SecProbe.io

CORRESP
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filename1.htm

CORRESP

 650 Page Mill Road

Palo Alto, CA 94304-1050

PHONE 650.493.9300

FAX 650.493.6811

www.wsgr.com

 CONFIDENTIAL TREATMENT REQUESTED

BY ORIC PHARMACEUTICALS, INC.: ORIC-001

FOIA Confidential Treatment Requested Pursuant to 17 C.F.R. §200.83

The entity requesting confidential treatment is:

 ORIC
Pharmaceuticals, Inc.

 240 East Grand Avenue, 2nd Floor

South San Francisco, CA 94080

 Attention: Jacob M. Chacko, Chief
Executive Officer and President

CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[*].”

March 3, 2020

 VIA EDGAR AND
OVERNIGHT DELIVERY

 Securities and Exchange Commission

Division of Corporation Finance

 Office of Healthcare &
Insurance

 100 F Street, N.E.

 Washington, D.C. 20549-3720

Attn:
 Jeffrey Gabor

Ibolya Ignat

 Celeste Murphy

Kevin Vaughn

RE:
 ORIC Pharmaceuticals, Inc.

Registration Statement on Form S-1

CIK No. 0001796280

 Ladies and
Gentlemen:

 On behalf of our client, ORIC Pharmaceuticals, Inc. (the “Company” or “ORIC”), we submit this
letter in response to Comment 9 of the initial comments received from the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated January 8,
2020 (the “Comment Letter”), relating to the Company’s Registration Statement on Form S-1 (the “Registration Statement”), originally confidentially submitted in draft
form to the Commission on December 13, 2019, subsequently confidentially submitted in draft form to the Commission on January 24, 2020 and filed via EDGAR on February 28, 2020.

CONFIDENTIAL TREATMENT REQUESTED BY ORIC PHARMACEUTICALS, INC.

AUSTIN    BEIJING    BOSTON    BRUSSELS
HONG KONG    LONDON    LOS ANGELES    NEW YORK    PALO ALTO

SAN DIEGO    SAN
FRANCISCO    SEATTLE    SHANGHAI    WASHINGTON, DC    WILMINGTON, DE

 Securities and Exchange Commission

March 3, 2020

  Page
 2

 CONFIDENTIAL TREATMENT REQUESTED

BY ORIC PHARMACEUTICALS, INC.: ORIC-001

 Because of the commercially sensitive nature of information contained herein, this submission
is accompanied by the Company’s request for confidential treatment for selected portions of this letter. The Company has filed a separate letter with the Office of Freedom of Information and Privacy Act Operations in connection with the
confidential treatment request, pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. For the Staff’s reference, we have enclosed a copy of the Company’s letter to the Office of Freedom of
Information and Privacy Act Operations, as well as a copy of this correspondence, marked to show the portions redacted from the version filed via EDGAR and for which the Company is requesting confidential treatment.

For the convenience of the Staff, we have recited the prior comment from the Staff in italicized type and have followed the comment with the
Company’s response.

 Managements discussion and analysis of financial condition and results of operations, Critical accounting policies and
significant judgments and estimates, Stock-based compensation, page 97

 9. Once you have an estimated offering price or range, please explain
to us the reasons for any differences between the recent valuations of your common stock leading up to the initial public offering 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.

 Price Range

To assist the Staff in its evaluation of stock compensation disclosures and certain other matters, the Company advises the Staff that the
Company currently estimates a price range of $[*] to $[*] per share (the “Price Range”) for the initial public offering (the “IPO”) of the Company’s common stock, resulting in a midpoint of the Price Range of
$[*] per share (the “Midpoint Price”). The Price Range has been estimated based on a number of factors, including the progress of the Company’s studies and trials, other developments in the Company’s business, input
received from the Company’s “testing the waters meetings,” current market conditions and input received from J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Jefferies LLC (the “Lead Underwriters”),
including discussions that took place on February 28, 2020 among representatives of the Company and representatives of the Lead Underwriters.

The Price Range does not take into account any discount for the current lack of liquidity for the Company’s common stock and assumes a
successful IPO with no weighting attributed to any other outcome for the Company’s business, such as remaining a privately held company or being sold in an acquisition transaction. As is typical for initial public offerings, the Price Range was
not derived using a formal determination of fair value but was determined as a result of discussions among representatives of the Company and the Lead Underwriters. During these discussions, the parties considered quantitative factors, as well as non-quantitative factors, such as the valuations of recently completed public offerings and evaluating those issuers’ respective stages of development as compared to the Company, the current valuations of
public companies at a similar stage of clinical development as the Company taking into account the number of programs of those companies as compared to the Company and recent market conditions. Prior to February 28, 2020, the Lead Underwriters
had not discussed with the Company any specific estimated price range. The Price Range also does not reflect any stock split the Company may effect prior to the IPO.

