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CORRESP

Goodwin Procter LLP

100 Northern Avenue

Boston, MA 02210

goodwinlaw.com

+1 617 570 1000

 September 30, 2024

FOIA CONFIDENTIAL TREATMENT REQUESTED

 The entity
requesting confidential treatment is

 Upstream Bio, Inc.

 890
Winter Street, Suite 200

 Waltham, MA 02451

 Telephone: (781)
208-2466

 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 “[***].”

VIA EDGAR

 U.S. Securities and Exchange Commission

 Division of Corporation Finance

 Office of Life Sciences

 100 F Street, N.E.

 Washington, D.C. 20549

Attention: Chris Edwards, Jimmy McNamara, Kevin Kuhar and Franklin Wyman

RE: Upstream Bio, Inc.

 Registration Statement on Form S-1

 File No. 333-282197

CIK No. 0002022626

 Rule 83 Confidential
Treatment Request by Upstream Bio, Inc.

 Dear Ladies and Gentlemen:

On behalf of Upstream Bio, Inc. (the “Company”), in response to comments from the staff (the “Staff”) of the U.S. Securities and Exchange
Commission (the “Commission”) received by letter dated July 9, 2024 (the “Comment Letter”) relating to the Company’s Registration Statement on Form S-1, originally confidentially
submitted to the Commission on June 12, 2024, and subsequently publicly filed by the Company with the Commission on September 18, 2024 (File No. 333-282197) (the “Registration
Statement”), we submit this supplemental letter to address comment 14 of the Comment Letter.

 FOIA CONFIDENTIAL TREATMENT REQUESTED
BY UPSTREAM BIO, INC.

 Division of Corporation Finance

Office of Life Sciences

 U.S. Securities and Exchange Commission

 September 30, 2024

  Page
 2

 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 concurrently 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.

 We confirm on behalf of the Company that, prior to circulating copies of the preliminary prospectus in connection
with the offering, the Company will file a pre-effective amendment to the Registration Statement that will include all information other than information that may be excluded in reliance upon Rule 430A of
Regulation C, and the final price range to be included in such amendment which will comply with the Staff’s interpretation regarding the parameters of a bona fide price range.

Prior to the effectiveness of the Registration Statement, the Company intends to implement a reverse stock split of its common stock (the “Stock
Split”). The Company expects to reflect the Stock Split in a pre-effective amendment to the Registration Statement that includes the actual price range. For purposes of this letter, we have presented all
dollar and per share amounts without giving effect to the Stock Split to be consistent with the current presentation in the Registration Statement.

The Company respectfully requests that the bracketed information contained in this letter be treated as confidential information pursuant to Rule 83
promulgated by the Commission, 17 C.F.R. §200.8, and that the Commission provide timely notice to E. Rand Sutherland and Michael Gray before it permits any disclosure of the bracketed information in this letter.

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

14.
 Once you have an estimated offering price range, please explain to us the reasons for any differences
between recent valuations of your common stock leading up to the planned offering and the midpoint of your estimated offering price range. This information will facilitate our review of your accounting for stock compensation.

 The Company respectfully submits the below additional information to assist the Staff in its review of the Company’s position
with respect to its determination of the fair value of the Company’s common stock, par value $0.001 per share (“Common Stock”), underlying its outstanding equity awards and the reasons for the differences between the recent valuation
of its Common Stock and the estimated offering price for its initial public offering (“IPO”).

 2

FOIA CONFIDENTIAL TREATMENT REQUESTED BY UPSTREAM BIO, INC.

 Division of Corporation Finance

Office of Life Sciences

 U.S. Securities and Exchange Commission

 September 30, 2024

  Page
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 Preliminary IPO Price Range

The Company advises the Staff that it estimates a preliminary price range of approximately $[***] to $[***] per share (the “Preliminary Price Range”)
for its IPO, before giving effect to the Stock Split, resulting in a midpoint of the Preliminary Price Range of $[***] per share. The actual price range to be included in a subsequent amendment to the Registration Statement (which will comply with
the Staff’s interpretation regarding the parameters of a bona fide price range) has not yet been determined and remains subject to adjustment based on factors outside of the Company’s control. However, the Company believes that the
foregoing Preliminary Price Range will not be subject to significant change.

