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United States securities and exchange commission logo
April 23, 2021
Osvaldo Flores
Chief Executive Officer
Century Therapeutics, Inc.
3675 Market Street
Philadelphia, Pennsylvania 19104
Re: Century
Therapeutics, Inc.
Draft Registration
Statement on Form S-1
Submitted March 26,
2021
CIK No. 0001850119
Dear Dr. Flores:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submitted March 26, 2021
Prospectus Summary, page i
1. Please clarify the
meaning of scientific or technical terms the first time they are used in
order to ensure that
lay readers will understand the disclosure. For example, please briefly
explain what you mean
by iPSC-derived NK and T therapeutics and CRISPR-
HDR technology.
Our pipeline, page iii
2. We note the inclusion
of your Discovery Platform in your pipeline table on pages iii and
86. Given the stage of
development of the program, it does not appear material to the
company at this time.
Therefore, please remove the program from the pipeline table.
Osvaldo Flores
FirstName LastNameOsvaldo Flores
Century Therapeutics, Inc.
Comapany
April NameCentury Therapeutics, Inc.
23, 2021
April 223, 2021 Page 2
Page
FirstName LastName
Our team, page v
3. We note that your website lists Dr. Hiromitsu Nakauchi, M.D., Ph.D. as
a Scientific Co-
Founder of the company. Please explain whether Dr. Nakauchi remains
involved in the
company and, if so, in what capacity. If material, please include
disclosure regarding his
role and compensation, as appropriate.
Risk factors, page 1
4. We note your disclosure on page 38 of the risks related to the
potential termination of any
of your license agreements with FCDI and other licensors. Given the
bullet point on page
v which states that you are highly dependent on your strategic
relationships and
collaborations and any termination or loss of significant rights under
such arrangements
with your strategic partners could seriously harm your business,
please also add disclosure
in this section with respect to the risks related to the potential
breach or termination of
other material agreements, such as your collaboration and
manufacturing agreements with
FCDI.
Market and industry data, page 59
5. We note your statement cautioning investors not to give undue weight
to estimates or
projections included in the prospectus and your statement that you
have not independently
verified the accuracy or completeness of the data contained in
industry publications and
reports. These statements may imply an inappropriate disclaimer of
responsibility with
respect to the third party information; therefore, either remove the
potential disclaiming
language or clearly state in this section that you are liable for such
information.
Selected consolidated financial data, page 67
6. Please provide historical earnings and units per share information. In
addition, provide
pro forma earnings per share information for the latest year and any
subsequent interim
periods to give effect to (i) the 2021 Reorganization; (ii) the
automatic conversion of all
your preferred stock outstanding into 85,865,789 shares of your common
stock upon the
closing of the offering; and (iii) the reverse stock split to be
effected prior to the closing of
this offering. Provide a footnote that explains the nature of the pro
forma earnings per
share information and how it was calculated.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Significant Judgments and Estimates
Stock Based Compensation
Common Stock Valuations, page 81
7. Once you have an estimated offering price or range, please explain to
us how Prior
Century determined the fair value of the awards underlying their
equity issuances granted
Osvaldo Flores
FirstName LastNameOsvaldo Flores
Century Therapeutics, Inc.
Comapany
April NameCentury Therapeutics, Inc.
23, 2021
April 323, 2021 Page 3
Page
FirstName LastName
to the Company's employees. Address the reasons for any differences
between recent
equity valuations of Prior Century and the Company leading up to the
IPO and the
estimated offering price. This information will help facilitate our
review of your
accounting for equity issuances including stock-based compensation.
Please discuss with
the staff how to submit your response.
Advantages of our proprietary Allo-Evasion technology, page 95
8. Please revise the graphics on pages 95 and 112 to include labels and
units for both
axes, where applicable.
Our development candidates, page 104
9. We refer to your disclosure on page 104 that you believe your program
will continue the
advancement of your iT cell platform to generate safe and efficacious
iPSC-derived cell
therapies for different tumor indications. We also note your
disclosure on page 113 that
you believe that CNTY-101 addresses unmet needs for an
off-the-shelf, safe and
effective cell therapy offering an improved therapeutic profile.
Please note that
determinations of safety and efficacy are solely within the authority
of the FDA; therefore,
please revise the prospectus to remove all references and/or
implications of safety and
efficacy, including those cited above.
Licensing, partnerships and collaborations, page 118
10. Please provide the current expiration date for the last-to-expire
patent licensed under the
Differentiation License and the Reprogramming License agreements with
FCDI, the
WARF License, the iCELL sublicense agreement and the Empirica License
agreement. Please also disclose the duration of the license agreement
you granted FCDI to
manufacture or practice developments made by you both in Japan and
worldwide.
11. Please disclose the royalty term under your Reprogramming License
agreement with
FCDI (as required by the WARF License) and the Empirica License
agreement.