 CONFIDENTIAL TREATMENT
REQUESTED BY ORIC PHARMACEUTICALS, INC.

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 Securities and Exchange Commission

March 3, 2020

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 CONFIDENTIAL TREATMENT REQUESTED

BY ORIC PHARMACEUTICALS, INC.: ORIC-001

 The actual bona fide price range to be included in the Registration
Statement has not yet been determined and remains subject to adjustment based on further discussions between the Company and the Lead Underwriters, developments in the Company’s business, market conditions and other factors that are outside of
the Company’s control. However, the Company believes that the actual bona fide price range will be within the Price Range. In addition, the actual bona fide price range to be included in the Registration Statement
will be reflected in an amendment to the Registration Statement that will be filed before the commencement of the road show and will comply with the Staff’s interpretation regarding the parameters of a bona fide price
range.

 Equity Grants and Common Stock Valuation

As stated in the Registration Statement, the Company has granted stock-based awards, consisting of stock options, to its employees, directors
and other service providers.

 The Company measures stock-based awards based on their estimated fair value on the date of grant and
recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues stock options with only service-based vesting conditions and records the
expense for these awards using the straight-line method.

 The Registration Statement describes the Company’s use of the
Black-Scholes-Merton option-pricing model (“Black-Scholes”) for the purpose of calculating the estimated grant date fair value of the stock options. The Company’s board of directors (the “Board”), with input
from management, determined the estimated fair value per share of the Company’s common stock to be as follows:

 Valuation Date

Estimated Fair
Value Per Share
of Common Stock

 Valuation Method

 February 6, 2018

$
0.40

Hybrid of OPM/PWERM

 August 2, 2019

$
1.61

OPM

 November 21, 2019

$
2.29

PWERM

 These estimated fair values per share of common stock were determined after considering valuation reports from
an independent third-party valuation specialist as well as other objective and subjective factors as appropriate, including the Company’s stage of development and programs, the Company’s cash burn and cash balances, the value of public
companies with similar profiles to the Company, the likelihood of achieving a liquidity event, the lack of an active market for the Company’s shares of common stock, the issuance of preferred stock and the rights, preferences and privileges of
preferred stock as compared to common stock and the other factors described below. Set forth below in this letter is a discussion of each valuation and equity grant since January 1, 2018, along with a comparison of the estimated fair value of
the Company’s common stock to the Midpoint Price.

 CONFIDENTIAL TREATMENT
REQUESTED BY ORIC PHARMACEUTICALS, INC.

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 Securities and Exchange Commission

March 3, 2020

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 CONFIDENTIAL TREATMENT REQUESTED

BY ORIC PHARMACEUTICALS, INC.: ORIC-001

 The following table sets forth all equity awards made by the Company since January 1,
2018:

 Grant date

Type of award

Number of
shares

Exercise price
of options per
share

Estimated
fair value
of common
stock per
share on
grant date

 March 1, 2018

Options

2,184,680

$
 0.40

$
 0.40

 May 10, 2018

Options

4,094,500

$
 0.40

$
 0.40

 June 29, 2018

Options

236,700

$
 0.40

$
 0.40

 September 20, 2018

Options

1,083,500

$
 0.40

$
 0.40

 December 6, 2018

Options

880,000

$
 0.40

$
 0.40

 February 4, 2019

Options

638,000

$
 0.40

$
 0.40

 September 11, 2019

Options

2,418,000

$
 1.61

$
 1.61

 September 18, 2019

Options

125,000

$
 1.61

$
 1.61

 October 28, 2019

Options

125,000

$
 1.61

$
 1.61

 October 31, 2019

Options

35,000

$
 1.61

$
 1.61

 December 4, 2019

Options

610,000

$
 2.29

$
 2.29

 December 21, 2019

Options

725,000

$
 2.29

$
 2.29

 In addition to the equity awards identified above, the Board has approved the grant of an aggregate of
4,880,005 options with an exercise price equal to the IPO price, which grants will be effective as of the effective date of the Registration Statement.

February 6, 2018 Valuation

 In
preparing the February 6, 2018 valuation, the Company used a hybrid of the option pricing model (“OPM”) and the probability-weighted expected return method (“PWERM”). The hybrid method applied the PWERM in the
probability of a liquidation scenario and the OPM in the probability of a stay private / going concern scenario. The resulting estimated fair value of the Company’s common stock was $0.40 per share on a
non-marketable basis.

