13D Filing: OrbiMed Advisors and Scpharmaceuticals Inc (SCPH)

(c)          Except as disclosed in Item 3, the Reporting Persons have not effected any transactions in the Shares during the past sixty (60) days.

(d)          Not applicable.

(e)          Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer

In addition to the relationships between the Reporting Persons described in Items 2, 3 and 5 above, GP VI is the sole general partner of OPI VI, pursuant to the terms of the limited partnership agreement of OPI VI.  Advisors is the sole managing member of GP VI, pursuant to the terms of the limited liability company agreement of GP VI.  Pursuant to these agreements and relationships, Advisors and GP VI have discretionary investment management authority with respect to the assets of OPI VI.  Such authority includes the power of GP VI to vote and otherwise dispose of securities purchased by OPI VI.  The number of Shares attributable to OPI VI is 3,409,865.  Advisors and GP VI may each be considered to hold indirectly 3,409,865 Shares.  Isaly, pursuant to his authority as the managing member of, and owner of a controlling interest in, Advisors, also has shared discretionary power to direct the vote and the disposition of the securities of the Issuer held by OPI VI.

Jonathan Silverstein (“Silverstein”), a member of Advisors, had been a member of the Board of Directors of the Issuer since January 2017. Silverstein stepped down from the board as of the closing of the IPO.

Lock-up Agreement

In connection with the IPO, all of the Issuer’s stockholders, including OPI VI, executive officers and directors, have entered into an agreement (the “Lock-Up Agreement”), pursuant to which such parties have agreed not to, except in limited circumstances, sell or transfer, or engage in swap or similar transactions with respect to, shares of the Issuer’s Shares, including, as applicable, Shares received in the IPO and issuable upon exercise of certain warrants and options, from the closing of the IPO until 180 days from the closing date of the IPO.

The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Lock-Up Agreement, a form of which is included in this Statement as Exhibit 2 and incorporated herein by reference.

Investors’ Rights Agreement

OPI VI and certain other stockholders of the Issuer entered into an amended and restated investors’ rights agreement with the Issuer (the “Investors’ Rights Agreement”), dated as of December 22, 2016.  Pursuant to the Investors’ Rights Agreement and subject to the terms and conditions therein, the parties agreed that:

Demand Registration Rights

Beginning 180 days after the effective date of the registration statement, the holders of 10,126,771 Shares, including those issuable upon the conversion of preferred stock upon closing of the IPO, are entitled to demand registration rights. Under the terms of the Investors’ Rights Agreement, the Issuer will be required, upon the written request of holders of at least 30% of such securities that would result in an aggregate offering price of at least $20.0 million, to file a registration statement and use commercially reasonable efforts to effect the registration of all or a portion of these shares for public resale. The Issuer is required to effect only two registrations pursuant to this provision of the Investors’ Rights Agreement.

Short-Form Registration Rights

Pursuant to the Investors’ Rights Agreement, if the Issuer is eligible to file a registration statement on Form S-3, upon the written request of a majority in interest of the holders of registrable securities, including OPI VI, to sell registrable securities at an aggregate price of at least $2.0 million, the Issuer will be required to use commercially reasonable efforts to effect a registration of the registrable securities. The Issuer is required to effect only two registrations in any 12-month period pursuant to this provision of the Investors’ Rights Agreement. The right to have the registrable securities registered on Form S-3 is further subject to other specified conditions and limitations.