Form 10-Q IMMUNOMEDICS INC For: Sep 30

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Form 10-Q IMMUNOMEDICS INC For: Sep 30

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November 7, 2018 4:19 PM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 0-12104

Immunomedics, Inc.

(Exact name of Registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)	61-1009366 (I.R.S. Employer Identification No.)

300 The American Road, Morris Plains, New Jersey 07950

(Address of principal executive offices) (Zip Code)

(973) 605-8200

(Registrant’s Telephone Number, Including Area Code)

Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report: Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period the registrant was required to submit and post such files). Yes þ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer”, “large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer þ Accelerated Filer ◻

Non-Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of the registrant’s common stock outstanding as of November 5, 2018 was 190,019,435.

-IMMUNOMEDICS, INC.

TABLE OF CONTENTS



PART I:	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED):

	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2018 and June 30, 2018	3

	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended September 30, 2018 and 2017	4

	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2018 and 2017	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23

ITEM 4.	CONTROLS AND PROCEDURES	23

PART II:	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	23

ITEM 1A.	RISK FACTORS	23

ITEM 6.	EXHIBITS	41

EXHIBIT INDEX		42

SIGNATURES		43

PART I. FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS (Unaudited)

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except per share amounts)

(Unaudited)



	September 30, 2018			June 30, 2018
ASSETS
Current Assets:
Cash and cash equivalents	$	580,594		$	612,057
Marketable securities	4,941			26,745
Accounts receivable, net of allowances of $0 at September 30, 2018 and June 30, 2018, respectively	—			46
Other current assets	8,479			9,532
Total current assets	594,014			648,380
Property and equipment, net of accumulated depreciation of $31,449 thousand and $30,858 thousand at September 30, 2018 and June 30, 2018, respectively	18,587			15,733
Other long-term assets	61			60
Total Assets	$	612,662		$	664,173

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	33,710		$	31,664
Liability related to sale of future royalties - current	4,482			3,009
Warrant liabilities	5,979			8,973
Deferred revenues	—			94
Total current liabilities	44,171			43,740
Convertible senior notes, net	19,799			19,763
Liability related to sale of future royalties - non-current	207,280			198,998
Other long-term liabilities	2,097			1,986
Total Liabilities	273,347			264,487
Commitments and Contingencies (Note 11)
Stockholders' Equity:
Common stock, $0.1 par value; shares authorized 250,000 thousand; shares issued 187,143 thousand and shares outstanding 187,079 thousand at September 30, 2018; shares issued 186,801 thousand and shares outstanding 186,766 thousand at June 30, 2018	1,871			1,868
Capital contributed in excess of par	1,203,025			1,194,998
Treasury stock, at cost: 64 thousand shares at September 30, 2018 and 35 thousand shares at June 30, 2018	(1,092		)	(458		)
Accumulated deficit	(859,717		)	(795,548		)
Accumulated other comprehensive loss	(334		)	(353		)
Total Immunomedics, Inc. stockholders' equity	343,753			400,507
Noncontrolling interest in subsidiary	(4,438		)	(821		)
Total stockholder's equity	339,315			399,686
Total Liabilities and Stockholders' Equity	$	612,662		$	664,173

See accompanying notes to unaudited condensed consolidated financial statements

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE LOSS

(Dollars in thousands except per share amounts)

(Unaudited)



	Three Months Ended
	September 30,
	2018			2017
Revenues:
Product sales	$	—		$	526
License fee and other revenues	—			1
Research and development	—			163
Total revenues	—			690

Costs and Expenses:
Costs of goods sold	—			70
Research and development	38,239			17,342
Sales and marketing	5,799			226
General and administrative	13,131			4,650
Total costs and expenses	57,169			22,288
Operating loss	(57,169		)	(21,598		)
Changes in fair market value of warrant liabilities	1,218			(86,378		)
Loss on induced exchanges of debt	—			(13,005		)
Interest expense	(10,142		)	(2,647		)
Interest and other income	1,694			416
Insurance reimbursement	190			4,366
Foreign currency transaction gain, net	—			84
Loss before income tax	(64,209		)	(118,762		)
Income tax (expense) benefit	—			—
Net loss	$	(64,209	)	$	(118,762	)
Net loss attributable to noncontrolling interest	(40		)	(17		)
Net loss attributable to Immunomedics, Inc. stockholders	$	(64,169	)	$	(118,745	)
Loss per common share attributable to Immunomedics, Inc. stockholders (basic and diluted):	(0.34		)	(0.97		)
Weighted average shares used to calculated loss per common share (basic and diluted):	186,937			122,550
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	4			(73		)
Unrealized gain on securities available for sale	15			32
Other comprehensive income (loss), net of tax:	19			(41		)
Comprehensive loss	(64,190		)	(118,803		)
Comprehensive loss attributable to noncontrolling interest	(40		)	(17		)
Comprehensive loss attributable to Immunomedics, Inc. stockholders	$	(64,150	)	$	(118,786	)

See accompanying notes to unaudited condensed consolidated financial statements

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)



	Three Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(64,209	)	$	(118,762	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in fair value of warrant liabilities	(1,218		)	86,378
Depreciation and amortization	591			213
Loss on induced exchanges of debt	—			13,005
Amortization of deferred revenue	(94		)	(17		)
Amortization of bond premiums	3			(14		)
Amortization of debt issuance costs	36			1,569
Amortization of deferred rent	109			(9		)
(Decrease) increase in allowance for doubtful accounts	—			3
Non-cash expense related to stock compensation	1,734			584
Changes in operating assets and liabilities	13,396			(3,520		)
Net cash used in operating activities	(49,652		)	(20,570		)
Cash flows from investing activities
Purchases of marketable securities	—			(245		)
Proceeds from sales/maturities of marketable securities	21,818			15,124
Purchases of property and equipment	(3,184		)	(789		)
Net cash provided by investing activities	18,634			14,090
Cash flows from financing activities:
Exercise of stock options	131			612
Exercise of warrants	375			—
Sale of common stock and warrants, net of related expenses	—			5,906
Direct cost of raising equity	—			(419		)
Tax withholding payments for stock compensation	(167		)	(51		)
Net cash provided by financing activities	339			6,048
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	4			(2		)
Net decrease in cash, cash equivalents and restricted cash	(30,675		)	(434		)
Cash, cash equivalents and restricted cash beginning of period	612,582			43,393
Cash, cash equivalents and restricted cash end of period	$	581,907		$	42,959
Supplemental disclosure of cash flow information:
Interest paid	$	475		$	2,375
Schedule for non-cash investing and financing activities:
Issuance of common shares for debt conversion	$	—		$	80,000
Accrued capital expenditures	$	2,449		$	—
Shares received in cashless exercise	$	634		$	—
Non-cash component of warrant exercise	$	1,776		$	11,242

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheet that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (dollars in thousands):



	September 30, 2018		June 30, 2018
Cash and cash equivalents	$	580,594	$	612,057
Restricted cash in other current assets	1,313		525
Total cash, cash equivalents and restricted cash	$	581,907	$	612,582

See accompanying notes to unaudited condensed consolidated financial statements.

IMMUNOMEDICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Reference is made to the Annual Report on Form 10-K, as amended, of Immunomedics, Inc., a Delaware corporation (“Immunomedics,” the “Company,” “we,” “our” or “us”), for the fiscal year ended June 30, 2018, which contains our audited consolidated financial statements and the notes thereto.


1.	Business Overview, Basis of Presentation and Recent Accounting Pronouncements

Business Overview

Immunomedics, Inc., a Delaware corporation (“Immunomedics” or the “Company”), is a clinical-stage biopharmaceutical company that develops monoclonal antibody-based products for the targeted treatment of cancer. Immunomedics manages its operations as one line of business of researching, developing, manufacturing and marketing biopharmaceutical products, particularly antibody-based products for patients with difficult to treat solid tumor and blood cancers. The Company currently reports as a single industry segment with substantially all business conducted in the United States ("United States"). Immunomedics conducts its research activities in the United States and runs its development studies in the United States and selected European countries. Our corporate objective is to become a fully-integrated biopharmaceutical company and a leader in the field of antibody-drug conjugates (“ADCs”). To that end, our immediate priority is to commercialize our most advanced ADC product candidate, sacituzumab govitecan (“IMMU-132”), beginning in the United States, with metastatic triple-negative breast cancer (“mTNBC”) as the first indication. On May 21, 2018, we submitted a Biologics License Application (“BLA”) to the FDA for sacituzumab govitecan for the treatment of patients with mTNBC who have received at least two prior therapies for metastatic disease. On July 18, 2018, we received notification from the Food and Drug Administration ("FDA") that the BLA was accepted for filing and granted Priority Review with a PDUFA target action date of January 18, 2019. If approved, sacituzumab govitecan would be the first and only ADC approved for the treatment of mTNBC.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Immunomedics, which incorporate our subsidiaries, have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), for interim financial information and the instructions to the Quarterly Report on Form 10‑Q and Regulation S‑X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete annual financial statements. With respect to the financial information for the interim periods included in this Quarterly Report on Form 10-Q, which is unaudited, management believes that all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation of the results for such interim periods have been included. Operating results for the three-month period ended September 30, 2018, are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2019, or any other period. The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Accounting Pronouncements adopted during the year:

In November 2016, the FASB issued Accounting Standards Update ("ASU") 2016-18 "Statement of Cash Flows (Topic 230): Restricted Cash.” The amendments in this update require that cash and cash equivalent balances in a statement of cash flows include those amounts deemed to be restricted cash and restricted cash equivalents. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We adopted the amendments in this accounting standard update in the first quarter of fiscal 2019 on a retrospective basis resulting in an immaterial impact to our condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments,” which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017, and early adoption is permitted. ASU 2016-15 provides for retrospective application for all periods presented. ASU 2016-15 was effective for us in our first quarter of fiscal 2019 and did not result in any changes to the presentation of our Consolidated Statement of Cash Flows upon adoption.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” and has subsequently issued a number of amendments to Topic 606. On July 1, 2018, we adopted Topic 606 using the modified retrospective method. The adoption of Topic 606 did not have a material impact to our condensed consolidated financial statements.

Accounting Pronouncements yet to be adopted:

In August 2018, the FASB issued ASU 2018-13, "Fair Value measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," to no longer require public companies to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, and to require disclosure about the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. We are currently assessing the impact of ASU 2018-13.

In June 2018, the FASB issued ASU 2018-07, "Compensation-Stock Compensation," to improve the usefulness of information provided to users of financial statements while reducing cost and complexity in financial reporting and provide guidance aligning the measurement and classification for share-based payments to nonemployees with the guidance for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. This standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, but no earlier than an entity's adoption date of Topic 606. We are currently assessing the impact of ASU 2018-07.

In February 2016, the FASB issued ASU 2016-02, “Leases,” and issued subsequent amendments to the initial guidance contained within ASU 2017-13. This standard requires a lessee to record the assets and liabilities for the rights and obligations created by lease terms of more than 12 months on the balance sheet. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted. We are currently assessing the impact of ASU 2016-02.

2 . Revenue Recognition

Pursuant to Topic 606, we recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, Topic 606 includes provisions within a five step model that includes i) identifying the contract with a customer, ii) identifying the performance obligations in the contract, iii) determining the transaction price, iv) allocating the transaction price to the performance obligations, and v) recognizing revenue when, or as, an entity satisfies a performance obligation.

At contract inception, we assess the goods or services promised within each contract and assess whether each promised good or service is distinct and determine those that are performance obligations. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

3. Marketable Securities

Immunomedics considers all of its current investments to be available-for-sale. Marketable securities at September 30, 2018 consisted of the following (in thousands):



	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Fair Value
U.S. Government Sponsored Agencies	$	4,941	$	—	$	—	$	4,941

Maturities of debt securities classified as available-for-sale were as follows at September 30, 2018 (in thousands):



	Fair Value		Net Carrying Amount
Due after one year through five years	$	4,941	$	4,954

Marketable securities at June 30, 2018 consisted of the following (in thousands):



	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
U.S. Treasury Bonds	$	9,641	$	—	$	(9	)	$	9,632
Certificate of Deposits	5,610		—		—			5,610
U.S. Government Sponsored Agencies	6,751		—		(2		)	6,749
Corporate Debt Securities	4,510		—		(5		)	4,505
Commercial Paper	249		—		—			249
	$	26,761	$	—	$	(16	)	$	26,745

Maturities of debt securities classified as available-for-sale were as follows at June 30, 2018 (in thousands):



	Fair Value		Net Carrying Amount
Due within one year	$	21,745	$	21,860
Due after one year through five years	5,000		5,009
	$	26,745	$	26,869

4. Debt

Liability related to sale of future royalties:

On January 7, 2018, the Company entered into a funding agreement with RPI Finance Trust, a Delaware statutory trust ("RPI"), under which we sold a portion of our right to receive royalties on potential net sales of the ADC sacituzumab govitecan, in exchange for $175.0 million in cash. Concurrently, we entered into a common stock purchase agreement with RPI through which RPI purchased 4.4 million shares of the Company's common stock for $75.0 million (the "Financing").

The Company concluded that there were two units of accounting in the transaction: (1) the Liability related to the sale of future royalties and (2) the "Financing". We allocated the consideration of $250.0 million on a relative fair value basis to the liability for $182.2 million and the common stock for $67.8 million. We continue to accrete the Liability related to the sale of future royalties using the interest method with an annual interest rate of approximately 19.3%. As of June 30, 2018, we determined the fair value at $202.0 million. During the three months ended September 30, 2018, the Company recognized $9.8 million in interest expense.

Convertible Senior Notes:

In February 2015, the Company issued $100.0 million of Convertible Senior Notes (the "Convertible Senior Notes") (net proceeds of approximately $96.3 million after deducting the initial purchasers’ fees and offering expenses) in a private offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Rule 144A under the Securities Act. The Convertible Senior Notes will mature on February 15, 2020, unless earlier purchased or converted. The debt issuance costs of approximately $3.7 million, primarily consisting of underwriting, legal and other professional fees, are amortized over the term of the Convertible Senior Notes. The Convertible Senior Notes are senior unsecured obligations of the Company. Interest at 4.75% is payable semiannually on February 15 and August 15 of each year. The effective interest rate on the Convertible Senior Notes was 5.48% for the period from the date of issuance through September 30, 2018.

The Convertible Senior Notes are convertible at the option of holders into approximately 19.6 million shares of common stock at any time prior to the close of business on the day immediately preceding the maturity date. The exchange rate will initially be 195.8336 shares of common stock per $1,000 principal amount of Convertible Senior Notes (equivalent to an initial conversion price of approximately $5.11 per share of common stock).

If the Company undergoes a fundamental change (as defined in the indenture governing the Convertible Senior Notes), holders may require Immunomedics to purchase for cash all or part of the Convertible Senior Notes at a purchase price equal to 100% of the principal amount of the Convertible Senior Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date, subject to certain exceptions. In addition, if certain make-whole fundamental changes (as defined in the indenture governing the Convertible Senior Notes) occur, Immunomedics will, in certain circumstances, increase the conversion rate for any Convertible Note converted in connection with such make-whole fundamental change.

The indenture does not limit the amount of debt which may be issued by the Company under the indenture or otherwise, does not contain any financial covenants or restrict the Company from paying dividends, selling or disposing of assets, or issuing or repurchasing its other securities, provided that such event is not deemed to be a fundamental change (as defined in the indenture governing the Convertible Senior Notes). The indenture contains customary terms and covenants and events of default.

If an event of default with respect to the Convertible Senior Notes occurs, holders may, upon satisfaction of certain conditions, accelerate the principal amount of the Convertible Senior Notes plus premium, if any, and accrued and unpaid interest, if any. In addition, the principal amount of the Convertible Senior Notes plus premium, if any, and accrued and unpaid interest, if any, will automatically become due and payable in the case of certain types of bankruptcy or insolvency events of default involving the Company.

On September 21, 2017, the Company entered into separate, privately negotiated exchange agreements, (the "September 2017 Exchange Agreements") with certain holders of the Convertible Senior Notes. Under the September 2017 Exchange Agreements, such holders agreed to convert an aggregate $80.0 million of Convertible Senior Notes held by them. In total, the Company issued an aggregate 16.8 million shares of common stock in the September 2017 Exchange Agreements. The shares represent an aggregate of 1.1 million shares more than the number of shares into which the exchanged Convertible Senior Notes were convertible under their original terms. As a result of the September 2017 Exchange Agreements, the Company recognized a loss on induced exchanges of debt of $13.0 million representing the fair value of the incremental consideration paid to induce the holders to exchange their Convertible Senior Notes for equity (i.e., 1.1 million shares of common stock), based on the closing market price of the Company's Common Stock on the date of the September 2017 Exchange Agreements.

On October 2, 2018, the Company entered into privately negotiated exchange agreements (the "October 2018 Exchange Agreements"), with a limited number of holders of the Convertible Senior Notes. Under the October 2018 Exchange Agreements, the Company exchanged, in a private placement, $12.9 million in aggregate principal amount of the Convertible Senior Notes held by such holders for 2.6 million newly issued shares of the Company's common stock, par value $0.01 per share.

As a result of the October 2018 Exchange Agreements, the outstanding aggregate principal amount of the Convertible Senior notes was reduced to $7.1 million in the second quarter of fiscal 2019.

Total interest expense for the Convertible Senior Notes for the three months ended September 30, 2018 and 2017 was $0.2 million and $2.6 million, respectively. Included in interest expense was an immaterial amount of amortization of debt issuance costs for the three months ended September 30, 2018, and $1.6 million for the three months ended September 30, 2017 (which included $1.4 million of accelerated amortization of debt issuance costs associated with the $80.0 million exchange of Convertible Senior Notes in September 2017 for the three months ended September 30, 2017).

5. Share-based Compensation

Stock Incentive Plan

The Company has a stock incentive plan, the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”) that provides for the granting of stock options, restricted stock units (RSUs), performance stock options (PSOs) and other stock-based awards to eligible individuals on the terms and subject to the conditions set forth in the Plan. There have been no significant modifications to the Plan during the three months ended September 30, 2018 or 2017.

The following table summarizes the components of share-based compensation expense in the condensed consolidated statements of comprehensive loss (in thousands):



	Three Months Ended
	September 30,
	2018		2017
Research and development	$	620	$	350
Sales and marketing	271		—
General and administrative	843		233
Total share-based compensation expense	$	1,734	$	583

The following table summarizes the activity for stock options, RSUs and PSOs for the three months ended September 30, 2018 (in thousands):



	Stock Options		RSUs		PSOs
Equity awards outstanding, beginning of year	3,549		1,535		538
Changes during the year:
Granted	1,279		15		—
Exercised	(219	)	(30	)	—
Expired or forfeited	(23	)	—		—
Equity awards outstanding, end of period	4,586		1,520		538

As of September 30, 2018, total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized were as follows ($ in thousands):



	Stock Options		RSUs		PSOs
Unrecognized compensation cost	$	25,959	$	405	$	3,228
Expected weighted-average period in years of compensation cost to be recognized	3.7		1.3		3.3

6. Estimated Fair Value of Financial Instruments

Cash equivalents and marketable securities:



	($ in thousands)
September 30, 2018	Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)		Total
Money Market Funds Note ^(d)	$	324,375	$	—	$	—	$	324,375
Marketable Securities:
U.S. Government Sponsored Agencies	4,941		—		—		4,941
Total	$	329,316	$	—	$	—	$	329,316



	($ in thousands)
June 30, 2018	Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)		Total
Money Market Funds Note ^(d)	$	300,865	$	—	$	—	$	300,865
Marketable Securities:
U.S. Treasury Bonds	9,632		—		—		9,632
Certificate of Deposits	5,610		—		—		5,610
U.S. Government Sponsored Agencies	6,749		—		—		6,749
Corporate Debt Securities	4,505		—		—		4,505
Commercial Paper	249		—		—		249
Total	$	327,610	$	—	$	—	$	327,610

^(a) Level 1 - Financial instruments whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the company has the ability to access at the measurement date.

^(b) Level 2 - Financial instruments whose value are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.

^(c) Level 3 - Financial instruments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset.

^(d) The money market funds noted above are included in cash and cash equivalents.

Convertible Senior Notes

The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows (in thousands):



	As of September 30, 2018				As of June 30, 2018
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Convertible Senior Notes	$	19,799	$	79,424	$	19,763	$	89,436

The fair value of the Convertible Senior Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Senior Notes observed in market trading which are Level 2 inputs (see Note 4).

Warrant Liabilities

The Company has determined its warrant liabilities to be a Level 2 fair value measurement and used the Black Scholes valuation model to calculate the fair value. At the measurement dates, the Company estimated the fair value for the warrants based on a Black-Scholes valuation model and using the following assumptions:



	September 30, 2018 ⁽²⁾	June 30, 2018 ⁽²⁾	June 30, 2017 ⁽¹⁾	June 30, 2017 ⁽²⁾	February 10, 2017	October 11, 2016
Risk-free interest rate	2.12%	1.95%	1.14%	1.38%	1.47%	0.87%
Expected remaining term	0.03 years	0.3 years	0.5 years	1.3 years	3.0 years	2.0 years
Expected volatility	60.00%	60.00%	69.34%	73.85%	71.42%	75.00%
Dividend yield	—%	—%	—%	—%	—%	—%


⁽¹⁾	Represents the fair value assumptions for the warrants issued in connection with February 10, 2017 stock purchase agreement.


⁽²⁾	Represents the fair value assumptions for the warrants issued in connection with October 11, 2016 public offering.

The following table sets forth the warrant activity, including transfers of warrant liabilities to equity upon exercise, for the year ended September 30, 2018 (in thousands):



	Number of Warrants		Estimated Fair Value Level 2
(in thousands)	Number of Warrants		Estimated Fair Value Level 2
Fair value - June 30, 2018	450		$	8,973
Warrants exercised	(100	)	(1,776		)
Changes in fair market value of warrant liabilities	—		(1,218		)
Fair value - September 30, 2018	350		$	5,979

7. Stockholders’ Equity

Common Stock

On October 11, 2016, the Company completed an underwritten public offering of 10 million shares of its common stock and accompanying warrants to purchase 10 million shares of common stock at a purchase price of $3.00 per unit, comprised of one share of common stock and one warrant. The Company received gross and net proceeds of $30.0 million and approximately $28.6 million, respectively, after deducting the underwriting discounts and commissions as well as estimated expenses related to the offering. The warrants became exercisable nine months following the date of issuance and will expire on the second anniversary of the date of issuance and have an exercise price of $3.75. On the date of issuance, the fair value of these warrants was determined to be $7.3 million and recognized as a liability. The warrants under certain situations require cash settlement by the Company. During the three months ended September 30, 2018, there were 100,000 warrants exercised. The fair value of the 100,000 exercised warrants decreased $0.2 million from June 30, 2018, to the dates of exercise which has been recognized in the accompanying consolidated statements of comprehensive loss. The $1.8 million fair value of the warrants as of the exercise dates was reclassified to capital contributed in excess of par. As of September 30, 2018, there were 350,000 warrants outstanding.

During October 2018, the remaining warrants were exercised. No warrants remain outstanding.

Treasury Stock

During the three months ended September 30, 2018, there were 29,428 shares received in connection with a non-cash equity transaction related to the Company's Plan.

8. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss were as follows (in thousands):



	Currency Translation Adjustments			Net Unrealized Gains (Losses) on Available- for-Sale Securities			Accumulated Other Comprehensive Loss
Balance, July 1, 2018	$	(339	)	$	(14	)	$	(353	)
Other comprehensive income before reclassifications	4			15			19
Net current-period other comprehensive income	4			15			19
Balance, September 30, 2018	$	(335	)	$	1		$	(334	)
Balance, July 1, 2017	$	(234	)	$	(69	)	$	(303	)
Other comprehensive (loss) income before reclassifications	(73		)	32			(41		)
Net current-period other comprehensive (loss) income	(73		)	32			(41		)
Balance, September 30, 2017	$	(307	)	$	(37	)	$	(344	)

There were no amounts reclassified from accumulated other comprehensive income (loss). All components of accumulated other comprehensive loss are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries.

9. Related Party Transactions

On January 8, 2018, Morris Rosenberg joined the Company as Chief Technology Officer and became a full-time employee. Between May 5, 2017 and January 7, 2018, Mr. Rosenberg was engaged by the Company as an independent consultant pursuant to a consulting agreement between the Company and Mr. Rosenberg’s consulting company, M Rosenberg BioPharma Consulting LLC. The Company paid M Rosenberg BioPharma Consulting LLC $555 thousand during this time and Morris Rosenberg was also granted stock options to purchase 45,000 shares of the Company's common stock pursuant to the Immunomedics, Inc. 2014 Long-Term Incentive Plan. From July 1, 2018 through September 30, 2018, the Company paid M Rosenberg BioPharma $347 thousand for services agreed upon prior to Mr. Rosenberg becoming a full-time employee. As part of his employment contract, 50% of the 45,000 shares granted to Mr. Rosenberg as a consultant were forfeited, and the remaining 50% continue to vest. Mr. Rosenberg received 104,389 stock options and was permitted to continue to provide certain limited outside consulting services through M Rosenberg BioPharma Consulting LLC based on certain restrictions outlined in the contract. Additionally, during his employment period, except with the prior written consent of the Board, Mr. Rosenberg is not permitted to enter into any contract, agreement or other transaction arrangement to provide goods and/ or services to the Company through M Rosenberg BioPharma Consulting LLC.

10. Collaboration Agreement

AstraZeneca/MedImmune

In June 2018, the Company entered into a clinical collaboration with AstraZeneca and its global biologics research and development arm, MedImmune, to evaluate in Phase 1/2 studies the safety and efficacy of combining AstraZeneca’s Imfinzi^® (durvalumab), a human monoclonal antibody directed against PD-L1, with sacituzumab govitecan as a treatment of patients with triple-negative breast cancer (“TNBC”) and UC.

Part one of the two-part Phase 1/2 studies will be co-funded by the two companies. Immunomedics will supply the study drug and AstraZeneca will utilize its existing clinical trial infrastructure to accelerate the enrollment of the sacituzumab govitecan and durvalumab combination. The trial design allows for rapid transition into randomized Phase 2 studies should the first part of these studies show promising data and the companies agree to proceed based on efficacy and safety results obtained.

The collaboration terminates thirty days following the expiration of the study periods end-date. Either party may early terminate the collaboration by providing thirty days written notice.

11. Commitments and Contingencies

Commitments and Contingencies

a. Legal Matters

Patent litigation:

Immunomedics filed a first amended complaint on October 22, 2015 and a second amended complaint on January 14, 2016 in the United States District Court for the District of New Jersey, against Roger Williams Medical Center (“RWMC”), Richard P. Junghans, M.D., Ph.D. and Steven C. Katz, M.D. seeking lost profits, unjust enrichment damages and compensatory damages resulting from the infringement of its patents. The second amended complaint alleges that RWMC and Dr. Junghans breached a Material Transfer Agreement (“MTA”) through which it provided to them a monoclonal antibody known as MN-14 and related materials. Defendants are alleged to have breached the MTA and to have been negligent by, among other things, using the materials beyond the agreed-upon Research Project, sharing confidential information, failing to provide Immunomedics with a right of first refusal, failing to notify Immunomedics of intended publications prior to publishing, and refusing to return the materials upon request. Immunomedics also asserts defendants: claims of conversion, tortious interference, unjust enrichment, and infringement of three patents owned by Immunomedics. On January 28, 2016, defendants filed an Answer to the Second Amended Complaint. On October 12, 2016, Immunomedics filed a Third Amended Complaint, and further added as defendants Sorrento Therapeutics, Inc. and its subsidiaries TNK Therapeutics, Inc., BDL Products, Inc., and CARgenix Holdings, LLC. Defendants Junghans, Katz, and RWMC subsequently moved to dismiss for failure to state a claim on November 14, 2016, but this motion was denied on January 4, 2017. On December 2, 2016, Sorrento, TNK, BDL, and CARgenix moved to dismiss for lack of personal jurisdiction over them in New Jersey. The court granted this motion on January 25, 2017. On January 20, 2017, the court held a Markman hearing to construe the claims in the patents in suit. On February 28, 2017, the court issued an opinion and order finding, inter alia, that the term “effective amount” in the patents in suit is not indefinite and should be given its plain and order meaning, as proposed by Immunomedics, of “an amount capable of producing the claim result.” On May 11, 2017, the court entered an order referring the matter to mediation and designating Garrett E. Brown, Jr. (ret.) as the mediator. The mediation did not result in a settlement. On October 25, 2018, the Company entered into a Settlement Agreement with the defendants in this action, agreeing to dismiss all claims with prejudice in exchange for a settlement payment of $2.4 million.

Stockholder complaints:

Class Action Stockholder Federal Securities Cases

Two purported class action cases were filed in the United States District Court for the District of New Jersey; namely, Fergus v. Immunomedics, Inc., et al., No. 2:16-cv-03335, filed June 9, 2016; and Becker v. Immunomedics, Inc., et al., No. 2:16-cv-03374, filed June 10, 2016. These cases arise from the same alleged facts and circumstances, and seek class certification on behalf of purchasers of our common stock between April 20, 2016 and June 2, 2016 (with respect to the Fergus matter) and between April 20, 2016 and June 3, 2016 (with respect to the Becker matter). These cases concern the Company’s statements in press releases, investor conference calls, and SEC filings beginning in April 2016 that the Company would present updated information regarding its IMMU-132 breast cancer drug at the 2016 American Society of Clinical Oncology (“ASCO”) conference in Chicago, Illinois. The complaints allege that these statements were false and misleading in light of June 2, 2016 reports that ASCO had canceled the presentation because it contained previously reported information. The complaints further allege that these statements resulted in artificially inflated prices for our common stock, and that the Company and certain of its officers are thus liable under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. An order of voluntary dismissal without prejudice was entered on November 10, 2016 in the Becker matter. An order granting motion to consolidate cases, appoint lead plaintiff, and approve lead and liaison counsel was entered on February 7, 2017 in the Fergus matter. A consolidated complaint was filed on October 4, 2017. The Company filed a motion to dismiss the consolidated complaint on January 26, 2018 and the motion was fully briefed as of April 4, 2018. Oral arguments have not yet been scheduled.

Stockholder Claim in the Court of Chancery of the State of Delaware

On February 13, 2017, venBio commenced an action captioned venBio Select Advisor LLC v. Goldenberg, et al., C.A. No. 2017-0108-VCL (Del. Ch.) (the “venBio Action”), alleging that Company’s Board breached their fiduciary duties when the Board (i) amended the Company’s Amended and Restated By-laws (the “By-Laws”) to call for a plurality voting regime for the election of directors instead of majority voting, and providing for mandatory advancement of attorneys’ fees and costs for the Company’s directors and officers, (ii) rescheduled the Company’s 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”) from December 14, 2016 to February 16, 2017, and then again to March 3, 2017, and (iii) agreed to the proposed Licensing Transaction with Seattle Genetics. venBio also named Seattle Genetics as a defendant and sought an injunction preventing

the Company from closing the licensing transaction with Seattle Genetics. On March 6, 2017, venBio amended its complaint, adding further allegations. The Court of Chancery entered a temporary restraining order on March 9, 2017, enjoining the closing of the Licensing Transaction. venBio amended its complaint a second time on April 19, 2017, this time adding Greenhill & Co. Inc. and Greenhill & Co. LLC (together “Greenhill”), the Company’s financial advisor on the Licensing Transaction, as an additional defendant. On May 3, 2017, venBio and the Company and individual defendants Dr. Goldenberg, Ms. Sullivan and Mr. Brian A. Markison, a director of the Company (collectively, the “Individual Defendants”) entered into the Initial Term Sheet. On June 8, 2017, venBio the Company and Greenhill entered into the Greenhill Term Sheet. On February 9, 2018, the Court of Chancery approved the Settlement, and entered an order and partial judgment releasing all claims that were asserted by venBio against the Individual Defendents and Greenhill in the venBio Action and awarding venBio fees and expenses. On May 24, 2018 the remaining parties to the venBio Action participated in a mediation of the claims against Geoff Cox, Robert Forrester, Bob Oliver, and Jason Aryeh. The mediation was unsuccessful. Geoff Cox, Robert Forrester, Bob Oliver, and Jason Aryeh have submitted motions to dismiss the claims against them in the venBio Action, which remain pending in the Court of Chancery.

b. Other matters:

Immunomedics is also a party to various claims and litigation arising in the normal course of business, which includes some or all of certain of its patents. While it is not possible to determine the outcome of these matters, the Company believes that the resolution of all such matters will not have a material adverse effect on its consolidated financial position or liquidity, but could possibly be material to its consolidated results of operations in any one accounting period.

c. Purchase Obligations:

On September 11, 2018, we entered into a Master Services Agreement (the “MSA”) with Samsung BioLogics Co., Ltd. (“Samsung”), pursuant to which Samsung will provide the Company with certain biologics manufacturing and development services in accordance with one or more product specific agreements. In connection with the MSA, on September 11, 2018, we also entered into a product specific agreement with Samsung (the "PSA") for the production of hRS7, the antibody used in the Company’s lead antibody drug conjugate candidate, sacituzumab govitecan. As a result of entering into the PSA with Samsung, our purchase commitments increased during the quarter. Our total commitments and purchase obligations for manufacturing and consulting services now total $40.0 million in 2019, $31.6 million in 2020 and $10.4 million in 2021.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

The Securities and Exchange Commission (the “SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this Quarterly Report, and they may also be made a part of this Quarterly Report by reference to other documents filed with the SEC, which is known as “incorporation by reference.”

Words such as “may,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, are intended to identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among other things: the risk that we may be unable to obtain additional capital through strategic collaborations, licensing, issuance of equity financing in order to continue our research and development activities and secure regulatory approval of and market our drug candidates; our inability to further identify, develop and achieve commercial success for new products and technologies; the possibility of delays in the research and development necessary to select drug development candidates and delays in clinical trials; the risk that clinical trials may not result in marketable products; the risk that we may be unable to secure regulatory approval of and market our drug candidates; our dependence upon pharmaceutical and biotechnology collaborations; uncertainties about our ability to obtain new corporate collaborations and acquire new technologies on satisfactory terms, if at all; the development of competing products; our ability to protect our proprietary technologies; patent-infringement claims and other stockholder litigation; and risks of new, changing and competitive technologies and regulations in the United States and internationally. Refer to Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q for more information.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report or in any document incorporated by reference might not occur. Stockholders are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report or the date of the document incorporated by reference in this Quarterly Report. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by applicable law. All subsequent forward-looking statements attributable to the Company, or to any person authorized to act on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Overview

We are a clinical-stage biopharmaceutical company that develops monoclonal antibody-based products for the targeted treatment of cancer. Our advanced proprietary technologies allow us to create humanized antibodies that can be used either alone in unlabeled or “naked” form, or conjugated with chemotherapeutics, cytokines or toxins.

We believe that our antibodies have therapeutic potential, in some cases as a naked antibody or when conjugated with chemotherapeutics, cytokines or other toxins to create unique and potentially more effective treatment options. The attachment of effective anti-tumor compounds to antibodies is intended to allow the delivery of these therapeutic agents to tumor sites with better specificity than conventional chemotherapy. This treatment method is designed to optimize the therapeutic window through reducing the systemic exposure of the patient to the therapeutic agents, which ideally minimizes debilitating side effects while maximizing the concentration of the therapeutic agent at the tumor potentially leading to better efficacy.

Our portfolio of investigational products includes antibody-drug conjugates ("ADCs") that are designed to deliver a specific payload of a chemotherapeutic directly to the tumor while reducing overall toxicities that are usually associated with conventional administration of these chemotherapeutic agents. Our most advanced ADCs are sacituzumab govitecan (“IMMU-132”) and labetuzumab govitecan (“IMMU-130”), which are in advanced trials for a number of solid tumors. Sacituzumab govitecan is our lead product candidate and has received Breakthrough Therapy Designation from the United States Food and Drug Administration ("FDA") for the treatment of patients with metastatic triple-negative breast cancer ("mTNBC") who have received at least two prior therapies for metastatic disease.

Our corporate strategy is to commercialize sacituzumab govitecan on our own in the United States for the benefit of patients with mTNBC and the creation of value for our stockholders. On May 21, 2018, we submitted a Biologics License Application (“BLA”) to the FDA for sacituzumab govitecan for the treatment of patients with mTNBC who have received at least two prior therapies for metastatic disease. On July 18, 2018, we received notification from the FDA that the BLA was accepted for filing and granted Priority Review with a PDUFA target action date of January 18, 2019. If approved, sacituzumab govitecan would be the first and only ADC approved for the treatment of mTNBC.

As of September 30, 2018, we had $585.5 million in cash, cash equivalents and marketable securities. We believe our projected financial resources are adequate to (i) support our next phase of growth as we focus on commercializing and developing sacituzumab govitecan in mTNBC, advanced urothelial cancer ("UC"), advanced HR+ BC, advanced NSCLC and other indications of high medical need, (ii) further build our clinical, medical affairs, commercial and manufacturing infrastructure, (iii) begin to commercialize sacituzumab govitecan globally. In doing so and on the basis of our cash position, we believe we will be able to fund operations assuming we meet our regulatory and commercial objectives. However, in case of regulatory delays, alterations to our commercial forecast, or other unforeseen events, we may require additional funding. Potential sources of funding in such a case could include (i) the entrance into potential development and commercial partnerships to advance and maximize our full pipeline for mTNBC and beyond in the United States and Globally, and (ii) potential private and capital markets financing.

To accelerate the clinical and preclinical development of sacituzumab govitecan, we have entered into clinical collaborations with AstraZeneca and Clovis to investigate the ADC in earlier lines of therapy for mTNBC and advanced UC in combination with checkpoint and PARP inhibitors, respectively. We are also working with the University of Wisconsin on a clinical study in prostate cancer, and Yale University Cancer Center on a clinical study in endometrial and cervical cancers.

We also have a number of other product candidates, which target solid tumors and hematologic malignancies in various stages of clinical and preclinical development. They include other ADCs such as labetuzumab govitecan, which binds the CEACAM5 antigen expressed on CRC and other solid cancers, and IMMU-140 that targets HLA-DR for the potential treatment of hematologic malignancies. We believe that our portfolio of intellectual property provides commercially reasonable protection for our product candidates and technologies.

The development and commercialization of successful therapeutic products is subject to numerous risks and uncertainties including, without limitation, the following:


•	we may be unable to obtain additional capital through strategic collaborations, licensing, issuance of convertible debt securities or equity financing in order to continue our research and secure regulatory approval of and market our drug;


•	the type of therapeutic compound under investigation and nature of the disease in connection with which the compound is being studied;


•	our ability, as well as the ability of our partners, to conduct and complete clinical trials on a timely basis;


•	the time required for us to comply with all applicable federal, state and foreign legal requirements, including, without limitation, our receipt of the necessary approvals of the FDA, if at all;


•	the financial resources available to us during any particular period; and


•	many other factors associated with the commercial development of therapeutic products outside of our control.

See Risk Factors in Item 1A of this Quarterly Report.

Critical Accounting Policies and Accounting Estimates

A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

For a description of our significant accounting policies, refer to "Part II, Item 8. Financial Statements and Supplementary Data, Note 2 - Summary of Significant Accounting Policies" in our 2018 Annual Report on Form 10-K, as amended. Of these policies, the following are considered critical to an understanding of our Condensed Consolidated Financial Statements as they require the application of the most difficult, subjective and complex judgments; (i) Common stock warrants (ii) Interest expense on liability related to sale of future royalties, and (iii) Stock-based compensation.

Our critical accounting estimates and assumptions impacting the consolidated financial statements relate to revenue, stock compensation expenses, interest expense on liability related to sale of future royalties, and determination of fair value of warrants. Refer to "Note 2 - Revenue", "Note 4 - Debt", and "Note 6 - Estimated Fair Value of Financial Instruments", respectively, for more information.

Recent Accounting Pronouncements

Refer to "Note 1 - Business Overview, Basis of Presentation and Recent Accounting Pronouncements” in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements and accounting pronouncements not yet adopted, and their expected impact on our financial position and results of operations.

Results of Operations

Our results for any interim period, such as those described in the following analysis, are not necessarily indicative of the results for the entire fiscal year or any other future period.

Three-Month Period Ended September 30, 2018 Compared to 2017

Revenues



					($ in thousands)
					(Decrease)/Increase
Three Months Ended September 30,	2018		2017		2018 vs 2017
Product sales	$	—	$	526	$	(526	)	nm
License fee and other revenues	—		1		(1		)	nm
Research and development	—		163		(163		)	nm
Total revenues	$	—	$	690	$	(690	)	nm
nm - not meaningful

Total revenue for the three months ended September 30, 2018 decreased compared to the three months ended September 30, 2017, primarily due to the discontinued sale of LeukoScan^®duringthird quarter of fiscal 2018 to focus on our ADC business.

Costs and Expenses



					($ in thousands)
					(Decrease)/Increase
Three Months Ended September 30,	2018		2017		2018 vs 2017
Costs of goods sold	$	—	$	70	$	(70	)	nm
Research and development	38,239		17,342		20,897			nm
Sales and marketing	5,799		226		5,573			nm
General and administrative	13,131		4,650		8,481			nm
Total costs and expenses	$	57,169	$	22,288	$	34,881		nm
nm - not meaningful

Total costs and expenses for the three months ended September 30, 2018 increased compared to the three months ended September 30, 2017, primarily due to an increase in research and development expenses of $20.9 million, an increase in general and administrative expenses of $8.5 million, and an increase in sales and marketing expenses of $5.6 million attributed primarily to preparations to launch sacituzumab govitecan for commercial sales in the United States for patients with at least two prior lines of treatment for metastatic TNBC, and to expand clinical development of sacituzumab govitecan into earlier lines of therapy and other indications.

Cost of Goods Sold

The cost of goods sold for the three months ended September 30, 2018 decreased compared to the three months ended September 30, 2017, primarily due to the discontinued sale of LeukoScan^®during the third quarter of fiscal 2018 to focus on the ADC business.

Research and Development

We do not track expenses on the basis of each individual compound under investigation and therefore we do not provide a breakdown of such historical information in that format. We evaluate projects under development from an operational perspective, including such factors as results of individual compounds from laboratory/animal testing, patient results and enrollment statistics in clinical trials. It is important to note that multiple product candidates are often tested simultaneously. It is not possible to calculate each antibody’s supply costs. There are many different development processes and test methods that examine multiple product candidates at the same time. We have, historically, tracked our costs in the categories discussed below, specifically “research costs” and “product development costs” and by the types of costs outlined below.

Our research costs consist of outside costs associated with animal studies and costs associated with research and testing of our product candidates prior to reaching the clinical stage. Such research costs primarily include personnel costs, facilities, including depreciation, lab supplies, funding of outside contracted research and license fees. Our product development costs consist of costs from preclinical development (including manufacturing), conducting and administering clinical trials and patent expenses.

Research and development costs increased for the three months ended September 30, 2018, approximately $20.9 million to $38.2 million compared to the three months ended September 30, 2017. The increase in research and development costs for the three months ended September 30, 2018 compared to the three months ended September 30, 2017, relate primarily to increases in outside manufacturers' organizations services costs related to preparations to launch sacituzumab govitecan for commercial sales in the United States for patients with at least two prior lines of treatment for metastatic TNBC, an increase in outside consulting services to improve our manufacturing and regulatory functions associated with fulfilling the FDA requirements, an increase in clinical trial costs, and an increase in personnel costs in connection with preparations for the approval and launch of sacituzumab govitecan in the United States for patients with mTNBC.

Completion of clinical trials may take several years or more. The length of time varies according to the type, complexity and the disease indication of the product candidate. We estimate that clinical trials of the type we generally conduct are typically completed over the following periods:



		Estimated Completion Period
Clinical Phase		(Years)
I		0-1
II		1-2
III		1-4

The duration and cost of clinical trials through each of the clinical phases may vary significantly over the life of a particular project as a result of, among other things, the following factors:


•	the length of time required to recruit qualified patients for clinical trials;


•	the duration of patient follow-up in light of trial results;


•	the number of clinical sites required for trials; and


•	the number of patients that ultimately participate.

Sales and Marketing

Sales and marketing expenses increased during the three months ended September 30, 2018 compared to the three months ended September 30, 2017, primarily due to commercial launch preparation activities.

General and Administrative Expenses



					($ in thousands)
					(Decrease)/Increase
Three Months Ended September 30,	2018		2017		2018 vs 2017
Labor costs	$	5,069	$	1,155	$	3,914	nm
Legal and advisory fees	3,550		2,104		1,446		nm
Consulting services	1,662		520		1,142		nm
Other	2,850		871		1,979		nm
Total General and administrative	$	13,131	$	4,650	$	8,481	nm
nm- not meaningful

General and administrative expenses for the three months ended September 30, 2018 increased compared to the three months ended September 30, 2017 primarily due to increased labor costs and consulting services associated with the anticipated launch of sacituzumab govitecan in the United States for patients with mTNBC as well as an increase in legal and advisory fees.

Changes in fair market value of warrant liabilities

We recognized $1.2 million in non-cash income for the three months ending September 30, 2018, as a result of the net appreciation in the fair value of the outstanding warrants throughout the year compared to non-cash expense of $86.4 million for the three months ended September 30, 2017. During the three months ended September 30, 2018, there were 100,000 warrants exercised. The fair value of the 100,000 exercised warrants decreased $0.2 million from June 30, 2018 to the dates of exercise which has been recognized in the accompanying consolidated statements of comprehensive loss. Refer to "Note 7 - Stockholders' Equity" for more information.

Other financing expenses

On September 21, 2017, we entered into separate, privately negotiated Exchange Agreements with certain holders of the Convertible Senior Notes. As a result of the Agreements, we recognized a non-cash loss on induced exchanges of debt of approximately $13.0 million, representing the fair value of the incremental consideration (1.1 million common shares) paid to induce the holders to exchange their Convertible Senior Notes for equity, based on the closing market price of our Common Stock on the date of the Exchange Agreements.

Interest expense

Interest expense for the three months ended September 30, 2018, was $10.1 million, compared to $2.6 million for the three months ended September 30, 2017. The $7.5 million increase was due primarily to increased debt balances as a result of the RPI agreement. Refer to "Note 4 - Debt" for more information.

Insurance reimbursement

For the three months ended September 30, 2018 we received $0.2 million in insurance reimbursements related to legal costs incurred during our proxy contest during fiscal 2017, compared to $4.4 million for the three months ending September 30, 2017.

Income tax (expense) benefit

There was no income tax expense for the three months ended September 30, 2018.

