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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________________

FORM 10-Q

______________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-35921

______________________________________________________

Mirati Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________



Delaware	46-2693615
(State of Incorporation)	(I.R.S. Employer Identification No.)
9393 Towne Centre Drive, Suite 200
San Diego	92121
California	(Zip Code)
(Address of Principal Executive Offices)

(858) 332-3410

(Registrant’s Telephone Number, Including Area Code)

______________________________________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	MRTX	The Nasdaq Stock Market LLC

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 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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 the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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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 financing accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Total shares of common stock outstanding as of the close of business on August 3, 2020:



Class		Number of Shares Outstanding
Common Stock, $0.001 par value		44,540,693

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MIRATI THERAPEUTICS, INC.

FORM 10-Q

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PART I. FINANCIAL INFORMATION		4

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019	5
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2020 and 2019	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION		28

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 6.	Exhibits	53

SIGNATURES		55

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PART I. FINANCIAL INFORMATION



ITEM 1.	Financial Statements

MIRATI THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share amounts)



	June 30, 2020			December 31, 2019
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	131,689		$	46,535
Short-term investments	514,021			368,515
Other current assets	8,327			9,357
Total current assets	654,037			424,407
Property and equipment, net	3,187			1,776
Other long-term assets	6,726			6,017
Total assets	$	663,950		$	432,200
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	56,843		$	48,082
Deferred revenue and other current liabilities	852			824
Total current liabilities	57,695			48,906
Other long-term liabilities	1,251			999
Total liabilities	58,946			49,905
Commitments and contingencies (see Note 11)
Shareholders’ equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding at both June 30, 2020 and December 31, 2019	—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 44,482,308 and 39,517,329 issued and outstanding at June 30, 2020 and December 31, 2019, respectively	45			40
Additional paid-in capital	1,535,490			1,144,667
Accumulated other comprehensive income	11,284			9,889
Accumulated deficit	(941,815		)	(772,301		)
Total shareholders’ equity	605,004			382,295
Total liabilities and shareholders’ equity	$	663,950		$	432,200

See accompanying notes

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MIRATI THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, in thousands, except for share and per share amounts)



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue
License and collaboration revenues	$	—		$	577		$	267		$	1,821
Total revenue	—			577			267			1,821
Operating expenses
Research and development	65,083			38,324			136,791			72,564
General and administrative	19,779			9,894			37,825			19,656
Total operating expenses	84,862			48,218			174,616			92,220
Loss from operations	(84,862		)	(47,641		)	(174,349		)	(90,399		)
Other income, net	2,003			1,946			4,835			3,792
Net loss	$	(82,859	)	$	(45,695	)	$	(169,514	)	$	(86,607	)
Unrealized gain on available-for-sale investments	1,577			151			1,395			309
Comprehensive loss	$	(81,282	)	$	(45,544	)	$	(168,119	)	$	(86,298	)
Basic and diluted net loss per share	$	(1.89	)	$	(1.26	)	$	(3.91	)	$	(2.43	)
Weighted average number of shares used in computing net loss per share, basic and diluted	43,825,723			36,173,605			43,356,207			35,580,279

See accompanying notes

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Mirati Therapeutics, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited, in thousands, except share data)



Three Months Ended June 30, 2020
	Common Stock			Additional paid-in capital			Accumulated other comprehensive income		Accumulated deficit			Total shareholders' equity

	Shares	Amount
Balance at March 31, 2020	43,552,312	$	44	$	1,505,431		$	9,707	$	(858,956	)	$	656,226
Net loss for the period	—	—		—			—		(82,859		)	(82,859		)
Share-based compensation expense	—	—		20,787			—		—			20,787
Issuance of common stock from 2013 Employee Stock Purchase Plan ("ESPP")	6,207	—		524			—		—			524
Issuance of common stock under equity incentive plans	323,789	—		8,749			—		—			8,749
Net exercise of warrants	600,000	1		(1		)	—		—			—
Unrealized gain on investments	—	—		—			1,577		—			1,577
Balance at June 30, 2020	44,482,308	$	45	$	1,535,490		$	11,284	$	(941,815	)	$	605,004



Three Months Ended June 30, 2019
	Common Stock			Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit			Total shareholders' equity

	Shares	Amount
Balance at March 31, 2019	36,029,093	$	36	$	873,838	$	9,637	$	(599,957	)	$	283,554
Net loss for the period	—	—		—		—		(45,695		)	(45,695		)
Issuance of common stock, net of issuance costs	2,415,000	3		219,924		—		—			219,927
Share-based compensation expense	—	—		12,589		—		—			12,589
Issuance of common stock from ESPP	9,844	—		323		—		—			323
Issuance of common stock under equity incentive plans	97,489	—		1,632		—		—			1,632
Unrealized gain on investments	—	—		—		151		—			151
Balance at June 30, 2019	38,551,426	$	39	$	1,108,306	$	9,788	$	(645,652	)	$	472,481

See accompanying notes

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Mirati Therapeutics, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited, in thousands, except share data)



Six Months Ended June 30, 2020
	Common Stock			Additional paid-in capital			Accumulated other comprehensive income		Accumulated deficit			Total shareholders' equity

	Shares	Amount
Balance at December 31, 2019	39,517,329	$	40	$	1,144,667		$	9,889	$	(772,301	)	$	382,295
Net loss for the period	—	—		—			—		(169,514		)	(169,514		)
Issuance of common stock, net of issuance costs	3,538,462	4		323,973			—		—			323,977
Share-based compensation expense	—	—		42,354			—		—			42,354
Issuance of common stock from ESPP	6,207	—		524			—		—			524
Issuance of common stock under equity incentive plans	820,310	—		23,932			—		—			23,932
Net exercise of warrants	600,000	1		(1		)	—		—			—
Proceeds from disgorgement of shareholders' short-swing profits	—	—		41			—		—			41
Unrealized gain on investments	—	—		—			1,395		—			1,395
Balance at June 30, 2020	44,482,308	$	45	$	1,535,490		$	11,284	$	(941,815	)	$	605,004



Six Months Ended June 30, 2019
	Common Stock			Additional paid-in capital			Accumulated other comprehensive income		Accumulated deficit			Total shareholders' equity

	Shares	Amount
Balance at December 31, 2018	32,538,857	$	33	$	751,109		$	9,479	$	(559,045	)	$	201,576
Net loss for the period	—	—		—			—		(86,607		)	(86,607		)
Issuance of common stock, net of issuance costs	4,269,838	5		327,805			—		—			327,810
Share-based compensation expense	—	—		23,720			—		—			23,720
Issuance of common stock from ESPP	9,844			323								323
Issuance of common stock under equity incentive plans	332,887	—		4,300			—		—			4,300
Net exercise of warrants	1,400,000	1		(1		)	—		—			—
Proceeds from disgorgement of shareholders' short-swing profits	—	—		1,050			—		—			1,050
Unrealized gain on investments	—	—		—			309		—			309
Balance at June 30, 2019	38,551,426	$	39	$	1,108,306		$	9,788	$	(645,652	)	$	472,481

See accompanying notes

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MIRATI THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)



	Six Months Ended June 30,
	2020			2019
Operating activities:
Net loss	$	(169,514	)	$	(86,607	)
Non-cash adjustments reconciling net loss to operating cash flows:
Depreciation of property and equipment	253			99
Accretion of discount on investments	(863		)	(1,964		)
Share-based compensation expense	42,354			23,720
Changes in operating assets and liabilities:
Other current assets	1,029			(6,313		)
Other long-term assets	(409		)	(3,982		)
Accounts payable, accrued liabilities, deferred revenue and other liabilities	8,803			2,097
Cash flows used in operating activities	(118,347		)	(72,950		)
Investing activities:
Purchases of short-term investments	(384,127		)	(212,666		)
Sales and maturities of short-term investments	240,878			171,600
Purchases of property, plant, and equipment	(1,425		)	(69		)
Cash flows used in investing activities	(144,674		)	(41,135		)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs	323,977			327,810
Proceeds from issuance of common stock under equity incentive plans	23,932			4,300
Proceeds from disgorgement of shareholders' short-swing profits	41			1,050
Proceeds from stock issuances under employee stock purchase plan	524			323
Cash flows provided by financing activities	348,474			333,483
Increase in cash, cash equivalents and restricted cash	85,453			219,398
Cash, cash equivalents and restricted cash, beginning of period	46,856			32,694
Cash, cash equivalents and restricted cash, end of period	$	132,309		$	252,092

Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents	$	131,689		$	252,092
Restricted cash included in other long-term assets	620			—
Total cash, cash equivalents and restricted cash	$	132,309		$	252,092

Supplemental disclosures of non-cash investing activities:
Purchases of property, plant, and equipment included within accounts payable and accrued liabilities	$	239		$	—

See accompanying notes

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MIRATI THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

June 30, 2020

(Unaudited)

1. Description of Business

Mirati Therapeutics, Inc. ("Mirati" or the "Company") is a clinical-stage oncology company developing product candidates to address the genetic and immunological promoters of cancer. The Company was incorporated under the laws of the State of Delaware on April 29, 2013 as Mirati Therapeutics, Inc. and is located in San Diego, California. The Company has a wholly owned subsidiary in Canada, MethylGene, Inc., and operates in one business segment, primarily in the United States. The Company's common stock has been listed on the Nasdaq Global Select Market since June 5, 2018, and was previously listed on the Nasdaq Capital Market since July 15, 2013, under the ticker symbol "MRTX."

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been omitted.

In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Use of Estimates

The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Cash, Cash Equivalents and Short-term Investments

Cash and cash equivalents consist of cash and highly liquid securities with original maturities at the date of acquisition of ninety days or less. Investments with an original maturity of more than ninety days are considered short-term investments and have been classified by management as available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from sales of these securities to fund its operations, as necessary. Such investments are carried at fair value, and the unrealized gains and losses are reported as a component of accumulated other comprehensive income in shareholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis.

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Concentration of Credit Risk

The Company invests its excess cash in accordance with its investment policy. The Company's investments are comprised primarily of commercial paper and debt instruments of financial institutions, corporations, U.S. government-sponsored agencies and the U.S. Treasury. The Company mitigates credit risk by maintaining a diversified portfolio and limiting the amount of investment exposure as to institution, maturity and investment type. Financial instruments that potentially subject the Company to significant credit risk consist principally of cash equivalents and short-term investments.

Revenue Recognition

The Company recognizes revenue in connection with a collaboration and license agreement in accordance with the guidance of Revenue From Contracts With Customers, Accounting Standards Codification ("ASC") Topic 606 ("Topic 606"). Under Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements the Company determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Net Loss per Share

Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents as they are anti-dilutive. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of shares that may be issued under the Company’s stock option and warrant agreements.

The following table presents the weighted-average number of common share equivalents, calculated using the treasury stock method, not included in the calculation of diluted net loss per share due to the anti-dilutive effect of the securities:



	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Common stock options	2,112,690	2,371,908	2,145,789	2,347,335
Common stock warrants	9,623,913	10,417,753	9,658,342	10,710,055
Total	11,736,603	12,789,661	11,804,131	13,057,390

3. Recently Adopted and Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, entities are required to use a new forward-looking expected loss model that generally results in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the losses are recognized as allowances rather than as reductions in the amortized cost of the securities. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years. Effective January 1, 2020, the Company adopted the provisions of ASU 2016-13. The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

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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. The new guidance modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Effective January 1, 2020, the Company adopted the provisions of ASU 2018-13. The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update includes removing several exceptions under the existing guidance and includes several simplification updates, none of which apply to the Company's current accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. Effective January 1, 2020, the Company early adopted this updated guidance and it did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

4. Short-Term Investments

The following tables summarize the Company's short-term investments (dollars in thousands):



		As of June 30, 2020
	Maturity	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Corporate debt securities	2 years or less	$	177,244	$	1,044	$	—		$	178,288
Commercial paper	1 year or less	233,296		594		(1		)	233,889
U.S. Agency bonds	2 years or less	38,308		75		(1		)	38,382
U.S. Treasury bills	1 year or less	63,411		52		(1		)	63,462
		$	512,259	$	1,765	$	(3	)	$	514,021



		As of December 31, 2019
	Maturity	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Corporate debt securities	2 years or less	$	160,065	$	233	$	(1	)	$	160,297
Commercial paper	1 year or less	120,862		74		—			120,936
U.S. Agency bonds	2 years or less	50,745		41		(4		)	50,782
U.S. Treasury bills	2 years or less	36,474		27		(1		)	36,500
		$	368,146	$	375	$	(6	)	$	368,515

The Company has classified all of its investment securities as available-for-sale as the sale of such securities may be required prior to maturity to implement management strategies, and accordingly, carries these investments at fair value. As of June 30, 2020, and December 31, 2019, aggregated gross unrealized losses of available-for-sale investments were not material, and accordingly, no allowance for credit losses was recorded as of June 30, 2020.

5. Fair Value Measurements

The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1 or 2 within the fair value hierarchy as described in the accounting standards for fair value measurements.

The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy:


•	Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities;


•	Level 2- Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

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•	Level 3- Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The following tables summarize the assets measured at fair value on a recurring basis (in thousands):



	June 30, 2020
	Total		Level 1		Level 2
Assets
Cash and cash equivalents:
Cash	$	12,198	$	12,198	$	—
Money market funds	119,491		119,491		—
Total cash and cash equivalents	131,689		131,689		—

Short-term investments:
U.S. Treasury bills	63,462		63,462		—
Corporate debt securities	178,288		—		178,288
Commercial paper	233,889		—		233,889
U.S. Agency bonds	38,382		—		38,382
Total short-term investments	514,021		63,462		450,559
Total	$	645,710	$	195,151	$	450,559



	December 31, 2019
	Total		Level 1		Level 2
Assets
Cash and cash equivalents:
Cash	$	662	$	662	$	—
Money market funds	45,873		45,873		—
Total cash and cash equivalents	46,535		46,535		—

Short-term investments:
U.S. Treasury bills	36,500		36,500		—
Corporate debt securities	160,297		—		160,297
Commercial paper	120,936		—		120,936
U.S. Agency bonds	50,782		—		50,782
Total short-term investments	368,515		36,500		332,015
Total	$	415,050	$	83,035	$	332,015

The Company’s investments in Level 1 assets are valued based on publicly available quoted market prices for identical securities as of June 30, 2020 and December 31, 2019. The Company determines the fair value of Level 2 related securities with the aid of valuations provided by third parties using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids and/or offers. There were no transfers between fair value measurement levels during the three and six months ended June 30, 2020 or the year ended December 31, 2019.

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6. Other Current Assets and Other Long-Term Assets

Other current assets consisted of the following (in thousands):



	June 30,		December 31,
	2020		2019
Prepaid expenses	$	5,043	$	5,672
Deposits and other receivables	1,471		2,119
Interest receivable	1,813		1,566
	$	8,327	$	9,357

The other long-term assets balance as of June 30, 2020 consisted of $5.4 million in deposits paid in conjunction with the Company's research and development activities, $0.7 million for an operating right-of-use asset for the Company's corporate headquarters, and $0.6 million for a security deposit in connection with the lease of the Company's future corporate headquarters. As of December 31, 2019, the other long-term assets balance consisted of $5.1 million in deposits paid in conjunction with the Company's research and development activities, $0.6 million for an operating right-of-use asset for the Company's corporate headquarters, and $0.3 million for a security deposit in connection with the lease of the Company's future corporate headquarters.

7. Property and Equipment, Net

Property and equipment consisted of the following (in thousands):



	June 30,			December 31,
	2020			2019
Computer equipment	$	201		$	201
Office and other equipment	329			329
Laboratory equipment	2,791			2,212
Leasehold improvements	63			63
Assets not placed in service	1,085			—
Gross property and equipment	4,469			2,805
Less: Accumulated depreciation	(1,282		)	(1,029		)
Property and equipment, net	$	3,187		$	1,776

The Company incurred $0.1 million and immaterial depreciation expense for the three months ended June 30, 2020 and 2019, and $0.3 million and $0.1 million for the six months ended June 30, 2020 and 2019, respectively.

8. Accounts Payable, Accrued Liabilities and Long-Term Liabilities

Accounts payable and accrued liabilities consisted of the following (in thousands):



	June 30,		December 31,
	2020		2019
Accounts payable	$	24,099	$	16,367
Accrued clinical expense	22,920		21,290
Accrued development and other expense	4,743		2,510
Accrued compensation and benefits	5,081		7,915
	$	56,843	$	48,082

The long-term liabilities balance of $1.3 million as of June 30, 2020, and $1.0 million as of December 31, 2019, consisted primarily of clinical trial-related liabilities.

9. Collaboration Agreements

BeiGene Agreement

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Terms of Agreement

On January 7, 2018, the Company and BeiGene Ltd, ("BeiGene") entered into a Collaboration and License Agreement (the “Agreement”), pursuant to which the Company and BeiGene agreed to collaboratively develop sitravatinib in Asia (excluding Japan and certain other countries), Australia and New Zealand (the “Licensed Territory”). Under the Agreement, the Company granted BeiGene an exclusive license to develop, manufacture and commercialize sitravatinib in the Licensed Territory, with the Company retaining exclusive rights for the development, manufacture and commercialization of sitravatinib outside the Licensed Territory.

As consideration for the rights granted to BeiGene under the Agreement, BeiGene paid the Company a non-refundable, non-creditable up-front fee of $10.0 million. BeiGene is also required to make milestone payments to the Company of up to an aggregate of $123.0 million upon the first achievement of specified clinical, regulatory and sales milestones. The Agreement additionally provides that BeiGene is obligated to pay to the Company royalties at tiered percentage rates ranging from mid-single digits to twenty percent on annual net sales of licensed products in the Licensed Territory, subject to reduction under specified circumstances. The Agreement also provides that the Company will supply BeiGene with sitravatinib for use in BeiGene’s development activities in the Licensed Territory.

The Agreement will terminate upon the expiration of the last royalty term for the licensed products, which is the latest of (i) the date of expiration of the last valid patent claim related to the licensed products under the Agreement, (ii) 10 years after the first commercial sale of a licensed product and (iii) the expiration of any regulatory exclusivity as to a licensed product. BeiGene may terminate the Agreement at any time by providing 60 days prior written notice to the Company. Either party may terminate the Agreement upon a material breach by the other party that remains uncured following 60 days after the date of written notice of such breach or upon certain bankruptcy events. In addition, the Company may terminate the Agreement upon written notice to BeiGene under specified circumstances if BeiGene challenges the licensed patent rights.

Revenue Recognition

The Company evaluated the Agreement under Topic 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under the Agreement, the Company performed the following steps: (i) identified the promised goods or services in the contract; (ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measured the transaction price, including any constraints on variable consideration; (iv) allocated the transaction price to the performance obligations; and (v) recognized revenue when (or as) the Company satisfied each performance obligation.

The Company determined the transaction price is equal to the up-front fee of $10.0 million. The transaction price was allocated to the performance obligations on the basis of the relative stand-alone selling price estimated for each performance obligation. In estimating the stand-alone selling price for each performance obligation, the Company developed assumptions that require judgment and included forecasted revenues, expected development timelines, discount rates, probabilities of technical and regulatory success and costs for manufacturing clinical supplies. As such, of the up-front fee, the Company allocated $9.5 million to the license to the Company's intellectual property, bundled with the associated know-how, and $0.5 million to the initial obligation to supply sitravatinib for clinical development in the Licensed Territory.

Licenses of Intellectual Property. The license to the Company’s intellectual property, bundled with the associated know-how, represents a distinct performance obligation. The license and associated know-how was transferred to BeiGene during the three months ended March 31, 2018, therefore during 2018 the Company recognized the full revenue amount of $9.5 million related to this performance obligation as license and collaboration revenues in its condensed consolidated statements of operations and comprehensive loss; no revenue related to this performance obligation was recorded during the three and six months ended June 30, 2020 or 2019.

Manufacturing Supply Services. The Company's initial obligation to supply sitravatinib for clinical development in the Licensed Territory represents a distinct performance obligation. The Company recognizes revenue when BeiGene obtains control of the goods, upon delivery, over the period of the obligation, which began in late 2018 and will continue into 2020. No revenue related to this performance obligation was recognized for the three months ended June 30, 2020. The Company recognized $0.6 million as license and collaboration revenues for this performance obligation for the three months ended June 30, 2019, primarily consisting of cost-sharing payments due from BeiGene. The Company recognized $0.3 million as license and collaboration revenues for this performance obligation for the six months ended June 30, 2020, primarily consisting of cost-sharing payments due from BeiGene. The Company recognized $1.8 million as license and collaboration revenues for this performance obligation for the six months ended June 30, 2019, of which $1.6 million relates to cost-sharing payments due from BeiGene and $0.2 million relates to recognition from the deferred revenue balance.

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Milestone Payments. The Company is entitled to development milestones under the agreement. The next clinical development milestone is for BeiGene initiating the first pivotal clinical trial in the Licensed Territory upon which the Company will be paid a $5.0 million milestone payment. The Company is also entitled to certain regulatory milestone payments which are paid upon receipt of regulatory approvals within the Licensed Territory. No milestone payments were earned during the three and six months ended June 30, 2020 or 2019. The Company evaluated whether the remaining milestones are considered probable of being reached and determined that their achievement is highly dependent on factors outside of the Company's control. Therefore, these payments have been fully constrained and are not included in the transaction price. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement of each milestone and any related constraint, and if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect the reported amount of license and collaboration revenues in the period of adjustment.

Royalties. As the license is deemed to be the predominant item to which sales-based royalties relate, the Company will recognize revenue when the related sales occur. No royalty revenue was recognized during the three and six months ended June 30, 2020 or 2019.

The following table presents a summary of the activity in the Company's contract liabilities during the six months ended June 30, 2020 (in thousands):



Opening balance, January 1, 2020	$	(172	)
Revenue from performance obligations satisfied during reporting period	29
Closing balance, June 30, 2020	$	(143	)

The closing balance represents deferred revenue and was classified within current liabilities at June 30, 2020.

Pfizer Agreement

In October 2014, the Company entered into a drug discovery collaboration and option agreement with Array BioPharma, Inc. ("Array," acquired by Pfizer Inc. during 2019) whereby Array provided services to facilitate the discovery, optimization and development of small molecule compounds that bind and specifically inhibit KRAS G12C. In June 2017, the two parties entered into a second, separate discovery collaboration and option agreement whereby Array provided services to facilitate the discovery, optimization and development of small molecule compounds that bind and specifically inhibit KRAS G12D. Both agreements established an option mechanism which enabled the Company to elect an exclusive worldwide license under the technology for the development and commercialization of certain products based on such compounds.

Under the agreements, following the joint discovery periods which have concluded, the Company executed its options to retain exclusive worldwide licenses to develop, manufacture and commercialize inhibitors of KRAS G12C and KRAS G12D, including but not limited to, MRTX849 and MRTX1133. Under each agreement, Pfizer is entitled to potential development milestone payments of up to $9.3 million, and tiered sales milestone payments of up to $337.0 million based upon worldwide net sales, and tiered royalties in the high single digits to mid-teens on worldwide net sales of products arising from the collaborations. Under the agreements, the Company has incurred $4.3 million in development milestone payments from inception through June 30, 2020.

The royalty term for each agreement shall be payable on a country-by-country and product-by-product basis, and separately will terminate at the later of (i) the date of expiration of the last valid patent claim within the collaboration patent rights or the Pfizer background technology covering such product in the country in which such product is sold at the time of such sale, or (ii) 10 years after the first commercial sale of such product in such country. The Company may terminate each agreement at any time by providing 60 days prior written notice to Pfizer. Either party may terminate each agreement upon a material breach by the other party that remains uncured following 60 days after the date of written notice of such breach or upon certain bankruptcy events.

No expense was incurred under these agreements for the three months ended June 30, 2020. For the six months ended June 30, 2020, the Company incurred expenses under these agreements with Pfizer of $4.5 million, consisting of a $3.0 million milestone payment for initiation of the first Phase 2 trial for MRTX849, and $1.5 million in research and development services. For the three months ended June 30, 2019, the Company incurred expense of $1.5 million, consisting of research and development

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services. For the six months ended June 30, 2019, the Company incurred expense of $4.0 million, consisting of a $1.0 million milestone payment for initiation of the first Phase 1 trial for MRTX849, and $3.0 million in research and development services.

10. Warrants

As of June 30, 2020, the following warrants for common stock were issued and outstanding:



Issue date	Expiration date	Exercise price		Number of warrants outstanding
January 11, 2017	None	$	0.001	4,533,224
November 20, 2017	None	$	0.001	4,137,999
June 11, 2018	None	$	0.001	421,650
				9,092,873

During the three and six months ended June 30, 2020, 600,006 warrants for shares of the Company's common stock were exercised via cashless exercise, resulting in the issuance of 600,000 shares of common stock. No warrants were exercised during the three months ended June 30, 2019. During the six months ended June 30, 2019, 1,400,025 warrants for shares of the Company's common stock were exercised via cashless exercise, resulting in the issuance of 1,400,000 shares of common stock.

11. Commitments and Contingencies

On June 24, 2014, the Company entered into a lease agreement for completed office and laboratory space located in San Diego, California. The office space under the lease is the Company's corporate headquarters. The lease commenced in two phases (in July 2014 and March 2015) at a combined total initial monthly rent of $24,100 per month. The leased property is subject to a 3% annual rent increase following availability. In addition to such base monthly rent, the Company is obligated to pay certain customary amounts for its share of operating expenses and facility amenities. The original lease provided for expiration on January 31, 2018. On March 23, 2017, the Company entered into a First Amendment to Lease Agreement to amend the original lease agreement and to extend the term of the original lease for one year through January 31, 2019. On April 5, 2018, the Company entered into a Second Amendment to Lease Agreement to extend the lease term through January 31, 2020. On August 2, 2018, the Company entered into a Third Amendment to Lease Agreement to expand the size of the existing space for an additional base rent of $4,000 per month. On October 30, 2019, the Company entered into a Fourth Amendment to Lease Agreement to extend the lease term to approximately October 1, 2020, and to expand the size of the existing space for no additional base rent. On March 4, 2020, the Company entered into a Fifth Amendment to Lease Agreement to expand the size of the existing space for no additional base rent. All other terms and covenants from the original lease agreement remain unchanged.

The Company's building lease is considered to be an operating lease. The lease agreement indicates the interest rate applicable to the lease is 12%, therefore the Company used a discount rate of 12% to calculate the value of its lease obligations. The Company recorded less than $0.1 million and $0.1 million in operating lease cost for the three months ended June 30, 2020 and 2019, respectively. The Company recorded $0.1 million and $0.2 million in operating lease cost for the six months ended June 30, 2020 and 2019, respectively. The building lease has a remaining lease term of under one year from June 30, 2020. As of June 30, 2020, the condensed consolidated balance sheet includes a $0.7 million operating right-of-use asset within other long-term assets, and a $0.7 million operating lease liability in deferred revenue and other current liabilities, and remaining lease payments on an undiscounted basis are $0.2 million for 2020 and $0.1 million for 2021.

On June 30, 2020, the Company entered into an amended and restated lease agreement (the "Amended and Restated Lease") for office and laboratory space located in San Diego, California, for the Company's future corporate headquarters. The Amended and Restated Lease supersedes in its entirety the original lease agreement for the Company's future corporate headquarters dated as of August 22, 2019. The commencement date of the Amended and Restated Lease is expected to be March 22, 2021, and the Amended and Restated Lease will have a lease term of 12 years ("Lease Term"), unless terminated earlier. The Lease Term has an initial abatement period, and the initial base rent payable will be approximately $0.6 million per month following the abatement period, which amount will increase by 3% per year over the Lease Term. The Company has also received customary incentives from the landlord for tenant improvements, which effectively reduce the total lease payments owed for the lease. As of June 30, 2020, the Company had not taken control of the space and the Lease Term had not commenced. Accordingly, no right-of-use asset or lease liability related to the lease has been recorded.

12. Shareholders' Equity

Sale of Common Stock

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In January 2020, the Company sold 3,538,462 shares of its common stock at a public offering price of $97.50 per share. After deducting underwriter discounts, commissions and offering expenses, the Company received net proceeds from the transaction of $324.0 million.

In June 2019, the Company sold 2,415,000 shares of its common stock at a public offering price at $97.00 per share. After deducting underwriter discounts, commissions and offering expenses, the Company received net proceeds from the transaction of $219.9 million.

In January 2019, the Company sold 1,854,838 shares of its common stock at a public offering price of $62.00 per share. After deducting underwriter discounts, commissions and offering expenses, the Company received net cash proceeds from the transaction of $107.9 million.

Share-based Compensation

Total share-based compensation expense by statement of operations and comprehensive loss classification is presented below (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Research and development expense	$	11,457	$	6,611	$	23,305	$	11,768
General and administrative expense	9,330		5,978		19,049		11,952
	$	20,787	$	12,589	$	42,354	$	23,720

During the three and six months ended June 30, 2020, 323,789 and 820,310 shares were issued under our equity incentive plans, generating net proceeds of $8.7 million and $23.9 million, respectively. During the three and six months ended June 30, 2019, 97,489 and 332,887 shares were issued under our equity incentive plans, generating net proceeds of $1.6 million and $4.3 million, respectively.

Disgorgement Proceeds

In January 2019, the Company received a payment of $1.1 million, representing a disgorgement of short-swing profits from the sale of common stock by a beneficial owner pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended. In January 2020, the Company received an immaterial disgorgement of short-swing profits. The Company recognized these proceeds as a capital contribution from shareholders and reflected a corresponding increase to additional paid-in capital.

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13. Subsequent Event

At the Market Facility

On July 2, 2020, the Company entered into a sales agreement pursuant to which the Company may, from time to time, sell shares of the Company's common stock, par value $0.001 per share, having an aggregate offering price of up to $200.0 million.

ORIC Pharmaceuticals Agreement

On August 3, 2020, the Company entered into a license agreement with ORIC Pharmaceuticals, Inc. ("ORIC") under which it granted an exclusive worldwide license to develop and commercialize small molecule inhibitors of the polycomb repressive complex 2, or PRC2 (the "ORIC Agreement"). Under the terms of the ORIC Agreement, Mirati received a one-time non-cash payment of $20.0 million in shares of ORIC common stock. The number of shares issued to the Company were based on a price of $34.00 per share, representing a premium of 10% to the 60-day volume weighted average trading price of ORIC shares. Mirati’s obligation under the ORIC Agreement is to transfer the licensed technology to ORIC.

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ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included in this Quarterly Report on Form 1O-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2019 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed by us with the Securities and Exchange Commission ("SEC").

This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such forward-looking statements, which represent our intent, belief, or current expectations, involve risks and uncertainties. We use words such as “may,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “predict,” “potential,” “believe,” “should” and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such statements may include, but are not limited to, statements concerning projections about our accounting and finances, plans and objectives for the future, future operating and economic performance and other statements regarding future performance. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q. As a result of many factors, including without limitation those set forth under “Risk Factors” under Item 1A of Part II below, and elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.

References in the following discussion to "we," "our," "us," "Mirati" or "the Company" refer to Mirati Therapeutics, Inc. and its subsidiaries.

Overview

Mirati Therapeutics, Inc. is a clinical-stage oncology company developing product candidates to address the genetic and immunological promoters of cancer. Our KRAS inhibitor programs are focused on developing novel inhibitors of KRAS mutations and includes one clinical program and a preclinical program. In immuno-oncology, we are advancing our kinase inhibitor clinical program where our product candidate has the potential to improve the immune environment of tumor cells and enhance and expand the efficacy of existing cancer immunotherapy medicines when given in combination. We also have additional preclinical programs which include potentially first-in-class and best-in-class product candidates specifically designed to address mutations and tumors where few treatment options exist. We approach each of our discovery and development programs with a singular focus: to translate our deep understanding of the molecular drivers of cancer into better therapies and better outcomes for patients.

Our clinical programs consist of two product candidates: MRTX849, a KRAS G12C inhibitor, and sitravatinib, a multi-kinase inhibitor. Our preclinical pipeline includes MRTX1133, a KRAS G12D inhibitor, and other discovery stage programs.

KRAS Inhibitor Programs

The RAS family of genes is the most commonly mutated oncogene and mutations in this gene family occur in up to approximately 25% of all human cancers. Among the RAS family members, mutations most frequently occur in KRAS (approximately 85% of all RAS family mutations). Tumors characterized by KRAS mutations are commonly associated with poor prognosis and resistance to therapy. Nonclinical studies have demonstrated that cancer cells exhibiting KRAS mutations are highly dependent on KRAS function for cell growth and survival. Historically, KRAS has been extremely difficult to directly inhibit due to the absence of a tractable small molecule drug binding site. Our KRAS inhibitor programs are focused on the discovery and development of small molecule compounds that target KRAS G12C and G12D. We are pursuing development of our KRAS G12C and KRAS G12D inhibitor programs in both single agent and rational combination approaches.

MRTX849, a KRAS G12C inhibitor

Background

MRTX849, our lead KRAS G12C compound, is an investigational, specific, potent and orally available small molecule. MRTX849 is designed to directly inhibit KRAS G12C mutations. KRAS G12C mutations are present in approximately 14% of non-small cell lung cancer (“NSCLC”) adenocarcinoma patients, 4% of colorectal cancer (“CRC”) patients, 2% of pancreatic

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cancer patients, as well as smaller percentages of several other difficult-to-treat cancers. Based on observed preclinical attributes, we believe MRTX849 has the potential to be a best-in-class product candidate for the suppression of G12C mutant KRAS signaling. Single agent treatment with MRTX849 has shown complete regression in a subset of KRAS G12C-positive human tumor models implanted in mice.

Program Update

We received U.S. Food and Drug Administration (“FDA”) authorization of our investigational new drug application ("IND") for MRTX849 in November 2018, and on January 15, 2019, we announced that we had dosed the first patient in the dose escalation phase of a Phase 1/2 clinical trial in patients with advanced solid tumors that harbor G12C mutations. This trial is designed to enable expansion of the single agent cohorts and could potentially serve as the basis of a new drug application (“NDA”) submission seeking accelerated approval by the FDA. This trial also enables exploratory combination cohorts. Following single agent dose escalation, we are expanding into cohorts that include patients with NSCLC, CRC and those with other tumors that carry the G12C mutation. In the first quarter of 2020, we have initiated enrollment in a registration enabling cohort as a monotherapy in NSCLC.

On October 28, 2019, we reported the first interim clinical data from this Phase 1/2 clinical trial in a presentation at the 2019 American Association for Cancer Research-National Cancer Institute-European Organisation for Research and Treatment of Cancer (“AACR-NCI-EORTC”) International Conference on Molecular Targets and Cancer Therapeutics in Boston, Massachusetts. As of October 11, 2019, the trial had enrolled 17 patients, including 10 patients with NSCLC, four patients with CRC, and three patients with other tumor types. Five dose cohorts have been evaluated: 150 mg, 300 mg, 600 mg, and 1200 mg, taken orally once daily (“QD”), and 600 mg, taken orally twice daily (“BID”). The trial enrolled single patient dose escalation cohorts in an accelerated titration design. Trial objectives include evaluation of safety, tolerability, pharmacodynamics, pharmacokinetics (“PK”) and tumor response evaluated using RECIST v1.1 criteria.

As of the data cut-off date of October 11, 2019, 12 patients across all dose levels were evaluable for response with at least one radiographic scan.


•	At the highest dose (600 mg BID), three of five evaluable patients with NSCLC and one of two evaluable patients with CRC achieved a Partial Response ("PR"), and the remaining patients experienced stable disease.


•	Across all dose levels, three of six patients with NSCLC and one of four patients with CRC achieved a PR. Two responding patients (one with NSCLC and one with CRC) achieved confirmed PRs, both with continuing tumor shrinkage following their first scan. The other two patients with PRs (both NSCLC) remain on study but have not yet had confirmatory scans.


•	Clinical PK data demonstrated that the dose of 600 mg BID results in drug levels that meet or exceed those likely to lead to full inhibition of KRAS G12C signaling.


•	Treatment duration across all dose levels ranged from 6.7- 38.6 weeks for patients with NSCLC and 9.9-30.1 weeks for patients with CRC as of the data cut-off.

Treatment-related adverse events were primarily grade 1 events. One patient experienced a dose-limiting toxicity ("DLT") at the 1200 mg QD dose (capsule burden intolerance 12 capsules) and one patient experienced a DLT at the 600 mg BID dose (grade 3/4 isolated amylase/lipase increase). The maximum tolerated dose was not established and further dose escalation may be explored. Enrollment into dose expansion at the 600 mg BID dose is underway.

MRTX849 Development in Collaboration with Novartis Pharmaceuticals Corporation ("Novartis")

In July 2019, we announced a clinical collaboration agreement with Novartis to evaluate the combination of MRTX849 and Novartis’ investigational SHP2 inhibitor, TNO155, in patients with advanced solid tumors that harbor G12C mutations. Under the terms of the non-exclusive collaboration, we will sponsor the trial and we and Novartis will jointly oversee and share the costs of clinical development activities for the combined therapy. Novartis will provide TNO155 at no cost. This clinical trial is currently enrolling patients.

MRTX1133, a KRAS G12D inhibitor

MRTX1133, our lead KRAS G12D compound, has been identified as a clinical development candidate and is a potent and selective inhibitor of KRAS G12D. KRAS G12D mutations have been detected in over 25 different types of cancer, including pancreatic, colon, lung and endometrial adenocarcinoma. The prevalence of cancers harboring KRAS G12D mutations exceeds

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the prevalence of KRAS G12C positive cancers by greater than two-fold and is an area of significant unmet medical need. MRTX1133 is presently advancing through IND-enabling preclinical studies, including regulatory toxicology studies and clinical trial manufacturing activities, and plan to file an IND in the first half of 2021.

MRTX849 and MRTX1133 Discovery Collaboration with Pfizer Inc. ("Pfizer")

In October 2014, we entered into a drug discovery collaboration and option agreement with Array BioPharma, Inc. ("Array," acquired by Pfizer during 2019) whereby Array provided services to facilitate the discovery, optimization and development of small molecule compounds that bind and specifically inhibit KRAS G12C. In June 2017, the two parties entered into a second, separate discovery collaboration and option agreement whereby Array provided services to facilitate the discovery, optimization and development of small molecule compounds that bind and specifically inhibit KRAS G12D. Both agreements established an option mechanism which enabled the Company to elect an exclusive worldwide license under the technology for the development and commercialization of certain products based on such compounds.

Under the agreements, following the joint discovery periods which have concluded, we executed our options to retain exclusive worldwide licenses to develop, manufacture and commercialize inhibitors of KRAS G12C and KRAS G12D, including but not limited to, MRTX849 and MRTX1133. Under each agreement, Pfizer is entitled to potential development milestone payments of up to $9.3 million, and tiered sales milestone payments of up to $337.0 million based upon worldwide net sales, and tiered royalties in the high single digits to mid-teens on worldwide net sales of products arising from the collaborations. Under the agreements, we have incurred $4.3 million in development milestone payments from inception through June 30, 2020.

Sitravatinib

Sitravatinib is a spectrum-selective kinase inhibitor designed to potently inhibit receptor tyrosine kinases (“RTK”s), including TAM family receptors (TYRO3, Axl, Mer), split family receptors (VEGFR2, KIT) and RET. Sitravatinib is an investigational agent that is being evaluated in combination with immune checkpoint inhibitors.

Sitravatinib’s potent inhibition of TAM and split family RTKs may overcome resistance to checkpoint inhibitor therapy through targeted reversal of an immunosuppressive tumor microenvironment, enhancing antigen-specific T cell response and expanding dendritic cell-dependent antigen presentation. As an immuno-oncology agent, sitravatinib is being evaluated in combination with nivolumab (OPDIVO®), Bristol-Myers Squibb Company’s (“BMS”) anti-PD-1 checkpoint inhibitor, in patients with NSCLC who have experienced documented disease progression following treatment with a checkpoint inhibitor. Sitravatinib is also being developed in certain Asian territories in collaboration with BeiGene, Ltd. (“BeiGene”) which is evaluating sitravatinib in combination with tislelizumab, BeiGene’s investigational anti-PD-1 checkpoint inhibitor, in a number of advanced solid tumors.

Sitravatinib in Combination with Nivolumab

In an ongoing Phase 2 clinical trial, we are evaluating sitravatinib in combination with nivolumab in patients with NSCLC who have experienced documented disease progression following prior treatment with a checkpoint inhibitor. On May 7, 2020, we announced updated preliminary data from this clinical trial. Patients in the prior clinical benefit ("PCB") cohort experienced PCB on a checkpoint inhibitor as part of their last treatment regimen prior to enrollment. PCB is defined as either complete response, partial response, or stable disease for greater than or equal to 12 weeks. The PCB cohort had been fully enrolled with 87 patients.

As of the data cutoff of January 30, 2020:


•	preliminary median overall survival of 15.6 months for the PCB cohort (n=87);


•	preliminary median overall survival of 18.1 months for the subset of PCB patients who received the combination as either 2nd or 3rd line of therapy after progressing on treatment with a checkpoint inhibitor (n=73), which is a patient cohort consistent with the inclusion criteria for the ongoing Phase 3 clinical trial; and


•	the combination has been well-tolerated and most adverse events were Grade 1 or 2 and were similar to data presented previously.

We held an end of Phase 2 meeting with the FDA in the third quarter of 2018 with respect to the development of sitravatinib in combination with a checkpoint inhibitor in NSCLC. Based on feedback received from the FDA, we initiated in July 2019 a Phase 3 randomized clinical trial in second-line NSCLC patients. The Phase 3 clinical trial is comparing the combination of sitravatinib plus nivolumab to docetaxel in patients whose tumors have progressed on prior therapy with platinum-chemotherapy

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in combination with a checkpoint inhibitor. Ultimately, we expect the results of this clinical trial, if positive, to enable an NDA submission for the treatment of NSCLC patients whose tumors have progressed following treatment with a platinum-containing regimen in combination with a checkpoint inhibitor. Enrollment is ongoing in the Phase 3 clinical trial.

In January 2020, we amended the protocol to include third line patients who have received chemotherapy followed by a checkpoint inhibitor, in addition to second line patients treated with a combination of chemotherapy and a checkpoint inhibitor. We also amended the statistical design to include an interim analysis of overall survival that we believe, if positive, could support an NDA submission seeking full approval. By amending the protocol, the overall sample size decreased from approximately 660 to 530 patients.

On January 7, 2019, we announced a clinical trial collaboration with BMS in connection with the aforementioned Phase 3 clinical trial. Under the terms of the collaboration, we are sponsoring and funding the clinical trial and BMS is providing nivolumab at no cost. In certain specified cases, BMS will have an exclusive right to negotiate a commercial agreement with us for a limited period of time with respect to developing and commercializing sitravatinib worldwide excluding certain territories in Asia, Australia and New Zealand. We maintain global development and commercial rights to sitravatinib outside of certain Asian territories, where we have partnered with BeiGene, and we are free to develop the program in combination with other agents.

During the third quarter of 2018, we initiated an open label, multi-cohort Phase 2 clinical trial of sitravatinib in combination with nivolumab in patients with advanced or metastatic urothelial carcinoma. On November 9, 2019, we reported data from this clinical trial at the 2019 Society of Immunotherapy of Cancer (SITC) 34th Annual Meeting, based on a data cutoff of October 17, 2019. Data from Cohort 1 of the trial were presented, where patients must have been previously treated with an immune checkpoint inhibitor and prior platinum-based chemotherapy and had documented disease progression. A summary of these data is presented below:


•	as of the data cut-off date of October 17, 2019, 22 patients were evaluable for response with at least one radiographic scan;


•	6 of 22 evaluable patients achieved a confirmed CR (1 patient) or PR (5 patients);


•	21 of 22 evaluable patients achieved a confirmed CR, PR, or stable disease;


•	4 responding patients had been treated for more than 6 months; and


•	the combination was well-tolerated and most adverse events were Grade 1 or 2.

During the third quarter of 2018, we also initiated an open label Phase 2 clinical trial to assess the mechanism of action of sitravatinib combined with nivolumab in patients with advanced clear cell renal cell cancer (“RCC”).

Sitravatinib Development in Collaboration with BeiGene, Ltd.

In January 2018, we entered into a Collaboration and License Agreement (the “BeiGene Agreement”) with BeiGene, pursuant to which we and BeiGene agreed to collaboratively develop sitravatinib in Asia (excluding Japan and certain other countries), Australia and New Zealand (the “Licensed Territory”). Under the BeiGene Agreement, we granted BeiGene an exclusive license to develop, manufacture and commercialize sitravatinib in the Licensed Territory, and we retained exclusive rights for the development, manufacturing and commercialization of sitravatinib outside the Licensed Territory.

In November 2018, we announced the dosing of the first patient under the BeiGene Agreement in a Phase 1b clinical trial to assess the safety and tolerability, pharmacokinetics and preliminary anti-tumor activity of sitravatinib in combination with BeiGene’s investigational anti-PD-1 antibody, tislelizumab, in patients with advanced solid tumors. The clinical trial is currently enrolling patients in China and Australia. BeiGene’s clinical trials will evaluate the combination of sitravatinib and tislelizumab in patients with NSCLC, RCC, hepatocellular cancer, gastric cancer and ovarian cancer. In December 2019, BeiGene reported initial proof of concept data for the ovarian cancer arm of the trial at the 2019 ESMO Immuno-Oncology Congress.

Critical Accounting Policies and Significant Judgments and Estimates

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these

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financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures. On an ongoing basis, our actual results may differ significantly from our estimates.

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2019.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2020 and 2019

The following table summarizes the significant items within our results of operations for the three and six months ended June 30, 2020 and 2019 (in thousands):



	Three months ended June 30,				Increase			Six months ended June 30,				Increase
	2020		2019		(Decrease)			2020		2019		(Decrease)
License and collaboration revenues	$	—	$	577	$	(577	)	$	267	$	1,821	$	(1,554	)

Research and development expenses	$	65,083	$	38,324	$	26,759		$	136,791	$	72,564	$	64,227
General and administrative expenses	19,779		9,894		9,885			37,825		19,656		18,169
Other income, net	2,003		1,946		57			4,835		3,792		1,043

Revenues

License and collaboration revenues relate to the BeiGene Agreement under which BeiGene was granted an exclusive license to develop, manufacture and commercialize sitravatinib in the Licensed Territory. No license and collaboration revenues were earned for the three months ended June 30, 2020, and $0.3 million in license and collaboration revenues were earned for the six months ended June 30, 2020. License and collaboration revenues for the three and six months ended June 30, 2019 were $0.6 million and $1.8 million, respectively. License and collaboration revenues earned for these periods relate to a manufacturing supply services agreement with BeiGene.

Research and development expenses

Research and development expenses consist primarily of:


•	salaries and related expenses for personnel, including expenses related to stock options or other share-based compensation granted to personnel in research and development functions;


•	fees paid to external service providers such as Clinical Research Organizations ("CROs") and contract manufacturing organizations related to clinical trials, including contractual obligations for clinical development, clinical sites, manufacturing and scale-up, and formulation of clinical drug supplies;


•	fees paid to contract services related to drug discovery efforts including chemistry and biology services;


•	license fees paid in connection with our early discovery efforts; and


•	costs for allocated facilities and depreciation of equipment.

We record research and development expenses as incurred.