 Determining the Fair Value of Common Stock Prior to the IPO

As there has been no public market for the Common Stock to date, the estimated fair value of its Common Stock has been determined by the Company’s board
of directors (the “Board”) as of the date of each equity award, with input from management, considering the Company’s most recently available third-party valuations of its Common Stock, and the Board’s assessment of additional
objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant.

The Company’s most recent third-party valuations of its Common Stock utilized by the Board in determining exercise prices at the time of each equity award
were as follows:

 Date of

 Third-Party

Valuation

Date of
Board Approval

Estimated
Fair Market Value
of Common Stock
per Share

 October 31, 2022

December 7, 2022

$3.48

 February 17, 2023

March 2, 2023

$4.47

 June 6, 2023

June 10, 2023

$5.10

 March 1, 2024

March 13, 2024

$5.96

 April 22, 2024

April 25, 2024

$6.91

 May 20, 2024

June 11, 2024

$9.59

 July 19, 2024

July 31, 2024

$11.14

 3

FOIA CONFIDENTIAL TREATMENT REQUESTED BY UPSTREAM BIO, INC.

 Division of Corporation Finance

Office of Life Sciences

 U.S. Securities and Exchange Commission

 September 30, 2024

  Page
 4

 Equity Awards Between January 1, 2023 and September 30, 2024

The following table summarizes by grant date the number of shares subject to awards granted between January 1, 2023 and September 30, 2024, the per
share exercise price of the awards and the fair value of Common Stock underlying the awards on each grant date:

 Grant Date

Type of
Award

Number of
Shares Subject
to Awards
Granted

Per Share
Exercise
Price
of Award

Per Share
Fair Value
of Common Stock
on Grant Date

Per Share
Estimated Fair
Value of Award
on Grant Date(1)

 01/06/2023

Option

14,000

$3.48

$3.48

$2.45

 03/02/2023

Option

45,585

$4.47

$4.47

$3.17

 03/03/2023

Option

553,430

$4.47

$4.47

$3.17

 03/14/2023

Option

34,870

$4.47

$4.47

$3.17

 04/08/2023

Option

42,918

$4.47

$4.47

$2.98

 06/12/2023

Option

40,235

$5.10

$5.10

$3.42

 07/18/2023

Option

80,471

$5.10

$5.10

$3.37

 08/09/2023

Option

24,141

$5.10

$5.10

$3.31

 08/10/2023

Option

33,900

$5.10

$5.10

$3.31

 08/14/2023

Option

287,500

$5.10

$5.10

$3.31

 08/15/2023

Option

10,729

$5.10

$5.10

$3.31

 09/06/2023

Option

48,282

$5.10

$5.10

$3.40

 03/27/2024

Option

742,581

$5.96

$5.96

$3.41

 04/04/2024

Option

826,220

$5.96

$5.96

$4.20

 04/25/2024

Option

1,004,575

$6.91

$6.91

$4.87

 05/02/2024

Option

310,600

$6.91

$6.91

$4.78

 05/05/2024

Option

108,250

$6.91

$6.91

$4.78

 05/07/2024

Option

12,000

$6.91

$6.91

$4.78

 06/11/2024

Option

9,000

$9.59

$9.59

$6.81

 06/19/2024

Option

12,000

$9.59

$9.59

$6.80

 07/31/2024

Option

34,000

$11.14

$11.14

$8.60

(1)
 The per share estimated fair value of options reflects the fair value of options granted on each grant date
determined using the Black-Scholes option-pricing model.

 Valuation Methodologies

The third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting
and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “Practice Aid”). As disclosed in the Registration Statement, the Company’s enterprise value valuations were prepared using
either an option pricing method (“OPM”) market-adjusted back-solve approach based on a recent arms-length transaction, a market-adjusted equity, or a hybrid method (“Hybrid”), which is a combination of an OPM scenario and one or
more scenarios using a probability-weighted expected return method (“PWERM”), with an IPO scenario and a sale scenario.

 4

FOIA CONFIDENTIAL TREATMENT REQUESTED BY UPSTREAM BIO, INC.

 Division of Corporation Finance

Office of Life Sciences

 U.S. Securities and Exchange Commission

 September 30, 2024

  Page
 5

 The OPM treats common stock and preferred stock as call options on the total equity value of a Company, with
exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders
exceeded the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger.