The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) was enacted on December 22, 2017, and, among other changes, reduced the federal statutory tax rate from 35.0% to 21.0%. In accordance with U.S. GAAP for income taxes, as well as SEC Staff Accounting Bulletin No. 118 (“SAB 118”), the company made a reasonable estimate of the impacts of the 2017 Tax Act in its results for the year ended June 30, 2018. SAB 118 allows for a measurement period of up to one year to complete the company’s accounting for the impacts of the 2017 Tax Act from the date of enactment. As of September 30, 2018, no additional adjustments have been made to the provisional amounts recorded as of June 30, 2018. The company will continue to evaluate the impacts as additional clarification and implementation guidance related to the 2017 Tax Act is released.

Liquidity and Capital Resources

Since its inception in 1982, Immunomedics’ principal sources of funds have been the private and public sale of equity and debt securities, and revenues from licensing agreements, including up-front and milestone payments, funding of development programs, and other forms of funding from collaborations.

As of September 30, 2018, we had $585.5 million in cash, cash equivalents and marketable securities. We believe our projected financial resources are adequate to (i) support our next phase of growth as we focus on commercializing and developing sacituzumab govitecan in mTNBC, advanced UC, advanced HR+ BC, advanced NSCLC and other indications of high medical need, (ii) further build our clinical, medical affairs, commercial and manufacturing infrastructure, (iii) begin to commercialize sacituzumab govitecan globally, and (iv) fund operations into 2021 or beyond assuming we meet our regulatory and commercial objectives. However, in case of regulatory delays, alterations to our commercial forecast, or other unforeseen events, we may require additional funding in 2021. Potential sources of funding in such a case could include (i) the entrance into potential development and commercial partnerships to advance and maximize our full pipeline for mTNBC and beyond in the United States and globally, and (ii) potential private and capital markets financing.

Actual results could differ materially from our expectations as a result of a number of risks and uncertainties, including the risks described in Item 1A Risk Factors, “Factors That May Affect Our Business and Results of Operations,” and elsewhere in this Quarterly Report on Form 10-Q. Our working capital and working capital requirements are affected by numerous factors and such factors may have a negative impact on our liquidity. Principal among these are the success of product commercialization and marketing products, the technological advantages and pricing of our products, the impact of the regulatory requirements applicable to us, and access to capital markets that can provide us with the resources, when necessary, to fund our strategic priorities.



	($ in thousands)
	Three Months Ended September 30,
	2018			2017
Net cash used in operating activities	$	(49,652	)	$	(20,570	)
Net cash provided by investing activities	18,634			14,090
Net cash provided by financing activities	339			6,048

Net cash used in operating activities. Net cash used in operating activities during the three months ended September 30, 2018 was approximately $49.7 million, compared to $20.6 million during the three months ended September 30, 2017, an increase in cash used in operating activities of $29.1 million. The increase in cash used in operating activities for the period was primarily due to changes in the fair value of warrant liabilities offset by a decrease in the net loss.

Net cash provided by investing activities. Net cash provided by investing activities during the three months ended September 30, 2018 was $18.6 million, compared to cash provided by investing activities of $14.1 million during the three months ended

September 30, 2017; an increase of approximately $4.5 million, due primarily to an increase of $6.7 million in proceeds from sales or maturities of marketable securities offset by a $2.4 million increase in purchases of property and equipment.

Net cash provided by financing activities. Net cash provided by financing activities during the three months ended September 30, 2018 was $0.3 million, compared to $6.0 million of cash provided by financing activities during the three months ended September 30, 2017. The decrease of $5.7 million was due primarily to our sale of common stock and warrants, net of related expenses in the prior year.

Working Capital and Cash Requirements

Working capital was $549.8 million as of September 30, 2018, compared to $604.6 million as of June 30, 2018, a $54.8 million decrease. The decrease in cash was primarily due to our preparations for the approval and launch of sacituzumab govitecan in the United States for patients with mTNBC.

We expect to continue to fund our operations with our current financial resources. Potential sources of funding include (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing our full pipeline for mTNBC and beyond, (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), and (iii) potential equity and debt financing transactions.

Until we can generate significant cash through (i) the entrance into various potential strategic partnerships towards advancing and maximizing our full pipeline for mTNBC and beyond, or (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), we expect to continue to fund our operations with our current financial resources. In the future, if we cannot obtain sufficient funding through the above methods, we could be required to finance future cash needs through the sale of additional equity and/or debt securities in capital markets. However, there can be no assurance that we will be able to raise the additional capital needed to complete our pipeline of research and development programs on commercially acceptable terms, if at all. The capital markets have experienced volatility in recent years, which has resulted in uncertainty with respect to availability of capital and hence the timing to meet an entity’s liquidity needs. Our existing debt may also negatively impact our ability to raise additional capital. If we are unable to raise capital on acceptable terms, our ability to continue our business would be materially and adversely affected. Actual results could differ materially from our expectations as a result of a number of risks and uncertainties, including the risks described in Item 1A Risk Factors, “Factors That May Affect Our Business and Results of Operations,” and elsewhere in our Quarterly Report on Form 10-Q. Our working capital and working capital requirements are affected by numerous factors and such factors may have a negative impact on our liquidity. Principal among these are the success of product commercialization and marketing products, the technological advantages and pricing of our products, the impact of the regulatory requirements applicable to us, and access to capital markets that can provide us with the resources, when necessary, to fund our strategic priorities.

Contractual Commitments

On September 11, 2018, we entered into a MSA with Samsung, pursuant to which Samsung will provide the Company with certain biologics manufacturing and development services in accordance with one or more product specific agreements. In connection with the MSA, on September 11, 2018, we also entered into a product specific agreement with Samsung (the "PSA") for the production of hRS7, the antibody used in the Company’s lead antibody drug conjugate candidate, sacituzumab govitecan. As a result of entering into the PSA with Samsung, our purchase commitments increased during the quarter. Our total commitments and purchase obligations for manufacturing and consulting services now total $40.0 million in 2019, $31.6 million in 2020 and $10.4 million in 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk has not changed materially since our disclosure in Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended June 30, 2018, as amended.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures: We maintain controls and procedures designed to ensure that we are able to collect the information we are required to disclose in the reports we file with the SEC, and to record, process, summarize and disclose this information within the time periods specified in the rules promulgated by the SEC. Our Chief Executive Officer and Principal Financial Officer are responsible for establishing and maintaining these disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and, as required by the rules of the SEC, evaluating their effectiveness. Based on their evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Principal Financial Officer believe that these procedures are effective to ensure that we are able to collect, process and disclose the information we are required to disclose in the reports we file with the SEC within the required time periods.

(b)Changes in Internal Controls over Financial Reporting: There were no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information called for by this item is incorporated by reference to "Note 11 - Commitments and Contingencies" of Notes to Unaudited Condensed Consolidated Financial Statements contained in Part I Item 1 of the Quarterly Report on Form 10-Q.

Item 1A. RISK FACTORS

Factors That May Affect Our Business and Results of Operations

Our business is subject to certain risks and uncertainties, each of which could materially adversely affect our business, financial condition, cash flows and results of operations.

Risks Relating to Our Business, Operations and Product Development

We have a long history of operating losses and it is likely that our operating expenses will continue to exceed our revenues for the foreseeable future.

We have incurred significant operating losses since our formation in 1982. We continue to spend our cash resources to fund our research and development programs and, subject to adequate funding, we expect these expenses to increase for the foreseeable future. Our only significant sources of revenue in recent years have been derived from collaboration agreements and sales of our LeukoScan^® product in certain European countries. There can be no assurance that we will be profitable in future quarters or other periods. Additionally, the only product sales we have earned to date have come from the limited sales of our LeukoScan^® diagnostic imaging product for which our (i) patent protection has expired and (ii) future sales were discontinued during the third quarter of fiscal year 2018. In addition, we have made the strategic decision to focus on our therapeutic pipeline. We have never had product sales of any therapeutic product. We expect to experience significant operating losses as we invest further in our research and development activities while simultaneously attempting to develop and commercialize our other therapeutic product candidates. If we are unable to develop commercially viable therapeutic products, certain obligations the Company has to third parties, including, without limitation, our obligation to pay RPI royalties on certain sacituzumab govitecan revenues pursuant to the Royalty Agreement may also erode profitability of this product. If we are unable to develop commercially viable therapeutic products or to license them to third parties, it is likely that we will never achieve significant revenues or become profitable, either of which would jeopardize our ability to continue as a going concern.

We have significant future capital needs and may be unable to raise capital when needed, which could force us to delay or reduce our clinical development efforts.

We believe our financial resources are adequate to support the Company’s next phase of growth as it focuses on developing sacituzumab govitecan in mTNBC, advanced UC and other indications of high medical need and on further building its clinical, medical affairs, commercial and manufacturing infrastructure, as well as provide sufficient cash to fund operations well into the future.

We will require additional funding in the future to complete our clinical trials currently planned or underway, continue research and new development programs, and continue operations. Potential sources of funding include (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing our full pipeline for mTNBC and beyond, (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), and (iii) potential equity and debt financing transactions.

Our most advanced therapeutic product candidates are still only in the clinical development stage, and will require us to raise capital in the future in order to fund further expensive and time-consuming studies before they can even be submitted for final regulatory approval. A failure of a clinical trial could severely harm our business and results of operations.

Clinical trials involve the administration of a product candidate to patients who are already extremely ill, making patient enrollment often difficult and expensive. Moreover, even in ideal circumstances where the patients can be enrolled and then followed for the several months or more required to complete the study, the trials can be suspended, terminated, delayed or otherwise fail for any number of reasons, including:


•	later-stage clinical trials may raise safety or efficacy concerns not readily apparent in earlier trials or fail to meet the primary endpoint;


•	unforeseen difficulties in manufacturing the product candidate in compliance with all regulatory requirements and in the quantities needed to complete the trial which may become cost-prohibitive;


•	we or any of our collaboration partners may experience delays in obtaining, or be unable to obtain, agreement for the conduct of our clinical trials from the FDA, IRBs, or other reviewing entities at clinical sites selected for participation in our clinical trials;


•	while underway, the continuation of clinical trials may be delayed, suspended or terminated due to modifications to the clinical trial’s protocols based on interim results obtained or changes required or conditions imposed by the FDA, an IRB, a data and safety monitoring board (“DSMB”), or any other regulatory authority;


•	our third-party contractors may fail to meet their contractual obligations to us in a timely manner;


•	the FDA or other regulatory authorities may impose a clinical hold, for example based an inspection of the clinical trial operations or trial sites;


•	we or any of our collaboration partners may suspend or cease trials in our or their sole discretion;


•	during the long trial process alternative therapies may become available which make further development of the product candidate impracticable; and


•	if we are unable to obtain the additional capital we need to fund all of the clinical trials we foresee, we may be forced to cancel or otherwise curtail such trials and other studies.

Any substantial delay in successfully completing clinical trials for our product candidates, sacituzumab govitecan and labetuzumab govitecan, could severely harm our business and results of operations.

Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, the Company may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between the company and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of regulatory approval of one or more of our product candidates.

Our clinical trials may not adequately show that our drugs are safe or effective, and a failure to achieve the planned endpoints could result in termination of product development.

Progression of our drug products through the clinical development process is dependent upon our trials indicating our drugs have adequate safety and efficacy in the patients being treated by achieving pre-determined safety and efficacy endpoints according to the trial protocols. Failure to achieve either of these endpoints could result in delays in our trials; require the performance of additional unplanned trials or termination of any further development of the product for the intended indication.

These factors could result in delays in the development of our product candidates and could result in significant unexpected costs or the termination of programs.

Should the clinical development process be successfully completed, our ability to derive revenues from the sale of therapeutics will depend upon our first obtaining FDA as well as foreign regulatory approvals, all of which are subject to a number of unique risks and uncertainties.

Even if we are able to demonstrate the safety and efficacy of our product candidates in clinical trials, if we fail to gain timely approval to commercialize our product candidates from the FDA and other foreign regulatory authorities, we will be unable to generate the revenues we will need to build our business. The FDA or comparable regulatory authorities in other countries may delay, limit or deny approval of our product candidates for various reasons. For example, such authorities may disagree with the design, scope or implementation of our clinical trials; or with our interpretation of data from our preclinical studies or clinical trials; or may otherwise take the position that our product candidates fail to meet the requirements and standards for regulatory approval. There is limited FDA precedent or guidance on ADCs, and ADC product candidates may present more complex review considerations than conventional drugs, given their biologic (antibody), drug, and linker components. There are numerous FDA personnel assigned to review different aspects of a BLA, and uncertainties can be presented by their ability to exercise judgment and discretion during the review process. During the course of review, the FDA may request or require additional preclinical, clinical, CMC (chemistry, manufacturing, and control), or other data and information, and the development and provision of these data and information may be time consuming and expensive. Regulatory approvals may not be granted on a timely basis, if at all, and even if and when they are granted, they may not cover all the indications for which we seek approval. For example, while we may develop a product candidate with the intention of addressing a large, unmet medical need, the FDA may only approve the use of the drug for indications affecting a relatively small number of patients, thus greatly reducing the market size and our potential revenues. The approvals may also contain significant limitations in the form of warnings, precautions or contraindications with respect to conditions of use, which could further narrow the size of the market. In certain countries, even if the health regulatory authorities approve a drug, it cannot be marketed until pricing for the drug is also approved. Finally, even after approval can be obtained, we may be required to recall or withdraw a product as a result of newly discovered safety or efficacy concerns, either of which would have a materially adverse effect on our business and results of operations.

In order to fund future operations, we will need to raise significant amounts of additional capital. Because it can be difficult for a mid-cap company like ours to raise equity capital on acceptable terms, we cannot assure you that we will be able to obtain the necessary capital when we need it, or on acceptable terms, if at all.

Even if our technologies and product candidates are superior, if we lack the capital needed to bring our future products to market, we will never be successful. We have obtained the capital necessary to fund our research and development programs to date primarily from the following sources:


•	upfront payments, milestone payments, and payments for limited amounts of our antibodies received from licensing partners;


•	proceeds from the public and private sale of our equity or debt securities; and


•	limited product sales of LeukoScan^®(which were discontinued during February 2018), licenses, grants and interest income from our investments.

Over the long term, we expect to commercialize sacituzumab govitecan in mTNBC in the United States and globally, to expand sacituzumab govitecan to treat patients with other solid tumors, including UC, CRPC, SCLC, NSCLC and other serious cancers, to expand research and development activities to continue to expand and we do not believe we will have adequate cash to continue commercial expansion and development of sacituzumab govitecan, or to complete development of product candidates in line with our pipeline included in our long term corporate strategy. Our capital requirements are dependent on numerous factors, including:


•	the rate of progress of commercialization of sacituzumab govitecan in mTNBC and our ability to develop it for other cancers;


•	the rate at which we progress our research programs and the number of product candidates we have in preclinical and clinical development at any one time;


•	the cost of conducting clinical trials involving patients in the United States, Europe and possibly elsewhere;


•	our need to establish the manufacturing capabilities necessary to produce the quantities of our product candidates we project we will need;


•	the time and costs involved in obtaining FDA and foreign regulatory approvals;


•	the cost of first obtaining, and then defending, our patent claims and other intellectual property rights; and


•	our ability to enter into licensing and other collaborative agreements to help offset some of these costs.

There may be additional cash requirements for many reasons, including, but not limited to, changes in our commercial expansion plans, our research and development plans, the need for unexpected capital expenditures or costs associated with any acquisitions of other businesses, assets or technologies that we may choose to undertake and marketing and commercialization of our product candidates. If we deplete our existing capital resources, we will be required to either obtain additional capital quickly, or significantly reduce our operating expenses and capital expenditures, either of which could have a material adverse effect on us.

Until we can generate significant cash through either (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing the Company’s full pipeline for mTNBC and beyond, or (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), we expect to continue to fund our operations with our current financial resources. We believe our projected financial resources are adequate to (i) support our next phase of growth as we focus on commercializing and developing sacituzumab govitecan in mTNBC, advanced UC, advanced HR+ BC, advanced NSCLC and other indications of high medical need, (ii) further build our clinical, medical affairs, commercial and manufacturing infrastructure, (iii) begin to commercialize sacituzumab govitecan globally, and (iv) fund operations into 2021 or beyond assuming we meet our regulatory and commercial objectives. If, however, we cannot obtain sufficient funding through either (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing the Company’s full pipeline for mTNBC and beyond, or (ii) through the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), we could be required to finance future cash needs through the sale of additional equity and/or debt securities in capital markets. However, there can be no assurance that we will be able to raise the additional capital needed to complete our pipeline of research and development programs on commercially acceptable terms, if at all. The capital markets have experienced volatility in recent years, which has resulted in uncertainty with respect to availability of capital and hence the timing to meet an entity’s liquidity needs. The Company’s existing debt will also negatively impact the Company’s ability to raise additional capital. If the Company is unable to raise capital on acceptable terms, its ability to continue its business would be materially and adversely affected. Having insufficient funds may require us to delay, scale-back, or eliminate some or all of our programs, or renegotiate less favorable terms than we would otherwise choose. Failure to obtain adequate financing also may adversely affect our ability to operate as a going concern.

Additionally, if we raise funds by issuing equity securities, dilution to existing stockholders would result; and if we raise funds by incurring additional debt financing, the terms of the debt may involve future cash payment obligations and/or conversion to equity as well as restrictions that may limit our ability to operate our business.

If we, or any of our collaboration partners, or our or their contract manufacturers, cannot successfully and efficiently manufacture the compounds that make up our products and product candidates, our ability, and the ability of our collaboration partners, to sell products and conduct clinical trials will be impaired.

Our ability to conduct our preclinical and clinical research and development programs depends, in large part, upon our ability to manufacture our proprietary compounds in accordance with the FDA and other regulatory requirements. We have limited historical experience in manufacturing these compounds in significant quantities, and we may not be able to do so in the quantities required to commercialize these products. Any interruption in manufacturing at this site, whether by natural acts or otherwise, could significantly and adversely affect our operations, and delay our research and development programs.

We and our collaboration partners also depend on third parties to provide certain raw materials, and contract manufacturing and processing services. All manufacturers of biopharmaceutical products must comply with current Good Manufacturing Practice regulations or cGMPs, required by the FDA and other regulatory agencies. Such regulations address, among other matters, controls in manufacturing processes, quality control and quality assurance requirements and the maintenance of proper records and documentation. The FDA and other regulatory agencies routinely inspect manufacturing facilities, including in connection with the review of a BLA. The FDA generally will issue a notice on Form 483 if it finds issues with respect to its inspections, to which the facility must adequately respond in order to avoid escalated regulatory concerns. If our manufacturing facility or those facilities of our collaboration partners and our respective contract manufacturers or processors do not comply with applicable cGMPs and other regulatory requirements, in addition to regulatory enforcement, we may be subject to product liability claims, we may be unable to meet clinical demand for our products, and we could suffer delays in the progress of clinical trials for products under development and of potential approval and commercialization.

Although historically we have been a research and development company, we plan to commercialize our lead product candidate internally rather than license such asset. There can be no assurance that we will be successful in developing and expanding commercial operations or balancing our research and development activities with our commercialization activities.

We have historically been engaged primarily in research and development activities, but plan to commercialize our lead product candidate, sacituzumab govitecan, ourselves. There can be no assurance that we will be able to successfully manage the balance of our research and development operations with our planned commercialization activities. Potential investors should be aware of the problems, delays, expenses and difficulties frequently encountered by companies balancing development of product candidates, which can include problems such as unanticipated issues relating to clinical trials and receipt of approvals from the FDA and foreign regulatory bodies, with commercialization efforts, which can include problems relating to managing manufacturing and supply, reimbursement, marketing problems and additional costs. Our product candidates will require significant additional research and clinical trials, and we will need to overcome significant regulatory burdens prior to commercialization in the United States and other countries. In addition, we may be required to spend significant funds on building out our commercial operations. If we are unable to develop commercially viable therapeutic products, certain obligations the Company has to third parties, including, without limitation, our obligation to pay RPI royalties on certain sacituzumab govitecan revenues pursuant to the funding agreement may also erode profitability of this product. There can be no assurance that after the expenditure of substantial funds and efforts, we will successfully develop and commercialize any of our product candidates, generate any significant revenues or ever achieve and maintain a substantial level of sales of our products.

We may not successfully establish and maintain collaborative and licensing arrangements, which could adversely affect our ability to develop and commercialize certain of our product candidates. Any of our collaboration partners may not adequately perform their responsibilities under our agreements, which could adversely affect our development and commercialization program.

A key element of our business strategy has been to develop, market and commercialize our product candidates through collaborations with more established pharmaceutical companies. To the extent we continue to rely on this business strategy, we may not be able to maintain or expand these licenses and collaborations or establish additional licensing and collaboration arrangements necessary to develop and commercialize any of our product candidates. Even if we are able to maintain or establish licensing or collaboration arrangements, these arrangements may not be on favorable terms and may contain provisions that will restrict our ability to develop, test and market our product candidates. Any failure to maintain or establish licensing or collaboration arrangements on favorable terms could adversely affect our business prospects, financial condition or ability to develop and commercialize our product candidates.

We expect to rely at least in part on third party collaborators to perform a number of activities relating to the development and commercialization of certain of our product candidates, including the manufacturing of product materials, the design and conduct of clinical trials for certain of our product candidates, and potentially the obtaining of regulatory approvals and marketing and distribution of any successfully developed products. Our collaborative partners may also have or acquire rights to control aspects of our product development and clinical programs. As a result, we may not be able to conduct these programs in the manner or on the time schedule we currently contemplate. In addition, if any of these collaborative partners withdraw support for our programs or product candidates or otherwise impair their development, our business could be negatively affected. Our expenses may also increase as a result of our plan to undertake these activities internally to commercialize sacituzumab govitecan.

In addition, our success depends on the performance of our collaborators of their responsibilities under these arrangements. Some potential collaborators may not perform their obligations in a timely fashion or in a manner satisfactory to us. Because such agreements may be exclusive, we may not be able to enter into a collaboration agreement with any other company covering the same product field during the applicable collaborative period. In addition, our collaborators’ competitors may not wish to do business with us at all due to our relationship with our collaborators. If we are unable to enter into additional product discovery and development collaborations, our ability to sustain or expand our business will be significantly diminished.

Our future success will depend upon our ability to first obtain and then adequately protect our patent and other intellectual property rights, as well as avoiding the infringement of the rights of others.

Our future success will be highly dependent upon our ability to first obtain and then defend the patent and other intellectual property rights necessary for the commercialization of our product candidates. We have filed numerous patent applications on the technologies and processes that we use in the United States and certain foreign countries. Although we have obtained a number of issued United States patents to date, the patent applications owned or licensed by us may not result in additional patents being issued. Moreover, these patents may not afford us the protection we need against competitors with similar technologies or products. A number of jurisdictions where we have sought, or may in the future choose to seek, intellectual property protection, have intellectual property laws and patent offices which are still developing. Accordingly, we may have difficulty obtaining intellectual property protection in these markets, and any intellectual property protections which we do obtain may be less protective than in the United States, which could have an adverse effect on our operations and financial prospects.

The successful development of therapeutic products frequently requires the application of multiple technologies that may be subject to the patent or other intellectual property rights of third parties. Although we believe it is likely we will need to license technologies and processes from third parties in the ordinary course of our business, we are not currently aware of any material conflict involving our technologies and processes with any valid patents or other intellectual property rights owned or licensed by others that would affect commercial sales of sacituzumab govitecan or other products starting in 2019. In the event that a third party was to claim such a conflict existed, they could sue us for damages as well as seek to prevent us from commercializing our product candidates. It is possible that a third party could successfully claim that our products infringe on their intellectual property rights. Uncertainties resulting from the litigation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Any patent litigation or other proceeding, even if resolved in our favor, would require significant financial resources and management time.

Some of our competitors may be able to sustain these costs more effectively than we can because of their substantially greater financial and managerial resources. If a patent litigation or other proceeding is resolved unfavorably to us, we may be enjoined from manufacturing or selling our products without a license from the other party, in addition to being held liable for significant damages. We may not be able to obtain any such license on commercially acceptable terms, if at all.

In addition to our reliance on patents, we attempt to protect our proprietary technologies and processes by relying on trade secret laws, nondisclosure and confidentiality agreements and licensing arrangements with our employees and other persons who have access to our proprietary information. These agreements and arrangements may not provide meaningful protection for our proprietary technologies and processes in the event of unauthorized use or disclosure of such information. In addition, our competitors may independently develop substantially equivalent technologies and processes or otherwise gain access to our trade secrets or technology, either of which could materially and adversely affect our competitive position.

Expiry of our intellectual property rights could lead to increased competition.

Even where we are able to obtain and then defend patent and other intellectual property rights necessary for research, development and commercialization of our product candidates, such intellectual property rights will be for a limited term. Where patents which we own or license expire, the technology the subject of the patent may be utilized by third parties in research and development or competing products (for example, biosimilars of a patented product may be manufactured by third parties once

the patent expires). While we endeavor to maintain robust intellectual property protection, as our existing issued patents expire it may materially and adversely affect our competitive position.

We face substantial competition in the biotechnology industry and may not be able to compete successfully against one or more of our competitors.

The biotechnology industry is highly competitive, particularly in the area of diagnostic and therapeutic oncology products. In recent years, there have been extensive technological innovations achieved in short periods of time, and it is possible that future technological changes and discoveries by others could result in our products and product candidates quickly becoming uncompetitive or obsolete. A number of companies, including Amgen, AstraZeneca, Bayer Healthcare Pharmaceuticals, Biogen Idec, Bristol-Myers Squibb, Celgene, Eli Lilly, Genmab, GlaxoSmithKline, Immunogen, Johnson & Johnson, Merck, Merck Serono, Novartis, Pfizer, Roche, and Seattle Genetics, are engaged in the development of therapeutic oncology products. Many of these companies have significantly greater financial, technical and marketing resources than we do. In addition, many of these companies have more established positions in the pharmaceutical industry and are therefore better equipped to develop, commercialize and market oncology products. Even some smaller competitors may obtain a significant competitive advantage over us if they are able to discover or otherwise acquire patentable inventions, form collaborative arrangements or merge with larger pharmaceutical companies. Further, even if we are able to successfully develop and commercialize products, other manufacturers operating in emerging markets may also have a competitive advantage over us with respect to competing products due to their ability to manufacture with a lower cost base.

We expect to face increasing competition from universities and other non-profit research organizations. These institutions carry out a significant amount of research and development in the field of antibody-based technologies and they are increasingly aware of the commercial value of their findings. As a result, they are demanding greater patent and other proprietary rights, as well as licensing and future royalty revenues. It is possible that such competition could come from universities with which we have, or have previously had, collaborative research and development relationships, notwithstanding our efforts to protect our intellectual property in the course of such relationships.

We may be liable for contamination or other harm caused by hazardous materials that we use in the operations of our business.

In addition to laws and regulations enforced by the FDA, we are also subject to regulation under various other foreign, federal, state and local laws and regulations. Our manufacturing and research and development programs involve the controlled use of viruses, hazardous materials, chemicals and various radioactive compounds. The risk of accidental contamination or injury from these materials can never be completely eliminated, and if an accident occurs we could be held liable for any damages that result, which could exceed our available resources.

The nature of our business exposes us to significant liability claims, and our insurance coverage may not be adequate to cover any future claims.

The use of our compounds in clinical trials and any future sale exposes us to liability claims that could be substantial. These claims might be made directly by healthcare providers, medical personnel, patients, consumers, pharmaceutical companies, and others selling or distributing our compounds. While we currently have product liability insurance that we consider adequate for our current needs, we may not be able to continue to obtain comparable insurance in the future at an acceptable cost, if at all. If for any reason we cannot maintain our existing or comparable liability insurance, our ability to clinically test and market products could be significantly impaired. Moreover, the amount and scope of our insurance coverage, as well as the indemnification arrangements with third parties upon which we rely, may be inadequate to protect us in the event of a successful product liability claim. Any successful claim in excess of our insurance coverage could materially and adversely affect our financial condition and operating results.

Certain potential for conflicts of interest, both real and perceived, exist which could result in expensive and time-consuming litigation.

Certain of our former officers and directors have relationships and agreements, both with us as well as among themselves and their respective affiliates, which create the potential for both real, as well as perceived, conflicts of interest. These include Dr. David M. Goldenberg, our former Chairman of our Board of Directors, our former Chief Scientific Officer and our former Chief Patent Officer, and Ms. Cynthia L. Sullivan, a former director and our former President and Chief Executive Officer (who is also the wife of Dr. Goldenberg). Dr. Goldenberg is also a minority stockholder, of our majority-owned subsidiary, IBC. Dr. Goldenberg was the primary inventor of new intellectual property for Immunomedics and IBC and was largely responsible for allocating ownership between the two companies. Immunomedics has incurred expenses on behalf of the IBC operations, including interest,

over the past thirteen years. As of September 30, 2018, IBC has a liability to Immunomedics Inc. which is eliminated in consolidation.

On January 8, 2018, Morris Rosenberg joined the Company as Chief Technology Officer and became a full-time employee and was permitted to continue to provide certain limited outside consulting services through M Rosenberg BioPharma Consulting LLC.

As a result of these and other relationships, the potential for both real and perceived conflicts of interest exists and disputes could arise over the allocation of funds, research projects and ownership of intellectual property rights. In addition, in the event that we become involved in stockholder litigation regarding these potential conflicts, we might be required to devote significant resources and management time defending the company from these claims, which could adversely affect our results of operations.

The commercial success of our product candidates depends on the availability and sufficiency of third-party payor coverage and reimbursement. Given that recent cancer therapeutics for solid cancers such as the ones we are developing can cost approximately in excess of $12,500 a month, even if our product candidates become available for sale it is likely that federal and state governments, insurance companies and other payors of health care costs will try to first limit the use of these drugs to certain patients, and may be reluctant to provide a level of reimbursement that permits us to earn a significant profit on our investment, if any.

Our ability to successfully commercialize therapeutic products will depend, in significant part, on the extent to which hospitals and physicians can obtain appropriate reimbursement levels for the cost of our products and related treatment. Third-party payors are increasingly challenging the prices charged for diagnostic and therapeutic products and related services. In addition, legislative proposals to reform health care or reduce government insurance programs may result in lower prices or the actual inability of prospective customers to purchase our products. Furthermore, even if reimbursement is available, it may not be available at price levels sufficient for us to realize a positive return on our investment.

The United States government, state legislatures and foreign governmental entities have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage and requirements for substitution of generic products for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could exclude or limit our product candidates from coverage and limit payments for pharmaceuticals.

In addition, we expect that increased emphasis on managed care and cost containment measures in the United States by third-party payors and government authorities to continue and will place pressure on pharmaceutical pricing and coverage. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more product candidates for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

If we are unable to obtain and maintain sufficient third-party coverage and adequate reimbursement for our product candidates, the commercial success of our product candidates may be greatly hindered and our financial condition and results of operations may be materially and adversely affected.

Our products may not achieve market acceptance.

If any of our product candidates fail to achieve sufficient market acceptance, we may not be able to generate sufficient revenue to become profitable. The degree of market acceptance of our product candidates, if and when they are approved for commercial sale, will depend on a number of factors, including but not limited to:


•	the timing of our receipt of marketing approvals, the terms of such approvals and the countries in which such approvals are obtained;


•	the safety, efficacy, reliability and ease of administration of our product candidates;


•	the prevalence and severity of undesirable side effects and adverse events;


•	the extent of the limitations or warnings required by the FDA or comparable regulatory authorities in other countries to be contained in the labeling of our product candidates;


•	the clinical indications for which our product candidates are approved;


•	the availability and perceived advantages of alternative therapies;


•	any publicity related to our product candidates or those of our competitors;


•	the quality and price of competing products;


•	our ability to obtain third-party payor coverage and sufficient reimbursement;


•	the willingness of patients to pay out of pocket in the absence of third-party payor coverage; and


•	the selling efforts and commitment of our commercialization collaborators.

If our approved product candidates fail to receive a sufficient level of market acceptance, our ability to generate revenue from sales of our product candidates will be limited, and our business and results of operations may be materially and adversely affected.

A portion of our funding has come from federal government grants and research contracts. Due to reductions in funding, we may not be able to rely on these grants or contracts as a continuing source of funds.

During the last few years, we have generated revenues from awards made to us by the National Institutes of Health and the Department of Defense to partially fund some of our programs. We cannot rely on grants or additional contracts as a continuing source of funds. Funds available under these grants and contracts must be applied by us toward the research and development programs specified by the government rather than for all our programs generally. The government’s obligation to make payments under these grants and contracts is subject to appropriation by the United States Congress for funding in each year. It is possible that Congress or the government agencies that administer these government research programs will continue to scale back these programs or terminate them due to their own budgetary constraints, as they have recently been doing. Additionally, these grants and research contracts are subject to adjustment based upon the results of periodic audits performed on behalf of the granting authority. Consequently, the government may not award grants or research contracts to us in the future, and any amounts that we derive from existing awards may be less than those received to date. In those circumstances, we would need to provide funding on our own, obtain other funding, or scale back or terminate the affected program. In particular, we cannot assure you that any currently-contemplated or future efforts to obtain funding for our product candidate programs through government grants or contracts will be successful, or that any such arrangements which we do conclude will supply us with sufficient funds to complete our development programs without providing additional funding on our own or obtaining other funding. Where funding is obtained from government agencies or research bodies, our intellectual property rights in the research or technology funded by the grant are typically subject to certain licenses to such agencies or bodies, which could have an impact on our utilization of such intellectual property in the future.

We face a number of risks relating to the maintenance of our information systems and our use of information relating to clinical trials.

In managing our operations, we rely on computer systems and electronic communications, including systems relating to record keeping, financial information, sourcing, and back-up and the Internet (“Information Systems”). Our Information Systems include the electronic storage of financial, operational, research, patient and other data. Our Information Systems may be subject to interruption or damage from a variety of causes, including power outages, computer and communications failures, system capacity constraints, catastrophic events (such as fires, tornadoes and other natural disasters), cyber risks, computer viruses and security breaches. If our Information Systems cease to function properly, are damaged or are subject to unauthorized access, we may suffer interruptions in our operations, be required to make significant investments to fix or replace systems and/or be subject to fines, penalties, lawsuits, or government action. The realization of any of these risks could have a material adverse effect on our business, financial condition and results of operations. Our clinical trials information and patient data (which may include personally identifiable information) is part of our Information Systems and is therefore subject to all of the risks set forth above, notwithstanding our efforts to code and protect such information.

Risks Related to Government Regulation of our Industry

Legislative or regulatory reform of the healthcare system may affect our ability to sell our products profitably.

In recent years, there have been numerous initiatives on the federal and state levels in the United States for comprehensive reforms affecting the payment for, the availability of and reimbursement for healthcare services. There have been a number of

federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States. For example, the Patient Protection and Affordable Care Act (“ACA”) and the Health Care and Education Reconciliation Act of 2010, which amends the ACA, collectively, the United States Health Reform Laws, were signed into law in the United States in March 2010.

Among the provisions of the ACA of importance to the pharmaceutical industry are the following:

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the Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition of Medicare Part B and Medicaid coverage of the manufacturer's outpatient drugs furnished to Medicaid patients. Effective in 2010, the ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers' rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price, or AMP, to 23.1% of AMP, establishing new methodologies by which AMP is calculated and rebates owed by manufacturers under the Medicaid Drug Rebate Program are collected for drugs that are inhaled, infused, instilled, implanted or injected, adding a new rebate calculation for "line extensions" (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, expanding the universe of Medicaid utilization subject to drug rebates to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations, and expanding the population potentially eligible for Medicaid drug benefits;

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the expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals beginning in April 2010 and by adding new mandatory eligibility categories for certain individuals with income at or below 133.0% of the federal poverty level beginning in 2014, thereby potentially increasing both the volume of sales and manufacturers' Medicaid rebate liability;

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in order for a pharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to United States government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The required 340B discount on a given product is calculated based on the AMP and Medicaid rebate amounts reported by the manufacturer. Effective in 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although, under the current state of the law, with the exception of children's hospitals, these newly eligible entities will not be eligible to receive discounted 340B pricing on orphan drugs when used for the orphan indication. In addition, as 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase. Recent proposed guidance from the United States Department of Health and Human Services Health Resources and Services Administration, if adopted in its current form, may affect manufacturers' rights and liabilities in conducting audits and resolving disputes under the 340B program;


•	the ACA imposed a requirement on manufacturers of branded drugs to provide a 50% (and 70% commencing on January 1, 2019) discount off the negotiated price of branded drugs dispensed to Medicare Part D patients in the coverage gap (i.e., the donut hole);


•	the ACA imposed an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;


•	the ACA implemented the Physician Payments Sunshine Act;


•	the ACA requires annual reporting of drug samples that manufacturers and distributors provide to physicians;


•	the ACA expanded healthcare fraud and abuse laws in the United States, including the False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for non-compliance;


•	the ACA established a licensing framework for follow-on biologics;


•	a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with the funding for such research. The research conducted by the Patient-Centered Outcomes Research Institute may affect the market for certain pharmaceutical products by influencing decisions relating to coverage and reimbursement rates; and

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the ACA established the Center for Medicare and Medicaid Innovation within the Centers for Medicare & Medicaid Center, or Innovation Center, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. The Innovation Center has been funded through 2019, and funding will be automatically renewed for each 10-year budget window thereafter.

Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the ACA. Since January 2017, President Trump has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law. The Tax Cuts and Jobs Act of 2017, or the TCJA, includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the "individual mandate". Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called "Cadillac" tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Further, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to close the coverage gap in most Medicare drug plans, commonly referred to as the "donut hole".

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation's automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of up to 2.0% per fiscal year, which went into effect in 2013, and due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2027 unless additional Congressional action is taken. In January 2013, then-President Barack Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which, among others, delayed for another two months the budget cuts mandated by these sequestration provisions of the Budget Control Act of 2011. The ATRA also reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material and adverse effect on our customers and accordingly, our financial operations.

Further, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent United States Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. At the federal level, the Trump administration's budget proposal for fiscal year 2019 contains further drug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. Additionally, on May 11, 2018, President Trump laid out his administration's "Blueprint" to lower drug prices and reduce out of pocket costs of drugs, as well as additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of product candidates paid by consumers. HHS has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority. Although most of these, and other, proposals will require authorization through additional legislation to become effective, the United States Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs, including by addressing the role of pharmacy benefit managers in the supply chain. On October 15, 2018, the Department of Health and Human Services Secretary, Alex Azar, unveiled a proposed rule that could require drug companies to disclose the price of their products in pharmaceutical advertisements. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

More recently, on May 30, 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017, or Right to Try Act, was signed into law. The law, among other things, provides a federal framework for patients to access certain investigational new product candidates that have completed a Phase I clinical trial. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA approval under the FDA expanded access program. The Right to Try Act did not establish any new entitlement or positive right to any party or individual, nor did it create any new mandates, directives, or additional regulations requiring a manufacturer or sponsor of an eligible investigational new product candidates to provide expanded access.

We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. The United States Health Reform Laws and any further changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect on our business, financial condition and results of operations.

Healthcare laws and regulations may affect the pricing of our product candidates and may affect our profitability.

In certain countries, the government may provide healthcare at a subsidized cost to consumers and regulate prices, patient eligibility or third-party payor reimbursement policies to control the cost of product candidates. Such a system may lead to inconsistent pricing of our product candidates from one country to another. The availability of our product candidates at lower prices in certain countries may undermine our sales in other countries where our product candidates are more expensive. In addition, certain countries may set prices by reference to the prices of our product candidates in other countries. Our inability to secure adequate prices in a particular country may adversely affect our ability to obtain an acceptable price for our product candidates in existing and potential markets. If we are unable to obtain a price for our product candidates that provides an appropriate return on our investment, our profitability may be materially and adversely affected.

Our industry and we are subject to intense regulation from the United States Government and such other governments and quasi-official regulatory bodies where our products are and product candidates may be sold.

Both before and after regulatory approval to market a particular product candidate, including our biologic product candidates, the manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, distribution and record keeping related to the product are subject to extensive, ongoing regulatory requirements, including, without limitation, submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP requirements and good clinical practice requirements for any clinical trials that we conduct post-approval. As a result, we are subject to a number of governmental and other regulatory risks, which include:


•	clinical development is a long, expensive and uncertain process; delay and failure can occur at any stage of our clinical trials;


•	our clinical trials are dependent on patient enrollment and regulatory approvals; we do not know whether our planned trials will begin on time, or at all, or will be completed on schedule, or at all;


•	the FDA or other regulatory authorities may not approve a clinical trial protocol or may place a clinical trial on hold;

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we rely on third parties, such as consultants, contract research organizations, medical institutions, and clinical investigators, to conduct clinical trials for our drug candidates and if we or any of our third-party contractors fail to comply with applicable regulatory requirements, such as cGCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the EMA or comparable foreign regulatory authorities may require us to perform additional clinical trials;


•	if the clinical development process is completed successfully, our ability to derive revenues from the sale of therapeutics will depend on our first obtaining FDA or other comparable foreign regulatory approvals, each of which are subject to unique risks and uncertainties;


•	there is no assurance that we will receive FDA or corollary foreign approval for any of our product candidates for any indication; we are subject to government regulation for the commercialization of our product candidates;


•	we have not received regulatory approval in the United States for the commercial sale of any of our biologic product candidates;

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even if one or more of our product candidates does obtain approval, regulatory authorities may approve such product candidate for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate;


•	undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities;


•	later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with the regulatory

requirements of FDA and other applicable United States and foreign regulatory authorities could subject us to administrative or judicially imposed sanctions;


•	although several of our product candidates have received orphan drug designation in the United States and the EU for particular indications, we may not receive orphan drug exclusivity for any or all of those product candidates or indications upon approval, and even if we do obtain orphan drug exclusivity, that exclusivity may not effectively protect the product from competition;

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even if one or more of our product candidates is approved in the United States, it may not obtain the 12 years of exclusivity from biosimilars for which innovator biologics are eligible, and even if it does obtain such exclusivity, that exclusivity may not effectively protect the product from competition; the FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates, and if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained; and we may be liable for contamination or other harm caused by hazardous materials used in the operations of our business.

Healthcare providers, physicians and third-party payors often play a primary role in the recommendation and prescription of any currently marketed products and product candidates for which we may obtain marketing approval. Our current and future arrangements with healthcare providers, physicians, third-party payors and customers, and our sales, marketing and educational activities, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations (at the federal and state level) that may constrain our business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. In addition, our operations are also subject to various federal and state fraud and abuse, physician payment transparency and privacy and security laws, including, without limitation:

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The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities including pharmaceutical manufacturers from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, overtly or covertly, in case or in kind, to induce or reward, or in return for, or either the referral of an individual for, or the purchase, lease, order or recommendation of, an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare or Medicaid programs. This statute has interpreted broadly to apply to, among other things, arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. The term "remuneration" expressly includes kickbacks, bribes or rebates and also has been broadly interpreted to include anything of value, including, for example, gifts, discounts, waivers of payment, ownership interest and providing anything at less than its fair market value. There are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, however, the exceptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exception or safe harbor may be subject to scrutiny. The failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Our practices may not meet all of the criteria for safe harbor protection from federal Anti-Kickback Statute liability in all cases. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

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The federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibits individuals or entities from, among other things, knowingly presenting, or causing to be presented, claims for payment to, or approval by, the federal government that are false, fictitious or fraudulent or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes "any request or demand" for money or property presented to the federal government. Although we do not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to "cause" the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers, promoting a product off-label, marketing products of sub-standard quality, or, as noted above, paying a kickback that results in a claim for items or services. In addition, our activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. For example, several pharmaceutical and other healthcare companies have faced enforcement actions under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. The False

Claims Act also permits a private individual acting as a "whistleblower" to bring actions on behalf of the federal government alleging violations of the False Claims Act and to share in any monetary recovery. In addition, federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may also implicate the False Claims Act. Although the False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate various federal criminal statutes.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH,and their respective implementing regulations, including the Final Omnibus Rule published on January 25, 2013, impose, among other things, obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information held by certain healthcare providers, health plans and healthcare clearinghouses, known as covered entities, and business associates. Among other things, HITECH made certain aspects of HIPAA's rules (notably the Security Rule) directly applicable to business associates - independent contractors or agents of covered entities that receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal court to enforce the federal HIPAA laws and seek attorney's fees and costs associated with pursuing federal civil actions. The Department of Health and Human Services Office of Civil Rights, or the OCR, has increased its focus on compliance and continues to train state attorneys general for enforcement purposes. The OCR has recently increased both its efforts to audit HIPAA compliance and its level of enforcement, with one recent penalty exceeding $5 million.

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The federal physician payment transparency requirements, sometimes referred to as the "Physician Payments Sunshine Act," created under the United States Patient Protection and Affordable Care Act of 2010, as amended, or the ACA, and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children's Health Insurance Program (with certain exceptions) to annually report to the United States Department of Health and Human Services, or HHS, information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

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On October 25, 2018, President Trump signed into law the “Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act.” This law, in part (under a provision entitled “Fighting the Opioid Epidemic with Sunshine”), extends the reporting and transparency requirements for physicians in the Physician Payments Sunshine Act, to physician assistants, nurse practitioners, and other mid-level practitioners. This law will go into effect in 2021, requiring reporting of payments and transfers made in that same calendar year

According to the United States Federal Trade Commission, or the FTC, failing to take appropriate steps to keep consumers' personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, or the FTCA, 15 USC § 45(a). The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Medical data is considered sensitive data that merits stronger safeguards. The FTC's guidance for appropriately securing consumers' personal information is similar to what is required by the HIPAA Security Rule.

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Analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, some state laws require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report pricing and marketing information, including, among other things, information related to payments to physicians and other healthcare providers or marketing expenditures, state and local laws that require the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information and the use of prescriber-

identifiable data in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that certain business activities could be subject to challenge under one or more of such laws. The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Ensuring that business arrangements with third parties comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert management's attention from the business.

If our operations are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject to penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from participation in government healthcare programs, injunctions, private qui tam actions brought by individual whistleblowers in the name of the government and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our results of operations.

Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.

European Union member states and other foreign jurisdictions, including Switzerland, have adopted data protection laws and regulations which impose significant compliance obligations. Moreover, the collection and use of personal health data in the European Union, which was formerly governed by the provisions of the European Union Data Protection Directive, was replaced with the European Union General Data Protection Regulation, or the GDPR, in May 2018. The GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third party processors in connection with the processing of personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the United States, provides an enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. The recent implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process, including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management's attention and increase our cost of doing business. In addition, new regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase our costs of doing business. In this regard, we expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data protection in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.

Our employees and our independent contractors, principal investigators, consultants or commercial collaborators, as well as their respective sub-contractors, if any, may engage in misconduct or fail to comply with certain regulatory standards and requirements, which could expose us to liability and adversely affect our reputation.