Our research and development efforts during the three and six months ended June 30, 2020 and 2019 were focused primarily on our clinical development programs and our preclinical programs. The following table summarizes our research and development expenses, (in thousands):

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	Three months ended June 30,				Increase			Six months ended June 30,				Increase
	2020		2019		(Decrease)			2020		2019		(Decrease)
Third-party research and development expenses:
Clinical development programs:
MRTX849	24,187		7,585		16,602			54,785		14,964		39,821
Sitravatinib	14,295		16,152		(1,857		)	29,905		29,882		23
Discontinued programs	652		652		—			1,148		1,741		(593		)
Pre-clinical development programs:
MRTX1133	1,963		1,751		212			4,202		3,432		770
Preclinical and early discovery	1,707		636		1,071			3,069		1,423		1,646
Total third-party research and development expenses	42,804		26,776		16,028			93,109		51,442		41,667
Salaries and other employee related expense	8,018		4,126		3,892			15,260		7,942		7,318
Share-based compensation expense	11,457		6,611		4,846			23,305		11,768		11,537
Other research and development costs	2,804		811		1,993			5,117		1,412		3,705
Research and development expense	$	65,083	$	38,324	$	26,759		$	136,791	$	72,564	$	64,227

Research and development expenses for the three months ended June 30, 2020 were $65.1 million compared to $38.3 million for the three months ended June 30, 2019. The increase of $26.8 million primarily relates to increases in third-party research and development expense of $16.0 million, share-based compensation expense of $4.8 million and salaries and other employee related expense of $3.9 million. The increase in third-party research and development expense primarily relates to an increase in expenses associated with development of MRTX849 of $16.6 million. The increase in expenses associated with MRTX849 relates to the Phase 1 clinical trial which was initiated in the first quarter of 2019 and the costs are comprised largely of manufacturing expenses, CRO fees and other clinical trial-related expenses. The increase in share-based compensation of $4.8 million is due to an increase in the fair value of equity awards granted during the three months ended June 30, 2020, compared to the same period in 2019. The increase in salaries and other employee related expense of $3.9 million is primarily due to an increase in the number of research and development employees employed during the three months ended June 30, 2020, compared to the same period in 2019.

Research and development expenses for the six months ended June 30, 2020 were $136.8 million compared to $72.6 million for the six months ended June 30, 2019. The increase of $64.2 million relates to increases in third-party research and development expense of $41.7 million, an increase in salaries and other employee related expense of $7.3 million, and an increase in share-based compensation expense of $11.5 million. The increase in third-party research and development expense, salaries and other employee related expense, and share-based compensation expense is due to the factors that influenced similar fluctuations for the three months ended June 30, 2020 and 2019, respectively.

At this time, due to the risks inherent in the clinical development process and the early stage of our product development programs we are unable to estimate with any certainty the costs we will incur in the continued development of sitravatinib and MRTX849. The process of conducting clinical trials necessary to obtain regulatory approval and manufacturing scale-up to support expanded development and potential future commercialization is costly and time consuming. Any failure by us or delay in completing clinical trials, manufacturing scale up or in obtaining regulatory approvals could lead to increased research and development expense and, in turn, have a material adverse effect on our results of operations. We expect that our research and development expenses may increase if we are successful in advancing sitravatinib, MRTX849 and MRTX1133, or any of our other preclinical programs into more advanced stages of clinical development.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related benefits, including share-based compensation, related to our executive, finance, business development, legal, human resources, medical affairs, commercial and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance.

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General and administrative expenses for the three months ended June 30, 2020 and 2019 were $19.8 million and $9.9 million, respectively, representing an increase of $9.9 million. The increase in expense for the three months ended June 30, 2020 is due primarily to an increase in share-based compensation expense of $3.4 million, and professional services expense of $3.2 million, and to a lesser extent increases in salaries and other employee related expense of $2.5 million, and facilities, insurance and other expense of $0.9 million. The increase in share-based compensation expense is due to an increase in the fair value of equity awards granted during the three months ended June 30, 2020, compared to the same period in 2019. The increase in professional service expense is primarily due to an increase in commercial and medical affairs costs, and consulting fees during the three months ended June 30, 2020, compared to the same period in 2019. The increase in salaries and other employee related expense and facilities, insurance and other expense is due primarily to an increase in the number of general and administrative employees during the three months ended June 30, 2020 compared to the same period in 2019, and is largely driven by commercial readiness activities.

General and administrative expenses for the six months ended June 30, 2020 and 2019 were $37.8 million and $19.7 million, respectively, representing an increase of $18.1 million. The increase in expense for the six months ended June 30, 2020 is due primarily to an increase in share-based compensation expense of $7.1 million, and to a lesser extent increases in salaries and other employee related expense of $5.2 million, professional services expense of $4.2 million, and facilities, insurance and other expense of $1.7 million. The increase in expense for the six months ended June 30, 2020 for each of the categories indicated is due to the same factors that influenced similar fluctuations for the three months ended June 30, 2020 and 2019, respectively.

Other Income, Net

Other income, net consists primarily of interest income. Other income, net for the three months ended June 30, 2020 was $2.0 million compared to $1.9 million for the same period in 2019. Other income, net for the six months ended June 30, 2020 was $4.8 million compared to $3.8 million for the same period in 2019. The increase in interest income is due to an increase in short-term investment balances.

Liquidity and Capital Resources

At June 30, 2020, we had $645.7 million of cash, cash equivalents and short-term investments compared to $415.1 million at December 31, 2019. In January 2020, we completed a public offering of our common stock that generated net proceeds of $324.0 million. On July 2, 2020, we entered into a sales agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $200.0 million. Based on our current and anticipated level of operations, we believe that our cash, cash equivalents and short-term investments will be sufficient to meet our anticipated obligations for at least one year from the date that this Quarterly Report on Form 10-Q is filed with the SEC.

To date, we have funded our operations primarily through the sale of our common stock, pre-funded warrants to purchase our common stock, and to a lesser extent through up-front payments, research funding and milestone payments under collaborative arrangements. Since inception, we have primarily devoted our resources to funding research and development programs, including discovery research, preclinical and clinical development activities. To fund future operations, we will likely need to raise additional capital. The amount and timing of future funding requirements will depend on many factors, including the timing and results of our ongoing development efforts, the potential expansion of our current development programs, potential new development programs and related general and administrative support. We anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources, such as potential collaboration agreements. We cannot make assurances that anticipated additional financing will be available to us on favorable terms, or at all. Although we have previously been successful in obtaining financing through our equity securities offerings, there can be no assurance that we will be able to do so in the future. As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including in liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

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Cash Flows for the Six Months Ended June 30, 2020 and 2019

The following table provides a summary of the net cash flow activity for each of the periods set forth below (in thousands):



	Six months ended June 30,
	2020			2019
Net cash used in operating activities	$	(118,347	)	$	(72,950	)
Net cash used in investing activities	(144,674		)	(41,135		)
Net cash provided by financing activities	348,474			333,483
Increase in cash, cash equivalents and restricted cash	85,453			219,398

Net cash used in operating activities

Net cash used in operating activities for the six months ended June 30, 2020 was $118.3 million, compared to $73.0 million for the six months ended June 30, 2019, an increase of $45.3 million. Cash used in operating activities during 2020 primarily related to our net loss of $169.5 million, adjusted for non-cash items such as share-based compensation of $42.4 million and net cash inflows from a change in our operating assets and liabilities of $9.4 million. Cash used in operating activities during 2019 primarily related to our net loss of $86.6 million, adjusted for non-cash items such as share-based compensation expense of $23.7 million and net cash outflows from a change in our operating assets and liabilities of $8.2 million.

Net cash used in investing activities

For the six months ended June 30, 2020 and June 30, 2019, investing activities used cash of $144.7 million and $41.1 million, respectively due to purchases of short-term investments and property and equipment, offset by sales and maturities of short-term investments.

Net cash provided by financing activities

Net cash provided by financing activities for the six months ended June 30, 2020 and 2019 was $348.5 million and $333.5 million, respectively, and consisted of proceeds received from the issuance of common stock, issuance of common stock under equity incentive plans, and disgorgement of shareholders' short-swing profits.

Off-Balance Sheet Arrangements

During the three and six months ended June 30, 2020, we did not have any off-balance sheet arrangements (as defined by applicable SEC regulations) that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations and Commitments

There were no material changes outside of the ordinary course of business to our specific contractual obligations during the three and six months ended June 30, 2020.

Recent Accounting Pronouncements

Occasionally, new accounting standards are issued or proposed by the Financial Accounting Standards Board, or other standard-setting bodies that we adopt by the effective date specified within the standard. Unless otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

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ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Some of our short-term investments have market risk in that a change in prevailing interest rates may cause the fair value of the principal amount of the investment to fluctuate. Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. We invest our excess cash primarily in commercial paper and debt instruments of financial institutions, corporations, U.S. government-sponsored agencies and the U.S. Treasury. We mitigate credit risk by maintaining a well-diversified portfolio and limiting the amount of investment exposure as to institution, maturity and investment type. We invest our excess cash in accordance with our investment policy.

Because of the short-term maturities of our cash equivalents and short-term investments, we do not believe that an increase in market rates would have any significant impact on the realized value of our investments. If a 1% change in interest rates were to have occurred on June 30, 2020, this change would not have had a material effect on the fair value of our investment portfolio as of that date.

Effects of Inflation

We do not believe that inflation and changing prices had a significant impact on our results of operations for any periods presented herein.



ITEM 4.	Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) of the Exchange Act, our management, including our principal executive officer and our principal financial officer, conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based on that evaluation, management has concluded that as of June 30, 2020, the Company’s disclosure controls and procedures were effective at the reasonable assurance level and we believe the condensed consolidated financial statements included in this Form 10-Q for the three and six months ended June 30, 2020 present, in all material respects, our financial position, results of operations, comprehensive loss and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d) and Rule 15d-15(d) of the Exchange Act, our management, including our principal executive officer and our principal financial officer, conducted an evaluation of the internal control over financial reporting to determine whether any changes occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our principal executive officer and principal financial officer concluded that there were no changes in our internal controls over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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PART II-OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

None.



ITEM 1A.	Risk Factors.

You should consider carefully the following information about the risks described below, together with the other information contained in this Quarterly Report and in our other public filings in evaluating our business. The risk factors set forth below with an asterisk (*) next to the title contain changes to the description of the risk factors associated with our business previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019. Additional risks and uncertainties that we are unaware of may also become important factors that affect us. If any of the following risks actually occurs, our business, financial condition, results of operations and future growth prospects would likely be materially and adversely affected. In these circumstances, the market price of our common stock would likely decline.

Risks Relating to Our Financial Position and Capital Requirements

* We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon development programs or commercialization.

Our operations have consumed substantial amounts of cash since inception. Our research and development expenses were $65.1 million and $38.3 million for the three months ended June 30, 2020 and 2019, respectively, and $136.8 million and $72.6 million for the six months ended June 30, 2020 and 2019, respectively. We will require substantial additional capital to pursue additional clinical development for our lead clinical programs, including conducting late-stage clinical trials, manufacturing clinical supplies and potentially developing other assets in our pipeline, and, if we are successful, to commercialize any of our current product candidates. If the U.S. Food and Drug Administration ("FDA") or any foreign regulatory agency, such as the European Medicines Agency ("EMA") requires that we perform studies or trials in addition to those that we currently anticipate with respect to the development of our product candidates, or repeat studies or trials, or if our clinical trials are otherwise delayed or disrupted due to the COVID-19 pandemic or otherwise, our expenses would further increase beyond what we currently expect. We may not be able to adequately finance our development programs, which could limit our ability to move our programs forward in a timely and satisfactory manner or require us to abandon the programs, any of which would harm our business, financial condition and results of operations. Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development and commercialize our product candidates.

If we are unable to obtain funding from equity offerings or debt financings on a timely basis, we may be required to (1) seek additional collaborators for one or more of our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; (2) relinquish or license on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves; or (3) significantly curtail one or more of our research or development programs or cease operations altogether.

We are a clinical-stage company with no approved products and no historical product revenue. Consequently, we expect that our financial and operating results will vary significantly from period to period.

We are a clinical-stage company that has incurred losses since its inception and expect to continue to incur substantial losses in the foreseeable future. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of uncertainty.

Our actual financial condition and operating results have varied significantly in the past and are expected to continue to fluctuate significantly from quarter-to-quarter or year-to-year due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include:


•	the success of our clinical trials through all phases of clinical development;


•	delays in the commencement, enrollment and timing of clinical trials;


•	our ability to secure and maintain collaborations, licensing or other arrangements for the future development and/or commercialization of our product candidates, as well as the terms of those arrangements;

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•	our ability to obtain, as well as the timeliness of obtaining, additional funding to develop our product candidates;


•	the results of clinical trials or marketing applications for product candidates that may compete with our product candidates;


•	competition from existing products or new products that may receive marketing approval;


•	potential side effects of our product candidates that could delay or prevent approval or cause an approved drug to be taken off the market;


•	any delays in regulatory review and approval of our clinical development plans or product candidates;


•	our ability to identify and develop additional product candidates;


•	the ability of patients or healthcare providers to obtain coverage or sufficient reimbursement for our products;


•	our ability, and the ability of third parties such as Clinical Research Organizations ("CROs") to adhere to clinical study and other regulatory requirements;


•	the ability of third-party manufacturers to manufacture our product candidates and key ingredients needed to conduct clinical trials and, if approved, successfully commercialize our products;


•	the costs to us, and our ability as well as the ability of any third-party collaborators, to obtain, maintain and protect our intellectual property rights;


•	costs related to and outcomes of potential intellectual property litigation;


•	our ability to adequately support future growth;


•	our ability to attract and retain key personnel to manage our business effectively; and


•	our ability to build our finance infrastructure and, to the extent required, improve our accounting systems and controls.

Accordingly, the likelihood of our success must be evaluated in light of many potential challenges and variables associated with a clinical-stage company, many of which are outside of our control, and past operating or financial results should not be relied on as an indication of future results. Fluctuations in our operating and financial results could cause our share price to decline. It is possible that in some future periods, our operating results will be above or below the expectations of securities analysts or investors, which could also cause our share price to decline.

* We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have never generated any revenue from product sales and may never be profitable.

We have derived limited revenue from our research, collaboration and licensing agreements which has not been sufficient to cover the substantial expenses we have incurred in our efforts to develop our product candidates. Consequently, we have accumulated net losses since inception. Our net loss for the three months ended June 30, 2020 and 2019 were $82.9 million and $45.7 million, respectively, and $169.5 million and $86.6 million for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, we had an accumulated deficit of $941.8 million. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our shareholders' equity and working capital. Such losses are expected to increase in the future as we continue the development of our product candidates and seek regulatory approval and commercialization for our product candidates. We are unable to predict the extent of any future losses or when we will become profitable, if ever. Even if we do achieve profitability, we may not be able to sustain or increase profitability on an ongoing basis.

We do not anticipate generating revenue from sales of products for the foreseeable future, if ever. If any of our product candidates fail in clinical trials or do not gain regulatory approval, or if any of our product candidates, if approved, fail to achieve market acceptance, we may never become profitable. If one or more of our product candidates is approved for commercial sale and we retain commercial rights, we anticipate incurring significant costs associated with commercializing any such approved product candidate. Therefore, even if we are able to generate revenue from the sale of any approved product, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our ability to generate future revenue from product sales depends heavily on our success in:

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•	completing development and clinical trial programs for our product candidates;


•	maintaining existing collaboration and licensing agreements and entering into additional ones;


•	seeking and obtaining marketing approvals for any product candidates that successfully complete clinical trials;


•	establishing and maintaining supply and manufacturing relationships with third parties;


•	successfully commercializing any product candidates for which marketing approval is obtained; and


•	successfully establishing a sales force and marketing and distribution infrastructure.

* Raising additional funds through debt or equity financing will be dilutive and raising funds through licensing agreements may be dilutive, restrict operations or relinquish proprietary rights.

To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of those securities could result in substantial dilution for our current shareholders and the terms may include liquidation or other preferences that adversely affect the rights of our current shareholders. Existing shareholders may not agree with our financing plans or the terms of such financings. In addition, the COVID-19 pandemic continues to rapidly evolve and may result in a significant disruption of global financial markets. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the pandemic. If the disruption persists and deepens, we could experience an inability to access additional capital, which could in the future negatively affect our capacity to fund research and development programs, including discovery research, preclinical and clinical development activities. Moreover, the incurrence of debt financing could result in a substantial portion of our operating cash flow being dedicated to the payment of principal and interest on such indebtedness and could impose restrictions on our operations. In addition, if we raise additional funds through future collaboration and licensing arrangements, it may be necessary to relinquish potentially valuable rights to our products or proprietary technologies, or to grant licenses on terms that are not favorable to us. Additional funding may not be available to us on acceptable terms, or at all.

* Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act (the “Tax Act”), enacted many significant changes to the U.S. tax laws. Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation. For example, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) modified certain provisions of the Tax Act. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, CARES Act or any newly enacted federal tax legislation. Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.

* Our ability to use our U.S. net operating loss carryforwards and certain other tax attributes may be limited.

Our U.S. net operating loss ("NOL"), carryforwards generated in tax years ending on or prior to December 31, 2017, are only permitted to be carried forward for 20 years under applicable U.S. tax law. Under the Tax Act, as modified by the CARES Act, our federal NOLs generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs generated in tax years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act. In addition, under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change U.S. tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited. We believe we have experienced at least one ownership change based on past financing transactions and may experience ownership changes in the future as a result of subsequent shifts in our stock ownership.

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As a result, our pre-2018 NOL carryforwards may expire prior to being used, and the deductibility of our NOL carryforwards generated in tax years beginning after December 31, 2017, in taxable years beginning after December 31, 2020, will be subject to a percentage limitation. In addition, we believe that we have in the past undergone, and in the future it is possible we may undergo, additional ownership changes that could limit our ability to use all of our pre-change NOLs and other pre-change tax attributes (such as research tax credits) to offset our post-change income or taxes. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, including a recent California franchise tax law limiting the usability of California state NOLs to offset taxable income in taxable years beginning on or after January 1, 2020 and before January 1, 2023, which could accelerate or permanently increase state taxes owed. As a result, we may be unable to use all or a material portion of our NOLs and other tax attributes, which could adversely affect our future cash flows.

As a public company in the United States, we incur significant legal and financial compliance costs and we are subject to the Sarbanes-Oxley Act. We can provide no assurance that we will, at all times, in the future be able to report that our internal controls over financial reporting are effective.

Companies that file reports with the Securities and Exchange Commission ("SEC"), including us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires management to establish and maintain a system of internal control over financial reporting, and annual reports on Form 10-K filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), must contain a report from management assessing the effectiveness of a company’s internal control over financial reporting. Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis remains a costly and time-consuming effort that needs to be re-evaluated frequently. Failure on our part to have effective internal financial and accounting controls would cause our financial reporting to be unreliable, could have a material adverse effect on our business, operating results, and financial condition, and could cause our stock price to decline as a result.

If we cannot conclude that we have effective internal control over our financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified opinion regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements. Failure to comply with reporting requirements could also subject us to sanctions and/or investigations by the SEC, The Nasdaq Global Select Market or other regulatory authorities.

Furthermore, shareholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, any new regulations or disclosure obligations may increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

Risks Relating to Our Business and Industry

* The COVID-19 pandemic could adversely impact our business including our ongoing and planned clinical trials and preclinical research.

In December 2019, COVID-19 was reported to have surfaced in Wuhan, China. Since then, the virus has spread to numerous other countries, including the United States, resulting in the World Health Organization characterizing COVID-19 as a pandemic. The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, such as the ultimate geographic spread of the disease, severity of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease and to address its impact, including on the global economy, financial markets or otherwise. As the COVID-19 pandemic continues to create disruption around the globe, our business, current and planned clinical trials and preclinical research could be impacted in the United States and other countries, including:


•	delays or difficulties in enrolling and retaining patients in our ongoing clinical trials and our future clinical trials;


•	delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials;

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•	interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints;

•

limitations in resources, including our employees, that would otherwise be focused on the conduct of our business or our current or planned clinical trials or preclinical research, including because of sickness, the requirements to avoid contact with large groups of people or restrictions on movement or access to our facility as a result of government-imposed “shelter in place” or similar working restrictions;


•	interruptions or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines;


•	delays or interruptions in the manufacture, supply, import/export or distribution of materials and services needed to conduct clinical trials and preclinical research;


•	changes in regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs or require us to discontinue the clinical trial altogether;


•	interruptions or delays to our research and development pipeline; and


•	delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or furlough of government or contractor personnel.

Further, as a result of the COVID-19 pandemic, the extent and length of which is uncertain, we may be required to develop and implement additional clinical study policies and procedures designed to help protect study participants from the COVID-19 virus, which may include using telemedicine visits, remote monitoring of patients and clinical sites, and measures to ensure that data from clinical studies that may be disrupted as a result of the pandemic are collected pursuant to the study protocol and consistent with good clinical practices, with any material protocol deviation reviewed and approved by the site Institutional Review Board. Patients who may miss scheduled appoints, any interruption in study drug supply, or other consequence that may result in incomplete data being generated during a study as a result of the pandemic must be adequately documented and justified. For example, on March 18, 2020, the FDA issued a guidance on conducting clinical trials during the pandemic, which describe a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include in the clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of the study as a result of the COVID-19 pandemic; a list of all study participants affected by the COVID-19-pandemic related study disruption by unique subject identifier and by investigational site, and a description of how the individual’s participation was altered; and analyses and corresponding discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported for the study. If patients drop out of our trials, miss scheduled doses or follow-up visits or otherwise fail to follow trial protocols, or if our trials are otherwise disputed due to COVID-19 or actions taken to slow its spread, the integrity of data from our trials may be compromised or not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the applicable program.

While the extent of the impact of the COVID-19 pandemic on our business and financial results is uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic could have a material negative impact on our business, financial condition, and operating results.

* Our research and development programs and product candidates are at an early stage of development. As a result, we are unable to predict if or when we will successfully develop or commercialize our product candidates.

Our clinical-stage product candidates as well as our other pipeline assets are at an early stage of development and will require significant further investment and regulatory approvals prior to commercialization. Sitravatinib is in a Phase 3 combination clinical trial, and Phase 1/2 combination clinical trials. MRTX849 is in Phase 1/2 clinical trials and MRTX1133 is in preclinical development. Each of our product candidates will require the selection of suitable patients for our clinical trials and additional clinical development, management of clinical, preclinical and manufacturing activities, obtaining regulatory approval, obtaining manufacturing supply, building of a commercial organization, substantial investment and significant marketing efforts before we generate any revenues from product sales. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates. The treatment of cancer is a rapidly evolving field and will continue to evolve. By

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such time, if ever, as we may receive necessary regulatory approvals for our product candidates, the standard of care for the treatment of cancers may have evolved such that it would be necessary to modify our plans for full approval and commercial acceptance of our products may be limited by a change in the standard of care. In addition, some of our product development programs contemplate the development of companion diagnostics. Companion diagnostics are subject to regulation as medical devices and we or our future collaborators may be required to obtain marketing approval for accompanying companion diagnostics before we may commercialize our product candidates.

Even if we obtain the required financing or establish a collaboration to enable us to conduct late-stage clinical development of our product candidates and pipeline assets, we cannot be certain that such clinical development would be successful, or that we will obtain regulatory approval or be able to successfully commercialize any of our product candidates and generate revenue. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and the clinical trial process may fail to demonstrate that our product candidates are safe and effective for their proposed uses. Any such failure could cause us to abandon further development of any one or more of our product candidates and may delay development of other product candidates. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Any delay in, or termination of, our clinical trials will delay and possibly preclude the submission of any new drug applications ("NDAs") with the FDA and, ultimately, our ability to commercialize our product candidates and generate product revenue.

We have not previously submitted an NDA to the FDA, or similar drug approval filings to comparable foreign authorities, for any product candidate, and we cannot be certain that any of our product candidates will receive regulatory approval. Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. If we do not receive regulatory approvals for our product candidates, we may not be able to continue our operations. Even if we successfully obtain regulatory approvals to market one or more of our product candidates, our revenues will be dependent, in part, upon our or our collaborators' and future collaborators’ ability to obtain regulatory approval for the companion diagnostics to be used with our product candidates, if required, and upon the size of the markets in the territories for which we gain regulatory approval and have commercial rights. If the markets for patient subsets that we are targeting are not as significant as we estimate, we may not generate significant revenues from sales of such products, if approved.

We may attempt to obtain FDA approval of MRTX849, sitravatinib or other product candidates through the use of the accelerated approval pathway. If we are unable to obtain such approval, we may be required to await the completion of planned or ongoing clinical trials or conduct additional clinical trials, which could increase the expense of obtaining, and delay the receipt of, necessary approval. Even if we receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated approval.

We may in the future seek an accelerated approval for our one or more of our product candidates. Under the accelerated approval program, the FDA may grant accelerated approval to a product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. If such post-approval studies fail to confirm the drug’s clinical benefit, the FDA may withdraw its approval of the drug.

Prior to seeking accelerated approval for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA for accelerated approval. If we decide to submit an application for accelerated approval for our product candidates, there can be no assurance that such submission or application will be accepted or that review or approval will be granted on a timely basis, or at all. A failure to obtain accelerated approval would result in a longer time period to commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

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All of our product candidates are subject to extensive regulation, which can be costly and time consuming, cause delays or prevent approval of such product candidates for commercialization.

The clinical development of product candidates is subject to extensive regulation by the FDA in the United States and by comparable regulatory authorities in foreign markets. Product development is a very lengthy and expensive process, and its outcome is inherently uncertain. The product development timeline can vary significantly based upon the product candidate’s novelty and complexity. Regulations are subject to change and regulatory agencies have significant discretion in the approval process.

Numerous statutes and regulations govern human testing and the manufacture and sale of human therapeutic products in the United States, Europe and other countries and regions where we intend to market our products. Such legislation and regulation bears upon, among other things, the approval of trial protocols and human testing, the approval of manufacturing facilities, safety of the product candidates, testing procedures and controlled research, review and approval of manufacturing, preclinical and clinical data prior to marketing approval including adherence to good manufacturing practices ("GMP") during production and storage as well as regulation of marketing activities including advertising and labeling.

In order to obtain regulatory approval for the commercial sale of any of our product candidates, we must demonstrate through preclinical studies and clinical trials that the potential product is safe and effective for use in humans for each target indication. The failure to adequately demonstrate the safety and efficacy of a product under development could delay or prevent regulatory approval of our product candidates.

No assurance can be given that current regulations relating to regulatory approval will not change or become more stringent in the United States or foreign markets. Regulatory agencies may also require that additional trials be run in order to provide additional information regarding the safety or efficacy of any drug candidates for which we seek regulatory approval. Moreover, any regulatory approval of a drug which is eventually obtained may entail limitations on the indicated uses for which that drug may be marketed. Furthermore, product approvals may be withdrawn or limited in some way if problems occur following initial marketing or if compliance with regulatory standards is not maintained. Regulatory agencies could become more risk averse to any side effects or set higher standards of safety and efficacy prior to reviewing or approving a product. This could result in a product not being approved. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

The failure to maintain the BeiGene Agreement or the failure of BeiGene to perform its obligations under the BeiGene Agreement, could negatively impact our business.

Pursuant to the terms of the BeiGene Agreement, we granted to BeiGene an exclusive license to develop, manufacture and commercialize sitravatinib in the BeiGene Territory. Consequently, our ability to generate any revenues from sitravatinib in the BeiGene Territory depends on our ability to maintain our collaboration with BeiGene. We have limited control over the amount and timing of resources that BeiGene will dedicate to these efforts.

We are subject to a number of other risks associated with our dependence on the BeiGene Agreement with respect to sitravatinib in the BeiGene Territory, including:


•	BeiGene may not comply with applicable regulatory guidelines with respect to developing, manufacturing or commercializing sitravatinib, which could adversely impact sales or future development of sitravatinib in the BeiGene Territory or elsewhere;


•	We and BeiGene could disagree as to future development plans and BeiGene may delay, fail to commence or stop future clinical trials or other development;

•

There may be disputes between us and BeiGene, including disagreements regarding the BeiGene Agreement, that may result in (1) the delay of or failure to achieve developmental, regulatory and commercial objectives that would result in milestone or royalty payments, (2) the delay or termination of any future development or commercialization of sitravatinib in the BeiGene Territory, and/or (3) costly litigation or arbitration that diverts our management’s attention and resources;


•	BeiGene may not provide us with timely and accurate information regarding development, sales and marketing activities or supply forecasts, which could adversely impact our ability to comply with our obligations to BeiGene and manage our own inventory of sitravatinib, as well as our ability to generate accurate financial forecasts;

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•	Business combinations or significant changes in BeiGene’ business strategy may adversely affect BeiGene’ ability or willingness to perform its obligations under the BeiGene Agreement; and


•	BeiGene may not properly defend our intellectual property rights, or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential litigation.

The BeiGene Agreement is also subject to early termination, including through BeiGene’s right to terminate without cause upon advance notice to us. If the agreement is terminated early, we may not be able to find another collaborator for the further development and commercialization of sitravatinib in the BeiGene Territory on acceptable terms, or at all, and we may be unable to pursue continued development and commercialization of sitravatinib in the BeiGene Territory on our own.

We may not be successful in establishing development and commercialization collaborations which could adversely affect, and potentially prohibit, our ability to develop our product candidates.

Developing pharmaceutical products, conducting clinical trials, obtaining regulatory approval, establishing manufacturing capabilities and marketing approved products is expensive, and therefore we may seek to enter into additional collaborations with companies that have more resources and experience in order to continue to develop and commercialize our product candidates. We also may be required due to financial or scientific constraints to enter into additional collaboration agreements to research and/or to develop and commercialize our product candidates. The establishment and realization of such collaborations may not be possible or may be problematic. There can be no assurance that we will be able to establish such additional collaborations on favorable terms, if at all, or that our current or future collaborative arrangements will be successful or maintained for any specific product candidate or indication. If we are unable to reach successful agreements with suitable collaboration partners for the ongoing development and commercialization of our product candidates, we may face increased costs, we may be forced to limit the scope and number of our product candidates we can commercially develop or the territories in which we commercialize such product candidates, and we may be unable to commercialize products or programs for which a suitable collaboration partner cannot be found. If we fail to achieve successful collaborations, our operating results and financial condition will be materially and adversely affected.

In addition, the terms of any collaboration agreements may place restrictions on our activities with respect to other products, including by limiting our ability to grant licenses or develop products with other third parties, or in different indications, diseases or geographical locations, or may place additional obligations on us with respect to development or commercialization of our product candidates. If we fail to comply with or breach any provision of a collaboration agreement, a collaborator may have the right to terminate, in whole or in part, such agreement or to seek damages.

Some of our collaboration agreements, including the BeiGene Agreement, are complex and involve sharing or division of ownership of certain data, know-how and intellectual property rights among the various parties. Accordingly, our collaborators could interpret certain provisions differently than we or our other collaborators which could lead to unexpected or inadvertent disputes with collaborators. In addition, these agreements might make additional collaborations, partnering or mergers and acquisitions difficult.

There is no assurance that a collaborator who is acquired by a third party would not attempt to change certain contract provisions that could negatively affect our collaboration. The acquiring company may also not accept the terms or assignment of our contracts and may seek to terminate the agreements. Any one of our collaborators could breach covenants, restrictions and/or sub-license agreement provisions leading us into disputes and potential breaches of our agreements with other partners.

* If we or third parties are unable to successfully develop companion diagnostics for our product candidates, or experience significant delays in doing so, we may not achieve marketing approval or realize the full commercial potential of such product candidates.

A key part of our development strategy for our product candidates is to identify subsets of patients with specific types of tumors that express specific genetic markers. Identification of these patients will require the use and development of companion diagnostics. The FDA generally will either require approval or clearance of the diagnostic at the same time the FDA approves the therapeutic product, or as a post-marketing commitment at the time of the therapeutic product's approval. We do not have experience or capabilities in developing or commercializing diagnostics and plan to rely in large part on third parties to perform these functions.

Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory approval prior to commercialization. If we or third parties are unable to successfully develop companion diagnostics for our product candidates, or experience delays in doing so:

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•	the development of these product candidates may be delayed because it may be difficult to identify patients for enrollment in our clinical trials in a timely manner;


•	these product candidates may not receive marketing approval if their safe and effective use depends on a companion diagnostic; and


•	we may not realize the full commercial potential of these product candidates that receive marketing approval if, among other reasons, we are unable to appropriately identify patients or types of tumors with the specific genetic alterations targeted by these product candidates.

Even if our product candidates and any associated companion diagnostics are approved for marketing, the need for companion diagnostics may slow or limit adoption of our product candidates. Although we believe genetic testing is becoming more prevalent in the diagnosis and treatment of cancer, our product candidates may be perceived negatively compared to alternative treatments that do not require the use of companion diagnostics, either due to the additional cost of the companion diagnostic or the need to complete additional procedures to identify genetic markers prior to administering our product candidates.

If any of these events were to occur, our business and growth prospects would be harmed, possibly materially.

* We rely upon third-party contractors and service providers for the execution of some aspects of our development programs. Failure of these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs.

We outsource certain functions, tests and services to CROs, medical institutions and collaborators and outsource manufacturing to collaborators and/or contract manufacturers, and we rely on third parties for quality assurance, clinical monitoring, clinical data management and regulatory expertise. In particular, we rely on CROs to run our clinical trials on our behalf and contract manufacturers to manufacture our product candidates. There is no assurance that such individuals or organizations will be able to provide the functions, tests, drug supply or services as agreed upon or to acceptable quality standards, and we could suffer significant delays in the development of our products or processes. In particular, certain third party service providers may be unable to comply with their contractual obligations to us due to disruptions caused by COVID-19, including reduced operations or headcount reductions, or otherwise, and in certain cases we may have limited recourse if the non-compliance is due to factors outside of the service provider’s control.

In some cases, there may be only one or few providers of such services, including manufacturing services. In addition, the cost of such services could increase significantly over time. We rely on third parties as mentioned above to enroll qualified patients and conduct, supervise and monitor our clinical trials. Our reliance on these third parties and collaborators for clinical development activities reduces our control over these activities, but does not relieve us of our regulatory responsibilities, including ensuring that our clinical trials are conducted in accordance with good clinical practices ("GCP") regulations and the investigational plan and protocols contained in the regulatory agency applications. In addition, these third parties may not complete activities on schedule or may not manufacture compounds under GMP conditions. Preclinical studies may not be performed or completed in accordance with good laboratory practices, regulatory requirements or our trial design. If we or our CROs fail to comply with GCP regulations, 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 before approving any marketing applications. If these third parties or collaborators do not successfully carry out their contractual duties or meet expected deadlines, obtaining regulatory approval for manufacturing and commercialization of our product candidates may be delayed or prevented. We rely substantially on third-party data managers for our clinical trial data. There is no assurance that these third parties will not make errors in the design, management or retention of our data or data systems. There is no assurance that these third parties will pass FDA or regulatory audits, which could delay or prohibit regulatory approval.

Our CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could harm our competitive position. If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms. Further, switching or adding additional CROs involves additional cost and requires management time and attention. In addition, there is a natural transition period when a new CRO commences work. As a result, delays may occur, which could materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

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* The timelines of our clinical trials may be impacted by numerous factors and any delays may adversely affect our ability to execute our current business strategy.

Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome. We may experience delays in clinical trials at any stage of development and testing of our product candidates. Our planned clinical trials may not begin on time, have an effective design, enroll a sufficient number of subjects, or be completed on schedule, if at all.

Events which may result in a delay or unsuccessful completion of clinical trials include:


•	inability to raise funding necessary to initiate or continue a trial;


•	delays in obtaining regulatory approval to commence a trial;


•	delays in reaching agreement with the FDA on final trial design;


•	imposition of a clinical hold following an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authorities;


•	delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;


•	delays in obtaining required institutional review board approval at each site;


•	delays in having subjects complete participation in a trial or return for post-treatment follow-up;


•	delays caused by subjects dropping out of a trial due to side effects or otherwise;


•	clinical sites dropping out of a trial to the detriment of enrollment;


•	time required to add new clinical sites; and


•	delays by our contract manufacturers to produce and deliver a sufficient supply of clinical trial materials.

Furthermore, enrollment may depend on the availability of suitable companion diagnostics to identify genetic markers we are targeting and the capability and willingness of clinical sites to conduct genetic screening of potential patients.

If initiation or completion of any of our clinical trials for our product candidates are delayed for any of the above reasons or for other reasons, our development costs may increase, our approval process could be delayed, any periods after commercial launch and before expiration of patent protection may be reduced and our competitors may have more time to bring products to market before we do. Any of these events could impair the commercial potential of our product candidates and could have a material adverse effect on our business.

If we experience delays or difficulties in the enrollment of patients in clinical trials, those clinical trials could take longer than expected to complete and our receipt of necessary regulatory approvals could be delayed or prevented.

We may not be able to initiate or complete clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials. In particular, because we are focused on patients with specific genetic alterations in some of our trials, our pool of suitable patients may be smaller and more selective and our ability to enroll a sufficient number of suitable patients may be limited or take longer than anticipated. In addition, some of our competitors have ongoing clinical trials for product candidates that treat the same indications, including NSCLC, where we are studying sitravatinib in combination with checkpoint inhibitors, or target the same genetic alterations as our product candidates. Therefore, patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.

Patient enrollment for any of our clinical trials may also be affected by other factors, including without limitation:


•	the severity of the disease under investigation


•	the frequency of the genetic alteration we are seeking to target in the applicable trial, and the ability to effectively identify such alteration;

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•	the willingness of clinical sites and principal investigators to subject candidate patients to genetic screening;


•	the eligibility criteria for the study in question;


•	the perceived risks and benefits of the product candidate under study;


•	the availability, effectiveness and safety of other treatment options;


•	the patient referral practices of physicians;


•	the ability to monitor patients adequately during and after treatment; and


•	the proximity and availability of a sufficient number of clinical trial sites that are willing to comply with the requirements of our clinical protocols.

For example, due to the targeted indications and patient populations we intend to focus on for development of our product candidates, the number of study sites and patient populations available to us may be limited, and therefore enrollment of suitable patients to participate in clinical trials for these product candidates may take longer than would be the case if we were pursuing broader indications or patient populations.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved product label, or result in significant negative consequences following marketing approval, if any.

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. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects. In such an event, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial, or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:


•	regulatory authorities may withdraw approvals of such product;


•	regulatory authorities may require additional warnings on the product label;


•	we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;


•	we could be sued and held liable for harm caused to patients; and


•	our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of any product candidate, if approved, and could significantly harm our business, results of operations and prospects.

We are and continue to be subject to stringent government regulations concerning the clinical testing of our products. We will also continue to be subject to government regulation of any product that receives regulatory approval.

Numerous statutes and regulations govern human testing and the manufacture and sale of human therapeutic products in the United States and other countries where we intend to market our products. Such legislation and regulation bears upon, among other things, the approval of trial protocols and human testing, the approval of manufacturing facilities, testing procedures and controlled research, the review and approval of manufacturing, preclinical and clinical data prior to marketing approval, including adherence to GMP during production and storage, and marketing activities including advertising and labeling.

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Clinical trials may be delayed or suspended at any time by us or by the FDA or other similar regulatory authorities if it is determined at any time that patients may be or are being exposed to unacceptable health risks, including the risk of death, or if compounds are not manufactured under acceptable GMP conditions or with acceptable quality. Current regulations relating to regulatory approval may change or become more stringent. The agencies may also require additional trials be run in order to provide additional information regarding the safety, efficacy or equivalency of any product candidate for which we seek regulatory approval.

Moreover, any regulatory approval of a drug which is eventually obtained may entail limitations on the indicated uses for which that drug may be marketed or on the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with GMPs and GCPs for any clinical trials that we conduct post-approval. In addition, if the FDA or a comparable foreign regulatory authority approves any of our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. For example, prescription drugs may be promoted only for the approved indications in accordance with the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. However, physicians may, in their independent medical judgment, prescribe legally available products for off-label uses. The FDA does not regulate the behavior of physicians in their choice of treatments but the FDA does restrict manufacturer’s communications on the subject of off-label use of their products. Furthermore, product approvals may be withdrawn or limited in some way if problems occur following initial marketing or if compliance with regulatory standards is not maintained. Similar restrictions are imposed in foreign markets. Regulatory agencies could become more risk averse to any side effects or set higher standards of safety and efficacy prior to reviewing or approving a product. This could result in a product not being approved.

If we, or any future marketing collaborators or contract manufacturers, fail to comply with applicable regulatory requirements, we may be subject to sanctions including fines, product recalls or seizures and related publicity requirements, injunctions, total or partial suspension of production, civil penalties, suspension or withdrawals of previously granted regulatory approvals, warning or untitled letters, refusal to approve pending applications for marketing approval of new products or of supplements to approved applications, import or export bans or restrictions, and criminal prosecution and penalties. Any of these penalties could delay or prevent the promotion, marketing or sale of our products and product candidates.

The FDA’s policies, and policies of comparable foreign regulatory authorities, may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or to adopt 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, which would adversely affect our business, prospects and ability to achieve or sustain profitability.

We have no experience in clinical or commercial manufacturing and depend on others for the production of our product candidates at suitable levels of quality and quantity. Any problems or delays in the manufacture of our products would have a negative impact on our ability to successfully execute our development and commercialization strategies.

We do not currently have nor do we plan to acquire the infrastructure or capability internally to manufacture our clinical drug supplies for use in the conduct of our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale. We rely on collaborators and/or third parties for development, scale-up, formulation, optimization, management of clinical trial and commercial scale manufacturing and commercialization. There are no assurances we can scale-up, formulate or manufacture any product candidate in sufficient quantities with acceptable specifications for the conduct of our clinical trials or for the regulatory agencies to grant approval of such product candidate. We have not yet commercialized any products and have no commercial manufacturing experience. To be successful, our products must be properly formulated, scalable, stable and safely manufactured in clinical trial and commercial quantities in compliance with GMP and other regulatory requirements and at acceptable costs. Should any of our suppliers or our collaborators be unable to supply or be delayed in supplying us with sufficient supplies, no assurance can be given that we will be able to find alternative means of supply in a short period of time. Should such parties’ operations suffer a material adverse effect, the manufacturing of our products would also be adversely affected. Furthermore, key raw materials could become scarce or unavailable. There may be a limited number of third parties who can manufacture our products. We may not be able to meet specifications previously established for product candidates during scale-up and manufacturing.

Our reliance on third parties to manufacture our product candidates will expose us and our partners to risks including the following, any of which could delay or prevent the commercialization of our products, result in higher costs, or deprive us of potential product revenue:

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•

Contract manufacturers can encounter difficulties in achieving the scale-up, optimization, formulation, or volume production of a compound as well as maintaining quality control with appropriate quality assurance. They may also experience shortages of qualified personnel. Contract manufacturers are required to undergo a satisfactory GMP inspection prior to regulatory approval and are obliged to operate in accordance with FDA, International Council for Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use ("ICH"), European and other nationally mandated GMP regulations and/or guidelines governing manufacturing processes, stability testing, record keeping and quality standards. A failure of these contract manufacturers to follow GMP and to document their adherence to such practices or failure of an inspection by a regulatory agency may lead to significant delays in the availability of our product candidate materials for clinical study, leading to delays in our trials.

•

For each of our current product candidates we will initially rely on a limited number of contract manufacturers. Changing these or identifying future manufacturers may be difficult. Changing manufacturers requires re-validation of the manufacturing processes and procedures in accordance with FDA, ICH, European and other mandated GMP regulations and/or guidelines. Such re-validation may be costly and time-consuming. It may be difficult or impossible for us to quickly find replacement manufacturers on acceptable terms.


•	Our contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to produce, store and distribute our products successfully.

The successful commercialization of our product candidates, if approved, will depend on achieving market acceptance and we may not be able to gain sufficient acceptance to generate significant revenue.

Even if our product candidates are successfully developed and receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors such as private insurers or governments and other funding parties and the medical community. The degree of market acceptance for any of our products will depend on a number of factors, including:


•	demonstration of the clinical efficacy and safety of our products;


•	the prevalence and severity of any adverse side effects;


•	limitations or warnings contained in the product’s approved labeling;


•	cost-effectiveness and availability of acceptable pricing;


•	competitive product profile versus alternative treatment methods and the superiority of alternative treatment or therapeutics;


•	the effectiveness of marketing and distribution methods and support for the products; and


•	the availability of coverage and adequate reimbursement from third-party payors to the extent that our products receive regulatory approval.

Disease indications may be small subsets of a disease that could be parsed into smaller and smaller indications as different subsets of diseases are defined. This increasingly fine characterization of diseases could have negative consequences; including creating an approved indication that is so small as not to have a viable market for us. If future technology allows characterization of a disease in a way that is different from the characterization used for large pivotal studies, it may make those studies invalid or reduce their usefulness, and may require repeating all or a portion of the studies. Future technology may supply better prognostic ability which could reduce the portion of patients projected to need a new therapy. Even after being cleared by regulatory authorities, a product may later be shown to be unsafe or not to have its purported effect, thereby preventing its widespread use or requiring withdrawal from the market.

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* If we fail to obtain coverage and adequate reimbursement for our products, our revenue-generating ability will be diminished and there is no assurance that the anticipated market for our products will be sustained.

We believe that there will be many different applications for products successfully derived from our technologies and that the anticipated market for products under development will continue to expand. However, due to competition from existing or new products and the yet-to-be established commercial viability of our products, no assurance can be given that these beliefs will prove to be correct. Physicians, patients, formularies, payors or the medical community in general may not accept or utilize any products that we or our collaborative partners may develop. Other drugs may be approved during our clinical testing which could change the accepted treatments for the disease targeted and make our product candidates obsolete.

Our and our collaborators’ ability to commercialize our products successfully will depend, in part, on the extent to which coverage and adequate reimbursement for such products and related treatments will be available from governmental health payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers, managed care plans and other organizations. No assurance can be given that third-party payor coverage and adequate reimbursement will be available that will allow us to maintain price levels sufficient for the realization of an appropriate return on our investment in product development.

Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and private health insurers, managed care plans and other organizations is critical to new product acceptance. There is no uniform coverage and reimbursement policy among third-party payors in the United States; however, private third-party payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Additionally, coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available. Even if we obtain coverage for our product candidates, the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high. Patients are unlikely to use our product candidates unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our product candidates.

Additionally, we or our collaborators may develop companion diagnostic tests for use with our product candidates. We or our collaborators will be required to obtain coverage and reimbursement for these tests separate and apart from the coverage and reimbursement we seek for our product candidates, once approved. While we have not yet developed any companion diagnostic test for use with our product candidates, if we do, there is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement for the same reasons applicable to our product candidates.

In the United States and in many other countries, pricing and/or profitability of some or all prescription pharmaceuticals and biopharmaceuticals are subject to varying degrees of government control. In the United States, there has recently been increased government enforcement and government and payor scrutiny relating to drug pricing and price increases. For example, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, at the federal level, the Trump administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients and increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the Trump administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases. Further, on May 11, 2018, President Trump previously laid out his administration’s “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase 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 drug products paid by consumers. The Department of Health and Human Services (“HHS”) has solicited feedback on some of these measures and has implemented others under its existing authority. For example, in May 2019, Centers for Medicare & Medicaid Services (“CMS”) issued a final rule to allow Medicare Advantage plans the option to use step therapy for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019. Although some of these and other measures may require additional authorization to become effective, Congress and the Trump Administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. 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. These changes may adversely impact the prices we or our future collaborators may charge for our products candidates, if commercialized.

