13D Filing: OrbiMed Advisors and Loxo Oncology Inc. (LOXO)

Piggyback Registration Rights

The Investor Rights Agreement further provides that, in the event that the Issuer determines to register any of its securities under the Securities Act of 1933, as amended, either for its own account or for the account of other security holders, the stockholders who are party to the Investor Rights Agreement, including OPI V, will be entitled to certain “piggyback” registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations.  These rights do not apply with respect to a registration related to employee benefit plans, the offer and sale of debt securities, or corporate reorganizations or certain other transactions.

Form S-3 Registration Rights

The stockholders who are party to the Investor Rights Agreement, including OPI V, will be entitled to make a written request that the Issuer register their shares on Form S-3 (an “S-3 Demand Request”) if the Issuer is eligible to file a registration statement on Form S-3 and if the aggregate price to the public, net of selling expenses, is at least $750,000.  These stockholders may make an unlimited number of S-3 Demand Requests; provided however, the Issuer will not have to effect a registration pursuant to an S-3 Demand Request if the Issuer has effected two (2) registrations pursuant to S-3 Demand Requests within the twelve (12) month period immediately preceding the date of such S-3 Demand Request.  The Issuer will also not be required to effect an S-3 Demand Request during the period that is 30 days before the Issuer’s good faith estimate of the date of filing of, and ending on a date that is 90 days after the effective date of, a company initiated registration statement relating to an initial public offering of its securities, provided that the Issuer is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

Expenses of Registration

The Issuer will pay the registration expenses of the holders of the shares registered pursuant to the demand, piggyback and Form S-3 registration rights described above.

Indemnification

The Investor Rights Agreement contains customary cross-indemnification provisions, pursuant to which the Issuer is obligated to indemnify the selling stockholders in the event of material misstatements or omissions in the registration statement attributable to the Issuer, and the selling stockholders are obligated to indemnify the Issuer for material misstatements or omissions attributable to them.

Termination of Registration Rights.

OPI V’s demand, piggyback and Form S-3 registration rights described above generally will terminate upon the earlier of: (i) the date seven years following the Issuer’s initial public offering; (ii) a Deemed Liquidation Event (as defined in the Issuer’s Restated Certificate of Incorporation) or Stock Sale (as defined in the Investor Rights Agreement); or (iii) such time as all of the Registrable Securities (as defined in the Investor Rights Agreement) of the Issuer held by OPI V may be sold without any restriction on volume or manner of sale in any three-month period pursuant to Rule 144.

The foregoing description of the Investor Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Investor Rights Agreement, a copy of which is filed as Exhibit 3 and incorporated herein by reference.