Our employees and our independent contractors, principal investigators, consultants or commercial collaborators, as well as their respective sub-contractors, if any, may engage in fraudulent conduct or other illegal activity, which may include intentional, reckless or negligent conduct that violates, among others, (a) FDA laws and regulations, or those of comparable regulatory authorities in other countries, including those laws that require the reporting of true, complete and accurate information to the FDA, (b) manufacturing standards, (c) healthcare fraud and abuse laws or (d) laws that require the true, complete and accurate reporting of financial information or data. For example, such persons may improperly use or misrepresent information obtained in the course of our clinical trials, create fraudulent data in our preclinical studies or clinical trials or misappropriate our drug products, which could result in regulatory sanctions being imposed on us and cause serious harm to our reputation. It is not always possible for us to identify or deter misconduct by our employees and third parties, and any precautions we may take to detect or prevent such misconduct may not be effective. Any misconduct or failure by our employees and our independent contractors, principal investigators, consultants or commercial collaborators, as well as their respective sub-contractors, if any, to comply with the applicable laws or regulations may expose us to governmental investigations, other regulatory action or lawsuits. If any action is instituted against us as a result of the alleged misconduct of our employees or other third parties, regardless of the final outcome, our reputation may be adversely affected and our business may suffer as a result. If we are unsuccessful in defending against any such action, we may also be liable to significant fines or other sanctions, which could have a material and adverse effect on us.

Risks Related to Our Securities

Conversion of the Convertible Senior Notes will dilute the ownership interest of existing stockholders and could adversely affect the market price of our common stock.

The conversion of some or all of the Convertible Senior Notes will dilute the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon such conversion and exercise could adversely affect prevailing market prices of our common stock. In addition, the existence of the Convertible Senior Notes may encourage short selling by market participants.

Our indebtedness and debt service obligations may adversely affect our cash flow.

We intend to fulfill our current debt service obligations, including repayment of the principal from our existing cash and investments, as well as the proceeds from potential licensing agreements and any additional financing from equity or debt transactions. However, our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow to meet these obligations, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive, or delaying or curtailing research and development programs. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

We may add lease lines to finance capital expenditures and may obtain additional long‑term debt and lines of credit. If we issue other debt securities in the future, our debt service obligations will increase further.

Our indebtedness could have significant additional negative consequences, including, but not limited to:


•	requiring the dedication of a substantial portion of our existing cash and marketable securities balances and, if available, future cash flow from operations to service our indebtedness, thereby reducing the amount of our expected cash flow available for other purposes, including capital expenditures;


•	increasing our vulnerability to general adverse economic and industry conditions;


•	limiting our ability to obtain additional financing;


•	limiting our ability to sell assets if deemed necessary;


•	limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and


•	placing us at a possible competitive disadvantage to less leveraged competitors and competitors that have better access to capital resources.

We may not have the ability to raise funds necessary to purchase the Convertible Senior Notes upon a fundamental change and our future debt may contain limitations on our ability to repurchase the Convertible Senior Notes.

Following a fundamental change (which includes matters such as a change in control of the Company, approval by the Company’s stockholders of a plan of dissolution or liquidation of the Company, and the cessation of listing of the Company’s common stock on Nasdaq or The New York Stock Exchange, among others as further described in the indenture), holders of Convertible Senior Notes will have the right to require the Company to purchase their Convertible Senior Notes for cash. A fundamental change may also constitute an event of default or require prepayment under, and result in the acceleration of the maturity of, our other then-existing indebtedness. We cannot assure you that we will have sufficient financial resources, or will be able to arrange financing, to pay the fundamental change purchase price in cash with respect to any Convertible Senior Notes surrendered by holders for purchase upon a fundamental change. In addition, restrictions in the agreements governing our then-outstanding indebtedness, if any, may not allow us to purchase the Convertible Senior Notes upon a fundamental change. Our failure to purchase the Convertible Senior Notes upon a fundamental change when required would result in an event of default with respect to the Convertible Senior Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may

not have sufficient funds to repay the indebtedness and purchase the Convertible Senior Notes, which could have a material and adverse impact on our financial condition and results of operations.

Shares eligible for future sale may adversely affect our ability to sell equity securities.

Sales of our common stock (including the issuance of shares upon conversion of convertible debt) in the public market could materially and adversely affect the market price of shares. As of September 30, 2018 we had 187,143,011 shares of common stock issued, plus (1) options to purchase 4,585,853 shares of common stock with a weighted-average exercise price of $11.98 per share, (2) 1,520,939 restricted stock units to certain executive officers of the Company, (3) 537,501 performance stock options to certain executive officers of the Company, (4) 6,454,601 shares of common stock reserved for potential future grant under the Plan, (5) warrants to purchase 350,000 shares of common stock with an exercise price of $3.75 and (6) $20.0 million of principal amount of Convertible Senior Notes convertible into approximately 3,916,672 shares of common stock at the conversion rate of $5.11 subject to adjustment as described in the indenture. Of the 250,000,000 shares of common stock authorized under our Certificate of Incorporation, there are 45,491,423 shares of common stock that remain available for future issuance.

Our outstanding Convertible Senior Notes, options and warrants may adversely affect our ability to consummate future equity‑based financings due to the dilution potential to future investors.

Due to the number of shares of common stock we are obligated to issue pursuant to outstanding Convertible Senior Notes, options and warrants, potential investors may not purchase our future equity offerings at market price because of the potential dilution such investors may suffer as a result of the exercise of the outstanding options and warrants or conversion of the outstanding Convertible Senior Notes.

The market price of our common stock has fluctuated widely in the past, and is likely to continue to fluctuate widely based on a number of factors, many of which are beyond our control.

The market price of our common stock has been, and is likely to continue to be, highly volatile. Furthermore, the stock market and the market for stocks comparable biopharmaceutical companies like ours have from time to time experienced, and likely will again experience, significant price and volume fluctuations that are unrelated to actual operating performance.

From time to time, stock market analysts publish research reports or otherwise comment upon our business and future prospects. Due to a number of factors, we may fail to meet the expectations of securities analysts or investors and our stock price would likely decline as a result. These factors include:


•	Announcements by us, any collaboration partners, any future alliance partners or our competitors of pre-clinical studies and clinical trial results, regulatory developments, technological innovations or new therapeutic products, product sales, new products or product candidates and product development timelines;


•	The formation or termination of corporate alliances;


•	Developments in patent or other proprietary rights by us or our respective competitors, including litigation;


•	Developments or disputes concerning our patent or other proprietary rights, and the issuance of patents in our field of business to others;


•	Government regulatory action;


•	Period-to-period fluctuations in the results of our operations; and


•	Developments and market conditions for emerging growth companies and biopharmaceutical companies, in general.

In addition, Internet “chat rooms” have provided forums where investors make predictions about our business and prospects, oftentimes without any real basis in fact, that readers may trade on.

In the past, following periods of volatility in the market prices of the securities of companies in our industry, securities class action litigation has often been instituted against those companies. Refer to “Legal Proceedings” for more information. If we face such litigation in the future, it would result in substantial costs and a diversion of management’s attention and resources, which could negatively impact our business.

Our principal stockholders can significantly influence all matters requiring the approval by our stockholders.

As of June 30, 2018 venBio Select Advisor LLC, (“venBio”) is the beneficial owner of approximately 9.5% of our outstanding common stock. venBio is our largest stockholder, and Dr. Behzad Aghazadeh, the Managing Partner and portfolio manager of the venBio Select Fund, serves as Chairman of our Board of Directors.

As a result of this voting power, venBio has the ability to significantly influence the outcome of substantially all matters that may be put to a vote of our stockholders, including the election of our directors.

There are limitations on the liability of our directors, and we may have to indemnify our officers and directors in certain instances.

Our certificate of incorporation limits, to the maximum extent permitted under Delaware law, the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors. Our bylaws provide that we will indemnify our officers and directors and may indemnify our employees and other agents to the fullest extent permitted by law. These provisions may be in some respects broader than the specific indemnification provisions under Delaware law. The indemnification provisions may require us, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of certain proceedings against them as to which they could be indemnified and to obtain directors’ and officers’ insurance. Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify a director, officer, employee or agent made or threatened to be made a party to an action by reason of the fact that he or she was a director, officer, employee or agent of the corporation or was serving at the request of the corporation, against expenses actually and reasonably incurred in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Delaware law does not permit a corporation to eliminate a director’s duty of care and the provisions of our certificate of incorporation have no effect on the availability of equitable remedies, such as injunction or rescission, for a director’s breach of the duty of care.

We believe that our limitation of officer and director liability assists us to attract and retain qualified employees and directors. However, in the event an officer, a director or the board of directors commits an act that may legally be indemnified under Delaware law, we will be responsible to pay for such officer(s) or director(s) legal defense and potentially any damages resulting there from. Furthermore, the limitation on director liability may reduce the likelihood of derivative litigation against directors and may discourage or deter stockholders from instituting litigation against directors for breach of their fiduciary duties, even though such an action, if successful, might benefit our stockholders and us. Given the difficult environment and potential for incurring liabilities currently facing directors of publicly-held corporations, we believe that director indemnification is in our and our stockholders’ best interests because it enhances our ability to attract and retain highly qualified directors and reduce a possible deterrent to entrepreneurial decision-making.

Nevertheless, limitations of director liability may be viewed as limiting the rights of stockholders, and the broad scope of the indemnification provisions contained in our certificate of incorporation and bylaws could result in increased expenses. Our board of directors believes, however, that these provisions will provide a better balancing of the legal obligations of, and protections for, directors and will contribute positively to the quality and stability of our corporate governance. Our board of directors has concluded that the benefit to stockholders of improved corporate governance outweighs any possible adverse effects on stockholders of reducing the exposure of directors to liability and broadened indemnification rights.

We are exposed to potential risks from legislation requiring companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act.

The Sarbanes-Oxley Act requires that we maintain effective internal controls over financial reporting and disclosure controls and procedures. Among other things, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act (“Section 404”). Compliance with Section 404 requires substantial accounting expense and significant management efforts. Our testing, or the subsequent review by our independent registered public accounting firm, may reveal deficiencies in our internal controls that would require us to remediate in a timely manner so as to be able to comply with the requirements of Section 404 each year. If we are not able to comply with the requirements of Section 404 in a timely manner each year, we could be subject to sanctions or investigations by the SEC, the Nasdaq Stock Market or other regulatory authorities that would require additional financial and management resources and could adversely affect the market price of our common stock.

We do not intend to pay dividends on our common stock. Until such time as we pay cash dividends our stockholders, must rely on increases in our stock price for appreciation.

We have never declared or paid dividends on our common stock. We intend to retain future earnings to develop and commercialize our product candidates and therefore we do not intend to pay cash dividends in the foreseeable future. Until such time as we determine to pay cash dividends on our common stock, our stockholders must rely on increases in the market price of our common stock for appreciation of their investment.

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K are included with this Form 10-Q and are listed on the “Exhibit Index” immediately following the Signatures.

EXHIBIT INDEX



Exhibit Number		Description of Document

31.1*		Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

32.1*		Certifications of Chief Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

10.57*		Form of Exchange Agreement, dated October 2, 2018, between the Company and certain of the Company's noteholders.

10.58*		Transition Agreement, dated as of August 23, 2018, between the Company and Michael Garone.

10.59*+		Master Services Agreement, dated as of September 11, 2018, between the Company and Samsung BioLogics Co., Ltd.

10.60*+		Product Specific Agreement, dated as of September 11, 2018, between the Company and Samsung BioLogics Co., Ltd.

10.61*		Executive Employment Agreement, dated as of September 24, 2018, between the Company and Jared Freedberg.

10.62*		Nonqualified Stock Option Grant, dated as of September 24, 2018, between the Company and Jared Freedberg.

10.63*		Executive Employment Agreement, dated as of September 26, 2018, between the Company and Kurt Andrews.

10.64*		Nonqualified Stock Option Grant, dated as of July 11, 2018, between the Company and Kurt Andrews.

10.65*		Immunomedics, Inc. Annual Cash Bonus Plan.

101*		The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018, formatted in XBRL (eXtensible Business Reporting Language) filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Comprehensive Loss; (iii) the Condensed Consolidated Statements of Cash Flows; and, (iv) the Notes to Unaudited Condensed Consolidated Financial Statements.

* Filed herewith.

+ Confidential treatment has been requested for certain portions of this exhibit. The confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	IMMUNOMEDICS, INC.

November 7, 2018	/s/ Michael Pehl
	Michael Pehl
	Chief Executive Officer


November 7, 2018	/s/ Usama Malik
	Usama Malik
	Principal Financial Officer

Form of Exchange Agreement

October 2, 2018

Immunomedics, Inc.

300 The American Road,

Morris Plains, NJ 07950

Attn: Michael R. Garone

Re:Exchange of 4.75% Convertible Senior Notes due 2020 for Common Stock

Ladies and Gentlemen:

The undersigned investor (the “Investor”), for itself and on behalf of the beneficial owners listed on Exhibit B.1 hereto (“Accounts”) for whom the Investor holds contractual and investment authority (each, including the Investor if it is a party exchanging Notes, an “Exchanging Investor”), hereby agrees to exchange, with Immunomedics, Inc. (the “Company”), certain 4.75% Convertible Senior Notes due 2020fa, CUSIP 452907 AK4 (the “Notes”) for shares (the “Shares”) of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”). The Investor understands that the exchange (the “Exchange”) is being made without registration of the Shares under the Securities Act of 1933, as amended (the “Securities Act”), or any securities laws of any state of the United States or of any other jurisdiction and that the Shares are being offered only to institutional “accredited investors” within the meaning of Rule 501 of Regulation D under the Securities Act that are also “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act, pursuant to a private placement exemption from registration under Section 4(a)(2) of the Securities Act.

This Exchange Agreement and the Terms and Conditions for Exchange of Securities, dated October 2, 2018, attached hereto as Exhibit A (the “Terms and Conditions” and, together with this Exchange Agreement, the “Agreement”) is made as of the date hereof between the Company and the Investor.

Subject to the terms and conditions of this Agreement, the Investor hereby agrees to exchange, and cause the other Exchanging Investors to exchange, $[ ] aggregate principal amount of the Notes (the “Exchanged Notes”) for a number of Shares as set forth in the Terms and Conditions, and the Company agrees to issue such Shares to the Exchanging Investors in exchange for such Exchanged Notes.

At or prior to the times set forth in Exhibit B.2 hereto (the “Exchange Procedures”), the Investor shall cause the Exchanged Notes to be delivered by book entry transfer through the facilities of The Depository Trust Company (“DTC”) to Wells Fargo Bank, National Association, in its capacity as trustee of the Notes (in such capacity, the “Trustee”), for the account/benefit of the Company for cancellation as instructed in the Exchange Procedures and on the Trading Day (as defined in the Terms and Conditions) prior to the Closing (as defined in the Terms and Conditions); and on the Closing Date (as defined in the Terms and Conditions), subject to satisfaction of the conditions precedent specified in Section 5 of the Terms and Conditions and the prior receipt by the Trustee from the Investor of the Exchanged Notes, the Company shall deliver to the DTC account specified by the Investor for each relevant Exchanging Investor in Exhibit B.1 a number of Shares as set forth in the Terms and Conditions. All questions as to the form of all documents and the validity and acceptance of the Exchanged Notes and the Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding.

Subject to the terms and conditions of this Agreement, the Investor hereby, for itself and on behalf of its Accounts, (a) waives any and all other rights with respect to such Exchanged Notes and (b) releases and discharges the Company from any and all claims the undersigned and its Accounts may now have, or may have in the future, arising out of, or related to, such Exchanged Notes.

Each of the provisions of the Terms and Conditions is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Exchange Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations, warranties, and agreements set forth therein shall be deemed to have been made at and as of the date of this Exchange Agreement. Unless otherwise defined herein, terms defined in the Terms and Conditions are used herein as therein defined.

This Agreement constitutes the entire agreement between the Company and the Investor with respect to the subject matters hereof. This Exchange Agreement may be executed by one or more of the parties hereto in any number of separate counterparts

(including by facsimile or other electronic means, including telecopy, email or otherwise), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Exchange Agreement by facsimile or other transmission (e.g., “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof.

[SIGNATURE PAGE FOLLOWS]

If the foregoing correctly sets forth your understanding as to the matters set forth herein, please indicate your acceptance thereof in the space provided below for that purpose and deliver a copy to the undersigned, whereupon this Agreement shall constitute a binding agreement between the Company and the Investor.



	Very truly yours,
	Immunomedics, Inc.

	By
		Name:
		Title:

Please confirm that the foregoing correctly sets forth the agreement between the Company and the Investor by signing in the space provided below for that purpose.



	AGREED AND ACCEPTED:


	Investor:
	[ ],
	in its capacity as described in the first paragraph hereof

	By
		Name:
		Title:

EXHIBIT A

Terms and Conditions for Exchange of Securities

Each of Immunomedics, Inc. a Delaware corporation (the “Company”), and the undersigned (the “Investor”), for itself and on behalf of the beneficial owners listed on Exhibit B.1 to the Exchange Agreement for whom the Investor holds contractual and investment authority (together with the Investor, the “Exchanging Investors”), hereby confirms its agreement pursuant to that certain exchange agreement, dated as of the date hereof (the “Exchange Agreement”), to which these Terms and Conditions for Exchange of Securities (the “Terms and Conditions”) are attached as Exhibit A, as set forth in these Terms and Conditions and in the Exchange Agreement (together, this “Agreement”) relating to the exchange of certain Notes for Shares as set forth in this Agreement. Capitalized terms used but not defined in the Terms and Conditions have the meanings set forth in the Exchange Agreement.

1.Exchange Consideration; Exchange. On the basis of the representations, warranties and agreements herein contained and subject to the terms and conditions herein set forth, the Investor hereby agrees to exchange, and to cause the other Exchanging Investors to exchange $[ ] aggregate principal amount of the Notes (the “Exchanged Notes”) for [ ] Shares (the “Exchange Consideration”).

“Market Disruption Event” means (i) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted to trading (the “Primary Exchange”) to open for trading during its regular trading session or (ii) the occurrence or existence on any Scheduled Trading Day (as defined in the Indenture) of any suspension or limitation imposed on trading on the Primary Exchange (by reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock for more than a one half-hour period in the aggregate during regular trading hours of the Primary Exchange prior to 1:00 p.m., New York City time.

“Trading Day” is defined in the Indenture; provided that references to Market Disruption Event for purposes thereof shall be deemed to be references to “Market Disruption Event” as defined herein.

The Exchange shall occur in accordance with the Exchange Procedures; provided that each of the Company and the Investor acknowledges that the delivery of the Exchanged Notes for withdrawal through the Deposits and Withdrawal at Custodian (“DWAC”) program through the DTC or the delivery of the Shares to any Exchanging Investor may be delayed due to procedures and mechanics within the system of the DTC or The NASDAQ Global Market (“NASDAQ”) (including the procedures and mechanics regarding the listing of the Shares on NASDAQ) and that such a delay will not be a default under this Agreement so long as (i) the Investor and/or the Company, as the case may be, is using its reasonable best efforts to effect such delivery, and (ii) such delay is no longer than three business days; provided, further, that no delivery of Shares will be made until such Exchanged Notes have been properly submitted for withdrawal through the DWAC program in accordance with this Agreement, and no accrued interest will be payable by reason of any delay in making such delivery.

The cancellation of the Exchanged Notes shall be effected through the DWAC program in accordance with the customary procedures of the Trustee.

For the avoidance of doubt, as of the Trading Day prior to the Closing (as defined below), the aggregate principal amount of Exchanged Notes shall be terminated and cancelled in full and the Exchanging Investors shall have no rights thereunder, except the right to receive the Shares on the Closing Date.

2.The Closing. The closing of the Exchange will take place at a closing (the “Closing”), which shall take place at the offices of DLA Piper LLP (US) at 12:00 p.m., New York City time, on October 5, 2018, or the next Trading Day thereafter (the “Closing Date”), or at such other time and place as the Company and the Investor may mutually agree.

3.Representations and Warranties and Covenants of the Company. As of the date hereof and as of the Closing, the Company represents and warrants to, and covenants with, the Exchanging Investors that:

(a)The Company is duly organized and validly existing under the laws of Delaware, with full power and authority to conduct its business as it is currently being conducted and to own its assets.

(b)The Company has full power and authority to enter into this Agreement and perform all obligations required to be performed by the Company hereunder.

(c)This Agreement has been duly authorized, executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in equity or at law).

(d)The execution of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (i) does not require the consent, approval, authorization, order, registration or qualification of, or filing with, any governmental authority, non-governmental regulatory authorities (including NASDAQ, other than the filing with NASDAQ of a Listing of Additional Shares notification (the “LAS”) which the Company will so file prior to the issuance of Shares included in the Exchange Consideration on the Closing Date), or court, or body or arbitrator having jurisdiction over the Company (except as may be required under the securities or Blue Sky laws of the various states); and (ii) does not and will not constitute or result in a breach, violation or default under any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license, whether written or oral, express or implied, or with the Company’s Certificate of Incorporation or by-laws, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of the Company or on the part of any

other party thereto or cause the acceleration or termination of any obligation or right of the Company or any other party thereto.

(e)The Shares have been duly reserved for issuance and, when issued, delivered and paid for in the manner set forth in this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights, other than any rights that have been complied with or waived.

(f)Assuming the accuracy of the representations and warranties of the Investor set forth in this Agreement, the issuance of the Shares pursuant to this Agreement are exempt from the registration requirements of the Securities Act and the Shares will not be subject to restrictions on transfer under the Securities Act (and will not have any restrictive legends on such certificates or book-entry notations representing such Shares).

(g)(A) As of the date hereof, (x) the Company is not aware of any material non-public information regarding the Company, other than any material non-public information relating to the Exchange and (y) all reports and other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended, since January 1, 2017 when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, other than, any material facts with respect to information regarding the Exchange, the Information (as defined below) or any information referred to in the wall-crossing email referenced in Section 4(y) below and (B) the Company hereby agrees to publicly disclose on or before 8:30 a.m., New York City time, on the first business day after the date hereof, the exchange of the Exchanged Notes as contemplated by this Agreement in a press release; provided that (i) if the Exchange does not take place and (ii) the Company believes, in good faith, that there is no legal requirement to publicly disclose information about the Exchange, no press release will be required. The Company hereby acknowledges and agrees that this press release will disclose all confidential information to the extent the Company believes such confidential information constitutes material non-public information, if any, with respect to the Exchange or otherwise communicated by the Company to the Investor or any Exchanging Investor in connection with the Exchange. For the avoidance of doubt, the Company may be aware of material non-public information regarding the Company at the time of the Closing that has not been communicated to the Investor or any Exchanging Investor.

(h)The Company is responsible for paying all of its fees and expenses, the fees and expenses of its advisors, transfer agent, registrar and other representatives, if any, of the transactions contemplated by this Agreement; provided that Investor (for itself and on behalf of the Exchanging Investors) is responsible for any applicable transfer taxes.

(i)The Company will, upon request, execute and deliver any additional documents deemed by the Trustee or the transfer agent to be reasonably necessary to complete the transactions contemplated by this Agreement.

(j)The Company will, on the first business day following the Closing, file a Current Report on Form 8-K publically disclosing the exchange of the Exchanged Notes as contemplated by this Agreement.

(k)The Company and each of its subsidiaries within the meaning of Rule 1-02(w) of Regulation S-X promulgated under the Securities Act have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, (i) have a material adverse effect on the business, properties, financial position, stockholders’ equity, or results of operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”), (ii) prevent or materially interfere with consummation of the transactions contemplated by this Agreement, or (iii) result in the delisting of Shares from NASDAQ.

(l)Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority (including, without limitation,

the rules and regulations of the NASDAQ), in each case, applicable to the Company, except, in the case of clauses (ii) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

(m)The Company is not and, after giving effect to the transactions contemplated by this Agreement, will not be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

4.Representations and Warranties and Covenants of the Investor. As of the date hereof and as of the Closing, the Investor hereby, for itself and on behalf of the Exchanging Investors, represents and warrants to, and covenants with, the Company that:

(a)The Investor and each Exchanging Investor is a corporation, limited partnership, limited liability company or other entity, as the case may be, duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation.

(b)The Investor has all requisite corporate power and authority to execute and deliver this Agreement for itself and on behalf of the Exchanging Investors and to carry out and perform its obligations under the terms hereof and the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Investor and constitutes the valid and binding obligation of the Investor, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors, and rules of law governing specific performance, injunctive relief or other equitable remedies. If the Investor is executing this Agreement on behalf of an Account, (i) the Investor has all requisite discretionary and contractual authority to enter into this Agreement on behalf of, and, bind, each Account, and (ii) Exhibit B.1 attached to the Exchange Agreement is a true, correct and complete list of (A) the name of each Account and (B) the principal amount of each Account’s Exchanged Notes.

(c)Each of the Exchanging Investors is the current sole legal and beneficial owner of the Exchanged Notes set forth on Exhibit B.1 attached to the Exchange Agreement. When the Exchanged Notes are exchanged, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances or adverse claims, rights or proxies of any kind (i) arising by operation of applicable law, (ii) arising by operation of any organizational documents of the Company, the Investor, each Exchanging Investor or the Notes, (iii) that is not terminated on or prior to the Closing, or (iv) created by or imposed by or on the Company. None of the Exchanging Investors has, in whole or in part, other than pledges or security interests that an Exchanging Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker, (x) assigned, transferred, hypothecated, pledged, exchanged or otherwise disposed of any of its Notes (other than to the Company pursuant hereto), or (y) given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to its Notes.

(d)The execution, delivery and performance of this Agreement by the Investor and compliance by the Investor with all provisions hereof and the consummation of the transactions contemplated hereby, will not (i) require any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency (except as may be required under the securities or Blue Sky laws of the various states), (ii) constitute a breach or violation of any of the terms or provisions of, or result in a default under, (x) the organizational documents of any of the Investor or any Exchanging Investor or (y) any material indenture, loan agreement, mortgage, lease or other agreement or instrument to which the Investor or any of the Exchanging Investors is a party or by which such Investor or Exchanging Investor is bound, or (iii) violate or conflict with any applicable law or any rule, regulation, judgment, decision, order or decree of any court or any governmental body or agency having jurisdiction over the Investor or any of the Exchanging Investors.

(e)The Investor and each Exchanging Investor is a resident of the jurisdiction set forth on Exhibit B.1 attached to the Exchange Agreement.

(f)The Investor and each Exchanging Investor will comply with all applicable laws and regulations in effect necessary for the Investor to consummate the transactions contemplated hereby and obtain any consent, approval or permission required for the transactions contemplated hereby and the laws and regulations of any jurisdiction to which the Investor and each such Exchange Investor is subject, and the Company shall have no responsibility therefor.

(g)The Investor acknowledges that no person has been authorized to give any information or to make any representation or warranty concerning the Company or the Exchange other than the information set forth herein in connection with the Investor’s and the Exchange Investor’s examination of the Company and the terms of the Exchange

and the Shares, and the Company does not, and Cowen and Company, LLC (the “Placement Agent”) does not, take any responsibility for, and neither the Company nor the Placement Agent can provide any assurance as to the reliability of, any other information that others may provide to the Investor or any Exchanging Investor.

(h)The Investor and each Exchanging Investor has such knowledge, skill and experience in business, financial and investment matters so that it is capable of evaluating the merits and risks with respect to the Exchange and an investment in the Shares. With the assistance of each Exchanging Investor’s own professional advisors, to the extent that the Exchanging Investor has deemed appropriate, such Exchanging Investor has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Shares and the consequences of the Exchange and this Agreement and the Exchanging Investor has made its own independent decision that the investment in the Shares is suitable and appropriate for the Exchanging Investor. Each Exchanging Investor has considered the suitability of the Shares as an investment in light of such Exchanging Investor’s circumstances and financial condition and is able to bear the risks associated with an investment in the Shares.

(i)The Investor confirms that it and each Exchanging Investor is not relying on any communication (written or oral) of the Company, the Placement Agent or any of their respective affiliates or representatives as investment advice or as a recommendation to purchase the Shares in the Exchange. It is understood that information provided by the Company, the Placement Agent or any of their respective affiliates and representatives shall not be considered investment advice or a recommendation to conduct the Exchange, and that none of the Company, the Placement Agent or any of their respective affiliates or representatives is acting or has acted as an advisor to the Investor or any Exchanging Investor in deciding to invest in the Shares. The Investor confirms that it and each Exchanging Investor is not relying and has not relied, upon any statement, advice (whether accounting, tax, financial legal or other), representation or warranty by the Company or any of its affiliates or representatives, including, without limitation, the Placement Agent, except for the representations and warranties made by the Company in this Exchange Agreement.

(j)The Investor confirms that the Company has not (i) given any guarantee, representation or warranty as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Shares or (ii) made any representation or warranty to the Investor or any Exchanging Investor regarding the legality of an investment in the Shares under applicable legal investment or similar laws or regulations. In deciding to participate in the Exchange, the Investor is not relying on the advice or recommendations of the Company and the Investor has made its own independent decision that the investment in the Shares is suitable and appropriate for the Investor.

(k)The Investor and each Exchanging Investor is familiar with the business and financial condition and operations of the Company and the Investor and each Exchanging Investor has had the opportunity to conduct its own investigation of the Company and the Shares. The Investor and each Exchanging Investor has had access to the SEC filings of the Company and such other information concerning the Company and the Shares as it deems necessary to enable it to make an informed investment decision concerning the Exchange. The Investor and each Exchanging Investor has been offered the opportunity to ask such questions of the Company and its representatives concerning the Company, its business, operations, performance, financial condition and prospects and the terms and conditions of the Exchange and has received answers thereto, as it deems necessary to enable it to make an informed investment decision concerning the Exchange.

(l)The Investor acknowledges and understands that at the time of the Closing, the Company may be in possession of material non-public information not known to the Investor or any Exchanging Investor that may impact the value of the Notes, including the Exchanged Notes, and the Shares (“Information”) that the Company is unable to disclose to the Investor or any Exchanging Investor. The Investor and each Exchanging Investor understands, based on its experience, the disadvantage to which the Investor and each Exchanging Investor is subject due to the disparity of information between the Company, on the one hand, and the Investor and each Exchanging Investor, on the other hand. Notwithstanding this, the Investor and each Exchanging Investor has deemed it appropriate to participate in the Exchange. The Investor agrees that the Company and its directors, officers, employees, agents, stockholders and affiliates shall have no liability to the Investor or any Exchanging Investor or its beneficiaries whatsoever due to or in connection with the Company’s use or non-disclosure of the Information or otherwise as a result of the Exchange contemplated hereby, and the Investor hereby irrevocably waives any claim that it or any Exchanging Investor might have based on the failure of the Company to disclose the Information.

(m)The Investor and each Exchanging Investor understands that no federal, state, local or foreign agency has passed upon the merits or risks of an investment in the Shares or made any finding or determination concerning the fairness or advisability of this investment.

(n)Each Exchanging Investor is an “accredited investor” as defined in Rule 501(a) under the Securities Act and it and any account (including for purposes of this Section 4(n), the Accounts) for which it is acting (for which it has sole investment discretion) is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act. The Investor agrees to furnish any additional information reasonably requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the Exchange.

(o)The Investor and each Exchanging Investor (i) has held its respective Exchanged Notes for at least six (6) months and (ii) is not, and has not been during the consecutive three month period preceding the date hereof and as of the Closing, will not be, a director, officer or “affiliate” within the meaning of Rule 144 under the Securities Act (an “Affiliate”) of the Company. To the Investor’s best knowledge, no Exchanging Investor acquired any of the Notes, directly or indirectly, from an Affiliate of the Company. Each Exchanging Investor and its Affiliates collectively beneficially own and will beneficially own as of the Closing Date (i) less than 10% of the outstanding Shares and (ii) less than 10% of the aggregate number of votes that may be cast by holders of those outstanding securities of the Company that entitle the holders thereof to vote generally on all matters submitted to the Company’s stockholders for a vote (the “Voting Power”). No Exchanging Investor is a subsidiary, affiliate or, to the Investor’s knowledge, otherwise closely-related to any director or officer of the Company or beneficial owner of 10% or more of the outstanding Shares or Voting Power (each such director, officer or beneficial owner, a “Related Party”). To the Investor’s knowledge, no Related Party beneficially owns 10% or more of the outstanding voting equity, or votes entitled to be cast by the outstanding voting equity, of any Exchanging Investor.

(p)Neither the Investor nor any Exchanging Investor is directly, or indirectly through one or more intermediaries, controlling or controlled by, or under direct or indirect common control with, the Company.

(q)Each Exchanging Investor is acquiring the Shares solely for its own beneficial account (or for any account (including for purposes of this Section 4(q), the Accounts) for which it has sole investment discretion), for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Shares. The Investor and each Exchanging Investor understands that the Shares have not been registered under the Securities Act or any state securities laws and are being issued without registration under the Securities Act by reason of specific exemption(s) under the provisions thereof which depend in part upon the investment intent of the Exchanging Investors and the accuracy of the other representations and warranties made by the Investor in this Agreement. The Investor and the Exchanging Investors understand that the Company is relying upon the representations, warranties and agreements contained in this Agreement (and any supplemental information provided to the Company by the Investor or the Exchanging Investors) for the purpose of determining whether this transaction meets the requirements for such exemption(s).

(r)The Investor acknowledges that the terms of the Exchange have been mutually negotiated between the Investor and the Company. The Investor was given a meaningful opportunity to negotiate the terms of the Exchange.

(s)The Investor acknowledges that it and each Exchanging Investor had a sufficient amount of time to consider whether to participate in the Exchange and that neither the Company nor the Placement Agent has placed any pressure on the Investor or any Exchanging Investor to respond to the opportunity to participate in the Exchange. The Investor acknowledges that neither it nor any Exchanging Investor become aware of the Exchange through any form of general solicitation or advertising within the meaning of Rule 502 under the Securities Act or otherwise through a “public offering” under Section 4(a)(2) of the Securities Act.

(t)The operations of the Investor and each Exchanging Investor have been conducted in material compliance with the applicable rules and regulations administered or conducted by the U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”), the applicable rules and regulations of the Foreign Corrupt Practices Act (“FCPA”) and the applicable Anti-Money Laundering (“AML”) rules in the Bank Secrecy Act. The Investor has performed due diligence necessary to reasonably determine that the Exchanging Investors are not named on the lists of denied parties or blocked persons administered by OFAC, resident in or organized under the laws of a country that is the subject of comprehensive economic sanctions and embargoes administered or conducted by OFAC (“Sanctions”), are not otherwise the subject of Sanctions and have not been found to be in violation or under suspicion of violating OFAC, FCPA or AML rules and regulations.

(u)The Investor acknowledges it and each Exchanging Investor understands that the Company intends to pay the Placement Agent a fee in respect of the Exchange.

(v)The Investor will, upon request, execute and deliver, for itself and on behalf of any Exchanging Investor, any additional documents deemed by the Company and the Trustee or the transfer agent to be reasonably necessary to complete the transactions contemplated by this Agreement.

(w)The Investor understands that, unless the Investor notifies the Company in writing to the contrary before the Closing, each of the Investor’s representations and warranties contained in this Agreement will be deemed to have been reaffirmed and confirmed as of the Closing.

(x)No later than one (1) business day after the date hereof, the Investor agrees to deliver to the Company settlement instructions substantially in the form of Exhibit B.1 attached to the Exchange Agreement for each of the Exchanging Investors.

(y)The Investor acknowledges and agrees that it and each Exchanging Investor has not transacted, and will not transact, in any securities of the Company, including, but not limited to, any hedging transactions, from the time the Investor was first contacted by the Company or the Placement Agent with respect to the transactions contemplated this Agreement until after the confidential information (as described in the confirmatory wall-crossing email received by the Investor from the Placement Agent) is made public.

(z)The Investor acknowledges that the Company may issue appropriate stop-transfer instructions to its transfer agent, if any, and may make appropriate notations to the same effect in its books and records to ensure compliance with the provisions of this Section 4.

(aa)The Investor understands that the Company, the Placement Agent and others will rely upon the truth and accuracy of the foregoing representations, warranties and covenants and agrees that if any of the representations and warranties deemed to have been made by it by its participation in the transactions contemplated by this Agreement and acquisition of the Shares are no longer accurate, the Investor shall promptly notify the Company and the Placement Agent. The Investor understands that, unless the Investor notifies the Company in writing to the contrary before the Closing, each of the Investor’s representations and warranties contained in this Agreement will be deemed to have been reaffirmed and confirmed as of the Closing. If the Investor is exchanging any Exchanged Notes and acquiring the Shares as a fiduciary or agent for one or more accounts (including for purposes of this Section 4(aa), the Accounts which are Exchanging Investors), it represents that (i) it has sole investment discretion with respect to each such account, (ii) it has full power to make the foregoing representations, warranties and covenants on behalf of such account and (iii) it has contractual authority with respect to each such account.

(bb)The Investor acknowledges and agrees that the Placement Agent has not acted as a financial advisor or fiduciary to the Investor or any Exchanging Investor and that the Placement Agent and its respective directors, officers, employees, representatives and controlling persons have no responsibility for making, and have not made, any independent investigation of the information contained herein or in the Company’s SEC filings and make no representation or warranty to the Investor or any Exchanging Investor, express or implied, with respect to the Company, the Notes or the Shares or the accuracy, completeness or adequacy of the information provided to the Investor or any Exchanging Investor or any other publicly available information, nor shall any of the foregoing persons be liable for any loss or damages of any kind resulting from the use of the information contained therein or otherwise supplied to the Investor or any Exchanging Investor.

5.Conditions to Obligations of the Investor and the Company. The obligations of the Investor to deliver (or cause to be delivered) the Exchanged Notes and of the Company to deliver the Shares to each Exchanging Investor in accordance with this Agreement are subject to the satisfaction at or prior to the Closing of the following conditions precedent: (a) the representations and warranties of the Company contained in Section 3 hereof and of the Investor contained in Section 4 hereof shall be true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing and (b) no provision of any applicable law or any judgment, ruling, order, writ, injunction, award or decree of any governmental authority shall be in effect prohibiting or making illegal the consummation of the transactions contemplated by this Agreement.

The obligations of the Investor to deliver (or cause to be delivered) the Exchanged Notes is subject to the following conditions: the Shares (i) shall have been approved for listing on the NASDAQ and (ii) shall not have been suspended, as of the Closing Date, by the SEC or the NASDAQ from trading on the NASDAQ.

The obligations of the Company to deliver the Shares is subject to the Investor properly submitting (or causing to be submitted) the Exchanged Notes for withdrawal through the DWAC program in accordance with the Exchange Procedures.

6.Waiver, Amendment. Neither these Terms and Conditions, the Exchange Agreement nor any provisions hereof or thereof shall be modified, changed, discharged or terminated, except by an instrument in writing, signed by the party against whom any waiver, change, discharge or termination is sought.

7.Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the Investor without the prior written consent of the other party.

8.Taxation. The Investor acknowledges that, if an Exchanging Investor is a United States person for U.S. federal income tax purposes, either (i) the Company must be provided with a correct taxpayer identification number (“TIN”) (generally a person’s social security or federal employer identification number) and certain other information on a properly completed and executed Internal Revenue Service (“IRS”) Form W-9, which is provided herein on Exhibit C attached to the Exchange Agreement, or (ii) another basis for exemption from backup withholding must be established. The Investor further acknowledges that, if an Exchanging Investor is not a United States person for U.S. federal income tax purposes, the Company must be provided the appropriate properly completed and executed IRS Form W-8, attesting to that non-U.S. Exchanging Investor’s foreign status and certain other information, including information establishing an exemption from withholding under Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended. The Investor further acknowledges that any Exchanging Investor may be subject to 30% U.S. federal withholding or 28% U.S. federal backup withholding tax on certain payments made to such Exchanging Investor unless such Exchanging Investor properly establishes an exemption from, or a reduced rate of, such withholding or backup withholding.

9. Waiver of Jury Trial. EACH OF THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to such state’s rules concerning conflicts of laws that might provide for any other choice of law.

11. Submission to Jurisdiction. Each of the Company and the Investor (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted exclusively in the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York; (b) waives any objection that it may now or hereafter have to the venue of any such suit, action or proceeding; and (c) irrevocably consents to the jurisdiction of the aforesaid courts in any such suit, action or proceeding. Each of the Company and the Investor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

12. Venue. Each of the Company and the Investor irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 11. Each of the Company and the Investor irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

13. Service of Process. Each of the Company and the Investor irrevocably consents to service of process in the manner provided for notices in Section 14. Nothing in this Agreement will affect the right of the Company or the Investor to serve process in any other manner permitted by law.

14. Agent for Service of Process. The Investor hereby irrevocably appoints and designates the Agent for Service of Process as designated in Exhibit B.1 attached to the Exchange Agreement (the “Agent for Service of Process”) as its true and lawful attorney-in-fact and duly authorized agent for the limited purpose of accepting service of legal process and the Investor agrees that service of process upon such party shall constitute personal service of such process on such person. The Investor shall maintain the designation and appointment of the Agent for Service of Process at such address until all obligations under this Agreement shall have been completed in total. If the Agent for Service of Process shall cease to so act, the Investor shall reasonably promptly deliver to the Company and the Placement Agent evidence in writing of acceptance by another agent for service of process of such appointment, which such other agent for service of process shall have an address for receipt of service of process in the State of New York and the provisions above shall equally apply to such other agent for service of process.

15. Section and Other Headings. The section and other headings contained in these Terms and Conditions are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

16. Notices. All notices and other communications to the Company provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally, sent by registered or certified mail, return receipt requested, postage prepaid or sent by facsimile or other form of electronic transmission and will be deemed given on the date so delivered (or, if such day is not a business day, on the first subsequent business day) to the following addresses, or in the case of the Investor, the address provided on Exhibit B.1 attached to the Exchange Agreement (or such other address as the Company or the Investor shall have specified by notice in writing to the other):



If to the Company:	Immunomedics, Inc.
	300 The American Road
	Morris Plains, NJ 07950
	Attn: Michael Garone, Vice President - Finance
	Email: [email protected]

with a copy to (which shall not constitute notice):	DLA Piper LLP (US)
	51 John F. Kennedy Parkway
	Short Hills, NJ 07078
	Attn: Andrew P. Gilbert, Esq. Scott A. Cowan, Esq.
	Facsimile: (973) 520-2574
	Email: [email protected]

17. Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the Company and the Investor and their respective heirs, legal representatives, successors and permitted assigns.

18. Notification of Changes. The Investor hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the Closing pursuant to this Agreement that would cause any representation, warranty or covenant of the Investor contained in this Agreement to be false or incorrect.

19. Reliance by Placement Agent and Financial Advisor. The Placement Agent, acting as financial advisor to the Company, may rely on each representation and warranty of the Company and the Investor made herein or pursuant to the terms hereof with the same force and effect as if such representation or warranty were made directly to the Placement Agent. The Placement Agent shall be a third-party beneficiary of this Agreement to the extent provided in this Section 19.

20. Severability. If any term or provision of this Agreement (in whole or in part) is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

21. Survival. The representations and warranties of the Company and the Investor contained in this Agreement or made by or on behalf of the Exchanging Investors pursuant to this Agreement shall survive the consummation of the transactions contemplated hereby.

22. Termination. This Agreement may be terminated and the transactions contemplated hereby abandoned (a) by mutual agreement of the Company and the Investor or (b) by either the Company or the Investor if the conditions to such party’s obligations set forth herein have not been satisfied (unless waived by the party entitled to the benefit thereof), and the Closing has not occurred on or before 5:00 p.m., New York City time, on the tenth (10th) business day following the date hereof, unless otherwise mutually agreed to by the parties to this Agreement without liability of either the Company or the Investor or the other Exchanging Investors, as the case may be; provided that neither the Company nor the Investor shall be released from liability hereunder if the Agreement is terminated and the transactions abandoned by reason of the failure of the Company or the Investor or the other Exchanging Investors, as the case may be to have performed its obligations hereunder. In the event that a condition precedent to the Company’s or the Investor’s obligations is not satisfied, nothing contained herein shall be deemed to require the Company or the Investor, as the case may be, to terminate the Agreement, rather than to waive such condition precedent and proceed with the transactions contemplated hereby. Except as provided above, if the is terminated and the transactions contemplated hereby are not concluded as described above, the Agreement will become void and of no further force and effect.

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EXHIBIT B.1

Exchanging Investor Information

Agent for Service of Process:

Investor Address:

Telephone:

Country of Residence:

Taxpayer Identification Number:

Account for Notes

DTC Participant Number:

DTC Participant Name:

DTC Participant Phone Number:

DTC Participant Contact Email:

FFC Account #:

Account # at Bank/Broker:

Account for Shares (if different from Notes)

DTC Participant Number:

DTC Participant Name:

DTC Participant Phone Number:

DTC Participant Contact Email:

FFC Account #:

Account # at Bank/Broker:

Exchanging Investor Address:

Telephone:

Country of Residence:

Taxpayer Identification Number:

EXHIBIT B.2

Exchange Procedures

NOTICE TO INVESTOR

Attached are Investor Exchange Procedures for the settlement of the exchange of 4.75% Convertible Senior Notes due 2020, CUSIP 452907 AK4 (the “Notes”) of Immunomedics, Inc. (the “Company”) for shares of the Company’s common stock, par value $0.01 per share (the “Shares”) pursuant to the Exchange Agreement, dated as of October 2, 2018, between you and the Company which is expected to occur on October 5, 2018. To ensure timely settlement, please follow the instructions for exchanging your Notes for Shares as set forth on the following page.

These instructions supersede any prior instructions you received. Your failure to comply with the attached instructions may delay your receipt of Shares for your Notes.

If you have any questions, please contact Iain Franks of Cowen and Company, LLC at [email protected] or (415) 646-7266.

Thank you.

Delivery of Notes

You must direct the eligible DTC participant through which you hold a beneficial interest in the Notes to post on October 4, 2018, no later than 9:00 a.m., New York City time, one-sided withdrawal instructions through DTC via DWAC for the aggregate principal amount of Notes (CUSIP/ISIN # 452907AK4/US452907AK41) set forth in Exhibit B.1 of the Exchange Agreement to be exchanged for Shares. It is important that this instruction be submitted and the one-sided DWAC withdrawal (not a deliver vs. payment or free delivery) is posted on October 4, 2018.