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Outside of the United States, the successful commercialization of our products will depend largely on obtaining and maintaining government coverage, because in many countries patients are unlikely to use prescription drugs that are not covered by their government healthcare programs. Negotiating coverage and reimbursement with governmental authorities can delay commercialization by 12 months or more. Coverage and reimbursement policies may adversely affect our ability to sell our products on a profitable basis. In many international markets, governments control the prices of prescription pharmaceuticals, including through the implementation of reference pricing, price cuts, rebates, revenue-related taxes and profit control, and we expect prices of prescription pharmaceuticals to decline over the life of the product or as volumes increase.

Healthcare reform and controls on healthcare spending may limit the price we charge for any products and the amounts thereof that we can sell. In particular, in the United States, the federal government and private insurers have changed and have considered ways to change, the manner in which healthcare services are provided. In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, "ACA") became law in the United States. With respect to pharmaceutical products, the ACA, among other things, expanded and increased industry rebates for drugs covered by Medicaid and made changes to the coverage requirements under Medicare Part D, Medicare’s prescription drug benefits program. Some of the provisions of the ACA have yet to be fully implemented, and there remains 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. On December 14, 2018, a Texas U.S. District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. Additionally, on December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and has allotted one hour for oral arguments, which are expected to occur in the fall. It is unclear how such litigation and other efforts to repeal and replace the ACA will impact the ACA and our business.

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. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013 and, as amended by subsequent legislation including the Bipartisan Budget Act of 2018, will stay in effect through 2030 unless additional Congressional action is taken. The CARES Act, which was designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester reductions from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and accordingly, our financial operations.

We anticipate that the ACA, as well as alternative or replacement healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the reimbursement we may receive for any approved product. It is possible that additional governmental action is taken to address the COVID-19 pandemic. Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

In addition, levels of reimbursement may be impacted by other current and future legislation, regulation or reimbursement policies of third-party payors in a manner that may harm the demand and reimbursement available for our products, including for companion diagnostics for our products, which in turn, could harm our future product pricing and sales. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.

* Competition in our targeted market area is intense and this field is characterized by rapid technological change. Therefore developments by competitors may substantially alter the predicted market or render our product candidates uncompetitive.

There are hundreds of drugs in clinical development today in the area of oncology therapeutics. We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions. Many companies have filed, and continue to file, patent applications in oncology which may or could affect our programs. Some of these patent applications may have already been allowed or issued, and others may issue in the future. In the oncology market, our major competitors include, but are not limited to: Amgen, Inc., Astellas Pharma

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Inc., AstraZeneca plc, Eisai Co. Ltd., Eli Lilly and Company, Exelixis, Inc., F. Hoffman-La Roche Ltd., Johnson & Johnson, Merck & Co. Inc., Nektar Therapeutics, Novartis AG and Pfizer Inc. among others. Since this area is competitive and of strong interest to pharmaceutical and biotechnology companies, there will likely be additional patent applications filed, and additional patents granted, in the future, as well as additional research and development programs expected in the future.

In addition to companies that have kinase inhibitors addressing our oncology indications of interest, our competition also includes hundreds of private and publicly traded companies that operate in the area of oncology but have therapeutics with different mechanisms of action. The oncology market in general is highly competitive with over 1,000 molecules currently in clinical development.

Developments by others may render our products or technologies non-competitive or obsolete or we may not be able to keep pace with technological developments. Our competitors may have developed or may be developing technologies which may be the basis for competitive products. Some of these products may prove to be more effective and less costly than the products developed or being developed by us. Our competitors may obtain regulatory approval for their products more rapidly than we do which may change the standard of care in the indications we are targeting, rendering our technology or products non-competitive or obsolete. For example, with the recent approval of immunotherapy agents for the treatment of NSCLC and other cancers, the standard of care for the treatment of cancer is evolving and will continue to evolve which could require us to change the design and timelines for our registration trails and may limit the commercial acceptance of our products in the future. Others may develop treatments or cures superior to any therapy we are developing or will develop. Moreover, alternate, less toxic forms of medical treatment may be developed which may be competitive with our products.

Many of the organizations which could be considered to be our competitors have substantially more financial and technical resources, more extensive discovery research, preclinical research and development capabilities and greater manufacturing, marketing, distribution, production and human resources than we do. Many of our current or potential competitors have more experience than us in research, preclinical testing and clinical trials, drug commercialization, manufacturing and marketing, and in obtaining domestic and foreign regulatory approvals. In addition, failure, unacceptable toxicity, lack of sales or disappointing sales or other issues regarding competitors’ products or processes could have a material adverse effect on our product candidates, including our clinical candidates or our lead compounds. Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates less competitive. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and brand recognition and to be commercially successful. Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA, EMA or other regulatory approval or discovering, developing and commercializing medicines before we do, which would have a material adverse impact on our business.

We will not be able to successfully commercialize our product candidates without establishing sales and marketing capabilities internally or through collaborators.

We may not be able to find suitable sales and marketing staff and collaborators for all of our product candidates. We have no prior experience in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any collaborators may not be adequate or successful or could terminate or materially reduce the effort they direct to our products. The development of a marketing and sales capability will require significant expenditures, management resources and time. The cost of establishing such a sales force may exceed any potential product revenue, or our marketing and sales efforts may be unsuccessful. If we are unable to develop an internal marketing and sales capability in a timely fashion, or at all, or if we are unable to enter into a marketing and sales arrangement with a third party on acceptable terms, we may be unable to successfully develop and seek regulatory approval for our product candidates and/or effectively market and sell approved products, if any.

* We are subject to competition for our skilled personnel and may experience challenges in identifying and retaining key personnel that could impair our ability to conduct our operations effectively.

Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel. If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. Although we have not experienced problems attracting and retaining highly qualified personnel in the recent past, our industry has experienced a high rate of turnover of management personnel in recent years. Our ability to compete in the highly competitive biotechnology and pharmaceuticals industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical

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personnel, especially Charles M. Baum, M.D., Ph.D., our President and Chief Executive Officer, James Christensen, Ph.D., our Executive Vice President and Chief Scientific Officer, Daniel Faga, our Executive Vice President and Chief Operating Officer, Benjamin Hickey, our Executive Vice President and Chief Commercial Officer and Joseph Leveque, M.D., our Executive Vice President and Chief Medical Officer, whose services are critical to the successful implementation of our product candidate acquisition, development and regulatory strategies, as well as the management of our financial operations. We are not aware of any present intention of any of these individuals to leave our Company. In order to induce valuable employees to continue their employment with us, we have provided equity awards that vest over time. The value to employees of equity awards that vest over time is significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies.

Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us at any time, with or without notice. The loss of the services of any of our executive officers or other key employees and our inability to find suitable replacements could harm our business, financial condition and prospects. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.

We may also experience growth in the number of our employees and the scope of our operations, especially in clinical development. This growth will place a significant strain on our management, operations and financial resources and we may have difficulty managing this future potential growth. No assurance can be provided that we will be able to attract new employees to assist in our growth. Many of the other pharmaceutical companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do. We also may employ consultants or part-time and contract employees. There can be no assurance that these individuals are retainable. While we have been able to attract and retain skilled and experienced personnel and consultants in the past, no assurance can be given that we will be able to do so in the future.

* Our current and future relationships with customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

As a pharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. Our current and future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, which may constrain the business or financial arrangements and relationships through which we sell, market and distribute any drugs for which we obtain marketing approval. In addition, we may be subject to transparency laws and patient privacy regulation by U.S. federal and state governments and by governments in foreign jurisdictions in which we conduct our business. The laws that may affect our ability to operate include:

•

the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order, lease, furnishing, prescribing or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid. The term “remuneration” has been broadly interpreted to include anything of value. The ACA, among other things, amended the intent requirement of the federal Anti‑Kickback Statute such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate, in order to commit a violation;

•

federal civil and criminal false claims laws, including the federal False Claims Act which can be enforced by private individuals on behalf of the government through civil whistleblower or qui tam actions, and civil monetary penalty laws prohibit individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. Entities 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, or for providing medically unnecessary services or items. In addition, 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 federal False Claims Act;


•	the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit

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program, including third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of or payment for healthcare benefits, items or services;

•

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH"), and their respective implementing regulations, which impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as individuals and entities that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, known as business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. HITECH also created 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 U.S. federal courts to enforce the federal HIPAA laws and seek attorneys' fees and costs associated with pursuing federal civil actions;

•

the federal Open Payments program, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to “payments or other transfers of value” made to physicians, which is defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals and ownership and investment interests held by such healthcare professionals and their immediate family members. Beginning in 2022, applicable manufacturers also will be required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives; and

•

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of such laws. To the extent that any of our product candidates is ultimately sold in countries other than the United States, we may be subject to similar laws and regulations in those countries. If we or our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, 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, exclusion from participation in government healthcare programs, and the curtailment or restructuring of our operations, any of which could have a material adverse effect on our business. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including any of our collaborators, is found not to be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusion from participation in government healthcare programs, which could also materially affect our business.

In addition, California recently enacted the California Consumer Privacy Act (“CCPA”), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling certain personal data of consumers or households. The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action. The CCPA went into effect on January 1, 2020. The CCPA may impact our business activities and exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information.

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We may become subject to the risk of product liability claims.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. Human therapeutic products involve the risk of product liability claims and associated adverse publicity. Currently, the principal risks we face relate to patients in our clinical trials, who may suffer unintended consequences. Claims might be made by patients, healthcare providers, pharmaceutical companies or others. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection laws. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates, if approved. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:


•	decreased demand for our product candidates;


•	injury to our reputation;


•	withdrawal of clinical trial participants;


•	initiation of investigations by regulators;


•	costs to defend the related litigation;


•	a diversion of management’s time and our resources;


•	substantial monetary awards to trial participants or patients;


•	product recalls, withdrawals or labeling, marketing or promotional restrictions;


•	loss of revenue from product sales; and


•	the inability to commercialize any of our product candidates, if approved.

We may not have or be able to obtain or maintain sufficient and affordable insurance coverage, and without sufficient coverage any claim brought against us could have a materially adverse effect on our business, financial condition or results of operations. We run clinical trials through investigators that could be negligent through no fault of our own and which could affect patients, cause potential liability claims against us and result in delayed or stopped clinical trials. We are required in many cases by contractual obligations to indemnify collaborators, partners, third-party contractors, clinical investigators and institutions. These indemnifications could result in a material impact due to product liability claims against us and/or these groups. We currently carry $10 million in product liability insurance, which we believe is appropriate for our clinical trials. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Our business involves the controlled use of hazardous materials and as such we are subject to environmental and occupational safety laws. Continued compliance with these laws may incur substantial costs and failure to maintain compliance could result in liability for damages that may exceed our resources.

Our preclinical research, manufacturing and development processes involve the controlled use of hazardous and radioactive materials. We are subject to federal, local and foreign laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. The risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, we could be held liable for any damages that result, and any such liability could exceed our resources. We may not be adequately insured against this type of liability. We may be required to incur significant costs to comply with environmental laws and regulations in the future, and our operations, business or assets may be materially adversely affected by current or future environmental laws or regulations.

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We may have to dedicate resources to the settlement of litigation.

Securities legislation in the United States, Canada and other countries makes it relatively easy for shareholders to sue. This could lead to frivolous lawsuits which could take substantial time, money, resources and attention or force us to settle such claims rather than seek adequate judicial remedy or dismissal of such claims.

If we are required to defend patent infringement actions brought by third parties, or if we sue to protect our own patent rights or otherwise to protect our proprietary information and to prevent its disclosure, or if we are involved in other litigation, whether as a plaintiff or defendant, we may be required to pay substantial litigation costs and managerial attention may be diverted from business operations even if the outcome is in our favor. If we are required to defend our patents or trademarks against infringement by third parties, we may be required to pay substantial litigation costs and managerial attention and financial resources may be diverted from our research and development operations even if the outcome is in our favor.

We may be vulnerable to disruption, damage, theft of our intellectual property and financial obligation as a result of system failures.

We are dependent upon our own or third-party information technology systems, infrastructure and data, to operate our business. Despite the implementation of security measures, any of the internal computer systems belonging to us, our collaborators or our third-party service providers are vulnerable to damage from computer viruses, unauthorized access (including by foreign private parties and state actors), natural disasters, terrorism, war and telecommunication and electrical failure. Cyber-attacks are increasing in their frequency, sophistication and intensity, and the prevalent use of mobile devices that access confidential information increases the risk of data security breaches. Any system failure, accident or security breach that causes interruptions in our own, in collaborators’ or in third-party service vendors’ operations could result in a material disruption of our drug discovery and development programs or theft of our intellectual property. In addition, we rely upon third-party contractors and service providers for the hosting, support and/or maintenance of some aspects of our computer hardware, computer software and telecommunications systems. Failure of those contractors and service providers to provide systems and services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs, or loss of confidential or proprietary information. To the extent that any disruption or security breach results in a loss or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur liability, our drug discovery and development programs may be adversely affected and the further development of our product candidates may be delayed. Furthermore, such disruptions or security breaches could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to litigation or other liability under laws and regulations that protect personal data, any of which could disrupt our business and/or result in increased costs.

* Changes in funding for the FDA, the SEC and other government agencies, or shutdowns or furloughs related to the COVID-19 pandemic, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including most recently beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

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Risks Relating to Our Intellectual Property

We may not obtain adequate protection for our product candidates through patents and other intellectual property rights and as such our competitive advantage in the marketplace may be compromised.

Our success depends, in part, on our ability to secure and protect our patents, trade secrets, trademarks and other intellectual property rights and to operate without infringing on the proprietary rights of others or having third parties circumvent the rights that we own or license. We have filed and are actively pursuing patent applications in the United States, Japan, Europe and other major markets via the Patent Cooperation Treaty or directly in countries of interest. The patent positions of healthcare companies, universities and biopharmaceutical companies, including ours, are uncertain and involve complex questions of law and fact for which important legal issues may remain unresolved. Therefore, there is no assurance that our pending patent applications will result in the issuance of patents or that we will develop additional proprietary products which are patentable. Moreover, patents issued or to be issued to us may not provide us with any competitive advantage. Further, if the patent applications we hold or in-license with respect to our programs, product candidates and companion diagnostic fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our product candidates, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize future products.

Our patents may be challenged by third parties at the United States Patent and Trademark Office ("USPTO"), comparable foreign patent offices, or in patent litigation. In addition, it is possible that third parties with products that are very similar to ours will circumvent our patents by means of alternate designs or processes or file applications or be granted patents that would block or hurt our efforts.

There are no assurances that our patent counsel, lawyers or advisors have given us correct advice or counsel. Opinions from such patent counsel or lawyers may not be correct or may be based on incomplete facts. We cannot be certain that we are the first to invent or first to file for patent protection for the inventions covered by pending patent applications and, if we are not, we may be subject to priority disputes. We may be required to disclaim part or all of the subject matter and/or term of certain patents or all of the subject matter and/or term of certain patent applications. There may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim. There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of one or more claims, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. No assurance can be given that if challenged, our patents would be declared by the USPTO, comparable foreign patent offices or a court to be valid or enforceable or that even if found valid and enforceable, a competitor’s technology or product would be found by a court to infringe our patents. The possibility exists that others will develop products which have the same effect as our products on an independent basis which do not infringe our patents or other intellectual property rights, or will design around the claims of patents that we have had issued that cover our products. The steps we have taken to protect our intellectual property may not prevent the misappropriation of our proprietary information and technologies, particularly in foreign countries where laws or law enforcement practices may not protect proprietary rights to the same extent as in the United States, Europe or Japan. Unauthorized disclosure of our proprietary information could also harm our competitive position. We could also inadvertently use our collaborators’ data inappropriately which could lead to liability. We may file patent applications but have the scope of the claims narrowed or significantly narrowed during prosecution or we may not be able to supply sufficient data to satisfy a patent office to support the full breadth of our claims and, as a result, may not obtain the original claims desired or we may receive amended claims with significantly reduced scope. Alternatively, it is possible that we may not receive any patent protection from an application.

Maintaining our patents and applications requires timely payment of fees and other associated costs in the countries of filing, and we could inadvertently abandon a patent or patent application (or trademark or trademark application) due to non-payment of fees, or as a result of a failure to comply with filing deadlines or other requirements of the prosecution process, resulting in the loss of protection of certain intellectual property rights in a certain country. Alternatively, we, our collaborators or our patent counsel may take action resulting in a patent or patent application becoming abandoned which may not be able to be reinstated, or if reinstated, may suffer patent term adjustments. Any of these outcomes could hurt our ability to gain full patent protection for our products. Registered trademarks and/or applications for trademark registrations in the United States that belong to us are subject to similar risks as described above for patents and patent applications.

Many of our collaboration agreements are complex and may call for licensing or cross-licensing of potentially blocking patents, know-how or intellectual property. Due to the potential overlap of data, know-how and intellectual property rights there can be no assurance that one of our collaborators will not dispute our right to send data or know-how or other intellectual property rights to third parties and this may potentially lead to liability or termination of a program or litigation. There are no assurances that the actions of our collaborators would not lead to disputes or cause us to default with other collaborators. We cannot be certain that a collaborator will not challenge the validity of licensed patents.

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We cannot be certain that any country’s patent and/or trademark office will not implement new rules which could affect how we draft, file, prosecute and/or maintain patents and patent applications, or that certain patent rights and/or trademark rights will be granted by governmental authorities in particular foreign countries. We cannot be certain that increasing costs for drafting, filing, prosecuting and maintaining patent applications and patents will not limit our ability to file for patent protection, or to prosecute applications through to grant. We may be forced to abandon or return the rights to specific patents due to a lack of financial resources. There is no assurance that we could enter into licensing arrangements at a reasonable cost, or develop or obtain alternative technology in respect of patents issued to third parties that incidentally cover our products. Any inability to secure such licenses or alternative technology could result in delays in the introduction of some of our products or even lead to prohibition of the development, manufacture or sale of certain products by us.

We may file applications for trademark registrations in connection with our product candidates in various jurisdictions, including the United States. No assurance can be given that any of our trademark applications will be registered in the United States or elsewhere, or that the use of any registered or unregistered trademarks will confer a competitive advantage in the marketplace. Furthermore, even if we are successful in our trademark registrations, the FDA and regulatory authorities in other countries have their own process for drug nomenclature and their own views concerning appropriate proprietary names. No assurance can be given that the FDA or any other comparable regulatory authority will accept any of our trademarks or will not request reconsideration of one of our trademarks, for use in connection with our drug product candidates, whether currently or at some time in the future. The loss, abandonment, or cancellation of any of our trademarks or trademark applications could negatively affect the success of the product candidates to which they relate.

Moreover, some of our know-how and technology which is not patented or not patentable may constitute trade secrets. Therefore, we require our consultants, advisors and collaborators to enter into confidentiality agreements and our employees to enter into invention and non-disclosure agreements. However, no assurance can be given that such agreements will provide for a meaningful protection of our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure of information. Furthermore, we cannot provide assurance that any of our employees, consultants, contract personnel or collaborators, either accidentally or through willful misconduct, will not cause serious negative impact to our programs and/or our strategy. All of our employees have signed confidentiality agreements, but there can be no assurance that they will not inadvertently or through their misconduct give trade secrets away.

Third-party patents or intellectual property infringement claims may result in a reduction in the scope of our patent protection and competitive exclusivity with respect to our product candidates. Patent litigation, including defense against third-party intellectual property claims, may result in us incurring substantial costs.

Patent applications which may relate to or affect our business may have been filed by others. Such patent applications or patents resulting there from may conflict with our technologies, patents or patent applications, potentially reducing the scope or strength of our patent protection, and may ultimately be determined to limit or prohibit our freedom to operate with respect to our product candidates. Such events could cause us to stop or change the course of our research and development or modify our intellectual property strategies. We could also become involved in interference proceedings in connection with one or more of our patents or patent applications to determine priority of invention, or in post-grant opposition proceedings at the USPTO or comparable foreign patent offices. There can be no guarantees that an interference proceeding or defense of a post-grant opposition would be successful or that such an outcome would be upheld on appeal. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of such interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees.

No assurance can be given that our patents, once issued, would be declared by a court to be valid or enforceable, or that we would not be found to infringe a competitor’s patent.

Third parties may assert that we are using their proprietary information without authorization. Third parties may also have or obtain patents and may claim that technologies licensed to or used by us infringe their patents. Because patent applications can take many years to issue, third parties may have currently pending patent applications which may later result in issued patents that our product candidates or companion diagnostic may infringe, or which such third parties claim are infringed by the use of our technologies. If any third-party patents are held by a court of competent jurisdiction to cover any aspect of our product candidates, including the formulation or method of use of such product candidate, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtain a license under the applicable patents, or until such patents expire. In any such case, such a license may not be available on commercially reasonable terms or at all. We may attempt to invalidate a competitor’s patent or trademark. There is no assurance such action will ultimately be successful and, even if initially successful, it could be overturned upon appeal. In addition, any legal action that seeks damages or an injunction to stop us from carrying on our commercial activities relating to the affected technologies could subject us to monetary liability. Some of our

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competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.

Parties making claims against us for alleged infringement of their intellectual property rights may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we could be required to redesign our infringing products or obtain a license from such third party to continue developing and commercializing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms, or at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. It may be impossible to redesign our products and technology, or it may require substantial time and expense, which could force us to cease commercialization of one or more of our product candidates, or some of our business operations, which could materially harm our business. In addition, in any such proceeding, we may be required to pay substantial damages, including treble damages and attorneys’ fees in the event we are found liable for willful infringement.

Our intellectual property may be infringed upon by a third party.

Third parties may infringe one or more of our issued patents or trademarks. We cannot predict if, when or where a third party may infringe one or more of our issued patents or trademarks. There is no assurance that we would be successful in a court of law to prove that a third party is infringing one or more of our issued patents. Even if we are successful in proving in a court of law that a third party is infringing one or more of our issued patents there can be no assurance that we would be successful in halting their infringing activities, for example, through a permanent injunction, or that we would be fully or even partially financially compensated for any harm to our business. We may be forced to enter into a license or other agreement with the infringing third party at terms less profitable or otherwise less commercially acceptable to us than if the license or agreement were negotiated under conditions between those of a willing licensee and a willing licensor. We may not become aware of a third party infringer within legal timeframes that would enable us to seek adequate compensation, or at all, thereby possibly losing the ability to be compensated for any harm to our business. Such a third-party may be operating in a foreign country where the infringer is difficult to locate, where we do not have issued patents and/or the patent laws may be more difficult to enforce. Some third-party infringers may be able to sustain the costs of complex patent infringement litigation more effectively than we can because they have substantially greater resources. Any inability to stop third-party infringement could result in loss in market share of some of our products or even lead to a delay, reduction and/or inhibition of the development, manufacture or sale of certain products by us. There is no assurance that a product produced and sold by a third-party infringer would meet our or other regulatory standards or would be safe for use. Such third-party infringer products could irreparably harm the reputation of our products thereby resulting in substantial loss in market share and profits.

Third parties may seek to obtain approval of a generic version of approved products. Defense against entry of a generic product may result in us incurring substantial costs and ultimate failure to prevail against approval of a generic product could result in a substantial loss of market share and profits.

Even if we are successful in obtaining regulatory approval to sell any of our product candidates in one or more countries, we cannot be certain that our patents and other intellectual property rights will ultimately prevent approval during the patent term

of generic products developed and commercialized by third parties. A generic manufacturer may seek approval of a generic version of any of our products in the United States by filing an Abbreviated New Drug Application ("ANDA"), with the FDA asserting that our patents are invalid and/or unenforceable to maintain market exclusivity for any of our products, if approved. We cannot predict if, or when, one or more generic manufacturers may attempt to seek regulatory approval for a generic version of any of our products, if approved. There is no assurance that we will ultimately be successful in a court of law to prevent entry of a generic version of any of our products during the applicable patent term and we may incur substantial costs defending our patents and intellectual property rights. An inability to stop a generic manufacturer from selling a generic version of our products could result in a substantial loss of market share and profits or even preclude the ability to continue to commercialize any of our products, if approved.

Risks Related to Our Shares of Common Stock

Our share price is volatile and may be influenced by numerous factors that are beyond our control.

A low share price and low market valuation may make it difficult to raise sufficient additional cash due to the significant dilution to current shareholders. Market prices for shares of biotechnology and biopharmaceutical companies such as ours are often volatile. Factors such as clinical and regulatory developments regarding our products or processes, developments regarding potential or future third-party collaborators, announcements of technological innovations, new commercial products, patents, the

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development of proprietary rights by us or by others or any litigation relating to these rights, regulatory actions, general conditions in the biotechnology and pharmaceutical industries, failure to meet analysts’ expectations, publications, financial results or public concern over the safety of biopharmaceutical and biotechnological products, economic conditions in the United States and other countries, terrorism and other factors could have a significant effect on the share price for our shares of common stock. Any setback or delay in the clinical development of our programs could result in a significant decrease in our share price. In recent years the stock of other biotechnology and biopharmaceutical companies has experienced extreme price fluctuations that have been unrelated to the operating performance of the affected companies. There can be no assurance that the market price of our shares of common stock will not experience significant fluctuations in the future, including fluctuations that are unrelated to our performance. These fluctuations may result due to macroeconomic and world events, national or local events, general perception of the biotechnology industry or to a lack of liquidity. In addition, other biotechnology companies' or our competitors’ programs could have positive or negative results that impact their stock prices and their results or experience stock price fluctuations that could have a positive or negative impact on our stock price, regardless whether such impact is direct or not.

Shareholders may not agree with our business, scientific, clinical and financial strategy, including additional dilutive financings, and may decide to sell their shares or vote against such proposals. Such actions could materially impact our stock price. In addition, portfolio managers of funds or large investors can change or change their view on us and decide to sell our shares. These actions could have a material impact on our stock price. In order to complete a financing, or for other business reasons, we may elect to consolidate our shares of common stock. Investors may not agree with these actions and may sell our shares. We may have little or no ability to impact or alter such decisions.

* Our principal shareholders control the majority of our shares, and their actions may significantly influence matters submitted to our shareholders for approval and our share price.

Based on the information available to us as of June 30, 2020, our shareholders and their affiliates who owned more than 5% of our outstanding common stock collectively owned 60% of our outstanding common stock. Boxer Capital, LLC ("Boxer Capital") and its affiliates collectively own 12% of our outstanding common stock. In addition, in conjunction with certain financing transactions, we granted Boxer Capital the right to nominate a member of our Board of Directors and the right to appoint an observer on our Board of Directors. In addition, we granted Baker Brothers Advisors, LLC ("Baker Brothers") the right to appoint an observer on our Board of Directors. Collectively Baker Brothers and Boxer Capital may have significant influence over matters submitted to our shareholders for approval, including the election and removal of directors and the approval of any merger, consolidation, or sale of all or substantially all of our assets. Furthermore, if Baker Brothers, Boxer Capital or any other of our major shareholders determine to exit from the industry or from their holdings in us, for whatever reason, the impact on our share price could be detrimental over a prolonged period of time.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our shareholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders.

Pursuant to our 2013 Equity Incentive Plan (the "2013 Plan"), and our 2013 Employee Stock Purchase Plan (the "ESPP"), our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants, and to sell our common stock to our employees, respectively. Pursuant to the Inducement Plan, the Board of Directors is authorized to grant stock options and other equity-based awards to new employees who satisfy the standards for inducement grants in accordance with the Nasdaq Stock Market LLC listing rules. Any increase in the number of shares outstanding as a result of the exercise of outstanding options, the vesting or settlement of outstanding stock awards, or the purchase of shares pursuant to the ESPP will cause our shareholders to experience additional dilution, which could cause our stock price to fall.

* Our bylaws, as amended (our “Bylaws”) provide that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought

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on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to our company or our shareholders, (iii) any action asserting a claim against our company arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or Bylaws, or (iv) any action asserting a claim against our company governed by the internal affairs doctrine. This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended, or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

This choice of forum provision may limit a shareholder’s ability to bring certain claims in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or shareholders, which may discourage lawsuits with respect to such claims, although our shareholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. If a court were to find this choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, would be our shareholders’ only source of gain.

We have never declared or paid any cash dividends on our common shares, and we currently expect that earnings, if any, and cash flow will primarily be retained and used in our operations, including servicing any debt obligations we may have now or in the future. Accordingly, although we do not anticipate paying any dividends in the foreseeable future, we may not be able to generate sufficient cash flow in order to allow us to pay future dividends on, or make any distributions with respect to our common stock. As a result, capital appreciation, if any, of our common stock would be our shareholders’ sole source of gain on their investment in our common stock for the foreseeable future.

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ITEM 6.	Exhibits



Exhibit number		Description of document
2.1		Arrangement Agreement, dated May 8, 2013, by and between MethylGene Inc. and the Company.⁽²⁾
3.1		Amended and Restated Certificate of Incorporation.⁽¹⁾
3.2		Bylaws.⁽¹⁾
3.3		Amendment to Bylaws.⁽³⁾
4.1		Form of Common Stock Certificate.⁽²⁾
4.2		Form of Warrant to Purchase Common Stock.⁽⁴⁾
4.3		Form of Warrant to Purchase Common Stock.⁽⁵⁾
4.4		Form of Warrant to Purchase Common Stock.⁽⁶⁾
10.1		Separation and Release Agreement, dated June 1, 2020, by and between the Registrant and Isan Chen.
10.2		Amended and Restated Lease to 3545 Cray Court, dated June 30, 2020.
31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
32.1		Certifications Pursuant to U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002.
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_____________________________________________________


⁽¹⁾	Incorporated by reference to Mirati Therapeutics, Inc.’s Registration Statement on Form 10-12B (No. 001-35921), filed with the Securities and Exchange Commission on May 10, 2013.


⁽²⁾	Incorporated by reference to Mirati Therapeutics, Inc.’s Amended Registration Statement on Form 10-12B/A (No. 001-35921), filed with the Securities and Exchange Commission on June 14, 2013.


⁽³⁾	Incorporated by reference to Mirati Therapeutics, Inc.'s Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 16, 2016.


⁽⁴⁾	Incorporated by reference to Mirati Therapeutics, Inc.'s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 6, 2017.


⁽⁵⁾	Incorporated by reference to Mirati Therapeutics, Inc.'s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 16, 2017.


⁽⁶⁾	Incorporated by reference to Mirati Therapeutics, Inc.'s Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 7, 2018.

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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 hereunto duly authorized.



		MIRATI THERAPEUTICS, INC.

Date: August 6, 2020	by:	/s/ Charles M. Baum
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 6, 2020	by:	/s/ Daniel R. Faga
		Executive Vice President and Chief Operating Officer
		(Principal Financial Officer)

Date: August 6, 2020	by:	/s/ Vickie S. Reed
		Senior Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

AMENDED AND RESTATED LEASE AGREEMENT

THIS AMENDED AND RESTATED LEASE AGREEMENT AMENDS, RESTATES AND SUPERSEDES IN ITS ENTIRETY THAT CERTAIN LEASE AGREEMENT DATED AS OF AUGUST 22, 2019 (THE “ORIGINAL LEASE”), BY AND BETWEEN TENANT (AS DEFINED BELOW) AND LANDLORD (AS DEFINED BELOW).

THIS AMENDED AND RESTATED LEASE AGREEMENT (this “Lease”) is made this _30_ day of June, 2020, between ARE-SD REGION NO. 38, LLC, a Delaware limited liability company (“Landlord”), and MIRATI THERAPEUTICS, INC., a Delaware corporation (“Tenant”).


Building:	3545 Cray Court, San Diego, California

Premises:

The entire Building containing approximately 118,225 rentable square feet (“RSF”), as determined by Landlord, as shown on Exhibit A. The Premises shall be Delivered (as defined in Section 2 below) to Tenant in two phases as provided in Section 2 below. As used in this Lease, the “Initial Premises” shall mean a portion of the Building containing approximately 54,505 RSF, as shown on Exhibit A and the “Subsequent Premises” shall mean the balance of the Building containing approximately 63,720 RSF, all as shown on Exhibit A.


Project:	The real property on which the Building in which the Premises are located, together with all improvements thereon and appurtenances thereto as described on Exhibit B.


Base Rent:	See the Schedule of Base Rent attached hereto as Exhibit H.

Rentable Area of Premises: 118,225 RSF

Rentable Area of Project: 118,225 RSF

Tenant’s Share of Operating Expenses: 100% (46.10% with respect to the Initial Premises and 53.90% with respect to the Subsequent Premises)

Security Deposit: $620,681.25

Target Commencement Date: March 22, 2021

Base Term:

Beginning on the Commencement Date and ending 144 months from the first day of the first full month following the Commencement Date. For clarity, if the Commencement Date occurs on the first day of a month, the expiration of the Base Term shall be measured from that date. If the Commencement Date occurs on a day other than the first day of a month, the expiration of the Base Term shall be measured from the first day of the following month.


Permitted Use:	Research and development laboratory, related office and other related uses consistent with the character of the Project and otherwise in compliance with the provisions of Section 7 hereof.

Address for Rent Payment: Landlord’s Notice Address:

ARE-SD Region No. 38, LLC 26 North Euclid Avenue

P. O. Box 944439 Pasadena, CA 91101

Cleveland, OH 44194-4439 Attention: Corporate Secretary

Tenant’s Notice Address    Tenant’s Notice Address
Prior to the Commencement Date:    Following the Commencement Date:
9393 Towne Centre Drive, Suite 200    3545 Cray Court
San Diego, California 92121    La Jolla, CA 92121
Attention: Chief Operating Officer    Attention: Chief Operating Officer

With a copy to:    With a copy to:
9393 Towne Centre Drive, Suite 200    3545 Cray Court
San Diego, California 92121    La Jolla, CA 92121
Attention: General Counsel    Attention: General Counsel

The following Exhibits and Addenda are attached hereto and incorporated herein by this reference:


[X] EXHIBIT A - PREMISES DESCRIPTION	[X] EXHIBIT B - DESCRIPTION OF PROJECT


[X] EXHIBIT C - WORK LETTER	[X] EXHIBIT D - COMMENCEMENT DATE


[X] EXHIBIT E - RULES AND REGULATIONS	[X] EXHIBIT F - TENANT’S PERSONAL PROPERTY


[X] EXHIBIT G - MAINTENANCE OBLIGATIONS	[X] EXHIBIT H - BASE RENT SCHEDULE

[X] EXHIBIT I - BRIDGE SCHEMATIC

1.Lease of Premises. Upon and subject to all of the terms and conditions hereof, Landlord hereby leases the Project to Tenant and Tenant hereby leases the Project from Landlord. From and after the Commencement Date with respect to the Initial Premises and after the Subsequent Premises Commencement Date with respect to the Subsequent Premises through the expiration of the Term, Tenant shall have access to the Building, the Project (including the parking areas of the Project), and the Premises 24 hours a day, 7 days a week, except in the case of emergencies, as the result of Legal Requirements, or the performance by Landlord of any installation, maintenance or repairs for which Landlord is responsible under this Lease, and otherwise subject to the terms of this Lease.

Notwithstanding anything to the contrary contained in this Lease, Tenant and Landlord acknowledge and agree that the effectiveness of this Lease shall be subject to the following condition precedent (“Condition Precedent”) having been satisfied: Landlord shall have obtained the consent to this Lease from the lender that currently holds a mortgage secured by the Project. If the Condition Precedent is not satisfied on or before the date that is 60 days after the mutual execution and delivery of this Lease by the parties, Landlord shall notify Tenant, this Lease shall automatically terminate and: (a) the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), and any prepaid Base Rent actually delivered by Tenant shall be returned to Tenant, and (b) neither Landlord nor Tenant shall have any further rights, duties or obligations under this Lease, except with respect to provisions which expressly survive termination of this Lease. Landlord shall have no liability whatsoever to Tenant relating to or arising from the failure of the Condition Precedent to be satisfied.

2. Delivery; Acceptance of Initial Premises and Subsequent Premises; Commencement Date; Subsequent Premises Commencement Date.

(a) Landlord shall use reasonable efforts to deliver (“Delivery” or “Deliver”) the Initial Premises to Tenant on or before the Target Commencement Date, with Landlord’s Work (other than the Tenant Improvements in the Subsequent Premises and the Bridge Work (as defined in Section 44(u))) Substantially Completed and in broom clean condition. If Landlord fails to timely Deliver the Initial Premises, Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and this Lease shall not be void or voidable except as provided herein. If Landlord does not Deliver the Initial Premises within 150 days of the Target Commencement Date for any reason other than Force Majeure delays and Tenant Delays, this Lease may be terminated by Tenant by written notice to Landlord, and if so terminated by Tenant: (i) the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), and any prepaid Base Rent actually delivered by Tenant shall be returned to Tenant shall be returned to Tenant, and (ii) neither Landlord nor Tenant shall have any further rights, duties or obligations under this Lease, except with respect to provisions which expressly survive termination of this Lease. As used herein, the terms “Landlord’s Work,” “Tenant Delays” and “Substantially Completed” shall have the meanings set forth for such terms in the Work Letter. If Tenant does not elect to void this Lease within 5 business days of the lapse of such 150 day period, such right to void this Lease shall be waived and this Lease shall remain in full force and effect.

The “Commencement Date” shall be the earlier of: (x) the date Landlord Delivers the Initial Premises to Tenant with Landlord’s Work in the Initial Premises Substantially Completed and Landlord’s Work (other than the construction of the Tenant Improvements in the Subsequent Premises and the Bridge Work) substantially completed; and (y) the date Landlord could have Delivered the Initial Premises to Tenant with Landlord’s Work in the Initial Premises Substantially Completed but for Tenant Delays. Landlord shall use reasonable efforts to deliver to Tenant not less than 5 business days advance written notice of the Commencement Date. For the avoidance of doubt, prior to the Subsequent Premises Commencement Date, references in this Lease to the “Premises” shall mean the Initial Premises.

Subject to the provisions of Section 6 of the Work Letter, Landlord shall permit Tenant access to the Initial Premises for a period of 60 days prior to the Commencement Date for Tenant’s installation and setup of cabling, furniture, fixtures and equipment (“FF&E Installation”) in the Initial Premises, provided that such FF&E Installation is coordinated with Landlord, and Tenant complies with this Lease and all other reasonable restrictions and conditions Landlord may impose. Any access to the Initial Premises by Tenant before the Commencement Date shall be subject to all of the terms and conditions of this Lease, excluding the obligation to pay Base Rent or Operating Expenses.

For the period of 365 consecutive days after the Commencement Date, Landlord shall, at its sole cost and expense (which shall not constitute an Operating Expense), be responsible for any repairs that are required to be made to the Building Systems (as defined in Section 13) serving the Initial Premises, unless Tenant or any Tenant Party was responsible for the cause of such repair, in which case Tenant shall pay the cost. Tenant shall also be entitled to the benefit of any warranties issued to Landlord in connection with the Tenant Improvements in the Initial Premises.

Except as set forth in the Work Letter or as otherwise expressly set forth in this Lease: (A) Tenant shall accept the Initial Premises in their condition as of the Commencement Date; (B) Landlord shall have no obligation for any defects in the Initial Premises; and (C) Tenant’s taking possession of the Initial Premises shall be conclusive evidence that Tenant accepts the Initial Premises and that the Initial Premises were in good condition at the time possession was taken.

(b) Landlord shall use reasonable efforts to Deliver the Subsequent Premises to Tenant on or before June 25, 2021 (the “Target Subsequent Premises Commencement Date”), with Landlord’s Work in the Subsequent Premises Substantially Completed and in broom clean condition. If Landlord fails to timely Deliver the Subsequent Premises, Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and this Lease shall not be void or voidable except as provided herein. If Landlord does not Deliver the Subsequent Premises on or before January 1, 2022, for any reason other than Force Majeure delays and Tenant Delays, this Lease may be terminated by Tenant by written notice to Landlord, and if so terminated by Tenant: (i) Tenant shall voluntarily surrender the Initial Premises on such date in accordance with all surrender requirements contained in this Lease and in the condition in which Tenant is required to surrender the Premises as of the expiration date of this Lease, (ii) the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), and any prepaid Base Rent actually delivered by Tenant shall be returned to Tenant shall be returned to Tenant, and (ii) neither Landlord nor Tenant shall have any further rights, duties or obligations under this Lease, except with respect to provisions which expressly survive termination of this Lease. If Tenant does not elect to void this Lease on or before January 5, 2022, such right to void this Lease shall be waived and this Lease shall remain in full force and effect.

The “Subsequent Premises Commencement Date” shall be the earlier of: (x) the date Landlord Delivers the Subsequent Premises to Tenant with the Tenant Improvements in the Subsequent Premises Substantially Completed; and (y) the date Landlord could have Delivered the Subsequent Premises to Tenant with the Tenant Improvements in the Subsequent Premises Substantially Completed but for Tenant Delays.

Subject to the provisions of Section 6 of the Work Letter, Landlord shall permit Tenant access to the Subsequent Premises for a period of 60 days prior to the Subsequent Premises Commencement Date for Tenant’s FF&E Installation in the Subsequent Premises, provided that such FF&E Installation is coordinated with Landlord, and Tenant complies with this Lease and all other reasonable restrictions and conditions Landlord may impose. Any access to the Subsequent Premises by Tenant before the Subsequent Premises Commencement Date shall be subject to all of the terms and conditions of this Lease, excluding the obligation to pay Base Rent or Operating Expenses.

For the period of 365 consecutive days after the Subsequent Premises Commencement Date, Landlord shall, at its sole cost and expense (which shall not constitute an Operating Expense), be responsible for any repairs that are required to be made to the Building Systems (as defined in Section 13) serving the Subsequent Premises, unless Tenant or any Tenant Party was responsible for the cause of such repair, in which case Tenant shall pay the cost. Tenant shall also be entitled to the benefit of any warranties issued to Landlord in connection with the Tenant Improvements in the Subsequent Premises.

Except as set forth in the Work Letter or as otherwise expressly set forth in this Lease: (A) Tenant shall accept the Subsequent Premises in their condition as of the Subsequent Premises Commencement Date; (B) Landlord shall have no obligation for any defects in the Subsequent Premises; and (C) Tenant’s taking possession of the Subsequent Premises shall be conclusive evidence that Tenant accepts the Subsequent Premises and that the Subsequent Premises were in good condition at the time possession was taken.

(c) General. Upon request of Landlord, Tenant shall (absent manifest error) execute and deliver a written acknowledgment of the Commencement Date, the Subsequent Premises Commencement Date and the expiration date of the Term when such are established in the form of the “Acknowledgement of Commencement Date” attached to this Lease as Exhibit D; provided, however, Tenant’s failure to execute and deliver such acknowledgment shall not affect Landlord’s rights hereunder. The “Term” of this Lease shall be the Base Term, as defined above on the first page of this Lease and any Extension Terms which Tenant may elect pursuant to Section 40 hereof.

Tenant agrees and acknowledges that, except as otherwise expressly set forth in this Lease, neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of all or any portion of the Premises or the Project, and/or the suitability of the Premises or the Project for the conduct of Tenant’s business, and Tenant waives any implied warranty that the Premises or the Project are suitable for the Permitted Use. This Lease constitutes the complete agreement of Landlord and Tenant with respect to the subject matter hereof and supersedes any and all prior representations, inducements, promises, agreements, understandings and negotiations which are not contained herein. Landlord in executing this Lease does so in reliance upon Tenant’s representations, warranties, acknowledgments and agreements contained herein.

3. Rent.

(a) Base Rent. Pursuant to the terms of the Original Lease, Tenant delivered to Landlord the Security Deposit under the Original Lease in the amount of $320,540.00, and delivered the first month’s Base Rent due under the Original Lease in the amount of $320,540.00. The balance of Base Rent due and payable under this Lease for the first full calendar month following the Abatement Period, in the amount of $318,761.69, and the balance of the Security Deposit in the amount of $300,141.25 shall be due and payable on delivery of an executed copy of this Lease to Landlord. Tenant shall pay to Landlord in advance, without demand, abatement, deduction or set-off, monthly installments of Base Rent on or before the first day of each calendar month during the Term hereof, in lawful money of the United States of America, by electronic transfer to Landlord (including ACH) or at the office of Landlord for payment of Rent set forth above, or to such other person or at such other place as Landlord may from time to time designate in writing. Landlord shall provide ACH wiring information for Rent payment upon request from Tenant. Tenant shall be entitled to elect its method of payment pursuant to the immediately preceding sentence. Payments of Base Rent for any fractional calendar month shall be prorated. The obligation of Tenant to pay Base Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. Tenant shall have no right at any time to abate, reduce, or set-off any Rent (as defined in Section 5) due hereunder except for any abatement as may be expressly provided in this Lease.

Notwithstanding anything to the contrary contained in this Lease, so long as Tenant is not in Default (as defined in Section 20) under this Lease, Tenant shall be entitled to the abatement of (i) Base Rent due with respect to the Initial Premises for the first 17 months following the Commencement Date (the “Initial Premises Abatement Period”), and (ii) Base Rent due with respect to the Subsequent Premises for the first 17 months following the Subsequent Premises Commencement Date (the “Subsequent Premises Abatement Period”). Tenant shall commence paying full Base Rent with respect to the Initial Premises on the date immediately following the expiration of the Initial Premises Abatement Period and shall commence paying Base Rent with respect to the entire Premises on the day immediately following the expiration of the Subsequent Premises Abatement Period. The Initial Premises Abatement Period and the Subsequent Premises Abatement Period may be collectively referred to herein as the “Abatement Period.” Exhibit H attached hereto has assumed that the Commencement Date will occur on the Target Commencement Date and that the Subsequent Premises Commencement Date will occur on the Target Subsequent Premises Commencement Date. For the avoidance of doubt, notwithstanding anything to the contrary reflected on Exhibit H, if either the Commencement Date or the Subsequent Premises Commencement Date occurs on a date other than the Target Commencement Date or the Target Subsequent Premises Commencement Date, as applicable, Tenant will have the benefit of the full Initial Premises Abatement Period commencing on the actual Commencement Date and the full Subsequent Premises Abatement Period with respect to the Subsequent Premises commencing on the actual Subsequent Premises Commencement Date.

(b) Additional Rent. In addition to Base Rent, Tenant agrees to pay to Landlord as additional rent (“Additional Rent”): (i) commencing on the Commencement Date with respect to the Initial Premises and on the Subsequent Premises Commencement Date with respect to the Subsequent Premises, Tenant’s Share of “Operating Expenses” (as defined in Section 5), and (ii) any and all other amounts Tenant assumes or agrees to pay under the provisions of this Lease, including, without limitation, any and all other sums that may become due by reason of any default of Tenant or failure to comply with the agreements, terms, covenants and conditions of this Lease to be performed by Tenant, after any applicable notice and cure period.

If OAS Landlord (as defined in Section 41), in its sole and absolute discretion, elects to construct any OAS Amenities (as defined in Section 41), Landlord and Tenant acknowledge and agree that, any time after the OAS Amenities Commencement Date (as defined in Section 41), Landlord shall have right to increase the RSF of the Premises (which shall in turn result in a corresponding increase in the Base Rent payable by Tenant under this Lease) by 0.1% for each 1,000 square feet of OAS Amenities constructed at One Alexandria Square up to a maximum of a 5% increase in the RSF of the Premises if 50,000 square feet or more of OAS Amenities are constructed. If Landlord elects to increase the RSF of the Premises pursuant to the immediately preceding sentence, then, commencing on the date that such increase in the RSF becomes effective, Tenant’s obligation to pay the Amenities Fee under Section 41(c) shall terminate. For example, if 40,000 square feet of OAS Amenities is constructed, then the RSF of the Premises (including, without limitation, for the purposes of the calculation of the payment of Base Rent) shall be 122,954 rentable square feet. For the avoidance of doubt, if the RSF of the Premises is increased pursuant to this paragraph, Exhibit H shall be amended to reflect the Base Rent due for the remaining balance of the Base Term based on such increased RSF.

