SEC Filings

S-1
AVEXIS, INC. filed this Form S-1 on 01/15/2016
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Table of Contents


AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

12. Stock-based Compensation (Continued)

common stock value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock. The hybrid methodology weights the results from each approach, the OPM and the PWERM, to arrive at an indication of value for the common stock.

          Based on the above, the Company derived the fair value of its common stock to be $2.32 per share as of March 7, 2014.

    March 31, 2014 Valuation

          In order to estimate the value of the Company's common stock as of March 31, 2014, the Company determined the aggregate equity value of its business using a weighted interpolation, giving a 50% weight to the March 7, 2014 valuation (see above) and a 50% weight to the August 11, 2014 valuation (see below) in deriving the fair value of its common stock of $2.87 per share as of March 31, 2014. In deriving this value, consideration was given to significant events and developments between these two valuation dates, including the March 21, 2014 entry into the ReGenX License which provided the Company an exclusive worldwide license to the use of the AAV9 vector for the gene therapy treatment of SMA in humans, the initiation of the Company's Phase 1 clinical trial in April 2014, the dosing of the first patient in the clinical trial May 2014, the submission of an Orphan Drug Application to the FDA with respect to AVXS-101 in June 2014 and discussions with potential strategic acquirers of the Company.

    June 30, 2014 Valuation

          In order to estimate the value of the Company's common stock as of June 30, 2014, the Company determined the aggregate equity value of its business using a weighted interpolation and giving a 10% weight to the March 7, 2014 valuation (see above) and a 90% weight to the August 11, 2014 valuation (see below) in deriving the fair value of its common stock of $3.30 per share as of June 30, 2014. In deriving this value, consideration was given to significant events and developments between these two valuation dates, including the March 21, 2014 entry into the ReGenX License, which provided the Company an exclusive worldwide license to the use of the AAV9 vector for the gene therapy treatment of SMA in humans, the initiation of the Company's Phase 1 clinical trial in April 2014, the dosing of the first patient in the clinical trial in May 2014, the submission of an Orphan Drug Application to the FDA with respect to AVXS-101 in June 2014 and discussions with potential strategic acquirers of the Company.

    August 11, 2014 Valuation

          On August 11, 2014, the Company entered into an arms-length transaction to issue and sell its Class C preferred stock at a price per share of $5.471. The Company's common stock valuation as of such date was prepared using both an option-pricing method, or OPM, and a probability-weighted expected return method, or PWERM, depending on the form and timing of an expected future liquidity event. The combination of the two approaches to arrive at a concluded fair value estimate of the common stock is known as a hybrid approach. The hybrid approach applies and weights the method that is best suited to the form of liquidity and what is known about the range of

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