To receive Shares

You must direct your eligible DTC participant through which you wish to hold a beneficial interest in the Shares to be issued upon exchange to post on October 5, 2018, no later than 9:00 a.m., New York City time, a one-sided deposit instruction through DTC via DWAC for a number of Shares equal to the Exchange Consideration per $1,000 principal amount of the Exchanged Notes (CUSIP/ISIN # 452907AK4/US452907AK41) set forth in Exhibit B.1 of the Exchange Agreement. It is important that this instruction be submitted and the DWAC posted on October 5, 2018.

Closings

On October 5, 2018, after the Company receives your Notes on the trading day prior to such day and your delivery instructions on such day as set forth above, and subject to the satisfaction of the conditions to Closing as set forth in your Exchange Agreement, the Company will deliver your Shares in respect of your Notes exchanged in accordance with the delivery instructions above.

EXHIBIT C

Under U.S. federal income tax law, a holder who exchanges Notes for Shares generally must provide such holder’s correct TIN on IRS Form W-9 below or otherwise establish a basis for exemption from backup withholding. A TIN is generally an individual holder’s social security number or a holder’s employer identification number. If the correct TIN is not provided, the holder may be subject to a $50 penalty imposed by the IRS under Section 6723 of the Internal Revenue Code of 1986, as amended. In addition, certain payments made to holders may be subject to U.S. backup withholding (currently set at 28% of the payment). If a holder is required to provide a TIN but does not have a TIN, the holder should consult its tax advisor regarding how to obtain a TIN. Certain holders are not subject to these backup withholding and reporting requirements. A Non-U.S. holder must establish its status as an exempt recipient from backup withholding and can do so by submitting a properly completed IRS Form W-8 (available from the Company), signed, under penalties of perjury, attesting to such holder’s exempt foreign status. U.S. backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is timely furnished to the IRS. Holders are urged to consult their tax advisors regarding how to complete the appropriate forms and to determine whether they are exempt from backup withholding or other withholding taxes.

PERSONAL AND CONFIDENTIAL

August 23, 2018

Michael Garone

4 Hawser Way

Randolph, NJ 07869

Re: Transition Agreement

Dear Mike:

This will confirm the agreement (the “Agreement”) that has been reached with you in connection with the transition and pending separation of your employment from Immunomedics, Inc., a Delaware corporation having its principal offices in Morris Plains, New Jersey (the “Company”).

1.Separation of Employment. Unless earlier terminated in accordance with the provisions of this Agreement, you and the Company agree that your last day of employment with the Company will be no later than one (1) year from such date that the Company files a Biologics License Application for IMMU-132 with the U.S. Food and Drug Administration (the “One-Year Anniversary Date”). Your last day of employment with the Company, whether the One-Year Anniversary Date or earlier, will be referred to as the “Separation Date.” From the date of this Agreement through the Separation Date, you shall continue to (i) use your best efforts to carry out the duties and responsibilities of your position and (ii) observe and adhere to all applicable Company policies and procedures as may be interpreted, adopted, revised or deleted from time to time. Notwithstanding the foregoing, it is understood that this Agreement does not modify the at-will nature of your employment or serve as a guarantee of employment through any particular date.

2.Transition to Successor CFO. You understand that as of the date of this Agreement, an interim Chief Financial Officer (“Successor CFO”) has been appointed, or shortly thereafter will be appointed, by the Company’s Board of Directors (the “Board”) and that the Successor CFO shall commence providing services in such role as of the effective date of such appointment (“Transition Date”). You acknowledge and agree that you shall be deemed to have resigned from your position as Chief Financial Officer of the Company effective as of the Transition Date and you shall take such further actions as may be necessary or desirable to effectuate the foregoing.

3.Position; Duties. Effective as of the Transition Date, and to and including the Separation Date, the Company will employ you, and you agree to serve as Vice President, Finance, continuing to report to the Chief Executive Officer (“CEO”), and carrying out such projects and responsibilities as may be reasonably assigned to you by the CEO, or the Board. You also agree to use your best efforts to transition your knowledge and job responsibilities to the Successor CFO, including but not limited to assisting him/her to learn about the historical practices of Company and the industry, and introducing him/her to key contacts within the Company and the industry.

4.Base Salary; Annual Bonus; Benefits. From the date of this Agreement through the Separation Date, and as compensation for all services rendered by you hereunder, the Company will continue to pay you your current base salary (“Base Salary”) at the rate of Three Hundred and Fifty Thousand Dollars ($350,000) per year, subject to all required withholdings and authorized deductions and payable semi-monthly in installments at such times as the Company customarily pays its other senior level executives. For each fiscal year of your employment, you shall continue to be eligible to receive an annual discretionary cash bonus (the “Annual Bonus”) for services rendered under this Agreement. The amount

of the Annual Bonus, if any, will be determined by the Compensation Committee of the Board in its discretion, based on your individual performance and Company performance, and paid at such times as the Company pays annual bonuses to other senior-level executives. Your Annual Bonus target is forty percent (40%) of your Base Salary for the applicable fiscal year (the “Target Bonus”). Except as set forth herein, to be eligible to receive an Annual Bonus, or any portion thereof, you must be employed by the Company both at the time the amount of the Annual Bonus, if any, is determined, and at the time the Annual Bonus, if any, is paid. In addition, from the date of this Agreement through the Separation Date, you shall continue to be eligible to participate in employee retirement and welfare benefit plans made available to the Company’s senior level executives as a group or to its employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans. Nothing in this Agreement shall prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate.

5.Severance. In consideration of your obligations set forth in this Agreement, and subject to your continued employment with the Company through the One-Year Anniversary Date, unless otherwise provided in Section 6, the Company agrees to the following arrangements (collectively, the “Severance Benefits”):

(a)Any outstanding unvested Time-Based Equity Awards that you hold as of the Separation Date will immediately vest in full and will remain exercisable subject to the terms specified in the agreement evidence such award. For purposes of this Agreement “Time-Based Equity Award” means an equity award, the vesting, exercisability or risk of forfeiture associated therewith as of your termination of employment is conditioned solely upon your continued service and the performance conditions, if any, associated with such equity award having been satisfied.

(b)The Company will make a cash payment to you in an amount equal to two (2) times the sum of (i) your Base Salary and (ii) your Target Bonus (at 40% of Base Salary regardless of satisfaction of individual and Company performance metrics), less all required withholding taxes and authorized deductions (the “Severance Payment”). The Severance Payment shall be paid in a lump sum within sixty (60) days of the Separation Date.

(c)The Company will make an additional lump-sum cash payment to you equal to the dollar amount obtained by multiplying one-twelfth (1/12th) of the annual Target Bonus in effect for you for the year of your termination by the number of full or partial months of employment which you complete with the Company in that year (the “Pro-Rated Bonus”). The payment of your Pro-Rated Bonus shall be made not more than sixty (60) days following the Separation Date. The payment will be subject to the Company’s collection of all required withholding taxes.

(d)The Company will make an additional lump-sum cash payment to you equal to the dollar amount obtained by multiplying one two-hundred sixtieth (1/260^th) of your Base Salary by the number of days of vacation that you are entitled to as of the Separation Date (the “Pro-Rated Vacation Pay”). The payment of your Pro-Rated Vacation Pay shall be made not more than sixty (60) days following the Separation Date. The payment will be subject to the Company’s collection of all required withholding taxes.

(e)Should you be eligible for and timely and properly elect to continue health care coverage under the Company’s group health plan for yourself, your spouse and your eligible dependents following the Separation Date pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse you for the cost of such COBRA coverage. Such reimbursement will be paid to you on or about the tenth (10th) day of the month immediately following the month in which you timely remit the premium payment. Such reimbursement will continue until the earliest of (i) the expiration of the 12-month period measured from the Separation Date or (ii) the first date you are covered under another employer’s heath benefit program which provides substantially the same level of benefits without exclusion for pre-existing medical conditions, after which time any continued

COBRA coverage shall be at your own expense. Should the Company’s reimbursement of the cost of such COBRA coverage result in the recognition of taxable income (whether for federal, state or local income tax purposes) by you or your spouse or other eligible dependent, then each of you will be responsible for the payment of the income and employment tax liability resulting from such coverage, and the Company will not provide any tax gross-up payments to you (or any other person) with respect to such income and employment tax liability. COBRA continuation coverage will in all respects be subject to the requirements, conditions and limitations of COBRA and of the medical and dental plans of the Company, which may be amended from time to time. To the extent you are subject to the delayed benefit commencement provisions of Section 17 below, the Company will, at the end of the delayed commencement period, promptly reimburse you with a lump sum cash payment equal to the cost you incurred for such health care coverage for that period.

(f)Notwithstanding anything in this Agreement to the contrary, the Severance Benefits described in this Section 5 shall begin if, and only if, you execute and deliver to the Company within twenty-one (21) days of the Separation Date and do not thereafter revoke a general release in form and substance acceptable to the Company pursuant to which you release the Company and its officers, directors, stockholders, employees and agents from any and all claims that may arise out of or relate to your employment, the terms and conditions of your employment, or the termination of that employment, subject only to the terms of this Agreement and the Indemnification Agreement, in a form similar to that attached as Exhibit A to this Agreement (the “Release”).

(g)The Company will not be entitled to set off any of the following amounts against the Severance Benefits to which you may become entitled hereunder: (i) any amounts which you may subsequently earn through other employment or service following your termination of employment with the Company, or (ii) any amounts which you might have potentially earned in other employment or service had you sought such other employment or service; or (iii) any amounts which you might earn from the Company through the provision of other services to the Company following your termination of employment with the Company; for example the provision of services under the terms of Paragraph 9 of this Agreement.

(h)Notwithstanding any provision of this Agreement to the contrary, in no event will the timing of your execution of the Release directly or indirectly result in your designating the calendar year of payment of all or part of the Severance Benefits, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A of the Internal Revenue Code of 1986, as amended and the regulations and guidance promulgated thereunder (“Section 409A”) is subject to execution of the Release could be made in more than one taxable year, payment will be made in the later taxable year.

(i)You agree and acknowledge that the arrangements, payments and benefits referenced herein are in lieu of and in full satisfaction of any amounts that might otherwise be payable under any contract, plan, policy or practice, past or present, of the Company or any of its affiliates, including but not limited to with respect to any severance pay. You further acknowledge that, except as expressly set forth herein, you will not be eligible to participate or continue to participate in any employee benefit plans or compensation arrangements of the Company or any of its affiliates after the Separation Date.

6.Early Termination.

(a)Notwithstanding the provisions of Section 1, either you or the Company may terminate your employment at any time for any reason prior to the One-Year Anniversary Date upon 60 days’ prior written notice (the “Early Termination”). The Company will have the discretion to terminate your employment during the notice period and pay continued Base Salary in lieu of notice.

(b)In the event of an Early Termination by you or by the Company, you will be entitled to the Severance Benefits set forth in Section 5 on the same terms and subject to the same conditions set forth therein.

7.Confidential Information.

(a) You agree that in the course of your employment with the Company you have had and will continue to have access to confidential and proprietary information concerning the business of the Company and its affiliates, including its business plans and strategies, business transactions and relationships, forecasts, credit and financial information, advertising, merchandising, marketing and sales information, information regarding the vendors, suppliers, business partners, officers and other personnel of the Company and its affiliates, trade practices, trade secrets, know-how, research, inventions, products, developments, clinical data and other matters that are not publicly known, which is integral to the operations and success of the Company and its affiliates (“Confidential Information”). You further understand and agree that (i) you will at all times, whether during or after the separation of your employment, keep such Confidential Information confidential, (ii) you will not at any time make use of such Confidential Information on your own behalf, or on behalf of any third party, and (iii) you will return to the Company on or before your Separation Date any and all copies, duplicates, reproduction or excerpts of such Confidential Information within your possession, custody or control. This obligation is understood to be in addition to, and not as any replacement for, any agreements you may have signed with the Company concerning confidentiality, trade secrets, non-disclosure, or assignment of inventions or other intellectual property developments, which agreements will remain in full force and effect.

(b) The above restrictions shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of your own; (ii) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation; (iii) information approved for release by written authorization of the Company; or (iv) information that may be required by law or an order of any court, agency or proceeding to be disclosed; provided that you shall provide the Company prior written notice of any such required disclosure once you have knowledge of it and will help the Company to the extent reasonable to obtain an appropriate protective order. Moreover, the foregoing shall not limit your ability to (x) discuss the terms of your employment, wages and working conditions to the extent expressly protected by applicable law, (y) report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state “whistleblower” laws, or (z) respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation.

(c) Pursuant to the Defend Trade Secrets Act of 2016, you acknowledge that you will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

8.Return of Company Property. All documents (electronic, paper or otherwise), records (electronic, paper or otherwise), materials, software, equipment, and other physical property, including but not limited to smartphones and Blackberries, ID cards, building and office access cards, keys, access codes, computers and databases, and all copies of the foregoing, whether or not otherwise containing Confidential Information, that have come into your possession or been produced by you in connection with your employment (“Property”), have been and remain the sole property of the Company or its affiliates, as applicable. You agree to return all such Property to the Company on or before the Separation Date.

9.Cooperation. For the twenty-four (24) month period following termination of your employment for any reason, you agree to reasonably cooperate with the Company in (i) responding to reasonable requests by the Company for information concerning work performed by you during the period of your employment with the Company, the winding up of your pending work, and/or the orderly transfer

of such pending work to such other employees as may be designated by the Company, and (ii) any investigation or review that may be performed by the Company or any government authority or in any litigation in which the Company may become involved concerning work performed by you and/or with regard to any matters that relate to or arise out of the business of the Company during the period of your employment and about which you may have knowledge. Your cooperation shall include, but not be limited to, being available to meet and speak with officers or employees of the Company and/or its counsel at reasonable times and locations, executing accurate and truthful documents and taking such other actions as may reasonably be requested by of the Company and/or its counsel to effectuate the foregoing. The Company will reimburse you for any reasonable travel and out of pocket expenses incurred by you in providing such cooperation and shall use its best efforts to schedule any such cooperation at a time that is mutually convenient for you and the Company and does not unreasonably interfere with your duties or obligations to any subsequent employer. Moreover, with respect to the foregoing clause (i), in the event that the cooperation being requested of you is anticipated to be extensive, you and the Company shall discuss in good faith an hourly consulting fee for your services, such fee to be paid at the higher of your current effective hourly rate or your final effective hourly rate.

10.Non-Interference. During your employment with the Company and for a period of twelve (12) months after the Separation Date (regardless of the reason for your separation), you agree that you shall not, except on behalf of the Company and in the furtherance of your authorized duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity:

(a) solicit, entice or induce, or attempt to solicit, entice or induce, any customer, vendor, supplier, or business development partner to terminate, diminish, or materially alter in any manner harmful to the Company its relationship with the Company, discontinue, terminate, cancel, not renew, or refrain from entering into, a business relationship or transaction with the Company, even if you do not initiate such discussion or seek out the contact;

(b) solicit or recruit, or attempt to solicit or recruit, any employee, consultant or independent contractor of the Company to terminate employment or otherwise cease providing services to the Company, even if you do not initiate such discussion or seek out the contact; or

(c) disrupt, interfere or attempt to disrupt or interfere with a business relationship or transaction between Company and any customer/client, potential customer/client, employee, consultant or independent contractor.

11.Mutual Non-Disparagement. Both during your employment and after the Separation Date, you agree to refrain from making any oral or written statement or taking any other action, directly or indirectly, that disparages, criticizes, or causes reputational harm to the Company, its management, business or employment practices, or its employees, consultants, agents, or representatives, or that disrupts or impairs the Company’s normal, ongoing operations. Similarly, representatives of the Company shall refrain from making any oral or written statement or taking any other action that disparages or criticizes you; provided that any violation of this non-disparagement provision by any representative of the Company who does not have knowledge of this Agreement shall not constitute a breach of this Agreement by the Company. This non-disparagement provision does not apply on occasions when you or the Company are subpoenaed or ordered by a court or other governmental authority to testify or give evidence, in which case, both parties to this Agreement must, of course, respond truthfully.

12.Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and by email and shall be deemed to have been duly given when hand-delivered or mailed by overnight mail with certified receipt, addressed

as follows (or to such other address as a party hereto shall designate to the other party by like notice, provided that notice of change of address shall be deemed given only when received):

If to the Company: If to you:

Immunomedics, Inc. Michael R. Garone

Attn: Michael Pehl 4 Hawser Way

300 The American Road Randolph, New Jersey 07869

Morris Plains, New Jersey 07950

And by email: And by email:

@ [email protected] @ [email protected]

13.Contents of Agreement; Amendment; Headings.

(a)The terms described in this Agreement set forth the entire agreement and understanding of the parties and supersede all prior agreements, arrangements and understandings, written or oral, between the parties, including but not limited to the letter agreement between you and the Company dated January 31, 2017, and providing for change in control severance benefits (the “Change in Control Severance Agreement”); provided, however that the Indemnification Agreement, between you and the Company, dated February 14, 2017, and the Confidentiality and Assignment Agreement between you and the Company, and any other contractual obligations concerning confidentiality and/or assignment of intellectual property, shall remain in full force and effect. For the avoidance of doubt, the parties agree and acknowledge that, upon full execution of this Agreement, the Change in Control Severance Agreement is null and void, and you agree and acknowledge that you shall have no right to benefits of any kind, including severance benefits, under the Change in Control Severance Agreement. You acknowledge and agree that you are not relying on any representations or promises by any representative of the Company concerning the meaning or any aspect of this Agreement.

(b)This Agreement may not be altered or modified other than in writing signed by you and an authorized representative of the Company.

(c)The headings in this Agreement are for convenience only, and both parties agree that they shall not be construed or interpreted to modify or affect the construction or interpretation of any provision of this Agreement. Both parties have been represented by independent legal counsel of their choosing in the drafting and execution of this Agreement, and the provisions contained in it shall not be construed or interpreted for or against either party because that party drafted or caused that party’s legal representative to draft any of its provisions.

14.Remedies Cumulative; No Waiver. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

15.Governing Law; Jurisdiction. This Agreement shall be construed in accordance with the laws of the State of New Jersey without regard to conflicts of law principles. You irrevocably agree to submit to the exclusive jurisdiction of the state and/or federal courts sitting in New Jersey, for the purposes of any suit, action or other proceeding arising out of or relating in any way to this Agreement, to your employment by the Company or to the termination of such employment. You waive and agree not to assert in any such proceeding a claim that you are not personally subject to the jurisdiction of the courts referred to above, that the suit or action was brought in an inconvenient forum or that the venue of the suit or action is improper. THE PARTIES FURTHER AGREE TO IRREVOCABLY AND VOLUNTARILY

WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT.

16.Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and shall be binding upon, (i) the Company and its successors and assigns and (ii) you, the personal representative of your estate and your heirs and legatees; provided except that your duties and responsibilities under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by you. Should you die before you receive the full amount of payments and benefits to which you may become entitled under this Agreement, then the balance of such payments shall be made, on the due dates hereunder had you survived, to the executors or administrators of your estate. For the avoidance of doubt, any third party who acquires, directly or indirectly through a transaction with a parent company or other direct or indirect shareholder of the Company, in a single transaction or series of related transactions (a) equity securities of the Company possessing the voting power under normal circumstances to elect a majority of the managers (or any similar governing body) or representing more than fifty percent (50%) of the voting power of the Company, or (b) all or substantially all of the assets of the Company and its subsidiaries or of a parent company determined on a consolidated basis (in either case, whether by merger, consolidation, sale, exchange, issuance, transfer or redemption of the Company’s or any such parent company’s equity securities, by sale, exchange or transfer of the Company’s or any such parent company’s consolidated assets or otherwise) will be deemed a successor for purposes of this Agreement.

17.Code Section 409A.

(a)Although the Company makes no guarantee with respect to the tax treatment of payments hereunder, payments under this Agreement are intended to either comply with, or be exempt from, the requirements of Section 409A. To the extent that this Agreement or the payments hereunder are not exempt from the requirements of Section 409A, this Agreement and the payments hereunder are intended to comply with the requirements of Section 409A and shall be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, the Company shall have (i) no obligation to prevent, minimize, or make a gross-up payment to offset any negative consequences to you under Section 409A and (ii) no liability to you for any negative consequences if they arise.

(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any “nonqualified deferred compensation” subject to Section 409A upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean Separation from Service. If you are deemed on your Retirement Date to be a “specified employee,” within the meaning of that term under Internal Revenue Code Section 409A(a)(2)(B) and using the identification methodology selected by the Company from time to time, or if none, the default methodology, then with regard to any payment or the providing of any benefit that constitutes “nonqualified deferred compensation” subject to Section 409A, to the extent required to be delayed in compliance with Internal Revenue Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided to you prior to the earlier of (i) the expiration of the six-month period measured from the date of your Separation from Service and (ii) within ten business days after the appointment of a personal representative or executor of the estate after your death. On the first day of the seventh month following the date of your Separation from Service or, if earlier, within ten business days after the appointment of a personal representative or executor of the estate after your death, all payments delayed pursuant to this section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due to you under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c)If under this Agreement, an amount of “nonqualified deferred compensation” under Section 409A is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment.

(d)To the extent any reimbursement of costs and expenses provided for under this Agreement constitutes taxable income to you for Federal income tax purposes, such reimbursements shall be made no later than December 31 of the calendar year next following the calendar year in which the expenses to be reimbursed are incurred.

(e)With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Internal Revenue Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

18.Section 280G of the Code. Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to you or for your benefit pursuant to the terms of this Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 18, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to you of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to you if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.

(a)Any such reduction shall be made in accordance with Section 409A and the following:

i.the Covered Payments consisting of cash severance benefits that do not constitute nonqualified deferred compensation subject to Section 409A shall be reduced first, in reverse chronological order; and

ii.all other Covered Payments consisting of cash payments, and Covered Payments consisting of accelerated vesting of equity based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) does not apply, and that in either case do not constitute nonqualified deferred compensation subject to Section 409A, shall be reduced second, in reverse chronological order;

iii.all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject to Section 409A shall be reduced third, in reverse chronological order; and

iv.all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.

(b)Any determination required under this Section 18 shall be made in writing in good faith by an independent accounting firm selected by the Company (the “Accountants”). The Company and you shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 18. For purposes of making the calculations and determinations required by this Section 18, the Accountants may rely on reasonable, good-faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Company and you. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 18.

(c)It is possible that after the determinations and selections made pursuant to this Section 18 you will receive Covered Payments that are in the aggregate more than the amount intended or required to be provided after application of this Section 18 (“Overpayment”) or less than the amount intended or required to be provided after application of this Section 18 (“Underpayment”).

i.In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or you that the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made, then you shall pay any such Overpayment to the Company together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of your receipt of the Overpayment until the date of repayment.

ii.In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of you together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date the amount should have otherwise been paid to you until the payment date.

19.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Facsimile signatures and signatures transmitted by PDF shall be equivalent to original signatures.

20.

[INTENTIONALLY LEFT BLANK]

If the above sets forth our agreement as you understand it and consent to it, please so signify by executing the enclosed copy of this letter and return it to me at the address listed above.

Very truly yours,

Immunomedics, Inc.

/s/ Michael Pehl

By: Michael F. Pehl

Title: President and CEO

Agreed to and Accepted:

/s/ Michael Garone

Michael Garone

Dated: August 23, 2018

EXHIBIT A

FORM OF:

CONFIDENTIAL GENERAL RELEASE AND WAIVER OF CLAIMS

[to be signed on or after Separation Date]

In consideration of the severance payments and other benefits to which I have become entitled pursuant to that certain agreement between Immunomedics, Inc. (the “Company”), and myself dated [date of transition services agreement] (the “Agreement”), and in connection with the termination of my employment on [date of termination], I, Michael Garone, hereby furnish the Company with the following confidential general release and waiver of claims (“Release”).

1.(a) I, individually and on behalf of myself, my heirs, executors, administrators, successors, and assigns, knowingly and voluntarily hereby release and forever discharge the Company and its affiliates, related entities, parents, subsidiaries, and divisions, and each of their past, present, or future officers, directors, members, partners, managers, stockholders, employees, agents, investors, and advisors, and each of their respective predecessors, successors and assigns, and any and all employee pension or welfare benefits plans of the Company, including current and former trustees and administrators of these plans (collectively, the “Releasees”) from any and all claims, liabilities, demands, causes of action, costs, expenses, attorney fees, damages, indemnities and obligations of every kind and nature, in law, equity or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising from or relating to my employment with the Company and the termination of that employment. Without limiting the generality of the foregoing, this Release includes, but is not limited to, (i) any rights or claims arising under any federal, state, or local constitution, statute, ordinance, or regulation, including without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 through 1988 of Title 42 of the United States Code, the Americans with Disabilities Act of 1990, the Genetic Information Nondiscrimination Act of 2008, the Family and Medical Leave Act of 1993, the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, the Age Discrimination in Employment Act of 1967 (the “ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), the Rehabilitation Act of 1973, the Employee Retirement Income Security Act of 1974,the anti-retaliation provisions of the Fair Labor Standards Act, the Worker Adjustment Retraining and Notification (“WARN”) Act and any state WARN statutes, the Occupational Safety

and Health Act, the Uniformed Services Employment and Reemployment Rights Act, the anti-retaliation provisions of the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1514A (also known as the Sarbanes-Oxley Act and/or Dodd-Frank Wall Street Reform Consumer Protection Act), the Fair Credit Reporting Act, the New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the Conscientious Employee Protection Act, and the New Jersey Wage Laws, each of the foregoing as amended, and any other federal, state or local constitution, law, regulation, or ordinance; (ii) any rights or claims under any plan, program, policy, agreement, contract, understanding or promise, express or implied, written or oral, formal or informal, between the Company or any of the Releasees and myself, including but not limited to the Agreement; (iii) any claim for unpaid compensation, wages, bonus or incentive compensation, profits, commission, equity, securities, benefits, vacation, severance pay, and/or other fringe benefit of the Company or any of the other Releasees; (iv) any rights or claims under any common law theory, including for alleged tortious, negligent, defamatory and/or fraudulent conduct; and (v) any claim for attorney’s fees or costs.

(b) Notwithstanding the foregoing, I understand that nothing in this Release shall serve to waive (i) any claims or rights that, pursuant to law, cannot be legally waived or subject to a release of this kind, such as claims for unemployment or workers’ compensation benefits; (ii) rights to vested benefits under any applicable retirement plans as of my termination date; (iii) any right I may have to bring appropriate proceedings to enforce the terms of the Agreement; (iv) any claims or rights I may have to indemnification pursuant to the Indemnification Agreement, between me and the Company, dated February 14, 2017, and/or (v) rights, pursuant to the OWBPA, to seek a judicial determination of the validity of this Release’s waiver of claims under the ADEA.

2.I hereby represent and warrant that I have not filed, caused to be filed or permitted to be filed any complaints, charges, lawsuits or other proceedings against the Company or any of the other Releasees, and that no such complaints, charges, lawsuits or other proceedings are pending. I further covenant and agree that I will not file, cause to be filed or permit to be filed any complaints, charges, lawsuits or other proceedings at any time hereafter with respect to any claims released pursuant to this Release. I understand that nothing in this Release shall be construed to prohibit me from filing a charge with or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or a comparable state or local agency (the “EEOC”) or with the Securities and Exchange Commission (“SEC”). Notwithstanding the foregoing, if I file a charge with the EEOC, I agree not to violate the confidentiality provisions of the Agreement. I further agree that if I, or anyone on my behalf, files a charge with the EEOC, civil action, suit or legal proceeding against the Releasees involving any matter subject to this Release I hereby waive my right to seek or recover any personal relief (including but not limited to monetary damages) in any charge, complaint, or lawsuit filed by; provided, however, that this limitation on recovery shall not apply to administrative proceedings before the SEC.

3.I represent and warrant that I have complied with and agree to comply with my continuing obligations under Sections 7-11 of the Agreement, which include obligations regarding confidentiality, return of company property, cooperation, non-interference, and non-disparagement. I understand and acknowledge that my right to the Severance Benefits is subject to my continued compliance with same.

4.I acknowledge that:

(a) I have carefully read this Release in its entirety and understand its terms;

(b) I am fully competent to sign this Release and do so freely and voluntarily without any undue influence or coercion from anyone;

(c) The Severance Benefits being provided to me in consideration for this Release are of significant value and I would not be entitled to same but for my execution and non-revocation of this Release;

(d) By way of this Release, the Company has advised me of my right to consult with an attorney of my choosing prior to executing this Release (although I may choose voluntarily not to do so);

(e) I have been provided with at least twenty-one (21) days in which to review and consider this Release, although I may choose voluntarily to execute this Release earlier. I understand that if I do not execute this Release within such twenty-one (21) day period, this Release shall be null and void, and I shall have no right to the Severance Benefits;

(e) I understand that I have seven (7) days following my execution of this Release to revoke the Release by delivering my revocation in writing to the Company (Attn: Michael F. Pehl, CEO), which must be received no later than 5:00 p.m. Eastern Time on the seventh (7th) day of the revocation period. If not revoked within 7 days, this Release will become fully effective and irrevocable on the eighth day after I sign it. If I revoke my acceptance, I acknowledge this Release shall be null and void and I shall have no rights to the Severance Benefits.

Agreed to and accepted:

________________________

Michael Garone

________________________

Date

Confidential treatment has been requested with respect to portions of this agreement as indicated by “[***]” and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

EXECUTION VERSION

MASTER SERVICES AGREEMENT

Between

SAMSUNG BIOLOGICS CO., LTD.

and

IMMUNOMEDICS, INC.

Table of Contents

Section 1DEFINITIONS 1

Section 2RELATED AGREEMENTS AND EXHIBITS 8

Section 3MANAGEMENT OF SERVICE 9

Section 4SERVICES 13

Section 5SERVICE DESCRIPTIONS 15

Section 6CHANGES TO THE SPECIFICATIONS, ANALYTICAL METHODS, MANUFACTURING PROCESS, FACILITY OR EQUIPMENT 22

Section 7REGULATORY APPROVALS AND INSPECTIONS. 24

Section 8QUALITY COMPLIANCE 25

Section 9CONSIDERATION AND PAYMENT TERMS 26

Section 10CONFIDENTIALITY 28

Section 11OWNERSHIP OF MATERIALS AND INTELLECTUAL PROPERTY 31

Section 12WARRANTIES. 32

Section 13INDEMNIFICATION 34

Section 14DISCLAIMER OF CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY 35

Section 15TERM AND TERMINATION OF AGREEMENT 35

Section 16ARBITRATION 40

Section 17MISCELLANEOUS 41

MASTER SERVICES AGREEMENT

This Master Services Agreement (this “MSA”) is made and entered into as of the date of last signature below (the “Effective Date”) by and between Immunomedics, Inc., a Delaware corporation having its principal place of business at 300 The American Rd, Morris Plains, NJ 07950 (“Client”), and Samsung BioLogics Co., Ltd., a company with offices at 300, Songdo bio-daero, Yeonsu-gu, Incheon, 21987, Republic of Korea (“SBL”). Client and SBL are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

WHEREAS, Client and SBL wish to enter into a business relationship whereby SBL will provide Client with certain biologics manufacturing and/or development services;

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth and for other valuable consideration, the Parties agree as follows:

Section 1DEFINITIONS

Each of the following capitalized terms as used in this MSA, whether in the singular or plural, shall have the respective meanings set forth below.

1.1 “Acceptance Procedure” means the review of the Batch Related Documents and any additional test(s) of a Batch of Product which are performed to verify that the Product delivered meets the Specifications and complies with Regulatory Authority requirements, which are conducted by Client or its designee after SBL’s release of a Batch of Product, to determine whether to accept the same, in accordance with the applicable PSA and QAG.

1.2 “Affected Party” is defined in Section 17.3.

1.3 “Affiliate” means any corporation, company, partnership or other entity which directly or indirectly, controls, is controlled by or is under common control with either Party hereto. A corporation or other entity shall be regarded as controlling another corporation or other entity if it owns or directly or indirectly controls more than fifty percent (50 %) of the voting stock or other ownership interest of the corporation or other entity, or if possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint more than fifty percent (50 %) of the members of the governing body of the corporation or other entity.

1.4 “Applicable Laws” means any and all applicable laws of any jurisdiction which are applicable to any of the Parties in carrying out activities described in this MSA or any PSAs that may be in effect from time to time, and shall include all statutes, enactments, acts of legislature, laws, ordinances, rules, regulations, notifications, guidelines, directions, directives and orders of any Regulatory Authority, statutory authority, stock exchange, securities regulatory agency, tribunal, board, or court or any central or state government or local authority or other governmental entity in such jurisdictions.

1.5 “Background IP” means any Intellectual Property related to a Product and/or its use, or the Manufacture of such Product, in each case, which is owned and/or controlled by a Party prior to the Effective Date or outside or not relating to the performance of the MSA.

1.6 “Batch” means the quantity of Product Manufactured by SBL which results from a single run of the applicable Manufacturing Process, which amounts and batch size shall be set forth in the applicable PSA.

1.7 “Batch Record” is defined in the applicable QAG.

1.8 “Batch Related Documents” means Manufacturing Documentation in support of SBL’s release of a Product, including analytical raw data, Certificates of Analysis, executed master batch records, and such other documents as reasonably requested by Client to enable the release of a Product in conformance with the applicable QAG.

1.9 “Binding Year” shall be defined in the applicable PSA.

1.10 “Business Day” means a day on which commercial banks are open for business in the Republic of Korea.

1.11 “Calendar Year” means each period of twelve (12) consecutive calendar months beginning on January 1.

1.12 “Cell Line” means in respect of a given Product, the cell bank vials supplied or otherwise made available to SBL by Client to perform the Services.

1.13 “Certificate of Analysis” is defined in the applicable QAG.

1.14 “Certificate of Compliance” is defined in the applicable QAG.

1.15 “Change” is defined in Section 6.1.

1.16 “Client” is defined in the preamble.

1.17 “Client Materials” means reagents and other materials supplied by Client or its third party supplier to SBL to be used in the Services hereunder, as each is further defined in the applicable PSA and/or applicable QAG.

1.18 “Client Technology” means know-how, technology, research and other information of Client including and relating to the Manufacturing Process, SOPs, analytical methods, quality control analysis, specifications, transportation and storage requirements provided by Client to SBL in connection with this MSA and any applicable PSA.

1.19 “Clinical Product” means a Drug Substance or Drug Product which contains a Product Manufactured by SBL pursuant to a PSA and which is to be used by Client in a research study or studies that prospectively assigns human participants or groups of humans to one or more health-related interventions to evaluate the effects on health outcomes.

1.20 “Commercial Product” means a Drug Substance or Drug Product which contains a Product Manufactured by SBL which is intended for commercial sale and use by humans and for importation or exportation into countries or regions designated in each PSA.

1.21 “Commercially Reasonable Efforts” means with respect to an activity to be carried out by a Party pursuant to this MSA, the carrying out of such activity in a diligent manner, and using efforts and resources comparable to the efforts and resources commonly used in the contract manufacturing of biologics (in the case of SBL) or in the biopharmaceutical industry (in the case of Client) by companies with resources and expertise similar to those of such Party.

1.22 “Common Raw Materials” is defined in Section 5.3.1.

1.23 “Confidential Information” means any data, know-how and other information, whether technical or non-technical disclosed by one Party (hereinafter the “Disclosing Party”) or otherwise became known to the other Party (hereinafter the “Receiving Party”) hereunder or under the Confidentiality Agreement entered into by the Parties on April 24, 2017 (“Existing CDA”) relating to the subject matter of the MSA, regardless of form or manner of disclosure, i.e., whether disclosed in writing, in electric file or format or in other tangible manner, or orally, visually or in other intangible manner.

1.24 “Control” (including, with correlative meanings, “Controlled”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or other ownership interest, by contract or otherwise) of that person or entity and/or the ownership of 50% or more of the voting shares of that person or entity.

1.25 “Core Team” is defined in Section 3.3.

1.26 “Current Good Manufacturing Practices” or “cGMP” means current good manufacturing practices and regulations applicable to the Manufacture of Product that are promulgated by any Regulatory Authority, including as promulgated under and in accordance with (i) the U.S. Federal Food, Drug and Cosmetic Act, Title 21 of the U.S. Code of Federal Regulations, Parts 210, 211, 600, 601 and 610, (ii) relevant EU legislation, including European Directive 2003/94/EC or national implementations of that Directive, (iii) relevant guidelines, including the EU Guidelines for Good Manufacturing Practices for Medicinal Products (Eudralex Vol. 4 and Annexes thereto), (iv) International Conference on Harmonisation Good Manufacturing Practice Guide for Active Pharmaceuticals Ingredients and (v) and any analogous set of regulations, guidelines or standards as defined, from time to time, by any relevant Regulatory Authority having jurisdiction over the development, manufacture or commercialization of the Product, as applicable, in each case as in effect as of the date such manufacturing for the Product are or were conducted.

1.27 “Damages” means any direct damages, costs, expenses, fines, penalties (including reasonable attorneys’ fees and costs), losses and liabilities.

1.28 “Drug Product” means a finished or intermediate dosage form that contains a Drug Substance, generally, but not necessarily, in association with one or more other ingredients.

1.29 “Drug Substance” means an active ingredient that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to affect the structure or any function of the human body, but does not include intermediates used in the synthesis of such ingredient.

1.30 “Effective Date” is defined in the preamble.

1.31 “EMA” means the European Medicines Agency, or any successor agency.

1.32 “Engineering Batch” means a Batch that is intended to demonstrate the transfer of the Manufacturing Process to the Facility as further indicated in the applicable PSA.

1.33 “Facility” means one or more of the manufacturing facilities of SBL where the Services shall be performed, located at 300, Songdo bio-daero, Yeonsu-gu, Incheon, 21987, Republic of Korea, which will be further defined in the applicable PSA.

1.34 “FDA” means the United States Food and Drug Administration or any successor agency thereto.

1.35 “Firm Period” shall be defined in the applicable PSA.

1.36 “Force Majeure Event” is defined in Section 17.3.

1.37 “Implementation Plan and Budget” is defined in Section 6.2(b).

1.38 “Indemnified Party” is defined in Section 13.3.

1.39 “Indemnifying Party” is defined in Section 13.3.

1.40 “Intellectual Property” is means (a) patents, patent rights, provisional patent applications, patent applications, designs, registered designs, registered design applications, industrial designs, industrial design applications and industrial design registrations, including any and all divisions, continuations, continuations-in-part, extensions, restorations, substitutions, renewals, registrations, revalidations, reexaminations, reissues or additions, including supplementary certificates of protection, of or to any of the foregoing items; (b) copyrights, copyright registrations, copyright applications, original works of authorship fixed in any tangible medium of expression, including literary works (including all forms and types of computer software, including all source code, object code, firmware, development tools, files, records and data, and all documentation related to any of the foregoing), pictorial and graphic works; (c) trade secrets, technology, developments, discoveries and improvements, know-how, proprietary rights, formulae, confidential and proprietary information, technical information, techniques, inventions, designs, drawings, procedures, processes, models, formulations, manuals and systems, whether or not patentable or copyrightable, including all biological, chemical, biochemical, toxicological, pharmacological and metabolic material and information and data relating thereto and formulation, clinical, analytical and stability information and data which have actual or potential commercial value and are not available in the public domain; (d) trademarks, trademark registrations, trademark applications, service marks, service mark registrations, service mark applications, business marks, brand names, trade names, trade dress, names, logos and slogans, Internet domain names, and all goodwill associated therewith; and (e) all other intellectual property or proprietary rights, in each case whether or not subject to statutory registration or protection.

1.41 “Joint Steering Committee” or “JSC” is defined in Section 3.2.1.

1.42 “Manufacturing” or to “Manufacture” means the manufacturing of the Product, and any services relating to such manufacturing, including, but not limited to, testing, quality control, documentations, archiving, and packaging, and up to release of the Product, to be performed by SBL at the Facility under the MSA and any applicable PSA.

1.43 “Manufacturing Documentation” means with respect to a given Product, the data acquired and generated, documents and records describing or otherwise related to the Manufacturing Process including, without limitation: documents and records consisting of or containing process descriptions, requirements and specifications; Client Materials and Specifications; analytical methods, process trend and variability data; validations protocols and reports; process development reports; Batch Records; Batch Related Documents, and SOPs, including, without limitation, SOP’s for the Raw Materials handling, the Manufacturing operations, equipment operation, in-process, final Product and stability quality control testing, quality assurance, validation, storage and shipping.

1.44 “Manufacturing Process” means, with respect to a given Product, the mutually agreed production process and analytical methods for the Manufacturing of the Product pursuant to the applicable PSA, as summarily described in the applicable QAG and as described in the Manufacturing Documentation, as such process may be changed from time to time in accordance with the MSA.

1.45 “Non-Affected Party” is defined in Section 17.3.

1.46 “Non-Conforming Product” means an entire Batch of Product that fails to conform to the Specifications, cGMP (if applicable), and any/or other mutually agreed upon written express requirements for SBL to follow under the applicable PSA and the applicable QAG.

1.47 “Party” and “Parties” is defined in the preamble.

1.48 “Pilot Batch” means a Batch of Product designated as a pilot Batch which shall not comply with cGMP and is not required to meet the Specifications, unless otherwise agreed in writing by the Parties.

1.49 “Pre-Approval Inspection” means an on-site inspection of the Facility by the Regulatory Authority prior to granting the Regulatory Approval for a Commercial Product as required by various Regulatory Authorities to ensure that the Manufacturing Process and the Facility meet the appropriate requirements and comply with cGMP.

1.50 “Process Validation Batch” means a Batch of Commercial Product produced from a process validation run conducted by SBL hereunder to (i) demonstrate and document the consistency and reproducibility of the Manufacturing Process at the Facility, and (ii) support the Regulatory Approval of both the Product Manufactured and the Manufacturing Process at the Facility each as defined in the Project Plan.

1.51 “Product” means a product to be Manufactured by SBL pursuant to this MSA and any applicable PSA.

1.52 “Product Purchase Commitment” is defined in Section 5.7.

1.53 “Product specific agreement” or “PSA” is defined in Section 2.1.

1.54 “Project Management Team Leader” is defined in Section 3.3.2.

1.55 “Project Plan” means a formal, approved document used to guide both project execution and project control. The primary uses of the Project Plan are to document planning assumptions and decisions, facilitate communication among project stakeholders, and document approved scope, cost, and schedule baselines. The Project Plan will contain the description and overall objectives of the Services for Manufacturing a Product and shall include, among other things: (a) JSC and Core Team membership rosters, (b) change request procedures, (c) details, intentions, and deliverables for Technology Transfer, (d) project schedule, (e) detailed procurement plan, as needed, and (f) project budgets and invoicing plans.

1.56 “PSA Effective Date” means the effective date of any PSA governed by this MSA.

1.57 “Purchase Order” is defined in Section 5.6.

1.58 “Quality Agreement” or “QAG” means that certain quality agreement that governs the responsibilities related to quality systems and quality requirements for the Product(s) Manufactured hereunder, including quality control, testing and release of such Product(s) at the Facility entered into by the Parties. Clinical Products and Commercial Products shall have separate QAGs.

1.59 “Raw Materials” means those materials that are used in the Manufacturing Process, including, but not limited to, chemicals, reagents, filters, excipients, disposable consumables, and secondary packaging materials. Raw Materials exclude the Client Materials.

1.60 “Reference Standards” means standard materials prepared by Client and/or SBL in accordance with the applicable QAG.

1.61 “Regulatory Approval” means all approvals, licenses, registrations or authorizations thereof of any national, regional, state or local regulatory agency, department, bureau or other governmental entity in any jurisdiction where a Product is marketed or intended to be marketed, necessary for the manufacture and sale of a Product, which manufacturing includes the Manufacturing of the Products at the Facility.

1.62 “Regulatory Authority” means any national (e.g., the FDA), supra-national (e.g., the EMA), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, in any jurisdiction responsible for granting the Regulatory Approval.

1.63 “SBL Assignable Error” means: negligence, fraud, recklessness, willful misconduct, [***] or [***] to the extent that SBL has not [***] and [***] or material breach of cGMP (if applicable) on the part of employees, consultants, contractors, sub-contractors, agents or representatives of SBL.

1.64 “Service” or “Services” is defined in Section 2.1.

1.65 “Service Fee” is defined in Section 9.1.

1.66 “Specialized Raw Materials” is defined in Section 5.3.1.

1.67 “Specification(s)” means the criteria for the Products, Client Materials, or Raw Materials, as the case maybe, which details are provided in documentation as reviewed and approved in writing by the Parties.

1.68 “Standard Operating Procedure(s)” or “SOP(s)” means the standard operating procedures established by and mutually agreed upon by both Parties regarding the Manufacturing Process.

1.69 “Technology Transfer” means the activities by the Parties necessary to Manufacture the Product for Client at the Facility as further described in the applicable Project Plan which may include: (i) transfer of the Client Technology, Client Intellectual Property and Client Material from Client to SBL; (ii) implementation of the Manufacturing Process at the Facility, including establishing a small scale Manufacturing Process model at SBL; (iii) Manufacturing Process fit activities, including required small- and large-scale process development and validation work as allocated between the Parties to SBL and process engineering required to modify / equip, qualify and validate the Facility for the Manufacturing of the Commercial Product; (iv) stability testing, if applicable, for the Product required for licensure; (v) comparability testing to the appropriate reference Product, and (vi) regulatory support for Regulatory Approvals, each as further described in the Project Plan.

1.70 “Term” is defined in Section 15.1.

1.71 “Warehouse” means SBL’s warehouse for storage of the Product located at 300, Songdo bio-daero, Yeonsu-gu, Incheon, 21987, Republic of Korea.

SECTION 2 RELATED AGREEMENTS AND EXHIBITS

2.1 Product Specific Agreements. Pursuant to one or more product specific agreements entered into and mutually agreed from time to time by duly authorized representatives of the Parties (“Product specific agreements” or “PSAs”), SBL will perform Manufacturing services for Client as specified in such PSAs and applicable Project Plan and in accordance with the terms and conditions of this MSA (“Services”). Each PSA shall refer to this MSA and contain, without limitation, as applicable (i) a high level scope of work of the Services to be performed under such PSA which describes key activities, (ii) a description of the Product for which SBL will perform such Services for Client, (iii) a description of the Cell Line; (iv) fees to be paid to SBL by Client for the Services with a general timing plan for invoicing and a more detailed plan to be in the Project Plan, (v) if the Services pertain to the Manufacture of the Product, the number of batches of Product to be Manufactured by SBL and delivered to Client and the Specifications, (vi) any other deliverables, (vii) the SBL Facility where the Services are to be performed, and (viii) the Regulatory Approvals to be obtained by the Parties. Services shall be governed by the terms and conditions of this MSA, the applicable PSA, and any applicable Quality Agreement. In the event of a conflict between a Quality Agreement and either any provision of this MSA or any PSA, the MSA or PSA shall control except with respect to Product quality terms, in which case, the Quality Agreement will control. In the event of a conflict between any provision of this MSA and the PSA, this MSA shall control, except as explicitly specified in the PSA.