4. Base Rent Adjustments.

(a) Annual Adjustments. Base Rent shall be increased during the Base Term pursuant to the Schedule of Base Rent attached hereto as Exhibit H.

(b) TI Allowance. Landlord shall, subject to the terms of the Work Letter, make available to Tenant the Additional Tenant Improvement Allowance (as defined in the Work Letter). Commencing on the Subsequent Premises Commencement Date and continuing thereafter on the first day of each month during the Base Term, Tenant shall pay the amount necessary to fully amortize the portion of the Additional Tenant Improvement Allowance actually funded by Landlord, if any, in equal monthly payments with interest at a rate of 8% per annum over the Base Term, which interest shall begin to accrue on the date that Landlord first disburses such Additional Tenant Improvement Allowance or any portion(s) thereof. Notwithstanding anything to the contrary contained herein, Tenant may, at Tenant’s sole election, accelerate or prepay all or any portion of the outstanding and unamortized portion of the Additional Tenant Improvement Allowance that was actually funded by Landlord in full at any time without penalty, in which event the amortizing payments shall be appropriately adjusted. Any of the Additional Tenant Improvement Allowance and applicable interest remaining unpaid as of the expiration or earlier termination of this Lease shall be paid to Landlord in a lump sum at the expiration or earlier termination of this Lease.

5. Operating Expense Payments. Landlord shall deliver to Tenant a reasonably detailed written estimate of Operating Expenses for each calendar year during the Term (the “Annual Estimate”), which may be revised by Landlord from time to time during such calendar year. Commencing on the Commencement Date with respect to the Initial Premises and on the Subsequent Premises Commencement Date with respect to the Subsequent Premises, and continuing thereafter on the first day of each month during the Term, Tenant shall pay Landlord an amount equal to 1/12th of Tenant’s Share of the Annual Estimate. Payments for any fractional calendar month shall be prorated.

The term “Operating Expenses” means all costs and expenses of any kind or description whatsoever incurred or accrued each calendar year by Landlord with respect to the Project (including, without duplication, (i) Taxes (as defined in Section 9), (ii) capital repairs, replacements and improvements amortized over the lesser of 10 years and the useful life of such capital repairs, replacements and improvements, (iii) following the completion of the Bridge Work, the costs for maintenance, repair and replacements with respect to the Bridge and related improvements,(iv) all costs and expenses (including, without limitation, any subsidies which OAS Landlord may provide in connection with the OAS Amenities) incurred or accrued in connection with the OAS Amenities (with respect to which Tenant shall be responsible for Tenant’s share of such costs, which share shall be calculated using the RSF of the Project as the numerator and the aggregate RSF of the Project, the OAS Project, and those buildings located at 3033 Science Park Road, 3013 Science Park Road, 3115 Merryfield Row and 3215 Merryfield Row, as the denominator; provided, however, that in no event shall Tenant’s pro rata share of the OAS Amenities exceed 12.28%) and (v) the costs of Landlord’s third party property manager (not to exceed 1% of Base Rent) or, if there is no third party property manager, administration rent in the amount of 1% of Base Rent (provided that during the Abatement Period, Tenant shall nonetheless be required to pay administration rent each month equal to the amount of the administration rent that Tenant would have been required to pay in the absence of there being an Abatement Period)), excluding only:

(a) the original construction costs of the Project and renovation prior to the date of this Lease and costs of correcting defects in such original construction or renovation;

(b) capital expenditures for expansion or reconfiguration of the Project;

(c) interest, principal or any other payments under any Mortgage (as defined in Section 27) debts of Landlord, financing costs and amortization of funds borrowed by Landlord, whether secured or unsecured and all payments of rent (but not taxes or operating expenses) under any ground lease or other underlying lease of all or any portion of the Project;

(d) depreciation of the Project (except for capital improvements, the cost of which are includable in Operating Expenses and amortized pursuant to this Section 5);

(e) salaries, wages, benefits and other compensation paid to officers and employees of Landlord who are not assigned in whole or in part (and, if in part, then on a pro rata basis based on the amount of time devoted to the Project) to the operation, management, maintenance or repair of the Project;

(f) general organizational, administrative and overhead costs relating to maintaining Landlord’s existence, either as a corporation, partnership, or other entity, including general corporate, legal and accounting expenses;

(g) costs (including attorneys’ fees and costs of settlement, judgments and payments in lieu thereof) incurred in connection with negotiations or disputes with employees, consultants, management agents, leasing agents, purchasers or mortgagees of the Building;

(h) costs incurred by Landlord due to the violation by Landlord, its employees, agents or contractors of any provision of this Lease or any Legal Requirement (as defined in Section 7);

(i) penalties, fines or interest incurred as a result of Landlord’s inability or failure to make payment of Taxes and/or to file any tax or informational returns when due, or from Landlord’s failure to make any payment of Taxes required to be made by Landlord hereunder before delinquency;

(j) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in or to the Project to the extent the same exceeds the costs of such goods and/or services rendered by unaffiliated third parties on a competitive basis;

(k) costs of Landlord’s charitable or political contributions, or of fine art maintained at the Project;

(l) transaction costs incurred in the sale or refinancing of the Project;

(m) costs of repairs directly resulting from the gross negligence or willful misconduct of Landlord or any Landlord Insured Parties (as defined in Section 17);

(n) any costs incurred to remove, study, test or remediate Hazardous Materials known to exist in or about the Building or the Project prior to the Commencement Date (provided, however, that the foregoing is in no event intended to limit Tenant’s obligations under Section 28 or Section 30 of this Lease);

(o) the cost of installing or upgrading any utility metering for any part of the Project;

(p) net income taxes of Landlord or the owner of any interest in the Project, franchise, capital stock, gift, estate or inheritance taxes or any federal, state or local documentary taxes imposed against the Project or any portion thereof or interest therein;

(q) any expenses otherwise includable within Operating Expenses to the extent actually reimbursed by any other person;

(r) costs of Landlord’s charitable or political contributions, or of fine art maintained at the Project;

(s) costs incurred in the sale or refinancing of the Project;

(t) franchise, capital stock, gift, estate or inheritance taxes or any federal, state or local documentary taxes imposed against the Project or any portion thereof or interest therein;

(u) reserves;

(v) subject to the terms of Section 14, a property management fee in excess of 1% of Base Rent (Tenant acknowledges and agrees that wages for Landlord’s (or its affiliates) employees including, without limitation, property manager and bookkeeping wages, are not included within the scope of the 1% management fee and may be passed through as part of Operating Expenses subject to the terms of this Section 5); and

(w) any capital repairs, replacements and improvements except to the extent as amortized in accordance with clause (ii) above.

Notwithstanding anything to the contrary contained in this Lease, Landlord shall not be entitled to collect Operating Expenses from Tenant in excess of 100% of the total Operating Expenses actually incurred or accrued by Landlord nor shall Landlord be entitled to make any profit from Landlord’s collection of Operating Expenses. Notwithstanding anything to the contrary contained herein, (A) if Tenant’s Share of any insurance deductible payable by Tenant to Landlord as part of Operating Expenses under this Lease exceeds $25,000, Tenant may, at Tenant’s option, pay the same to Landlord (i) in full at the time the deductible expense is incurred by Landlord or (ii) fully amortized (with interest) in equal monthly installments over the remaining Term and (B) all Operating Expenses accounting shall be generally consistently applied from year to year.

Within 90 days after the end of each calendar year (or such longer period as may be reasonably required), Landlord shall furnish to Tenant a statement (an “Annual Statement”) showing in reasonable detail: (a) the total and Tenant’s Share of actual Operating Expenses for the previous calendar year, and (b) the total of Tenant’s payments in respect of Operating Expenses for such year. If Tenant’s Share of actual Operating Expenses for such year exceeds Tenant’s payments of Operating Expenses for such year, the excess shall be due and payable by Tenant as Rent within 30 days after delivery of such Annual Statement to Tenant. If Tenant’s payments of Operating Expenses for such year exceed Tenant’s Share of actual Operating Expenses for such year Landlord shall pay the excess to Tenant within 30 days after delivery of such Annual Statement, except that after the expiration, or earlier termination of the Term or if Tenant is delinquent in its obligation to pay Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord. Landlord’s and Tenant’s obligations to pay any overpayments or deficiencies due pursuant to this paragraph shall survive the expiration or earlier termination of this Lease.

The Annual Statement shall be final and binding upon Tenant unless Tenant, within 90 days after Tenant’s receipt thereof, shall contest any item therein by giving written notice to Landlord, specifying each item contested and the reason therefor. If, during such 90 day period, Tenant reasonably and in good faith questions or contests the accuracy of Landlord’s statement of Tenant’s Share of Operating Expenses, Landlord will provide Tenant with access to Landlord’s books and records relating to the operation of the Project and such information as Landlord reasonably determines to be responsive to Tenant’s questions (the “Expense Information”). If after Tenant’s review of such Expense Information, Landlord and Tenant cannot agree upon the amount of Tenant’s Share of Operating Expenses, then Tenant shall have the right to have a regionally or nationally recognized independent public accounting firm selected by Tenant and approved by Landlord (which approval shall not be unreasonably withheld or delayed), working pursuant to a fee arrangement other than a contingent fee (at Tenant’s sole cost and expense), audit and/or review the Expense Information for the year in question (the “Independent Review”). The results of any such Independent Review shall be binding on Landlord and Tenant. If the Independent Review shows that the payments actually made by Tenant with respect to Operating Expenses for the calendar year in question exceeded Tenant’s Share of Operating Expenses for such calendar year, Landlord shall at Landlord’s option either (i) credit the excess amount to the next succeeding installments of estimated Operating Expenses or (ii) pay the excess to Tenant within 30 days after delivery of such statement, except that after the expiration or earlier termination of this Lease or if Tenant is delinquent in its obligation to pay Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord. If the Independent Review shows that Tenant’s payments with respect to Operating Expenses for such calendar year were less than Tenant’s Share of Operating Expenses for the calendar year, Tenant shall pay the deficiency to Landlord within 30 days after delivery of such statement. If the Independent Review shows that Tenant has overpaid with respect to Operating Expenses by more than 5% then Landlord shall reimburse Tenant for all costs incurred by Tenant for the Independent Review. Operating Expenses for the calendar years in which Tenant’s obligation to share therein begins and ends shall be prorated.

“Tenant’s Share” shall be the percentage set forth on the first page of this Lease. Landlord and Tenant agree that the rentable square footage of the Premises shall not be subject to re-measurement by either party during the Term. Base Rent, Tenant’s Share of Operating Expenses and all other amounts payable by Tenant to Landlord hereunder are collectively referred to herein as “Rent.”

Following the first calendar year during which the Subsequent Premises Commencement Date occurs, that part of Operating Expenses which is comprised of Controllable Operating Expenses (as defined below) shall, during the Base Term, be increased by no more than 5% per year. Such limitation of 5% per year on increases shall be cumulative year to year, so that if in any year the increase in cumulative Operating Expenses is more or less than 5%, then the difference between 5% and the actual percentage increase in that year may be carried forward to any future year, and may be applied in such future year to increase the actual percentage increase (even if more than 5% for such year) subject to the limitation that Controllable Operating Expenses shall not have increased by more than 5% compounded annually since the beginning of the Term. “Controllable Operating Expenses” shall mean those Project Operating Expenses for which increases are reasonably within the control of Landlord, and shall specifically not include, without limitation, Taxes, assessments, refuse and or trash removal, insurance, collectively bargained union wages, electricity and other utilities. There shall be no limitation on the amount of increase from year to year on Project Operating Expenses which are not Controllable Operating Expenses.

6. Security Deposit. Tenant shall deposit with Landlord a security deposit (the “Security Deposit”) for the performance of all of Tenant’s obligations hereunder in the amount set forth on page 1 of this Lease, which Security Deposit shall be in the form of an unconditional and irrevocable letter of credit (the “Letter of Credit”): (i) in form and substance reasonably satisfactory to Landlord, (ii) naming Landlord as beneficiary, (iii) expressly allowing Landlord to draw upon it at any time from time to time by delivering to the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by Silicon Valley Bank or another FDIC-insured financial institution reasonably satisfactory to Landlord, and (v) redeemable by presentation of a sight draft in the state of Landlord’s choice. If Tenant does not provide Landlord with a substitute Letter of Credit complying with all of the requirements hereof at least 10 business days before the stated expiration date of any then current Letter of Credit, Landlord shall have the right to draw the full amount of the current Letter of Credit and hold the funds drawn in cash without obligation for interest thereon as the Security Deposit. The Security Deposit shall be held by Landlord as security for the performance of Tenant’s obligations under this Lease. The Security Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Upon each occurrence of a Default (as defined in Section 20), Landlord may use all or any part of the Security Deposit to pay delinquent payments due under this Lease, future rent damages under California Civil Code Section 1951.2, and the cost of any damage, injury, expense or liability caused by such Default, without prejudice to any other remedy provided herein or provided by law. Landlord’s right to use the Security Deposit under this Section 6 includes the right to use the Security Deposit to pay future rent damages following the termination of this Lease pursuant to Section 21(c) below. Upon any use of all or any portion of the Security Deposit in accordance with the terms of this Lease, Tenant shall pay Landlord on demand the amount that will restore the Security Deposit to the amount set forth on Page 1 of this Lease. Tenant hereby waives the provisions of any law, now or hereafter in force, including, without limitation, California Civil Code Section 1950.7, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant. Upon bankruptcy or other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for periods prior to the filing of such proceedings. If Tenant shall fully perform every provision of this Lease to be performed by Tenant, the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within 60 days after the expiration or earlier termination of this Lease.

Landlord and Tenant acknowledge and agree that Tenant previously delivered to Landlord a Letter of Credit in the amount of $320,540.00. Concurrently with Tenant’s delivery of an executed copy of this Lease to Landlord, Tenant shall deliver to Landlord either, (a) a replacement Letter of Credit in the amount of $620,681.25, or (b) a supplement to the existing Letter of Credit increasing the amount of the existing Letter of Credit by $300,141.25 for a total of $620,681.25.

If Landlord transfers its interest in the Project or this Lease, Landlord shall either (a) transfer any Security Deposit then held by Landlord to a person or entity assuming Landlord’s obligations under this Section 6, or (b) return to Tenant any Security Deposit then held by Landlord and remaining after the deductions permitted herein. Upon such transfer to such transferee or the return of the Security Deposit to Tenant, Landlord shall have no further obligation with respect to the Security Deposit, and Tenant’s right to the return of the Security Deposit shall apply solely against Landlord’s transferee. The Security Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Landlord’s obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest shall accrue thereon.

7. Use. The Premises shall be used solely for the Permitted Use set forth in the basic lease provisions on page 1 of this Lease, and in compliance with all laws, orders, judgments, ordinances, regulations, codes, directives, permits, licenses, covenants and restrictions now or hereafter applicable to the Premises, and to the use and occupancy thereof, including, without limitation, the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq. (together with the regulations promulgated pursuant thereto, “ADA”) (collectively, “Legal Requirements” and each, a “Legal Requirement”). Tenant shall, upon 5 days’ written notice from Landlord, discontinue any use of the Premises which is declared by any Governmental Authority (as defined in Section 9) having jurisdiction to be a violation of a Legal Requirement. Tenant will not use or permit the Premises to be used for any purpose or in any manner that would void Tenant’s or Landlord’s insurance, increase the insurance risk, or cause the disallowance of any sprinkler or other credits. Landlord hereby acknowledges that the use that Tenant has disclosed to Landlord that Tenant will be making of the Premises as of the Commencement Date will not result in the voidance of or an increased insurance risk with respect to the insurance currently being maintained by Landlord. Tenant shall not permit any part of the Premises to be used as a “place of public accommodation”, as defined in the ADA or any similar legal requirement. Tenant shall reimburse Landlord promptly upon demand for any additional premium charged for any such insurance policy by reason of Tenant’s failure to comply with the provisions of this Section or otherwise caused by Tenant’s use and/or occupancy of the Premises. Tenant will use the Premises in a careful, safe and proper manner and will not commit or permit waste, overload the floor or structure of the Premises, subject the Premises to use that would damage the Premises or obstruct or interfere with the rights of Landlord, including conducting or giving notice of any auction, liquidation, or going out of business sale on the Premises, or using or allowing the Premises to be used for any unlawful purpose. Tenant shall cause any equipment or machinery to be installed in the Premises so as to reasonably prevent sounds or vibrations from the Premises from extending to areas outside the Project. Tenant shall not place any machinery or equipment which will overload the floor in or upon the Premises or transport or move such items in the Project elevators without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Except as may be provided under the Work Letter, Tenant shall not, without the prior written consent of Landlord, use the Premises in any manner which will require ventilation, air exchange, heating, gas, steam, electricity or water beyond the existing capacity of the Project.

Notwithstanding anything to the contrary contained in this Lease, Landlord shall be responsible, at Landlord’s sole cost and expense (but subject to the terms of the Work Letter regarding Excess TI Costs) and not as an Operating Expense, for the compliance of the Initial Premises and the Project with applicable Legal Requirements (including the ADA) as of the Commencement Date and for the compliance of the Subsequent Premises with applicable Legal Requirements (including the ADA) as of the Subsequent Premises Commencement Date, but regardless of when such lack of compliance is discovered. Subject to the terms of the immediately preceding sentence, following the Commencement Date, Landlord shall, as an Operating Expense (to the extent such Legal Requirement is generally applicable to similar buildings in the area in which the Project is located) and at Tenant’s expense (to the extent such Legal Requirement is triggered by reason of Tenant’s specific use of the Premises or Tenant’s Alterations) make any alterations or modifications to the exterior of the Building that are required by Legal Requirements. Except as provided in the two immediately preceding sentences, Tenant, at its sole expense, shall make any alterations or modifications to the interior or the exterior of the Premises or the Project that are required by Legal Requirements (including, without limitation, compliance of the Premises with the ADA) related to Tenant’s use or occupancy of the Premises or Tenant’s Alterations. In no event shall Tenant’s Alterations include the Tenant Improvements (as defined in the Work Letter) constructed pursuant to the Work Letter. Notwithstanding any other provision herein to the contrary (other than the first sentence of this paragraph), Tenant shall be responsible for any and all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages or judgments, and all reasonable expenses incurred in investigating or resisting the same (including, without limitation, reasonable attorneys’ fees, charges and disbursements and costs of suit) (collectively, “Claims”) arising out of or in connection with Legal Requirements related to Tenant’s use or occupancy of the Premises or Tenant’s Alterations, and Tenant shall indemnify, defend, hold and save Landlord harmless from and against any and all Claims arising out of or in connection with any failure of the Premises to comply with any Legal Requirement related to Tenant’s use or occupancy of the Premises or Tenant’s Alterations.

Tenant acknowledges that Landlord may, but shall not be obligated to, seek to obtain Leadership in Energy and Environmental Design (LEED), WELL Building Standard, or other similar “green” certification with respect to the Project and/or the Premises, and Tenant agrees, at no material cost or expense to Tenant, to reasonably cooperate with Landlord, and to provide such information and/or documentation as Landlord may reasonably request, in connection therewith.

8. Holding Over. If, with Landlord’s express written consent, Tenant retains possession of the Premises after the termination of the Term, (i) unless otherwise agreed in such written consent, such possession shall be subject to immediate termination by Landlord at any time, (ii) all of the other terms and provisions of this Lease (including, without limitation, the adjustment of Base Rent pursuant to Section 4 hereof) shall remain in full force and effect (excluding any expansion or renewal option or other similar right or option) during such holdover period, (iii) Tenant shall continue to pay Base Rent in the amount payable upon the date of the expiration or earlier termination of this Lease or such other amount as Landlord may indicate, in Landlord’s sole and absolute discretion, in such written consent, and (iv) all other payments shall continue under the terms of this Lease. If Tenant remains in possession of the Premises after the expiration or earlier termination of the Term without the express written consent of Landlord, (A) Tenant shall become a tenant at sufferance upon the terms of this Lease except that the monthly Base Rent shall be equal to 150% of the Base Rent in effect during the last 30 days of the Term, and (B) Tenant shall be responsible for all damages suffered by Landlord resulting from or occasioned by Tenant’s holding over beyond the date that is 30 days after the expiration or earlier termination of the Term, including consequential damages. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided, and this Section 8 shall not be construed as consent for Tenant to retain possession of the Premises. Acceptance by Landlord of Rent after the expiration of the Term or earlier termination of this Lease shall not result in a renewal or reinstatement of this Lease.

9. Taxes. Landlord shall pay, as part of Operating Expenses (except to the extent the cost thereof is expressly excluded from Operating Expenses pursuant to Section 5 hereof), all taxes, levies, fees, assessments and governmental charges of any kind, existing as of the Commencement Date or thereafter enacted (collectively referred to as “Taxes”), imposed by any federal, state, regional, municipal, local or other governmental authority or agency, including, without limitation, quasi-public agencies (collectively, “Governmental Authority”) during the Term, including, without limitation, all Taxes: (i) imposed on or measured by or based, in whole or in part, on rent payable to (or gross receipts received by) Landlord under this Lease and/or from the rental by Landlord of the Project or any portion thereof, or (ii) based on the square footage, assessed value or other measure or evaluation of any kind of the Premises or the Project, or (iii) assessed or imposed by or on the operation or maintenance of any portion of the Premises or the Project, including parking, or (iv) assessed or imposed by, or at the direction of, or resulting from Legal Requirements, or interpretations thereof, promulgated by any Governmental Authority, or (v) imposed as a license or other fee, charge, tax, or assessment on Landlord’s business or occupation of leasing space in the Project. Landlord may contest by appropriate legal proceedings the amount, validity, or application of any Taxes or liens securing Taxes. Taxes shall not include any net income taxes imposed on Landlord except to the extent such net income taxes are in substitution for any Taxes payable hereunder. If any such Tax is levied or assessed directly against Tenant, then Tenant shall be responsible for and shall pay the same at such times and in such manner as the taxing authority shall require. Tenant shall pay, prior to delinquency, any and all Taxes levied or assessed against any personal property or trade fixtures placed by Tenant in the Premises, whether levied or assessed against Landlord or Tenant. If any Taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property, or if the assessed valuation of the Project is increased by a value attributable to improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, higher than the base valuation on which Landlord from time-to-time allocates Taxes to all tenants in the Project, Landlord shall have the right, but not the obligation, to pay such Taxes. Landlord’s reasonable determination of any excess assessed valuation shall be binding and conclusive, absent manifest error. The amount of any such payment by Landlord shall constitute Additional Rent due from Tenant to Landlord within 30 days after Tenant’s receipt of demand therefor from Landlord.

10. Parking. Subject to all applicable Legal Requirements, Force Majeure, a Taking (as defined in Section 19 below) and the exercise by Landlord of its rights hereunder, Tenant shall have the exclusive use of all of the parking spaces at the Project, which Tenant may, at its election, subject to applicable requirements of the City of San Diego and Landlord’s reasonable approval, mark as being available exclusively for Tenant’s use. Landlord shall not be responsible for enforcing Tenant’s parking rights against any third parties. Notwithstanding the foregoing, prior to the Subsequent Premises Commencement Date, Tenant shall only have the use of the parking spaces identified on Exhibit A attached hereto as “The Parking Available to Tenant.” After the Subsequent Premises Commencement Date, Landlord shall not make changes to the parking areas of the Project without the prior approval of Tenant (which approval shall not be unreasonably withheld), except to the extent required by Legal Requirements.

Subject to compliance with Legal Requirements, Landlord shall install 16 electric vehicle charging stations in the parking areas of the Project, which shall be available exclusively for Tenant’s use. Landlord shall use its reasonable good faith efforts to complete the installation of such vehicle charging stations within 3 months after the Commencement Date. Landlord and Tenant acknowledge and agree that the costs attributable to the installation of the infrastructure for 8 of the electric vehicle charging stations shall be paid for by Landlord. The balance of the costs attributable to the electric vehicle charging stations shall be payable out of the TI Fund (as defined in the Work Letter).

11. Utilities, Services. Commencing on the Commencement Date, Tenant shall contract directly with utility providers for all water, electricity, heat, light, power, sewer, and other utilities (including gas and fire sprinklers to the extent the Project is plumbed for such services), janitorial, and refuse and trash collection (“Utilities”) required and/or utilized by Tenant during the Term. Tenant shall pay directly to such Utility providers prior to delinquency for all such Utilities furnished to Tenant or the Project during the Term and shall pay for all maintenance charges for Utilities, and any storm sewer charges or other similar charges for Utilities imposed by any Governmental Authority or Utility provider, and any taxes, penalties, surcharges or similar charges thereon. To the extent that any Utilities, maintenance charges for Utilities, any storm sewer charges or other similar charges for Utilities imposed by any Governmental Authority or Utility provider, or any taxes, penalties, surcharges or similar charges are paid for by Landlord, Tenant shall reimburse Landlord for such costs as Operating Expenses. No interruption or failure of Utilities, from any cause whatsoever other than Landlord’s willful misconduct, shall result in eviction or constructive eviction of Tenant, termination of this Lease, or the abatement of Rent. Notwithstanding anything to the contrary contained herein, for the period commencing on the Commencement Date through the day immediately preceding the Subsequent Premises Commencement Date, Landlord shall be responsible out of the TI Fund for the portion of the cost of the Utilities furnished to the Project during such period equitably attributable to Landlord’s construction of the Tenant Improvements in the Subsequent Premises.

Tenant shall have the right to use the existing emergency generator at the Project (which is designed to have a capacity of 1,250kW) (the “Emergency Generator”). During the period commencing on the mutual execution of this Lease by the parties through the Commencement Date, Landlord shall run the emergency generator no less frequently than once per month for a period of 15 minutes for the purpose of determining whether it operates when started. Except as expressly provided in the immediately preceding sentence, Landlord shall have no obligation with respect to any maintenance, repair or, except as otherwise expressly provided in this paragraph, replacements with respect to the Emergency Generator or any future emergency generator and Tenant shall be responsible for the maintenance, repair and replacement of the Emergency Generator and any future emergency generator during the Term in accordance with the terms of Section 14 below. Landlord makes no representation or warranty with respect to the condition of the Emergency Generator or with respect to suitability of the Emergency Generator for Tenant’s use. Upon written request from Tenant, Landlord shall transfer to Tenant any permits then being held by Landlord, if any, required for the operation of the Emergency Generator by Tenant following the Commencement Date. If Tenant reasonably determines during the Base Term that the Emergency Generator needs to be replaced in order for Tenant to continue to operate in the Premises, then prior to any replacement of the Emergency Generator, Tenant may submit a written request to Landlord (the “Generator Replacement Request”) for Landlord’s approval of the replacement of the Emergency Generator. The Generator Replacement Request delivered by Tenant to Landlord shall (a) identify the reason that the replacement of the Emergency Generator is required and include supporting documentation evidencing the need for the replacement as opposed to a repair, (b) identify the make, model and specifications of the replacement emergency generator, (c) include the anticipated schedule for the replacement, (d) identify the identity of the contractors that will perform the replacement (which contractors shall be reasonably acceptable to Landlord), which performance shall be subject to contracts reasonably acceptable to Landlord which identify Landlord as a third party beneficiary of such contracts and any warranties issued in connection with such contracts, and (e) the cost of the replacement emergency generator. Subject to Landlord’s review of the Generator Replacement Request and, if desired by Landlord, Landlord’s inspection of the Emergency Generator, Landlord shall make a determination regarding the Generator Replacement Request within 30 days after Landlord’s receipt of the Generator Replacement Request. If Landlord approves (which approval shall not be unreasonably withheld, conditioned or delayed), the Generator Replacement Request, Landlord shall reimburse Tenant for the cost of the replacement of the Emergency Generator (not to exceed the amount set forth in the Generator Replacement Request) within 30 days after Tenant’s delivery to Landlord of (i) a request for payment including evidence of payment of such cost, and (ii) unconditional lien releases from the contractors performing such replacement of the Emergency Generator. On the first day of the first full calendar month following Landlord’s reimbursement to Tenant of the cost of the Emergency Generator replacement (including the cost to purchase the replacement generator), Tenant shall commence paying on a monthly basis through the expiration of the Term, as part of Operating Expenses, the amount required to amortize the cost of such replacement of the Emergency Generator over the useful life of the replacement Emergency Generator (as reasonably determined by Landlord taking into account all relevant factors). If Landlord does not approve the replacement of the Emergency Generator (the approval of which shall not be unreasonably withheld, conditioned or delayed), Landlord shall deliver written notice to Tenant of such refusal along with the reason for such refusal. If Landlord does not approve Tenant’s Generator Replacement Request, (x) Tenant may replace the Emergency Generator at its own cost, or (y) Landlord and Tenant shall cooperate in good faith to develop an alternative scope of work to address the repairs needed to the Emergency Generator reasonably acceptable to Landlord and Tenant.

If required pursuant to applicable Legal Requirements, Tenant agrees to provide Landlord with access to Tenant’s water and/or energy usage data on a monthly basis, either by providing Tenant’s applicable utility login credentials to Landlord’s Measurabl online portal, or by another delivery method reasonably agreed to by Landlord and Tenant. The costs and expenses incurred by Landlord in connection with receiving and analyzing such water and/or energy usage data shall be included as part of Operating Expenses.

Notwithstanding anything to the contrary set forth herein, if (i) a stoppage of an Essential Service (as defined below) to the Premises shall occur and such stoppage is due solely to the gross negligence or willful misconduct of Landlord and not due in any part to any act or omission on the part of Tenant or any Tenant Party or any matter beyond Landlord’s reasonable control (any such stoppage of an Essential Service being hereinafter referred to as a “Service Interruption”), and (ii) such Service Interruption continues for more than 5 consecutive days after Landlord shall have received written notice thereof from Tenant, and (iii) as a result of such Service Interruption, the conduct of Tenant’s normal operations in the Premises are materially and adversely affected, then there shall be an abatement of one day’s Base Rent for each day during which such Service Interruption continues after such 5 day period; provided, however, that if any part of the Premises is reasonably useable for Tenant’s normal business operations or if Tenant conducts all or any part of its operations in any portion of the Premises notwithstanding such Service Interruption, then the amount of each daily abatement of Base Rent shall only be proportionate to the nature and extent of the interruption of Tenant’s normal operations or ability to use the Premises. The rights granted to Tenant under this paragraph shall be Tenant’s sole and exclusive remedy resulting from a failure of Landlord to provide services, and Landlord shall not otherwise be liable for any loss or damage suffered or sustained by Tenant resulting from any failure or cessation of services. For purposes hereof, the term “Essential Services” shall mean the following services: HVAC service, water, sewer and electricity, but in each case only to the extent that Landlord has an obligation to provide the same to Tenant under this Lease.

12. Alterations and Tenant’s Property. Any alterations, additions, or improvements made to the Premises by or on behalf of Tenant, including additional locks or bolts of any kind or nature upon any doors or windows in the Premises, but excluding installation, removal or realignment of furniture systems (other than removal of furniture systems owned or paid for by Landlord) not involving any modifications to the structure or connections (other than by ordinary plugs or jacks) to Building Systems (as defined in Section 13) (“Alterations”) shall be subject to Landlord’s prior written consent, which may be given or withheld in Landlord’s sole discretion if any such Alteration adversely affects the Building structure or Building Systems and shall not be otherwise unreasonably withheld. Tenant may construct nonstructural Alterations in the Premises without Landlord’s prior approval if the aggregate cost of all such work in any 12 month period does not exceed $150,000 (a “Notice-Only Alteration”), provided Tenant notifies Landlord in writing of such intended Notice-Only Alteration, and such notice shall be accompanied by plans, specifications, work contracts and such other information concerning the nature and cost of the Notice-Only Alteration as may be reasonably requested by Landlord, which notice and accompanying materials shall be delivered to Landlord not less than 15 business days in advance of any proposed construction. If Landlord approves any Alterations, Landlord may impose such reasonable conditions on Tenant in connection with the commencement, performance and completion of such Alterations as Landlord may deem appropriate. Any request for approval shall be in writing, delivered not less than 15 business days in advance of any proposed construction, and accompanied by plans, specifications, bid proposals, work contracts and such other information concerning the nature and cost of the alterations as may be reasonably requested by Landlord, including the identities and mailing addresses of all persons performing work or supplying materials. Landlord’s right to review plans and specifications and to monitor construction shall be solely for its own benefit, and Landlord shall have no duty to ensure that such plans and specifications or construction comply with applicable Legal Requirements. Tenant shall cause, at its sole cost and expense, all Alterations to comply with insurance requirements and with Legal Requirements and shall implement at its sole cost and expense any alteration or modification required by Legal Requirements as a result of any Alterations. Except with respect to Notice-Only Alterations, Tenant shall pay to Landlord, as Additional Rent, on demand, an amount equal to the reasonable out-of-pocket costs incurred by Landlord with respect to each Alteration. Before Tenant begins any Alteration, Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable law. Tenant shall reimburse Landlord for, and indemnify and hold Landlord harmless from, any expense incurred by Landlord by reason of faulty work done by Tenant or its contractors, delays caused by such work, or inadequate cleanup.

Tenant shall furnish security or make other arrangements reasonably satisfactory to Landlord to assure payment for the completion of all Alterations work free and clear of liens, and shall provide (and cause each contractor or subcontractor to provide) certificates of insurance for workers’ compensation and other coverage in amounts and from an insurance company reasonably satisfactory to Landlord protecting Landlord against liability for personal injury or property damage during construction. Upon completion of any Alterations, Tenant shall deliver to Landlord: (i) sworn statements setting forth the names of all contractors and subcontractors who did the work and final lien waivers from all such contractors and subcontractors; and (ii) “as built” plans for any such Alteration for which “as-built” plans are available.

Except for Tenant’s Property (as hereinafter defined), all Installations (as hereinafter defined) shall be and shall remain the property of Landlord during the Term and following the expiration or earlier termination of the Term, shall not be removed by Tenant at any time during the Term, and shall remain upon and be surrendered with the Premises as a part thereof. Notwithstanding the foregoing, Landlord shall, if requested in writing by Tenant, at the time its approval of any such Installation is requested, or at the time it receives notice of a Notice-Only Alteration, notify Tenant whether Landlord requires that Tenant remove such Installation upon the expiration or earlier termination of the Term, in which event Tenant shall remove such Installation in accordance with the immediately succeeding sentence. Upon the expiration or earlier termination of the Term, Tenant shall remove (i) all wires, cables or similar equipment which Tenant has installed in the Premises or in the risers or plenums of the Building, (ii) any Installations for which Landlord has given Tenant notice of removal in accordance with the immediately preceding sentence, and (iii) all of Tenant’s Property (as hereinafter defined), and Tenant shall restore and repair any damage caused by or occasioned as a result of such removal, including, without limitation, capping off all such connections behind the walls of the Premises and repairing any holes. During any restoration period beyond the expiration or earlier termination of the Term, Tenant shall pay Rent to Landlord as provided herein as if said space were otherwise occupied by Tenant. If Landlord is requested by Tenant or any lender, lessor or other person or entity claiming an interest in any of Tenant’s Property to waive any lien Landlord may have against any of Tenant’s Property, and Landlord consents to such waiver, then Landlord shall be entitled to be paid as administrative rent a fee of $1,000 per occurrence for its time and effort in preparing and negotiating such a waiver of lien.

For purposes of this Lease, (x) “Removable Installations” means any items listed on Exhibit F attached hereto and any items agreed by Landlord in writing (which agreement shall not be unreasonably withheld, conditioned or delayed) to be included on Exhibit F in the future, (y) ”Tenant’s Property” means Removable Installations and, other than Installations, any personal property or equipment of Tenant that may be removed without material damage to the Premises, and (z) ”Installations” means all property of any kind paid for out of the TI Fund, all Alterations, all fixtures, and all partitions, hardware, built-in machinery, built-in casework and cabinets and other similar additions, equipment, property and improvements built into the Premises so as to become an integral part of the Premises, including, without limitation, fume hoods which penetrate the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in cold rooms, walk-in warm rooms, deionized water systems, glass washing equipment, autoclaves, chillers, built-in plumbing, electrical and mechanical equipment and systems, and any power generator and transfer switch.

Except as otherwise provided in Section 42, Tenant shall not be required to remove or restore the Tenant Improvements (as defined in the Work Letter) at the expiration or earlier termination of this Lease, nor shall Tenant have the right to remove any of the Tenant Improvements at any time except as otherwise provided in this Section 12.

13. Landlord’s Repairs. Landlord, as an Operating Expense (except to the extent the cost thereof is excluded from Operating Expenses pursuant to pursuant to Section 5 hereof or except as otherwise expressly set forth in the fourth full paragraph of Section 2(a) of this Lease and/or the fourth full paragraph of Section 2(b) of this Lease), shall, subject to the second paragraph of Section 14 below, maintain the (a) Building structure (including the roof), (b) all exterior, parking and other areas outside the Building, and (c) the HVAC, electrical, plumbing, fire sprinklers, elevators and all other building systems serving the Premises and other portions of the Project (“Building Systems”), in good repair, reasonable wear and tear and uninsured losses and damages caused by Tenant, or by any of Tenant, or by any of Tenant’s assignees, sublessees, licensees, agents, servants, employees, invitees and contractors (or any of Tenant’s assignees, sublessees and/or licensees respective agents, servants, employees, invitees and contractors) (collectively, “Tenant Parties”) excluded. Subject to the provisions of the penultimate paragraph of Section 17, losses and damages caused by Tenant or any Tenant Party shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost and expense. Landlord reserves the right to stop Building Systems services when necessary (i) by reason of accident or emergency, or (ii) for planned repairs, alterations or improvements, which are, in the judgment of Landlord, desirable or necessary to be made, until said repairs, alterations or improvements shall have been completed. Landlord shall have no responsibility or liability for failure to supply Building Systems services during any such period of interruption; provided, however, that Landlord shall, except in case of emergency, give Tenant 5 business days advance notice of any planned stoppage of Building Systems services for routine maintenance, repairs, alterations or improvements. Landlord shall use reasonable efforts to coordinate any planned stoppages of Building Systems with Tenant to minimize interference with Tenant’s operations in the Premises during any such planned stoppages of Building Systems. Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this Section, after which Landlord shall make a commercially reasonable effort to effect such repair. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after Tenant’s written notice of the need for such repairs or maintenance. Tenant waives its rights under any state or local law to terminate this Lease or to make such repairs at Landlord’s expense and agrees that the parties’ respective rights with respect to such matters shall be solely as set forth herein. Repairs required as the result of fire, earthquake, flood, vandalism, war, or similar cause of damage or destruction shall be controlled by Section 18.

14. Tenant’s Repairs Subject to Section 13 hereof (and except as otherwise expressly set forth in the fourth full paragraph of Section 2(a) of this Lease and the fourth full paragraph of Section 2(b) of this Lease), Tenant, at its expense, shall repair, replace and maintain in good condition all portions of the Premises, including, without limitation, entries, doors, ceilings, interior windows, interior walls, and the interior side of demising walls. Such repair and replacement may include capital expenditures and repairs whose benefit may extend beyond the Term. Should Tenant fail to make any such repair or replacement or fail to maintain the Premises, Landlord shall give Tenant notice of such failure. If Tenant fails to commence cure of such failure within 10 days of Landlord’s notice, and thereafter diligently prosecute such cure to completion, Landlord may perform such work and shall be reimbursed by Tenant within 10 days after demand therefor; provided, however, that if such failure by Tenant creates or could create an emergency, Landlord may immediately commence cure of such failure and shall thereafter be entitled to recover the costs of such cure from Tenant. Subject to Sections 17 and 18, Tenant shall bear the full uninsured cost of any repair or replacement to any part of the Project that results from damage caused by Tenant or any Tenant Party.

Notwithstanding anything to the contrary contained in this Lease, as of the Commencement Date with respect to the Initial Premises and as of the Subsequent Premises Commencement Date with respect to the balance of the Project, the maintenance and repair obligations for the Premises and the Project shall be allocated between Landlord and Tenant as set forth on Exhibit G attached hereto. The maintenance obligations allocated to Tenant pursuant to Exhibit G (the “Tenant Maintenance Obligations”) shall be performed by Tenant at Tenant’s sole cost and expense. The Tenant Maintenance Obligations shall include the procurement and maintenance of contracts, in form and substance reasonably satisfactory to Landlord, with copies to Landlord upon Landlord’s written request, for and with contractors reasonably acceptable to Landlord specializing and experienced in the respective Tenant Maintenance Obligations. Notwithstanding anything to the contrary contained herein, the scope of work of any such contracts entered into by Tenant pursuant to this paragraph shall, at a minimum, comply with manufacturer’s recommended maintenance procedures for the optimal performance of the applicable equipment. Landlord shall, notwithstanding anything to the contrary contained in this Lease, have no obligation to perform any Tenant Maintenance Obligations. The Tenant Maintenance Obligations shall not include the right or obligation on the part of Tenant to make any structural and/or capital repairs or improvements to the Project, and Landlord shall continue, as part of Operating Expenses (except as otherwise expressly excluded from Operating Expenses pursuant to Section 5 and except as otherwise expressly set forth in the fourth full paragraph of Section 2(a) of this Lease and the fourth full paragraph of Section 2(b) of this Lease), to be responsible as provided in Section 13 for capital repairs and replacements required to be made to the Project. If Tenant fails to maintain any portion of the Project for which Tenant is responsible as part of the Tenant Maintenance Obligations in a manner reasonably acceptable to Landlord within the requirements of this Lease (each, a “Maintenance Obligation Failure”), Landlord shall have the right, but not the obligation, to provide Tenant with written notice thereof. If Tenant does not cure such Maintenance Obligation Failure within 10 business days (unless the nature of such repair or maintenance is such that longer than 10 business days is reasonably required to cure, in which case Tenant shall have additional time so long as Tenant is diligently pursuing such cure) of Landlord’s written notice, Landlord shall provide to Tenant with a second written notice stating that Tenant’s failure to cure its Maintenance Obligation Failure within 5 days after Tenant’s receipt of the second notice may result in Landlord assuming the maintenance obligation with respect to which the Maintenance Obligation Failure exists. Landlord and Tenant acknowledge and agree that (a) the administrative rent of 1% of Base Rent provided for in Section 5 assumes Tenant continues to maintain the portions of the Project for which Tenant is responsible as part of the Tenant Maintenance Obligations in a manner reasonably acceptable to Landlord within the requirements of this Lease as provided in this Section 14, and (b) if at any time during the Term, Landlord assumes any or all of the Tenant Maintenance Obligations as provided for in the immediately preceding sentence, then such administrative rent shall be increased to 3% of Base Rent. If Landlord has assumed any of Tenant Maintenance Obligations pursuant to the terms of this paragraph, either Landlord or Tenant may elect, upon not less than 30 days written notice to the other, to have Landlord assume the balance of the Tenant Maintenance Obligations and Tenant shall not be required to perform any of the Tenant Maintenance Obligations following such date.

15. Mechanic’s Liens. Tenant shall discharge, by bond or otherwise, any mechanic’s lien filed against the Premises or against the Project for work claimed to have been done for, or materials claimed to have been furnished to, Tenant within 10 days after the filing thereof, at Tenant’s sole cost and shall otherwise keep the Premises and the Project free from any liens arising out of work performed, materials furnished or obligations incurred by Tenant. Should Tenant fail to discharge any lien described herein, Landlord shall have the right, but not the obligation, to pay such claim or post a bond or otherwise provide security to eliminate the lien as a claim against title to the Project and the cost thereof shall be immediately due from Tenant as Additional Rent. If Tenant shall lease or finance the acquisition of office equipment, furnishings, or other personal property of a removable nature utilized by Tenant in the operation of Tenant’s business, Tenant warrants that any Uniform Commercial Code Financing Statement filed as a matter of public record by any lessor or creditor of Tenant will upon its face or by exhibit thereto indicate that such Financing Statement is applicable only to removable personal property of Tenant located within the Premises. In no event shall the address of the Project be furnished on the statement without qualifying language as to applicability of the lien only to removable personal property, located in an identified suite held by Tenant.

16. Indemnification. Tenant hereby indemnifies and agrees to defend, save and hold Landlord, its officers, directors, employees, managers, agents, sub-agents, constituent entities and lease signators (collectively, “Landlord Indemnified Parties”) harmless from and against any and all Claims for injury or death to persons or damage to property occurring within or about the Premises or the Project arising directly or indirectly out of use or occupancy of the Premises or the Project (including, without limitation, any act, omission or neglect by Tenant or any Tenant’s Parties in or about the Premises or at the Project) or the a breach or default by Tenant in the performance of any of its obligations hereunder, unless to the extent caused by the willful misconduct or gross negligence of Landlord Indemnified Parties. Landlord shall not be liable to Tenant for, and Tenant assumes all risk of damage to, personal property (including, without limitation, loss of records kept within the Premises). Tenant further waives any and all Claims for injury to Tenant’s business or loss of income relating to any such damage or destruction of personal property (including, without limitation, any loss of records). Landlord Indemnified Parties shall not be liable for any damages arising from any act, omission or neglect of any tenant in the Project or of any other third party or Tenant Parties.

17. Insurance. Landlord shall maintain all risk property and, if applicable, sprinkler damage insurance covering the full replacement cost of the Project. Landlord shall further procure and maintain commercial general liability insurance with a single loss limit of not less than $2,000,000 for bodily injury and property damage with respect to the Project. Landlord may, but is not obligated to, maintain such other insurance and additional coverages as it may deem necessary, including, but not limited to, flood, environmental hazard and earthquake, loss or failure of building equipment, errors and omissions, rental loss during the period of repair or rebuilding, workers’ compensation insurance and fidelity bonds for employees employed to perform services and insurance for any improvements installed by Tenant or which are in addition to the standard improvements customarily furnished by Landlord without regard to whether or not such are made a part of the Project. All such insurance shall be included as part of the Operating Expenses. The Project may be included in a blanket policy (in which case the cost of such insurance allocable to the Project will be determined by Landlord based upon the insurer’s cost calculations). Tenant shall also reimburse Landlord for any increased premiums or additional insurance which Landlord reasonably deems necessary as a result of Tenant’s use of the Premises.

