Subsequent Events

Reverse Stock Split

On October 2, 2018, we filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation with the Secretary of State of the state of Delaware to effect a 1-for-12 reverse stock split of our issued and outstanding common stock. The primary purpose of the reverse stock split was to raise the per share trading price of our common stock to seek to maintain the listing of our common stock on The Nasdaq Global Market. At the effective time of the reverse stock split at 5:00 p.m. on October 3, 2018, each 12 shares of our issued and outstanding common stock were automatically combined and converted into one issued and outstanding share of common stock. All of our stock options and RSUs outstanding immediately prior to the reverse stock split were proportionately adjusted. All issued and outstanding common stock, options exercisable for common stock, restricted stock units, and per share amounts contained in our condensed financial statements have been retrospectively adjusted.

Tender Offer

On October 15, 2018, we filed a tender offer statement on Schedule TO with the Securities and Exchange Commission related to an offer by us to certain eligible optionholders, subject to specified conditions, to exchange some or all of their outstanding options to purchase shares of our common stock for new RSUs (the "Exchange Offer"). The Exchange Offer will expire at 5:00 p.m., U.S. Pacific Time, on November 11, 2018, unless extended.

An option holder will be eligible to exchange their options (an “Eligible Holder”) if:


•	on the date the Exchange Offer commences, either an optionholder is employed by us (each, an “Employee”) or is a non-employee member (each, a “Non-Employee Director”) of our board of directors and has not been notified by us that such optionholder’s employment or service relationship with us is being terminated; and


•	such optionholder continues to be an Employee or serve as a Non-Employee Director and has not submitted a notice of resignation or received a notice of termination, as of the first business day following the Expiration Time (as defined in the Exchange Offer).

An option will be eligible for exchange (an “Eligible Option”) if it:


•	is held by an Eligible Holder;


•	has an exercise price equal to or greater than $4.56 (and an exercise price greater than the closing price of our common stock on the last business day before the Expiration Time); and


•	was granted under our 2009 Equity Incentive Plan, 2012 Equity Incentive Plan or 2015 Inducement Plan.

The exchange ratio for each Eligible Option will be determined using the Black-Scholes option pricing model and will be based on, among other things, the fair market value of a share of our common stock, the volatility of our common stock, U.S. treasury rates, the exercise prices of the Eligible Options, the remaining terms of the Eligible Options and the term of the new RSUs. For purposes of determining the fair value of Eligible Options, the fair market value of a share of our common stock will be determined based on the trailing 20-day volume weighted average price (the “20-Day VWAP”). The 20-Day VWAP represents the simple arithmetic average of the daily VWAPs over the 20 consecutive trading days beginning on October 15, 2018 and ending on the last business day prior to the Expiration Time. For purposes of determining the fair value of the new RSUs, the fair market value of a share of our common stock will be determined based on the closing trading price of a share of our common stock on Nasdaq on the last business day prior to the Expiration Time. In no event will an Eligible Optionholder be eligible to receive more new RSUs than the number of shares underlying the number of Eligible Options.

The foregoing is only a summary of the Exchange Offer, does not purport to be complete and is qualified in its entirety by reference to the full text of the Schedule TO, which was filed with the Securities and Exchange Commission on October 15, 2018.

First Amendment to Second Amended and Restated Collaboration and License Agreement

On November 5, 2018, we entered into an amendment to the 2014 Sanofi Amendment with Sanofi to modify the parties’ rights and obligations with respect to our miR-21 programs, including our RG-012 program (the “2018 Sanofi Amendment”).

Under the terms of the 2018 Sanofi Amendment, we have granted Sanofi a worldwide, royalty-free, fee-bearing, exclusive license, with the right to grant sublicenses, under our know-how and patents to develop and commercialize miR-21 compounds and products for all indications, including Alport Syndrome. Sanofi will control and will assume all responsibilities and obligations for developing and commercializing each of our miR-21 programs, including our obligations regarding the administration and expense of clinical trials and all other costs, including in-license royalties and other in-license payments, related to our miR-21 programs. Under the terms of the 2018 Sanofi Amendment, we have assigned to Sanofi certain agreements and all materials directed to miR-21 or to any miR-21 compound or product and are required to provide reasonable technical assistance to Sanofi for a period of 24 months after the date of the 2018 Sanofi Amendment.

Under the terms of the 2018 Sanofi Amendment, we are eligible to receive approximately $6.8 million in upfront payments and a payment for miR-21 program-related materials (collectively, the “Upfront Amendment Payments”). We are also eligible to receive up to $40.0 million in development milestone payments. In addition, Sanofi has agreed to reimburse us for certain out-of-pocket transition activities and assume our upstream license royalty obligations. We and Sanofi also agreed to a general release of claims against each other for any claims that arose at any time prior to the date of the 2018 Sanofi Amendment, or that thereafter could arise based on anything that occurred prior to the date of the 2018 Sanofi Amendment.

Fourth Amendment to Loan and Security Agreement

On November 5, 2018 and in connection with the 2018 Sanofi Amendment we entered into a fourth amendment to the Term Loan with the Lender (the "Fourth Amendment").

Under the terms of the Fourth Amendment, the Lender has consented to the 2018 Sanofi Amendment and our license, assignment and transfer to Sanofi of certain of our intellectual property, as required to be delivered to Sanofi under the 2018 Sanofi Amendment (the “Assigned Assets”), which previously served as collateral under the loan and security agreement, and has released its liens in the Assigned Assets, provided that the Lender will continue to have liens on all proceeds received by us pursuant to the Sanofi License. Under the terms of the Fourth Amendment, we now have the option to prepay part of the Term Loan at any time and in any amount after 10 days’ prior written notice. We are also required to prepay part of the Term Loan with 25% of certain payments we receive under the 2018 Sanofi Amendment, which payments consist of the Upfront Amendment Payments and the first development milestone payment in the amount of $10.0 million. We will be required to pay the applicable 5.5% final payment fee related to each such 2018 Sanofi Amendment prepayment. Under the Fourth Amendment, we are required to maintain cash in a collateral account controlled by the Lender of (i) $10.0 million, if we have not received net proceeds of at least $15.0 million from (a) the issuance and sale of our unsecured subordinated convertible debt and/or equity securities or (b) upfront or milestone payments in connection with a joint venture, collaboration or other partnering transaction, other than pursuant to the Sanofi License (the receipt of such net proceeds, a “Capital Event”), or (ii) $5.0 million if a Capital Event has occurred.

The maturity date of the Term Loan remains unchanged and the Term Loan is required to be paid in full on June 1, 2020.