12. Please include disclosure in the Business section and expand your
disclosure on page 71
in the MD&A section to include the material terms of the master
services agreement with
Distributed Bio, Inc. We refer to your disclosure on page F-19, but
did not note any
further references in the prospectus. Please also file the master
services agreement as an
exhibit to the registration statement as required by Item 601(b)(10)
of Regulation S-K or
tell us why you believe you are not required to do so.
13. We note your disclosure on page 120 that Bayer was granted a right of
first refusal under
the Option Agreement to submit bids for the transfer, sale or license
of certain product
candidates comprised of allogeneic iPSC-derived natural killer cells
among others (or the
Research Products ). Given that your pipeline includes product
candidates that may
include iPSC-derived natural killer (or iNK) therapeutics, please
clarify if the Research
Products would include any of the product candidates listed in the
pipeline table on page
Osvaldo Flores
FirstName LastNameOsvaldo Flores
Century Therapeutics, Inc.
Comapany
April NameCentury Therapeutics, Inc.
23, 2021
April 423, 2021 Page 4
Page
FirstName LastName
iii and if so, please revise your disclosure to highlight this
arrangement in the Summary
and also in the Risk Factor disclosure on page 4.
Intellectual Property, page 121
14. We note your disclosure on page 124 regarding the sublicense to
patents owned by WARF
with respect to the Thompson Factors. Please also disclose the
type of patent protection
provided to this sublicense.
15. We note your disclosure that you license a patent portfolio covering
the composition,
production and use of the CRISPR-MAD7 gene-editing technology from
Inscripta, Inc. on
a non-exclusive basis. Please disclose the applicable jurisdiction of
those patents. Please
also file the license agreement as an exhibit to this registration
statement as required by
Item 601(b)(10) of Regulation S-K or explain to us why it is not
material.
16. You disclose on page 125 that you license from FCDI a portfolio of six
patent families
relating to the differentiation of iPSC cells, but we note your
disclosure of only five issued
U.S. patents. Please confirm and expand your disclosure to include all
patents in the six
patent families, along with the type of patent protection provided,
expiration dates and
applicable jurisdictions. Consider adding tabular disclosure in
addition to the narrative for
ease of use.
Century Therapeutics, LLC and Subsidiary Financial Statements
Consolidated statements of operations and comprehensive loss, page F-4
17. Please present historical net loss per units and net loss per share
information and provide
the disclosures required by ASC 260-10-50. Refer to ASC 260-10-15-2.
Note 3. Initial Capitalization, page F-13
18. We note that on June 21, 2019, Prior Century and Bayer entered into a
commitment
agreement to initially capitalize the Company. Please address the
following:
We note that in exchange for issuing 67,226,891 common units to
Prior Century, the
Company acquired substantially all of Prior Century s assets,
assumed all of its
liabilities and assumed the operations of Prior Century and after
Bayer's cash
contributions to the Company, Prior Century owned 78% of the
Company's equity
interests. We further note that notwithstanding its 78% equity
interest, Prior
Century accounts for its investment in the Company under the
equity method of
accounting. With reference to specific terms of Bayer's approval
and veto rights,
please tell us and expand your disclosures to clarify how you
determined that Prior
Century did not retain control the Company; and
Provide us with a sufficiently detailed explanation of how your
determined the fair
value of the 67,226,891 units issued to Prior Century. Expand
your disclosures
herein, or within your Common Stock Critical Accounting Policies
section, to clarify.
Osvaldo Flores
Century Therapeutics, Inc.
April 23, 2021
Page 5
19. We note the relative fair value allocation of the transaction costs
resulted in $225 million
of in-process research and development (IPR&D). Please expand your
disclosures herein,
or within Management's Discussion and Analysis, to describe the
significant
IPR&D projects acquired.
Note 14. Stock-based compensation, page F-22
20. Please disclose the fair value of Prior Century's shares underlying its
options issued to the
Company's employees during the periods presented and how you determined
such fair
values. Please address how you took into consideration the fair value of
the Company's
equity interests as determined in connection with its initial
capitalization as discussed in
Note 3. In this regard, we note that subsequent to the initial
capitalization of the
Company, Prior Century has no significant operations other than its
investment in the
Company.
General
21. Please provide us with supplemental copies of all written communications,
as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
have presented or expect to present to potential investors in reliance on
Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain, copies
of those
communications.
You may contact Christine Torney at 202-551-3652 or Jeanne Baker at
202-551-3691 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jane Park at 202-551-7439 or Laura Crotty at 202-551-7614 with any
other questions.
Sincerely,
FirstName LastNameOsvaldo Flores
Division of
Corporation Finance
Comapany NameCentury Therapeutics, Inc.
Office of Life
Sciences
April 23, 2021 Page 5
cc: Rachael Bushey, Esq.
FirstName LastName