Tenant, at its sole cost and expense, shall maintain during the Term: all risk property insurance with business interruption and extra expense coverage, covering the full replacement cost of all property and improvements installed or placed in the Premises by Tenant at Tenant’s expense; workers’ compensation insurance with no less than the minimum limits required by law; employer’s liability insurance with employers liability limits of $1,000,000 bodily injury by accident – each accident, $1,000,000 bodily injury by disease – policy limit, and $1,000,000 bodily injury by disease – each employee; and commercial general liability insurance, with a minimum limit of not less than $4,000,000 per occurrence for bodily injury and property damage with respect to the Premises. The commercial general liability insurance maintained by Tenant shall name Alexandria Real Estate Equities, Inc., and Landlord, its officers, directors, employees, managers, agents, sub-agents, constituent entities and lease signators (collectively, “Landlord Insured Parties”), as additional insureds; insure on an occurrence and not a claims-made basis; be issued by insurance companies which have a rating of not less than policyholder rating of A and financial category rating of at least Class X in “Best’s Insurance Guide”; not contain a hostile fire exclusion; contain a contractual liability endorsement; and provide primary coverage to Landlord Insured Parties (any policy issued to Landlord Insured Parties providing duplicate or similar coverage shall be deemed excess over Tenant’s policies regardless of limits). Tenant shall (i) provide Landlord with 30 days’ advance written notice of cancellation of such commercial general liability policy, and (ii) require Tenant’s insurer to endeavor to provide 10 days’ advance written notice of cancellation of such commercial general liability policy. Copies of such policies (if requested by Landlord), or certificates of insurance showing the limits of coverage required hereunder and showing Landlord as an additional insured, along with reasonable evidence of the payment of premiums for the applicable period, shall be delivered to Landlord by Tenant prior to (i) the earlier to occur of (x) the Commencement Date, or (y) the date that Tenant accesses the Premises under this Lease, and (ii) each renewal of said insurance. Tenant’s policy may be a “blanket policy” with an aggregate per location endorsement which specifically provides that the amount of insurance shall not be prejudiced by other losses covered by the policy; provided, however, that such per location endorsement shall not be required for so long as the Premises is the only location in which Tenant is conducting business. Tenant shall, at least 5 days prior to the expiration of such policies, furnish Landlord with renewal certificates.

In each instance where insurance is to name Landlord as an additional insured, Tenant shall upon written request of Landlord also designate and furnish certificates so evidencing Landlord as additional insured to: (i) any lender of Landlord holding a security interest in the Project or any portion thereof, (ii) the landlord under any lease wherein Landlord is tenant of the real property on which the Project is located, if the interest of Landlord is or shall become that of a tenant under a ground or other underlying lease rather than that of a fee owner, and/or (iii) any management company retained by Landlord to manage the Project.

The property insurance obtained by Landlord and Tenant shall include a waiver of subrogation by the insurers and all rights based upon an assignment from its insured, against Landlord or Tenant, and their respective officers, directors, employees, managers, agents, invitees and contractors (“Related Parties”), in connection with any loss or damage thereby insured against. Neither party nor its respective Related Parties shall be liable to the other for loss or damage caused by any risk insured against under property insurance required to be maintained hereunder, and each party waives any claims against the other party, and its respective Related Parties, for such loss or damage. The failure of a party to insure its property shall not void this waiver. Landlord and its respective Related Parties shall not be liable for, and Tenant hereby waives all claims against such parties for, business interruption and losses occasioned thereby sustained by Tenant or any person claiming through Tenant resulting from any accident or occurrence in or upon the Premises or the Project from any cause whatsoever. If the foregoing waivers shall contravene any law with respect to exculpatory agreements, the liability of Landlord or Tenant shall be deemed not released but shall be secondary to the other’s insurer.

Landlord may require insurance policy limits to be raised to conform with requirements of Landlord’s lender and/or insurance consultants; provided, however, that the increased amount of coverage is consistent with coverage amounts then being required by institutional owners of similar projects with tenants occupying similar size premises in the geographical area in which the Project is located.

18. Restoration. If, at any time during the Term, the Project or the Premises are damaged or destroyed by a fire or other insured casualty, Landlord shall notify Tenant within 45 days after discovery of such damage as to the amount of time Landlord reasonably estimates it will take to restore the Project or the Premises, as applicable (the “Restoration Period”). If the Restoration Period is estimated to exceed 9 months (the “Maximum Restoration Period”), Landlord may, in such notice, elect to terminate this Lease as of the date that is 60 days after the date of discovery of such damage or destruction; provided, however, that notwithstanding Landlord’s election to restore, Tenant may elect to terminate this Lease by written notice to Landlord delivered within 5 business days of receipt of a notice from Landlord estimating a Restoration Period for the Premises longer than the Maximum Restoration Period. Unless either Landlord or Tenant so elects to terminate this Lease, Landlord shall, subject to receipt of sufficient insurance proceeds (with any deductible to be treated as a current Operating Expense), promptly restore the Premises (excluding the improvements installed by Tenant or by Landlord and paid for by Tenant), subject to delays arising from the collection of insurance proceeds, from Force Majeure events or as needed to obtain any license, clearance or other authorization of any kind required to enter into and restore the Premises issued by any Governmental Authority having jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or remediation of Hazardous Materials (as defined in Section 30) in, on or about the Premises (collectively referred to herein as “Hazardous Materials Clearances”); provided, however, that if repair or restoration of the Premises is not substantially complete as of the end of the Maximum Restoration Period or, if longer, the Restoration Period, Landlord may, in its sole and absolute discretion, elect not to proceed with such repair and restoration, or Tenant may by written notice to Landlord delivered within 5 business days of the expiration of the Maximum Restoration Period or, if longer, the Restoration Period, elect to terminate this Lease, in which event Landlord shall be relieved of its obligation to make such repairs or restoration and this Lease shall terminate as of the date that is 60 days after the later of: (i) discovery of such damage or destruction, or (ii) the date all required Hazardous Materials Clearances are obtained, but Landlord shall retain any Rent paid and the right to any Rent payable by Tenant prior to such election by Landlord or Tenant.

Tenant, at its expense, shall promptly perform, subject to delays arising from the collection of insurance proceeds, from Force Majeure (as defined in Section 34) events or to obtain Hazardous Material Clearances, any repairs or restoration Tenant wishes to have performed that are not required to be done by Landlord and shall promptly re-enter the Premises and commence doing business in accordance with this Lease. Notwithstanding the foregoing, either Landlord or Tenant may terminate this Lease upon written notice to the other if the Premises are damaged during the last year of the Term and Landlord reasonably estimates that it will take more than 2 months to repair such damage; provided, however, that such notice is delivered within 10 business days after the date that Landlord provides Tenant with written notice of the estimated Restoration Period. Notwithstanding anything to the contrary contained herein, Landlord shall also have the right to terminate this Lease if insurance proceeds are not available for such restoration. Rent shall be abated from the date all required Hazardous Material Clearances are obtained until the Premises are repaired and restored, in the proportion which the area of the Premises, if any, which is not usable by Tenant bears to the total area of the Premises, unless Landlord provides Tenant with other space during the period of repair that is suitable (as reasonably determined by Tenant) for the temporary conduct of Tenant’s business for the Permitted Use. In the event that no Hazardous Material Clearances are required to be obtained by Tenant with respect to the Premises, rent abatement shall commence on the date of discovery of the damage or destruction. Such abatement shall be the sole remedy of Tenant, and except as provided in this Section 18, Tenant waives any right to terminate this Lease by reason of damage or casualty loss.

The provisions of this Lease, including this Section 18, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, or any other portion of the Project, and any statute or regulation which is now or may hereafter be in effect shall have no application to this Lease or any damage or destruction to all or any part of the Premises or any other portion of the Project, the parties hereto expressly agreeing that this Section 18 sets forth their entire understanding and agreement with respect to such matters.

19. Condemnation. If the whole or any material part of the Premises or the Project is taken for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a “Taking” or “Taken”), and the Taking would in Landlord’s reasonable judgment, either prevent or materially interfere with Tenant’s use of the Premises or materially interfere with or impair Landlord’s ownership or operation of the Project, then upon written notice by Landlord this Lease shall terminate and Rent shall be apportioned as of said date. If part of the Premises shall be Taken, and this Lease is not terminated as provided above, Landlord shall promptly restore the Premises and the Project as nearly as is commercially reasonable under the circumstances to their condition prior to such partial Taking and the rentable square footage of the Building, the rentable square footage of the Premises, Tenant’s Share of Operating Expenses and the Rent payable hereunder during the unexpired Term shall be reduced to such extent as may be fair and reasonable under the circumstances. Upon any such Taking, Landlord shall be entitled to receive the entire price or award from any such Taking without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award. Tenant shall have the right, to the extent that same shall not diminish Landlord’s award, to make a separate claim against the condemning authority (but not Landlord) for such compensation as may be separately awarded or recoverable by Tenant for moving expenses and damage to Tenant’s trade fixtures, if a separate award for such items is made to Tenant. Tenant hereby waives any and all rights it might otherwise have pursuant to any provision of state law to terminate this Lease upon a partial Taking of the Premises or the Project.

20. Events of Default. Each of the following events shall be a default (“Default”) by Tenant under this Lease:

(a) Payment Defaults. Tenant shall fail to pay any installment of Rent or any other payment hereunder when due; provided, however, that Landlord will give Tenant notice and an opportunity to cure any failure to pay Rent within 3 business days of any such notice not more than once in any 12 month period and Tenant agrees that such notice shall be in lieu of and not in addition to, or shall be deemed to be, any notice required by law.

(b) Insurance. Any insurance required to be maintained by Tenant pursuant to this Lease shall be canceled or terminated or shall expire or shall be reduced or materially changed, or Landlord shall receive a notice of nonrenewal of any such insurance and Tenant shall fail to obtain replacement insurance at least 5 days before the expiration of the current coverage.

(c) Abandonment. Tenant shall abandon the Premises. Tenant shall not be deemed to have abandoned the Premises if (i) Tenant provides Landlord with reasonable advance notice prior to vacating and, at the time of vacating the Premises, Tenant completes Tenant’s obligations with respect to the Surrender Plan in compliance with Section 28, (ii) Tenant has made reasonable arrangements with Landlord for the security of the Premises for the balance of the Term, and (iii) Tenant continues during the balance of the Term to satisfy all of its obligations under this Lease as they come due.

(d) Improper Transfer. Tenant shall assign, sublease or otherwise transfer or attempt to transfer all or any portion of Tenant’s interest in this Lease or the Premises except as expressly permitted herein, or Tenant’s interest in this Lease shall be attached, executed upon, or otherwise judicially seized and such action is not released within 90 days of the action.

(e) Liens. Tenant shall fail to discharge or otherwise obtain the release of any lien placed upon the Premises in violation of this Lease within 10 days after Tenant’s receipt of notice of any such lien is filed against the Premises.

(f) Insolvency Events. Tenant or any guarantor or surety of Tenant’s obligations hereunder shall: (A) make a general assignment for the benefit of creditors; (B) commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property (collectively a “Proceeding for Relief”); (C) become the subject of any Proceeding for Relief which is not dismissed within 90 days of its filing or entry; or (D) die or suffer a legal disability (if Tenant, guarantor, or surety is an individual) or be dissolved or otherwise fail to maintain its legal existence (if Tenant, guarantor or surety is a corporation, partnership or other entity).

(g) Estoppel Certificate or Subordination Agreement. Tenant fails to execute any document required from Tenant under Sections 23 or 27 within 5 business days after a second notice requesting such document.

(h) Other Defaults. Tenant shall fail to comply with any provision of this Lease other than those specifically referred to in this Section 20, and, except as otherwise expressly provided herein, such failure shall continue for a period of 30 days after written notice thereof from Landlord to Tenant.

Any notice given under Section 20(h) hereof shall: (i) specify the alleged default, (ii) demand that Tenant cure such default, (iii) be in lieu of, and not in addition to, or shall be deemed to be, any notice required under any provision of applicable law, and (iv) not be deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice; provided that if the nature of Tenant’s default pursuant to Section 20(h) is such that it cannot be cured by the payment of money and reasonably requires more than 30 days to cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said 30 day period and thereafter diligently prosecutes the same to completion; provided, however, that such cure shall be completed no later than 120 days from the date of Landlord’s notice.

21. Landlord’s Remedies.

(a) Payment By Landlord; Interest. Upon a Default by Tenant hereunder, Landlord may, without waiving or releasing any obligation of Tenant hereunder, make such payment or perform such act. All sums so paid or incurred by Landlord, together with interest thereon, from the date such sums were paid or incurred, at the annual rate equal to 12% per annum or the highest rate permitted by law (the “Default Rate”), whichever is less, shall be payable to Landlord on demand as Additional Rent. Nothing herein shall be construed to create or impose a duty on Landlord to mitigate any damages resulting from Tenant’s Default hereunder.

(b) Late Payment Rent. Late payment by Tenant to Landlord of Rent and other sums due will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult and impracticable to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord under any Mortgage covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within 5 days after the date such payment is due, Tenant shall pay to Landlord an additional sum equal to 6% of the overdue Rent as a late charge. Notwithstanding the foregoing, before assessing a late charge the first time in any calendar year, Landlord shall provide Tenant written notice of the delinquency and will waive the right if Tenant pays such delinquency within 5 days thereafter. The parties agree that this late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. In addition to the late charge, Rent not paid when due shall bear interest at the Default Rate from the 5th day after the date due until paid.

(c) Remedies. Upon the occurrence of a Default, Landlord, at its option, without further notice or demand to Tenant, shall have in addition to all other rights and remedies provided in this Lease, at law or in equity, the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.

(i) Terminate this Lease, or at Landlord’s option, Tenant’s right to possession only, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim for damages therefor;

(ii) Upon any termination of this Lease, whether pursuant to the foregoing Section 21(c)(i) or otherwise, Landlord may recover from Tenant the following:

(A) The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus

(B) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

(C) The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

(D) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including, but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and

(E) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.

The term “rent” as used in this Section 21 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 21(c)(ii)(A) and (B), above, the “worth at the time of award” shall be computed by allowing interest at the Default Rate. As used in Section 21(c)(ii)(C) above, the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.

(iii) Landlord may continue this Lease in effect after Tenant’s Default and recover rent as it becomes due (Landlord and Tenant hereby agreeing that Tenant has the right to sublet or assign hereunder, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease following a Default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies hereunder, including the right to recover all Rent as it becomes due.

(iv) Whether or not Landlord elects to terminate this Lease following a Default by Tenant, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. Upon Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

(v) Independent of the exercise of any other remedy of Landlord hereunder or under applicable law, Landlord may conduct an environmental test of the Premises as generally described in Section 30(d) hereof, at Tenant’s expense.

(d) Effect of Exercise. Exercise by Landlord of any remedies hereunder or otherwise available shall not be deemed to be an acceptance of surrender of the Premises and/or a termination of this Lease by Landlord, it being understood that such surrender and/or termination can be effected only by the express written agreement of Landlord and Tenant. Any law, usage, or custom to the contrary notwithstanding, Landlord shall have the right at all times to enforce the provisions of this Lease in strict accordance with the terms hereof; and the failure of Landlord at any time to enforce its rights under this Lease strictly in accordance with same shall not be construed as having created a custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease or as having modified the same and shall not be deemed a waiver of Landlord’s right to enforce one or more of its rights in connection with any subsequent default. A receipt by Landlord of Rent or other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Landlord. To the greatest extent permitted by law, Tenant waives the service of notice of Landlord’s intention to re-enter, re-take or otherwise obtain possession of the Premises as provided in any statute, or to institute legal proceedings to that end, and also waives all right of redemption in case Tenant shall be dispossessed by a judgment or by warrant of any court or judge. Any reletting of the Premises or any portion thereof shall be on such terms and conditions as Landlord in its sole discretion may determine. Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises or collect rent due in respect of such reletting or otherwise to mitigate any damages arising by reason of Tenant’s Default.

22. Assignment and Subletting.

(a) General Prohibition. Without Landlord’s prior written consent subject to and on the conditions described in this Section 22, Tenant shall not, directly or indirectly, voluntarily or by operation of law, assign this Lease or sublease the Premises or any part thereof or mortgage, pledge, or hypothecate its leasehold interest or grant any concession or license within the Premises, and any attempt to do any of the foregoing shall be void and of no effect. If Tenant is a corporation, partnership or limited liability company, the shares or other ownership interests thereof which are not actively traded upon a stock exchange or in the over-the-counter market, a transfer or series of transfers whereby 25% or more of the issued and outstanding shares or other ownership interests of such corporation are, or voting control is, transferred (but excepting transfers upon deaths of individual owners) from a person or persons or entity or entities which were owners thereof at time of execution of this Lease to persons or entities who were not owners of shares or other ownership interests of the corporation, partnership or limited liability company at time of execution of this Lease, shall be deemed an assignment of this Lease requiring the consent of Landlord as provided in this Section 22.

(b) Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or otherwise transfer this Lease or sublet the Premises other than pursuant to a Permitted Assignment (as hereinafter defined), then at least 15 business days, but not more than 45 business days, before the date Tenant desires the assignment or sublease to be effective (the “Assignment Date”), Tenant shall give Landlord a notice (the “Assignment Notice”) containing such information about the proposed assignee or sublessee, including the proposed use of the Premises and any Hazardous Materials proposed to be used, stored handled, treated, generated in or released or disposed of from the Premises, the Assignment Date, any relationship between Tenant and the proposed assignee or sublessee, and all material terms and conditions of the proposed assignment or sublease, including a copy of any proposed assignment or sublease in its final form, and such other information as Landlord may deem reasonably necessary or appropriate to its consideration whether to grant its consent. Landlord may, by giving written notice to Tenant within 15 business days after receipt of the Assignment Notice: (i) grant such consent (provided that Landlord shall further have the right to review and approve or disapprove the proposed form of sublease prior to the effective date of any such subletting, which approval shall not be unreasonably withheld, conditioned or delayed), (ii) refuse such consent, in its reasonable discretion; or (iii) terminate this Lease with respect to the space described in the Assignment Notice as of the Assignment Date (an “Assignment Termination”). Among other reasons, it shall be reasonable for Landlord to withhold its consent in any of these instances: (1) the proposed assignee or subtenant is a governmental agency; (2) in Landlord’s reasonable judgment, the use of the Premises by the proposed assignee or subtenant would entail any alterations that would lessen the value of the leasehold improvements in the Premises, or would require increased services by Landlord; (3) in Landlord’s reasonable judgment, the proposed assignee or subtenant is engaged in areas of scientific research or other business concerns that are controversial; (4) in Landlord’s reasonable judgment, the proposed assignee or subtenant lacks the creditworthiness to support the financial obligations it will incur under the proposed assignment or sublease; (5) intentionally omitted; (6) Landlord has received from any prior landlord to the proposed assignee or subtenant a negative report concerning such prior landlord’s experience with the proposed assignee or subtenant; (7) Landlord has experienced previous defaults by or is in litigation with the proposed assignee or subtenant; (8) the use of the Premises by the proposed assignee or subtenant will violate any applicable Legal Requirement; (9) intentionally omitted; (10) intentionally omitted; or (11) the assignment or sublease is prohibited by Landlord’s lender. If Landlord delivers notice of its election to exercise an Assignment Termination, Tenant shall have the right to withdraw such Assignment Notice by written notice to Landlord of such election within 5 business days after Landlord’s notice electing to exercise the Assignment Termination. If Tenant withdraws such Assignment Notice, this Lease shall continue in full force and effect. If Tenant does not withdraw such Assignment Notice, this Lease, and the term and estate herein granted, shall terminate as of the Assignment Date with respect to the space described in such Assignment Notice. No failure of Landlord to exercise any such option to terminate this Lease, or to deliver a timely notice in response to the Assignment Notice, shall be deemed to be Landlord’s consent to the proposed assignment, sublease or other transfer. Tenant shall pay to Landlord a fee equal to Two Thousand Five Hundred Dollars ($2,500) in connection with its consideration of any Assignment Notice and/or its preparation or review of any consent documents. Notwithstanding the foregoing, Landlord’s consent to an assignment of this Lease or a subletting of any portion of the Premises to any entity controlling, controlled by or under common control with Tenant (a “Control Permitted Assignment”) shall not be required, provided that Landlord shall have the right to approve the form of any such sublease or assignment. In addition, notwithstanding anything to the contrary contained in this Lease, Tenant shall have the right to assign this Lease, upon 30 days prior written notice to Landlord (unless Tenant is prohibited from providing such notice by confidentiality or Legal Requirements in which case Tenant shall notify Landlord promptly thereafter) but without obtaining Landlord’s prior written consent (and without triggering any Assignment Termination), to a corporation or other entity which is a successor-in-interest to Tenant, by way of merger, consolidation or corporate reorganization, or by the purchase of all or substantially all of the assets or the ownership interests of Tenant provided that (i) such merger or consolidation, or such acquisition or assumption, as the case may be, is for a good business purpose and not principally for the purpose of transferring this Lease, and (ii) the net worth (as determined in accordance with generally accepted accounting principles (“GAAP”)) of the assignee is not less than the net worth (as determined in accordance with GAAP) of Tenant as of the date of Tenant’s most current quarterly or annual financial statements, and (iii) if, following such assignment, the Tenant under this Lease is an entity other than Mirati Therapeutics, Inc., a Delaware corporation, such assignee shall agree in writing to assume all of the terms, covenants and conditions of this Lease (a “Corporate Permitted Assignment”). Control Permitted Assignments and Corporate Permitted Assignments are hereinafter referred to as “Permitted Assignments.”

(c) Additional Conditions. As a condition to any such assignment or subletting, whether or not Landlord’s consent is required, Landlord may require:

(i) that any assignee or subtenant agree, in writing at the time of such assignment or subletting, that if Landlord gives such party notice that Tenant is in default under this Lease, such party shall thereafter make all payments otherwise due Tenant directly to Landlord, which payments will be received by Landlord without any liability except to credit such payment against those due under this Lease, and any such third party shall agree to attorn to Landlord or its successors and assigns should this Lease be terminated for any reason; provided, however, in no event shall Landlord or its successors or assigns be obligated to accept such attornment; and

(ii) A list of Hazardous Materials, certified by the proposed assignee or sublessee to be true and correct, which the proposed assignee or sublessee intends to use, store, handle, treat, generate in or release or dispose of from the Premises, together with copies of all documents relating to such use, storage, handling, treatment, generation, release or disposal of Hazardous Materials by the proposed assignee or subtenant in the Premises or on the Project, prior to the proposed assignment or subletting, including, without limitation: permits; approvals; reports and correspondence; storage and management plans; plans relating to the installation of any storage tanks to be installed in or under the Project (provided, said installation of tanks shall only be permitted after Landlord has given its written consent to do so, which consent may be withheld in Landlord’s sole and absolute discretion); and all closure plans or any other documents required by any and all federal, state and local Governmental Authorities for any storage tanks installed in, on or under the Project for the closure of any such tanks. Neither Tenant nor any such proposed assignee or subtenant is required, however, to provide Landlord with any portion(s) of the such documents containing information of a proprietary nature which, in and of themselves, do not contain a reference to any Hazardous Materials or hazardous activities.

(d) No Release of Tenant, Sharing of Excess Rents. Notwithstanding any assignment or subletting, Tenant and any guarantor or surety of Tenant’s obligations under this Lease shall at all times remain fully and primarily responsible and liable for the payment of Rent and for compliance with all of Tenant’s other obligations under this Lease. Except in connection with a Permitted Assignment, if the Rent due and payable by a sublessee or assignee (or a combination of the rental payable under such sublease or assignment plus any bonus or other consideration therefor or incident thereto in any form) exceeds the sum of the rental payable under this Lease, (excluding however, any Rent payable under this Section) and actual and reasonable brokerage fees, marketing expenses, legal costs, tenant improvement allowances, and any design or construction fees directly related to and required pursuant to the terms of any such sublease (“Excess Rent”), then Tenant shall be bound and obligated to pay Landlord as Additional Rent hereunder 50% of such Excess Rent within 10 days following receipt thereof by Tenant. If Tenant shall sublet the Premises or any part thereof, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant’s obligations under this Lease, all rent from any such subletting, and Landlord as assignee and as attorney-in-fact for Tenant, or a receiver for Tenant appointed on Landlord’s application, may collect such rent and apply it toward Tenant’s obligations under this Lease; except that, until the occurrence of a Default, Tenant shall have the right to collect such rent.

(e) No Waiver. The consent by Landlord to an assignment or subletting shall not relieve Tenant or any assignees of this Lease or any sublessees of the Premises from obtaining the consent of Landlord to any further assignment or subletting nor shall it release Tenant or any assignee or sublessee of Tenant from full and primary liability under this Lease. The acceptance of Rent hereunder, or the acceptance of performance of any other term, covenant, or condition thereof, from any other person or entity shall not be deemed to be a waiver of any of the provisions of this Lease or a consent to any subletting, assignment or other transfer of the Premises.

(f) Prior Conduct of Proposed Transferee. Notwithstanding any other provision of this Section 22, if (i) the proposed assignee or sublessee of Tenant has been required by any prior landlord, lender or Governmental Authority to take remedial action in connection with Hazardous Materials contaminating a property, where the contamination resulted from such party’s action or use of the property in question, (ii) the proposed assignee or sublessee is subject to an enforcement order issued by any Governmental Authority in connection with the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials (including, without limitation, any order related to the failure to make a required reporting to any Governmental Authority), or (iii) because of the existence of a pre-existing environmental condition in the vicinity of or underlying the Project, the risk that Landlord would be targeted as a responsible party in connection with the remediation of such pre-existing environmental condition would be materially increased or exacerbated by the proposed use of Hazardous Materials by such proposed assignee or sublessee, Landlord shall have the absolute right to refuse to consent to any assignment or subletting to any such party.

23. Estoppel Certificate. Tenant shall, within 10 business days of written notice from Landlord, execute, acknowledge and deliver a statement in writing in any form reasonably requested by a proposed lender or purchaser, (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which the rental and other charges are paid in advance, if any, (ii) acknowledging that, to Tenant’s actual knowledge. there are not any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (iii) setting forth such further information with respect to the status of this Lease or the Premises as may be reasonably requested thereon. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the real property of which the Premises are a part. Tenant’s failure to deliver such statement within such time shall, at the option of Landlord, constitute a Default under this Lease, and, in any event, shall be conclusive upon Tenant that this Lease is in full force and effect and without modification except as may be represented by Landlord in any certificate prepared by Landlord and delivered to Tenant for execution.

24. Quiet Enjoyment. So long as Tenant is not in Default under this Lease, Tenant shall, subject to the terms of this Lease, at all times during the Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through or under Landlord.

25. Prorations. All prorations required or permitted to be made hereunder shall be made on the basis of a 360 day year and 30 day months.

26. Rules and Regulations. Tenant shall, at all times during the Term and any extension thereof, comply with all reasonable nondiscriminatory rules and regulations at any time or from time to time established by Landlord covering use of the Premises and the Project. The current rules and regulations are attached hereto as Exhibit E. If at any time there is any conflict between said rules and regulations and other provisions of this Lease, the terms and provisions of this Lease shall control.

27. Subordination. This Lease and Tenant’s interest and rights hereunder are hereby made and shall be subject and subordinate at all times to the lien of any Mortgage now existing or hereafter created on or against the Project or the Premises, and all amendments, restatements, renewals, modifications, consolidations, refinancing, assignments and extensions thereof, without the necessity of any further instrument or act on the part of Tenant; provided, however that so long as there is no Default hereunder, Tenant’s right to possession of the Premises shall not be disturbed by the Holder of any such Mortgage. Tenant agrees, at the election of the Holder of any such Mortgage, to attorn to any such Holder. Tenant agrees upon demand to execute, acknowledge and deliver such instruments, confirming such subordination, and such instruments of attornment as shall be requested by any such Holder, provided any such instruments contain appropriate nondisturbance provisions assuring Tenant’s quiet enjoyment of the Premises as set forth in Section 24 hereof. Notwithstanding the foregoing, any such Holder may at any time subordinate its Mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without regard to their respective dates of execution, delivery or recording and in that event such Holder shall have the same rights with respect to this Lease as though this Lease had been executed prior to the execution, delivery and recording of such Mortgage and had been assigned to such Holder. The term “Mortgage” whenever used in this Lease shall be deemed to include deeds of trust, security assignments and any other encumbrances, and any reference to the “Holder” of a Mortgage shall be deemed to include the beneficiary under a deed of trust.

Landlord agrees to use reasonable efforts to cause the Holder of the existing Mortgage to enter into a subordination, non-disturbance and attornment agreement (“SNDA”) with Tenant with respect to this Lease. The SNDA shall be on the form proscribed by the Holder and Tenant shall pay the Holder’s fees and costs in connection with obtaining such SNDA; provided, however, that Landlord shall request that Holder make any reasonable changes to the SNDA requested by Tenant. Landlord’s failure to cause the Holder to enter into the SNDA with Tenant (or make any of the changes requested by Tenant) despite such efforts shall not be a default by Landlord under this Lease.

28. Surrender. Upon the expiration of the Term or earlier termination of Tenant’s right of possession, Tenant shall surrender the Premises to Landlord in the same condition as received, subject to any Alterations or Installations permitted by Landlord to remain in the Premises, free of Hazardous Materials brought upon, kept, used, stored, handled, treated, generated in, or released or disposed of from, the Premises by any person other than a Landlord Party (collectively, “Tenant HazMat Operations”) and released of all Hazardous Materials Clearances, broom clean, ordinary wear and tear and casualty loss and condemnation covered by Sections 18 and 19 excepted. At least 3 months prior to the surrender of the Premises or such earlier date as Tenant may elect to cease operations at the Premises, Tenant shall deliver to Landlord a narrative description of the actions proposed (or required by any Governmental Authority) to be taken by Tenant in order to surrender the Premises (including any Installations permitted by Landlord to remain in the Premises) at the expiration or earlier termination of the Term, free from any residual impact from the Tenant HazMat Operations and otherwise released for unrestricted use and occupancy (i.e., for all of the same uses permitted at the Project prior to the date of this Lease) (the “Decommissioning and HazMat Closure Plan”). Such Decommissioning and HazMat Closure Plan shall be accompanied by a current listing of (i) all Hazardous Materials licenses and permits held by or on behalf of any Tenant Party with respect to the Premises, and (ii) all Hazardous Materials used, stored, handled, treated, generated, released or disposed of from the Premises, and shall be subject to the review and approval of Landlord’s environmental consultant. In connection with the review and approval of the Decommissioning and HazMat Closure Plan, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such additional nonproprietary information concerning Tenant HazMat Operations as Landlord shall reasonably request. On or before such surrender, Tenant shall deliver to Landlord evidence that the approved Decommissioning and HazMat Closure Plan shall have been satisfactorily completed and Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, to cause Landlord’s environmental consultant to inspect the Premises and perform such additional procedures as may be deemed reasonably necessary to confirm that the Premises are, as of the effective date of such surrender or early termination of this Lease, free from any residual impact from Tenant HazMat Operations. Tenant shall reimburse Landlord, as Additional Rent, for the actual out-of-pocket expense incurred by Landlord for Landlord’s environmental consultant to review and approve the Decommissioning and HazMat Closure Plan and to visit the Premises and verify satisfactory completion of the same, which cost shall not exceed $5,000. Landlord shall have the unrestricted right to deliver such Decommissioning and HazMat Closure Plan and any report by Landlord’s environmental consultant with respect to the surrender of the Premises to third parties.

If Tenant shall fail to prepare or submit a Decommissioning and HazMat Closure Plan approved by Landlord, or if Tenant shall fail to complete the approved Decommissioning and HazMat Closure Plan, or if such Decommissioning and HazMat Closure Plan, whether or not approved by Landlord, shall fail to adequately address any residual effect of Tenant HazMat Operations in, on or about the Premises, Landlord shall have the right to take such actions as Landlord may deem reasonable or appropriate to assure that the Premises and the Project are surrendered free from any residual impact from Tenant HazMat Operations, the cost of which actions shall be reimbursed by Tenant as Additional Rent, without regard to the limitation set forth in the first paragraph of this Section 28.

Tenant shall immediately return to Landlord all keys and/or access cards to parking, the Project, restrooms or all or any portion of the Premises furnished to or otherwise procured by Tenant. If any such access card or key is lost, Tenant shall pay to Landlord, at Landlord’s election, either the cost of replacing such lost access card or key or the cost of reprogramming the access security system in which such access card was used or changing the lock or locks opened by such lost key. Any Tenant’s Property, Alterations and property not so removed by Tenant as permitted or required herein shall be deemed abandoned and may be stored, removed, and disposed of by Landlord at Tenant’s expense, and Tenant waives all claims against Landlord for any damages resulting from Landlord’s retention and/or disposition of such property. All obligations of Tenant hereunder not fully performed as of the termination of the Term, including the obligations of Tenant under Section 30 hereof, shall survive the expiration or earlier termination of the Term, including, without limitation, indemnity obligations, payment obligations with respect to Rent and obligations concerning the condition and repair of the Premises.

29. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

30. Environmental Requirements.

(a) Prohibition/Compliance/Indemnity. Tenant shall not cause or permit any Hazardous Materials (as hereinafter defined) to be brought upon, kept, used, stored, handled, treated, generated in or about, or released or disposed of from, the Premises or the Project in violation of applicable Environmental Requirements (as hereinafter defined) by Tenant or any Tenant Party. If Tenant breaches the obligation stated in the preceding sentence, or if the presence of Hazardous Materials in the Premises during the Term or any holding over results in contamination of the Premises, the Project or any adjacent property or if contamination of the Premises, the Project or any adjacent property by Hazardous Materials brought into, kept, used, stored, handled, treated, generated in or about, or released or disposed of from, the Premises by anyone other than Landlord and Landlord’s employees, agents and contractors otherwise occurs during the Term or any holding over, Tenant hereby indemnifies and shall defend and hold Landlord, its officers, directors, employees, agents and contractors harmless from any and all actions (including, without limitation, remedial or enforcement actions of any kind, administrative or judicial proceedings, and orders or judgments arising out of or resulting therefrom), costs, claims, damages (including, without limitation, punitive damages and damages based upon diminution in value of the Premises or the Project, or the loss of, or restriction on, use of the Premises or any portion of the Project), expenses (including, without limitation, attorneys’, consultants’ and experts’ fees, court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief (whether or not based upon personal injury, property damage, or contamination of, or adverse effects upon, the environment, water tables or natural resources), liabilities or losses (collectively, “Environmental Claims”) which arise during or after the Term as a result of such contamination. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, treatment, remedial, removal, or restoration work required by any federal, state or local Governmental Authority because of Hazardous Materials present in the air, soil or ground water above, on, or under the Premises. Without limiting the foregoing, if the presence of any Hazardous Materials on the Premises, the Project or any adjacent property caused or permitted by Tenant or any Tenant Party results in any contamination of the Premises, the Project or any adjacent property, Tenant shall promptly take all actions at its sole expense and in accordance with applicable Environmental Requirements as are necessary to return the Premises, the Project or any adjacent property to the condition existing prior to the time of such contamination, provided that Landlord’s approval of such action shall first be obtained, which approval shall not unreasonably be withheld so long as such actions would not potentially have any material adverse long-term or short-term effect on the Premises or the Project. Notwithstanding anything to the contrary contained in this Lease, Tenant shall not be responsible for, and the indemnification and hold harmless obligation set forth in this Lease shall not apply to (i) contamination in the Premises which Tenant can prove existed in the Premises immediately prior to the Commencement Date, (ii) the presence of any Hazardous Materials in the Premises which Tenant can prove migrated from outside of the Premises into the Premises, or (iii) caused by Landlord or any Landlord’s employees, agents and contractors, unless in any case, the presence of such Hazardous Materials (x) is the result of a breach by Tenant of any of its obligations under this Lease, or (y) was caused, contributed to or exacerbated by Tenant or any Tenant Party.

(b) Business. Landlord acknowledges that it is not the intent of this Section 30 to prohibit Tenant from using the Premises for the Permitted Use. Tenant may operate its business according to prudent industry practices so long as the use or presence of Hazardous Materials is strictly and properly monitored according to all then applicable Environmental Requirements. As a material inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business, Tenant agrees to deliver to Landlord prior to the Commencement Date a list identifying each type of Hazardous Materials to be brought upon, kept, used, stored, handled, treated, generated on, or released or disposed of from, the Premises and setting forth any and all governmental approvals or permits required in connection with the presence, use, storage, handling, treatment, generation, release or disposal of such Hazardous Materials on or from the Premises (“Hazardous Materials List”). Upon Landlord’s request, or any time that Tenant is required to deliver a Hazardous Materials List to any Governmental Authority (e.g., the fire department) in connection with Tenant’s use or occupancy of the Premises, Tenant shall deliver to Landlord a copy of such Hazardous Materials List. Tenant shall deliver to Landlord true and correct copies of the following documents (the “Haz Mat Documents”) relating to the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials prior to the Commencement Date, or if unavailable at that time, concurrent with the receipt from or submission to a Governmental Authority: permits; approvals; reports and correspondence; storage and management plans, notice of violations of any Legal Requirements; plans relating to the installation of any storage tanks to be installed in or under the Project (provided, said installation of tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent may be withheld in Landlord’s sole and absolute discretion); all closure plans or any other documents required by any and all federal, state and local Governmental Authorities for any storage tanks installed in, on or under the Project for the closure of any such tanks; and a Decommissioning and HazMat Closure Plan (to the extent surrender in accordance with Section 28 cannot be accomplished in 3 months). Tenant is not required, however, to provide Landlord with any portion(s) of the Haz Mat Documents containing information of a proprietary nature which, in and of themselves, do not contain a reference to any Hazardous Materials or hazardous activities. It is not the intent of this Section to provide Landlord with information which could be detrimental to Tenant’s business should such information become known to or possessed by Tenant’s competitors.

(c) Tenant Representation and Warranty. Tenant hereby represents and warrants to Landlord that (i) neither Tenant nor any of its legal predecessors has been required by any prior landlord, lender or Governmental Authority at any time to take remedial action in connection with Hazardous Materials contaminating a property which contamination was permitted by Tenant of such predecessor or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii) Tenant is not subject to any enforcement order issued by any Governmental Authority in connection with the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials (including, without limitation, any order related to the failure to make a required reporting to any Governmental Authority). If Landlord determines that this representation and warranty was not true as of the date of this lease, Landlord shall have the right to terminate this Lease in Landlord’s sole and absolute discretion.

(d) Testing. Landlord shall have the right to conduct annual tests of the Premises to determine whether any contamination of the Premises or the Project has occurred as a result of Tenant’s use. Tenant shall be required to pay the cost of such annual test of the Premises if there is violation of this Section 30 or if contamination for which Tenant is responsible under this Section 30 is identified; provided, however, that if Tenant conducts its own tests of the Premises using third party contractors and test procedures acceptable to Landlord which tests are certified to Landlord, Landlord shall accept such tests in lieu of the annual tests to be paid for by Tenant. In addition, at any time, and from time to time, prior to the expiration or earlier termination of the Term, Landlord shall have the right to conduct appropriate tests of the Premises and the Project to determine if contamination has occurred as a result of Tenant’s use of the Premises. In connection with such testing, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such nonproprietary information concerning the use of Hazardous Materials in or about the Premises by Tenant or any Tenant Party. If contamination has occurred for which Tenant is liable under this Section 30, Tenant shall pay all costs to conduct such tests. If no such contamination is found, Landlord shall pay the costs of such tests (which shall not constitute an Operating Expense). Landlord shall provide Tenant with a copy of all third party, nonconfidential reports and tests of the Premises made by or on behalf of Landlord during the Term without representation or warranty and subject to a confidentiality agreement. Tenant shall, at its sole cost and expense, promptly and satisfactorily remediate any environmental conditions identified by such testing (for which Tenant is responsible under this Section 30) in accordance with all Environmental Requirements. Landlord’s receipt of or satisfaction with any environmental assessment in no way waives any rights which Landlord may have against Tenant.

(e) Control Areas. Tenant shall have the use of 100% of the control areas in the Building.

(f) Underground Tanks. Tenant shall have no right to use or install any underground or other storage tanks at the Project.

(g) Tenant’s Obligations. Tenant’s obligations under this Section 30 shall survive the expiration or earlier termination of this Lease. During any period of time after the expiration or earlier termination of this Lease required by Tenant or Landlord to complete the removal from the Premises of any Hazardous Materials for which Tenant is responsible under this Section 30 (including, without limitation, the release and termination of any licenses or permits restricting the use of the Premises and the completion of the approved Decommissioning and HazMat Closure Plan), Tenant shall continue to pay the full Rent in accordance with this Lease for any portion of the Premises not relet by Landlord in Landlord’s sole discretion, which Rent shall be prorated daily.

(h) Definitions. As used herein, the term “Environmental Requirements” means all applicable present and future statutes, regulations, ordinances, rules, codes, judgments, orders or other similar enactments of any Governmental Authority regulating or relating to health, safety, or environmental conditions on, under, or about the Premises or the Project, or the environment, including without limitation, the following: the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act; and all state and local counterparts thereto, and any regulations or policies promulgated or issued thereunder. As used herein, the term “Hazardous Materials” means and includes any substance, material, waste, pollutant, or contaminant listed or defined as hazardous or toxic, or regulated by reason of its impact or potential impact on humans, animals and/or the environment under any Environmental Requirements, asbestos and petroleum, including crude oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas). As defined in Environmental Requirements, Tenant is and shall be deemed to be the “operator” of Tenant’s “facility” and the “owner” of all Hazardous Materials brought on the Premises by Tenant or any Tenant Party, and the wastes, by-products, or residues generated, resulting, or produced therefrom.

31. Tenant’s Remedies/Limitation of Liability. Landlord shall not be in default hereunder unless Landlord fails to perform any of its obligations hereunder within 30 days after written notice from Tenant specifying such failure (unless such performance will, due to the nature of the obligation, require a period of time in excess of 30 days, then after such period of time as is reasonably necessary). Upon any default by Landlord, Tenant shall give notice by registered or certified mail to any Holder of a Mortgage covering the Premises and to any landlord of any lease of property in or on which the Premises are located and Tenant shall offer such Holder and/or landlord a reasonable opportunity to cure the default, including time to obtain possession of the Project by power of sale or a judicial action if such should prove necessary to effect a cure; provided Landlord shall have furnished to Tenant in writing the names and addresses of all such persons who are to receive such notices. All obligations of Landlord hereunder shall be construed as covenants, not conditions; and, except as may be otherwise expressly provided in this Lease, Tenant may not terminate this Lease for breach of Landlord’s obligations hereunder.

All obligations of Landlord under this Lease will be binding upon Landlord only during the period of its ownership of the Premises and not thereafter. The term “Landlord” in this Lease shall mean only the owner for the time being of the Premises. Upon the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all obligations of Landlord thereafter accruing, but such obligations shall be binding during the Term upon each new owner for the duration of such owner’s ownership.

32. Inspection and Access. Landlord and its agents, representatives, and contractors may enter the Premises at any reasonable time to inspect the Premises and to make such repairs as may be required or permitted pursuant to this Lease and for any other business purpose. Landlord and Landlord’s representatives may enter the Premises during business hours on not less than 2 business days’ advance written notice (except in the case of emergencies in which case no such notice shall be required and such entry may be at any time) for the purpose of effecting any such repairs, inspecting the Premises, showing the Premises to prospective purchasers and, during the last year of the Term, to prospective tenants or for any other business purpose. Landlord may erect a suitable sign on the Premises stating that the Project is available for sale and/or, during the last year of the Term, stating that the Premises are available to let. Landlord may grant easements, make public dedications, create restrictions on or about the Premises, provided that no such easement, dedication, designation or restriction materially, adversely affects Tenant’s use or occupancy of the Premises for the Permitted Use or materially, adversely affects Tenant’s occupancy of or access to or from the Premises, or, other than on a temporary basis, materially, adversely affects Tenant’s parking rights under Section 10, other than on a temporary basis. At Landlord’s request, Tenant shall execute such commercially reasonable instruments as may be necessary for such easements, dedications or restrictions. Tenant shall at all times, except in the case of emergencies, have the right to have a representative of Tenant escort Landlord or its agents, representatives, contractors or guests while the same are in the Premises, provided such escort does not materially and adversely affect Landlord’s access rights hereunder. Notwithstanding anything to the contrary set forth in this Lease, Tenant may designate by prior written notice to Landlord certain limited areas of the Premises as “Secured Areas” should Tenant require such areas for the purpose of securing certain valuable property or confidential information. Landlord may not enter such Secured Areas except in the case of emergency or in the event of a Landlord inspection, in which case Landlord shall provide Tenant with 10 days’ prior written notice of the specific date and time of such Landlord inspection.

Subject to the terms of this Section 32, Landlord may from time to time during the Term, during regular business hours and/or otherwise at times mutually acceptable to Landlord and Tenant, conduct third party tours of the Premises (“Tours”), which Tours may be held with not less than 2 business day’s advance notice.

33. Security. Tenant acknowledges and agrees that security devices and services, if any, while intended to deter crime may not in given instances prevent theft or other criminal acts and that Landlord is not providing any security services with respect to the Premises. Tenant agrees that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Premises. Tenant shall be solely responsible for the personal safety of Tenant’s officers, employees, agents, contractors, guests and invitees while any such person is in, on or about the Premises and/or the Project. Tenant shall at Tenant’s cost obtain insurance coverage to the extent Tenant desires protection against such criminal acts.

34. Force Majeure. Except for the payment of Rent, neither Landlord nor Tenant shall be held responsible or liable for delays (nor shall such delays constitute a Default under this Lease) in the performance of its obligations hereunder when caused by, related to, or arising out of acts of God, sinkholes or subsidence, strikes, lockouts, or other labor disputes, embargoes, quarantines, weather, national, regional, or local disasters, calamities, or catastrophes, inability to obtain labor or materials (or reasonable substitutes therefor) at reasonable costs or failure of, or inability to obtain, utilities necessary for performance, governmental restrictions, orders, limitations, regulations, or controls, national emergencies, local, regional or national health epidemic or pandemic (including COVID-19), delay in issuance or revocation of permits, enemy or hostile governmental action, terrorism, insurrection, riots, civil disturbance or commotion, fire or other casualty, and other causes or events beyond their reasonable control (“Force Majeure”).

35. Brokers. Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker”) in connection with this transaction and that no Broker brought about this transaction, other than Cushman & Wakefield and CBRE. Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker, other than the broker, if any named in this Section 35, claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this leasing transaction.

36. Limitation on Landlord’s Liability. NOTWITHSTANDING ANYTHING SET FORTH HEREIN OR IN ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER PERSON FOR (AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO: TENANT’S PERSONAL PROPERTY OF EVERY KIND AND DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES, EQUIPMENT, INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY ANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS, ACCOUNTING AND OTHER RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE PREMISES AND ANY AND ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BE NO PERSONAL RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN ANY WAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECT MATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD’S INTEREST IN THE PROJECT OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY INSURANCE PROCEEDS PAYABLE IN RESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED AGAINST LANDLORD IN CONNECTION WITH THIS LEASE NOR SHALL ANY RECOURSE BE HAD TO ANY OTHER PROPERTY OR ASSETS OF LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANY LOSS OF INCOME OR PROFIT THEREFROM.

37. Severability. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby. It is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or provision as similar in effect to such illegal, invalid or unenforceable clause or provision as shall be legal, valid and enforceable.

38. Signs; Exterior Appearance. Tenant shall have the exclusive right to install and display signs anywhere on or about the Building or Project, subject to any and all applicable Legal Requirements. Tenant shall be responsible, at Tenant’s sole cost and expense, for the maintenance of all signs and for the removal of all of Tenant’s signs at the expiration or earlier termination of this Lease and for the repair of all damage resulting from such removal. Notwithstanding anything to the contrary contained in this Section 38, provided that Tenant’s signage on any monument sign(s) serving the Project is more prominent, Tenant acknowledges that Landlord shall have the right to include the name and/or logo of Landlord or Alexandria Real Estate Equities, Inc., on such monument sign(s).