2.2 Project Plan. Concurrently with the execution of a PSA, or within a reasonable time after the PSA effective date, the Parties shall agree upon a Project Plan which will specify in detail the scope and schedule of the Services to be performed pursuant to such PSA, including Technology Transfer and Manufacture. The Project Plan shall also set forth the JSC members (if applicable), Core Team members, and Project Management Team Leader for the Services as well as the frequency and duration of meetings. The Project Plan may be updated as needed by the mutual agreement of the Client and SBL and is governed by and incorporated into the applicable PSA by reference. If there is a conflict between the Project Plan and the applicable PSA, the PSA shall control. If any of the assumptions on which the Parties have relied upon in defining the scope of the activities required to effect the Technology Transfer and/or other Services under a PSA or Project Plan including but not limited to Manufacture, and the associated timeframes, fees, expenditures and costs proves to be invalid, or if for any reason it becomes apparent that additional activities are required as part of or in connection with the Technology Transfer and/or other Services under a PSA or Project Plan including but not limited to Manufacture, the Parties shall (acting reasonably and in good faith) discuss and seek to agree to appropriate revisions to the Technology Transfer activities, and associated timelines and pricing within such Project Plan, and to amend the related PSA as necessary.

2.3 Quality Agreement (QAG). The Parties shall agree upon and finalize a Quality Agreement within a reasonable period of time after each PSA Effective Date (but in any event no later than the start of the engineering run which shall cover such PSA and such Quality Agreement shall be incorporated into the applicable PSA and this MSA. The Quality Agreement may be amended from time to time, subject to the JSC’s approval followed by the Parties’ written agreement pursuant to Section 17.9 (if applicable).

SECTION 3 MANAGEMENT OF SERVICE

3.1 General. Each Party will be responsible for its internal decision making process and for reasonably informing the other Party of decisions affecting the Service in a regular and timely manner. Without limiting the foregoing, the Parties shall establish the joint committees or teams set forth herein to advise the Parties on certain matters including, without limitation, the Facility modification, the Technology Transfer, and optimization of the Manufacturing operation relating to the Products.

3.2 Joint Steering Committee.

3.2.1 Formation and Composition. The applicable Project Plan will set forth a Joint Steering Committee for the applicable Products (the “Joint Steering Committee” or “JSC”) if the Parties mutually agree that such JSC is necessary. The JSC will be a cross-functional committee composed of an equal number of representatives appointed by each of Client and SBL with each of Client and SBL having at least three (3) representatives, and with one (1) representative from each of Client and SBL having oversight for quality activities, and with one (1) representative from each of Client and SBL having oversight for manufacturing and supply chain activities, including the transfer and implementation of the Manufacturing Process at the Facility. Either Party may replace any or all of its representatives at any time. Such Party shall notify, in writing, of such replacement to the other Party.

3.2.2 Responsibilities. The JSC shall (i) establish and oversee the governance structure for the Services including the formation of the subcommittee herein; (ii) monitor any Facility modification and the Technology Transfer and Manufacturing strategy of the Products at the Facility, including strategies for the Regulatory Approval of the Facility to Manufacture the Products; (iii) provide strategic guidance to the Core Team as required by the Project Plan; (iv) conduct high level project stage reviews with the Core Team as required by the Project Plan at appropriate milestones or completion of key deliverables or a sequence of events to review and approve key deliverables, evaluate the Core Team’s progress and performance, all in order to ensure that the Manufacturing Process is being implemented appropriately; (v) advise on and/or resolve business, manufacturing, supply chain, quality, regulatory or other issues unresolved at the Core Team level; (vi) review and recommend for approval by the Parties any changes to the MSA or the applicable PSA; (vii) review and approve, subject to Section 17.9, changes to the Specifications, analytical methods, the Manufacturing Process, the Facility or equipment as escalated to the JSC by the Core Team or by a Party pursuant to Section 3.6 below; (viii) review completion of the Services; (ix) settle disputes or disagreements unresolved by a subcommittee; and (x) perform such other functions as appropriate to further the purposes of the MSA as determined by the Parties.

3.3 Core Team.

3.3.1 Formation and Composition. The applicable Project Plan will set forth a Core Team for the applicable Product (the “Core Team”). The Core Team shall be composed of an equal number of representatives from each of SBL and Client, with at least four (4) representatives appointed by each of Client and SBL. Such representatives will include the Project Management Team Leaders of Client and SBL as well as their representatives from manufacturing, technical operations, supply chain, quality assurance, quality control, regulatory affairs or other individuals with expertise and responsibilities for those functions required to execute the Facility modification, the Technology Transfer and Manufacturing. Either Party may replace any or all of its representatives at any time. Such Party shall notify, in writing, of such replacement to the other Party.

3.3.2 Appointment of Project Management Team Leader. Each Party shall appoint a Project Management Team Leader (each, a “Project Management Team Leader”) to act as the primary contact for such Party in connection with matters related to the Services. Each Project Management Team Leader, unless otherwise mutually agreed by the Parties, shall serve as the leaders of the Core Team. A Party may replace its Project Management Team Leader at any time and from time to time for any reason. Such Party shall notify, in writing, of such replacement to the other Party.

3.3.3 Responsibilities. The Core Team shall (i) develop and maintain the Project Plan and monitor, review and manage the Services according to the MSA and applicable PSA; (ii) conduct project stage reviews with the JSC as required by the Project Plan at appropriate milestones or completion of key deliverables or a sequence of events to review key deliverables, review its progress and performance against plans; (iii) develop a change management process to identify, review and recommend any significant changes in the project scope, time, fee or risk to the JSC; (iv) investigate and resolve business, manufacturing, supply chain, quality, regulatory or other issues arising during the Services; (v) review and escalate to the JSC, as needed, changes to the Project Plan or applicable QAG; (vi) review and recommend to the JSC changes to the Specifications, analytical methods, the Manufacturing Process, the Facility or equipment; (vii) coordinate the activities of the Parties relating to the Manufacturing hereunder, including but not limited to: managing the technical operations and quality aspects of routine manufacturing, conducting Product testing technical operations and quality aspects of routine manufacturing, conducting Product testing and release, and managing supply chain activities including shipping and delivery logistics; (viii) report periodically on operation and quality progress and performance; and (ix) perform such other tasks and undertake such other responsibilities as may be specifically delegated to the Core Team by mutual agreement of the Parties.

3.4 Meetings

3.4.1 JSC. The JSC shall meet by audio or video teleconference as agreed by the JSC or as necessary to make such determinations as may be required of it from time to time. Any member of the JSC may designate a substitute to attend and perform the functions of that member at any meeting of the JSC and each Party may, in its reasonable discretion, invite non-member representatives of such Party to attend such meetings with advance notice to the other Party.

3.4.2 Core Team. The Core Team shall meet by audio or video teleconference as agreed by the Core Team. Any member of the Core Team may designate a substitute to attend and perform the functions of that member at any meeting of the Core Team and each Party may, in its reasonable discretion, invite non-member representatives of such Party to attend such meetings with advance notice to the other Party.

3.4.3 Travel Expenses. Each Party shall be responsible for all of its own expenses of traveling to and participating in any joint committee or team meeting, including the JSC and Core Team.

3.5 Decisions. All decisions of JSC, the Core Team and any other joint committee or team formed under the MSA or any applicable PSA, except as expressly set forth herein, shall be made by the unanimous agreement of all of its members or their designated representatives, and shall be reflected in written meeting reports which summarily address topics discussed, shall be responsible for the reserved capacity for one (1) Engineering Batch and five (5) Clinical Batches per Section 5(a)(ii) of this PSA, except to the extent the failure to complete a successful Technology Transfer was due to SBL Assignable Error, and provided that SBL shall use Commercially Reasonable Efforts to mitigate the costs for such reserved capacity in accordance with Section 5.5 of the MSA, including making Commercially Reasonable Efforts to fill open reserved capacity. shall be responsible for the reserved capacity for one (1) Engineering Batch and five (5) Clinical Batches per Section 5(a)(ii) of this PSA, except to the extent the failure to complete a successful Technology Transfer was due to SBL Assignable Error, and provided that SBL shall use Commercially Reasonable Efforts to mitigate the costs for such reserved capacity in accordance with Section 5.5 of the MSA, including making Commercially Reasonable Efforts to fill open reserved capacity. JSC and Core Team shall be subject to approval by the authorized representatives of the Parties; provided, however, that no joint committee or team herein may amend or waive any provision of the MSA or applicable PSA or QAG, including without limitation, the financial terms set forth in Section 9, it being understood that the MSA or any PSA or QAG may be amended, and provisions of the MSA or any PSA or QAG may be waived pursuant to Section 17.9 only.

3.6 Disputes.

3.6.1 General. In the event that the Core Team and any other joint committee or team formed under the MSA or any applicable PSA, is unable, despite the good faith efforts of all members, to resolve a disputed issue that is within the purview of such joint committee or team within ten (10) Business Days of a meeting request by either Party, the disputed issue shall be referred immediately by such joint committee or team to the JSC. If the disputes still cannot be resolved within an additional twenty (20) Business Days of a meeting request by the JSC, the matter shall be handled in accordance with Section 16; provided, however, that SBL shall continue to Manufacture according to the then applicable Purchase Order, as long as the dispute in question (i) does not put at risk SBL’s facilities or personnel, or (ii) is an issue related to quality (which will then be handled in accordance with the QAG).

3.6.2 Project Management Team Leaders. Subject to Section 3.6.1, the Project Management Team Leaders (or their respective designee) will in good faith attempt to mutually resolve in a timely fashion any disagreement with respect to the Services hereunder, which could reasonably affect the quality of the Manufacturing of the Products, including without limitation, the related management processes and operations, control of production planning and scheduling, prioritization decisions, allocation of resources, timing of in-process and release testing, oversight of auxiliary facilities (e.g., in-process tests that need to be conducted at laboratories other than those at the Facility), Facility modification, the Technology Transfer, registration and troubleshooting decisions, and any other matters relating to implementation of the Manufacturing Process and the Manufacturing of the Product hereunder.

SECTION 4 SERVICES

4.1 Services. During the Term, in accordance with and subject to the terms and conditions set forth in this MSA, applicable PSA, and the applicable QAG, SBL shall provide the Services to Client relating to the Product(s). SBL shall complete the Services in accordance with the timelines set forth in the applicable PSA and the Project Plan, and Client shall not withhold support required for SBL to provide such Services, The applicable PSA may be amended by mutual agreement of the Parties pursuant to Section 17.9.

4.2 Compliance with Applicable Law. Subject to the provisions of Section 6 below, SBL shall maintain the Facility in accordance with cGMP and Applicable Laws and in such condition as will allow SBL to Manufacture the Products in accordance with the terms of the MSA, any PSA and the applicable QAG and Applicable Laws. SBL shall perform the Services under the MSA, any PSA and the applicable QAG in conformance of cGMP, if applicable, any requirements of the Regulatory Authorities that shall be mutually agreed upon by the Parties, and all Applicable Laws.

4.3 Project Personnel. SBL shall adequately staff the Facility with personnel necessary (including consultants and contractors), and with sufficient technical expertise, to perform its obligations under the MSA or any PSA. Notwithstanding anything to the contrary and in addition to the JSC and Core Team meetings described in Section 3 above, Client and SBL may arrange for core project personnel to have regular meetings, which shall be by audio or video teleconference. The Project Plan shall specify the frequency and duration of such meetings; provided that the associated costs for meetings requested solely by Client to the extent in excess of the agreed amount under the applicable PSA shall be passed through to Client by SBL.

4.4 Subcontract. SBL may not subcontract any portion of the Services without prior written approval from the Client. In the event SBL subcontracts any portion of the Services, SBL shall be primarily obligated to Client for any subcontracted services as if it were providing the Services itself. All costs associated with activities outsourced to 3rd party contractors (e.g. [***], etc.) will be passed through to Client with an additional [***] percent ([***]%) handling fee.

4.5 Development and Manufacturing Site. Unless otherwise agreed in advance in writing by Client, all Services shall be performed by SBL at the Facility.

4.6 Access to the Facility.

4.6.1 SBL shall accommodate visits by Client personnel in the Facility during operational hours during the Term, upon Client’s request, to coordinate, expedite and guide the Services. Client will provide SBL with written notice at least [***] prior to any visits, and the Parties shall decide on a mutually agreeable date, duration, visitor list, and agenda prior to any such visit, provided, however, that in the event that Client is made aware of or has reasonable cause to suspect any quality issues or technical difficulties with respect to the Services, upon Client’s request, SBL shall provide access as soon as reasonably possible to the Facility for the purpose of investigating or addressing such issues. Additionally, Client may, at no cost to SBL, request up to [***] of its personnel to be on-site at the Facility to observe and consult with SBL during the performance of Services under this MSA and such additional personnel in such numbers as deemed necessary shall be accommodated upon mutual agreement of the Parties. All applicable expenses associated with such on-site Client personnel shall be discussed in advance with Client and such costs as are agreed to between the Parties shall be passed through to Client by SBL.

4.6.2 While at the Facility, Client personnel shall have reasonable access to all areas as are relevant to SBL’s performance of the Services hereunder, provided that SBL may reasonably restrict Client personnel’s access to the Facility as it deems necessary to protect SBL’s Confidential Information and/or to ensure the safety and security of Client and SBL personnel, and visitors pursuant to this Section shall comply with all applicable SBL policies and procedures including but not limited to safety, confidentiality, and cGMP.

4.7 Manufacturing Documentation. SBL shall maintain Manufacturing Documentation to be true and accurate, and shall keep in strict confidence and shall not use for purposes other than providing or performing the Service or other obligations hereunder. SBL shall maintain all such Manufacturing Documentation for at least that period specified in the applicable QAG. Upon written request of Client and at mutually agreeable times, Client shall have the right to review Manufacturing Documentation, including the Batch Records, at the Facility as further defined in the applicable QAG. Client may also request scanned or printed copies of such Manufacturing Documentation, but shall be responsible for reasonable costs associated therewith. SBL shall record, maintain, and disclose such records, data, documentation and other information in the language as so required in the applicable QAG or as so required by a Regulatory Authority and in compliance with Applicable Laws. To the extent necessary, SBL may redact those portions of the Manufacturing Documentation provided pursuant this MSA or any applicable PSA to protect the confidential information of its other clients or third parties, unless such information is required to be disclosed by any applicable Regulatory Authority, in which case, SBL may submit such information directly to the applicable Regulatory Authority. The form and style of Batch documents, including, but not limited to: Batch production records, lot packaging records, equipment set up control, operating parameters, and data printouts, raw material data, and laboratory notebooks are the exclusive property of SBL. Notwithstanding anything to the contrary, SBL SOPs not specific to the Client’s Products may be provided to Client for on-site review if deemed necessary by both SBL and Client. Such SOPs cannot be removed from the SBL premises, copied, photographed or otherwise replicated.

SECTION 5 SERVICE DESCRIPTIONS

5.1 Technology Transfer. The Parties shall make their personnel available to enable the transfer and implementation in accordance with the Project Plan. Client shall transfer, including through SBL’s [***] portal for Technology Transfer, to and grant SBL the [***] set forth below in Section [***] in respect of the [***], and [***] in accordance with the plan, timelines and quantities set forth in the applicable Project Plan.

5.2 Facility Modification and Equipment. Except as otherwise specifically provided herein to the contrary, and upon mutual agreement of the Parties, Client and SBL will agree on what equipment in the Facility is necessary to perform the Services, and if it is necessary or Client deems it necessary to procure additional equipment beyond that which is in the Facility as of the applicable PSA Effective Date, the Core Team shall determine equitable allocation of costs including, as applicable, procurement, validation, installation, maintenance, commissioning, and decommissioning/validation (which determination shall be escalated to the JSC if in dispute). Thereafter, if any additional equipment is necessary, such costs and ownership of such equipment shall be dealt with pursuant to Sections 6.1 and/or 17.9, as applicable. SBL shall modify the Facility and engineer, procure, install, commission, test, qualify, troubleshoot and validate necessary equipment and instruments in order to accommodate Manufacture of the Product at the Facility, as further described in the Project Plan and applicable QAG. Except as provided in this MSA or any applicable PSA, the Facility, Warehouse and all the equipment shall be maintained, tested, validated, calibrated and qualified for their intended use by SBL at SBL’s expenses.

5.3 Raw Materials.

5.3.1 Management. SBL shall procure and maintain a reasonable quantity of the Raw Materials required for the Services in accordance with the MSA and any applicable PSA. On a per-Product basis, the Core Team shall finalize the categorization of the Raw Materials into Raw Materials which shall be used for that specific Product only (“Specialized Raw Materials”), Raw Materials which can be used across multiple products and/or customers (“Common Raw Materials”), and Raw Materials which will not be charged on a cost-plus basis to the Client, and shall attach such list to the applicable PSA. Such list of common and specialized Raw Materials may be amended from time to time, subject to the Parties’ approval pursuant to Section 17.9. During Technology Transfer, the Core Team shall agree on estimates for Raw Materials anticipated to be consumed in the Manufacture of each Batch. SBL will make Commercially Reasonable Efforts to use no more than the Raw Material amounts estimated during Technology Transfer. SBL will be responsible for [***] as determined pursuant to the terms set forth in the applicable PSA. Client and SBL shall mutually agree to strategies regarding Raw Material safety stock and sourcing from qualified vendors. SBL shall notify Client whenever inventories of Specialized Raw Materials become insufficient for the Manufacture of the Product by SBL. In the event SBL is not able to [***] according to an agreed-upon forecast or manufacturing plan due to the Parties’ failure to agree to such strategies, then SBL shall use Commercially Reasonable Efforts to [***] and [***]. Client shall be responsible for the costs of such reserved capacity regardless of whether it is utilized or not, subject to the terms of the applicable PSA.

5.3.2 Data Transfer. Client and SBL shall agree on the Specifications of the Raw Materials, including without limitation analytical methods, supplier information including supplier site information, and other information concerning the stability, storage, and safety thereof that are required for the Manufacturing hereunder, as further described in the applicable PSA and QAG.

5.3.3 Testing and Evaluation. SBL or vendors qualified by SBL shall perform all testing and evaluation of the Raw Materials as required by the Specifications for the Raw Materials and the cGMPs or as set forth in the applicable PSA and QAG, if applicable.

5.3.4 Storage. SBL shall secure sufficient and suitable cGMP storage facilities and/or equipment at the Facility that meet the Specifications for storage of the Raw Materials; provided that such storage requirements shall be customary within SBL’s industry. SBL shall preserve and protect the Raw Materials from loss and damage while in SBL’s possession, consistent with reasonable technical and business judgment, the Specifications and any relevant SOPs or other instructions provided by Client; provided, however, that SBL shall be responsible for [***] and [***] only to the extent caused by an SBL Assignable Error or as set forth in the applicable PSA. At the end of each calendar year of the relevant PSA, Client shall be responsible for the loss of Raw Material to the extent purchased in reliance on a Purchase Order, Firm Period, or Binding Year which expires or becomes obsolete because Client fails to honor such Purchase Order, Firm Period or Binding Year and SBL cannot reasonably otherwise utilize such Raw Material.

5.3.5 Service Fee Related to Raw Material. Common Raw Materials and Specialized Raw Materials will be charged on a cost-plus basis to Client in accordance with Sections 9.1(ii) and 9.2.2, subject to any changes in the scope of work.

5.4 Client Materials.

5.4.1 Management. Client shall provide, either by itself or through its third party supplier, to SBL free of charge, Client Materials in amounts reasonably necessary to carry out the Services as agreed by the Parties. The applicable PSA shall set forth the exact timing of such provision of Client Materials to SBL. SBL shall make Commercially Reasonable Efforts to import the Client Materials to the Republic of Korea in a timely manner, provided that Client provides reasonable assistance. Delivery conditions for the Client Materials shall be [***] provided that the title to such Client Materials shall remain at all times with the Client. During Technology Transfer, the Core Team shall agree on estimates for Client Material anticipated to be consumed in the Manufacture of each Batch. Although SBL will make Commercially Reasonable Efforts to use no more than those amounts, SBL will not be responsible for Client Materials used in excess of the agreed-upon estimate; provided, however, that (a) SBL shall be responsible for any [***] to the extent caused by an SBL Assignable Error and (b) notwithstanding anything to the contrary, SBL will not in any circumstance be responsible for any [***] that are [***]. Client and SBL shall mutually agree to strategies regarding Client Material safety stock and sourcing from qualified vendors. Notwithstanding anything to the contrary, in the event SBL is not able to utilize any capacity reserved to Manufacture Product according to an agreed-upon binding forecast or manufacturing plan due to the Parties’ failure to agree to such strategies, then Client shall be responsible for the costs of such reserved capacity regardless of whether it is utilized or not, subject to the terms of the applicable PSA.

5.4.2 Data Transfer. Client shall provide SBL with the Specifications of the Client Materials, including without limitation analytical methods, supplier information, and other information concerning the stability, storage, and safety thereof that are required for the Manufacturing hereunder, as further described in the applicable QAG.

5.4.3 Testing and Evaluation. SBL shall perform testing of the Client Materials in accordance with the applicable QAG and/or Client’s instruction prior to the performance of the Manufacturing hereunder, in order to determine whether such Client Materials meet the Specification described in the applicable QAG (if applicable). SBL shall inform Client of (a) any damage to the Client Materials received that is visually obvious (e.g., damaged or punctured containers and temperature monitoring results outside of predetermined Specifications) within [***] Business Days after SBL’s receipt of the Client Materials and (b) any non-conformance of the Client Materials to Specification either: (i) within [***] calendar days after SBL’s receipt of the Client Materials or (ii) if release testing of Client Materials is not performed until it is needed for Manufacture, within [***] calendar days after such release testing is performed; or (iii) as otherwise agreed between the Parties. If, prior to performing any Service on the Client Materials, SBL determines that such Client Materials are defective or damaged, SBL shall not perform the Service on such Client Materials and shall follow Client’s written instructions regarding disposal or return of such Client materials to Client, such disposal or return to be at Client’s discretion and cost.

5.4.4 Storage. SBL shall secure sufficient and suitable cGMP storage facilities and/or equipment at the Facility that meet the Specifications for storage of the Client Materials; provided that such storage requirements shall be customary within SBL’s industry. SBL shall preserve and protect the Client Materials from loss and damage while in SBL’s possession, consistent with reasonable technical and business judgment, the Specifications and any relevant SOPs or other instructions provided by Client; provided, that SBL shall only be liable for loss and damage after [***] and [***] in cases of [***]. In all other cases, Client shall be responsible for the [***] of the [***]. Notwithstanding anything to the contrary, SBL shall not in any event be responsible for the Cell Line.

5.4.5 Service Fee Related to Client Material. Handling fees relating to the Client Material will be charged to Client in accordance with Sections 9.1(iii) and 9.2.3.

5.5 Forecasts. For each Commercial Product, the Parties shall determine a mutually agreeable mechanism for forecasting of each Product, which shall be detailed in writing and attached to or included in each relevant PSA. For Clinical Product, the Parties shall agree upon the number and schedule of Batches to be Manufactured by SBL in the applicable PSA.

5.6 Purchase Orders. For each Clinical Product or Commercial Product, Client shall notify SBL in a binding form and procedure to be agreed upon in the applicable PSA requesting a specific amount of Product to be Manufactured (a “Purchase Order”).

5.7 Product Purchase Commitment. As further set forth in a PSA, during the Term the Parties may agree that Client will purchase a minimum quantity of batches of a certain Product in a given year (a “Product Purchase Commitment”).

5.8 Batch Failure during Manufacture.

5.8.1 If, during Manufacture of a Batch and prior to SBL’s batch release, the Core Team determines that a Batch is Non-Conforming Product (a “Batch Failure”), SBL shall take Commercially Reasonable Efforts to [***] (except to the extent prohibited by cGMP or applicable QAG) and [***] on a date to be mutually agreed by the Parties, but no later than [***] (as defined in the applicable PSA) for such Product pursuant to the applicable PSA. which Batch shall be invoiced and paid for as if it were the failed Batch (i.e., Client shall only be invoiced for the Batch actually delivered). Client shall be responsible for the costs and fees of the Raw Materials and Client Materials for the replacement Batch as if it were the failed Batch (i.e., Client shall only be invoiced the applicable cost of the Raw Materials and Client Materials actually used to Manufacture the replacement Batch). Client shall ensure that SBL has adequate Client Materials to Manufacture such Batches. The remedies contained in Section 5.8 of this MSA shall be the sole and exclusive remedies of Client regarding a Batch Failure and a Batch Failure shall not constitute a material breach of this MSA or a PSA unless SBL fails to provide the remedies contained in this Section 5.8 or deliver such replacement Batch within the time period set forth in the applicable PSA.

5.8.2 The Parties shall conduct a root cause analysis of the Batch Failure, which shall be done through SBL’s deviation process and which result will be reviewed and confirmed by the JSC. If either the Core Team does not agree on the Batch Failure root cause, or the JSC does not agree on the results of the Core Team’s Batch Failure root cause analysis, the Parties shall refer to an independent mutually agreed-on laboratory or firm with international repute, acting as a neutral arbiter, to conduct a root cause analysis of the Batch Failure. The costs of the independent laboratory will be shared by the Parties equally; provided, however, that to the extent either Party is determined to be incorrect as to the root cause of the Batch Failure, such Party will be responsible for the reasonable costs of the independent laboratory and must reimburse the other Party for such Party’s share of the reasonable costs incurred with respect to the independent laboratory’s analysis. The decision of the independent laboratory must be in writing and will be binding on the Parties.

5.8.3 The PSA applicable to such Product Batch Failure shall set forth responsibility among the Parties of the following costs in the event of a Batch Failure: (1) the SBL Service Fee to Manufacture the failed Batch; (2) SBL’s costs to procure the Raw Materials used in the failed Batch plus applicable SBL handling fees associated with such Raw Materials; (3) SBL handling fees associated with the applicable Client Materials used in the failed Batch; and (4) Client’s cost to procure the Client Materials used in the failed Batch which amount is to be calculated based on the actual costs of such materials as supported by reasonable documentary evidence (as opposed to the market value thereof) incurred by Client. Notwithstanding anything to the contrary, SBL shall not be responsible in the event of Batch Failure to the extent: (a) Drug Substance that is Client Material pursuant to a Drug Product PSA and (b) Cell Line that is Client Material pursuant to a Drug Substance PSA.

5.8.4 In the event that any of the foregoing procedures results in a Batch being delivered in a different year than the year in which the original Batch was ordered for delivery by Client, the Service Fee for such re-Manufactured Batch shall be the Service Fee set forth in the applicable PSA for such Batch.

5.9 Storage, Packaging and Delivery.

5.9.1 Service Deliverables other than Products. Storage, packaging and delivery of the Service deliverables other than Products Manufactured, and the Products Manufactured hereunder shall be made in accordance with the terms of this MSA, the applicable PSA, Project Plan, QAG and the Applicable Laws.

5.9.2 Products.

(a) Release by SBL and Acceptance by Client.

(i) SBL shall perform all testing in accordance with the Specifications of the Product and release the Product in accordance with the terms of the applicable PSA and QAG. Upon such release SBL shall deliver to Client a copy of the Manufacturing Documentation in support of the SBL’s release of the Product for each Batch, including a Certificate of Analysis and Certificate of Compliance and all other Batch Related Documents in accordance with the applicable QAG;

(ii) Acceptance of Product. Client will complete the Acceptance Procedure and determine the acceptability of such Product in accordance with the applicable QAG and notify SBL of the result within [***] calendar days of Client’s receipt of the Batch Related Documents. Upon Client’s acceptance, SBL will have no liability for such Product, except as set forth in Section 5.9.2(a)(iv) regarding Latent Defect. If Client does not reject such Product within the [***] calendar day period, the Product will be deemed to have been accepted.

(iii) Non-Conforming. If, during the Acceptance Procedure, any Product is determined by Client or SBL to be Non-Conforming Product, at the option of Client, SBL shall use Commercially Reasonable Efforts to promptly re-Manufacture and deliver to Client the quantity of the Product equivalent to the quantity of Non-Conforming Product as soon as possible and on a date to be mutually agreed by the Parties, but no later [***] (as defined in the applicable PSA) for such Product, and such replacement Batch shall be invoiced and paid for as if it were the original Non-Conforming Product. If SBL does not confirm that such Product is Non-Conforming Product, the Parties shall refer to an independent and mutually agreed-on laboratory or firm with international repute to test the disputed Product. The costs of the independent laboratory will be shared by the Parties equally; provided, however, that to the extent either Party is determined to be incorrect as to whether a Product is a Non-Conforming Product, such Party will be responsible of the reasonable costs incurred for the independent laboratory’s test and must reimburse the other Party for its share of the reasonable costs incurred with respect to the independent laboratory’s test. The decision of the independent laboratory must be in writing and will be binding on the Parties. Section 5.9.2(a) (i) and (ii) shall apply to such replaced Product mutatis mutandis. Responsibility for the costs of such Non-Conforming Product shall be allocated between the Parties as if such Non-Conforming Product is a Batch Failure and Section 5.8.2 – 5.8.4 shall apply to such Non-Conforming Product mutatis mutandis. The remedies contained in this Section 5.9.2 shall be the sole and exclusive remedy of Client in the event of Non-Conforming Product.

(iv) Latent Defect. After completion of review of the Batch Related Documents, if Client finds any hidden defects of the Product which could not have been reasonably discovered through the review of the Batch Related Documents (“Latent Defect”), Client shall promptly give notice of such claim in writing to SBL. In such case, if the Latent Defect is solely due to SBL Assignable Error, the above Section 5.9.2(a)(iii) and Section 13.1 shall apply provided that Client has no obligation to pay for such replacement Product. If no written claim for Latent Defect is received by SBL within [***] from Client’s discovery of the Latent Defect, the Product shall be deemed as irrevocably accepted. Notwithstanding anything to the contrary, such claim for Latent Defect must be made within [***], or prior to modification of the Product for conjugation, whichever is earlier.

(b) Delivery. Shipping conditions for the Product Manufactured hereunder shall be [***], unless otherwise agreed to in the applicable PSA. The title to Product hereunder shall be transferred from SBL to Client when the Product is made available at the point of delivery consistent with [***] or the Incoterm set forth in the PSA. The Parties further agree as follows:

(i) After SBL’s release of the Product and prior to each pick-up by Client or Client’s designated carrier, SBL shall propose to Client a delivery schedule of the Product, in order for the Parties to agree on it in advance for each pick-up. SBL shall schedule Delivery with the carrier selected and paid for by Client;

(ii) SBL shall not deliver the Product until it has been instructed to by Client in accordance with the applicable QAG. Client shall confirm specific delivery instructions with SBL prior to SBL release. Upon SBL’s release of Product, SBL shall store the Manufactured Product as described in Section 5.9.2(c) and Client shall, in accordance with Section 5.9.2(c)(iii) compensate SBL for storage costs for the Manufactured Product as set forth in the applicable PSA;

(iii) SBL shall provide Client with invoice, packing lists, supporting export documents as specified by Client by separate delivery and shipment documentation instructions, together with each shipment of the Product (or such other deliverables); and

(iv) In cooperation with Client and subject to the delivery schedule agreed by the Parties, SBL shall adhere to the first-expire-first-out (FEFO) principle in shipping all released Product.

(i) Pursuant to the terms of this MSA and any applicable PSA, SBL shall store the Products Manufactured hereunder.

(ii) SBL shall store, package, label and prepare shipment according to the Specifications for the Product Manufactured hereunder, the applicable QAG and the SOPs, and using storage and/or shipping containers determined in the applicable PSA.

(iii) If Client does not direct SBL to prepare Manufactured Product to be picked up by Client or Client’s designated carrier with a pick-up date within [***] calendar days after Client’s receipt of the Batch Related Documents (the “Pickup Date”), SBL shall store the Product at the Warehouse, subject to the availability of space and storage conditions, and Client shall pay storage fees to SBL as set forth in Section 9.1 for the period of storage at the Warehouse commencing on the Pickup Date until the actual delivery date. SBL shall be responsible for [***] of Manufactured Product during [***].

SECTION 6 CHANGES TO THE SPECIFICATIONS, ANALYTICAL METHODS, MANUFACTURING PROCESS, FACILITY OR EQUIPMENT

6.1 Approval for Change. SBL shall not make any change to the Manufacturing Process, the Services, or the Specifications (a “Change”), without the prior written consent of Client in accordance with the applicable PSA and QAG.

6.2 Changes Required by cGMP, Regulatory Authorities or Requested by Client. Except as otherwise expressly set forth to the contrary in the applicable QAG, in the event that cGMP, a Regulatory Authority, Applicable Law, or any other regulatory or legal authority requires, or Client requests, a Change, SBL shall accommodate such requirements or requests, subject to the following:　

(a) In the case of Change(s) requested by Client or for which Client first becomes aware, Client shall promptly notify SBL in writing of the required and/or requested Change(s), and provide information necessary for SBL to evaluate the effect of such Change(s), and SBL shall promptly advise Client as to any (i) additional equipment required, modifications to the Facility or equipment, and/or additional equipment and the Facility qualification and validation requirements; (ii) Manufacturing Process development, transfer, scale-up, testing, qualification, or validation requirements; (iii) regulatory requirements pursuant to such Changes; (iv) changes to the Manufacturing scheduling and/or Product delivery schedule; and (v) other impacts on the Facility or SBL’s ability to Manufacture products (including the Products) in the Facility, if any, which may result from such Change(s). The notification and formal approval procedure of such Changes shall be in accordance with the applicable QAG (i.e., change control procedures) (if applicable). The Parties shall meet in a timely manner to identify and discuss such Changes as appropriate;

(b) Prior to implementation of any such Change(s), SBL shall provide Client with an estimated plan and budget of the reasonable and necessary costs that would be incurred by SBL as a result of the implementation of any such Change(s), including, but not limited to (i) process and analytical development; (ii) equipment and/or the Facility modifications, qualification, validation, maintenance, and decommissioning/disposal; (iii) process and analytical validation; (iv) document revisions or changes, the Facility, equipment, and system modifications or changes; (v) additional stability testing; and (vi) preparing submissions to Regulatory Authorities (collectively, the “Implementation Plan and Budget”). Following review and approval by Client of such Implementation Plan and Budget, subject to the Core Team’s approval and agreement followed by the Parties’ written agreement pursuant to Section 17.9 (if applicable), SBL shall commence implementation of such Change(s);

(c) During any such implementation, SBL shall provide Client with regular updates on the progress of implementation. Subject to any timeframe imposed by Applicable Law, SBL shall exercise Commercially Reasonable Efforts to implement the Change according to the Implementation Plan and Budget’s target completion date. SBL shall provide written notice to Client if SBL becomes aware of any cause which may create delay with the implementation of Changes. Following any such notice, both Parties shall discuss an amendment of Implementation Plan and Budget; and

(d) Upon the approval of the Implementation Plan and Budget for Change(s), both Parties shall negotiate in good faith to determine the allocation of the costs incurred by SBL for the implementation of any such Change(s) between the Parties, in accordance with the following principles:

(i) the costs for the general Facility Changes required by cGMP, any Regulatory Authority, or any Applicable Laws related to the maintenance of the Manufacturing Facility by SBL as set forth in Section 7.2, shall be borne by SBL, provided that where the Change relates exclusively or partially to the Manufacture of Product, in which case the costs shall be borne by Client fully or proportionately, respectively;

(ii) the costs for the Changes other than as described in Section 6.2(d)(i) above which are requested by Client and relate solely to the Manufacture of the Product and which are beneficial solely to Client shall be borne by Client; and

(iii) the costs for the Changes other than as described in Section 6.2(d)(i) and (ii) above shall be discussed in good faith by the Parties to achieve equitable allocation of such costs.

SECTION 7 REGULATORY APPROVALS AND INSPECTIONS.

7.1 Regulatory Approvals. SBL shall provide reasonable assistance and cooperation in order for Client to obtain and maintain the Regulatory Approvals. The out of pocket costs and fees associated with assistance and cooperation, to the extent not detailed in the MSA or PSA shall be borne by Client, or as otherwise mutually agreed between the Parties. As specified in the applicable PSA, the Parties shall agree on which Regulatory Approvals are to be obtained.

7.2 Regulatory Approvals for the Facility. SBL shall, at its cost and expense, obtain and maintain all approvals, licenses, registrations or authorizations of any federal, state or local regulatory agency, department, bureau or other governmental entity (other than the Regulatory Approvals, which will be obtained or maintained by Client) and subject to Applicable Laws that are required to Manufacture and ship the Product at the Facility and perform the Services.

7.3 Regulatory Inspections. SBL shall facilitate on-site inspections of the Facility conducted by Regulatory Authorities. SBL shall notify Client according to the applicable QAG provisions of any contacts or inquiries by the Regulatory Authorities, including inspections, Pre-Approval Inspections, sample requests, and written correspondence and its result, related to the Product as further defined in the applicable QAG and Client may participate in all such contacts or inquiries. Any out of pocket expenses or costs reasonably incurred by SBL for such inspections, including Pre-Approval Inspections, at the Facility shall be borne by Client.

SECTION 8 QUALITY COMPLIANCE

8.1 Quality Agreement. Both Parties shall adhere to the provisions of the applicable QAG with respect to any given Product and the Parties agree that all elements of quality assurance, quality control and the like shall be governed by the terms and conditions of the applicable QAG. In the event of a conflict between the MSA and the applicable QAG, the MSA shall prevail over those of the applicable QAG with the exception of Product quality-related matters, cGMP and related regulatory requirements in which case, the terms of the applicable QAG shall prevail.

8.2 Records & Audit.

8.2.1 Audit by Client. Upon Client’s request, but no more than [***], SBL shall accept an audit or visit to the Facility and, if necessary, the Warehouse, by Client and allow Client to inspect the Facility and, if necessary, the Warehouse, and Manufacture of the Product during provision of the Services solely to ascertain compliance by SBL with the terms of this MSA or any applicable PSA; provided, however that in the event Client uses a designee, SBL must provide prior written consent. SBL shall be reimbursed for its reasonable costs for audits beyond the audit described in the first sentence of this Section 8.2.1. SBL will make Commercially Reasonable Efforts to require vendors or subcontractor to accept an audit or visit to their facilities by Client upon similar notice as described in Section 8.2.2 below.

8.2.2 Audit Notice. Client shall provide SBL with a written notice at least [***] prior to the initiation of the audit or visit to the Facility and, if necessary the Warehouse, set forth in Section 8.2.1, which shall be conducted on a mutually agreeable date and time, and with a mutually agreed duration, agenda, and visitor list. Notwithstanding the foregoing, if the audit or visit is required for cause (i) due to safety reasons that necessitate immediate audit of or visit to the Facility or (ii) Client asserts that a violation of the Quality Agreement has occurred which cannot be resolved through the normal Core Team / JSC process, the foregoing sentence shall not apply and Client may conduct such audit or visit as soon as reasonably possible by providing SBL with a prior notice by email. Access to SBL’s facilities shall be coordinated with SBL so as to minimize disruption to SBL’s ability to perform services for its other clients. Client representatives must comply with all of SBL’s cGMP, confidentiality and security procedures and protocols during such observations, consultations, and inspections. SBL shall at all times cooperate and provide all the necessary documents reasonably required by Client during such audit; provided that, to the extent necessary, SBL may redact that portion of documents to protect the confidential information of its other clients. Client shall be responsible for any costs and liability to the extent caused by Client’s or its representatives’ failure to comply with SBL’s security, safety or confidentiality procedures.

8.3 Responsibility for Recalled Product. For a Commercial Product, either Party shall notify the other Party as soon as practicably possible if any Commercial Product is the subject of a threatened or actual recall by a Regulatory Authority (a “Recall”) which may be attributable to any Service or Manufacture by or on behalf of SBL hereunder. Client shall be responsible for conducting all Recalls and shall make all decisions regarding, and in all events shall have sole authority for, conducting any recalls, market withdrawals or corrections with respect to the Product and SBL shall at all times provide its reasonable assistance and cooperation to Client in conducting such Recalls to the extent the Recall arises out of SBL’s Manufacture of the Product. Details regarding the roles and responsibilities of the Parties in regard to Recalls are set forth in the applicable QAG. If such Recall results solely from SBL Assignable Error, SBL shall be responsible for direct and documented out-of-pocket costs associated with such Recall subject to Section 14 of this Agreement and the section on limitation of liability in the applicable PSA, and will replace the Recalled Products with new Products, contingent upon the receipt from Client of all Client Materials required for the Manufacture of the replacement Product. If SBL is unable to replace the Recalled or returned Products (except where this inability results from a failure to receive the Client Materials), then SBL shall [***]. In all other circumstances, Recalls will be made at Client’s cost and expense. The provisions of this Section 8.3 shall not apply to any Clinical Product and shall be Client’s sole and exclusive remedy with respect to a Recall.

For the purpose of this Section, Recall expenses shall not include [***] or [***] that is the subject of the Recall. If SBL and Client cannot agree which Party is at fault or whether a Recall was reasonably beyond the control of the Parties, then an independent third party technical expert of international repute, acceptable to both Parties, shall be designated to make such determination. The designated technical expert shall not be an employee, consultant, officer, director or shareholder of, or otherwise associated with, SBL, Client or their respective Affiliates. The technical expert’s determination will be binding and conclusive upon the Parties. The cost of designating such technical expert shall be borne by the Party determined at fault, and if neither Party is determined to be at fault, then the cost of such technical expert shall be borne by both Parties in equal proportion.

SECTION 9 CONSIDERATION AND PAYMENT TERMS

9.1 Consideration. In consideration for SBL’s performing the Services and other obligations undertaken by SBL pursuant to a PSA, Client shall pay SBL (i) amounts as set forth in the applicable PSA (the “Service Fee”); (ii) a handling surcharge of a certain percentage or certain amount (not to exceed [***]) to be set forth in the applicable PSA of the costs of Raw Materials paid by SBL (including but not limited to taxes and customs duties/fees); (iii) a handling surcharge of a certain amount to be set forth in the applicable PSA related to the Client Materials (which shall be based on the actual costs of such materials as supported by reasonable documentary evidence as opposed to the market value thereof and which may include taxes and customs duties/fees); and (iv) storage fees as set forth in the relevant PSA.

9.2 Invoices.

9.2.1 Service Fee of the Project Stages and Batches. Batches of Product shall be invoiced upon SBL’s release of a Batch of Product pursuant to Section 5.9.2. Otherwise, Service Fees shall be invoiced according to the invoicing plan set forth in the applicable Project Plan or applicable PSA. SBL’s invoices pursuant to this MSA shall be electronic, unless otherwise agreed by the Parties.

9.2.2 Raw Materials. With respect to the Raw Materials, SBL shall submit invoices to Client for the applicable Raw Materials cost (including any agreed upon safety stock) according to Section 9.1. SBL shall submit an invoice to Client (i) for the cost [***] procured upon receipt of the invoice from vendors/suppliers; and (ii) for the cost of [***] used by SBL in Manufacturing a Batch of Product in a project stage upon completion of such project stage or upon SBL’s release of a Batch of Product as applicable. Notwithstanding the foregoing, the Parties shall collaborate in the selection of the vendors of the Raw Materials. All such vendors shall be approved by Client before supplying SBL with Raw Materials for any Product.

9.2.3 Client Materials. With respect to the Client Materials, which shall be supplied by Client to SBL at no cost during SBL’s performance the Service, SBL shall submit an invoice to Client in an amount as set forth in Section 9.1 upon SBL’s completion of such project stage of the Service SBL’s release of a Batch of Product, as applicable.

9.3 Payment.

9.3.1 Mode of Payment; Foreign Exchange. All payments for undisputed amounts to SBL due under the MSA or any applicable PSA shall be made within [***] calendar days from the receipt of the SBL’s invoice in USD $ by means of telegraphic transfer to the account with the bank designated by SBL in the foregoing invoice. For the purpose of computing payment amounts incurred in a currency other than USD$, such currency shall be converted into USD$ using the basic exchange rate published by Bloomberg (or its successor institution) on its website “http://www.bloomberg.com/markets/currencies” (or any other website that may be used by Bloomberg or its successor institution for publication of currency exchange rates) at the opening of business on such invoice date.

9.3.2 Taxes. All prices and charges are exclusive of any applicable taxes, levies, imposts, duties and fees of whatever nature imposed by any law or regulations in any country in respect of the Services, importation or exportation of Raw Materials, Client Materials, Batches, and Product, which shall be paid by Client. For the avoidance of doubt, the foregoing shall not include any taxes imposed on the income or profit of SBL and any withholding tax lawfully levied on any payment to be made by Client to SBL, each of which shall be solely borne by SBL. Client shall pay or reimburse SBL for all customs duties and taxes in connection with the purchase, sale, importation or exportation of any Raw Materials, Client Materials, Batches, or Product or the provision of Services, except to the extent such duties and taxes are recoverable by or refundable to SBL. SBL agrees to assist Client in claiming exemption under double taxation or similar agreement or treaty from time to time in force to obtain a refund of any customs duties, value added taxes, and other taxes payable by SBL.

9.3.3 Price Adjustments. The Service Fees as set forth in the applicable PSA, shall be adjusted annually, on the last day of January, effective January 1, 2019, by the percentage change in the consumer price index as published by the Bank of Korea for the immediately preceding twelve (12) months, provided, that such adjustment shall [***] period. The relevant date for price adjustment under this Section shall be the issue date of SBL’s invoice.

9.3.4 Default Interest. Any amount that is not paid by a Party to the other when due under the MSA or any PSA shall bear default interest at the rate of the lesser of: (a) [***] percent ([***]%) per annum from the day following the due date until paid in full, or (b) the [***]. In the event there is an undisputed amount which is invoiced by SBL but not paid by Client for more than [***] after the due date, such event shall be considered a material breach of the relevant PSA.

SECTION 10 CONFIDENTIALITY

10.1 Confidential Information. If a Party intends to disclose its Confidential Information in writing, in electric file or format or in other tangible manner, such Party will make reasonable efforts to indicate it is confidential; and if to disclose orally, visually or in other intangible manner, such Party will make reasonable efforts to reduce it in writing or in electric file or format, identified as confidential and delivered to another Party within thirty (30) days after such oral or visual disclosure: provided, however, that, in each case of the foregoing, a failure to do so shall not deny, negate or destroy the confidential nature of any Party’s Confidential Information that is disclosed to the other Party, and no such failure shall serve as conclusive evidence that the disclosed information shall not be considered Confidential Information by and between the Parties. Furthermore, the existence and terms of the MSA shall be deemed to be the Confidential Information of both Parties.

