopharmaceutical transactions. The Company discounted this scenario with a 30.0% discount rate which was based on the Venture Capital Rate of Return Studies and also applied a 7.5% Discount for Lack of Marketability (“DLOM”) under this scenario.
•
In the longer-term IPO scenario, the Company estimated it would be approximately 1.5 years until this transaction. The selected enterprise value was between the 50th and 75th percentile of the comparable public biopharmaceutical transactions. The Company also used a 30.0% discount rate in this scenario and applied a DLOM of 10.0% to the concluded value under this scenario.
The valuation also utilized market data from recent guideline M&A transactions in the biopharmaceutical industry to determine the enterprise value under a liquidity event through a trade sale/merger transaction (high M&A) and sale of the Company’s intellectual property if neither a success sale/merger or an IPO materializes (low M&A).
•
Under the high M&A scenario, the Company selected an enterprise value between the 50th percentile and 75th percentile for a sale. The Company selected a term of 2.0 years as an opportune timeframe for an M&A transaction to occur, utilized a 30.0% discount rate and applied a DLOM of 15.0%.
•
Under the low M&A scenario, the Company selected an enterprise value just below the 25th percentile range for the low M&A scenario. The Company selected a term of 1.3 years, utilized a 30.0% discount rate and applied a DLOM of 15.0%.
FOIA CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO 17 C.F.R. § 200.83
BY WAVE LIFE SCIENCES PTE. LTD.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
October 23, 2015
Page
To determine the ordinary share value under the PWERM, the Company assigned the following probabilities to each scenario:
Short-term IPO
20.0 %
Long-term IPO
10.0
High M&A
55.0
Low M&A
15.0
Total
100.0 %
The resulting fair value of the Company’s ordinary shares was $3.81 per share, which the Company utilized for determining the fair value per share for the March 2015 option grants.
July 9, 2015 Awards
On July 9, 2015, the Board granted options to purchase an aggregate of 114,274 ordinary shares with an exercise price of $5.17 per share.
June 2015 Retrospective Valuation
In accordance with the Practice Aid, the June 24, 2015 valuation used the Market Approach to determine an enterprise value. The valuation then used the PWERM to allocate and value the ordinary shares.
The valuation utilized market data from recent IPOs of companies in the biopharmaceutical industry to determine the enterprise value under a short term and long term IPO scenario.
•
Under the short-term IPO scenario, the Company estimated it would be approximately 0.5 years until this transaction. The Company selected an enterprise value between the 50th and 75th percentiles of comparable public biopharmaceutical transactions. The Company discounted this scenario with a 25.0% discount rate which was based on the Venture Capital Rate of Return Studies and also applied a 5.0% DLOM under this scenario.
•
In the longer-term IPO scenario, the Company estimated it would be approximately 1.3 years until this transaction. The Company selected an enterprise value between the 50th and 75th percentiles of comparable public biopharmaceutical transactions. The Company also used a 25.0% discount rate in this scenario and applied a DLOM of 7.5% to the concluded value under this scenario.
FOIA CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO 17 C.F.R. § 200.83
BY WAVE LIFE SCIENCES PTE. LTD.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
October 23, 2015
Page
The valuation utilized market data from recent guideline M&A transactions in the biopharmaceutical industry to determine the enterprise value under a high and low M&A scenario.
•
Under the high M&A scenario, the Company selected an enterprise value between the 50th percentile and 75th percentile for a sale. The Company selected a term of 1.8 years as an opportune timeframe for an M&A transaction to occur, utilized a 25.0% discount rate and applied a DLOM of 15.0%.
•
Under the low M&A scenario, the Company selected an enterprise value just below the 25th percentile range for the low M&A scenario. The Company selected a term of 1.0 years, utilized a 25.0% discount rate and applied a DLOM of 15.0%.
To determine the ordinary share value under the PWERM, the Company assigned the following probabilities to each scenario:
Short-term IPO
40.0 %
Long-term IPO
15.0
High M&A
35.0
Low M&A
10.0
Total
100.0 %
The resulting fair value of the Company’s ordinary shares was $7.59 per share, which the Company utilized for determining the fair value per share for the June 2015 option grants.