39. Intentionally Omitted.

40. Right to Extend Term. Tenant shall have the right to extend the Term of this Lease upon the following terms and conditions:

(a) Extension Rights. Tenant shall have 2 consecutive rights (each, an “Extension Right”) to extend the term of this Lease for 5 years each (each, an “Extension Term”) on the same terms and conditions as this Lease (other than with respect to Base Rent and the Work Letter) by giving Landlord written notice of its election to exercise each Extension Right at least 9 months prior, and no earlier than 12 months prior, to the expiration of the Base Term of this Lease or the expiration of the first Extension Term.

Upon the commencement of any Extension Term, Base Rent shall be payable at the Market Rate (as defined below). Base Rent shall thereafter be adjusted on each annual anniversary of the commencement of such Extension Term by a percentage as determined by Landlord and agreed to by Tenant at the time the Market Rate is determined. As used herein, “Market Rate” shall mean the rate that comparable landlords of comparable buildings have accepted in current transactions from non-equity (i.e., not being offered equity in the buildings) and nonaffiliated tenants of similar financial strength for space of comparable size, quality (including all Tenant Improvements, Alterations and other improvements) and floor height in Class A laboratory/office buildings in the Torrey Pines submarket of San Diego for a comparable term, with the determination of the Market Rate to take into account all relevant factors, including tenant inducements, views, available amenities (including, without limitation, The Alexandria Amenities (as defined in Section 41 below)), age of the Building, age of mechanical systems serving the Premises, parking costs, leasing commissions, allowances or concessions, if any. In addition, Landlord may impose a market rent for the parking rights provided hereunder.

If, on or before the date which is 240 days prior to the expiration of the Base Term of this Lease or the expiration of the prior Extension Term, Tenant has not agreed with Landlord’s determination of the Market Rate and the rent escalations during the applicable Extension Term after negotiating in good faith, Tenant shall be deemed to have elected arbitration as described in Section 40(b). Tenant acknowledges and agrees that, if Tenant has elected to exercise the Extension Right by delivering notice to Landlord as required in this Section 40(a), Tenant shall have no right thereafter to rescind or elect not to extend the term of this Lease for the Extension Term.

(b) Arbitration.

(i) Within 10 days of Tenant’s notice to Landlord of its election (or deemed election) to arbitrate Market Rate and escalations, each party shall deliver to the other a proposal containing the Market Rate and escalations that the submitting party believes to be correct (“Extension Proposal”). If either party fails to timely submit an Extension Proposal, the other party’s submitted proposal shall determine the Base Rent and escalations for the Extension Term. If both parties submit Extension Proposals, then Landlord and Tenant shall meet within 7 days after delivery of the last Extension Proposal and make a good faith attempt to mutually appoint a single Arbitrator (and defined below) to determine the Market Rate and escalations. If Landlord and Tenant are unable to agree upon a single Arbitrator, then each shall, by written notice delivered to the other within 10 days after the meeting, select an Arbitrator. If either party fails to timely give notice of its selection for an Arbitrator, the other party’s submitted proposal shall determine the Base Rent for the Extension Term. The 2 Arbitrators so appointed shall, within 5 business days after their appointment, appoint a third Arbitrator. If the 2 Arbitrators so selected cannot agree on the selection of the third Arbitrator within the time above specified, then either party, on behalf of both parties, may request such appointment of such third Arbitrator by application to any state court of general jurisdiction in the jurisdiction in which the Premises are located, upon 10 days prior written notice to the other party of such intent.

(ii) The decision of the Arbitrator(s) shall be made within 30 days after the appointment of a single Arbitrator or the third Arbitrator, as applicable. The decision of the single Arbitrator shall be final and binding upon the parties. The average of the two closest Arbitrators in a three Arbitrator panel shall be final and binding upon the parties. Each party shall pay the fees and expenses of the Arbitrator appointed by or on behalf of such party and the fees and expenses of the third Arbitrator shall be borne equally by both parties. If the Market Rate and escalations are not determined by the first day of the Extension Term, then Tenant shall pay Landlord Base Rent in an amount equal to the Base Rent in effect immediately prior to the Extension Term and increased by 103% until such determination is made. After the determination of the Market Rate and escalations, the parties shall make any necessary adjustments to such payments made by Tenant. Landlord and Tenant shall then execute an amendment recognizing the Market Rate and escalations for the Extension Term.

(iii) An “Arbitrator” shall be any person appointed by or on behalf of either party or appointed pursuant to the provisions hereof and: (i) shall be (A) a member of the American Institute of Real Estate Appraisers with not less than 10 years of experience in the appraisal of improved office and high tech industrial real estate in the greater San Diego metropolitan area, or (B) a licensed commercial real estate broker with not less than 15 years’ experience representing landlords and/or tenants in the leasing of high tech or life sciences space in the greater San Diego metropolitan area, (ii) devoting substantially all of their time to professional appraisal or brokerage work, as applicable, at the time of appointment and (iii) be in all respects impartial and disinterested.

(c) Rights Personal. Extension Rights are personal to Tenant and are not assignable without Landlord’s consent, which may be granted or withheld in Landlord’s sole discretion separate and apart from any consent by Landlord to an assignment of Tenant’s interest in this Lease, except that they may be assigned in connection with any Permitted Assignment of this Lease.

(d) Exceptions. Notwithstanding anything set forth above to the contrary, Extension Rights shall, at Landlord’s option, not be in effect and Tenant may not exercise any of the Extension Rights:

(i) during any period of time that Tenant is in Default under any provision of this Lease; or

(ii) if Tenant has been in Default (beyond any applicable notice a cure periods) under any provision of this Lease 3 or more times, whether or not the Defaults are cured, during the 12 month period immediately prior to the date that Tenant intends to exercise an Extension Right, whether or not the Defaults are cured.

(e) No Extensions. The period of time within which any Extension Rights may be exercised shall not be extended or enlarged by reason of Tenant’s inability to exercise the Extension Rights.

(f) Termination. The Extension Rights shall, at Landlord’s option, terminate and be of no further force or effect even after Tenant’s due and timely exercise of an Extension Right, if, after such exercise, but prior to the commencement date of an Extension Term, (i) Tenant fails to timely cure any default by Tenant under this Lease; or (ii) Tenant has Defaulted 3 or more times during the period from the date of the exercise of an Extension Right to the date of the commencement of the Extension Term, whether or not such Defaults are cured.

41. Regional Amenities.

(a) The Alexandria. ARE-SD Region No. 17, LLC, a Delaware limited liability company (“The Alexandria Landlord”) is the owner of that certain amenity building located at 10996 Torreyana Road, San Diego, California (“The Alexandria”). As of the date of this Lease, the amenities at The Alexandria are anticipated to include, without limitation, shared conference facilities, a fitness center and restaurant (collectively, the “Alexandria Amenities”). The Alexandria Amenities are available for non-exclusive use by (a) Tenant, (b) intentionally omitted, (c) Landlord, (d) the tenants of The Alexandria Landlord, (e) The Alexandria Landlord, (f) other affiliates of Landlord, The Alexandria Landlord and Alexandria Real Estate Equities, Inc. (“ARE”), (g) the tenants of such other affiliates of Landlord, The Alexandria Landlord and ARE, and (h) any other parties permitted by The Alexandria Landlord (collectively, “Users”). Landlord, The Alexandria Landlord, ARE, and all affiliates of Landlord, Alexandria Landlord and ARE may be referred to collectively herein as the “ARE Parties.” Notwithstanding anything to the contrary contained herein, Tenant acknowledges and agrees that The Alexandria Landlord shall have the right, at the sole discretion of The Alexandria Landlord, to not make the Alexandria Amenities available for use by some or all currently contemplated Users (including Tenant). The Alexandria Landlord shall have the sole right to determine all matters related to the Alexandria Amenities including, without limitation, relating to the reconfiguration, relocation, modification or removal of any of the Alexandria Amenities and/or to revise, expand or discontinue any of the services (if any) provided in connection with the Alexandria Amenities. Tenant acknowledges and agrees that Landlord has not made any representations or warranties regarding the availability of the Alexandria Amenities and that Tenant is not entering into this Lease relying on the continued availability of the Alexandria Amenities to Tenant.

(b) One Alexandria Square. Following the Effective Date, certain affiliates of Landlord (collectively, “OAS Landlord”) may construct certain amenities as part of the redevelopment of that certain project which may be known as “One Alexandria Square,” which consists of the land and those certain buildings located at 3010 Science Park Road, 10931 North Torrey Pines Road, 10933 North Torrey Pines Road, and 10975 North Torrey Pines Road, which amenities may include shared conferencing facilities, a fitness center and/or a restaurant (individually or collectively, the “OAS Amenities”) for the non-exclusive use Users. Notwithstanding anything to the contrary contained herein, Tenant acknowledges and agrees that OAS Landlord shall have the right, at the sole discretion of OAS Landlord, to construct any OAS Amenities desired by OAS Landlord at One Alexandria Square but not make all or a portion of such OAS Amenities available for use by some or all currently contemplated Users. OAS Landlord shall have the sole right to determine all matters related to the OAS Amenities including, without limitation, relating to the type, design and construction thereof. Tenant acknowledges and agrees that Landlord has not made any representations or warranties regarding the development of any of the OAS Amenities and that Tenant is not entering into this Lease relying on the construction and completion of the OAS Amenities or with an expectation that the OAS Amenities will ever be constructed and/or made available to Tenant. The Alexandria Amenities and the OAS Amenities may be referred to herein collectively as the “Regional Amenities.”

(c) License. Commencing (i) with respect to the Alexandria Amenities on the Commencement Date with respect to the Initial Premises and on the Subsequent Premises Commencement date with respect to the Subsequent Premises, and (ii) with respect to the OAS Amenities on the date that all or a portion of the OAS Amenities are made available for use by Users (the “OAS Amenities Commencement Date”), and so long as the Project along with The Alexandria and One Alexandria Square, respectively, continue to be owned by affiliates of ARE, Tenant (and, subject to Landlord’s approval, which may be granted or withheld in Landlord’s reasonable discretion with respect to each prospective subtenant, the subtenants of Tenant) shall have the non-exclusive right to the use of the available Alexandria Amenities and OAS Amenities, respectively, in common with other Users pursuant to the terms of this Section 41. Fitness center passes shall be issued to Tenant for all full time employees of Tenant employed at the Premises. Commencing on the Commencement Date, subject to the terms of Section 3(b) above, Tenant shall commence paying Landlord a fixed fee during the Base Term equal to $2.16 per RSF of the Premises per year (“Amenities Fee”), which Amenities Fee shall by payable on the first day of each month during the Term whether or not Tenant elects to use any or all of the Regional Amenities. The Amenities Fee shall be increased annually on each anniversary of the Commencement Date by 3%. If all of the then-existing Regional Amenities become materially unavailable for use by Tenant (for any reason other than a Default by Tenant under this Lease or the default by Tenant of any agreement(s) relating to the use of the Regional Amenities by Tenant) for a period in excess of 90 consecutive days, then, commencing on the date that the then-existing Regional Amenities in their entirety become materially unavailable for use by Tenant and continuing for the period that the then-existing Amenities in their entirety remain materially unavailable for use by Tenant, the Amenities Fee then-currently payable by Tenant shall be abated.

(d) Shared Conference Facilities. Use by Tenant of any shared conference facilities and/or restaurant(s) at The Alexandria or One Alexandria Square shall be in common with other Users with scheduling procedures reasonably determined by The Alexandria Landlord, the OAS Landlord or the then-designated operators of the applicable shared conference facilities (in either case, the “Event Operator”). Tenant’s use of the shared conference facilities shall be subject to the payment by Tenant to The Alexandria Landlord, the OAS Landlord or the Event Operator, as applicable, of a fee equal to the quoted rates for the usage of the shared conference facilities at The Alexandria or One Alexandria Square, as applicable, in effect at the time of Tenant’s scheduling. Tenant’s use of the conference rooms in the shared conference area shall be subject to availability and The Alexandria Landlord and/or the OAS Landlord (or, if applicable, Event Operator) reserve the right to exercise its reasonable discretion in the event of conflicting scheduling requests among Users. Tenant hereby acknowledges that (i) Biocom/San Diego, a California non-profit corporation (“Biocom”) has the right to reserve the shared conference facilities and any reservable dining area(s) included within the Alexandria Amenities for up to 50% of the time that such shared conference facilities and reservable dining area(s) are available for use by Users each calendar month, and (ii) Illumina, Inc., a Delaware corporation, has the exclusive use of the main conference room within the shared conference facilities at The Alexandria for up to 4 days per calendar month.

Tenant shall be required to use the food service operator(s) designated by The Alexandria Landlord at The Alexandria or the OAS Landlord at One Alexandria Square (as applicable, the “Designated Food and Beverage Operator”) for any food and/or beverage service or catered events held by Tenant in the shared conference facilities. The Alexandria Landlord and the OAS Landlord have the right, in their sole and absolute discretion, to change the Designated Food and Beverage Operator at any time. Tenant may not use any vendors other than the Designated Food and Beverage Operator nor may Tenant supply its own food and/or beverages in connection with any food and/or beverage service or catered events held by Tenant in the shared conference facilities.

Tenant shall, at Tenant’s sole cost and expense, (i) be responsible for the set-up of the shared conference facilities in connection with Tenant’s use (including, without limitation ensuring that Tenant has a sufficient number of chairs and tables and the appropriate equipment), and (ii) surrender the shared conference facilities after each time that Tenant uses the shared conference facilities free of Tenant’s personal property, in substantially the same set up and same condition as received, and free of any debris and trash. If Tenant fails to restore and surrender the shared conference facilities as required by sub-section (ii) of the immediately preceding sentence, such failure shall constitute a “Shared Facilities Default.” Each time that Landlord, The Alexandria Landlord or OAS Landlord, as applicable, reasonably determines that Tenant has committed a Shared Facilities Default, Tenant shall be required to pay Landlord, The Alexandria Landlord or OAS Landlord, as applicable, a penalty within 5 days after notice from Landlord, The Alexandria Landlord or OAS Landlord, as applicable, of such Shared Facilities Default. The penalty payable by Tenant in connection with the first Shared Facilities Default shall be $200. The penalty payable shall increase by $50 for each subsequent Shared Facilities Default (for the avoidance of doubt, the penalty shall be $250 for the second Shared Facilities Default, shall be $300 for the third Shared Facilities Default, etc.). In addition to the foregoing, Tenant shall be responsible for reimbursing The Alexandria Landlord, OAS Landlord or Landlord, as applicable, for all costs expended by The Alexandria Landlord, OAS Landlord or Landlord, as applicable, in repairing any damage to the shared conference facilities, the Alexandria Amenities, the OAS Amenities, The Alexandria or One Alexandria Square caused by Tenant or any Tenant Related Party. The provisions of this Section 41(d) shall survive the expiration or earlier termination of this Lease.

(e) Rules and Regulations. Tenant shall be solely responsible for paying for any and all ancillary services (e.g., audio visual equipment) provided to Tenant, all food services operators and any other third party vendors providing services to Tenant at The Alexandria or One Alexandria Square. Tenant shall use the Regional Amenities (including, without limitation, the shared conference facilities) in compliance with all applicable Legal Requirements and any rules and regulations imposed by The Alexandria Landlord, the OAS Landlord or Landlord from time to time and in a manner that will not interfere with the rights of other Users. The use of the Regional Amenities other than the shared conference facilities by employees of Tenant shall be in accordance with the terms and conditions of the standard licenses, indemnification and waiver agreement required by The Alexandria Landlord, the OAS Landlord or the operator of the applicable Regional Amenities to be executed by all persons wishing to use such Regional Amenities. Neither The Alexandria Landlord, the OAS Landlord nor Landlord (nor, if applicable, any other affiliate of Landlord) shall have any liability or obligation for the breach of any rules or regulations by other Users with respect to the Regional Amenities. Tenant shall not make any alterations, additions, or improvements of any kind to the shared conference facilities, the Regional Amenities, The Alexandria or One Alexandria Square.

Tenant acknowledges and agrees that The Alexandria Landlord and OAS Landlord shall have the right at any time and from time to time to reconfigure, relocate, modify or remove any of the Regional Amenities at The Alexandria and/or One Alexandria Square and/or to revise, expand or discontinue any of the services (if any) provided in connection with the Regional Amenities.

(f) Waiver of Liability and Indemnification. Tenant warrants that it will use reasonable care to prevent damage to property and injury to persons while on The Alexandria and/or One Alexandria Square. Tenant waives any claims it or any Tenant Parties may have against any ARE Parties relating to, arising out of or in connection with the use by Tenant and/or any Tenant Parties of the Regional Amenities and any entry by Tenant and/or any Tenant Parties onto The Alexandria or One Alexandria Square, and Tenant releases and exculpates all ARE Parties from any liability relating to, arising out of or in connection with the Regional Amenities and any entry by Tenant and/or any Tenant Parties onto The Alexandria or One Alexandria Square except, in each case, to the extent caused by the willful misconduct or gross negligence of any ARE Party. Tenant hereby agrees to indemnify, defend, and hold harmless the ARE Parties from any claim of damage to property or injury to person relating to, arising out of or in connection with (i) the use of the Regional Amenities by Tenant or any Tenant Parties, and (ii) any entry by Tenant and/or any Tenant Parties onto The Alexandria or One Alexandria Square, except to the extent caused by the willful misconduct or negligence of any ARE Party. The provisions of this Section 41(f) shall survive the expiration or earlier termination of this Lease.

(g) Insurance. As of the Commencement Date, Tenant shall cause The Alexandria Landlord to be named as an additional insured under the commercial general liability policy of insurance that Tenant is required to maintain pursuant to Section 17 of this Lease. As of the OAS Amenities Commencement Date, Tenant shall cause the OAS Landlord to be named as an additional insured(s) under the commercial general liability policy of insurance that Tenant is required to maintain pursuant to Section 17 of this Lease.

42. Early Termination Right. Tenant shall have the right, subject to the provisions of this Section 42, to terminate this Lease (“Termination Right”) with respect to the entire Premises only on the last day of the 84^th full calendar month after the Commencement Date (“Early Termination Date”), so long as (a) Tenant delivers to Landlord a written notice (“Termination Notice”), of its election to exercise its Termination Right no less than 9 months in advance of the Early Termination Date, and (b) concurrent with Tenant’s delivery of a Termination Notice to Landlord, Tenant delivers a termination payment to Landlord in the amount of Seven Million Five Hundred Thousand Dollars ($7,500,000.00) (the “Termination Payment”). If Tenant timely and properly exercises the Termination Right by delivery of a Termination Notice and the Termination Payment to Landlord, then Tenant shall vacate the Premises and deliver possession thereof to Landlord in the condition required by the terms of this Lease on or before the Early Termination Date and Tenant shall have no further obligations under this Lease after the Early Termination Date except for those accruing prior to the Early Termination Date and those which, pursuant to the terms of this Lease, survive the expiration or early termination of this Lease. For the avoidance of doubt, if Tenant elects to terminate the Lease pursuant to this Section 42, then, on or before the Early Termination Date, Tenant shall be required to pay to Landlord all remaining Additional Rent due for the balance of the Base Term pursuant to Section 4(b) (not including interest for any period following the Early Termination Date).

43. Roof Equipment. Tenant shall have the right at its sole cost and expense, subject to compliance with all Legal Requirements, to install, maintain, and remove on the top of the roof of the Building one or more satellite dishes, communication antennae, or other equipment as Tenant may from time to time desire (collectively, the “Roof Equipment”) on the following terms and conditions:

(a) Requirements. Tenant shall submit to Landlord (i) the plans and specifications for the installation of the Roof Equipment, (ii) copies of all required governmental and quasi-governmental permits, licenses, and authorizations that Tenant will and must obtain at its own expense, with the cooperation of Landlord, if necessary for the installation and operation of the Roof Equipment, and (iii) an insurance policy or certificate of insurance evidencing insurance coverage as required by this Lease and any other insurance as reasonably required by Landlord for the installation and operation of the Roof Equipment. Landlord shall not unreasonably withhold or delay its approval for the installation and operation of the Roof Equipment; provided, however, that Landlord may reasonably withhold its approval if the installation or operation of the Roof Equipment (A) may damage the structural integrity of the Building, (B) may void, terminate, or invalidate any applicable roof warranty, or (C) may reduce the leasable space in the Building.

(b) No Damage to Roof. If installation of the Roof Equipment requires Tenant to make any roof cuts or perform any other roofing work, such cuts shall only be made only in the manner reasonably designated in writing by Landlord; and any such installation work (including any roof cuts or other roofing work) shall be performed by Tenant, at Tenant’s sole cost and expense by a roofing contractor reasonably designated by Landlord. If Tenant or its agents shall otherwise cause any damage to the roof during the installation, operation, and removal of the Roof Equipment such damage shall be repaired promptly at Tenant’s expense and the roof shall be restored in the same condition it was in before the damage. Landlord shall not charge Tenant Additional Rent for the installation and use of the Roof Equipment. If, however, Landlord’s insurance premium or Tax assessment increases as a result of the Roof Equipment, Tenant shall pay such increase as Additional Rent within ten (10) days after receipt of a reasonably detailed invoice from Landlord. Tenant shall not be entitled to any abatement or reduction in the amount of Rent payable under this Lease if for any reason Tenant is unable to use the Roof Equipment. In no event whatsoever shall the installation, operation, maintenance, or removal of the Roof Equipment by Tenant or its agents void, terminate, or invalidate any applicable roof warranty.

(c) Protection. The installation, operation, and removal of the Roof Equipment shall be at Tenant’s sole risk. Tenant shall indemnify, defend, and hold Landlord harmless from and against any and all claims, costs, damages, liabilities and expenses (including, but not limited to, attorneys’ fees) of every kind and description that may arise out of or be connected in any way with Tenant’s installation, operation, or removal of the Roof Equipment.

(d) Removal. At the expiration or earlier termination of this Lease or the discontinuance of the use of the Roof Equipment by Tenant, Tenant shall, at its sole cost and expense, remove the Roof Equipment from the Building. Tenant shall leave the portion of the roof where the Roof Equipment was located in good order and repair, reasonable wear and tear excepted. If Tenant does not so remove the Roof Equipment, Tenant hereby authorizes Landlord to remove and dispose of the Roof Equipment and charge Tenant as Additional Rent for all costs and expenses incurred by Landlord in such removal and disposal. Tenant agrees that Landlord shall not be liable for any Roof Equipment or related property disposed of or removed by Landlord.

(e) Access. Landlord grants to Tenant the right of ingress and egress on a 24 hour 7 day per week basis to install, operate, and maintain the Roof Equipment.

(f) Appearance. If permissible by Legal Requirements, the Roof Equipment shall be painted the same color as the Building so as to render the Roof Equipment virtually invisible from ground level.

(g) No Assignment. Tenant shall not assign, convey, or otherwise transfer to any person or entity any right, title, or interest in all or any portion of the Roof Equipment or the use and operation thereof other than in connection with an assignment of this Lease.

44. Miscellaneous.

(a) Notices. All notices or other communications between the parties shall be in writing and shall be deemed duly given upon delivery or refusal to accept delivery by the addressee thereof if delivered in person, or upon actual receipt if delivered by reputable overnight guaranty courier, addressed and sent to the parties at their addresses set forth above. Landlord and Tenant may from time to time by written notice to the other designate another address for receipt of future notices.

(b) Joint and Several Liability. If and when included within the term “Tenant,” as used in this instrument, there is more than one person or entity, each shall be jointly and severally liable for the obligations of Tenant.

(c) Financial Information. Tenant shall furnish Landlord with true and complete copies of (i) Tenant’s most recent audited annual financial statements within 90 days of the end of each of Tenant’s fiscal years during the Term, (ii) Tenant’s most recent unaudited quarterly financial statements within 45 days of the end of each of Tenant’s first three fiscal quarters of each of Tenant’s fiscal years during the Term, (iii) at Landlord’s request from time to time, updated business plans, including cash flow projections and/or pro forma balance sheets and income statements, all of which shall be treated by Landlord as confidential information belonging to Tenant, (iv) corporate brochures and/or profiles prepared by Tenant for prospective investors, and (v) any other financial information or summaries that Tenant typically provides to its lenders or shareholders. So long as Tenant is a “public company”, then the foregoing requirements of this Section 43(c) shall not apply.

(d) Recordation. Neither this Lease nor a memorandum of lease shall be filed by or on behalf of Tenant in any public record. Landlord may prepare and file, and upon request by Landlord Tenant will execute, a memorandum of lease.

(e) Interpretation. The normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Lease or any exhibits or amendments hereto. Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.

(f) Not Binding Until Executed. The submission by Landlord to Tenant of this Lease shall have no binding force or effect, shall not constitute an option for the leasing of the Premises, nor confer any right or impose any obligations upon either party until execution of this Lease by both parties.

(g) Limitations on Interest. It is expressly the intent of Landlord and Tenant at all times to comply with applicable law governing the maximum rate or amount of any interest payable on or in connection with this Lease. If applicable law is ever judicially interpreted so as to render usurious any interest called for under this Lease, or contracted for, charged, taken, reserved, or received with respect to this Lease, then it is Landlord’s and Tenant’s express intent that all excess amounts theretofore collected by Landlord be credited on the applicable obligation (or, if the obligation has been or would thereby be paid in full, refunded to Tenant), and the provisions of this Lease immediately shall be deemed reformed and the amounts thereafter collectible hereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder.

(h) Choice of Law. Construction and interpretation of this Lease shall be governed by the internal laws of the state in which the Premises are located, excluding any principles of conflicts of laws.

(i) Time. Time is of the essence as to the performance of Tenant’s obligations under this Lease.

(j) OFAC. Tenant and all controlling owners of Tenant are currently (a) in compliance with and shall at all times during the Term of this Lease remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the term of this Lease be listed on, the Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, or the Sectoral Sanctions Identification List, which are all maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.

(k) Incorporation by Reference. All exhibits and addenda attached hereto are hereby incorporated into this Lease and made a part hereof. If there is any conflict between such exhibits or addenda and the terms of this Lease, such exhibits or addenda shall control.

(l) Entire Agreement. This Lease, including the exhibits attached hereto, constitutes the entire agreement between Landlord and Tenant pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, letters of intent, negotiations and discussions, whether oral or written, of the parties, and there are no warranties, representations or other agreements, express or implied, made to either party by the other party in connection with the subject matter hereof except as specifically set forth herein.

(m) No Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly installment of Base Rent or any Additional Rent will be other than on account of the earliest stipulated Base Rent and Additional Rent, nor will any endorsement or statement on any check or letter accompanying a check for payment of any Base Rent or Additional Rent be an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue any other remedy provided in this Lease.

(n) Hazardous Activities. Notwithstanding any other provision of this Lease, Landlord, for itself and its employees, agents and contractors, reserves the right to refuse to perform any repairs or services in any portion of the Premises which, pursuant to Tenant’s routine safety guidelines, practices or custom or prudent industry practices, require any form of protective clothing or equipment other than safety glasses. In any such case, Tenant shall contract with parties who are acceptable to Landlord, in Landlord’s reasonable discretion, for all such repairs and services, and Landlord shall, to the extent required, equitably adjust Tenant’s Share of Operating Expenses in respect of such repairs or services to reflect that Landlord is not providing such repairs or services to Tenant.

(o) Intentionally Omitted.

(p) Discontinued Use. If, at any time following the Commencement Date, Tenant does not continuously operate its business in the Premises for a period of 180 consecutive days (not including any failure to operate resulting from a casualty, a Taking or a Force Majeure event that precludes Tenant’s operations in the entire Premises), Landlord may, but is not obligated to, elect to terminate this Lease upon 30 days’ written notice to Tenant, whereupon this Lease shall terminate 30 days’ after Landlord’s delivery of such written notice (“Termination Date”), and Tenant shall vacate the Premises and deliver possession thereof to Landlord in the condition required by the terms of this Lease on or before the Termination Date and Tenant shall have no further obligations under this Lease except for those accruing prior to the Termination Date and those which, pursuant to the terms of this Lease, survive the expiration or early termination of this Lease.

(q) Nonrecurring Payments. If a time frame for the payment by Tenant of a nonrecurring charge, cost or expense payable by Tenant pursuant to this Lease is not set forth in this Lease, such nonrecurring charge, cost or expense shall be due within 30 days after Landlord’s delivery to Tenant of written demand therefor.

(r) EV Charging Stations. Landlord shall not unreasonably withhold its consent to Tenant’s written request to install, at Tenant’s sole cost and expense, 1 or more electric vehicle car charging stations (“EV Stations”) in the parking area serving the Project; provided, however, that Tenant complies with all reasonable nondiscriminatory requirements, standards, rules and regulations which may be imposed by Landlord, at the time Landlord’s consent is granted, in connection with Tenant’s installation, maintenance, repair and operation of such EV Stations, which may include, without limitation, the charge to Tenant of a reasonable monthly rental amount for the parking spaces used by Tenant for such EV Stations, Landlord’s designation of the location of Tenant’s EV Stations, and Tenant’s payment of all costs whether incurred by Landlord or Tenant in connection with the installation, maintenance, repair and operation of each Tenant’s EV Station(s). Nothing contained in this paragraph is intended to increase the number of parking spaces which Tenant is otherwise entitled to use at the Project under Section 10 of this Lease nor impose any additional obligations on Landlord with respect to Tenant’s parking rights at the Project.

(s) California Accessibility Disclosure. For purposes of Section 1938(a) of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Project has not undergone inspection by a Certified Access Specialist (CASp). In addition, the following notice is hereby provided pursuant to Section 1938(e) of the California Civil Code: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” In furtherance of and in connection with such notice: (i) Tenant, having read such notice and understanding Tenant’s right to request and obtain a CASp inspection, hereby elects not to obtain such CASp inspection and forever waives its rights to obtain a CASp inspection with respect to the Premises, Building and/or Project to the extent permitted by Legal Requirements; and (ii) if the waiver set forth in clause (i) hereinabove is not enforceable pursuant to Legal Requirements, then Landlord and Tenant hereby agree as follows (which constitutes the mutual agreement of the parties as to the matters described in the last sentence of the foregoing notice): (A) Tenant shall have the one-time right to request for and obtain a CASp inspection, which request must be made, if at all, in a written notice delivered by Tenant to Landlord; (B) any CASp inspection timely requested by Tenant shall be conducted (1) at a time mutually agreed to by Landlord and Tenant, (2) in a professional manner by a CASp designated by Landlord and without any testing that would damage the Premises, Building or Project in any way, and (3) at Tenant’s sole cost and expense, including, without limitation, Tenant’s payment of the fee for such CASp inspection, the fee for any reports prepared by the CASp in connection with such CASp inspection (collectively, the “CASp Reports”) and all other costs and expenses in connection therewith; (C) the CASp Reports shall be delivered by the CASp simultaneously to Landlord and Tenant; (D) Tenant, at its sole cost and expense, shall be responsible for making any improvements, alterations, modifications and/or repairs to or within the Premises to correct violations of construction-related accessibility standards including, without limitation, any violations disclosed by such CASp inspection; and (E) if such CASp inspection identifies any improvements, alterations, modifications and/or repairs necessary to correct violations of construction-related accessibility standards relating to those items of the Building and Project located outside the Premises that are Landlord’s obligation to repair as set forth in this Lease, then Landlord shall perform such improvements, alterations, modifications and/or repairs as and to the extent required by Legal Requirements to correct such violations, and Tenant shall reimburse Landlord for the cost of such improvements, alterations, modifications and/or repairs within 10 business days after Tenant’s receipt of an invoice therefor from Landlord.

(t) Counterparts. This Lease may be executed in 2 or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature process complying with the U.S. federal ESIGN Act of 2000) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. Electronic signatures shall be deemed original signatures for purposes of this Lease and all matters related thereto, with such electronic signatures having the same legal effect as original signatures.

(u) Bridge Work. Landlord shall use reasonable good faith efforts to substantially complete the construction of the Bridge and related improvements (collectively, the “Bridge Work”) on or before the date that is 18 months after the Commencement Date (as such date may be delayed by Force Majeure or delays caused by Tenant, the “Target Bridge Completion Date”). Notwithstanding the foregoing, Tenant acknowledges that (i) Landlord does not currently have the governmental approvals necessary for the development and construction of the Bridge, and (ii) Landlord shall have no obligation to commence the design or construction of the Bridge prior to Landlord obtaining the governmental approvals (including, without, limitation, the building entitlements) necessary for the development of Bridge. If, despite Landlord’s good faith reasonable efforts, Landlord fails to substantially complete the Bridge Work on or before the Target Bridge Completion Date (as such date may be delayed by Force Majeure or delays caused by Tenant), then the initial Base Rent payable under this Lease shall be reduced by $3.00 per RSF of the Premises per year (prorated for any partial year) until the Bridge Work is substantially completed. As of the date of this Lease, Landlord contemplates that the Bridge Work will be consistent with the schematic attached hereto as Exhibit I.

Notwithstanding the foregoing, if, during Landlord’s performance of the Bridge Work, Tenant will not have access to at least 85% of their parking spaces, then Landlord, at Landlord’s cost, shall implement a parking efficiency program (such as valet parking, or off-site parking with shuttle access if more than a 5 minute walk from the Project) in order to address such shortage during Landlord’s performance of the Bridge Work.

Tenant acknowledges and agrees that the Bridge work may be performed after the Commencement Date, in which case Landlord will require access to portions of the Project (not including the Premises) in order to perform the Bridge Work. Landlord and its contractors and agents shall have the right to enter such portions of the Project (not including the Premises) to perform the Bridge Work and Tenant shall cooperate with Landlord, at no material cost to Tenant, in connection with the same. Landlord shall use reasonable efforts to minimize interference with Tenant’s operations in the Premises during the performance of the Bridge Work. Landlord further agrees to use reasonable efforts to coordinate with Tenant to schedule the performance of any portion of the Bridge Work which would be reasonably likely to cause a material interference with Tenant’s business operations in the Premises. Tenant acknowledges that Landlord’s performance of the Bridge Work and related improvements may adversely affect Tenant’s use and occupancy of the Premises. Tenant further acknowledges that construction noise, vibrations and dust associated with normal construction activities in connection with construction of the Bridge and related improvements are to be expected during the performance of the Bridge Work. Tenant waives all claims against Landlord for rent abatement in connection with performance of the Bridge Work.

(v) HazMat Storage Shed. Notwithstanding anything to the contrary contained in the Lease, commencing on the Commencement Date, Tenant shall have the exclusive right to use the existing Hazardous Materials storage shed located at the Project, for the storage of Tenant’s Hazardous Materials (not including flammable materials, which may in no event be stored in the HazMat Storage Shed). Tenant shall have all of the obligations under the Lease with respect to the HazMat Storage Shed as though the HazMat Storage Shed were part of the Premises, excluding the obligation to pay additional Base Rent and Operating Expenses. Tenant shall maintain appropriate records, obtain and maintain appropriate insurance, implement reporting procedures, and take or cause to be taken all other actions necessary or required under applicable Legal Requirements in connection with the use of the HazMat Storage Shed. Landlord shall have no obligation to make any repairs or other improvements to the HazMat Storage Shed and Tenant shall maintain the same, at Tenant’s sole cost and expense, in good repair and condition during the term as though the same were part of the Premises. Tenant shall not make any alterations, additions, or improvements to the HazMat Storage Shed of any kind whatsoever. Tenant shall, at Tenant’s sole cost and expense, surrender the HazMat Storage Shed at the expiration or earlier termination of the term of the Lease free of any debris and trash and free of any Hazardous Materials in accordance with the requirements of Section 28 of the Lease. In accordance with and subject to the terms of Section 7 hereof, Landlord shall be responsible, at Landlord’s sole cost and expense and not as an Operating Expense, for the compliance of the HazMat Storage Shed with applicable Legal Requirements (including the ADA) as of the Commencement Date, but regardless of when such lack of compliance is discovered.

[Signatures are on the next page]

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first above written.

TENANT:

MIRATI THERAPEUTICS, INC.,

a Delaware corporation

By: /s/ Vickie Reed

Vickie Reed

Its: SVP & CAO

LANDLORD:

ARE-SD REGION NO. 38, LLC,
a Delaware limited liability company

By:    ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
    a Delaware limited partnership,
    managing member

By:    ARE-QRS CORP.,
        a Maryland corporation,
        general partner

By: /s/ Gary Dean

Gary Dean

Its: Senior Vice President – Real Estate Legal

EXHIBIT A TO LEASE

DESCRIPTION OF PREMISES

EXHIBIT B TO LEASE

DESCRIPTION OF PROJECT

EXHIBIT C TO LEASE

WORK LETTER

THIS WORK LETTER dated June 30, 2020 (this “Work Letter”) is made and entered into by and between ARE-SD REGION NO. 38, LLC, a Delaware limited liability company (“Landlord”), and MIRATI THERAPEUTICS, INC., a Delaware corporation (“Tenant”), and is attached to and made a part of the Lease Agreement dated June 30, 2020 (the “Lease”), by and between Landlord and Tenant. Any initially capitalized terms used but not defined herein shall have the meanings given them in the Lease.

1.General Requirements.

(a) Tenant’s Authorized Representative. Tenant designates Vickie Reed (“Tenant’s Representative”) as the only person authorized to act for Tenant pursuant to this Work Letter. Landlord shall not be obligated to respond to or act upon any request, approval, inquiry or other communication (“Communication”) from or on behalf of Tenant in connection with this Work Letter unless such Communication is in writing from Tenant’s Representative. Tenant may change Tenant’s Representative at any time upon not less than 5 business days advance written notice to Landlord. Neither Tenant nor Tenant’s Representative shall be authorized to direct Landlord’s contractors in the performance of Landlord’s Work (as hereinafter defined).

(b) Landlord’s Authorized Representative. Landlord designates Michael D’Ambrosia and Christopher Clement (either such individual acting alone, “Landlord’s Representative”) as the only persons authorized to act for Landlord pursuant to this Work Letter. Tenant shall not be obligated to respond to or act upon any request, approval, inquiry or other Communication from or on behalf of Landlord in connection with this Work Letter unless such Communication is in writing from Landlord’s Representative. Landlord may change either Landlord’s Representative at any time upon not less than 5 business days advance written notice to Tenant. Landlord’s Representative shall be the sole persons authorized to direct Landlord’s contractors in the performance of Landlord’s Work.

(c) Architects, Consultants and Contractors. Landlord and Tenant hereby acknowledge and agree that: (i) the general contractor and any subcontractors for the Tenant Improvements shall be selected by Landlord, subject to Tenant’s approval, which approval shall not be unreasonably withheld, conditioned or delayed, and (ii) Dowler Gruman Architects shall be the architect (the “TI Architect”) for the Tenant Improvements.

2. Tenant Improvements.

(a) Tenant Improvements Defined. As used herein, “Tenant Improvements” shall mean all improvements to the Project of a fixed and permanent nature as shown on the TI Construction Drawings, as defined in Section 2(c) below. The Tenant Improvement shall include, without limitation the following improvements as reflected on the Space Plans and/or the TI Specifications: (a) upgrading of the flooring, paint and lighting throughout the Tenant Improvement including the replacement of the light bulbs with LED fixtures, (b) upgrading the landscaping near the main entrance of the Building, (c) the construction/renovation of offices, conference rooms, second (2^nd) floor (i.e., the top floor) kitchen and laboratory, and (d) expansion of an existing patio with additional hardscape and a covered 2-story volume. Other than Landlord’s Work (as defined in Section 3(a)) below, Landlord shall not have any obligation whatsoever with respect to the finishing of the Premises for Tenant’s use and occupancy. The contemplated schedule of critical dates for the Tenant Improvements is attached hereto as Schedule 5 (the “Schedule”). Tenant shall have a right to have a representative present for all design and construction meetings relating to the Tenant Improvements and the Budget (as defined in Section 5(a)) for the Tenant Improvements.

(b) Tenant’s Space Plans. The plan prepared by the TI Architect attached hereto as Schedule 1 (the “Space Plans”) and the basis of design and minimum required tenant improvement specifications for the Tenant Improvements attached hereto as Schedule 2 and, to the extent applicable, described on the Responsibility Matrix attached hereto as Schedule 4 (collectively, the “TI Specifications”) have been approved by both Landlord and Tenant. Landlord and Tenant further acknowledge and agree that any changes to the Space Plans or the TI Specifications requested by Tenant (as opposed to changes required in connection with Landlord’s Work outside of Tenant’s control) constitute a Change Request the cost of which changes shall be paid for out of the TI Fund (as defined in Section 5(e) below). Tenant shall be solely responsible for all costs incurred by Landlord to alter the Building as a result of such Tenant requested changes.

(c) Schematic Drawings. Landlord shall cause the Architect, in line with time periods provided for on the Schedule to deliver to Tenant schematic drawings for the Tenant Improvements that are a logical extension of the Space Plans and the TI Specifications (the “Schematic Drawings”). Not more than 5 days thereafter, Tenant shall deliver to Landlord and the Architect the written objections, questions or comments of Tenant with regard to the applicable Schematic Drawings; provided, however, that Tenant may not disapprove any matter that is consistent with the applicable Space Plans without submitting a Change Request. Landlord shall cause the applicable Schematic Drawings to be revised to address such written comments and shall resubmit said drawings to Tenant for approval within 5 days thereafter. Such process shall continue until Landlord and Tenant have approved the applicable Schematic Drawings. The failure (other than as a result of Landlord’s failure to (i) deliver the Schematic Drawings within the time period provided above or (ii) timely respond to Tenant) to complete the Schematic Drawings for the Tenant Improvements in compliance with the Schedule shall constitute a Tenant Delay. Any disputes regarding the applicable Schematic Drawings shall be resolved in accordance with Section 2(f) hereof. Provided that the design reflected in the Schematic Drawings is consistent with the applicable Space Plans, Tenant shall approve such Schematic Drawings submitted by Architect, unless Tenant submits a Change Request.

(d) Design Development Drawings. After Landlord and Tenant have approved the applicable Schematic Drawings, Landlord shall cause the Architect, in line with time periods provided for in the Schedule, to deliver to Tenant preliminary permit set plans and specifications for development of the Tenant Improvements (the “Design Development Drawings”). Tenant shall be solely responsible for ensuring that the applicable Design Development Drawings reflect Tenant’s requirements for the Tenant Improvements. Tenant shall deliver its written comments on the Design Development Drawings to Landlord not later than 5 days after Tenant’s receipt of the same; provided, however, that Tenant may not disapprove any matter that is consistent with the applicable Schematic Drawings without submitting a Change Request. Landlord and the Architect shall consider all such comments in good faith and shall, within 5 days after receipt, notify Tenant how Landlord proposes to respond to such comments and Landlord will submit revised applicable Design Development Drawings reflecting Tenant’s comments and Landlord’s response to such comments; provided, however, that Landlord will not be required to consider any comments which are not consistent with the applicable Schematic Drawings unless Tenant submits a Change Request. The failure (other than as a result of Landlord’s failure to (i) deliver the applicable Design Development Drawings within the time period provided above or (ii) timely respond to Tenant) to complete the Design Development Drawings for the Design Development Drawings for the Tenant Improvements in compliance with the Schedule shall constitute a Tenant Delay. Any disputes regarding the applicable Design Development Drawings shall be resolved in accordance with Section 2(f) hereof. Provided that the design reflected in the applicable Design Development Drawings is consistent with the applicable Schematic Drawings, Tenant shall approve the Design Development Drawings submitted by Architect, unless Tenant submits a Change Request.

(e) Working Drawings. Landlord shall cause the TI Architect to prepare and deliver to Tenant for review and comment construction plans, specifications and drawings for the Tenant Improvements (“TI Construction Drawings”), which TI Construction Drawings shall be prepared substantially in accordance with the Design Development Drawings. Tenant shall be solely responsible for ensuring that the TI Construction Drawings reflect Tenant’s requirements for the Tenant Improvements. Tenant shall deliver its written comments on the TI Construction Drawings to Landlord not later than 10 business days after Tenant’s receipt of the same; provided, however, that Tenant may not disapprove any matter that is consistent with the Design Development Drawings without submitting a Change Request. Landlord and the TI Architect shall consider all such comments in good faith and shall, within 10 business days after receipt, notify Tenant how Landlord proposes to respond to such comments, but Tenant’s review rights pursuant to the foregoing sentence shall not delay the design or construction schedule for the Tenant Improvements. Any disputes in connection with such comments shall be resolved in accordance with Section 2(f) hereof. Provided that the design reflected in the TI Construction Drawings is consistent with the Design Development Drawings, Tenant shall approve the TI Construction Drawings submitted by Landlord, unless Tenant submits a Change Request. Once approved by Tenant, subject to the provisions of Section 4 below, Landlord shall not modify the TI Construction Drawings except as may be reasonably required in connection with the issuance of the TI Permit (as defined in Section 3(b) below).

(f) Approval and Completion. Upon any dispute regarding the design of the Tenant Improvements, which is not settled within 10 business days after notice of such dispute is delivered by one party to the other, Tenant may make the final decision regarding the design of the Tenant Improvements, provided (i) Tenant acts reasonably and such final decision is either consistent with or a compromise between Landlord’s and Tenant’s positions with respect to such dispute, (ii) that all costs and expenses resulting from any such decision by Tenant shall be payable out of the TI Fund, and (iii) Tenant’s decision will not adversely affect the base Building, structural components of the Building or any Building Systems (in which case Landlord shall make the final decision). Any changes to the TI Construction Drawings following Landlord’s and Tenant’s approval of same requested by Tenant shall be processed as provided in Section 4 hereof.

3. Performance of Landlord’s Work.

(a) Definition of Landlord’s Work. As used herein, “Landlord’s Work” shall mean (i) the work of constructing the Tenant Improvements, (ii) the renovation of the base, shell and core of the Building consistent with the renderings and basis of design attached hereto as Schedule 3, and (iii) the renovation of the Project exterior to the Building also as shown on Schedule 3, including renovating the central plant and related site work reflected on Schedule 3, and, to the extent applicable, described on the Responsibility Matrix attached hereto as Schedule 4. Subject to the terms of the Lease, Landlord shall construct a bridge connection between the Building and either that certain building commonly known as Spectrum II or a to-be-constructed building to be known as Spectrum III, as reasonably determined by Landlord (the “Bridge”), which Bridge shall be constructed at Landlord’s sole cost and expense. Notwithstanding anything to the contrary contained herein, in no event shall construction of the Bridge (or failure to construct the Bridge) be considered part of the definition of Landlord’s Work including, without limitation, for purposes of determining Substantial Completion or Delivery of the Premises. As reflected in the Lease, Landlord’s Work shall be completed in two phases.

The references in the Responsibility Matrix attached hereto as Schedule 4 to (x) “Provided by Landlord at Landlord Cost” refers to work that will be paid for by Landlord, (y) “Provided by Tenant at Tenant’s Cost or Excess TI Allowance” refers to work that will be paid for out of the Additional Tenant Improvement Allowance or paid for out-of-pocket by Tenant, and (z) “Provided by Landlord as part Tenant Improvements” refers to work that will be paid for out of the TI Fund.

Tenant shall be solely responsible for ensuring that the design and specifications for Landlord’s Work are consistent with Tenant’s requirements. Landlord shall be responsible for obtaining all permits, approvals and entitlements necessary for Landlord’s Work, but shall have no obligation to, and shall not, secure any permits, approvals or entitlements related to Tenant’s specific use of the Premises or Tenant’s business operations therein. This includes securing county approval of San Diego Regional Hazardous Material Questionnaire which Tenant shall be required to obtain.