Notwithstanding the foregoing, Confidential Information shall not include the information, which as evidenced by written records:

(a) was at the time of disclosure by the Disclosing Party hereunder publicly known or available;

(b) after disclosure by the Disclosing Party hereunder, became publicly known or available by publication or otherwise, other than by an authorized act or omission by the Receiving Party;

(c) was in the possession of the Receiving Party without confidentiality restriction at the time of the disclosure by the Disclosing Party hereunder, as can be proven by documentary evidence;

(d) was lawfully received from any third party having the lawful right to make such disclosure, without obligation of confidentiality; or

(e) was independently developed by the Receiving Party’s directors, officers or employees without reference to the Disclosing Party’s Confidential Information, as demonstrated by records contemporaneous with such development.

10.2 Confidentiality. The Receiving Party recognizes the proprietary and confidential nature of the Disclosing Party’s Confidential Information and agrees that no right, title, ownership, license, or interest of any character in the Disclosing Party’s Confidential Information other than as specifically granted herein, is conveyed or transferred to the Receiving Party. Both Parties further agree to maintain the Disclosing Party’s Confidential Information in confidence and not to disclose or divulge the Disclosing Party’s Confidential Information, in whole or in part, to any third party, and not use the Disclosing Party’s Confidential Information for any purpose other than pursuing the MSA. Each Party shall guard such Confidential Information using the same degree of care as it normally uses to guard its own confidential or proprietary information of like importance, but in any event no less than reasonable care. The Receiving Party shall limit disclosure of the Disclosing Party’s Confidential Information to its and those of its directors, officers, employees, consultants and agents (“Representatives”) who have a need to know the Disclosing Party’s Confidential Information for performance of the Service and implementation of the MSA, provided that, the Receiving Party shall undertake procedures to ensure that each of its Representatives to whom the Disclosing Party’s Confidential Information is disclosed understands (i) the confidential nature of the Disclosing Party’s Confidential Information and (ii) that he or she is under an obligation similar to those contained herein to hold the Disclosing Party’s Confidential Information disclosed strictly confidential. Notwithstanding anything herein to the contrary, neither Party shall disclose any Confidential Information of the other Party to any of its Affiliates without the express advance written approval of the Party whose Confidential Information is to be disclosed. In the event that either Party determines that applicable securities laws require disclosure of Confidential Information, such Party shall promptly notify the other Party, and the Parties shall cooperate in making a disclosure (joint disclosure if necessary) which shall meet the requirements of the applicable securities laws.

10.3 Authorized Disclosures. Disclosure is permitted in the event that (a) the Disclosing Party’s Confidential Information is reasonably required to obtain or maintain any Regulatory Approvals for the Products in any or all jurisdictions or (b) the Disclosing Party needs to disclose such Confidential Information to comply with Applicable Law; provided that such Receiving Party shall (1) notify the Disclosing Party in writing within a reasonable time prior to any such disclosure to allow the Disclosing Party to protect its Confidential Information, and (2) exercise its Commercially Reasonable Efforts to limit disclosure of the Disclosing Party’s Confidential Information to that which is necessary for compliance and to otherwise maintain the confidentiality of the Confidential Information.

10.4 Survival of Confidential Obligations. The confidentiality obligations of the Receiving Party pursuant to this MSA shall survive for a period of five (5) years from the expiration or termination of this MSA.

10.5 Return of the Confidential Information. All written, printed or other tangible Confidential Information of the Disclosing Party disclosed under the MSA, and all copies thereof shall be returned to the Disclosing Party (or destroyed at the Disclosing Party’s request) by the Receiving Party within thirty (30) business days from the written request by the Disclosing Party. All Confidential Information disclosed electronically shall be completely deleted and destroyed by the Receiving Party within thirty (30) Business Days from the written request by the Disclosing Party. Notwithstanding the foregoing, (i) digital backup files automatically generated by the Receiving Party’s customary electronic data processing system may be retained and properly stored as confidential files for the sole purpose of backup and will be deleted in accordance with the Receiving Party’s retention policy, and (ii) a single copy of the Confidential Information may be retained in the secured files of the Receiving Party for the sole purpose of determining the scope of obligations incurred by it under the MSA provided that the Receiving Party shall keep such Confidential Information in confidence and will use the Confidential Information solely to comply with the terms of the MSA as well as the applicable law, rule and regulation.

SECTION 11 OWNERSHIP OF MATERIALS AND INTELLECTUAL PROPERTY

11.1 Reference Standard, Client Technology, Client Materials, Cell Line, and Product. SBL hereby understands and agrees that all rights to, titles of and interests in the Reference Standards, Client Technology, Client Materials, and Cell Line belong to Client, unless otherwise specifically provided herein.

11.2 Background Intellectual Property. It is acknowledged that each Party possesses Background IP. Any Intellectual Property relating to the Reference Standards, Client Technology, Client Materials and Cell Line owned and/or controlled by Client as of the date of provision of such Reference Standards, Client Technology, Client Materials and Cell Line by Client to SBL pursuant to Section 5.1 or otherwise under this MSA or any PSA, shall be deemed to be included in the Background IP of Client. Any new Intellectual Property that is derived from, or arises out of, a Party’s Background IP shall be owned by such Party.

11.3 Inventions. Any Intellectual Property arising out of or resulting from the Services under the MSA, but not derived from either Party’s Background IP shall be hereinafter collectively called an “Invention”.

11.3.1 Client Invention. Any Invention that (i) is [***] by one or more employees or officers of Client (or its third party consultant or subcontractor) or (ii) does not constitute an SBL Invention or Joint Invention shall be the sole property of Client (“Client Invention”). Client may use any Client Invention for any purpose, including filing patent application and SBL shall provide reasonable cooperation to Client at the expense of Client (as to all reasonable out-of-pocket expenses incurred by SBL that are supported by adequate documentation). Client hereby grants SBL a [***] and license to use such Background IP of Client and the Client Invention during the Term for the sole purposes of [***] in accordance with the MSA on behalf of Client or its designee. This Section 11.3 shall survive the expiration or earlier termination of the MSA and continue in effect as long as the intellectual property right to such Client Invention is legally valid.

11.3.2 SBL Invention. Any Invention that is [***] by one or more employees or officers of SBL (or its third party consultant or subcontractor) and which is not derived from, or arises out of Client Background IP, the Product, the Cell Line or Client’s Confidential Information or any other proprietary right of Client or its third party vendors, contractors, or other partners or clients under or in connection with the MSA, shall be the sole property of SBL (“SBL Invention”), and shall not be deemed to be Client Invention or Joint Invention for the purposes of the MSA; provided, however, that SBL grants to Client a [***] license under such Background IP of SBL and the SBL Invention to [***].

11.3.3 Client-SBL Joint Invention. Any Invention that is [***] by one or more employees, or officers of SBL (or its third party consultant or subcontractor) on the one hand and one or more employees, officers, agents or contractors of Client (or its Affiliates) on the other hand, and (i) which is not otherwise a Client Invention or a SBL Invention, or (ii) is not an improvement to a Party’s Background IP, shall be jointly owned by Client and SBL (a “Joint Invention”), and shall not be a Client Invention or SBL Invention for the purposes of the MSA. Subject to the terms and conditions of the MSA, any such Joint Invention may be exploited by SBL or Client without compensation and liability of other obligation (including accounting obligations) to the other Party, and each Party has a non-exclusive, royalty-free, worldwide license, with the right to sublicense, under its interest in such Joint Inventions. For clarity, any Intellectual Property rights (including patents) and Inventions [***] shall in all events be owned solely by Client and nothing herein conveys any right, title or interest in such to SBL.

SECTION 12 WARRANTIES.

12.1 The Parties’ General Warranties. Each Party warrants and represents that: (i) it has the corporate power and authority to enter into this MSA and has taken all necessary action on its part required to authorize the execution, delivery and performance of this Agreement; (ii) it is aware of no legal, contractual or other restriction, limitation or condition that might adversely affect its ability to enter into this MSA and perform its obligations hereunder; (iii) it is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated; (iv) this MSA (a) has been duly executed and delivered by a duly authorized representative of it, and (b) is the legal, valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally; and (v) the execution, delivery and performance of this Agreement by it does not and will not (a) violate any Applicable Laws applicable to it, or (b) violate or conflict with any provision of its Articles of Incorporation or By-laws or other organizational documents.

12.2 Client’s Warranties. Client represents and warrants to SBL that as of the Effective Date of the MSA and during the Term: (a) the formulation, composition, use, distribution, marketing, or sale of the Product shall comply with all Applicable Laws and that during the Term, Client will perform all obligations and take other necessary actions to be in compliance with such requirements, Applicable Laws, rules and regulations, including applicable cGMPs; (b) Client will comply with all Applicable Laws, and that it will keep SBL informed of any information known to Client which would affect SBL’s provision of the Service hereunder; (c) all Reference Standard, Client Technology, Client Materials, and Cell Line provided to SBL by or on behalf of Client will be suitable for the Manufacture of the Product; and (d) to the best of Client’s knowledge, SBL’s use of the Client Materials, Manufacturing Process, and Client Technology as directed, or consented in writing by Client for the purpose of the Service and to the extent as set forth in the MSA will not infringe any third party’s Intellectual Property rights.

12.3 SBL’s Warranties. SBL represents and warrants that:

12.3.1 As of the Effective Date and during the Term, (i) SBL is the lawful owner, lessee, operator, or licensee of the Facility, equipment, machinery, as well as permissions required, to enable SBL to perform its obligations under this MSA, and (ii) to the best of SBL’s knowledge, none of the SBL Inventions or SBL Background IP infringes any third party Intellectual Property, nor will SBL’s provision of the Services or Products or any other deliverables under this MSA (other than those directed by the Client) infringe on the Intellectual Property rights of any third party.

12.3.2 All Product Batches, at the time of delivery to Client’s designated carrier, shall (a) conform to the Specifications (except for Pilot Batches and Engineering Batches unless otherwise agreed); (b) be Manufactured, packaged, handled and stored in compliance with the requirements of cGMPs (except for Pilot Batches and Engineering Batches unless otherwise agreed) and all Applicable Laws; (c) comply with the Standard Operating Procedures; (d) be Manufactured in compliance with the Quality Agreement; (e) be transferred free and clear of any liens, claims or encumbrances of any kind; and (f) be free from material defects at the time supplied to Client, provided however that after Client’s acceptance of the Product, Client’s remedy for any breach of the warranty set forth in this Section 12.3.2(f) will be pursuant to Section 5.9.2(a)(iv) (Latent Defect), Section 8.3 (Responsibility for Recalled Product) and Section 13.1 (Indemnification by SBL), as applicable.

12.4 No Other Warranties. THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION OR IN ANY PSA ARE EXPRESSLY IN LIEU OF AND EXCLUDE, AND THE PARTIES HEREBY EXPRESSLY DISCLAIM AND NEGATE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED (ARISING BY OPERATION OF LAW OR OTHERWISE), INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, EVEN IF THAT PURPOSE IS KNOWN.

SECTION 13 INDEMNIFICATION

13.1 Indemnification by SBL. SBL shall indemnify and hold harmless Client, its Affiliates, and their officers, directors, employees or agents from and against any Damages arising or resulting from any third party (which shall exclude Client Affiliates) claims to the extent such Damages are relating to, arising out of, in connection with, or resulting from claims, demands, or actions based upon (i) gross negligence or willful misconduct of SBL or its officers, directors, employees or agents, including any subcontractor or vendor used in the Manufacture of Product, (ii) any claim that the use of any production or Manufacturing Process employed by SBL (other than those directed by the Client) in the provision of the Services and Products under this MSA infringes on any third party’s Intellectual Property rights, in each case (i) and (ii) except to the extent that such Damages are caused by the causes as set forth in Section 13.2 for which Client is obliged to indemnify, or (iii) breach of the representations, warranties and covenants of SBL.

13.2 Indemnification by Client. Client shall indemnify and hold harmless SBL, its Affiliates, and their officers, directors, employees or agents from and against any Damages arising or resulting from any third party (which shall exclude SBL Affiliates) claims to the extent such Damages are relating to, arising out of, in connection with, or resulting from claims, demands or actions based upon (i) gross negligence or willful misconduct of Client or its officers, directors, employees or agents, or (ii) any claim that the use of the Client Materials, Manufacturing Process, and/or Client Technology, as well as any tests, studies, experiments, or other activities undertaken at the direction of, or with the written consent of, Client infringes any third party’s Intellectual Property rights; in each case (i) and (ii) except to the extent that such Damages are caused by the causes as set forth in Section 13.1 for which SBL is obliged to indemnify, or (iii) breach of the representations, warranties and covenants of Client.

13.3 Indemnification Procedure. The foregoing indemnification by SBL or Client shall be conditioned, if and to the extent Damages are based on or related to a third party claim, upon a Party who intends to claim indemnification under Sections 13.1 and 13.2 (the “Indemnified Party”) (i) providing written notice to the other Party (“Indemnifying Party”) within twenty (20) calendar days after the Indemnified Party have been given written notice of such third party claim, provided that absence or delay of such prior written notice will not relieve the Indemnifying Party of its obligation to indemnify except to the extent such absence or delay materially prejudices the Indemnifying Party’s ability to defend the third party claim; (ii) permitting the Indemnifying Party, upon timely notice by the Indemnified Party, the opportunity to assume full responsibility (at the Indemnifying Party’s cost and expense) for the investigation and defense of any such claim with counsel reasonably satisfactory to the Indemnified Party, provided, however, that the Indemnifying Party shall keep the Indemnified Party informed as to the progress of the defense of any claim and that the Indemnified Party shall cooperate in such defense and shall make available all records, materials and witness reasonably requested by the Indemnifying Party in connection therewith; and (iii) not settling or compromising any such claim admitting liability of the Indemnified Party without the Indemnifying Party’s prior written consent, with such consent not to be unreasonably denied, withheld or conditioned.

SECTION 14 DISCLAIMER OF CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY

14.1 Disclaimer of Consequential Damages. EXCEPT WITH RESPECT TO A PARTY’S WILLFUL MISCONDUCT OR [***], NEITHER PARTY WILL BE LIABLE UNDER THIS AGREEMENT FOR ANY SPECIAL, PUNITIVE, CONSEQUENTIAL, INCIDENTAL OR OTHER INDIRECT DAMAGES OF ANY TYPE OR NATURE, WHETHER BASED IN CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, INCLUDING LOSS OF PROFITS OR REVENUES.

14.2 Limitation of Liability. Specific caps on Damages shall be set forth in the applicable PSA.

SECTION 15 TERM AND TERMINATION OF AGREEMENT

15.1 Term. This MSA will become effective as of the Effective Date and will be in effect for as long as a PSA is in effect (the “Term”). Unless otherwise set forth therein, each PSA will have its own initial term as stated therein and shall automatically renew for successive terms of two (2) years each unless either Party gives written notice to the other Party of its intention to terminate the PSA at least [***] prior to the end of the then current PSA term.

15.2 Termination. This MSA or a PSA may be earlier terminated as set forth in this Section 15.2.

15.2.1 Material Breach. A Party may terminate this MSA or any applicable PSA for a material breach by the other Party; provided, however, that the non-breaching Party shall give the breaching Party written notice of such breach and if the breaching Party fails to commence Commercially Reasonable Efforts to cure that breach within [***] after receipt of such written notice, then the non-breaching Party may terminate this Agreement on [***] written notice after expiration of such [***] period. This MSA shall terminate if all effective PSAs are terminated.

15.2.2 Insolvency. This MSA may be terminated by either Party upon written notice at any time during the MSA if the other Party: (a) files in any court pursuant to any statute a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of such Party, or of its assets; (b) proposes a written agreement of composition for extension of its debts; (c) is served with an involuntary petition against it, filed in any insolvency proceeding which is admitted in the court; or (d) makes an assignment for the benefit of its creditors. The Party affected shall immediately notify the other Party in writing of the occurrence of any of the foregoing events.

15.2.3 Force Majeure. Either Party may terminate a PSA if a Party is unable to perform its obligations pursuant to a PSA in the event of a Force Majeure Event in accordance with Section 17.3.

15.2.4 Other Specified Events. The Parties may additionally terminate a PSA as set forth in the applicable PSA.

15.3 Effect of Expiration or Termination.

15.3.1 Payment of Amounts Due. Expiration or termination of the MSA or PSA for any reason shall not exempt any Party from paying to any other Party any undisputed amounts owing to such Party at the time of such expiration or termination.

15.3.2 Decommissioning. Upon expiration or termination of a PSA for any reason, SBL shall cease and refrain from the Services described in any applicable PSA (including the Manufacturing and supplying the Product) for Client unless otherwise provided in the following Sections 15.3.2(a) to 15.3.2(d), and both Parties shall pursue decommissioning activities as set forth hereunder or pursuant to the terms of the applicable PSA, in which case the terms of the applicable PSA shall govern. All costs related to decommissioning activities shall be identified and agreed to upon the expiration or termination of the applicable PSA, and shall be allocated as set forth in this Section 15.3.2, or pursuant to the terms of the applicable PSA, or otherwise as mutually agreed between the Parties.

(a) Fully Manufactured Product.

(i) If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2, upon Client’s election, SBL shall (i) deliver already fully Manufactured Product to Client in accordance with the terms and conditions of the MSA and applicable PSA or (ii) destroy such Product. If Client elected (i) above, Client shall pay [***] and any related costs or fees for the Service relating to such Product in accordance with the terms and conditions of the MSA and applicable PSA, and if Client elected (ii) above, SBL shall [***].

(ii) If SBL terminates a PSA pursuant to Section 15.2.1, or 15.2.2 upon SBL’s election, SBL may (1) deliver the fully Manufactured Product to Client in accordance with the terms and conditions of the MSA and applicable PSA (including the current Firm Period or Binding Year in the PSA) or (2) destroy such Product. If SBL elected (1) above, Client shall pay [***]and any related costs or fees for the Service relating to such Product in accordance with the terms and conditions of the MSA and applicable PSA, and if SBL elected (2) above, Client shall [***].

(iii) If either Party terminates a PSA pursuant to Section 15.2.3, both Parties shall negotiate in good faith manner for the handling of the fully Manufactured Product and the allocation of costs and expenses between the Parties.

(iv) If a PSA is naturally expired pursuant to Section 15.1, the provisions of (ii) above shall apply.

(b) Client Materials being used for the Service (Product in Process).

(i) If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2, upon Client’s election, SBL shall (1) continue to use the Client Materials being used for the Manufacturing hereunder (the Product in process) and deliver the fully Manufactured Product to Client in accordance with the terms and conditions of the MSA and applicable PSA, or (2) deliver to Client or destroy such Product in process. If Client elected (1) above, Client shall pay [***] and any related costs or fees for the Service relating to the fully Manufactured Product in accordance with the terms and conditions of the MSA and applicable PSA, and if Client elected (2) above, SBL shall [***].

(ii) If SBL terminates a PSA pursuant to Section 15.2.1 or 15.2.2, upon SBL’s election, SBL may (1) continue to use the Client Materials being used for the Manufacturing hereunder (the Product in process) and deliver the fully Manufactured Product to Client in accordance with the terms and conditions of the MSA and applicable PSA, or (2) destroy such Product in process, provided that SBL shall not destroy any Product in process if Client requests that SBL return all Product in process and any Client Materials to Client, at Client’s expense. If SBL elected (1) above, Client shall pay [***] and any related costs or fees for the Service relating to the fully Manufactured Product in accordance with the terms and conditions of the MSA, and if SBL elected (2) above, Client shall [***].

(iii) If either Party terminates a PSA pursuant to Section 15.2.3, both Parties shall negotiate in good faith manner for the handling of the Client Materials being used for the Manufacturing hereunder (Product in process) and the allocation of costs and expenses between the Parties.

(iv) If a PSA is naturally expired pursuant to Section 15.1, the provisions of (ii) above shall apply.

(c) Client Materials, Cell Line, and Reference Standards. Upon expiration or termination of a PSA, upon Client’s election, SBL shall deliver to Client and/or destroy all remaining Client Materials (subject to Sections 15.3.2(a) and 15.3.2(b)), all remaining Cell Line vials, Reference Standards and other materials required for Manufacturing.

The costs and expenses for such activities shall be borne by the Parties as follows:

(i) If Client terminates the PSA pursuant to Section 15.2.1 or 15.2.2, SBL shall [***] and SBL shall [***];

(ii) If SBL terminates the PSA pursuant to Section 15.2.1 or 15.2.2, Client shall [***];

(iii) If either Party terminates the PSA pursuant to Section 15.2.3, both Parties shall negotiate in good faith manner the allocation of all such costs and expenses for such activities; and

(iv) If a PSA is naturally expired pursuant to Section 15.1, SBL shall return all remaining Client Materials, Cell Line vials, Reference Standards and other materials to Client at Client’s cost.

(d) Raw Materials.

(i) If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2 and if Client so elects, SBL shall deliver the remaining Raw Materials to Client for Client’s payment of SBL’s cost to procure such Raw Materials, or dispose of them at Client’s election. SBL shall [***].

(ii) If SBL terminates a PSA pursuant to Section 15.2.1 or 15.2.2, SBL may deliver the remaining Raw Materials to Client or dispose of them at SBL’s election. If so delivered, Client shall pay [***] to SBL and bear the costs and expenses for the [***] by SBL.

(iii) If either Party terminates a PSA pursuant to Section 15.2.3, both Parties shall negotiate in good faith for the handling of the Raw Materials and the allocation of costs and expenses between the Parties.

(iv) If a PSA is naturally expired pursuant to Section 15.1, and if Client so elects, SBL shall deliver the remaining Raw Materials to Client for Client’s payment of SBL’s cost to procure such Raw Materials, or dispose of them. Client shall [***].

(e) Outstanding Obligations Regarding Purchase of Product.

(i) If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2, Client shall [***] including but not limited to [***], or otherwise; provided, however, that Client shall [***], pursuant to the terms of this MSA and PSA.

(ii) If SBL terminates a PSA pursuant to Section 15.2.1 or 15.2.2, [***], unless specifically stipulated otherwise in the applicable PSA.

(iii) For all other cases of termination of a PSA other than subsection (i) or (ii) above, the outstanding obligations regarding purchase of Product will be expressly set forth in the applicable PSA.

(f) Outbound Technology Transfer.

(i) Upon expiration or termination of this Agreement or any PSA, upon Client’s request prior to or following termination or expiration of this Agreement or a PSA, which request shall be made within [***] days of such termination or expiration, SBL shall provide reasonable assistance and cooperation to Client (or its designee), at Client’s cost and expense, to facilitate transfer of the Manufacturing Process, including all information, materials and documentation necessary to Manufacture the Product (the “Outbound Technology Transfer”) from SBL to Client or Client’s designee. Notwithstanding anything to the contrary, when providing the Outbound Technology Transfer, SBL shall not be obligated to provide information to the extent such information is confidential to SBL or confidential to SBL’s any other customer, provided that SBL shall provide information related to the Product or Services required by a Regulatory Authority.

(ii) SBL shall provide Outbound Technology Transfer with a capacity of a total maximum of [***] (provided by qualified personnel), which represents [***] per Business Day for [***]. Both Parties shall endeavor to allocate sufficient resources for the Outbound Technology Transfer. SBL will have no obligation to provide Outbound Technology Transfer more than [***] after termination or expiration of the MSA or applicable PSA, provided however that in the event Client reasonably requests additional manhours for Outbound Technology Transfer during the [***] period, the JSC shall mutually agree on the number of additional manhours for SBL to provide, and Client shall be responsible for any and all additional costs. For clarity, SBL’s assistance shall be time-based, and SBL shall in no way guarantee or ensure that after the Outbound Technology Transfer is complete, Client or Client’s designee will be able to Manufacture the Product.

(iii) During the Term, Client may request SBL to provide [***] to Client [***]. Upon written request from Client, SBL shall conduct an [***] on the same terms and conditions as provided in Section [***].

(g) Survival. Any termination or expiration of this MSA shall not affect any outstanding obligations due hereunder prior to such termination or expiration, nor shall it prejudice any other remedies that the Parties may have under this MSA. For greater certainty, except as otherwise expressly provided, termination or expiration of this MSA, irrespective of the cause, shall not affect any rights or obligations which, from the context thereof, are intended to survive termination or expiration of this MSA, including but not limited to Sections 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17.

SECTION 16 ARBITRATION

16.1 Informal Discussions. Except as otherwise provided herein, in the event of any controversy or claim arising out of or relating to this MSA, or the rights or obligations of the Parties hereunder, the Parties shall first try to settle their differences amicably between themselves through the Core Team and then JSC level. Thereafter, either Party may initiate informal dispute resolution on the executive level by sending written notice of the dispute to the other Party, and within thirty (30) days after such notice appropriate executives of the Parties shall meet for attempted resolution by good faith negotiations. If such representatives are unable to resolve promptly such disputed matter within the said thirty (30) days, either Party may refer the matter by written notice to the Chief Executive Officer of the other Party, or his/her designee, and the Chief Executive Officer of such Party, for discussion and resolution. If such individuals or their designees are unable to resolve such dispute within thirty (30) days of such written notice, either Party may initiate arbitration proceedings in accordance with the provisions of this Article 16.

16.2 Arbitration. If the Parties do not fully settle a dispute pursuant to Section 16.1, and a Party wishes to pursue the matter, each such dispute, controversy or claim shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules of the International Chamber of Commerce (“ICC”), and judgment on the arbitration award may be entered in any court having jurisdiction thereof to enforce the arbitration award. The arbitration shall be conducted by a panel of three persons experienced in the pharmaceutical business, and within thirty (30) days after initiation of arbitration, each Party shall select one person to act as arbitrator and the two Party-selected arbitrators shall select a third arbitrator within thirty (30) days of their appointment. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the ICC. The place of arbitration shall be New York, New York, United States and all proceedings and communications shall be in English. Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award. The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s direct compensatory damages, other than with respect to damages arising out of a Party’s willful misconduct or grossly negligent breach of confidentiality or intellectual property obligations under this MSA, and in all cases, any decision or determination by the arbitrators shall comply with Article 14, as applicable. The Parties agree that, in the event of a good faith dispute as set forth in Section 3.6.1, neither Party may terminate this Agreement until final resolution of the dispute through arbitration or other judicial determination. The Parties further agree that any payments made pursuant to this Agreement pending resolution of the dispute shall be refunded if an arbitrator or court determines that such payments are not due.

16.3 Costs and Fees. Each Party shall bear its own attorneys’ fees, costs, and disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrators. Absent the filing of an application to correct or vacate the arbitration award as permitted by Applicable Law, each Party shall fully perform and satisfy the arbitration award within fifteen (15) days after the service of the award on such Party.

SECTION 17 MISCELLANEOUS

17.1 Notices. Any notice required or permitted under the MSA shall be in writing with duly authorized signature and made to the following addresses or facsimile numbers:

If to Client:

Immunomedics, Inc.

300 American Road

Morris Plains, NJ 07950

Attention: CEO

With a copy to:

DLA Piper LLP

51 John F. Kennedy Parkway, Suite 120

Short Hills, New Jersey 07078-2704

United States

Attention: Andrew Gilbert, Esq.

If to SBL:

Samsung BioLogics Co., Ltd.

300, Songdo bio-daero, Yeonsu-gu

Incheon 21987, South Korea

Attention: Head of Corporate Business Planning

Facsimile: +82-32-455-3242

With copy to: SBL Contract Legal Compliance Team

Either Party may change its designated address and facsimile number by notice to the other Party in the manner provided in this Section 17.1.

Any notice shall be deemed to have been delivered on the date of delivery of delivered personally, or on the next day of sending if sent by facsimile, or on the fifth day of posting if sent by registered or certified mail with return receipt requested and postage prepaid.

17.2 Governing Law. This MSA shall be construed and interpreted in accordance with the laws of State of New York, United States and all rights and remedies shall be governed by such laws without regard to principles of conflicts of law. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to the transactions contemplated by the MSA.

17.3 Effect of Force Majeure Event. Except as set forth in this Section 17.3, neither Party (the “Affected Party”) shall be liable to the other Party (the “Non-Affected Party”) for failure or delay to perform its obligation under the MSA or any applicable PSA when such failure or delay is due to riots, storms, fires, explosions, floods, earthquakes, war, embargoes, blockades, insurrections, an act of God or any other cause similar thereto which is beyond the control of the Affected Party including those affected upstream suppliers (“Force Majeure Event”).

Each Party agrees to give the other Party prompt written notice of the occurrence of any Force Majeure Event, the nature thereof, and the extent to which the affected Party will be unable fully to perform its obligations under the MSA. If a condition constituting Force Majeure Event as defined herein exists for more than [***], the Parties shall negotiate a mutually satisfactory solution to the problem, if practicable, including termination of this MSA upon [***] written notice from the failure of reaching a mutually satisfactory solution to the Force Majeure Event, or the use of a third party to fulfill the obligations hereunder of the Party invoking Force Majeure Event, at the expense of the party invoking Force Majeure Event.

17.4 Assignment. Neither Party shall assign, in whole or in part, the MSA or any PSA without the prior written consent of the other Party, such approval not to be unreasonably withheld. Notwithstanding the above, Client may, without such consent, assign the MSA and/or any PSAs to (i) its Affiliate or (ii) any purchaser of Client’s rights relating to the Product or all or substantially all of the assets of Client, or of all of its capital stock, or to any successor corporation or entity resulting from any merger or consolidation of such Party with or into such corporation or entity. In such case, such third party shall subscribe in writing to be bound to this MSA and applicable PSAs, and Client shall remain liable to SBL, on a joint and several basis, for full performance of the assignee third party’s obligations and covenants under this MSA if such assignee is an Affiliate. For clarity, in the event that any Party assigns this MSA as permitted under this Section 17.4, it shall be required to contemporaneously assign any and all PSAs which are then in effect together with this MSA.

17.5 No Grant of License. Nothing in the MSA shall affect, or grant any right to, patents, know-how or other intellectual property owned by either Party prior to the commencement of the MSA unless otherwise expressly provided in the MSA.

17.6 No Right to Use Names. Except as expressly provided herein, no right, expressed or implied, is granted by the MSA to use in any manner the name of either of the Parties or any other trade name, symbol, logo or trademark of the other Party in connection with the performance of the MSA, without the prior written consent of the other Party. Notwithstanding the foregoing, either Party may use such names as required under Applicable Laws, in connection with filings Regulatory Authorities or securities regulations, provided however that such Party provides reasonable advance written notice to the other Party.

17.7 Independent Contractors. The Parties hereto are independent contractors and nothing contained in the MSA shall be deemed or construed to create a partnership, joint venture, employment, franchise, agency or fiduciary relationship between the Parties.

17.8 Integration. This MSA, all PSAs, all QAGs, and the [***] Agreement constitutes the entire agreement between the Parties relating to the subject matter of the MSA and supersedes all previous oral and written communications or understandings between the Parties, including, without limitation, that certain Letter of Intent between the Parties, dated January 12, 2018 (as amended), and the Existing CDA with respect to the subject matter of the MSA.

17.9 Amendment; Waiver. Except as otherwise expressly provided herein, no alteration of or modification to the MSA, any PSA or any QAG shall be effective unless made in writing and executed by an authorized representative of both Parties. No course of dealing or failing of either Party to strictly enforce any term, right or condition of the MSA, any PSA or any QAG in any instance shall be construed as a general waiver or relinquishment of such term, right or condition. The observance of any provision of the MSA, any PSA or any QAG may be waived (either generally or any given instance and either retroactively or prospectively) only with the written consent of the Party granting such waiver.

17.10 Severability. The Parties do not intend to violate any applicable law. However, if any sentence, paragraph, clause or combination of the MSA is in violation of any law or is found to be otherwise unenforceable, such sentence, paragraph, clause or combination of the same shall be deleted and the remainder of the MSA shall remain binding, provided that such deletion does not alter the basic purpose and structure of the MSA.

17.11 Construction. The Parties mutually acknowledge that they have participated in the negotiation and preparation of the MSA. Ambiguities, if any, in the MSA shall not be construed against any Party, irrespective of which Party may be deemed to have drafted the MSA or authorized the ambiguous provision.

17.12 Interpretation. The captions and headings to the MSA are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of the MSA. Unless context otherwise clearly requires, whenever used in the MSA: (a) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation”; (b) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to the MSA; (c) the word “law” or “laws” means any applicable, legally binding statute, ordinance, resolution, regulation, code, guideline, rule, order, decree, judgment, injunction, mandate or other legally binding requirement of a governmental authority (including a court, tribunal, agency, legislative body or other instrumentality of any (i) government or country or territory, (ii) any state, province, county, city or other political subdivision thereof, or (iii) any supranational body); and (d) all references to the word “will” are interchangeable with the word “shall” and shall be understood to be imperative or mandatory in nature. All references to days, months, quarters or years are references to calendar days, calendar months, calendar quarters, or calendar years. Whenever any matter hereunder requires consent or approval, such consent or approval shall not be unreasonably withheld or delayed.

17.13 Counterparts. This MSA may be executed in two or more counterparts, including electronic or PDF counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have executed the MSA as of the date first above written.

Immunomedics, Inc.

Signature: /s/ Michael Pehl

Name: Michael Pehl

Title: Chief Executive Officer

Date: September 11, 2018

SAMSUNG BIOLOGICS CO., LTD.

Signature: /s/ Dr. Tae Han Kim

Name: Dr. Tae Han Kim

Title: Representative Director and President

Date: September 11, 2018

EXECUTION VERSION

SAMSUNG BIOLOGICS CO., LTD.

PRODUCT SPECIFIC AGREEMENT - COMMERCIAL PRODUCT DRUG SUBSTANCE

This Product Specific Agreement (this “PSA”) is made effective as of the date of last signature below (the “PSA Effective Date”) by and between Immunomedics, Inc., a Delaware corporation having its principal place of business at 300 The American Rd, Morris Plains, NJ 07950 (“Client”) and Samsung BioLogics Co., Ltd., a company with offices at 300, Songdo bio-daero, Yeonsu-gu, Incheon, 21987, Republic of Korea (“SBL”). Client and SBL are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, Client and SBL entered into a Master Services Agreement effective as of the date of last signature (the “MSA”) and whereas pursuant to Section 2.1 of the MSA, the Parties wish to enter into this PSA whereby SBL will provide certain Services as detailed herein;

NOW, THEREFORE, the Parties agree as follows:

1.Relationship to the MSA. All capitalized terms not defined in this PSA will have the meanings given to them in the MSA. This PSA is hereby incorporated by reference into the MSA. This PSA is subject in all respects to the terms of the MSA, and in the event of any conflict between the terms of this PSA and the terms of the MSA, the terms of the MSA shall govern, unless specifically stated in this PSA that the terms of this PSA shall govern.

2.Definitions

a.“Annual Forecast” is defined in Section 5(d)(i)(1).

b.“Batch Size” shall mean [***] in BRX.

c.“Biosimilar” means any biological product that is subject to review under an abbreviated approval pathway as a biosimilar, follow on biologic product or generic biological product, as those terms are commonly understood under the FD&C Act of the PHS Act and related rules and regulations, or the corresponding or similar laws, rules and regulations of any other jurisdiction under this PSA or the MSA.

d.“Campaign” shall mean a series of Batches of the Product that are produced in sequence using the same manufacturing equipment (including but not limited to the same bioreactor) followed by validated cleaning of such equipment and purification suite, and for the purposes of counting the number of Product batches in a Campaign in a given period, the start date of such Campaign shall be the determining factor. A Campaign will be deemed to end upon the completion of validated cleaning of such equipment and

purification suite of the manufacturing equipment used to produce the Product in such Campaign.

e.“Complete Response Letter” shall mean a letter received from the FDA pursuant to 21 CFR 314.110 of the United States Code of Federal Regulations.

f.“Down Payment” shall mean the payment of USD [***] made by Client to Samsung on [***] as a down payment [***].

g.“Firm Period” has the meaning set forth in Section 5(d)(i)(1).

h.“Liability Cap” has the meaning set forth in Section 9.

i.[***].

j.“New Batch” has the meaning set forth in Section 5(d)(iii).

k.“Pickup Date” has the meaning set forth in Section 7.

l.“Product” has the meaning set forth in Section 3(a).

m.“Product Purchase Commitment” has the meaning set forth in Section 5(e)(i).

n.“Product Purchase Commitment Shortfall” has the meaning set forth in Section 5(e)(iii).

o.“Quarter” means each three (3) calendar month period ending on March 31, June 30, September 30 and December 31, respectively.

p.“Quarterly Forecast” is defined in Section 5(d)(ii)(1).

q.“Year” means each one (1) year period that begins on January 1 and ends on December 31.

3.General Information.

a.Product: Sacituzumab (Antibody of ADC; IMMU-132).

b.Commercial Product Specification: The Product Specification will be as set forth in the QAG.

c.Cell Line: [***].

d.Manufacturing Facility: SBL [***] scale facility in Plant [***], located at 300, Songdo bio-daero, Yeonsu-gu, Incheon 21987, Republic of Korea.

4.Raw Materials.

a.Client Materials. Client Materials to be supplied by Client to SBL free of charge by itself or a third party designee.

i.List: See Exhibit A: Client Materials

ii.Timing of Provision of Client Materials to SBL: Client shall have the Cell Line delivered to the Facility in time to meet the Manufacturing schedule, but no later than [***] before the [***].

b.Raw Materials. The Parties shall finalize the categorization of Raw Materials to be used in performing the Services of this PSA into Specialized Raw Materials, Common Raw Materials, and Raw Materials which may not be charged on a cost-plus basis to the Client pursuant to Section 5.3 of the MSA, and shall attach this list to this PSA as Exhibit B.

i.Handling Fee for Common Raw Materials to be procured by SBL at Client’s expense: [***].

ii.Handling Fee for Specialized Raw Materials to be procured by SBL at Client’s expense: [***].

iii.SBL, or vendors qualified by SBL, shall perform all testing and evaluation of the Raw Materials as required by the Specifications for the Raw Materials and cGMP.

5.Technology Transfer, Manufacturing, and Supply Services. SBL shall perform the Services as set forth in this Section 5.

a.Services.

i.SBL shall provide the Services as set forth in the Scope of Work, attached as Exhibit C in accordance with this PSA and the Project Plan.

ii.Batch Prices. If pricing is [***] based on volume, such [***] pricing is on annual, not cumulative basis.

iii.Fees and invoicing.

1.Services shall be invoiced upon completion of activities by SBL according to the Services and Deliverables to be provided pursuant to the Scope of Work, attached as Exhibit C to this PSA, or otherwise as agreed by the Parties in this PSA or a Project Plan.

2. Batches of Commercial Product shall be invoiced upon release by SBL pursuant to MSA Section 5.9.2(a)(i).

3.Notwithstanding the foregoing, the Down Payment, together with any amounts paid by Client [***] as of the PSA Effective Date, will be applied as a credit to any invoices by SBL issued under this PSA until such Down Payment is depleted. Once the Down Payment is depleted, SBL shall invoice and Client shall pay in accordance with this PSA and Section 9 of the MSA.

b.Service Fees. In consideration for SBL’s performance of the Services pursuant to this Section 5, Client shall pay the Service Fees as set forth in Exhibit D. Additional Service Fees and costs may be detailed in an amendment to this PSA or in a Change Implementation Plan and Budget pursuant to Section 6.2(b) of the MSA. All invoices issued by SBL under this PSA shall be paid in US Dollars.

c.[***]. SBL shall be responsible for [***] in accordance with this Section 5(c). For purposes of this PSA, [***] shall be defined as the [***]. SBL shall [***] and [***] under this PSA [***]. The [***]used for the [***] under this PSA. [***] and [***] under this PSA. The Parties agree to review, from time to time, all [***] in order to determine [***] above.

d.Forecasts / Purchase Orders

i.Annual Forecast.

1.Each Year of the PSA term, Client shall provide to SBL a rolling [***] Forecast (the “Annual Forecast”) at latest by the December 1 of the previous Year. The first Annual Forecast shall be provided by December 1,2018. Upon receipt, SBL shall provide a written confirmation or comments on the Annual Forecast within [***] of receipt, upon which the [***] of each Annual Forecast (the “Firm Period”) shall be [***] percent ([***]%) firm and binding as to the total number of Batches of Commercial Product that are to be delivered in each Year of the Firm Period. The [***] of each Annual Forecast shall be partially binding on Client as follows: when the [***] of any Annual Forecast becomes the [***] of the next Annual Forecast, such [***] must forecast between [***] and [***] of the [***] of the previous Annual Forecast, rounded up to the nearest batch. By way of example, if Client submits an Annual Forecast on [***] which forecasts [***] of Commercial Product for [***], when Client submits the next Annual Forecast on [***], it must forecast between [***] and [***] Batches of Commercial Product for [***]. The [***] of the Annual Forecast shall be non-binding, good-faith estimates of Commercial Product to be delivered by SBL in such Years.

2.Each Annual Forecast issued by Client shall be consistent with the Product Purchase Commitment and the previously issued Annual Forecast in

terms of Batches of Commercial Product forecasted for each Year falling in the Firm Period.

3.Notwithstanding anything to the contrary in this PSA, in the event Client submits Purchase Orders requesting a number of Batches in excess of the Annual Forecast for any given Year, SBL shall use Commercially Reasonable Efforts to Manufacture such Batches in excess of the number of Batches set forth in any Firm Period and Annual Forecast, subject to SBL’s existing commitments.

4.Notwithstanding the foregoing, Client’s responsibility for the Firm Period under this Section 5(d)(i) shall be subject to Section 10.

ii.Quarterly Forecast.

1.Each Quarter of the PSA term, Client shall provide to SBL a rolling [***] Quarter Forecast (the “Quarterly Forecast”) at least [***] before the end of the then-current Quarter. The first Quarterly Forecast shall be provided on December 1, 2018.

2.The Quarterly Forecast shall set forth the Batches of Commercial Product that are requested by Client to be delivered in each Quarter of the Quarterly Forecast. Quarterly Forecasts shall be consistent with the then-current Annual Forecast when requesting Batches to be delivered in a Quarter falling in the Firm Period of any Annual Forecast. If there is a conflict between any Quarterly Forecast and any Annual Forecast, the Annual Forecast shall supersede unless agreed to by SBL.

iii.Purchase Orders. Each time Client submits a Quarterly Forecast to SBL pursuant to Section 5(d)(ii), SBL and Client shall discuss in good-faith the Manufacturing schedule for any Batches of Commercial Product that are requested to be delivered in such new Quarter entering the Quarterly Forecast (each a “New Batch”). The Parties shall discuss in good-faith for up to [***] and shall agree upon a manufacturing schedule for the New Batches covered by the applicable Quarterly Forecast, upon which Client shall issue a binding Purchase Order for each New Batch which is consistent with the Parties’ agreement and the Quarterly Forecast. The Purchase Order shall detail the Batch requested, and estimated delivery date(s) for such Batch, which delivery date shall be finalized upon SBL’s release of the Batch pursuant to Section 5.9.2(b)(i) of the MSA. If Client requests to increase the forecast from the existing Purchase Order, and SBL is able to accommodate, such additional Batches shall be purchased by Client as if Manufactured pursuant to a Purchase Order. If the Parties agree to add the new Batches to a Campaign that was already scheduled pursuant to a previous Quarterly Forecast, Client shall re-issue the previously issued Purchase Orders to align with such new agreement.

1.The Parties agree that (a) all Manufacturing shall be on a [***] Campaign per Year basis, (b) if there are more than [***] Campaigns per Year scheduled as a result of a Quarterly Forecast then Client will be subject to a changeover fee of USD [***] per additional Campaign.

e.Product Purchase Commitment.

i.Notwithstanding anything to the contrary, during each of Years 2020-2025, both inclusive, Client shall pay SBL for the greater of (a) the number of Batches stipulated for each Year in Table (A) below or (b) the number of Batches Forecasted by Client for such Year (the “Product Purchase Commitment”).

Table (A)



Commercial Year	1 (2020)	2 (2021)	3 (2022)	4 (2023)	5 (2024)	6 (2025)
# of Batches	[***]	[***]	[***]	[***]	[***]	[***]

ii.Upon execution of this PSA, Client shall issue a binding Purchase Order and SBL shall reserve capacity for [***] Engineering Run to be completed in [***], [***] to be completed in [***], and [***] to be completed in [***], each of which shall be Manufactured prior to Commercial Year 1 pursuant to Section 5(d)(i) above..

iii.Each Year commencing with [***], Client shall pay to SBL the price set forth in this PSA for each of the number of Batches of Commercial Product falling short of the Product Purchase Commitment (the “Product Purchase Commitment Shortfall”) for Client’s reserved but unused capacity. For any Year for which a Product Purchase Commitment Shortfall payment is owed to SBL, such payment shall be made on or before December 31 of the Year when there is a Product Purchase Commitment Shortfall for such Year. Notwithstanding the foregoing, Client’s responsibility for the Product Purchase Commitment Shortfall under this Section 5(e)(iii) shall be subject to Section 10.

iv.In the event Client receives a Complete Response Letter from the FDA, Client shall have the right to [***] provided by Client pursuant to this PSA, including, for clarity, the [***] and any [***] for the [***] and/or [***] of the [***].

f.Batch Failure.

i.Upon a Batch Failure, as determined in accordance with Section 5.8 of the MSA, SBL shall use Commercially Reasonable Efforts to deliver to Client a replacement Batch as soon as reasonably possible but no later than the following Campaign scheduled in accordance with the Quarterly Forecast.

ii.Pursuant to Section 5.8.3 of the MSA, the Parties shall be responsible for costs related to Batch Failure as follows:

1.To the extent the Batch Failure is caused solely as a result of SBL Assignable Error, SBL shall be responsible for (A) the [***] which amount is to be calculated based on the [***]; (B) SBL’s costs to [***] plus applicable SBL [***] as described in this PSA; (C) [***] as described in this PSA; and (D) [***] which amount is to be calculated based on the [***] as supported by reasonable documentary evidence (as opposed to the market value thereof) incurred by Client. Such cost responsibility shall be issued as a credit against future invoices by SBL, or [***].

2.To the extent the Batch Failure is solely caused as a result of Client’s acts or omissions, including but not limited to Client Materials, Client Technology, or Cell Line, Client shall be responsible for costs (A)-(D) in Section 5(f)(ii)(1) above.

3.For all other cases of Batch Failure, SBL and Client shall discuss in good faith to [***]. If the Parties cannot agree as to [***], the Parties shall [***].

4.SBL shall meet its cost responsibility obligations pursuant to this Section 5(f) solely through providing Client with a credit of equivalent value to be used against future invoices by SBL, or if this PSA is terminated, SBL shall refund such amounts.