 The PWERM is
a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for the company, assuming various outcomes. The common stock value is based on the probability-weighted present value of expected
future investment returns considering each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the date of the applicable valuation (each, a
“Valuation Date”) at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock. A discount for lack of marketability (“DLOM”) of the common stock is then
applied to arrive at an indication of value for the common stock.

 The hybrid method is a hybrid between the PWERM and OPM, estimating the
probability-weighted value across multiple scenarios, but using the OPM to estimate the allocation of value within one or more of those scenarios. When using the hybrid method, the third-party valuations considered two future-event scenarios: an IPO
scenario and a sale scenario. The equity value of the Company in the IPO scenario was determined using a market approach. The IPO scenario assumed that all shares of redeemable convertible preferred stock would convert into shares of Common Stock
and would no longer have the liquidation preferences and preferential rights attributable to the redeemable convertible preferred stock as compared to the Common Stock prior to the IPO. The guideline initial public offering transactions in the IPO
scenario consist of biotechnology companies with recent initial public offerings. The valuation converted the Company’s estimated future value in an IPO to present value using a risk-adjusted discount rate. The equity value for the sale
scenario was estimated using the price of a recently issued preferred security or a market-adjusted equity approach. At certain Valuation Dates, a preferred tranche model was used (time-based call option or milestone-based model) as appropriate at
each respective Valuation Date. The valuation utilized an OPM to quantify or attribute value to these economic rights of redeemable convertible preferred stock as compared to the Common Stock, such as liquidation preferences, dividend provisions,
and participation rights after liquidation preferences.

 October 31, 2022 Valuation

The fair value of the Common Stock of $3.48 per share at October 31, 2022 was determined with the assistance of an independent third-party valuation firm
and approved by the Board on December 7, 2022. This valuation was used to support the fair market value of the Common Stock in accordance with Section 409A of the IRC with respect to options granted on January 6, 2023, along with
other factors determined by the Board to be relevant at the time of such grant of options.

 5

FOIA CONFIDENTIAL TREATMENT REQUESTED BY UPSTREAM BIO, INC.

 Division of Corporation Finance

Office of Life Sciences

 U.S. Securities and Exchange Commission

 September 30, 2024

  Page
 6

 The October 31, 2022 valuation applied the OPM to allocate the fair value of the Company’s equity
to various securities within the Company’s capital structure. Under this method, the OPM model was built based on the Company’s capital structure and reasonable option model inputs. The total equity value of the Company was determined
based on a market-adjusted approach. Under this approach, the Company’s equity value from the prior valuation of June 30, 2022 was adjusted based on consideration given to the performance of the biotechnology indices as well as the
Company’s entity-specific factors. The valuation also considered the Series A redeemable convertible preferred stock (the “Series A Preferred”) investor right to purchase additional future Series A Preferred shares at one
additional milestone tranche closing. The 35.0% DLOM applied to the fair value of Common Stock was estimated using a put option analysis.

 The principal
factor that contributed to the increase in the fair value of the Common Stock from June 30, 2022, the date of the Company’s most recent valuation, to October 31, 2022 included the following:

•

 A market adjustment factor of 3.6% was applied as of the Valuation Date to reflect the improved market conditions
within the biotechnology indices over the measurement period.

 Between October 31, 2022 and February 17, 2023, the Company
continued to operate its business in the ordinary course and there were no significant developments in its business. As a result, the Company determined that no developments that would affect the valuation occurred from October 31, 2022 to
February 17, 2023.

 February 17, 2023 Valuation

The fair value of the Common Stock of $4.47 per share at February 17, 2023 was determined with the assistance of an independent third-party valuation firm
and approved by the Board on March 2, 2023. This valuation was used to support the fair market value of the Common Stock in accordance with Section 409A of the IRC with respect to options granted on March 2, 2023, March 3, 2023,
March 14, 2023 and April 8, 2023, along with other factors determined by the Board to be relevant at the time of each such grant of options.

 6

FOIA CONFIDENTIAL TREATMENT REQUESTED BY UPSTREAM BIO, INC.

 Division of Corporation Finance

Office of Life Sciences

 U.S. Securities and Exchange Commission

 September 30, 2024

  Page
 7

 The February 17, 2023 valuation applied the OPM method to allocate the fair value of the Company’s
equity to various securities within the Company’s capital structure. Under this method, the O