(b) Commencement and Permitting. Landlord shall commence construction of the Tenant Improvements upon obtaining a building permit (the “TI Permit”) authorizing the construction of the Tenant Improvements consistent with the TI Construction Drawings approved by Tenant. The cost of obtaining the TI Permit shall be payable from the TI Fund. Tenant shall assist Landlord in obtaining the TI Permit. If any Governmental Authority having jurisdiction over the construction of Landlord’s Work or any portion thereof shall impose terms or conditions upon the construction thereof that: (i) are inconsistent with Landlord’s obligations hereunder, (ii) increase the cost of constructing Landlord’s Work, or (iii) will materially delay the construction of Landlord’s Work, Landlord and Tenant shall reasonably and in good faith seek means by which to mitigate or eliminate any such adverse terms and conditions.

(c) Completion of Landlord’s Work. Landlord shall substantially complete or cause to be substantially completed Landlord’s Work in a good and workmanlike manner, in accordance with the TI Construction Drawings and the TI Permit subject, in each case, to Minor Variations and normal “punch list” items of a non-material nature that do not interfere with the use of the Premises (and the completion of which punch list items will not materially interfere with Tenant’s use of the Premises) and with a certificate or temporary certificate of occupancy (or an equivalent approval having been issued) for the Premises permitting lawful occupancy of the Premises (but specifically excluding any permits, licenses or other governmental approvals required to be obtained in connection with Tenant’s operations in the Premises) (“Substantial Completion” or “Substantially Complete”). Upon Substantial Completion of Landlord’s Work, Landlord shall require the TI Architect and the general contractor to execute and deliver, for the benefit of Tenant and Landlord, a Certificate of Substantial Completion in the form of the American Institute of Architects (“AIA”) document G704. For purposes of this Work Letter, “Minor Variations” shall mean any modifications reasonably required: (i) to comply with all applicable Legal Requirements and/or to obtain or to comply with any required permit (including the TI Permit); (ii) to comply with any request by Tenant for modifications to Landlord’s Work; (iii) to comport with good design, engineering, and construction practices that are not material; or (iv) to make reasonable adjustments for field deviations or conditions encountered during the construction of Landlord’s Work.

(d) Selection of Materials. Where more than one type of material or structure is indicated on the TI Construction Drawings approved by Landlord and Tenant, the option will be selected by Landlord, in its reasonable discretion. As to all building materials and equipment that Landlord is obligated to supply under this Work Letter, Landlord shall select the manufacturer thereof in its sole and absolute subjective discretion.

(e) Delivery of the Premises. When Landlord’s Work is Substantially Complete, subject to the remaining terms and provisions of this Section 3(e), Tenant shall accept the Premises. Tenant’s taking possession and acceptance of the Premises, respectively, shall not constitute a waiver of: (i) any warranty with respect to workmanship (including installation of equipment) or material (exclusive of equipment provided directly by manufacturers) with respect to the Premises, (ii) any non-compliance of Landlord’s Work with applicable Legal Requirements with respect to the Premises, or (iii) any claim that Landlord’s Work in the Premises was not completed substantially in accordance with the TI Construction Drawings (subject to Minor Variations and such other changes as are permitted hereunder) (collectively, a “Construction Defect”). Tenant shall have one year after Substantial Completion within which to notify Landlord of any such Construction Defect discovered by Tenant in the Premises, and Landlord shall use reasonable efforts to remedy or cause the responsible contractor to remedy any such Construction Defect within 30 days thereafter. Notwithstanding the foregoing, Landlord shall not be in default under the Lease if the applicable contractor, despite Landlord’s reasonable efforts, fails to remedy such Construction Defect within such 30-day period. If the contractor fails to remedy such Construction Defect within a reasonable time, Landlord shall use its reasonable efforts to remedy the Construction Defect within a reasonable period.

Tenant shall be entitled to receive the benefit of all construction warranties and manufacturer’s equipment warranties relating to equipment installed in the Premises. If requested by Tenant, Landlord shall attempt to obtain extended warranties from manufacturers and suppliers of such equipment, but the cost of any such extended warranties shall be borne solely out of the TI Fund. Landlord shall promptly undertake and complete, or cause to be completed, all punch list items. Landlord shall use reasonable efforts to complete, or cause to be completed, all punch list items, within 30 days after the Substantial Completion of each applicable phase of the Tenant Improvements, as applicable.

(f) Commencement Date Delay. Except as otherwise provided in the Lease, Delivery of the Premises shall occur when Landlord’s Work has been Substantially Completed, except to the extent that completion of Landlord’s Work shall have been actually delayed by any one or more of the following causes (“Tenant Delay”):

(i) Tenant’s Representative was not available to give or receive any Communication or to take any other action required to be taken by Tenant hereunder within 1 business day after written notice from Landlord;

(ii) Tenant’s request for Change Requests (as defined in Section 4(a) below) whether or not any such Change Requests are actually performed;

(iii) Construction of any Change Requests;

(iv) Tenant’s request for materials, finishes or installations requiring unusually long lead times;

(v) Tenant’s delay in reviewing, revising or approving plans and specifications beyond the periods set forth herein;

(vi) Tenant’s delay in providing information critical to the normal progression of the Project. Tenant shall provide such information as soon as reasonably possible, but in no event longer than one week after receipt of any request for such information from Landlord;

(vii) Tenant’s delay in making payments to Landlord for Excess TI Costs (as defined in Section 5(d) below); or

(viii) Any other act or omission by Tenant or any Tenant Party (as defined in the Lease), or persons employed by any of such persons which continues for 1 business day after written notice from Landlord.

If Delivery is delayed for any of the foregoing reasons, then Landlord shall cause the TI Architect to certify the date on which the Tenant Improvements would have been Substantially Completed but for such Tenant Delay and such certified date shall be the date of Delivery.

4. Changes. Any changes requested by Tenant to the Tenant Improvements shall be requested and instituted in accordance with the provisions of this Section 4 and shall be subject to the written approval of Landlord and the TI Architect, such approval not to be unreasonably withheld, conditioned or delayed.

(a) Tenant’s Request For Changes. If Tenant shall request changes to the Tenant Improvements (“Changes”), Tenant shall request such Changes by notifying Landlord in writing in substantially the same form as the AIA standard change order form (a “Change Request”), which Change Request shall detail the nature and extent of any such Change. Such Change Request must be signed by Tenant’s Representative. Landlord shall, before proceeding with any Change, use commercially reasonable efforts to respond to Tenant as soon as is reasonably possible with an estimate of: (i) the time it will take, and (ii) the architectural and engineering fees and costs that will be incurred, to analyze such Change Request (which costs shall be paid from the TI Fund to the extent actually incurred, whether or not such change is implemented). Landlord shall thereafter submit to Tenant in writing, within 5 business days of receipt of the Change Request (or such longer period of time as is reasonably required depending on the extent of the Change Request), an analysis of the additional cost or savings involved, including, without limitation, architectural and engineering costs and the period of time, if any, that the Change will extend the date on which Landlord’s Work will be Substantially Complete. Any such delay in the completion of Landlord’s Work caused by a Change, including any suspension of Landlord’s Work while any such Change is being evaluated and/or designed, shall be Tenant Delay.

(b) Implementation of Changes. If Tenant: (i) approves in writing the cost or savings and the estimated extension in the time for completion of Landlord’s Work, if any, and (ii) deposits with Landlord any Excess TI Costs required in connection with such Change, Landlord shall cause the approved Change to be instituted. Notwithstanding any approval or disapproval by Tenant of any estimate of the delay caused by such proposed Change, the TI Architect’s determination of the amount of Tenant Delay in connection with such Change shall be final and binding on Landlord and Tenant.

5. Costs.

(a) Budget For Tenant Improvements. Before the commencement of construction of the Tenant Improvements, Landlord shall obtain and submit to Tenant for approval (which approval shall not be unreasonably withheld, conditioned or delayed), a detailed breakdown by trade of the estimated costs incurred or that will be incurred in connection with the design and construction of the Tenant Improvements (the “Budget”). Notwithstanding anything to the contrary contained herein, if Tenant does not approve or disapprove the Budget within 10 days after Landlord’s delivery to Tenant of such initial Budget, Tenant shall be deemed to have approved such initial Budget. The Budget shall be based upon the TI Construction Drawings approved by Tenant and shall include a payment to Landlord of administrative rent (“Administrative Rent”) equal to 3% of the “hard” TI Costs for monitoring and inspecting the construction of the Tenant Improvements and Changes, which sum shall be payable from the TI Fund. If the Budget is greater than the TI Allowance, Tenant shall deposit with Landlord the difference, in cash, prior to the commencement of construction of the Tenant Improvements or Changes, for disbursement by Landlord as described in Section 5(d).

(b) TI Allowance. Landlord shall provide to Tenant a tenant improvement allowance (collectively, the “TI Allowance”) as follows:

1. a “Tenant Improvement Allowance” in the maximum amount of $215.00 per RSF in the Premises; and

2. an “Additional Tenant Improvement Allowance” in the maximum amount of $35.00 per RSF in the Premises, which shall, to the extent used, result in Additional Rent as set forth in Section 4(b) of the Lease.

Tenant shall notify Landlord, on or before the date provided in the Schedule, how much Additional Tenant Improvement Allowance Tenant has elected to receive from Landlord. Such election shall be final and binding on Tenant, and may not thereafter be modified without Landlord’s consent, which may be granted or withheld in Landlord’s sole and absolute subjective discretion. The TI Allowance shall be disbursed in accordance with this Work Letter.

(c) Miscellaneous Allowance. Landlord shall make available to Tenant an allowance of up to $3.00 per RSF of the Premises (the “Miscellaneous Allowance”) for the costs of Tenant’s cabling, Tenant’s signage, EV stations (the cost of which EV stations shall be allocated between Landlord and Tenant pursuant to the terms of Section 10 of the Lease) and the cost of other items reasonably acceptable to Landlord (“Acceptable Items”). Landlord shall reimburse Tenant for the actual reasonable cost of Acceptable Items within 30 days after Tenant’s delivery to Landlord of invoices and other evidence reasonably requested by Landlord reflecting the actual reasonable costs incurred by Tenant for such Acceptable Items. The Miscellaneous Allowance shall only be available for use by Tenant for costs incurred by Tenant for Acceptable Items during the period commencing on the execution date of the Lease through the date that is 90 days after the Subsequent Premises Commencement Date (such period, the “Miscellaneous Allowance Reimbursement Period”). Any portion of the Miscellaneous Allowance with respect to which Landlord has not received an invoice (and/or other evidence reasonably requested by Landlord) within 90 days after the Miscellaneous Allowance Reimbursement Period for costs incurred during the Miscellaneous Allowance Reimbursement Period shall be forfeited and shall not be available for use by Tenant.

(d) Costs Includable in TI Fund. The TI Fund shall be used solely for the payment of design, permits and construction costs in connection with the construction of the Tenant Improvements, including, without limitation, the demolition of existing improvements required in connection with the construction of the Tenant Improvements, soft costs incurred or accrued in connection with the Tenant Improvements prior to the date of the Lease, the cost of electrical power and other utilities used in connection with the construction of the Tenant Improvements (including, without limitation, the cost of utilities equitably attributable to Landlord’s construction of the Tenant Improvements in the Subsequent Premises for the period commencing on the Commencement Date through the day immediately preceding the Subsequent Premises Commencement Date), the cost of preparing the Space Plan and the TI Construction Drawings, all costs set forth in the Budget, including Landlord’s Administrative Rent, Landlord’s out-of-pocket expenses, costs resulting from Tenant Delays and the cost of Changes (collectively, “TI Costs”). Notwithstanding anything to the contrary contained herein, except with respect to Acceptable Items as provided in Section 5(c) above, the TI Fund shall not be used to purchase any furniture, personal property or other non-Building system materials or equipment, including, but not limited to, Tenant’s voice or data cabling, non-ducted biological safety cabinets and other scientific equipment not incorporated into the Tenant Improvements.

(e) Excess TI Costs. Landlord shall have no obligation to bear any portion of the cost of any of the Tenant Improvements except to the extent of the TI Allowance. Any TI Costs in excess of the TI Allowance constitute “Excess TI Costs.” If at any time Excess TI Costs exceed the then-remaining TI Allowance and Excess TI Costs previously funded by Tenant, Tenant shall deposit with Landlord within 10 days after Landlord’s delivery of an invoice therefor, as a condition precedent to Landlord’s obligation to complete the Tenant Improvements, 100% of the then current (previously unfunded) Excess TI Costs. If Tenant fails to timely deposit any Excess TI Costs with Landlord, Landlord shall have all of the rights and remedies set forth in the Lease for nonpayment of Rent (including, but not limited to, the right to interest at the Default Rate and the right to assess a late charge). For purposes of any litigation instituted with regard to such amounts, those amounts will be deemed Rent under the Lease. The TI Allowance and Excess TI Costs are herein referred to as the “TI Fund.” Funds deposited by Tenant shall be the first disbursed to pay TI Costs. Notwithstanding anything to the contrary set forth in this Section 5(d), Tenant shall be fully and solely liable for the sum of TI Costs and the cost of Minor Variations in excess of the TI Allowance. If upon completion of the Tenant Improvements and the payment of all sums due in connection therewith there remains any undisbursed portion of the TI Fund, Tenant shall be entitled to such undisbursed TI Fund solely to the extent of any Excess TI Costs deposit Tenant has actually made with Landlord.

6. Tenant Access.

(a) Tenant’s Access Rights. Landlord hereby agrees to permit Tenant access, at Tenant’s sole risk and expense, to the Premises (i) 60 days prior to the Commencement Date with respect to the Initial Premises and 60 days prior to the Subsequent Premises Commencement Date with respect to the Subsequent Premises to perform any work (“Tenant’s Work”) required by Tenant other than Landlord’s Work, provided that such Tenant’s Work is coordinated with the TI Architect and the general contractor, and complies with the Lease and all other reasonable restrictions and conditions Landlord may impose, and (ii) prior to the completion of Landlord’s Work, to inspect and observe work in process; all such access shall be during normal business hours or at such other times as are reasonably designated by Landlord. Notwithstanding the foregoing, Tenant shall have no right to enter onto the Premises or the Project unless and until Tenant shall deliver to Landlord evidence reasonably satisfactory to Landlord demonstrating that any insurance reasonably required by Landlord in connection with such pre-commencement access (including, but not limited to, any insurance that Landlord may require pursuant to the Lease) is in full force and effect. Any entry by Tenant shall comply with all established safety practices of Landlord’s contractor and Landlord until completion of Landlord’s Work and acceptance thereof by Tenant.

(b) No Interference. Neither Tenant nor any Tenant Party (as defined in the Lease) shall interfere with the performance of Landlord’s Work, nor with any inspections or issuance of final approvals by applicable Governmental Authorities, and upon any such interference, Landlord shall have the right to exclude Tenant and any Tenant Party from the Premises and the Project until Substantial Completion of Landlord’s Work.

(c) No Acceptance of Premises. The fact that Tenant may, with Landlord’s consent, enter into the Project prior to the date Landlord’s Work is Substantially Complete for the purpose of performing Tenant’s Work shall not be deemed an acceptance by Tenant of possession of the Premises, but in such event Tenant shall defend with counsel reasonably acceptable by Landlord, indemnify and hold Landlord harmless from and against any loss of or damage to Tenant’s property, completed work, fixtures, equipment, materials or merchandise, and from liability for death of, or injury to, any person, caused by the act or omission of Tenant or any Tenant Party.

7. Miscellaneous.

(a) Consents. Whenever consent or approval of either party is required under this Work Letter, that party shall not unreasonably withhold, condition or delay such consent or approval, unless expressly set forth herein to the contrary.

(b) Modification. No modification, waiver or amendment of this Work Letter or of any of its conditions or provisions shall be binding upon Landlord or Tenant unless in writing signed by Landlord and Tenant.

(c) No Default Funding. In no event shall Landlord have any obligation to fund any portion of the TI Allowance or to perform any Landlord’s Work during any period that Tenant is in Default under the Lease.

Schedule 1

Space Plans

Schedule 2

TI Specifications

The below is intended to convey what the Landlord is solely responsible for with respect to improving the Building. For avoidance of doubt, the Landlord will pay for all of the improvements as contemplated herein in addition to selecting and engaging the general contractor.

State and Local Code Compliance

Design and construction shall conform to all Federal, State and Local building codes and ordinances to include but not limited to the most current version of the following documents:

CA Mechanical Code

CA Plumbing Code

CA Building Code

CA Fire Code

Local Fire Department Regulations

National Fire Protection Association

ARCHITECTURAL


Interior Partitions	3-5/8” studs typical, gauge and spacing as required by code, and Type X, 5/8” drywall

Standard interior partitions penetrate ceiling grid 6”

Full height partitions to underside of structure where sound/security requirements occur. Restroom walls, conference rooms and private offices will have full height partitions to underside of structure with batt insulation within the wall cavity.

Fire rated assemblies, full height, tunnel and shaft wall construction per code

Backing required in any walls where casework, appliances, equipment or fixtures will be mounted

Coordinate with structural engineer to determine any specialty requirements for heavy loads

Smooth drywall finish to Level 4 with latex paint throughout office and lab space (Provide Level 5 finish at wall proposed WC locations and walls with dark accent paint.) Chemical storage and glass wash to be cleanable paint surfaces.


Glazing	Full height interior glazing at office fronts. Height 10’-0” unless existing condition prohibits.

Full height interior but glazed wall between lab and office to the greatest extent possible. Height 10’-0” unless existing condition prohibits.


Insulation	Batt insulation within wall cavity as required

Doors, Frames & Hardware

Offices/ General Use Areas

Interior conference and office assemblies to be 3’ x 8’ minimum wood doors with aluminum knockdown frames by Wilson Partitions or equivalent

Restroom doors to be 3’x8’ minimum solid wood core with aluminum knockdown frames by Wilson Partitions or equivalent

Lever style, heavy duty, satin aluminum hardware with components and ratings per code

Keying to be compatible with Landlord master system

Lab/ Lab Support/ Equipment/ Storage Areas

Door Assemblies are 3’ x 8’or 3’-6” x 8’ wood stained doors vision lites. Lever style, heavy duty, satin aluminum cylindrical passage lockset hardware

Include components and ratings as required by code

Keying to be compatible with Landlord’s master system

Ceiling System

Open Office

Exposed structure. Painted throughout including all exposed utilities and ducts.

Private Office Areas

Ceiling height to be 9’-6” unless existing condition prohibits

T-Bar suspension installation per code, utilize BERC clips in lieu of 2” wall angle

Armstrong XL 2’ x 2’, 15/16” exposed T-Grid, white

Armstrong 2’ x 2’ acoustic tile, Dune 1775NF with beveled tegular edge, white

Conference and Meeting Rooms

Drywall hard lid with acoustical ceiling or wall treatment

Lab Areas

Ceiling height to be 9’6” unless existing condition prohibits

Armstrong XL 2’ x 4’, 15/16” exposed T-grid, white

Armstrong or equivalent 2’ x 4’ vinyl clad, white

Lab Support/Equipment and Storage Areas

Armstrong XL 2’ x 4’, 15/16” exposed T-grid, white

Armstrong or equivalent 2’ x 4’ vinyl clad, white

Window Covering

MechoShade Systems or Equal roller shades up to height of proposed spandrel glass, manual controls

Cabinetry

Construction designation APA C-D plugged with exterior glue, 3/4” thick or 3/4” high-pressure particle board for break rooms, copy/work rooms and conference rooms

Solid surface countertops and splashes shall be constructed in accordance with WIC Manual of Millwork, “Custom” grade

Countertops at break area to be solid surface

Soft self-closing hinges with vertical, horizontal and depth adjustment

Adjustable shelf standards, full extension, heavy-duty drawer glides

Lab casework shall be fixed metal or plastic laminate with phenolic resin countertops Trespa or equal.

Floor Covering

Office and Admin Areas

Monterey or equal, overview multi-level loop pattern with 4” rubber base or finished and polished concrete, where applicable. Moisture barrier, as required

Lab/ Lab Support/ Equipment/ Storage Areas

Vinyl Composition Tile, Armstrong or equivalent, 12” x12” x 1/8” with 4” rubber coved base

Shipping/Receiving

Sealed concrete with 4” rubber base

Lobby Entry

Polished concrete or large format porcelain tile

Restrooms

Floors and wet walls to be finished with porcelain tile (60” AFF on wet walls), vinyl wall covering or epoxy paint above tile and on non-wet walls, solid surface or stone slab countertops with full coverage laminate aprons, privacy type plastic laminate toilet partitions 6” above floor finish, stainless steel Bobrick accessories, drywall ceilings with recessed lights and cove lighting above toilets, urinals and mirrors

Specialty Equipment

Environmentally controlled cold room with insulated raised floor.

FIRE PROTECTION


Fire Sprinkler	Spacing and number of heads to comply with recommendations of NFPA 13 for type of occupancy


Fire Extinguisher	Quantity required by code


Fire Alarm	All devices required by code

PLUMBING

All work shall be in strict conformance with the following codes & standards

CA Plumbing Code

CA Building Code

CA Fire Code

Local Fire Department Regulations

National Fire Protection Association


Principal Systems to be	Sanitary sewer drain, waste & vent - all spaces above ground level drain by gravity to the public sewer

Included in the Design Compressed gasses (CA, VAC)

N2 horizontal floor distribution.

RO/DI loop to/from RO/DI point of connection at shaft riser.

Water systems ICW, IHW, DCW, and DHW

Localized instantaneous electric domestic hot water heaters serve lavatories and sinks

Condensate drain piping runs from the HVAC units to the nearest indirect waste receptor (max. 60” AFF) or janitor sink

All drain piping from HVAC equipment and plumbing equipment to nearest indirect waste receptor or janitor sink

Materials Soil, waste and vent above ground: service-weight, no-hub cast-iron pipe and fittings.

Industrial waste and vent piping above ground to be plenum rated polypropylene DWV.

Water and condensate drain piping above ground: Type ‘L” hard-drawn copper type, ASTM B88, and wrought copper fittings, ANSI B1 6.22. All hot water supply piping shall be insulated per T-24 requirements.

Indirect drains: Type “M” copper fittings, ANSI B16.22, solder joint type. Insulate with Manville Micro-Lok 650AP

Specialty gas piping shall be type L copper, silver brazed

Deionized water: Schedule 40 polypropylene with socket fused joints


Plumbing Fixtures	Lab sink: 25 in. x 22 in. x 12 in. deep stainless steel sink

Emergency Shower/Eyewash: Water Saver Faucet Co. Model SSBF2150 or equivalent (no tempered water unless required by code)

Break room to have double compartment stainless steel sinks or scratch resistant composite Silgranit or equal.

Water closets: ADA compliant, handicap-height, vitreous china, wall mounted, floor outlet, low-flush toilet with flush valve

Urinal: ADA compliant, wall hung, vitreous china, low-flush urinal with flushometer

Lavatory: vitreous china, wall hung lavatory with a single temperature-metering faucet

Faucet: infra-red sensor control faucet on 120 v power

Service Sink: corner model, terrazzo mop service basin with vacuum breaker faucet


Drains	Floor Drains: Cast iron body floor drains with nickel bronze top, membrane clamp and adjustable collar

Floor Sinks: Cast iron body receptor with acid-resistant coated interior, bottom dome strainer, seepage flange and grate

HVAC

All work shall be in strict conformance with the following codes and standards

CA Mechanical Code

CA Plumbing Code

CA Building Code

CA Fire Code

Local Fire Department Regulations

National Fire Protection Association


Office Areas	Provide variable air volume terminals with hot water reheat coils. Office areas will be provided with 100% outside air from basement mounted air handlers. Each zone will have an independent thermostat connected to the building BMS.


Lab Areas	Basement mounted 100% OSA packaged unit air handlers with moisture eliminators and 95% efficient filtration. Temperature control by hot water reheat zones served by a hot water heating boiler equipped with a HW pump. Exhaust fans to be utility type roof mounted. Controls to be a DDC BMS system. Structural upgrades, as needed, to support weight of new equipment


Server/IT Room	Dedicated ductless split system

Environmental Design The following criteria will be used for sizing the heating and cooling systems:

Conditions

Indoor Conditions for Air Conditioned Area:

Offices, Labs 72∞F dB ± 3∞F dB, No Humidity Control

Electrical, Telecom, Storage Typical of office space unless equipment requires a more specifically controlled environment

Ventilation Air Outdoor air for ventilation per ASHRAE Standard 62-1989

For laboratory areas provide 100% outside air. The following minimum air change requirements are recommended:


1.	Lab Area 8 AC/Hr

Energy Use & The Energy Efficiency Standard, Title 24, to be used to set the minimum

Conservation performance requirements of the installation

Ceiling Registers Ceiling diffusers with perforated face with frame style compatible with the type of

& Diffusers ceiling used
Surface mounted diffusers require gaskets to prevent leakage

Supply diffusers, Titus-PMC or equal.

Linear diffusers for all hard lid areas with exception of the vivarium. Specialty diffusers by area as required


Duct Work	Exposed rigid ductwork to be provided at open ceiling areas.

Supply ducts, return ducts, and exhaust ducts plenum chambers, housing, and panels fabricated from zinc-coated (galvanized) steel sheets conforming to the latest ASTM Specs A-525. Zinc-coating to be of the “Commercial” class

Ductwork shall be installed in strict accordance with the latest SMACNA guidelines and shall also adhere to the latest State and Federal seismic requirements

Install flexible ducts as needed at concealed areas only in a fully extended condition free of sags and kinks, using minimum length required for connection. Flexible duct suspended on 36” centers with a min 3/4” wide flat banding material where horizontal support is required. Joints and connections to be made in accordance with Underwriters Laboratories, Inc. Connect to rigid sheet metal with min 1/2” wide collar positively clamped and secured with screws or other approved fastening


Lab Equipment	(1) 8’ fume hood assumed per 1,000 SF of open lab area. Fume hoods plumbed with the following house utilities: Lab Vacuum, Compressed Air, Nitrogen. No cup sinks provided at fume hoods.

All other equipment, including non-ducted bio safety cabinets, to be provided by Tenant

ELECTRICAL

All work shall be in strict conformance with the following codes and standards

NFPA 70 National Electrical Code

NFPA 101 Life Safety Code

BOCA Building Codes

IES - Illuminating Engineering Society of North America


Distribution	Suite metering section and distribution from the main SDG&E electrical room.

Feeders shall be copper conductors (Type THHN or THW) routed in electro metallic tubing, (EMT), polyvinylchloride (PVC) conduit, or rigid galvanized steel (RGS) conduit. EMT shall be used in all indoor, concealed locations where the feeder is protected from damage or weather

Feeders shall be sized according to the singleline diagram in the construction documents

Feeders shall be rack-mounted in accessible ceiling spaces or routed below grade under the slab

Existing emergency generator provided.


1.	Conduit and Wire


a.	Branch circuits for all power circuits serving office and convenience outlets, control power, etc. to be nominally sized as 120V 20A


b.	Branch circuits for lighting circuits to be either 277V 20A unless specifically indicated otherwise


c.	All area branch circuit conductors to be copper and routed in metal conduit


d.	Branch circuiting to individual offices shall be (3) #12AWG (two ‘hot’ and one neutral) plus (1) #12 green ground wire forming a two dedicated 120V 20A 3- wire circuits


e.	Each office to include (3) duplex receptacles, and (1) ring and string location


f.	One large conference room and three small conference rooms to include (1) floor box each with conduit and ring and string run to Tenant-provided AV devices. All hands large conference room to include (2) floor boxes with conduit and ring and string to Tenant-provided devices

2. Electrical Devices


a.	Electrical devices including receptacles and switches shall be rated according to the load served


b.	Electrical devices shall be white Decora Style with white thermoplastic cover plates


c.	Cover plates for receptacles and junction boxes shall be labeled indicating the circuit and panelboard from which the device is fed


d.	All floor furniture feeds shall be flush type, no power poles to be installed

3. Lighting Systems


a.	Fixtures shall be suitable for the application including the ability to provide egress illumination where required


b.	Fixtures shall meet U.L. requirements and selection and placement of fixtures shall comply with ADA requirements


c.	All lighting fixtures shall operate at 277V unless specifically noted otherwise


d.	Lab and private offices to have direct/indirect pendant style fixtures or recessed direct/indirect light fixtures. Landlord reserves the right to determine use and location of either style of fixture


e.	Open office to receive lighting suitable for application


f.	Exit Lights – Lithonia LRP, Green on clear, 120/277, EL N

4. Lighting Control Systems


a.	Lighting control compliant with Title 24 requirements including over-ride control for automatically shutting the lights off at prescribed periods of time


b.	Control zones to include perimeter areas for daylit spaces, skylit areas, and interior areas

Telephone & Data


1.	MPOE room modifications are included in the Tenant Improvement scope of work. Provide (x2) 4” conduits from MPOE to tenant MDF for future tenant fiber.


2.	All telephone and data infrastructure, cabling and equipment not required by Code are excluded from the Tenant Improvement project scope of work. All efforts related to this scope, including payment, by Tenant


3.	In high-bay areas, access control and other cabling to be housed in appropriate trays


4.	Pathways through open office areas will be concealed in EMT and secured tight to underside of structure. Orient to parallel with flutes of decking above to avoid going under beams. Where possible avoid pathways that cross through open ceiling areas.

Access Control


1.	All access control infrastructure and equipment not required by Code is excluded from the Tenant Improvement scope of work. All efforts related to this scope, including payment, by Tenant


2.	Pathways through open office areas will be concealed in EMT and secured tight to underside of structure. Orient to parallel with flutes of decking above to avoid going under beams. Where possible avoid pathways that cross through open ceiling areas.

Security


1.	All security infrastructure and equipment not required by Code is excluded from the Tenant Improvement project scope of work. All efforts related to this scope, including payment, by Tenant


2.	Pathways through open office areas will be concealed in EMT and secured tight to underside of structure. Orient to parallel with flutes of decking above to avoid going under beams. Where possible avoid pathways that cross through open ceiling areas.

FURNITURE & EQUIPMENT


1.	Furniture and equipment not required by code is excluded from the Tenant Improvement scope of work. More specifically, this also assumes the Tenant will pay for its own audio visual equipment.

Schedule 3

Renderings, Basis of Design

Section 6 MECHANICAL, PLUMBING & PIPING

The mechanical systems to be provided for the project include air handling units and exhaust fans to meet laboratory conditioning and building ventilation needs. Chillers, heating hot water boilers, cooling towers, and pumps will provide central utilities to the building. Following is a summary of the preliminary mechanical design approach followed by a description of the mechanical and plumbing systems and equipment to be provided during the shell improvements. The following conditions were utilized to size all shell equipment.

6a. MECHANICAL SYSTEM PERFORMANCE AND DESIGN APPROACH


i.	TEMPERATURE AND HUMIDITY DESIGN DATA


a.	The temperature design criteria listed below are based on industry standards and ASHRAE recommendations for this type of facility and location.


b.	Exterior Design Conditions


i.	Project Area Data



Location:	San Diego, California
California Title 24 Climate Zone:	7
Latitude:	33.2
Elevation:	50 ft


c.	Exterior Design Temperatures


i.	General


1.	The following information is taken from ASHRAE climate data for San Diego, CA. External design conditions are based on ASHRAE Climate Data for San Diego, CA, 1.0% (an annual basis of approximately 45 hours) data for summer, 0.4% data for winter (an annual basis of 18 hours).



Summer	Design Temperature	Winter:	Design Temperature
Dry Bulb	87 ºF	Dry Bulb	39 ºF
Wet Bulb	71 ºF
Daily Range	10 ºF


d.	Interior Design Temperatures (Basis of Design)



Space	Temp (±F)	RH (%)
Laboratories	72±2	10-70% (not controlled)
Laboratory Support and Equipment Rooms	72±2	10-70% (not controlled)
Administration Areas, Private Offices, and Open Office Areas	72±2	35-65% (not controlled)
Conference / Meeting and Training Rooms	72±2	30-60% (not controlled)
Telecommunications Space	72±2	No requirements
Mechanical Spaces – Shell	80	No requirements
Electrical Rooms - Shell	85	No requirements

Note: Active humidity control will not be provided.


ii.	INTERNAL DESIGN LOAD DATA


a.	Lighting and Equipment Loads


i.	The internal loading for the spaces will be determined based on the electrical and process requirements of the equipment to be located in these spaces and/or will be based on the following load profiles for electrical and process heat loads:



Room Description	Heat Load
Office, Conference, and Administrative Support Areas
Lighting	1.2 watts per square foot
Equipment	1.5 watts per square foot
People	100 square feet per person

Corridor, and Building Storage Areas
Lighting	1.2 watts per square foot
Equipment	1.0 watts per square foot



Open Bench Laboratories – Tenant Requirements
Lighting	1.5 watts per square foot
Equipment	7 watts per square foot (TBD)

Laboratory Equipment Rooms
Lighting	1.5 watts per square foot
Equipment	10 watts per square foot (TBD)

Electrical Rooms
Lighting	1.0 watts per square foot
Transformers	3% of the rated kW

Mechanical Rooms
Lighting	1.0 watts per square foot
Equipment	0 watts per square foot


iii.	OCCUPANCY – ASHRAE Guidelines


a.	The number of occupants in each space will be based on the occupant density listed in the programming documents or Architectural floor plans.


b.	The occupancy heat rejection will be as follows:



Office Area/Seated at rest		Lab Area/Standing light work
Sensible	245 Btuh/person	Sensible	270 Btuh/person
Latent	155 Btuh/person	Latent	300 Btuh/person


iv.	ROOM PRESSURIZATION RELATIONSHIP (Tenant Requirement)



Space	Pressurization
Building	Positive to ambient
Laboratories	Negative to adjacent spaces
Lab Corridors	Positive to Laboratories
Offices	Neutral or positive to adjacent spaces
Cold Rooms	No requirements
Toilet Rooms	Negative to adjacent spaces


v.	ZONING


a.	All zoning will be developed by the tenant, the below is a general guideline utilized for sizing shell equipment.


b.	General


i.	All zoning shall be based on the load, design conditions and comfort requirements of the spaces. In general, the interior space shall be separated from the exterior spaces. Each independent cooling or heating load shall be treated as a separate zone.


c.	Criteria


i.	All spaces shall be laid out based on the following:



Space	Requirement
Open Offices	Interior: Maximum of 2000 ft2. Exterior: Maximum of 1500 ft2.
Executive Offices	Executive will be zoned separately.
Private Offices	Interior: Maximum of 1500 ft2. Exterior: Maximum of 500 ft2.
Conference Rooms	Separate thermal control.
Laboratories	Labs shall be zoned separately.
Equipment Rooms	Similar function Equipment rooms may be zoned together. Small or low load equipment rooms may be served by adjacent spaces.
Corridors & Toilet Rooms	Shall be served by adjacent spaces.


vi.	ROOM AIR FLOW RATES


a.	Minimum Ventilation Level: the minimum outside air ventilation rates for all occupied spaces based on the minimum code requirement shall be as follows:



Spaces	CFM per person
All Areas	20


b.	Toilet Rooms: The minimum exhaust air ventilation rates for all toilet rooms shall be based on the following requirements:



Spaces – Shell Design	Ventilation Rate
All Toilet Areas	2 CFM/FT2
Minimum	100 CFM per toilet


c.	Laboratories: Air changes shown are maximum available per shell design.


i.	Air handling systems supplying air to the Laboratories shall utilize 100% outside air to ensure adequate ventilation and dilution in the laboratories. The Air Change Rate per Hour (ACH) listed is the minimum that will be provided. The design airflow rated will be based on the calculated airflow to maintain space temperature while providing adequate make-up air for fume hoods.



Space	Outside Air	Clean Room Classification	ACH Minimum	Filtration Level
Laboratories	100 %	Not Rated	8 (1)	95 %

(1) Lab air change rate assumes (1) 8’ fume hood per 1000 SF.


d.	Private Office, Open Office and Administrative Areas


i.	Air handling systems supplying air to the Office Areas shall utilize the minimum required ventilation air in order to minimize the cooling and heating system requirements. The air in the Office Areas shall be recirculated.



Space	Outside Air	Filtration Level
Private Offices	The larger of 20 cfm/psn or 0.15 cfm/sq ft	65	%
Open Offices	The larger of 20 cfm/psn or 0.15 cfm/sq ft	65	%
Admin. Support Areas	The larger of 20 cfm/psn or 0.15 cfm/sq ft	65	%


vii.	FUME HOOD PERFORMANCE CRITERIA


a.	Fume Hoods


i.	The fume hood airflow rates will be sized for an average 100 FPM face velocity measured over the entire face with a 18 inch sash height.

6b. MECHANICAL SYSTEMS DESCRIPTION – All equipment shown below will be provided as part of warm shell tenant improvements.


i.	SUPPLY AIR SYSTEMS


a.	General


i.	Smoke Detectors - Shell


1.	Smoke detectors shall be provided on all supply air systems over 2000 CFM. The smoke detector shall be located on the discharge side of the supply air unit and shall shut down the fan upon detection of smoke in the supply air duct via a hardwired interlock.


b.	Laboratory Areas – Air Handlers and Vertical ducting.


i.	Variable Volume Air Handling Unit with Hot Water Reheat (Laboratory)


1.	System Description


a.	The supply air system feeding the labs shall be VAV with zonal reheat. The air-handling unit will be designed as heating-cooling, single duct, re-heat type to provide 100% outside air. The units will operate 24 hours per day, 365 days per year.


b.	The units shall be provided to with smoke detectors which shall be installed by the mechanical contractor, wired by the electrical contractor and monitored by DDC control system.


c.	Redundancy: The air handling units will be provided with multiple supply fans/motors.


d.	Emergency power will not be required.


2.	Equipment and Materials Description


a.	Air Handler – Provided during shell design



Custom Air Handlers (2)
Unit Tag	Area Served	Air Flow (CFM)
AH-1 (1)	North	63,000
AH-2 (1)	South	37,000


(1)	Air handlers are scheduled for a future Tenant Improvement Phase. Air Handler sizing is based on 8 air changes for the entire suite. Labs requiring additional CFM will utilize future fan coils. Outside air shall be delivered from main air handler.


(2)	Final quantity of air handling units to be determined after conceptual floor plan is finalized.

The supply fan will be plug type or backward inclined centrifugal type. A variable frequency drive shall be provided to control the supply air volume in response to a signal from the duct mounted static pressure sensor. The supply fan shall speed up to maintain a constant duct static pressure as the filters load. In addition, the air handling supply fan speed will be modulated as required by building load and fume hood demands.


ii.	The air handler shall be a custom factory-fabricated unit. The cabinet shall be constructed with 2” thick 1-1/2 pound density double walls.


iii.	The new air-handling units will consist of the following components:


o	Louver Intake.


o	Moisture eliminator.


o	30% efficient pre-filter bank.


o	95% efficient filter bank.


o	Heating hot water coil with copper fins and tubes.


o	Chilled water coil with copper fins and tubes. Chilled water coil to be upstream of heating coil for dehumidification.


o	Multiple supply air fans with VFD.


o	Smoke Detector hard wired to fan VFD for shutdown.


ii.	EXHAUST AIR SYSTEMS – Provided in shell design


a.	General Building Exhaust Air Systems


i.	Restroom, Toilet, Break Room, and Storage Room Exhaust


1.	System Description


a.	Centrifugal in-line exhaust fans shall be provided. They shall have a light duty backward incline fan wheel. It shall be installed on a factory furnished curb. The height shall be coordinated with the detailing of the roof.


b.	The exhaust fans shall have an integral backdraft damper and shall be AMCA certified in accordance with AMCA Standard 210.


2.	Exhaust Air Distribution System Type


a.	The exhaust air distribution system shall consist of low pressure rated for 1-inch w.g down to the exhaust registers.


3.	Equipment and Products Description


a.	Exhaust Fans


b.	Laboratory Exhaust Air Systems – Provided in shell design

i. General


1.	Fume Hood Face Velocity


a.	All fume hoods shall be designed to have face velocity of 100 feet per minute.


b.	All future tenant fume hoods shall be provided with pressure independent venturi type VAV exhaust valves.


c.	Separate exhaust ducts shall extend through the roof into each chemical control zone. These ducts will be collected at the roof level to combine into a common exhaust duct or plenum, which feeds industrial grade centrifugal exhaust fans.


d.	The fume exhaust fan stacks for the combined fume and general exhaust fans will discharge at a minimum of 7 feet above the roof.


e.	The exhaust stack discharge velocity shall be a minimum of 3000 FPM.


f.	The exhaust system will operate 24 hours per day, 365 days per year.


2.	Exhaust Duct System Type


a.	Medium pressure/high velocity exhaust ductwork will be utilized between the exhaust air valve and the exhaust air plenum.


3.	Equipment and Products Description


a.	Exhaust Fan



Exhaust Fans
Unit Tag	Area Served	Air Flow (CFM)	External Static Pressure
EF-1 (1)	Labs	40,000	3.5
EF-2 (1)	Labs	40,000	3.5
EF-3 (1)	Labs	40,000	3.5


(1)	Final quantity of exhaust fans to be determined after conceptual


i.	The central exhaust system will consist of the following components.


o	Common exhaust plenum.


o	Isolation damper at each fan inlet (when the

exhaust sir system has multiple fans).


o	Constant volume centrifugal exhaust fans.


o	Exhaust stacks.


b.	Ductwork


i.	The fume hood exhaust air systems shall use PVC coated or stainless steel metal ductwork.

ii. HEATING WATER SYSTEMS (EXISTING BOILERS TO REMAIN) – Provided in shell design


a.	System Description

A central heating hot water system shall be provided with primary/secondary pumping. It shall be comprised of water tube Hydronic boilers with unit mounted primary pumps. Air separators, expansion tanks are existing to be reused if feasible. All associated heating hot water piping will be provided. The secondary pumps will be reused if determined to be in acceptable condition and appropriately sized.


b.	Heating Hot Water Piping Distribution System


i.	The heating hot water for shall be distributed throughout the building to heating coils and reheat coils by insulated pipe. Piping that is 2-1/2 inches or smaller shall be type L copper tubing. Piping that is three inches or larger shall be schedule 40 black steel.


c.	Equipment and Products Description


i.	Boilers


iii.	CHILLED WATER SYSTEM (VARIABLE VOLUME WATER COOLED) – Provided in shell design


a.	System Description


i.	One central, chilled water system will serve the building. It shall be comprised of two existing 450 ton water cooled chillers, one relocated 150 ton water cooled chiller. Variable volume primary pumping shall be provided. Air separators, expansion tanks are existing. All associated chilled piping will be provided. Mains shell be evaluated for reuse. The central plant is be located on grade.


b.	Equipment and Materials Description


i.	Chillers



Water Cooled Chiller
Unit Tag	Cooling Capacity (Tons)	Chilled Water Conditions
Unit Tag	Cooling Capacity (Tons)	EWT (˚F)	LWT (˚F)	GPM
CH-1 (R)	150	-	-	-
CH-2 (E)	450	-	-	-
CH-3 (E)	450	-	-	-

(E) Existing (R) Relocated


ii.	Pumps



Pumps (Existing to Remain – TBD)
Unit Tag	Flow rate (GPM)	Pressure (Feet)	Type of Pump
P-	TBD	-	Base mounted end suction
P-	TBD	-	Base mounted end suction
P-	TBD	-	Base mounted end suction


iv.	TOWER WATER SYSTEM – Provided in shell design


a.	System Description


i.	One central cooling tower system installed in a central yard remote from the

chillers will provide cooling water for the chillers condensers. Associated side stream filters and chemical treatment systems will be provided. Makeup water will first be softened to reduce dissolved solids reducing the amount of water consumption.


b.	Condenser Water Piping Distribution System


i.	The condenser water piping will be routed to the central plant.


c.	Equipment and Materials


i.	Cooling Towers (Existing to Remain)

ii. Pumps (Existing to Remain)

PLUMBING


1.1	APPLICABLE CODES, GUIDELINES AND STANDARDS


1.2	THE LATEST EDITION OF APPROVED YEAR OF THE FOLLOWING CODES, DESIGN GUIDELINES AND CONSTRUCTION STANDARDS WILL GOVERN THE DESIGN OF THE MECHANICAL SYSTEMS (WET AND DRY) AND ASSOCIATED SUPPORT SYSTEMS.


1.2.1	All work shall be in strict conformance with the following codes & standards


o	CA Plumbing Code


o	CA Building Code


o	CA Fire Code


o	Local Fire Department Regulations


o	National Fire Protection Association


o	All other Authorities Having Jurisdiction


o	All water fixtures used in general office space including restrooms but not including Process Fixtures, shall exceed the minimum rating by 30% specified in the Energy Policy Act of 1992, in accordance with LEED calculations


o	Adhesives shall comply: VOC content shall be less than the current VOC content limits of SCAQMD Rule #1168, AND all sealants used as fillers must meet to exceed the requirements of the South Coast Air Quality Management District Regulation 8, Rule 51

2.1 PIPED UTILITIES – MATERIAL DESCRIPTION


2.2.1.	Domestic and Industrial cold water, hot water and hot water return.


A.	Type L hard-drawn copper and wrought copper fittings. Joints shall be lead-free solder. Below ground piping shall be type “K” copper with silver brazed joints. All hot water supply piping shall be insulated with 1 inch thick fiberglass insulation for sizes up to 2 ½ inch size, 1 ½ inch thick for above 2 ½ inch size.


2.2.2.	Sanitary Waste and Vent Systems.


A.	Below Grade: Solid-wall Schedule 40 PVC pipe, ASTM D 2665, drain, waste and vent piping with PVC socket fittings.


B.	Above Grade: No-hub cast iron pipe and fittings with stainless steel clamp and shield assemblies with elastomeric gaskets. Above ground exposed piping at building exterior and in finished areas shall be galvanized steel with threaded galvanized cast iron DWV fittings.


2.2.3.	Industrial Waste and Vent Systems.


A.	ASTM D4101 fire retardant polypropylene with DWV socket electro-fusion welded joints per ASTM D2657. Below ground piping and fittings shall be waste and vent piping system with heat fusion type joints.


2.2.4.	Natural Gas Piping Systems.


A.	For sizes 2 inches and smaller shall be Schedule 40 black steel with 300# WOG black banded malleable iron screwed fittings. For sizes 2 ½ inches and larger shall be Schedule 40 black steel pipe, ASTM A120, with standard tube-turn welded fittings. Piping and fittings exposed to weather shall be galvanized.


B.	Below grade: PE piping and fittings conforming to ASTM D2513. Socket fusion type. Factory fabricated fittings.


2.2.5	Roof/Storm Water Piping Systems:


A.	Below Grade: Solid-wall Schedule 40 PVC pipe, ASTM D 2665, drain, waste and vent piping with PVC socket fittings.


B.	Above Grade: No-hub cast iron pipe and fittings with stainless steel clamp and shield assemblies with elastomeric gaskets. Above ground exposed piping at building exterior and in finished areas shall be galvanized steel with threaded galvanized cast iron DWV fittings


2.2.6	Purified Water (De-ionized) Water Systems.


A.	Pigmented polypropylene piping and fittings with butt fusion welded joints. Valves shall be diaphragm type. Piping and fittings in return air plenums shall be 25/50 polyvinylidene fluoride (PVDF)..


2.2.7	Compressed Clean Dry Air.


A.	Oxygen grade cleaned and capped type L hard-drawn copper tubing and wrought copper fittings with nitrogen purged brazed joints. Below ground piping shall be type “K” copper


2.2.8	Laboratory Vacuum Air.


A.	Type L hard-drawn copper tubing with wrought copper fittings. Joint shall be lead free solder. Below ground piping shall be type “K” copper with silver brazed joints.