6.Regulatory Approvals. The Regulatory Approvals covered by this PSA are FDA, EMA, the Pharmaceuticals and Medical Devices Agency (Japan) and the China Food and Drug Administration. SBL shall use Commercially Reasonable Efforts to support Client’s submissions or applications to any new Regulatory Authority, provided Client has provided SBL with reasonable notice, the Parties agree on an implementation plan, and Client pays SBL additional fees and costs, if applicable. Details of the scope of SBL’s Service in regards to Regulatory Approvals shall be detailed in Exhibit D (Service Fees) and the Project Plan.

7.Storage. Pursuant to Section 5.9 of the MSA, if Client does not direct SBL to prepare Manufactured Commercial Product to be picked up by Client or Client’s designated carrier with a pick-up date within [***] calendar days after Client’s receipt of the Batch Related Documents (the “Pickup Date”), SBL shall store the Commercial Product at the Warehouse, subject to the availability of space and storage conditions, and Client shall pay storage fees to SBL for the period of storage at the Warehouse commencing on the Pickup Date until the actual delivery date. Storage fees as follows: [***].

8.[***]. [***], during the PSA Term, SBL shall [***]. Notwithstanding the foregoing, in the event Client [***], SBL shall [***].

9.Limitation of Liability. In addition to the limitation of liability in Section 14 of the MSA for special, punitive, indirect or consequential damages, the Parties’ liability under this PSA shall be as set forth in this Section 9. Except for (i) Client’s indemnification obligations under Section 13.2(ii) of the MSA and SBL’s indemnification obligations under Section 13.1(ii) of the MSA; (ii) Client’s payment obligations under Section 9.3 of the MSA; and (iii) [***], a Party’s maximum aggregate liability to compensate the other Party for all Damages under this PSA will be set on a per Calendar Year basis and for the Calendar Year in which the cause of such liability lies or exists (whether in contract, tort, strict liability, statute, or otherwise) and shall be limited to [***] of the Fees paid or payable by Client to SBL in such Calendar Year period (excluding costs of Raw Materials, SBL handling fees, and other expense or cost reimbursements). For Damages relating to clause (iii) in the immediately preceding sentence, a Party’s maximum aggregate liability to compensate the other Party for all Damages under this PSA will be limited to [***] percent ([***]%) of the Fees paid or payable by Client to SBL in such Calendar Year period (excluding costs of Raw Materials, SBL handling fees, and other expense or cost reimbursements). For Damages relating to (i) and (ii) in the second sentence of this Section 9, a Party’s maximum aggregate liability to compensate the other Party for Damages under this PSA will be unlimited.

10.[***].

a.In the event that Client [***] including but not limited to [***], the Parties shall discuss in good faith [***]. If such good faith discussions are not successful, [***]. For example, if [***].

b.For purposes of Section 10(a) above, [***]. In the event of [***]. The Parties acknowledge that SBL shall [***].

11.Term. This PSA will commence as of the PSA Effective Date and will continue in full force and effect until December 31, 2025 (“PSA Term”), and may be extended for a period of two (2) years thereafter upon mutual agreement of the Parties, unless earlier terminated in accordance with the provisions of this PSA and/or Section 15.1 of the MSA.

12.Termination for Regulatory Cause. Client may terminate this PSA [***] advance written notice if:

a.Client or SBL receive notice from any Regulatory Authority that the Manufacture of the Product by SBL or otherwise pursuant to any PSA or the MSA is in violation of any Applicable Laws or may not be used for the Manufacture of Commercial Product, and [***];

b.Client is not able to obtain Regulatory Approval for manufacture and/or marketing of the Commercial Product in [***];

c.the waiver required from [***] at the Facility is withheld; or

d.an audit by or on behalf of a Regulatory Authority identifies a material deficiency in SBL’s performance of its obligations under the MSA and/or PSA, and [***].

13.Effects of Termination for Regulatory Cause.

a.In the event of termination by Client pursuant to Section 12(a) or 12(d), (i) Client shall not be responsible for the then [***], and (ii) during the [***] period following such termination, SBL shall have the exclusive first right to engage in good faith negotiation with Client for a period of [***] in an effort to come to an agreement on the terms and conditions of a PSA for the Manufacture of the Product, if Client later obtains Regulatory Approval in the United States. Notwithstanding anything herein to the contrary, the right of negotiation set forth in clause (ii) of this paragraph shall not apply in the event that (1) [***], or (2) [***].

b.In the event of termination by Client pursuant to Section 12(b), (i) Client shall be responsible for the then [***], and (ii) during the [***] period following such termination, SBL shall have the exclusive first right to engage in good faith negotiation with Client for a period of [***] in an effort to come to an agreement on the terms and conditions of a PSA for the Manufacture of the Product, if Client later obtains the applicable Regulatory Approval for manufacture and/or marketing of the Commercial Product in the United States and Europe. Notwithstanding anything herein to the contrary, the right of negotiation set forth in clause (ii) of this paragraph shall not apply in the event that (1) [***], or (2) [***].

c.In the event of termination by Client pursuant to Section 12(c), (i) Client shall be responsible for the first year of the then [***], and (ii) during the [***] period following such termination, SBL shall have the exclusive first right to engage in good faith negotiation with Client for a period of [***] in an effort to come to an agreement on the terms and conditions of a PSA for the Manufacture of the Product, if Client later obtains the waiver required from the United States National Institutes of Health for the

Manufacture of the Product at the Facility. Notwithstanding anything herein to the contrary, the right of negotiation set forth in clause (ii) of this paragraph shall not apply in the event that (1) [***], or (2) [***].

14.[***]. If (i) SBL [***], or (ii) [***] then such event shall [***]. SBL shall work with Client to [***] as soon as reasonably possible, but no later than [***], and [***]. In the event SBL [***], it will [***], and [***].

15.

The Parties have entered into this PSA as of the PSA Effective Date by their respective duly authorized representatives.



Samsung BioLogics Co., Ltd.		Immunomedics, Inc.

By:	/s/ Tae Han Kim	By:	/s/ Michael Pehl
Name:	Tae Han Kim	Name:	Michael Pehl
Title:	Representative Director & President	Title:	President and Chief Executive Officer

Date: _September 11, 2018______________________Date: September 11, 2018

Exhibit A: Client Materials

[***]

Exhibit B: Categorization of Raw Materials

Refer to the Project Plan applicable to this PSA, which includes the B6A Bill of Materials (document number: [***]).

Exhibit C: Scope of Work ([***])

[***]

[Seven pages omitted in their entirety]

Exhibit D: Service Fees



Service			Price (USD)	Comments
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]	[***]		[***]	[***]
[***]		[***]	[***]	[***]
[***]	[***]		[***]	[***]

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the 24 day of September, 2018 (the “Effective Date”) by and between Immunomedics, Inc., a Delaware corporation having its principal offices in Morris Plains, New Jersey (the “Company”) and Jared Freedberg (the “Executive”).

WHEREAS, the Company desires to employ Executive as General Counsel, and Executive desires to serve in such capacity on behalf of the Company, upon the terms and conditions hereinafter set forth; and

WHEREAS, Executive acknowledges that he has had an opportunity to consider this Agreement and to consult with an independent advisor of his choosing with regard to the terms of this Agreement, and enters into this Agreement voluntarily and with a full understanding of its terms.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:


1.	Employment.

1.1Employment Period. Subject to the provisions for earlier termination provided herein, Executive’s employment hereunder will be for a two (2) year term commencing on September, 24, 2018 (the “Start Date”) and ending on September 24, 2020 (the “Initial Employment Period”); provided, however, that this Agreement shall automatically renew for successive one (1) year periods thereafter (each a “Renewal Period” and together with the Initial Employment Period, the “Employment Period”), unless at least ninety (90) days prior to the end of the Initial Employment Period or any Renewal Period, one party notifies the other in writing that he/it is exercising the option not to renew the term of this Agreement. The non-renewal of this Agreement in the absence of a successor employment agreement shall be deemed a termination of Executive’s employment, effective as of the last day of the then-current Employment Period (“Non-Renewal Termination”).

1.2Position and Responsibilities. Commencing on the Start Date, Executive shall serve as General Counsel reporting to the Chief Executive Officer (“CEO”) or such other executive designated by him/her, and shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to Executive by CEO and/or the Company’s Board of Directors (the “Board”).

1.3Extent of Services. Executive shall use his best efforts to carry out Executive’s duties and responsibilities under Section 1.2 hereof and, consistent with the other provisions of this Agreement, shall devote substantially all of Executive’s business time, attention and energy thereto. In the performance of his duties, Executive shall observe and adhere to all applicable Company policies and procedures as may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion. Except with the prior written consent of the Board, Executive shall not, during the Employment Period, undertake or engage in any other employment, occupation or business enterprise that would interfere with Executive’s responsibilities and the performance of Executive’s duties hereunder, except for (a) reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as Executive may wish to serve, (b) reasonable time devoted to activities in the non-profit and business communities consistent with Executive’s duties, and (c) such other activities as may be specifically approved by the Company. The foregoing shall not be construed as preventing

Executive from owning less than one percent (1%) of the total outstanding shares of a publicly traded company.

1.4Licensure. Executive warrants that Executive maintains the appropriate license to practice law in the State of New Jersey as in-house counsel for the Company (“License”). As a material condition of employment, Executive must maintain Executive’s License in good standing during the Employment Period. Executive must immediately notify the Company if there is any change in status to his License and/or if he is no longer be authorized to practice law as in-house counsel in New Jersey. Moreover, Executive must immediately notify the Company if he is the subject of any grievance, investigation, or disciplinary proceeding by any government agency, court, state bar association, or attorney ethics committee.

1.5Principal Location of Services. Executive shall perform his duties hereunder principally out of the Company’s corporate headquarters (presently located in Morris Plains, New Jersey) and shall undertake such travel within or outside of the United States as is necessary or advisable for the efficient operations of the Company.


2.	Compensation and Benefits.

2.1Base Salary. For all the services rendered by Executive hereunder, the Company shall pay Executive a base salary (“Base Salary”) at the annual rate of four hundred thousand dollars ($400,000) subject to all required withholdings and authorized deductions and payable semi-monthly in installments at such times as the Company customarily pays its other senior-level executives.

2.2Annual Discretionary Cash Bonus. For each fiscal year during the Employment Period, commencing with the January 1, 2019 - December 30, 2019 fiscal year, Executive shall be eligible to receive an annual discretionary cash bonus (the “Annual Bonus”) for the services rendered by Executive under this Agreement. The amount of the Annual Bonus, if any, will be determined by the Compensation Committee of the Board (the “Compensation Committee”) in its discretion, based on Executive’s individual performance and Company performance in each case measured against performance goals and targets established by the Compensation Committee. Executive’s Annual Bonus target is forty (40%) of Executive’s Base Salary for the applicable fiscal year (the “Target Bonus”). The amount of the Annual Bonus, if any, will be determined as of the end of each fiscal year during the Employment Period and shall be paid as soon as reasonably practicable after the end of each fiscal year to which the bonus relates, but in no event later than 2-½ months after the end of such fiscal year. To be eligible to receive an Annual Bonus, or any portion thereof, Executive must be employed by the Company both at the time the amount of the Annual Bonus, if any, is determined, and at the time the Annual Bonus, if any, is paid. For the first calendar year during which Executive commences employment with the Company, Executive will be entitled to a prorated Annual Bonus in respect of the period from July 1, 2018 - December 31, 2018.

2.3Sign-On Bonus. As soon as practicable after the Start Date, Executive shall be paid a one-time sign-on cash bonus of one hundred and twenty thousand dollars ($120,000) subject to all required withholdings and authorized deductions (“Sign-On Bonus”), which will be paid through the Company’s customary payroll practices.

2.4Equity Compensation. Subject to approval of the Board, the Company will grant to Executive as soon as practicable after the Start Date an option to purchase 119,685 shares of the Company’s common stock (the “Option”) pursuant and subject to the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”) and a stock option agreement substantially in the form attached hereto as Exhibit A. The Option shall be a non-qualified stock option, and will have an exercise price per share equal to the Fair Market Value (as defined in the Plan) of a share of common stock of the Company as of the date of grant pursuant to the terms of the Plan. The Option shall vest and become exercisable as follows: upon the one-year anniversary of the Start Date, twenty-five percent (25%) of the total number of shares underlying the Option shall vest and become exercisable, and one additional forty-eighth (1/48^th) of the total number of shares underlying the Option shall vest and become exercisable on the corresponding day of each month thereafter, until the entire Option has vested and become exercisable on the fourth anniversary of the Start Date, in each case subject to Executive’s continued employment on each such vesting date. Upon termination of Executive’s employment, the vested portion of the Option shall remain exercisable in accordance with the terms and conditions of the applicable option agreement and this Agreement. Executive shall be eligible to participate in future equity compensation programs made available to the Company’s senior-level executives.

2.5Retirement and Welfare Plans. Executive shall be eligible to participate in employee retirement and welfare benefit plans made available to the Company’s senior-level executives as a group or to its employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans. Nothing in this Agreement shall prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate.

2.6Vacation. Executive shall be entitled to four (4) weeks of annual paid vacation, which shall be subject in all respects to the terms and conditions of the Company’s paid time off policies, as may be in effect from time to time.

2.7Reimbursement of Expenses. Executive shall be reimbursed for all customary and appropriate business-related expenses actually incurred and documented in accordance with the Company’s policies or plans applicable to senior-level executives.

3.Termination. Notwithstanding Section 1, Executive’s employment shall terminate, and the Employment Period shall terminate concurrently therewith, upon the occurrence of any of the following events:

3.1Termination Without Cause or Resignation for Good Reason Before a Change of Control.

(a)The Company may terminate Executive’s employment at any time without Cause (as defined in Section 3.8) prior to the expiration of the then-current Employment Period from the position in which Executive is employed hereunder upon not less than thirty (30) days’ prior written notice to Executive. The Company shall have the discretion to terminate Executive’s employment during the notice period and pay continued Base Salary in lieu of notice. In addition, Executive may initiate a termination of employment by resigning under this Section 3.1 for Good

Reason (as defined in, and in accordance with the notice provisions set forth in Section 3.8) prior to the expiration of the then-current Employment Period.

(b)Upon termination under this Section 3.1, Executive shall receive (i) Executive’s accrued but unpaid Base Salary through the date of termination (payable on the Company’s first (1^st) payroll date after Executive’s date of termination or earlier if required by applicable law), (ii) any unreimbursed business expenses incurred by Executive and payable in accordance with the Company’s standard expense reimbursement policies and Section 19 of this Agreement, and (iii) benefits earned, accrued and due under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan (collectively, the “Guaranteed Payments”).

(c)If Executive’s employment terminates as described in Section 3.1(a) above and if, upon such termination, Executive (i) executes within twenty-one (21) days (or forty-five (45) days to the extent required by applicable law) thereafter and does not revoke a written release in a form provided by the Company releasing the Company from any and all claims with respect to all matters arising out of or related to Executive’s employment by the Company or the termination thereof (the “Release”), (ii) complies with the terms and conditions of the Release, including, without limitation, any return of property, non-disparagement, and confidentiality provisions contained therein, and (iii) complies with the terms and conditions of Sections 5, 6, 7, and 8 below, Executive will be entitled to receive the benefits described below (collectively, the “Severance”):

(i)Executive shall receive cash severance in an amount equal to (A) two (2) months of Executive’s then-current Base Salary per each completed year of service, with a minimum of six (6) months’ Base Salary and a maximum of twelve (12) months’ Base Salary (such period, the “Severance Period”) plus (B) Executive’s Target Bonus for the fiscal year in which Executive’s employment is terminated prorated based on the number of days Executive is employed during such fiscal year and subject to satisfaction of the applicable performance conditions as determined by the Company. The cash severance amount, less all required withholdings and authorized deductions, shall be paid in substantially equal installments over the Severance Period consistent with the Company’s regularly scheduled payroll until the Severance has been paid in full, subject to Section 3.1(d) below.

(ii)Provided that Executive timely and properly elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall, for the duration of the Severance Period, pay Executive each month an amount equal to the monthly premiums for COBRA healthcare continuation coverage under the Company’s medical plan for Executive, and, where applicable, his spouse and eligible dependents, less an amount equal to the required monthly employee payment for such coverage calculated as if Executive had continued to be an employee of the Company throughout such period (the “COBRA Payment”). Any payment under this Section 3.1(c)(ii) shall be subject to applicable tax withholdings. Notwithstanding the foregoing, payments specified under this Section 3.1(c)(ii) shall cease if the Company’s statutory obligation to provide such COBRA healthcare continuation coverage terminates for any reason before the expiration of the Severance Period, including but not limited to Executive’s failure to timely elect continuation coverage under COBRA.

event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive’s designating the calendar year of payment, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) is subject to execution of the Release and could be made in more than one taxable year, payment shall be made in the later taxable year.

(e)Executive agrees and acknowledges that the Severance provided to Executive pursuant to Section 3.1(c) is in lieu of, and is not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy, or program, other than the Guaranteed Payments.

(f)Executive agrees and acknowledges that if Executive fails to comply with Section 5, 6, 7, or 8 below, all payments under Section 3.1(c) shall immediately cease and Executive shall be required to repay immediately any cash Severance previously paid by the Company thereunder.

(g)For the avoidance of doubt, a Non-Renewal Termination shall not constitute a termination without Cause or resignation for Good Reason subject to this Section 3.1.

3.2Termination Without Cause or Resignation for Good Reason After a Change of Control.

(a)If a Change of Control occurs and, during the period commencing six months prior to and one year following the date of the Change of Control, the Company terminates Executive’s employment without Cause or Executive resigns for Good Reason (as defined in, and in accordance with the notice provisions set forth in Section 3.8) prior to expiration of the then-current Employment Period, this Section 3.2 shall apply in lieu of Section 3.1.

(b)Upon termination under this Section 3.2, Executive shall receive the Guaranteed Payments. With the exception of unreimbursed business expenses, which shall be paid in accordance with Company policy and Section 19 of this Agreement, or as otherwise provided in the applicable benefit plan, Executive will be paid the Guaranteed Payments on the Company’s first (1st) payroll date after Executive’s date of termination, or earlier if required by applicable law.

(c)If Executive’s employment terminates as described in Section 3.2(a) above and if, upon such termination, Executive (i) executes within twenty-one (21) days (or forty-five (45) days to the extent required by applicable law) thereafter and does not revoke a Release, (ii) complies with the terms and conditions of the Release, including, without limitation, any return of property, non-disparagement, and confidentiality provisions contained therein, and (iii) complies with the terms and conditions of Sections 5, 6, 7, and 8 below, Executive shall be entitled to receive the following payments (collectively, the “Change of Control Severance”):

(i)Executive shall receive cash severance in an amount equal to the sum of (A) four (4) months of Executive’s then-current Base Salary per each completed year of service, with a minimum of twelve (12) months’ Base Salary and a maximum of twenty-four (24) months’ Base Salary plus (B) an amount equal to Executive’s Target Bonus. The severance amount shall be paid in a single lump-sum payment, less all required withholdings and deductions, subject to Section 3.2(d) below.

(ii)Provided that Executive timely and properly elects continuation coverage under COBRA, the Company shall, for a period of twelve (12) months following the date of Executive’s termination of employment (the “COBRA Period”), pay the COBRA Payment (as defined in Section 3.1(c)(ii) above). Any payment under this Section 3.2(c)(ii) shall be subject to applicable tax withholdings. Notwithstanding the foregoing, payments specified under this Section 3.2(c)(ii) shall cease if the Company’s statutory obligation to provide such COBRA healthcare continuation coverage terminates for any reason before the expiration of the COBRA Period, including but not limited to Executive’s failure to timely elect continuation coverage under COBRA.

(iii)Any outstanding unvested portion of the Option will vest immediately.

(d)Except as otherwise required by Section 3.9, the benefits described in subsections (i) and (ii) above shall be paid or begin, as the case may be, within sixty (60) days after Executive’s termination date, provided Executive has timely executed and not revoked the Release within such sixty (60) day period; and provided that notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive’s designating the calendar year of payment, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A is subject to execution of the Release and could be made in more than one taxable year, payment shall be made in the later taxable year.

(e)Executive agrees and acknowledges that the Change of Control Severance provided to Executive pursuant to Section 3.2(c) is in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy, or program, other than the Guaranteed Payments.

(f)Executive agrees and acknowledges that if Executive fails to comply with Section 5, 6, 7 or 8 below, all payments under Section 3.2(c) shall immediately cease and Executive shall be required to repay immediately any Change of Control Severance previously paid by the Company thereunder.

3.3Termination by Reason of Disability. Subject to applicable state and federal law, the Company may terminate Executive’s employment if Executive has been unable to perform the material duties of Executive’s position for a period of ninety (90) consecutive days or one hundred eighty (180) days in the aggregate during any twelve (12) month period because of physical or mental injury or illness (“Disability”). Executive agrees, in the event of a dispute under this Section 3.4 relating to Executive’s Disability, to submit to a physical examination by a licensed physician jointly selected by the Board and Executive. If the Company terminates Executive’s employment for Disability, Executive will not receive the Severance, the Change of Control Severance or any other severance compensation or benefits, except that the Company shall pay to Executive the Guaranteed Payments.

3.4Termination by Reason of Death. If Executive dies while employed by the Company, all obligations of the parties hereunder shall terminate immediately. Executive will not receive the Severance, the Change of Control Severance or any other severance compensation or benefits, except that the Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, the Guaranteed Payments.

3.5Termination for Cause or Resignation Without Good Reason. The Company may terminate Executive’s employment at any time for Cause (as defined in Section 3.8) upon written notice to Executive and, in any such event, all payments under this Agreement shall cease. Executive will not receive the Severance, the Change of Control Severance or any other severance compensation or benefits, except that the Company shall pay to Executive the Guaranteed Payments. In addition, Executive may initiate a termination of employment by resigning under this Section 3.5 without Good Reason (as defined in Section 3.8) prior to the expiration of the then-current Employment Period by providing at least three (3) months’ written notice (the “Notice Period”) to the Company and, in any such event, all payments under this Agreement shall cease upon Executive’s last day of employment. Executive will not receive the Severance, the Change of Control Severance or any other severance compensation or benefits, except that the Company shall pay to Executive the Guaranteed Payments. During the Notice Period, the Company may elect to place Executive on paid leave for any part or all of the Notice Period, or may shorten or waive the Notice Period in its sole discretion, without any compensation due to Executive past the last day of employment.

3.6Notice of Termination. Any termination of Executive’s employment shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 12. The notice of termination shall (a) indicate the specific termination provision in this Agreement relied upon, (b) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof; provided, that no basis need be provided by the Company in connection with a termination without Cause, and (c) specify the termination date in accordance with the requirements of this Agreement.

3.7Cooperation with the Company After Termination. Following termination of Executive’s employment for any reason, Executive agrees to reasonably cooperate with the Company in (a) all matters relating to the winding up of Executive’s pending work and the orderly transfer of any such pending work to such other employees as may be designated by the Company; (b) responding to requests by the Company for information concerning work performed by Executive during the period of Executive’s employment with the Company and with regard to any matters that relate to or arise out of the business of the Company during the period of his employment and about which Executive may have knowledge, (c) any investigation or review that may be performed by the Company or any government authority or in any litigation in which the Company may become involved. The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

3.8Definitions.

(a)“Cause” shall mean any of the following grounds for termination of Executive’s employment:

(i)Executive has been convicted of a felony or enters a plea of guilty or nolo contendere with respect thereto;

(ii)Executive fails to perform Executive’s reasonably assigned duties for the Company (other than a failure resulting from Executive’s incapacity due to physical or mental illness), which failure has continued for a period of at least thirty (30) days after a written notice of demand for substantial performance, signed by a duly authorized officer of the Company, has been delivered to Executive specifying the manner in which Executive has failed substantially to perform;

(iii)Executive causes material damage to the property of the Company;

(iv)Executive engages in conduct that is harmful to the public reputation of the Company;

(v)Executive engages in any act of dishonesty, fraud, or immoral or disreputable conduct;

(vi)Executive engages in willful misconduct in the performance of Executive’s duties;

(vii)Executive materially breaches any covenant or condition of this Agreement (including Sections 5, 6, 7, 8 or 10 below) or any other written agreement between the parties, or breaches Executive’s fiduciary duty to the Company; or

(viii)Executive fails to maintain a License in good standing at any time during the Employment Period or becomes the subject of any grievance, investigation, or disciplinary proceeding by any government agency, court, state bar association, or attorney ethics committee that may impair, restrict, or otherwise interfere with Executive’s ability to serve as General Counsel of the Company.

(b)“Change of Control” shall mean:

(i)A merger, consolidation, reorganization, or similar form of corporate transaction approved by the Company’s stockholders, unless securities representing more than fifty percent (50%) of the total and combined voting power of the outstanding voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly, by the persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction; or

(ii)The sale, transfer or other disposition of Company assets (including by way of merger or spin-off of any subsidiary or subsidiaries of the Company) occurring within a twelve (12) month period and representing, at a minimum, not less than forty percent (40%) of the total gross fair market value of all assets of the Company, to any person, entity, or group of persons acting in consort, other than a sale, transfer or disposition to: (A) a stockholder of the Company in exchange for or with respect to its stock; (B) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company; (C) a person, or more than one person acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of the outstanding stock of the Company; or (D) an entity,

at least fifty percent (50%) of the total value or voting power of which is owned by a person described in (C); or

(iii)Any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(l) under the Securities Exchange Act of 1934, as amended (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with the Company) becomes directly or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Company’s stockholders; or

(iv)The consummation of a Change in Control (as defined in the Plan).

Notwithstanding the foregoing, a transaction shall not constitute a Change of Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in the same proportions by the persons who held the Company’s securities immediately before such transaction.

(c) “Good Reason” shall mean the occurrence of any of the following events or conditions, unless Executive has expressly consented in writing thereto:

(i)A material reduction in Executive’s Base Salary;

(ii)The material diminution of Executive’s duties, responsibilities, powers or authorities, including the assignment of any duties and responsibilities materially inconsistent with his position as General Counsel; provided that Good Reason shall not exist under this clause (ii) if such material diminution of authority, duties and responsibilities is a result of: (1) the hiring of additional subordinates to fill some of Executive’s duties and responsibilities or (2) any disposition or sale of any subsidiary or business of the Company;

(iii)The Company requires that Executive’s principal office location be moved to a location more than fifty (50) miles from Executive’s principal office location immediately before the change without Executive’s prior consent; and

(iv)A material breach by the Company of this Agreement.

notwithstanding such efforts, the Good Reason condition continues to exist; and (v) Executive terminates his employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

3.9Required Postponement for Specified Executives. If Executive is considered a “specified employee” (as defined under Section 409A) and payment of any amounts under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A, payment of such amounts shall be delayed as required by Section 409A, and the accumulated postponed amounts shall be paid in a lump-sum payment within five (5) days after the end of the six (6) month period. If Executive dies during the postponement period prior to the payment of benefits, the amounts postponed on account of Section 409A shall be paid to the personal representative of Executive’s estate within sixty (60) days after the date of Executive’s death.

4.Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the Severance or Change of Control Severance provided for in Section 3 of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program that would otherwise apply to Executive.

5.Confidentiality. Executive agrees that his position places him in a position of confidence and trust with the Company’s customers, vendors, suppliers, business partners and/or employees. Executive also recognizes that Executive’s position with the Company will give Executive substantial access to Confidential Information (as defined below), the disclosure of which to competitors of the Company would cause the Company to suffer substantial and irreparable damage. Executive recognizes, therefore, that it is in the Company’s legitimate business interest to restrict Executive’s use of Confidential Information for any purposes other than the discharge of Executive’s employment duties at the Company, and to limit any potential appropriation of Confidential Information by Executive for the benefit of the Company’s competitors and/or to the detriment of the Company. Accordingly, Executive agrees as follows:

(a)Executive shall not at any time, whether during or after the termination of Executive’s employment with the Company for any reason, reveal to any person or entity any of the trade secrets or confidential information of the Company, or the trade secrets or confidential information of any third party which the Company is under an obligation to keep confidential, including but not limited to trade secrets or confidential information respecting inventions, research, developments, products, product plans, designs, methods, know-how, techniques, systems, processes, software programs, works of authorship, processes, formulas, technology, drawings, assays, raw data, scientific pre-clinical or clinical data, records, databases, formulations, clinical protocols, equipment designs, customer or vendor lists, projects, plans, proposals, strategies, market plans, forecasts, financials, and other business information (“Confidential Information”), except as may be required in the ordinary course of performing Executive’s duties as an employee of the Company, and Executive shall keep secret all Confidential Information entrusted to Executive and shall not use or attempt to use any such Confidential Information for personal gain or in any manner that may injure or cause loss, or could reasonably be expected to injure or cause loss, whether directly or indirectly, to the Company.

(b)The above restrictions shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of Executive; (ii) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation; (iii) information approved for release by written authorization of the Company; or (iv) information that may be required by law or an order of any court, agency or proceeding to be disclosed; provided that Executive shall provide the Company prior written notice of any such required disclosure once Executive has knowledge of it and will help the Company to the extent reasonable to obtain an appropriate protective order. Moreover, the foregoing shall not limit Executive’s ability to (x) to discuss the terms of Executive’s employment, wages and working conditions to the extent expressly protected by applicable law, (y) to report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state “whistleblower” laws, or (z) to respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation.

(c)Executive agrees that during Executive’s employment with the Company Executive shall not take, use or permit to be used any notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation or other materials of any nature constituting Confidential Information or Developments (as defined below) other than for the benefit of the Company. Executive further agrees that Executive shall not, after the termination of Executive’s employment for any reason, use or permit to be used any such notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation or other materials, it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company.

(d)Executive agrees that upon the termination of Executive’s employment with the Company for any reason, Executive shall not take or retain without written authorization any documents, files or other property of the Company, and Executive shall return promptly to the Company any such documents, files or property in Executive’s possession or custody, including any copies thereof maintained in any medium or format. Executive recognizes that all documents, files and property that Executive has received and will receive from the Company, including but not limited to scientific research, customer lists, handbooks, memoranda, product specifications, and other materials (with the exception of documents relating to benefits to which Executive might be entitled following the termination of Executive’s employment with the Company), are for the exclusive use of the Company and employees who are discharging their responsibilities on behalf of the Company, and that Executive has no claim or right to the continued use, possession or custody of such documents, files or property following the termination of Executive’s employment with the Company for any reason.

(e)Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.


6.	Intellectual Property.

(a)If at any time or times during Executive’s employment with the Company Executive shall (either alone or with others) make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called “Developments”) that (i) relates to the business of the Company, actual or demonstrably anticipated research of the Company, or any of the products or services being researched, developed, manufactured or sold by the Company or which may be used in relation therewith, (ii) results from tasks assigned to Executive by the Company or any work that Executive performs in connection with his employment with the Company (whether during working hours or on Executive’s own time) or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Executive shall promptly disclose to the Company (or any persons designated by it) each such Development, and Executive hereby assigns any rights Executive may have or acquire in the Developments and benefits and/or rights resulting therefrom, whether during or after Executive’s employment, to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company.

(b)Upon disclosure of each Development to the Company, Executive will, during Executive’s employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require:

(i)to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(ii)to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. In addition, Executive hereby waives any so-called “moral rights” with respect to the Developments. To the extent that Executive has any rights in the results and proceeds of Executive’s service to the Company that cannot be assigned in the manner described herein, Executive agrees to unconditionally waive the enforcement of such rights. Executive hereby waives any and all currently existing and future monetary rights in and to the Developments and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to Executive’s benefit by virtue of Executive being an employee of the Company.

(d)In the event the Company is unable, after reasonable effort, to secure Executive’s signature on any letters patent, copyright or other analogous protection relating to a Development, whether because of Executive’s physical or mental incapacity or for any other reason whatsoever, Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact for the sole purpose of acting for and on Executive’s behalf and in his stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright and other analogous protection thereon with the same legal force and effect as if executed by Executive.

7.Non-Competition. Executive is being hired to provide services to the Company that are of a special, unique and extraordinary character, and acknowledges that he will have substantial access to Confidential Information during the course of his employment. Accordingly, during the Employment Period and for a period of twelve (12) months after termination of Executive’s employment (for any reason whatsoever, whether voluntary or involuntary) (the “Non-Competition Period”), Executive shall not, without the prior written approval of the Company, whether alone or as a partner, officer, director, consultant, agent, employee, representative or stockholder of any company or other commercial enterprise, or in any other capacity, directly or indirectly be engaged by or provide services to any business or entity anywhere in the world that is directly or indirectly in competition with the Business of the Company. For purposes of this Agreement, the “Business” of the Company includes the research, development, testing, manufacture, sale, marketing, or licensing of therapeutic agents, antibody-drug conjugates, and other biopharmaceutical products that: (i) operate via the following targets or antigens: Trop-2, CEACAM5, and HLA DR and/or (ii) address the following indications or primary patient populations: breast cancer, urothelial cancer, relapsed and refractory head and neck cancer, relapsed and refractory ovarian cancer, refractory prostate cancer, and relapsed and refractory small cell lung cancer and non-small cell lung cancer. Notwithstanding the forgoing, nothing in this Section 7 shall prohibit Executive from providing legal services on behalf of any client whatsoever, whether or not such client is a competitor of the Company; provided that Executive acknowledges and agrees that the attorney-client privilege arising from his employment with the Company shall survive the termination of such employment, unless waived in writing by an authorized representative of the Company. Executive shall be permitted to own securities of a public company not in excess of five percent (5%) of any class of such securities and to own stock, partnership interests or other securities of any entity not in excess of five percent (5%) of any class of such securities and such ownership shall not be considered to be in competition with the Company.

8.Non-Solicitation. During the Employment Period and for a period of twelve (12) months after termination of such employment (for any reason, whether voluntary or involuntary), Executive agrees that Executive shall not, except on behalf of the Company and in the furtherance of Executive’s authorized duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity:

(a)solicit, entice or induce, or attempt to solicit, entice or induce, any customer, vendor, supplier, or business development partner (with the exception of legal service providers) to become a customer, vendor, supplier, or business development partner of any other person, firm, corporation or other entity with respect to products then manufactured, sold or under development by the Company or to cease doing business with the Company, and Executive shall not approach, assist or aid any other person, firm, corporation or entity for such purpose or authorize or knowingly approve the taking of such actions by any other person or entity; or

(b)solicit or recruit, or attempt to solicit or recruit, any employee, consultant or independent contractor of the Company (with the exception of lawyers and legal professionals) to terminate employment or otherwise cease providing services to the Company or to accept employment with, render services to, or work for a third party, person, or entity other than the Company; and Executive shall not approach, assist or aid any such person, firm, corporation or other entity for such purpose or authorize or knowingly approve the taking of such actions by any other person or entity.

9.General Provisions.

(a)For purposes of Sections 5, 6, 7, and 8 of this Agreement, the term “Company” shall include the Company’s direct and indirect controlled subsidiaries and affiliates. Executive acknowledges and agrees that the type and periods of restrictions imposed in Sections 5, 6, 7, and 8 of this Agreement are fair and reasonable, and that such restrictions are intended solely to protect the legitimate interests of the Company, including its Confidential Information, goodwill, and business interests, rather than to prevent Executive from earning a livelihood. Executive recognizes that the Company competes worldwide, and that Executive’s access to Confidential Information makes it necessary for the Company to restrict Executive’s post-employment activities in any market in which the Company competes, and in which Executive’s access to Confidential Information and other proprietary information could be used to the detriment of the Company. In the event that any restriction set forth in this Agreement is determined to be overbroad with respect to scope, time or geographical coverage, Executive agrees that such restriction or restrictions should be modified and narrowed, either by a court or by the Company, so as to preserve and protect the legitimate interests of the Company as described in this Agreement, and without negating or impairing any other restrictions or agreements set forth herein.

(b)Executive acknowledges and agrees that if Executive should breach any of the covenants, restrictions and agreements contained herein, irreparable loss and injury would result to the Company, monetary relief would not compensate for such breach, and damages arising out of such a breach may be difficult to ascertain. Executive therefore agrees that, in addition to all other remedies provided at law or at equity, the Company shall be entitled to have the covenants, restrictions and agreements contained in Sections 5, 6, 7, and 8 specifically enforced (including, without limitation, by temporary, preliminary, and permanent injunctions and restraining orders),

without the need to post any bond or security, by any state or federal court in the State of New Jersey having equity jurisdiction and Executive agrees to be subject to the jurisdiction of such court.

(c)Executive agrees that if the Company fails to take action to remedy any breach by Executive of this Agreement or any portion of the Agreement, such inaction by the Company shall not operate or be construed as a waiver of any subsequent breach by Executive of the same or any other provision, agreement or covenant.

(d)Executive acknowledges and agrees that the payments and benefits to be provided to Executive under this Agreement are provided as consideration for the covenants in Sections 5, 6, 7, and 8 hereof.

10.Representations and Warranties. Executive represents and warrants the following to the Company, each of which is a material inducement to the Company’s willingness to enter into this Agreement and a material provision of this Agreement:

(a)Other than (i) as previously disclosed in writing or provided to the Company and (ii) the attorney-client privilege arising from Executive’s representation of his past clients, Executive is not a party to or bound by any employment agreements, restrictive covenants, non-compete restrictions, non-solicitation restrictions, and/or confidentiality or non-disclosure agreements with any other person, business or entity, or any agreement or contract requiring Executive to assign inventions to another party (each, a “Restrictive Agreement”).

(b)No Restrictive Agreement prohibits, restricts, limits or otherwise affects Executive’s employment with the Company as an executive or ability to perform any of Executive’s duties or responsibilities for the Company as contemplated herein.

(c)Executive has not made any material misrepresentation or omission in the course of his communications with the Company regarding the Restrictive Agreements or other obligations to any current or former employer.

(d)Executive has not, directly or indirectly, removed, downloaded, or copied any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or corporate affiliates) without the express written consent of an authorized representative of such entity, and shall not use or possess, as of the date Executive begins employment and during his employment with the Company, any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or corporate affiliates), whether in hard copy or electronic form, including, but not limited to, documents, files, disks, or other materials, all of which Executive is prohibited from using in connection with his employment with the Company.

11.Survivorship. The respective rights and obligations of the parties under this Agreement, including but not limited to those rights and obligations set forth in Sections 5, 6, 7, and 8, shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

12.Notices. All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand-delivered or mailed by registered or certified mail, return receipt requested, as follows (provided that notice of change of address shall be deemed given only when received):

If to the Company, to:

Immunomedics, Inc.

300 The American Road

Morris Plains, NJ 07950

Attn: Chief Executive Officer

If to Executive, to:

The address of his principal residence most recently on file with the Company.

or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.

13.Contents of Agreement, Amendment, Interpretation and Assignment.

(a)This Agreement, including the Exhibit attached hereto, sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings concerning Executive’s employment by the Company and cannot be changed or modified except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer of the Company and by Executive.

(b)The headings in this Agreement are for convenience only, and both parties agree that they shall not be construed or interpreted to modify or affect the construction or interpretation of any provision of this Agreement.

(c)All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegatable in whole or in part by Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner as, and to the same extent that, the Company would be required to perform if no such succession had taken place.

14.Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement that can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any

provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

15.Remedies Cumulative; No Waiver. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

16.Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement other than such taxes that are, by their nature, obligations of the Company (for example, and without limitation, the employer portion of the Federal Insurance Contributions Act (FICA) taxes).

17.Counterparts. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. Facsimile signatures and signatures transmitted by PDF shall be equivalent to original signatures.

18.Governing Law; Jurisdiction. This Agreement shall be governed by and interpreted under the laws of the State of New Jersey without giving effect to any conflicts-of-law provisions. Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court located in New Jersey or any state court located within such state, in respect of any claim arising out of or relating to this Agreement or Executive’s employment with the Company, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding in which any such claim is made that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts. Any appellate proceedings shall take place in the appropriate courts having appellate jurisdiction over the courts set forth in this Section.

directly or indirectly, designate the calendar year of payment with respect to any amount that is “nonqualified deferred compensation” subject to Section 409A. All reimbursements provided under this Agreement that are “nonqualified deferred compensation” that is subject to Section 409A shall be made or provided in accordance with Section 409A, including, where applicable, the requirements that (a) any reimbursement is for expenses incurred during the Employment Period (or during such other time period specified in this Agreement), (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (c) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (d) the right to reimbursement is not subject to liquidation or exchange for another benefit. Nothing herein shall be construed as having modified the time and form of payment of any amounts or payments of “nonqualified deferred compensation” within the meaning Section 409A that were otherwise payable pursuant to the terms of any agreement between Company and Executive in effect prior to the date of this Agreement.

20.Section 280G of the Code. Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Code”) and, but for this Section 20, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.

(a)Any such reduction shall be made in accordance with Section 409A and the following:

(i)the Covered Payments consisting of cash severance benefits that do not constitute nonqualified deferred compensation subject to Section 409A shall be reduced first, in reverse chronological order; and

(ii)all other Covered Payments consisting of cash payments, and Covered Payments consisting of accelerated vesting of equity based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) does not apply, and that in either case do not constitute nonqualified deferred compensation subject to Section 409A, shall be reduced second, in reverse chronological order;

(iii)all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject to Section 409A shall be reduced third, in reverse chronological order; and

(iv)all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.

(b)Any determination required under this Section 20 shall be made in writing in good faith by an independent accounting firm selected by the Company (the “Accountants”). The Company and Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 20. For purposes of making the calculations and determinations required by this Section 20, the Accountants may rely on reasonable, good-faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Company and Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 20.

(c)It is possible that after the determinations and selections made pursuant to this Section 20 Executive will receive Covered Payments that are in the aggregate more than the amount intended or required to be provided after application of this Section 20 (“Overpayment”) or less than the amount intended or required to be provided after application of this Section 20 (“Underpayment”).

(i)In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive that the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made, then Executive shall pay any such Overpayment to the Company together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of Executive’s receipt of the Overpayment until the date of repayment.

(ii)In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of Executive together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date the amount should have otherwise been paid to Executive until the payment date.

[SIGNATURE PAGE FOLLOWS]

[Signature Page to Executive Employment Agreement]

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.




IMMUNOMEDICS, INC.

By:
Name:
Title:

EXECUTIVE

Jared Freedberg
Jared Freedberg

EXHIBIT A

Stock Option Grant Agreement

Immunomedics, Inc.

Nonqualified Stock Option Notice

This Notice evidences the award of nonqualified stock options (each, an “Option” or collectively, the “Options”) that have been granted to you, Jared Freedberg, subject to and conditioned upon your agreement to the terms of the attached Nonqualified Stock Option Agreement (the “Agreement”). The Options entitle you to purchase shares of common stock, par value $0.01 per share (“Common Stock”), of Immunomedics, Inc., a Delaware corporation (the “Company”), under the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”). The number of shares you may purchase and the exercise price at which you may purchase them are specified below. This Notice constitutes part of and is subject to the terms and provisions of the Agreement and the Plan, which are incorporated by reference herein. You must return an executed copy of this Notice to the Company within 30 days of the date hereof. If you fail to do so, the Options may be rendered null and void in the Company’s discretion.

Grant Date: September 24, 2018

Number of Options: 119,685 Options, each permitting the purchase of one Share

Exercise Price: $21.72 per share

Expiration Date: The Options expire at 5:00 p.m. Eastern Time on the 7th anniversary of the Grant Date (the “Expiration Date”), unless fully exercised or terminated earlier.

Exercisability Schedule: Subject to the terms and conditions described in the Agreement, the Options become exercisable in accordance with the schedule below:


(a)	25% of the Options become exercisable on the first anniversary of the Grant Date (the “Initial Vesting Date”), and


(b)	2.08333% of the Options become exercisable on the date one month after the Initial Vesting Date and on such date every month thereafter, through the fourth anniversary of the Grant Date.

Acceleration Events: The extent to which you may purchase shares under the Options may be accelerated in the following circumstances:


•	If your Service with the Company is terminated coincident with or within one year following a Change in Control either by the Company or its successor without Cause, the Options that had not yet become exercisable as of the date of termination will immediately become 100% exercisable.

The extent to which the Options are exercisable as of a particular date is rounded down to the nearest whole share. However, exercisability is rounded up to 100% on the fourth anniversary of the Grant Date.

IMMUNOMEDICS, INC.

By: Kurt Andrews

Date: 10/18/2018

I acknowledge that I have carefully read the attached Agreement and the prospectus for the Plan and agree to be bound by all of the provisions set forth in these documents.



Enclosures:	Nonqualified Stock Option Agreement Prospectus for the 2014 Long-Term Incentive Plan Exercise Form	OPTIONEE Jared Freedberg Date: 10/18/2018

Nonqualified Stock Option Agreement

Under the

Immunomedics, Inc. 2014 Long-Term Incentive Plan

1. Terminology. Capitalized terms used in this Agreement are defined in the correlating Stock Option Notice and/or the Glossary at the end of the Agreement.

2. Exercise of Options.

(a) Exercisability. The Options will become exercisable in accordance with the Exercisability Schedule set forth in the Stock Option Notice, so long as you are in the Service of the Company from the Grant Date through the applicable exercisability dates. None of the Options will become exercisable after your Service with the Company ceases, unless the Stock Option Notice provides otherwise with respect to exercisability that arises as a result of your cessation of Service.

(b) Right to Exercise. You may exercise the Options, to the extent exercisable, at any time on or before 5:00 p.m. Eastern Time on the Expiration Date or the earlier termination of the Options, unless otherwise provided under applicable law. Notwithstanding the foregoing, if at any time the Administrator determines that the delivery of Shares under the Plan or this Agreement is or may be unlawful under the laws of any applicable jurisdiction, or federal, state or foreign securities laws, the right to exercise the Options or receive Shares pursuant to the Options shall be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Shares under the Plan or this Agreement is or may violate the rules of the national securities exchange on which the shares are then listed for trade, the right to exercise the Options or receive Shares pursuant to the Options shall be suspended until the Administrator determines that such exercise or delivery would not violate such rules. Section 3 below describes certain limitations on exercise of the Options that apply in the event of your death, Total and Permanent Disability, or termination of Service. The Options may be exercised only in multiples of whole Shares and may not be exercised at any one time as to fewer than one hundred Shares (or such lesser number of Shares as to which the Options are then exercisable). No fractional Shares will be issued under the Options.

(c) Exercise Procedure. In order to exercise the Options, you must provide the following items to the Secretary of the Company or his or her delegate before the expiration or termination of the Options:


(i)	notice, in such manner and form as the Administrator may require from time to time, specifying the number of Shares to be purchased under the Options;


(ii)	full payment of the Exercise Price for the Shares or properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to time, to effectuate a broker-assisted cashless exercise, each in accordance with Section 2(d) of this Agreement; and


(iii)	full payment of applicable withholding taxes pursuant to Section 7 of this Agreement.