The preparation of the valuation included consideration of the following factors:
Company Specific
During the period from March 2015 through June 2015, the Company achieved the following milestones:
•
The Company expanded the breath of the target platform and further developed the proof of concept across multiple modalities, including but not limited to Huntington
Show Raw Text
CORRESP 1 filename1.htm CORRESP One Financial Center Boston, MA 02111 617-542-6000 617-542-2241 fax www.mintz.com Matthew J. Gardella | 617 348 1735 | mgardella@mintz.com CERTAIN PORTIONS OF THIS LETTER AS FILED VIA EDGAR HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS, WHICH HAVE BEEN REPLACED WITH THE PLACEHOLDER “[***].” October 23, 2015 VIA EDGAR Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, D.C. 20549 Attention: Suzanne Hayes, Assistant Director Christina De Rosa Christian Windsor Lisa Vanjoske Joel Parker Re: Wave Life Sciences Pte. Ltd. Registration Statement on Form S-1 (File No. 333-207379) Dear Ladies and Gentlemen: We are submitting this letter on behalf of Wave Life Sciences Pte. Ltd. (the “Company”) in response to comments received from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated October 2, 2015 (the “Comment Letter”) relating to the Staff’s review of the Company’s registration statement on Form S-1 submitted confidentially to the Commission on September 4, 2015, which was subsequently amended in response to the Comment Letter and filed publicly with the Commission on October 9, 2015 (the “Registration Statement”). In this letter, we are responding only to comment number 6 in the Comment Letter, the text of which we have incorporated into this response letter for convenience. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. BOSTON | LONDON | LOS ANGELES | NEW YORK | SAN DIEGO | SAN FRANCISCO | STAMFORD | WASHINGTON FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO 17 C.F.R. § 200.83 BY WAVE LIFE SCIENCES PTE. LTD. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. October 23, 2015 Page 2 As an overview, the Company is filing today Amendment No. 1 to the Registration Statement in response to the Staff’s second comment letter dated October 20, 2015. Subject to resolving any outstanding Staff comments and market conditions, the Company would like to (i) prepare over the weekend of October 31 to November 1, 2015 a preliminary prospectus reflecting the Share Split based on the bona fide price range for the Company’s initial public offering (“IPO”), which the Company and its investment bankers have determined, each as discussed further below, (ii) file Amendment No. 2 with the Commission, which will include this bona fide IPO price range and reflect the Share Split, on Monday, November 2, 2015 and (iii) complete printing of the preliminary prospectus and commence a road show later that same day. Subject to market conditions, the Company’s goal would be to obtain the effectiveness of the Registration Statement and price the offering by no later than November 12, 2015, the date after which financial statements for the period ended June 30, 2015 would be stale. Accordingly, the purpose of this letter is to preview with the Staff this bona fide IPO range and the Company’s analysis of how that range compares to the valuations the Company has used (or will use), for financial reporting purposes, for equity grants in March, July and October 2015. Because the Registration Statement contains financial statements no later than June 30, 2015, the only grants presented therein for financial reporting purposes are the March grants; the presentation of the July and October 2015 equity grants would appear in the financial statements for subsequent periods (i.e., the third quarter ended September 30, 2015 and the fourth quarter ending December 31, 2015). Confidential Treatment Request Due to the commercially sensitive nature of information contained herein, the Company hereby requests, pursuant to 17 C.F.R. § 200.83, that certain portions of this letter be maintained in confidence, not be made part of any public record and not be disclosed to any person as they contain confidential information. The Company has filed a separate copy of this letter, marked to show the portions redacted from the version filed via EDGAR and for which the Company is requesting confidential treatment. In accordance with 17 C.F.R. § 200.83(d)(1), if any person (including any governmental employee who is not an employee of the Commission) should request access to or an opportunity to inspect this letter, we request that we be immediately notified of any such request, be furnished with a copy of all written materials pertaining to such request (including, but not limited to, the request itself) and be given at least ten business days advance notice of any intended release so that the Company may, if deemed necessary or appropriate, pursue any remedies available to it. In such an event, we request that you telephone the undersigned rather than rely upon the U.S. mail for such notice. The address and telephone number for Matthew Gardella, the responsible representative, is c/o Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, MA 02111, telephone number (617) 542-6000. FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO 17 C.F.R. § 200.83 BY WAVE LIFE SCIENCES PTE. LTD. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. October 23, 2015 Page 3 Comment from the Staff: Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies and Significant Judgments and Estimates Share-Based Compensation, page 66 6. We may have additional comments on your accounting for equity issuances including stock compensation and beneficial conversion features. Once you have an estimated offering price, please provide us an analysis explaining the reasons for the differences between recent valuations of your common stock leading up to the IPO and the estimated offering price. Response: The Company supplementally advises the Staff that on October 23, 2015, representatives of the lead book-running managers of its IPO advised the Company that, based on then-current market conditions, they anticipated that the underwriters currently anticipate recommending to the Company a preliminary estimated IPO price range of $[***] to $[***] per share (the “Preliminary IPO Price Range”). The share numbers, as well as all option exercise prices and estimated fair values of ordinary shares referred to in this letter, have been adjusted to reflect an estimated 4.683373-to-1.0 share split of the Company’s capital shares (the “Share Split”), which the Company plans to reflect in a subsequent pre-effective amendment to the Registration Statement. The Preliminary IPO Price Range and the related Share Split are based on existing conditions in the public capital markets for biotechnology companies, the Company’s financial position and prospects (assuming the completion of the IPO), the market valuations of comparable publicly traded companies and preliminary discussions with the underwriters regarding potential valuations for the Company. Until such time as the Company revises the Registration Statement through a pre-effective amendment to include the price range and other details of the IPO and to commence the road show, the Preliminary IPO Price Range and the Share Split remain subject to adjustment based on factors outside the Company’s control, such as changes in market conditions, the Company’s business and prospects and the valuation of comparable publicly traded companies. Historically, the fair value of the ordinary shares underlying the Company’s share-based awards has been determined on each grant date by the Company’s board of directors (the “Board”), with input from management. All options to purchase the Company’s ordinary shares were intended to be granted with an exercise price per share no less than the fair market value per share of the FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO 17 C.F.R. § 200.83 BY WAVE LIFE SCIENCES PTE. LTD. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. October 23, 2015 Page 4 Company’s ordinary shares underlying those options on the date of grant, as determined by the Board in good faith and based on the information known to the Board on the date of grant. In the absence of a public trading market for the Company’s ordinary shares, on each grant date, the Board considered various objective and subjective factors described in detail in the Registration Statement to determine fair value, including contemporaneous valuations from third-party valuation specialists using methodologies, approaches and assumptions consistent with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “Practice Aid”). In connection with its preparation for the IPO, the Company completed retrospective valuations for March 2015 and June 2015, using methodologies, approaches and assumptions consistent with the Practice Aid. The following table summarizes share awards granted since January 1, 2015, giving effect to the Share Split. Date of Grant Number of Instruments Granted (#) Per Share Exercise Price ($) Fair Value Per Share of Ordinary Shares ($) Type of Valuation Methodology 3/10/15 1,997,220 2.14 3.81 Retrospective 3/10/15 221,163 N/A (1) 3.81 Retrospective 3/22/15 140,501 2.14 3.81 Retrospective 7/9/15 114,274 5.17 7.59 Retrospective 10/7/15 82,662 8.82 8.82 Contemporaneous (1) Not applicable since the award was for fully vested ordinary shares. A discussion of each valuation and related award is as follows: March 2015 Awards On March 10, 2015 and March 22, 2015, the Board granted options to purchase an aggregate of 1,997,220 and 140,501 ordinary shares, respectively. Additionally, on March 10, 2015, the Board granted 221,163 fully vested ordinary shares to an executive of the Company. FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO 17 C.F.R. § 200.83 BY WAVE LIFE SCIENCES PTE. LTD. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. October 23, 2015 Page 5 March 2015 Retrospective Valuation In accordance with the Practice Aid, the March 10, 2015 valuation used the Market Approach to determine an enterprise value. The valuation then used the Probability-Weighted Expected Return Method (“PWERM”) to allocate and value the ordinary shares. The valuation utilized the market data from recent IPOs of companies in the biopharmaceutical industry to determine the enterprise value under a short-term and long-term IPO scenario. • Under the short-term IPO scenario, the Company estimated it would be approximately 0.8 years until this transaction. The Company selected an enterprise value between the 50th and 75th percentiles of comparable public biopharmaceutical transactions. The Company discounted this scenario with a 30.0% discount rate which was based on the Venture Capital Rate of Return Studies and also applied a 7.5% Discount for Lack of Marketability (“DLOM”) under this scenario. • In the longer-term IPO scenario, the Company estimated it would be approximately 1.5 years until this transaction. The selected enterprise value was between the 50th and 75th percentile of the comparable public biopharmaceutical transactions. The Company also used a 30.0% discount rate in this scenario and applied a DLOM of 10.0% to the concluded value under this scenario. The valuation also utilized market data from recent guideline M&A transactions in the biopharmaceutical industry to determine the enterprise value under a liquidity event through a trade sale/merger transaction (high M&A) and sale of the Company’s intellectual property if neither a success sale/merger or an IPO materializes (low M&A). • Under the high M&A scenario, the Company selected an enterprise value between the 50th percentile and 75th percentile for a sale. The Company selected a term of 2.0 years as an opportune timeframe for an M&A transaction to occur, utilized a 30.0% discount rate and applied a DLOM of 15.0%. • Under the low M&A scenario, the Company selected an enterprise value just below the 25th percentile range for the low M&A scenario. The Company selected a term of 1.3 years, utilized a 30.0% discount rate and applied a DLOM of 15.0%. FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO 17 C.F.R. § 200.83 BY WAVE LIFE SCIENCES PTE. LTD. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. October 23, 2015 Page 6 To determine the ordinary share value under the PWERM, the Company assigned the following probabilities to each scenario: Short-term IPO 20.0 % Long-term IPO 10.0 High M&A 55.0 Low M&A 15.0 Total 100.0 % The resulting fair value of the Company’s ordinary shares was $3.81 per share, which the Company utilized for determining the fair value per share for the March 2015 option grants. July 9, 2015 Awards On July 9, 2015, the Board granted options to purchase an aggregate of 114,274 ordinary shares with an exercise price of $5.17 per share. June 2015 Retrospective Valuation In accordance with the Practice Aid, the June 24, 2015 valuation used the Market Approach to determine an enterprise value. The valuation then used the PWERM to allocate and value the ordinary shares. The valuation utilized market data from recent IPOs of companies in the biopharmaceutical industry to determine the enterprise value under a short term and long term IPO scenario. • Under the short-term IPO scenario, the Company estimated it would be approximately 0.5 years until this transaction. The Company selected an enterprise value between the 50th and 75th percentiles of comparable public biopharmaceutical transactions. The Company discounted this scenario with a 25.0% discount rate which was based on the Venture Capital Rate of Return Studies and also applied a 5.0% DLOM under this scenario. • In the longer-term IPO scenario, the Company estimated it would be approximately 1.3 years until this transaction. The Company selected an enterprise value between the 50th and 75th percentiles of comparable public biopharmaceutical transactions. The Company also used a 25.0% discount rate in this scenario and applied a DLOM of 7.5% to the concluded value under this scenario. FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO 17 C.F.R. § 200.83 BY WAVE LIFE SCIENCES PTE. LTD. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. October 23, 2015 Page 7 The valuation utilized market data from recent guideline M&A transactions in the biopharmaceutical industry to determine the enterprise value under a high and low M&A scenario. • Under the high M&A scenario, the Company selected an enterprise value between the 50th percentile and 75th percentile for a sale. The Company selected a term of 1.8 years as an opportune timeframe for an M&A transaction to occur, utilized a 25.0% discount rate and applied a DLOM of 15.0%. • Under the low M&A scenario, the Company selected an enterprise value just below the 25th percentile range for the low M&A scenario. The Company selected a term of 1.0 years, utilized a 25.0% discount rate and applied a DLOM of 15.0%. To determine the ordinary share value under the PWERM, the Company assigned the following probabilities to each scenario: Short-term IPO 40.0 % Long-term IPO 15.0 High M&A 35.0 Low M&A 10.0 Total 100.0 % The resulting fair value of the Company’s ordinary shares was $7.59 per share, which the Company utilized for determining the fair value per share for the June 2015 option grants. The preparation of the valuation included consideration of the following factors: Company Specific During the period from March 2015 through June 2015, the Company achieved the following milestones: • The Company expanded the breath of the target platform and further developed the proof of concept across multiple modalities, including but not limited to Huntington