	Copper Type “L” Lead Free Solder fittings	Copper Type “L” Silver Brazed Fittings	Copper Type “M” Solder Joint Fittings	Cast Iron No-Hub	Schedule 40 PVC Solvent Cement	Polypropylen e Butt Fusion Welds	Schedule 40 Black Steel Piping
Domestic Water	X
Sanitary Waste				X (Above Grade)	X (Below Grade)
Clean Dry Air		X
Laboratory Vacuum Air		X
Industrial Water	X
Industrial Waste & Vent						X


2.3	PIPING/PLUMBING SYSTEMS DESCRIPTIONS


2.3.1	Domestic and Industrial Cold Water


A.	The existing domestic cold-water piping system shall be evaluated and determine the size and condition for future use.


B.	The entire existing piping system shall be purged and disinfected per AWWA C651 or AWWA C652.


C.	There will be one stub-out at the riser for future connection.


2.3.2	Domestic and Industrial Hot Water


A.	The existing domestic cold-water piping system shall be evaluated and determine the size and condition for future use.


B.	The entire existing piping system shall be purged and disinfected per AWWA C651 or AWWA C652.


C.	There will be one stub-out at the riser for future connection.


2.3.3	Sanitary and Industrial Waste and Vent Systems


A.	The existing underground sanitary and industrial waste systems will remain. The existing above ground sanitary and industrial waste systems shall be evaluated and determine the size and condition for future use.


B.	A sample port shall be provided outside the building for the industrial waste.


C.	The existing below ground equalization tank shall be capped abandoned in place.


2.3.4	Natural Gas System


A.	The existing natural gas piping system shall be evaluated and determine the size and condition for future use.


B.	The existing gas meter shall be relocated. Final location shall be approved by SDG&E.


C.	The main from the relocate gas meter to the mechanical yard shall be 5 psi service.


2.3.5	De-Ionized Water – Vertical Loop will be included in shell design


A.	The DI piping system shall be purged and disinfected.


2.3.6	Laboratory Vacuum


A.	The existing laboratory vacuum piping system will be removed and replaced.


B.	There will be one stub-out at the riser for future connection.


2.3.7	Laboratory Dry Compressed Air


A.	The existing laboratory compressed air piping system will be removed and replaced. The extent of the demolition of the existing system shall be based upon the number and capacity of laboratory vacuum utilizing equipment to be programmed for the facility as part of the TI scope of work.


B.	There will be one stub-out at the riser for future connection.


2.3.8	Roof/Storm Drain


A.	Existing roof drains and roof drain piping will remain in place.


B.	Storm drains serving new deck areas will be designed per 2016 CPC Chapter 11, with a rainfall rate of 1.5(in/hr).

C. Roof/Storm drain system shall be sloped at 1%.


2.4	PLUMBING FIXTURES AND EQUIPMENT


2.4.1	Floor drain and floor sinks


A.	Floor drains and floor sink in mechanical rooms will remain in place.


2.4.2	Air Compressor, Laboratory Vacuum and De-Ionized Water Skid.


A.	Existing equipment including air compressor, laboratory vacuum. De-ionized water skid excluded and will be provided by tenant.


2.4.3	Domestic Hot Water


A.	The existing domestic hot water system will be removed and replaced with new domestic water heater and storage tank.


2.4.4	Industrial Hot Water


A.	The existing industrial hot water system will be removed and replaced with new industrial water heater and storage tank.

Schedule 4

Shell and Tenant Improvement Responsibility Matrix

The following table dictates how various Project expenses will be allocated per the Letter of Intent. Core & Shell as used herein refers to the structure, envelope, elevators, and egress stairs.



DESCRIPTION	ALLOCATION
	Provided by Landlord at Landlord’s Cost	Provided by Tenant at Tenant’s Cost or Excess TI Allowance	Provided by Landlord as part of Tenant Improvements
GENERAL
Building Core & Shell certified by the USGBC at no less than LEED Gold (N/A for existing building)	N/A
All available surface and structured parking stalls	X
Permits & Fees
Building Site, Core & Shell Permit & Fees	X
All Tenant Improvement Related Permits & Fees			X
SITEWORK
Sidewalks, curbs, landscaping and asphalt parking.	X
Tele/Data conduits to main point of entry (MPOE) for local exchange carrier (if service requested is not existing already)			X
Domestic sanitary sewer to the building with connection to street lateral	X
Lab waste sewer points of connection to sanitary sewer.			X
Restoration of existing exterior hazardous material storage shed(s)			X
Main site storm drain utilities	X
SDG&E primary electrical service to U/G pull section & meter main	X
SDG&E gas service to meter & pressure regulator.	X
Domestic water service with connection at the street lateral.	X
Fire Water service to hydrants and building riser with connection at the street lateral	X
Trash Enclosure and Concrete Pad with gate	X
Existing exterior loading area to remain	X
Depressed Service Yard existing to remain with overhead screening element.	X
Irrigation water & distribution lines and existing water feed to service yard (existing to remain)	X
Domestic water bibs on roof & site as deemed necessary by LL for maintenance and convenience.	X
Landlord may allow tenant to insert utility feeds in LL’s trench, if such accommodation is coordinated, approved by design team, utilities & LL and has no impact to the LL’s shell & core building schedule.	X		X
LANDSCAPING
Site softscape including landscaping and irrigation service to include location, species and sizes of trees, shrubs and groundcovers.	X
Site hardscape including walkways, driveways, curbing, patios, and exterior lighting.	X
STRUCTURE
Structural steel and reinforced concrete decks with live load capacity of 100 psf	X
Concrete pads for base building equipment such as the main electrical meter, air handlers, exhaust fans, chillers, and pumps, etc.	X
Concrete pads in and on the structure for tenant specific building equipment			X
Shaft openings for base building utility risers.	X
Shaft openings for tenant utility risers in addition to base building			X
Miscellaneous metal items and/or concrete pads for base building equipment.	X
Miscellaneous metal items and/or concrete pads for Tenant equipment.			X
ROOFING
Class ‘A’ roofing system.	X
Roof penetrations for base building equipment & systems.	X
Roofing penetrations for Tenant equipment.			X
EXTERIOR
Closure aluminum break metal piece from the inside face of perimeter exterior windows to concrete slab.	X
Water-tight base building exterior, including waterproofing sub grade vertical walls and vapor barrier under the below grade slab.	X
Base building entrances.	X
Building mounted Tenant signage in accordance with City of San Diego rules and regulations.		X
Roof screen designed to obscure all rooftop equipment; design, material and location to be approved by LL (N/A within Prop D overlay)			N/A
COMMON AREAS
Main Level finished lobby.	X
Main Level lobby reception desk.		X
Main Level toilet rooms with tile floors and tile wet walls. Solid surface lavatory counters with integral sinks. Toilet room partitions and accessories shall be SS or similar upgraded finish.	X
Lower Level shower rooms shall utilize finishes similar to building toilet rooms.	X
Code required bicycle storage in subgrade space	X
Walls in exit stairways and Base Building utility rooms shall have a final paint finish.	X
Metal railings in all exit stairways.	X
Code required signage for all base building rooms.	X
Janitor’s closets in core areas.	X
Main Electrical Room and MPOE rooms.	X
Electrical closets in core areas.			X
IDF connected to MPOE.			X
Provide (x2) 4” conduits from MPOE to tenant MDF for future tenant fiber.			X
Common doors, frames & hardware at main entry, shell exit stairs, Loading Dock, Trash Enclosure (gates) Main Electric Room, MPOE Room, & Elevator Machine Room(s).	X
Tenant Premises interior doors, frames, and hardware. Including main entry door to suite.			X
Tenant Premises HVAC Rooms			X
ELEVATORS
One passenger elevators with 3,500 lb. capacity	X
One (1) 5,000 lb. capacity service elevator with 4’-6” wide by 8’ high door.	X
Upgraded elevator cab finishes above manufacturer’s standard.			X
WINDOW TREATMENT
Furnish and install Base Building window treatment, including blocking for window treatment. Window treatments are to be MechoShades or equal for all windows.			X
Window sills, as applicable			X
TENANT AREAS
Basement Vivarium and Mechanical Areas (N/A to current scope of project)		X
Basement System Engineering and Storage Areas			X
Basement Shipping and Receiving Areas			X
Drywall at inside face of exterior walls			X
Finishes at inside face of exterior walls			X
Finishes at inside face at Tenant side of core partitions			X
Toilet rooms within Tenant Premises			X
Electrical closets within Tenant Premises			X
Tenant Tel/data rooms			X
Tenant break or kitchen areas			X
Partitions, ceilings, flooring, painting, finishes, doors, frames, hardware, millwork, casework, and buildout.			X
Wire shelving & chemical racking systems		X
Fixed casework.			X
Laboratory Equipment including, but not limited to biosafety cabinets, autoclaves, glasswashers, bioreactors, rackwashers & associated steam generators.		X
Chemical Fume Hoods, bench fume hood, lab casework.			X
Fixtures, Furniture, Equipment (FF&E) and Appliances. Appliances may include refrigerators, ice machines, microwaves, dishwashers, garbage disposals and other common items.		X
Built-in water drinking stations.			X
Shaft enclosures for base building systems’ risers.	X
Shaft enclosures for Tenant risers within allocated space in the main vertical Base Building shafts.			X
All interior code required signage for Tenant Premises.			X
All wayfinding signage and tenant specific signage for branding purposes.		X
FIRE PROTECTION
Control area fire proofing at underside of elevated decks. No fireproofing required at roof.	X
Fire service entrance including fire department connection, alarm valve, and flow protection.	X
Exit stair distribution piping and sprinkler heads.	X
Primary distribution adequate to support ordinary hazard	X
All lateral piping, drop heads, and related equipment within Tenant Premises.			X
Modification of sprinkler branch and main piping and head locations to suit Tenant layout & hazard index.			X
Specialized extinguishing systems beyond existing wet-pipe system and not deemed necessary by code.		X
Preaction dry-pipe systems that are not deemed necessary by code.		X
Fire extinguishers required per SS&C permit drawings.	X
Fire extinguisher cabinets at Tenant Premises.			X
PLUMBING
Domestic Water service with site backflow prevention to building entry.	X
Domestic water distribution within Tenant Premises including reduced pressure backflow preventer.			X
Core restroom plumbing fixtures compliant with accessibility requirements.	X
Tenant restroom plumbing fixtures compliant with accessibility requirements.			X
Water riser for lab use and reduced pressure backflow preventer.	X
Industrial hot water generation for Tenant use.			X
Industrial water distribution within Tenant Premises.			X
Roof storm drainage system.	X
Sanitary Waste and vent service for core areas.	X
Sanitary Waste and vent risers serving Tenant Premises.			X
Sanitary Waste and vent distribution serving Tenant Premises.			X
Lab waste and vent pipe risers	X
Lab waste and vent pipe distribution serving Tenant Premises.			X
Hot water generation for restroom.			X
Central lab air compressor (if in excess of pro rata share for existing air compressor on site)			X
Compressed air vertical pipe riser.	X
Compressed air pipe distribution in Tenant Premises for specific points of use.			X
Central lab vacuum system.			X
Vacuum vertical pipe riser.	X
Lab vacuum pipe distribution in Tenant Premises for specific points of use.			X
Piping required to support bulk tank, remote port filling assembly, remote port filling unit, and associated permit fees with setting tank and piping inspection.			X
3000L Micro Bulk Nitrogen Tank		X
Nitrogen vertical pipe riser and equipment pad for micro bulk tank.	X
Nitrogen pipe distribution in Tenant Premises for specific points of use.			X
Temperate water generator (N/A given local domestic water temperature)		X
Temperate water pipe risers (N/A given local domestic water temperature)		X
Temperate water pipe distribution in Tenant Premises. (N/A given local domestic water temperature)			X
RO/DI water generator		X
RO/DI water vertical pipe riser.	X
RO/DI water pipe distribution in Tenant Premises for specific points of use.			X
Manifolds, piping, and other requirements including cylinders, not specifically mentioned above.		X
NATURAL GAS
Natural gas service, pressure regulator and meter sized for Tenant equipment.	X
Natural gas service for electric power generating equipment.			X
Natural gas service to Base Building boilers.	X		X
Natural gas pipe distribution to tenant program areas			X
HEATING, VENTILATION, AIR CONDITIONING
Central water-cooled chilled water plant. Chiller and Cooling Towers provided.	X
Chilled water pipe risers	X
Chilled water pipe distribution serving Tenant Premises.			X
Condenser water pipe distribution from Chiller to Cooling Tower	X
Central gas fired condensing boiler plant	X
House steam system (if required)		X
Heating Hot water pipe risers.	X
Heating Hot water pipe distribution within Tenant Premises.			X
4- pipe fan coil units within Tenant Premises.			X
4- pipe fan coil units within core areas.	X
Building Management System (BMS) for Base Building Infrastructure.	X
BMS (compatible with Landlord’s system) within Tenant Premises monitoring Tenant Infrastructure.			X
Air handling units.	X
Vertical supply air duct distribution.	X
Supply air duct distribution, VAV terminals, equipment connections, insulation, air terminals, dampers, hangers, etc. within Tenant Premises.			X
Laboratory exhaust and fans (Located in mechanical well)	X
Vertical exhaust air duct risers.	X
Exhaust air duct distribution, exhaust air valves, equipment connections, insulation, air terminals, dampers, hangers, etc. within Tenant Premises.			X
Restroom exhaust for restrooms within Tenant Premises.			X
Electric room ventilation system for main building electrical closets.	X
Electric room ventilation system for electrical closets within Tenant Premises.			X
Sound attenuation for Tenant equipment.			X
Additional/dedicated cooling for Tenant requirements.		X
ELECTRICAL
Uninterruptable Power System (UPS)		X
Electrical utility service to main meter section and house panel in main electrical room.	X
480/277v, main switchboard(s) after shell section			X
Existing standby power generators (if in excess of pro rata share for existing generator on site)			X
Existing automatic transfer switch for life safety loads on generator for base building loads.	X
Automatic transfer switch for Tenant emergency power.			X
Distribution within Tenant Premises for Tenant loads, as well as for base building critical systems			X
Lighting and power distribution for site lighting	X
Lighting and power distribution for Lobby & Restroom areas within core area.	X
Lighting and power distribution for Tenant Premises.			X
Shell area life safety emergency lighting/signage.	X
Tenant Premises life safety emergency lighting/signage.			X
Tenant panels, transformers, and distribution equipment			X
FIRE ALARM/SUPPRESSION
Base expandable fire alarm system at elevators & garage.	X
Building fire alarm system with devices in core areas.	X
Fire alarm sub panels and devices for Tenant Premises with integration into Base Building system.			X
Vertical fire riser.	X
NFPA compliant wet fire suppression system throughout tenant space.			X
Specialty dry suppression system for IDF or server rooms.		X
TELEPHONE/DATA
Underground local service provider conduit to MPOE room for copper and fiber optic service (if service requested is not existing already) Existing services include Spectrum, Century Link, and ACC/AT&T.			X
Tenant tele/data rooms.			X
Pathways from MPOE room directly into Tenant tele/data rooms			X
Tel/Data cabling from MPOE room to Tenant tele/data room			X
Fiber optic service for Tenant use		X
Tel/data infrastructure including, but not limited to, servers, computers, phone systems, switches, routers, MUX panels, equipment racks, ladder racks, etc.		X
Provisioning of circuits and service from service providers.		X
Audio visual systems		X
Station cabling from Tenant tel/data room to all Tenant locations, within the suite and exterior to the suite, if needed.		X
SECURITY
Building exterior entries equipped with electrified hardware to receive card reader device.	X
Card access readers at Building exterior entries.		X
Card access into or within tenant Premises on separate Tenant installed and managed system.		X
Video camera coverage of Tenant Premises on separate Tenant installed and managed system.		X
Manned security station in lobby		X

Schedule 5

Schedule of Critical Dates



Milestone	Completion Date Upper Level	Completion Date Main Level	Completion Date Ground Level
Test Fit	06.10.2020 (Followed by 2-day review and approval)
100% Design Development Package Complete Tele-Data Design Complete (by Mirati) AV Design Complete (by Mirati) Security Design Complete (by Mirati) Light Fixtures Complete for DPR buy-out (by Mirati) Equipment List Complete (by Mirati) including Fume Hoods. Bulk-tank on-site and TA permits pulled.	07.27.2020 (Followed by 5-day review and approval)	09.07.2020 (Followed by 5-day review and approval)	07.27.2020 (Followed by 5-day review and approval)
City Submittal Complete (Submit for plan check)	08.03.2020 (Followed by 5-day review and approval)	09.25.2020 (Followed by 5-day review and approval)	08.26.2020 (Followed by 5-day review and approval)
Additional Tenant Improvement Allowance Notification to Landlord (by Mirati)	12.31.2020
Initial Premise Commencement	03.22.2021
Subsequent Premise Commencement	06.25.2021

Any processed construction changes at the request of the tenant to modify permits will constitute a Tenant Delay if it extends past original completion date.

*Review and approval dates are to be business days.

If any of the stages noted above (e.g., Space Plan, Schematics etc.) is not finalized and approved by Tenant and Landlord within the applicable 2, 5, 10, or 15-day period noted above after initial delivery to Tenant for review, then each day thereafter until applicable stage is finalized shall constitute Tenant Delay (unless the failure to complete such stage resulted from Landlord’s failure to provide a response within the required time period).

EXHIBIT D TO LEASE

ACKNOWLEDGMENT OF COMMENCEMENT DATE

This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this _____ day of ______________, ____, between ARE-SD REGION NO. 38, LLC, a Delaware limited liability company (“Landlord”), and MIRATI THERAPEUTICS, INC., a Delaware corporation (“Tenant”), and is attached to and made a part of the Amended and Restated Lease dated May __, 2020 (the “Lease”), by and between Landlord and Tenant. Any initially capitalized terms used but not defined herein shall have the meanings given them in the Lease.

Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease, that the Commencement Date of the Base Term of the Lease is ______________, _____, and the termination date of the Base Term of the Lease shall be midnight on ______________, _____. In case of a conflict between the terms of the Lease and the terms of this Acknowledgment of Commencement Date, this Acknowledgment of Commencement Date shall control for all purposes.

IN WITNESS WHEREOF, Landlord and Tenant have executed this ACKNOWLEDGMENT OF COMMENCEMENT DATE to be effective on the date first above written.

TENANT:

MIRATI THERAPEUTICS, INC.,

a Delaware corporation

By:

Its:

LANDLORD:

ARE-SD REGION NO. 38, LLC,
a Delaware limited liability company

By:    ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
    a Delaware limited partnership,
    managing member

By:    ARE-QRS CORP.,
        a Maryland corporation,
        general partner

By:

Its:

EXHIBIT E TO LEASE

Rules and Regulations

1. The sidewalk, entries, and driveways of the Project shall not be obstructed by Tenant, or any Tenant Party, or used by them for any purpose other than ingress and egress to and from the Premises.

2. Tenant shall not place any objects, including antennas, outdoor furniture, etc., in the parking areas, landscaped areas or other areas outside of its Premises, or on the roof of the Project.

3. Except for animals assisting the disabled, no animals shall be allowed in the offices, halls, or corridors in the Project.

4. Tenant shall not install or operate any steam or gas engine or boiler in the Premises, except as specifically approved in the Lease. The use of oil, gas or inflammable liquids for heating and lighting is expressly prohibited. Explosives or other articles deemed extra hazardous shall not be brought into the Project.

5. Parking any type of recreational vehicles is specifically prohibited on or about the Project. Except for the overnight parking of operative vehicles, no vehicle of any type shall be stored in the parking areas at any time. In the event that a vehicle is disabled, it shall be removed within 48 hours. There shall be no “For Sale” or other advertising signs on or about any parked vehicle. All vehicles shall be parked in the designated parking areas in conformity with all signs and other markings.

6. Tenant shall maintain the Premises free from rodents, insects and other pests.

7. Landlord shall not be responsible to Tenant for any loss of property on the Premises, however occurring, or for any damage done to the effects of Tenant by the janitors or any other employee or person.

8. Tenant shall give Landlord prompt notice of any defects in the water, lawn sprinkler, sewage, gas pipes, electrical lights and fixtures, heating apparatus, or any other service equipment affecting the Premises.

9. Except as expressly permitted pursuant to the Lease, Tenant shall not permit storage outside the Premises, including without limitation, outside storage of trucks and other vehicles, or dumping of waste or refuse or permit any harmful materials to be placed in any drainage system or sanitary system in or about the Premises.

10. No auction, public or private, will be permitted on the Premises or the Project.

11. The Premises shall not be used for lodging, sleeping or cooking (except that Tenant may use microwave ovens, toasters and coffee makers in the Premises for the benefit of Tenant’s employees and contractors in an area designated for such items, but only if the use thereof is at all times supervised by the individual using the same) or for any immoral or illegal purposes or for any purpose other than that specified in the Lease. No gaming devices shall be operated in the Premises.

12. Tenant assumes full responsibility for protecting the Premises from theft, robbery and pilferage.

13. Tenant shall cause any vendors and other service providers hired by Tenant to perform services at the Premises or the Project with respect to Building Systems to maintain in effect workers’ compensation insurance as required by Legal Requirements and commercial general liability insurance with coverage amounts reasonably acceptable to Landlord. Tenant shall cause such vendors and service providers to name Landlord and Alexandria Real Estate Equities, Inc. as additional insureds under such policies and shall provide Landlord with certificates of insurance evidencing the required coverages (and showing Landlord and Alexandria Real Estate Equities, Inc. as additional insureds under such policies) prior to the applicable vendor or service provider providing any services to Tenant at the Project.

EXHIBIT F TO LEASE

TENANT’S PERSONAL PROPERTY

None.

EXHIBIT G TO LEASE

TENANT MAINTENANCE OBLIGATIONS



Maintenance Responsibilities	TENANT	ARE
Exterior / Site
Landscaping		ü
Pest control (exterior)		ü
Parking lot sweeping		ü
Project security (nightly rounds)		ü
Parking lot lighting		ü
Exterior monument and footpath lighting		ü
Landscape irrigation		ü
Exterior window washing		ü
Roof inspections		ü
Domestic backflow preventor certification - Industrial / Domestic		ü
Domestic backflow preventor certification - Fire		ü
Building Interior and Central Plant
Cold Rooms	ü
Autoclaves	ü
Glassware washers	ü
RO/DI laboratory water systems	ü
Laboratory gas distribution systems	ü
Emergency eyewash and shower stations	ü
Internal UPS units	ü
Elevators	ü
Elevator phone lines	ü
Fire extinguisher inspection / certification	ü
Fire sprinkler system	ü
Fire alarm system (and phone lines)	ü
Building HVAC equipment	ü
Smoke fire dampers	ü
Access controls	ü
CCTV	ü
Janitorial (In Premesis)	ü
I/R Testing of electrical systems		ü
Emergency Generator (inc. DEH and APCD Permits)	ü
Central Plant - chillers, boilers, cooling towers, pumps, etc.	ü
Water Treatment	ü
Building Management System (DDC)	ü
Tenant Equipment monitoring (Alarms to freezers, incubators, etc.)	ü

EXHIBIT H TO LEASE

BASE RENT SCHEDULE

EXHIBIT I TO LEASE

BRIDGE SCHEMATIC

732549058.24



Date: August 6, 2020	/s/ Charles M. Baum
	Charles M. Baum
	President and Chief Executive Officer
	(Principal Executive Officer)



Date: August 6, 2020		/s/ Daniel R. Faga
		Daniel R. Faga
		Executive Vice President and Chief Operating Officer
		(Principal Financial Officer)

Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2020	Aug. 03, 2020
Cover [Abstract]
Entity Central Index Key	0001576263
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-35921
Entity Registrant Name	Mirati Therapeutics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-2693615
Entity Address, Address Line One	9393 Towne Centre Drive, Suite 200
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121
City Area Code	858
Local Phone Number	332-3410
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	MRTX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		44,540,693

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 131,689	$ 46,535
Short-term investments	514,021	368,515
Other current assets	8,327	9,357
Total current assets	654,037	424,407
Property and equipment, net	3,187	1,776
Other long-term assets	6,726	6,017
Total assets	663,950	432,200
Current liabilities
Accounts payable and accrued liabilities	56,843	48,082
Deferred revenue and other current liabilities	852	824
Total current liabilities	57,695	48,906
Other long-term liabilities	1,251	999
Total liabilities	58,946	49,905
Commitments and contingencies (see Note 11)
Shareholders’ equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding at both June 30, 2020 and December 31, 2019	0	0
Common stock, $0.001 par value; 100,000,000 shares authorized; 44,482,308 and 39,517,329 issued and outstanding at June 30, 2020 and December 31, 2019, respectively	45	40
Additional paid-in capital	1,535,490	1,144,667
Accumulated other comprehensive income	11,284	9,889
Accumulated deficit	(941,815)	(772,301)
Total shareholders’ equity	605,004	382,295
Total liabilities and shareholders’ equity	$ 663,950	$ 432,200

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (USD per share)	$ 0.001	$ 0.001
Preferred stock authorized (shares)	10,000,000	10,000,000
Preferred stock issued (shares)	0	0
Preferred stock outstanding (shares)	0	0
Common stock, par value (USD per share)	$ 0.001	$ 0.001
Common stock authorized (shares)	100,000,000	100,000,000
Common stock issued (shares)	44,482,308	39,517,329
Common stock outstanding (shares)	44,482,308	39,517,329

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue
License and collaboration revenues	$ 0	$ 577	$ 267	$ 1,821
Total revenue	0	577	267	1,821
Operating expenses
Research and development	65,083	38,324	136,791	72,564
General and administrative	19,779	9,894	37,825	19,656
Total operating expenses	84,862	48,218	174,616	92,220
Loss from operations	(84,862)	(47,641)	(174,349)	(90,399)
Other income, net	2,003	1,946	4,835	3,792
Net loss	(82,859)	(45,695)	(169,514)	(86,607)
Unrealized gain on available-for-sale investments	1,577	151	1,395	309
Comprehensive loss	$ (81,282)	$ (45,544)	$ (168,119)	$ (86,298)
Basic and diluted net loss per share (USD per share)	$ (1.89)	$ (1.26)	$ (3.91)	$ (2.43)
Weighted average number of shares used in computing net loss per share, basic and diluted (shares)	43,825,723	36,173,605	43,356,207	35,580,279

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional paid-in capital	Accumulated other comprehensive income	Accumulated deficit
Balance at beginning of period (shares) at Dec. 31, 2018		32,538,857
Balance at beginning of period at Dec. 31, 2018	$ 201,576	$ 33	$ 751,109	$ 9,479	$ (559,045)
Increase (Decrease) in Stockholders' Equity
Net loss for the period	(86,607)				(86,607)
Issuance of common stock, net of issuance costs (shares)		4,269,838
Issuance of common stock, net of issuance costs	327,810	$ 5	327,805
Share-based compensation expense	23,720		23,720
Issuance of common stock from ESPP (shares)		9,844
Issuance of common stock from ESPP	323		323
Issuance of common stock under equity incentive plans (shares)		332,887
Issuance of common stock under equity incentive plans	$ 4,300		4,300
Net exercise of warrants (shares)	1,400,000	1,400,000
Net exercise of warrants		$ 1	(1)
Proceeds from disgorgement of shareholders' short-swing profits	$ 1,050		1,050
Unrealized gain (loss) on investments	309			309
Balance at end of period (shares) at Jun. 30, 2019		38,551,426
Balance at end of period at Jun. 30, 2019	472,481	$ 39	1,108,306	9,788	(645,652)
Balance at beginning of period (shares) at Mar. 31, 2019		36,029,093
Balance at beginning of period at Mar. 31, 2019	283,554	$ 36	873,838	9,637	(599,957)
Increase (Decrease) in Stockholders' Equity
Net loss for the period	(45,695)				(45,695)
Issuance of common stock, net of issuance costs (shares)		2,415,000
Issuance of common stock, net of issuance costs	219,927	$ 3	219,924
Share-based compensation expense	12,589		12,589
Issuance of common stock from ESPP (shares)		9,844
Issuance of common stock from ESPP	323		323
Issuance of common stock under equity incentive plans (shares)		97,489
Issuance of common stock under equity incentive plans	1,632		1,632
Unrealized gain (loss) on investments	151			151
Balance at end of period (shares) at Jun. 30, 2019		38,551,426
Balance at end of period at Jun. 30, 2019	$ 472,481	$ 39	1,108,306	9,788	(645,652)
Balance at beginning of period (shares) at Dec. 31, 2019	39,517,329	39,517,329
Balance at beginning of period at Dec. 31, 2019	$ 382,295	$ 40	1,144,667	9,889	(772,301)
Increase (Decrease) in Stockholders' Equity
Net loss for the period	(169,514)				(169,514)
Issuance of common stock, net of issuance costs (shares)		3,538,462
Issuance of common stock, net of issuance costs	323,977	$ 4	323,973
Share-based compensation expense	42,354		42,354
Issuance of common stock from ESPP (shares)		6,207
Issuance of common stock from ESPP	524		524
Issuance of common stock under equity incentive plans (shares)		820,310
Issuance of common stock under equity incentive plans	$ 23,932		23,932
Net exercise of warrants (shares)	600,000	600,000
Net exercise of warrants		$ 1	(1)
Proceeds from disgorgement of shareholders' short-swing profits	$ 41		41
Unrealized gain (loss) on investments	$ 1,395			1,395
Balance at end of period (shares) at Jun. 30, 2020	44,482,308	44,482,308
Balance at end of period at Jun. 30, 2020	$ 605,004	$ 45	1,535,490	11,284	(941,815)
Balance at beginning of period (shares) at Mar. 31, 2020		43,552,312
Balance at beginning of period at Mar. 31, 2020	656,226	$ 44	1,505,431	9,707	(858,956)
Increase (Decrease) in Stockholders' Equity
Net loss for the period	(82,859)				(82,859)
Share-based compensation expense	20,787		20,787
Issuance of common stock from ESPP (shares)		6,207
Issuance of common stock from ESPP	524		524
Issuance of common stock under equity incentive plans (shares)		323,789
Issuance of common stock under equity incentive plans	$ 8,749		8,749
Net exercise of warrants (shares)	600,000	600,000
Net exercise of warrants		$ 1	(1)
Unrealized gain (loss) on investments	$ 1,577			1,577
Balance at end of period (shares) at Jun. 30, 2020	44,482,308	44,482,308
Balance at end of period at Jun. 30, 2020	$ 605,004	$ 45	$ 1,535,490	$ 11,284	$ (941,815)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities:
Net loss	$ (169,514)	$ (86,607)
Non-cash adjustments reconciling net loss to operating cash flows:
Depreciation of property and equipment	253	99
Accretion of discount on investments	(863)	(1,964)
Share-based compensation expense	42,354	23,720
Changes in operating assets and liabilities:
Other current assets	1,029	(6,313)
Other long-term assets	(409)	(3,982)
Accounts payable, accrued liabilities, deferred revenue and other liabilities	8,803	2,097
Cash flows used in operating activities	(118,347)	(72,950)
Investing activities:
Purchases of short-term investments	(384,127)	(212,666)
Sales and maturities of short-term investments	240,878	171,600
Purchases of property, plant, and equipment	(1,425)	(69)
Cash flows used in investing activities	(144,674)	(41,135)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs	323,977	327,810
Proceeds from issuance of common stock under equity incentive plans	23,932	4,300
Proceeds from disgorgement of shareholders' short-swing profits	41	1,050
Proceeds from stock issuances under employee stock purchase plan	524	323
Cash flows provided by financing activities	348,474	333,483
Increase in cash, cash equivalents and restricted cash	85,453	219,398
Cash, cash equivalents and restricted cash, beginning of period	46,856	32,694
Cash, cash equivalents and restricted cash, end of period	132,309	252,092
Reconciliation of cash, cash equivalents and restricted cash, end of period:
Total cash, cash equivalents and restricted cash	132,309	252,092
Supplemental disclosures of non-cash investing activities:
Purchases of property, plant, and equipment included within accounts payable and accrued liabilities	$ 239	$ 0

Description of Business	6 Months Ended
Description of Business	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Mirati Therapeutics, Inc. ("Mirati" or the "Company") is a clinical-stage oncology company developing product candidates to address the genetic and immunological promoters of cancer. The Company was incorporated under the laws of the State of Delaware on April 29, 2013 as Mirati Therapeutics, Inc. and is located in San Diego, California. The Company has a wholly owned subsidiary in Canada, MethylGene, Inc., and operates in one business segment, primarily in the United States. The Company's common stock has been listed on the Nasdaq Global Select Market since June 5, 2018, and was previously listed on the Nasdaq Capital Market since July 15, 2013, under the ticker symbol "MRTX."

Recently Adopted and Recently Issued Accounting Pronouncements	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Recently Adopted and Recently Issued Accounting Pronouncements	Recently Adopted and Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, entities are required to use a new forward-looking expected loss model that generally results in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the losses are recognized as allowances rather than as reductions in the amortized cost of the securities. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years. Effective January 1, 2020, the Company adopted the provisions of ASU 2016-13. The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures. 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. The new guidance modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Effective January 1, 2020, the Company adopted the provisions of ASU 2018-13. The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update includes removing several exceptions under the existing guidance and includes several simplification updates, none of which apply to the Company's current accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. Effective January 1, 2020, the Company early adopted this updated guidance and it did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies On June 24, 2014, the Company entered into a lease agreement for completed office and laboratory space located in San Diego, California. The office space under the lease is the Company's corporate headquarters. The lease commenced in two phases (in July 2014 and March 2015) at a combined total initial monthly rent of $24,100 per month. The leased property is subject to a 3% annual rent increase following availability. In addition to such base monthly rent, the Company is obligated to pay certain customary amounts for its share of operating expenses and facility amenities. The original lease provided for expiration on January 31, 2018. On March 23, 2017, the Company entered into a First Amendment to Lease Agreement to amend the original lease agreement and to extend the term of the original lease for one year through January 31, 2019. On April 5, 2018, the Company entered into a Second Amendment to Lease Agreement to extend the lease term through January 31, 2020. On August 2, 2018, the Company entered into a Third Amendment to Lease Agreement to expand the size of the existing space for an additional base rent of $4,000 per month. On October 30, 2019, the Company entered into a Fourth Amendment to Lease Agreement to extend the lease term to approximately October 1, 2020, and to expand the size of the existing space for no additional base rent. On March 4, 2020, the Company entered into a Fifth Amendment to Lease Agreement to expand the size of the existing space for no additional base rent. All other terms and covenants from the original lease agreement remain unchanged. The Company's building lease is considered to be an operating lease. The lease agreement indicates the interest rate applicable to the lease is 12%, therefore the Company used a discount rate of 12% to calculate the value of its lease obligations. The Company recorded less than $0.1 million and $0.1 million in operating lease cost for the three months ended June 30, 2020 and 2019, respectively. The Company recorded $0.1 million and $0.2 million in operating lease cost for the six months ended June 30, 2020 and 2019, respectively. The building lease has a remaining lease term of under one year from June 30, 2020. As of June 30, 2020, the condensed consolidated balance sheet includes a $0.7 million operating right-of-use asset within other long-term assets, and a $0.7 million operating lease liability in deferred revenue and other current liabilities, and remaining lease payments on an undiscounted basis are $0.2 million for 2020 and $0.1 million for 2021. On June 30, 2020, the Company entered into an amended and restated lease agreement (the "Amended and Restated Lease") for office and laboratory space located in San Diego, California, for the Company's future corporate headquarters. The Amended and Restated Lease supersedes in its entirety the original lease agreement for the Company's future corporate headquarters dated as of August 22, 2019. The commencement date of the Amended and Restated Lease is expected to be March 22, 2021, and the Amended and Restated Lease will have a lease term of 12 years ("Lease Term"), unless terminated earlier. The Lease Term has an initial abatement period, and the initial base rent payable will be approximately $0.6 million per month following the abatement period, which amount will increase by 3% per year over the Lease Term. The Company has also received customary incentives from the landlord for tenant improvements, which effectively reduce the total lease payments owed for the lease. As of June 30, 2020, the Company had not taken control of the space and the Lease Term had not commenced. Accordingly, no right-of-use asset or lease liability related to the lease has been recorded.

Subsequent Event	6 Months Ended
Subsequent Event	Jun. 30, 2020
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event At the Market Facility On July 2, 2020, the Company entered into a sales agreement pursuant to which the Company may, from time to time, sell shares of the Company's common stock, par value $0.001 per share, having an aggregate offering price of up to $200.0 million. ORIC Pharmaceuticals Agreement On August 3, 2020, the Company entered into a license agreement with ORIC Pharmaceuticals, Inc. ("ORIC") under which it granted an exclusive worldwide license to develop and commercialize small molecule inhibitors of the polycomb repressive complex 2, or PRC2 (the "ORIC Agreement"). Under the terms of the ORIC Agreement, Mirati received a one-time non-cash payment of $20.0 million in shares of ORIC common stock. The number of shares issued to the Company were based on a price of $34.00 per share, representing a premium of 10% to the 60-day volume weighted average trading price of ORIC shares. Mirati’s obligation under the ORIC Agreement is to transfer the licensed technology to ORIC.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been omitted. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
Use of Estimates	Use of Estimates The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Cash and Cash Equivalents	Cash and cash equivalents consist of cash and highly liquid securities with original maturities at the date of acquisition of ninety days or less.
Short-term Investments	Investments with an original maturity of more than ninety days are considered short-term investments and have been classified by management as available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from sales of these securities to fund its operations, as necessary.
Concentration of Credit Risk	Concentration of Credit Risk The Company invests its excess cash in accordance with its investment policy. The Company's investments are comprised primarily of commercial paper and debt instruments of financial institutions, corporations, U.S. government-sponsored agencies and the U.S. Treasury. The Company mitigates credit risk by maintaining a diversified portfolio and limiting the amount of investment exposure as to institution, maturity and investment type. Financial instruments that potentially subject the Company to significant credit risk consist principally of cash equivalents and short-term investments.
Revenue Recognition	Revenue Recognition The Company recognizes revenue in connection with a collaboration and license agreement in accordance with the guidance of Revenue From Contracts With Customers, Accounting Standards Codification ("ASC") Topic 606 ("Topic 606"). Under Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements the Company determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Net Loss per Share	Net Loss per Share Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents as they are anti-dilutive. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of shares that may be issued under the Company’s stock option and warrant agreements.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, entities are required to use a new forward-looking expected loss model that generally results in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the losses are recognized as allowances rather than as reductions in the amortized cost of the securities. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years. Effective January 1, 2020, the Company adopted the provisions of ASU 2016-13. The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures. 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. The new guidance modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Effective January 1, 2020, the Company adopted the provisions of ASU 2018-13. The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update includes removing several exceptions under the existing guidance and includes several simplification updates, none of which apply to the Company's current accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. Effective January 1, 2020, the Company early adopted this updated guidance and it did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

Description of Business - Narrative (Details)	6 Months Ended
Description of Business - Narrative (Details)	Jun. 30, 2020 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Summary of Significant Accounting Policies - Narrative (Details)	6 Months Ended
	Jun. 30, 2020
Marketable Securities
Minimum original maturity period of marketable securities	90 days

Short-Term Investments - Summary (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized cost	$ 512,259	$ 368,146
Gross unrealized gains	1,765	375
Gross unrealized losses	(3)	(6)
Estimated fair value	$ 514,021	$ 368,515
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Maturity	2 years	2 years
Amortized cost	$ 177,244	$ 160,065
Gross unrealized gains	1,044	233
Gross unrealized losses	0	(1)
Estimated fair value	$ 178,288	$ 160,297
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Maturity	1 year	1 year
Amortized cost	$ 233,296	$ 120,862
Gross unrealized gains	594	74
Gross unrealized losses	(1)	0
Estimated fair value	$ 233,889	$ 120,936
U.S. Agency bonds
Debt Securities, Available-for-sale [Line Items]
Maturity	2 years	2 years
Amortized cost	$ 38,308	$ 50,745
Gross unrealized gains	75	41
Gross unrealized losses	(1)	(4)
Estimated fair value	$ 38,382	$ 50,782
U.S. Treasury bills
Debt Securities, Available-for-sale [Line Items]
Maturity	1 year	2 years
Amortized cost	$ 63,411	$ 36,474
Gross unrealized gains	52	27
Gross unrealized losses	(1)	(1)
Estimated fair value	$ 63,462	$ 36,500

Fair Value Measurements - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	$ 131,689	$ 46,535
Total short-term investments	514,021	368,515
Total	645,710	415,050
U.S. Treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	63,462	36,500
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	178,288	160,297
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	233,889	120,936
U.S. Agency bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	38,382	50,782
Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	12,198	662
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	119,491	45,873
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	131,689	46,535
Total short-term investments	63,462	36,500
Total	195,151	83,035
Level 1 \| U.S. Treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	63,462	36,500
Level 1 \| Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	0	0
Level 1 \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	0	0
Level 1 \| U.S. Agency bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	0	0
Level 1 \| Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	12,198	662
Level 1 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	119,491	45,873
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	0	0
Total short-term investments	450,559	332,015
Total	450,559	332,015
Level 2 \| U.S. Treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	0	0
Level 2 \| Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	178,288	160,297
Level 2 \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	233,889	120,936
Level 2 \| U.S. Agency bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total short-term investments	38,382	50,782
Level 2 \| Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	0	0
Level 2 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total cash and cash equivalents	$ 0	$ 0

Other Current Assets and Other Long-Term Assets - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 5,043	$ 5,672
Deposits and other receivables	1,471	2,119
Interest receivable	1,813	1,566
Other current assets	8,327	9,357
Deposits paid for research and development	5,400	5,100
Long-term operating right-of-use asset	700	600
Security deposit for lease	$ 600	$ 300

Accounts Payable, Accrued Liabilities and Long-Term Liabilities - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accounts payable	$ 24,099	$ 16,367
Accrued clinical expense	22,920	21,290
Accrued development and other expense	4,743	2,510
Accrued compensation and benefits	5,081	7,915
Total accounts payable and accrued liabilities	56,843	48,082
Long-term liabilities	$ 1,251	$ 999

Collaboration Agreements - Narrative (Details) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 07, 2018	Oct. 31, 2014	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2018
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Expenses related to collaboration agreement			$ 65,083,000	$ 38,324,000	$ 136,791,000	$ 72,564,000
BeiGene Agreement
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Up-front fee received	$ 10,000,000.0
Revenue from performance obligation expected to be earned	$ 123,000,000.0
Termination of contract, period after first commercial sale of product	10 years
Period required for notice of termination of contract	60 days
Revenue from performance obligations satisfied during reporting period					29,000
BeiGene Agreement \| Licenses of Intellectual Property
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Revenue from performance obligation earned			0	0	0	0	$ 9,500,000
BeiGene Agreement \| Manufacturing Supply Services
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Revenue from performance obligation earned						1,600,000	$ 500,000
Payments received in advance			0	(600,000)	(300,000)	(1,800,000)
Revenue from performance obligations satisfied during reporting period						200,000
BeiGene Agreement \| Milestone Payments
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Revenue from performance obligation expected to be earned			5,000,000.0		5,000,000.0
Milestone payments earned			0	0	0	0
BeiGene Agreement \| Royalties
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Revenue			0	0	0	0
Pfizer Agreement
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Termination of contract, period after first commercial sale of product		10 years
Period required for notice of termination of contract		60 days
Expenses related to collaboration agreement			$ 0	$ 1,500,000	4,500,000	4,000,000.0
Pfizer Agreement \| Milestone Payments
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Expenses related to collaboration agreement					3,000,000.0	1,000,000.0
Pfizer Agreement \| Research and Development Services
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Expenses related to collaboration agreement					$ 1,500,000	$ 3,000,000.0

Collaboration Agreements - Activity in Contract Liabilities (Details) - BeiGene Agreement $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Movement in Deferred Revenue [Roll Forward]
Opening balance at beginning of period	$ (172)
Revenue from performance obligations satisfied during reporting period	29
Closing balance at end of period	$ (143)

Warrants - Summary (Details) - $ / shares	3 Months Ended		6 Months Ended
Warrants - Summary (Details) - $ / shares	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Class of Warrant or Right [Line Items]
Number of warrants outstanding (shares)	9,092,873		9,092,873
Warrants exercised via cashless exercises (shares)	600,006	0	600,006	1,400,025
Common stock issued from exercise of warrants (shares)	600,000		600,000	1,400,000
January 11, 2017 Warrants
Class of Warrant or Right [Line Items]
Exercise price of warrants (USD per share)	$ 0.001		$ 0.001
Number of warrants outstanding (shares)	4,533,224		4,533,224
November 20, 2017 Warrants
Class of Warrant or Right [Line Items]
Exercise price of warrants (USD per share)	$ 0.001		$ 0.001
Number of warrants outstanding (shares)	4,137,999		4,137,999
June 11, 2018 Warrants
Class of Warrant or Right [Line Items]
Exercise price of warrants (USD per share)	$ 0.001		$ 0.001
Number of warrants outstanding (shares)	421,650		421,650

Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended		6 Months Ended
	Jan. 31, 2020	Jun. 30, 2019	Jan. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Stock issued in transaction (shares)	3,538,462	2,415,000	1,854,838
Sale price of common stock (USD per share)	$ 97.50	$ 97.00	$ 62.00		$ 97.00		$ 97.00
Proceeds from sale of stock	$ 324,000	$ 219,900	$ 107,900
Stock issued pursuant to stock option exercises (shares)				323,789	97,489	820,310	332,887
Proceeds from stock options exercised				$ 8,700	$ 1,600	$ 23,900	$ 4,300
Proceeds from disgorgement of shareholders' short-swing profits			$ 1,100			$ 41	$ 1,050

Subsequent Event - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	Aug. 03, 2020	Jul. 02, 2020	Jun. 30, 2020	Jan. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Jan. 31, 2019
Subsequent Event [Line Items]
Common stock, par value (USD per share)			$ 0.001		$ 0.001
Sale price of common stock (USD per share)				$ 97.50		$ 97.00	$ 62.00
Subsequent Event \| Common Stock
Subsequent Event [Line Items]
Common stock, par value (USD per share)		$ 0.001
Aggregate offering price		$ 200.0
License Agreement with ORIC Pharmaceuticals, Inc. \| Subsequent Event
Subsequent Event [Line Items]
One-time non-cash payment for license agreement	$ 20.0
Sale price of common stock (USD per share)	$ 34.00
Premium rate (as a percent)	10.00%

Label	Element	Value
Restricted Cash	us-gaap_RestrictedCash	$ 0
Restricted Cash	us-gaap_RestrictedCash	620,000
Pfizer Discovery and Collaboration Agreement [Member] \| Development Milestone Payments [Member]
Research and Development Arrangement, Discovery and Collaboration Agreement, Compensation Expected to be Paid	mrtx_ResearchandDevelopmentArrangementDiscoveryandCollaborationAgreementCompensationExpectedtobePaid	9,300,000
Research and Development Arrangement, Discovery and Collaboration Agreement, Milestone Payments Paid	mrtx_ResearchandDevelopmentArrangementDiscoveryandCollaborationAgreementMilestonePaymentsPaid	4,300,000
Pfizer Discovery and Collaboration Agreement [Member] \| Sales Milestone Payments [Member]
Research and Development Arrangement, Discovery and Collaboration Agreement, Compensation Expected to be Paid	mrtx_ResearchandDevelopmentArrangementDiscoveryandCollaborationAgreementCompensationExpectedtobePaid	$ 337,000,000.0