 In this valuation, the hybrid method was used to address two
probability-weighted scenarios projected for the Company: a liquidation scenario and a stay private / going concern scenario. The liquidation scenario was weighted 75% and the stay private scenario was weighted 25%. The relative probability of each
projected scenario was determined based on the fact that ORIC was an early development stage company with the significant risks associated with a pre-clinical drug company.

Under the PWERM portion of the valuation applied to the liquidation scenario, the Company valued its shares of common stock based upon the
probability-weighted present value of expected future investment returns, considering various future outcomes available to the Company as well as the rights of each of the share classes. As of February 6, 2018, there was a significant risk of
failure given the Company’s early stage of development that would have resulted in a liquidation or downside liquidity event in which the Company’s preferred stock would receive all of its liquidation preference with the Company’s
common stock receiving no return.

 CONFIDENTIAL TREATMENT
REQUESTED BY ORIC PHARMACEUTICALS, INC.

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 Securities and Exchange Commission

March 3, 2020

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 CONFIDENTIAL TREATMENT REQUESTED

BY ORIC PHARMACEUTICALS, INC.: ORIC-001

 The stay private / going concern scenario assumed an equity valuation determined by the OPM
which was used to determine the value of each class of the Company’s capital stock and a back-solve method based on the price of the Series C preferred stock tied to its initial issuance price. After the equity value of the Company was
determined, it was allocated among the various stock classes. Under the OPM, the rights of the holders of various classes of stock are treated as call options on any value of the Company above a series of breakpoints. For the Company, these
breakpoints were set after examining the liquidation preferences and conversion behaviors of the different classes of equity. To calculate the estimated fair market value of the Company’s common stock, the Company estimated a series of
variables, including the equity value of the Company, time to liquidity event, risk-free rate, volatility and illiquidity discount. For the February 6, 2018 stay private / going concern scenario, the Company used:

•

 an estimated equity value of approximately $[*] on a marketable basis;

•

 an estimated 2.5-year time period to reach a liquidity event;

•

 a risk-free Federal Reserve interest rate of 2.20% based on the yields of
2- and 3-year U.S. Treasury notes as of February 6, 2018;

•

 an annual standard deviation of return (usually referred to as volatility) of 1.05 based on an analysis of the
historical volatility of guideline companies over a period of up to 2.5 years; and

•

 a discount for lack of marketability (“DLOM”) of 30.0% on account of the lack of an active
trading market in the Company’s securities.

 March 1, 2018, May 10, 2018, June 29, 2018, September 20, 2018,
December 6, 2018 and February 4, 2019 grants

 At March 1, 2018, May 10, 2018, June 29, 2018,
September 20, 2018, December 6, 2018 and February 4, 2019, the Board determined that the estimated fair value of the Company’s common stock was $0.40 per share in consideration of the valuation analysis as of February 6,
2018 and other objective and subjective factors as appropriate, including, without limitation: the early stage of development of the Company and the fact that the Company had only recently initiated its first clinical trial, a Phase 1a trial of its
lead product candidate, ORIC-101, in healthy volunteers; the Company had no ongoing trials in combination with other therapies; the Company’s CD73 program was in preclinical development and a lead product
candidate for such program had not been identified; the Company had one additional program at the early research stage; the Company underwent a transition on its executive team with the hiring of Dr. Jacob Chacko as the Company’s new Chief
Executive Officer in May 2018, Dr. Pratik Multani as the Company’s new Chief Medical Officer in September 2018 and Matt Panuwat as the Company’s new Chief Business Officer in November 2018; uncertainty relating to when the
Company’s planned Phase 1b trials of its lead product candidate, ORIC-101, in combination with other therapies

 CONFIDENTIAL TREATMENT
REQUESTED BY ORIC PHARMACEUTICALS, INC.

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 Securities and Exchange Commission

March 3, 2020

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 CONFIDENTIAL TREATMENT REQUESTED

BY ORIC PHARMACEUTICALS, INC.: ORIC-001

would commence, if at all; uncertainty regarding the manufacturing process and formulation of the Company’s lead product candidate, ORIC-101, for the planned Phase 1b clinical trials;
uncertainty as to the progress, if any, of the Company’s other programs and as to when the Company would submit an investigational new drug application (“IND”) with the U.S. Federal Drug Administration (“FDA”)
to seek approval to commence Phase 1 clinical trials for any other program, if at all; uncertainty relating to the results of the Company’s planned future clinical trials; uncertainty regarding the ability and t