An exercise will not be effective until the Secretary of the Company or his or her delegate receives all of the foregoing items, and such exercise otherwise is permitted under and complies with all applicable federal, state and foreign securities laws. Notwithstanding the foregoing, if the Administrator permits payment by means of delivering properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to time, to effectuate a broker-assisted cashless exercise and such instructions provide for sale of Shares under a limit order rather than at the market, the exercise will not be effective until the earlier of the date the Company receives delivery of cash or cash equivalents in full payment of the Exercise Price or the date the Company receives confirmation from the broker that the sale instruction has been fulfilled, and the exercise will not be effective unless the earlier of such dates occurs on or before termination of the Options.

(d) Method of Payment. You may pay the Exercise Price by:


(i)	delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Administrator in its discretion;


(ii)	a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm designated or approved by the Administrator;


(iii)	subject to such limits as the Administrator may impose from time to time, tender (via actual delivery or attestation) to the Company of other shares of Common Stock of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price;


(iv)	subject to such limits as the Administrator may impose from time to time, net share settlement;


(v)	any other method approved by the Administrator; or


(vi)	any combination of the foregoing.

(e) Issuance of Shares upon Exercise. The Company shall issue to you the Shares underlying the Options you exercise as soon as practicable after the exercise date, subject to the Company’s receipt of the aggregate exercise price and the requisite withholding taxes, if any. Upon issuance of such Shares, the Company may deliver, subject to the provisions of Section 7 below, such Shares on your behalf electronically to the Company’s designated stock plan administrator or such other broker-dealer as the Company may choose at its sole discretion, within reason, or may retain such Shares in uncertificated book-entry form. Any share certificates delivered will, unless the Shares are registered or an exemption from registration is available under applicable federal and state law, bear a legend restricting transferability of such Shares.

3. Termination of Service.

(a) Termination of Unexercisable Options. If your Service with the Company ceases for any reason, the Options that are then unexercisable, after giving effect to any exercise acceleration provisions set forth on the Stock Option Notice, will terminate immediately upon such cessation.

(b) Exercise Period Following Termination of Service. If your Service with the Company ceases for any reason other than discharge for Cause, the Options that are then exercisable, after giving effect to any exercise acceleration provisions set forth on the Stock Option Notice, will terminate upon the earliest of:

(i) the expiration of 90 days following such cessation, if your Service ceases on account of (1) your termination by the Company other than a discharge for Cause, or (2) your voluntary termination other than for Total and Permanent Disability or death;

(ii) the expiration of 12 months following such cessation, if your Service ceases on account of your Total and Permanent Disability or death;

(iii) the expiration of 12 months following your death, if your death occurs during the periods described in clauses (i) or (ii) of this Section 3(b), as applicable; or

(iv) the Expiration Date.

In the event of your death, the exercisable Options may be exercised by your executor, personal representative, or the person(s) to whom the Options are transferred by will or the laws of descent and distribution.

(c) Misconduct. The Options will terminate in their entirety, regardless of whether the Options are then exercisable, immediately upon your discharge from Service for Cause, or upon your commission of any of the following acts during the exercise period following your termination of Service: (i) fraud on or misappropriation of any funds or property of the Company, or (ii) your breach of any provision of any employment, non-disclosure, non-competition, non-solicitation, assignment of inventions, or other similar agreement executed by you for the benefit of the Company, as determined by the Administrator, which determination will be conclusive.

terminated for purposes of this Section 3 upon such cessation if your Service does not continue uninterrupted immediately thereafter with the Company or an Affiliate of the Company.

4. Nontransferability of Options. Except to the extent permitted under Section 9(b) of the Plan, these Options and, before exercise, the underlying Shares are nontransferable otherwise than by will or the laws of descent and distribution and, during your lifetime, the Options may be exercised only by you or, during the period you are under a legal disability, by your guardian or legal representative. Except as provided above, the Options and, before exercise, the underlying Shares may not be assigned, transferred, pledged, hypothecated, subjected to any “put equivalent position,” “call equivalent position” (as each preceding term is defined by Rule 16(a)-1 under the Securities Exchange Act of 1934), or short position, or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.

5. Nonqualified Nature of the Options. The Options are not intended to qualify as incentive stock options within the meaning of Code section 422, and this Agreement shall be so construed. You hereby acknowledge that, upon exercise of the Options, you will recognize compensation income in an amount equal to the excess of the then Fair Market Value of the Shares over the Exercise Price and must comply with the provisions of Section 7 of this Agreement with respect to any tax withholding obligations that arise as a result of such exercise.

6. Withholding of Taxes.

(a) At the time the Options are exercised, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll or any other payment of any kind due to you and otherwise agree to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the Options. The Company may require you to make a cash payment to cover any withholding tax obligation as a condition of exercise of the Options or issuance of share certificates representing Shares.

(b) The Administrator may, in its sole discretion, permit you to satisfy, in whole or in part, any withholding tax obligation which may arise in connection with the Options either by electing to have the Company withhold from the Shares to be issued upon exercise that number of Shares, or by electing to deliver to the Company already-owned shares, in either case having a Fair Market Value not in excess of the amount necessary to satisfy the statutory minimum withholding amount due.

7. Adjustments. The Administrator may make various adjustments to your Options, including adjustments to the number and type of securities subject to the Options and the Exercise Price, in accordance with the terms of the Plan. In the event of any transaction resulting in a Change in Control (as defined in the Plan) of the Company, the outstanding Options will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Options by, or for the substitution of the equivalent awards of, the surviving or successor entity or a parent thereof. In the event of such termination, you will be permitted, immediately before the Change in Control, to exercise or convert all portions of such Options that are then exercisable or which become exercisable upon or prior to the effective time of the Change in Control.

8. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this Agreement will alter your at-will or other employment status or other service relationship with the Company, nor be construed as a contract of employment or service relationship between you and the Company, or as a contractual right for you to continue in the employ of, or in a service relationship with, the Company for any period of time, or as a limitation of the right of the Company to discharge you at any time with or without Cause or notice and whether or not such discharge results in the failure of any of the Options to become exercisable or any other adverse effect on your interests under the Plan.

9. No Rights as a Stockholder. You shall not have any of the rights of a stockholder with respect to the Shares until such Shares have been issued to you upon the due exercise of the Options. No adjustment will be made for dividends or distributions or other rights for which the record date is prior to the date such Shares are issued.

10. The Company’s Rights. The existence of the Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or

transfer of all or any part of the Company's assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11. Entire Agreement. This Agreement, together with the correlating Stock Option Notice and the Plan, contain the entire agreement between you and the Company with respect to the Options. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Options shall be void and ineffective for all purposes.

12. Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a materially adverse effect on the Options or Shares as determined in the discretion of the Administrator, except as provided in the Plan or in a written document signed by you and the Company.

13. Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Any conflict between the terms of this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon request to the Administrator.

14. Section 409A. This Agreement and the Options granted hereunder are intended to comply with, or otherwise be exempt from, Section 409A of the Code. This Agreement and the Options shall be administered, interpreted and construed in a manner consistent with this intent. Nothing in the Plan or this Agreement shall be construed as including any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Options. Should any provision of the Plan or this Agreement be found not to comply with, or otherwise be exempt from, the provisions of Section 409A of the Code, it may be modified and given effect, in the sole discretion of the Administrator and without requiring your consent, in such manner as the Administrator determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A of the Code. The foregoing, however, shall not be construed as a guarantee or warranty by the Company of any particular tax effect to you.

15. Electronic Delivery of Documents. By your signing the Notice, you (i) consent to the electronic delivery of this Agreement, all information with respect to the Plan and the Options, and any reports of the Company provided generally to the Company’s stockholders; (ii) acknowledge that you may receive from the Company a paper copy of any documents delivered electronically at no cost to you by contacting the Company by telephone or in writing; (iii) further acknowledge that you may revoke your consent to the electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledge that you understand that you are not required to consent to electronic delivery of documents.

16. No Future Entitlement. By execution of the Notice, you acknowledge and agree that: (i) the grant of these Options is a one-time benefit which does not create any contractual or other right to receive future grants of stock options, or compensation in lieu of stock options, even if stock options have been granted repeatedly in the past; (ii) all determinations with respect to any such future grants, including, but not limited to, the times when stock options shall be granted or shall become exercisable, the maximum number of shares subject to each stock option, and the purchase price, will be at the sole discretion of the Administrator; (iii) the value of these Options is an extraordinary item of compensation which is outside the scope of your employment contract, if any; (iv) the value of these Options is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service payments or similar payments, or bonuses, long-service awards, pension or retirement benefits; (v) the vesting of these Options ceases upon termination of employment with the Company or transfer of employment from the Company, or other cessation of eligibility for any reason, except as may otherwise be explicitly provided in this Agreement; (vi) if the underlying Common Stock does not increase in value, these Options will have no value, nor does the Company guarantee any future value; and (vii) no claim or entitlement to compensation or damages arises if these Options do not increase in value and you irrevocably release the Company from any such claim that does arise.

implementation, administration and management of these Options and the Plan and you expressly authorize such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). You understand that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that data will be held only as long as is necessary to implement, administer and manage these Options. You understand that you may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Secretary. You understand, however, that refusing or withdrawing your consent may affect your ability to accept a stock option.

18. Governing Law. The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Administrator relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Delaware, without regard to its provisions concerning the applicability of laws of other jurisdictions. As a condition of this Agreement, you agree that you will not bring any action arising under, as a result of, pursuant to or relating to, this Agreement in any court other than a federal or state court in New Jersey, and you hereby agree and submit to the personal jurisdiction of any federal or state court in New Jersey. You further agree that you will not deny or attempt to defeat such personal jurisdiction or object to venue by motion or other request for leave from any such court.

19. Resolution of Disputes. Any dispute or disagreement which shall arise under, or as a result of, or pursuant to or relating to, this Agreement shall be determined by the Administrator in good faith in its absolute and uncontrolled discretion, and any such determination or any other determination by the Administrator under or pursuant to this Agreement and any interpretation by the Administrator of the terms of this Agreement, will be final, binding and conclusive on all persons affected thereby. You agree that before you may bring any legal action arising under, as a result of, pursuant to or relating to, this Agreement you will first exhaust your administrative remedies before the Administrator. You further agree that in the event that the Administrator does not resolve any dispute or disagreement arising under, as a result of, pursuant to or relating to, this Agreement to your satisfaction, no legal action may be commenced or maintained relating to this Agreement more than twenty-four (24) months after the Administrator’s decision.

20. Headings. The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

{Glossary begins on next page}

GLOSSARY

(a) “Administrator” means the Board or the committee(s) or officer(s) appointed by the Board that have authority to administer the Plan.

(b) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, Immunomedics, Inc. For this purpose, “control” means ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity.

(c) “Cause” has the meaning ascribed to such term or words of similar import in your written employment or service contract with the Company as in effect at the time at issue and, in the absence of such agreement or definition, means your (i) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company, any affiliate, customer or vendor; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses) or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with your duties or willful failure to perform your responsibilities in the best interests of the Company; (v) illegal use or distribution of drugs; (vi) violation of any Company rule, regulation, procedure or policy; or (vii) breach of any provision of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by you for the benefit of the Company, all as determined by the Administrator, which determination will be conclusive.

(d) “Change in Control” has the meaning set forth in the Plan.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Company” includes Immunomedics, Inc. and its Affiliates, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Immunomedics, Inc.

(g) “Fair Market Value” of a share of Common Stock generally means either the closing price or the average of the high and low sale price per share of Common Stock on the relevant date, as determined in the Administrator’s discretion, as reported by the principal market or exchange upon which the Common Stock is listed or admitted for trade. Refer to the Plan for a detailed definition of Fair Market Value, including how Fair Market Value is determined in the event that no sale of Common Stock is reported on the relevant date.

(h) “Service” means your employment or other service relationship with the Company and its Affiliates. Your Service will be considered to have ceased with the Company and its Affiliates if, immediately after a sale, merger or other corporate transaction, the trade, business or entity with which you are employed or otherwise have a service relationship is not the Company or its successor or an Affiliate of the Company or its successor.

(i) “Shares” mean the shares of Common Stock underlying the Options.

(j) “Stock Option Notice” means the written notice evidencing the award of the Options that correlates with and makes up a part of this Agreement.

(k) “Total and Permanent Disability” has the meaning set forth in the Plan.

(l) “You”; “Your”. “You” or “your” means the recipient of the award of Options as reflected on the Stock Option Notice. Whenever the Agreement refers to “you” under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to your estate, personal representative, or beneficiary to whom the Options may be transferred by will or by the laws of descent and distribution, the word “you” shall be deemed to include such person.

EXERCISE FORM

Administrator of 2014 Long-Term Incentive Plan

c/o Office of the Corporate Secretary

Immunomedics, Inc.

300 The American Road

Morris Plains, New Jersey 07950

Gentlemen:

I hereby exercise the Options granted to me on ____________________, ____, by Immunomedics, Inc. (the “Company”), subject to all the terms and provisions of the applicable grant agreement and of the Immunomedics, Inc. 2014 Long-Term Incentive Plan and notify you of my desire to purchase ____________ shares of Common Stock of the Company at a price of $___________ per share pursuant to the exercise of said Options.

Total Amount Enclosed: $__________

Date:________________________ ____________________________________

(Optionee)

Received by IMMUNOMEDICS, INC. on

___________________________, ____

By: ________________________________

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the 26 day of September, 2018 (the “Effective Date”) by and between Immunomedics, Inc., a Delaware corporation having its principal offices in Morris Plains, New Jersey (the “Company”) and Kurt Andrews (the “Executive”).

WHEREAS, Executive commenced employment with the Company on July 11, 2014 and the Company desires to continue to employ Executive as Chief Human Resources Officer, and Executive desires to continue to serve in such capacity on behalf of the Company, upon the terms and conditions hereinafter set forth; and

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:


1.	Employment.

1.1Employment Period. Subject to the provisions for earlier termination provided herein, Executive’s employment hereunder will be for a two (2) year term commencing on July 11, 2018 (the “Start Date”) and ending on July 11, 2020 (the “Initial Employment Period”); provided, however, that this Agreement shall automatically renew for successive one (1) year periods thereafter (each a “Renewal Period” and together with the Initial Employment Period, the “Employment Period”), unless at least ninety (90) days prior to the end of the Initial Employment Period or any Renewal Period, one party notifies the other in writing that he/it is exercising the option not to renew the term of this Agreement. The non-renewal of this Agreement in the absence of a successor employment agreement shall be deemed a termination of Executive’s employment, effective as of the last day of the then-current Employment Period (“Non-Renewal Termination”).

1.2Position and Responsibilities. Commencing on the Start Date, Executive shall serve as Chief Human Resources Officer reporting to the Chief Executive Officer (“CEO”) or such other executive designated by him/her, and shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to Executive by CEO and/or the Company’s Board of Directors (the “Board”).

may be specifically approved by the Company. The foregoing shall not be construed as preventing Executive from owning less than one percent (1%) of the total outstanding shares of a publicly traded company.

1.4Principal Location of Services. Executive shall perform his duties hereunder principally out of the Company’s corporate headquarters (presently located in Morris Plains, New Jersey) and shall undertake such travel within or outside of the United States as is necessary or advisable for the efficient operations of the Company.


2.	Compensation and Benefits.

2.1Base Salary. For all the services rendered by Executive hereunder, the Company shall pay Executive a base salary (“Base Salary”) at the annual rate of three hundred and ten thousand dollars ($310,000) subject to all required withholdings and authorized deductions and payable semi-monthly in installments at such times as the Company customarily pays its other senior-level executives.

2.2Annual Discretionary Cash Bonus. For each fiscal year during the Employment Period, commencing with the January 1, 2019 - December 30, 2019 fiscal year, Executive shall be eligible to receive an annual discretionary cash bonus (the “Annual Bonus”) for the services rendered by Executive under this Agreement. The amount of the Annual Bonus, if any, will be determined by the Compensation Committee of the Board (the “Compensation Committee”) in its discretion, based on Executive’s individual performance and Company performance in each case measured against performance goals and targets established by the Compensation Committee. Executive’s Annual Bonus target is thirty-five (35%) of Executive’s Base Salary for the applicable fiscal year (the “Target Bonus”). The amount of the Annual Bonus, if any, will be determined as of the end of each fiscal year during the Employment Period and shall be paid as soon as reasonably practicable after the end of each fiscal year to which the bonus relates, but in no event later than 2-½ months after the end of such fiscal year. To be eligible to receive an Annual Bonus, or any portion thereof, Executive must be employed by the Company both at the time the amount of the Annual Bonus, if any, is determined, and at the time the Annual Bonus, if any, is paid. For the first calendar year during which Executive commences employment with the Company, Executive will be entitled to a prorated Annual Bonus in respect of the period from July 1, 2018 - December 31, 2018.

2.3Sign-On Bonus. As soon as practicable after the Start Date, Executive shall be paid a one-time sign-on cash bonus of one hundred thousand dollars ($100,000) subject to all required withholdings and authorized deductions (“Sign-On Bonus”), which will be paid through the Company’s customary payroll practices.

2.4Equity Compensation. Executive acknowledges that he has been granted an option to purchase 76,222 shares of the Company’s common stock (the “Option”) pursuant and subject to the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”) and applicable award agreement. . The Option is a non-qualified stock option, and will have an exercise price per share equal to the Fair Market Value (as defined in the Plan) of a share of common stock of the Company as of the date of grant pursuant to the terms of the Plan. The Option shall vest and become exercisable as follows: upon the one-year anniversary of the Start Date, twenty-five

percent (25%) of the total number of shares underlying the Option shall vest and become exercisable, and one additional forty-eighth (1/48^th) of the total number of shares underlying the Option shall vest and become exercisable on the corresponding day of each month thereafter, until the entire Option has vested and become exercisable on the fourth anniversary of the Start Date, in each case subject to Executive’s continued employment on each such vesting date. Upon termination of Executive’s employment, the vested portion of the Option shall remain exercisable in accordance with the terms and conditions of the applicable option agreement and this Agreement. Executive shall be eligible to participate in future equity compensation programs made available to the Company’s senior-level executives.

3.1Termination Without Cause or Resignation for Good Reason Before a Change of Control.

and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan (collectively, the “Guaranteed Payments”).

(d)Except as otherwise required by Section 3.9, the benefits described in subsections (i) and (ii) above shall begin within sixty (60) days after Executive’s termination date, provided Executive has timely executed and not revoked the Release within such sixty (60) day period; and provided that notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive’s designating the calendar year of payment, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) is subject to execution of the Release and could be made in more than one taxable year, payment shall be made in the later taxable year.

(e)Executive agrees and acknowledges that the Severance provided to Executive pursuant to Section 3.1(c) is in lieu of, and is not in addition to, any benefits to which

Executive may otherwise be entitled under any Company severance plan, policy, or program, other than the Guaranteed Payments.

(g)For the avoidance of doubt, a Non-Renewal Termination shall not constitute a termination without Cause or resignation for Good Reason subject to this Section 3.1.

3.2Termination Without Cause or Resignation for Good Reason After a Change of Control.

including but not limited to Executive’s failure to timely elect continuation coverage under COBRA.

(iii)Any outstanding unvested portion of the Option will vest immediately.

Executive will not receive the Severance, the Change of Control Severance or any other severance compensation or benefits, except that the Company shall pay to Executive the Guaranteed Payments. In addition, Executive may initiate a termination of employment by resigning under this Section 3.5 without Good Reason (as defined in Section 3.8) prior to the expiration of the then-current Employment Period by providing at least three (3) months’ written notice (the “Notice Period”) to the Company and, in any such event, all payments under this Agreement shall cease upon Executive’s last day of employment. Executive will not receive the Severance, the Change of Control Severance or any other severance compensation or benefits, except that the Company shall pay to Executive the Guaranteed Payments. During the Notice Period, the Company may elect to place Executive on paid leave for any part or all of the Notice Period, or may shorten or waive the Notice Period in its sole discretion, without any compensation due to Executive past the last day of employment.

3.8Definitions.

(a)“Cause” shall mean any of the following grounds for termination of Executive’s employment:

(i)Executive has been convicted of a felony or enters a plea of guilty or nolo contendere with respect thereto;

(iii)Executive causes material damage to the property of the Company;

(iv)Executive engages in conduct that is harmful to the public reputation of the Company;

(v)Executive engages in any act of dishonesty, fraud, or immoral or disreputable conduct;

(vi)Executive engages in willful misconduct in the performance of Executive’s duties;

(b)“Change of Control” shall mean:

beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Company’s stockholders; or

(iv)The consummation of a Change in Control (as defined in the Plan).

(c) “Good Reason” shall mean the occurrence of any of the following events or conditions, unless Executive has expressly consented in writing thereto:

(i)A material reduction in Executive’s Base Salary;

(ii)The material diminution of Executive’s duties, responsibilities, powers or authorities, including the assignment of any duties and responsibilities materially inconsistent with his position as Chief Human Resources Officer; provided that Good Reason shall not exist under this clause (ii) if such material diminution of authority, duties and responsibilities is a result of: (1) the hiring of additional subordinates to fill some of Executive’s duties and responsibilities or (2) any disposition or sale of any subsidiary or business of the Company;

(iv)A material breach by the Company of this Agreement.

For purposes of this Agreement, Executive shall not have Good Reason for termination unless (i) Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) Executive notifies the Company in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (iii) Executive cooperates in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”), to cure the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) Executive terminates his employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

after the end of the six (6) month period. If Executive dies during the postponement period prior to the payment of benefits, the amounts postponed on account of Section 409A shall be paid to the personal representative of Executive’s estate within sixty (60) days after the date of Executive’s death.

Executive’s ability to (x) to discuss the terms of Executive’s employment, wages and working conditions to the extent expressly protected by applicable law, (y) to report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state “whistleblower” laws, or (z) to respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation.


6.	Intellectual Property.

Company, or any of the products or services being researched, developed, manufactured or sold by the Company or which may be used in relation therewith, (ii) results from tasks assigned to Executive by the Company or any work that Executive performs in connection with his employment with the Company (whether during working hours or on Executive’s own time) or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Executive shall promptly disclose to the Company (or any persons designated by it) each such Development, and Executive hereby assigns any rights Executive may have or acquire in the Developments and benefits and/or rights resulting therefrom, whether during or after Executive’s employment, to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company.

(c)The Developments will be deemed “Work Made for Hire,” as such term is defined under the copyright laws of the United States, on behalf of the Company, and Executive agrees that the Company will be the sole owner of the Developments, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to Executive. If the Developments, or any portion thereof, are deemed not to be Work Made for Hire, or the rights in such Developments do not otherwise automatically vest in the Company, Executive hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Developments, including, without limitation, all of Executive’s right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Developments, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. In addition, Executive hereby waives any so-called “moral rights” with respect to the Developments. To the extent that Executive has any rights in the results and proceeds of Executive’s service to the Company that cannot be assigned in the manner described herein, Executive agrees to unconditionally waive the enforcement of such rights. Executive hereby waives any and all currently existing and future monetary rights in and to the Developments and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to Executive’s benefit by virtue of Executive being an employee of the Company.

by the Company or to cease doing business with the Company, and Executive shall not approach, assist or aid any other person, firm, corporation or entity for such purpose or authorize or knowingly approve the taking of such actions by any other person or entity; or

9.General Provisions.

(d)Executive acknowledges and agrees that the payments and benefits to be provided to Executive under this Agreement are provided as consideration for the covenants in Sections 5, 6, 7, and 8 hereof.

If to the Company, to:

Immunomedics, Inc.

300 The American Road

Morris Plains, NJ 07950

Attn: Chief Executive Officer

If to Executive, to:

The address of his principal residence most recently on file with the Company.

13.Contents of Agreement, Amendment, Interpretation and Assignment.

(a)This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings concerning Executive’s employment by the Company and cannot be changed or modified except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer of the Company and by Executive.

19.Section 409A. This Agreement is intended to comply with or otherwise be exempt from Section 409A and its corresponding regulations, to the extent applicable, and shall be so construed. Notwithstanding anything in this Agreement to the contrary, payments of “nonqualified deferred compensation” subject to Section 409A may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. For purposes of Section 409A, all payments of “nonqualified deferred compensation” subject to Section 409A to be made upon the termination of Executive’s employment under this Agreement may only be made upon a “separation from service” under Section 409A. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall Executive, directly or indirectly, designate the calendar year of payment with respect to any amount that is “nonqualified deferred compensation” subject to Section 409A. All reimbursements provided under this Agreement that are “nonqualified deferred compensation” that is subject to Section 409A shall be made or provided in accordance with Section 409A, including, where applicable, the requirements that (a) any reimbursement is for expenses incurred during the Employment Period (or during such other time period specified in this Agreement), (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (c) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (d) the right to reimbursement is not subject to liquidation or exchange for another benefit. Nothing herein shall be construed as having modified the time and form of payment of any amounts or payments

of “nonqualified deferred compensation” within the meaning Section 409A that were otherwise payable pursuant to the terms of any agreement between Company and Executive in effect prior to the date of this Agreement.

(a)Any such reduction shall be made in accordance with Section 409A and the following:

(iii)all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject to Section 409A shall be reduced third, in reverse chronological order; and

(iv)all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.

and expenses incurred by the Accountants in connection with the calculations required by this Section 20.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.




IMMUNOMEDICS, INC.

By:
Name:
Title:

EXECUTIVE

/s/ Kurt Andrews
Kurt Andrews

Immunomedics, Inc.

Nonqualified Stock Option Notice

This Notice evidences the award of nonqualified stock options (each, an “Option” or collectively, the “Options”) that have been granted to you, Kurt Andrews, subject to and conditioned upon your agreement to the terms of the attached Nonqualified Stock Option Agreement (the “Agreement”). The Options entitle you to purchase shares of common stock, par value $0.01 per share (“Common Stock”), of Immunomedics, Inc., a Delaware corporation (the “Company”), under the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”). The number of shares you may purchase and the exercise price at which you may purchase them are specified below. This Notice constitutes part of and is subject to the terms and provisions of the Agreement and the Plan, which are incorporated by reference herein. You must return an executed copy of this Notice to the Company within 30 days of the date hereof. If you fail to do so, the Options may be rendered null and void in the Company’s discretion.

Grant Date: July 11, 2018

Number of Options: 76,222 Options, each permitting the purchase of one Share

Exercise Price: $24.76 per share

Expiration Date: The Options expire at 5:00 p.m. Eastern Time on the 7th anniversary of the Grant Date (the “Expiration Date”), unless fully exercised or terminated earlier.

Exercisability Schedule: Subject to the terms and conditions described in the Agreement, the Options become exercisable in accordance with the schedule below:


(a)	25% of the Options become exercisable on the first anniversary of the Grant Date (the “Initial Vesting Date”), and


(b)	2.08333% of the Options become exercisable on the date one month after the Initial Vesting Date and on such date every month thereafter, through the fourth anniversary of the Grant Date.

Acceleration Events: The extent to which you may purchase shares under the Options may be accelerated in the following circumstances:

•

If your Service with the Company is terminated coincident with or within one year following a Change in Control either by the Company or its successor without Cause, the Options that had not yet become exercisable as of the date of termination will immediately become 100% exercisable. If, pursuant to Section 11(c) of the Plan, the Options are replaced in connection with a Change in Control with a Substitute Award payable in cash so long as your Service remains continuous through such dates that the Option would have otherwise become exercisable but for the Change in Control, and your Service with the surviving or successor entity is terminated coincident with or within one year following the Change in Control either by the Company or its successor without Cause, then you shall be entitled to a lump-sum payment in an amount equal to the remaining unvested portion of the Substitute Award payable immediately upon your termination of Service.

IMMUNOMEDICS, INC.

By: William Fricker

Date: 9/18/2018

I acknowledge that I have carefully read the attached Agreement and the prospectus for the Plan and agree to be bound by all of the provisions set forth in these documents.



Enclosures:	Nonqualified Stock Option Agreement Prospectus for the 2014 Long-Term Incentive Plan Exercise Form	OPTIONEE Kurt Andrews Date: 9/18/2018

Nonqualified Stock Option Agreement

Under the

Immunomedics, Inc. 2014 Long-Term Incentive Plan

1. Terminology. Capitalized terms used in this Agreement are defined in the correlating Stock Option Notice and/or the Glossary at the end of the Agreement.

2. Exercise of Options.


(i)	notice, in such manner and form as the Administrator may require from time to time, specifying the number of Shares to be purchased under the Options;


(ii)	full payment of the Exercise Price for the Shares or properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to

time, to effectuate a broker-assisted cashless exercise, each in accordance with Section 2(d) of this Agreement; and


(iii)	full payment of applicable withholding taxes pursuant to Section 7 of this Agreement.

(d) Method of Payment. You may pay the Exercise Price by:


(i)	delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Administrator in its discretion;


(ii)	a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm designated or approved by the Administrator;


(iii)	subject to such limits as the Administrator may impose from time to time, tender (via actual delivery or attestation) to the Company of other shares of Common Stock of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price;


(iv)	subject to such limits as the Administrator may impose from time to time, net share settlement;


(v)	any other method approved by the Administrator; or


(vi)	any combination of the foregoing.

3. Termination of Service.

(ii) the expiration of 12 months following such cessation, if your Service ceases on account of your Total and Permanent Disability or death;

(iii) the expiration of 12 months following your death, if your death occurs during the periods described in clauses (i) or (ii) of this Section 3(b), as applicable; or

(iv) the Expiration Date.

(d) Change in Status. In the event that your Service is with a business, trade or entity that, after the Grant Date, ceases for any reason to be part or an Affiliate of the Company, your Service will be deemed to have terminated for purposes of this Section 3 upon such cessation if your Service does not continue uninterrupted immediately thereafter with the Company or an Affiliate of the Company.

6. Withholding of Taxes.

contract of employment or service relationship between you and the Company, or as a contractual right for you to continue in the employ of, or in a service relationship with, the Company for any period of time, or as a limitation of the right of the Company to discharge you at any time with or without Cause or notice and whether or not such discharge results in the failure of any of the Options to become exercisable or any other adverse effect on your interests under the Plan.

termination, severance, resignation, redundancy, end of service payments or similar payments, or bonuses, long-service awards, pension or retirement benefits; (v) the vesting of these Options ceases upon termination of employment with the Company or transfer of employment from the Company, or other cessation of eligibility for any reason, except as may otherwise be explicitly provided in this Agreement; (vi) if the underlying Common Stock does not increase in value, these Options will have no value, nor does the Company guarantee any future value; and (vii) no claim or entitlement to compensation or damages arises if these Options do not increase in value and you irrevocably release the Company from any such claim that does arise.

17. Personal Data. For the purpose of implementing, administering and managing these Options, you, by execution of the Notice, consent to the collection, receipt, use, retention and transfer, in electronic or other form, of your personal data by and among the Company and its third party vendors or any potential party to any Change in Control transaction or capital raising transaction involving the Company. You understand that personal data (including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, date of birth, nationality, job and payroll location, data for tax withholding purposes and shares awarded, cancelled, exercised, vested and unvested) may be transferred to third parties assisting in the implementation, administration and management of these Options and the Plan and you expressly authorize such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). You understand that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that data will be held only as long as is necessary to implement, administer and manage these Options. You understand that you may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Secretary. You understand, however, that refusing or withdrawing your consent may affect your ability to accept a stock option.

20. Headings. The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

{Glossary begins on next page}

(a) “Administrator” means the Board or the committee(s) or officer(s) appointed by the Board that have authority to administer the Plan.

(d) “Change in Control” has the meaning set forth in the Plan.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(i) “Shares” mean the shares of Common Stock underlying the Options.

(j) “Stock Option Notice” means the written notice evidencing the award of the Options that correlates with and makes up a part of this Agreement.

(k) “Total and Permanent Disability” has the meaning set forth in the Plan.

EXERCISE FORM

Administrator of 2014 Long-Term Incentive Plan

c/o Office of the Corporate Secretary

Immunomedics, Inc.

300 The American Road

Morris Plains, New Jersey 07950

Gentlemen:

2014 Long-Term Incentive Plan and notify you of my desire to purchase ____________ shares of Common Stock of the Company at a price of $___________ per share pursuant to the exercise of said Options.

Total Amount Enclosed: $__________

Date:________________________ ____________________________________

(Optionee)

Received by IMMUNOMEDICS, INC. on

___________________________, ____

By: ________________________________

IMMUNOMEDICS, INC. ANNUAL CASH BONUS PLAN


1.	Background and Purpose.

1.Purpose. The purpose of the Immunomedics, Inc. Annual Cash Bonus Plan (the “Plan”) is to motivate and reward eligible employees by making a portion of their cash compensation dependent on the achievement of certain corporate, business unit and individual performance goals.

2.Effective Date. The Plan is effective as of September 26, 2018 (the “Effective Date”) and shall remain in effect until it has been terminated pursuant to Section 9.6.

2.Definitions. The following terms shall have the following meanings:

1.“Affiliate” means any corporation or other entity controlled by the Company.

2.“Award” means an award granted pursuant to the Plan, which shall be earned contingent on the employment requirement set forth in Section 6.3 and the attainment of the Performance Goals with respect to a Performance Period, as determined by the Committee pursuant to Section 6.1.

3.“Base Salary” means the Participant’s annualized rate of base salary on the last day of the Performance Period before (i) deductions for taxes or benefits and (ii) deferrals of compensation pursuant to any Company or Affiliate-sponsored plans; provided, that base salary shall be prorated, consistent with applicable law, to reflect any period of time during the Performance Period that the Participant was on an unpaid leave of absence or long-term disability.

4.“Board” means the Board of Directors of the Company, as constituted from time to time.

5.“Change in Control” means “Change in Control” as defined in the Immunomedics, Inc. 2014 Long-Term Incentive Plan.

6. “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, including any regulations or authoritative guidance promulgated thereunder and successor provisions thereto.

7.“Committee” means the Compensation Committee of the Board or such other committee appointed by the Board to administer the Plan pursuant to Section 3.1.

8.“Company” means Immunomedics, Inc., a Delaware corporation, and any successor thereto.

9.“Company Performance Metrics” means criteria established by the Committee relating to any of the following, as it may apply to one or more business units, divisions, or Affiliates, or on a Company-wide basis, and in absolute terms, relative to a base period, or relative to the performance of one or more comparable companies, peer groups, or an index covering multiple companies, which may include, but is not limited to, any of the following: product research and development; completion of an identified special project; clinical trials; regulatory filings or approvals; patent application or issuance; manufacturing or process development; sales or net sales; market share; market penetration; economic value added; customer service; customer satisfaction; inventory control; balance of cash, cash equivalents

and marketable securities; growth in assets; key hires; employee satisfaction; employee retention; business expansion; acquisitions, divestitures, joint ventures; capital or fund raising to support operations; government grants; license arrangements; collaboration or customer agreements or arrangements; legal compliance or safety and risk reduction; or such other measures as determined by the Committee consistent with these performance measures.

10.“Individual Performance Metrics” means criteria established by the Committee (or its designee) relating to a Participant, which may include, but shall not be limited to, the following: individual performance during the Performance Period relative to others in the business unit or division or other comparable positions in the Company taking into consideration the level of difficulty of the individual’s objectives, the consistency of his or her actions with corporate values, the level of performance versus objectives, the individual’s most recent performance rating (if applicable), past performance and future potential, and outside benchmark market data for similar positions.

11.“Negative Discretion” means the discretion of the Committee to reduce or eliminate the size of an Award in accordance with Section 6.1(b) of the Plan.

12.“Participant” means as to any Performance Period, the employees of the Company or an Affiliate who are designated by the Committee to participate in the Plan for that Performance Period.

13.“Performance Criteria” means the performance criteria upon which the Performance Goals for a particular Performance Period are based, as determined by Committee or the management of the Company which include either Company Performance Metrics or Individual Performance Metrics or a combination thereof.

14.“Performance Goals” means the goals selected by the Committee, or its designee, in its discretion to be applicable to a Participant for any Performance Period. Performance Goals shall be based upon one or more Performance Criteria. Performance Goals may include a threshold level of performance below which no Award will be paid and levels of performance at which specified percentages of the Target Award will be paid and may also include a maximum level of performance above which no additional Award amount will be paid.

15.“Performance Period” means the period for which performance is calculated, which shall be the Plan Year or a portion thereof, unless a longer period is otherwise established by the Committee.

16.“Plan” means the Immunomedics, Inc. Annual Cash Bonus Plan, as hereafter amended from time to time.

17.“Plan Year” means the Company’s fiscal year, which commences on January 1st and ends on December 31st or such other period.

18.“Pro-rated Award” means an amount equal to the Award otherwise payable to the Participant for a Performance Period in which the Participant was actively employed by the Company or an Affiliate for

only a portion thereof, multiplied by a fraction, the numerator of which is the number of days the Participant worked during the Performance Period and the denominator of which is the number of days in the Performance Period.

19. “Target Award” means the target award payable under the Plan to a Participant for a particular Performance Period, expressed as a percentage of the Participant’s Base Salary. In special circumstances, the target award may be expressed as a fixed amount of cash.

3.Administration.

1.Administration By the Committee. The Plan shall be administered by the Committee which shall consist of not less than two (2) members of the Board.

2.Authority of the Committee. Subject to the provisions of the Plan and applicable law, the Committee shall have the power, in addition to other express powers and authorizations conferred on the Committee by the Plan, to: (i) designate Participants; (ii) determine the terms and conditions of any Award; (iii) determine whether, to what extent, and under what circumstances Awards may be forfeited or suspended; (iv) interpret, administer, reconcile any inconsistency, correct any defect and/or supply any omission in the Plan or any instrument or agreement relating to, or Award granted under, the Plan; (v) establish, amend, suspend, or waive any rules for the administration, interpretation and application of the Plan; and (vi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

3.Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, and shall be given the maximum deference permitted by law.

4.Delegation By the Committee. The Committee, in its sole discretion, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company; provided, however, that the Committee may not delegate its responsibility to make Awards to executive officers.

5.Agents; Limitation of Liability. The Committee may appoint agents to assist in administering the Plan. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to it or him by any officer or employee of the Company, the Company's certified public accountants, consultants or any other agent assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.

4.Eligibility and Participation.

1.Eligibility. Employees of the Company and its participating Affiliates are eligible to participate in the Plan; provided, however, that any employee of the Company or a participating Affiliate who is eligible to participate in another cash incentive plan made available by the Company to a group of employees is not eligible to participate in the Plan.

2.Participation. The Committee, in its discretion, shall select the persons who shall be Participants for the Performance Period. Only eligible individuals who are designated by the Committee to participate in the Plan with respect to a particular Performance Period may participate in the Plan for that Performance Period. An individual who is designated as a Participant for a given Performance Period is not guaranteed or assured of being selected for participation in any subsequent Performance Period.

3.New Hires; Newly Eligible Participants. A newly hired or newly eligible Participant whose service commences prior to October 1 of the applicable Performance Period will be eligible to receive a Pro-rated Award reflecting participation for a portion of the Performance Period. Participants whose service commences on or after October 1 of the applicable Performance Period will not be eligible for an Award or Pro-rated Award with respect to such Performance Period.

5.Terms of Awards.

1.Determination of Target Awards. Prior to or within the first quarter of each Plan Year, the Committee, in its sole discretion, or its authorized designee, shall establish the Target Award for each Participant or class of Participants, the payment of which shall be conditioned on the achievement of the Performance Goals for the Performance Period.

2.Adjustments. The Committee is authorized, in its sole discretion, to adjust or modify a Performance Goal, including the calculation of a Performance Goal for a Performance Period during the Performance Period as it deems desirable and appropriate.

6.Payment of Awards.

1.Determination of Awards.

(a)Subject to Section 6.3, following the completion of each Performance Period, the Committee shall determine the extent to which the Performance Goals have been achieved or exceeded. If the employment requirement set forth in Section 6.3 and the minimum Performance Goals established by the Committee are not achieved, then no award will be earned under this Plan.

(b)In determining the amount of each Award, the Committee may reduce or eliminate the amount of an Award by applying Negative Discretion if, in its sole discretion, such reduction or elimination is appropriate.

2.Form and Timing of Payment. Except as otherwise provided herein, as soon as practicable following the Committee's determination pursuant to Section 6.1 for the applicable Performance Period,

each Participant shall receive a cash lump sum payment of his or her Award, less required withholding. In no event shall such payment be made later than March [15] following the end of the Performance Period.

3.Employment Requirement. Except as otherwise provided in Section 7, no Award may be earned by any Participant who is not actively employed by the Company or an Affiliate on the date that Awards are paid.

4.Deferral of Awards. The Committee, in its sole discretion, may permit a Participant to defer the payment of an Award that would otherwise be paid under the Plan. Any deferral election shall be subject to such rules and procedures as shall be determined by the Committee in its sole discretion.

7.Termination of Employment.

1.Employment Requirement. Except as otherwise provided in Section 7.2 or pursuant to the terms of a Participant’s employment agreement or similar agreement with the Company, if a Participant’s employment terminates for any reason prior to the date that Awards are paid, the Participant shall no longer be eligible to earn an Award for the Performance Period. However, the Committee, in its sole discretion, may pay a Pro-rated Award reflecting the Participant’s participation for a portion of the Performance Period. Such Pro-rated Award will be paid at the same time and in the same manner as Awards are paid to other Participants.

2.Termination of Employment Due to Death. If a Participant’s employment is terminated by reason of his or her death during a Performance Period, the Participant or his or her beneficiary will be paid a Pro-rated Award reflecting participation for a portion of the Performance Period. Payment of such Pro-rated Award will be made at the same time and in the same manner as Awards are paid to other Participants.

8.Change in Control.

If a Change in Control occurs during a Performance Period, subject to the terms of any Company plan or a Participant’s employment agreement, change in control agreement, severance agreement or similar agreement, as applicable, the Committee may, but is not required to, provide for a Participant to be paid a Pro-rated Award based on actual or target performance as of the date of the Change in Control, as determined by the Committee. Such Pro-rated Awards, if any, paid in connection with a Change in Control, will be paid within 30 days following the Change in Control.


9.	General Provisions.

1.Compliance With Legal Requirements. The Plan and the granting of Awards shall be subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required.

2.Non-transferability. A person’s rights and interests under the Plan, including any Award previously made to such person or any amounts payable under the Plan may not be assigned, pledged or transferred, except in the event of the Participant's death in which event any Awards due under the Plan shall be paid in accordance with Section 9.9.

3.No Right to Employment. Nothing in the Plan or in any notice of Award shall confer upon any person the right to continue in the employment of the Company or any Affiliate or affect the right of the Company or any Affiliate to terminate the employment of any Participant.

4.No Right to Award. Unless otherwise expressly set forth in a written employment agreement signed by the Company and a Participant, a Participant shall not have any right to any Award under the Plan until such Award has been paid to such Participant and participation in the Plan in one Performance Period does not connote any right to become a Participant in the Plan in any future Performance Period. Receipt of an Award with respect to one Performance Period does not create a guarantee, entitlement or expectation of an Award with respect to any future Performance Period.

5.Withholding. The Company shall have the right to withhold from any Award any federal, state or local income and/or payroll taxes required by law to be withheld, to withhold any authorized deductions, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to an Award.

6.Amendment or Termination of the Plan. The Board or the Committee may, at any time, amend, suspend or terminate the Plan in whole or in part. Notwithstanding the foregoing, no amendment shall adversely affect the rights of any Participant to Awards allocated prior to such amendment, suspension or termination.

7.Unfunded Status. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between the Company and any Participant, beneficiary or legal representative or any other person. To the extent that a person acquires a right to receive payments under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA).

8.Governing Law. The Plan shall be construed, administered and enforced in accordance with the laws of New Jersey without regard to conflicts of law.

9.Beneficiaries. To the extent that the Committee permits beneficiary designations, any payment of Awards due under the Plan to a deceased Participant shall be paid to the beneficiary duly designated by the Participant in accordance with the Company's practices. If no such beneficiary has been designated or survives the Participant, payment shall be made by will or the laws of descent or distribution.

10.Section 409A of the Code. It is intended that payments under the Plan qualify as short-term deferrals exempt from the requirements of Section 409A of the Code. In the event that any Award does not qualify for treatment as an exempt short-term deferral, it is intended that such amount will be paid in a manner that satisfies the requirements of Section 409A of the Code. The Plan shall be interpreted and construed accordingly.

11.Expenses. All costs and expenses in connection with the administration of the Plan shall be paid by the Company.

12.Section Headings. The headings of the Plan have been inserted for convenience of reference only and in the event of any conflict, the text of the Plan, rather than such headings, shall control.

13.Severability. In the event that any provision of the Plan shall be considered illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of the Plan, but shall be fully severable, and the Plan shall be construed and enforced as if such illegal or invalid provision had never been contained therein.

14.Gender and Number. Except where otherwise indicated by context, wherever used, the masculine pronoun includes the feminine pronoun; the plural shall include the singular, and the singular shall include the plural.

15.Non-exclusive. Nothing in the Plan shall limit the authority of the Company, the Board or the Committee to adopt such other compensation arrangements, as it may deem desirable for any Participant.

16.Notice. Any notice to be given to the Company or the Committee pursuant to the provisions of the Plan shall be in writing and directed to the Chief Human Resources Officer of the Company at 300 The American Road, Morris Plains, New Jersey 07950 or at Company email address designated for the Chief Human Resources Officer.

17.Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding upon any successor to all or substantially all of the assets of the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise.

18.Clawback. All Awards may be subject to the Company’s clawback policy as in effect from time to time and, in accordance with such policy, may be subject to the requirement that the Awards be repaid to the Company after they have been distributed to the Participant.

The action permitted to be taken by the Board under this Section 9.18 is in addition to, and not in lieu of, any and all other rights of the Board and/or the Company under applicable law and shall apply notwithstanding anything to the contrary in the Plan.

Exhibit 31.1

Certification of Chief Executive Officer

I, Michael Pehl, certify that:

1. I have reviewed this quarterly report of Immunomedics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2018



/s/ Michael Pehl
Michael Pehl
Chief Executive Officer

Exhibit 31.2

Certification of Principal Financial Officer

I, Usama Malik, certify that:

1. I have reviewed this quarterly report of Immunomedics, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2018



/s/ Usama Malik
Usama Malik
Principal Financial Officer

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Immunomedics, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Form 10-Q for the quarter ended September 30, 2018, (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.




Dated: November 7, 2018	/s/ Michael Pehl
	Michael Pehl
	Chief Executive Officer


Dated: November 7, 2018	/s/ Usama Malik
	Usama Malik
	Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exchanging Investor

Aggregate Principal Amount of
Exchanged Notes

DTC Participant Name

DTC Participant
Number