SEC Filings

S-1/A
AVEXIS, INC. filed this Form S-1/A on 02/01/2016
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Table of Contents


AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

12. Stock-based Compensation (Continued)

possible future equity values given the timing and form of a future event. The PWERM looks to a specific future range of total equity values based on an initial public offering. The OPM looks to a sale event and distinguishes between equity classes rather than future equity values. The OPM treats the common stock, Class B-1 and Class C preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company's securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the Class C and Class B-1 preferred stock liquidation preference at the time of the liquidity event, such as a strategic sale or a merger. The PWERM is a scenario-based methodology that estimates the fair value of the common stock based upon an analysis of future values for the company, assuming various outcomes. The 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 $2.47 per share as of August 11, 2014.

    September 30, 2014 Valuation

          In order to estimate the value of the Company's common stock as of September 30, 2014, the Company determined the aggregate equity value of its business interpolating the implied equity value from the August 11, 2014 valuation (see above) and the $15.94 price per common share paid in an arms-length transaction between stockholders of the Company in May 2015. In deriving this value, consideration was given to significant events and developments between these two valuation dates, including the dosing of the second patient in the Phase 1 clinical trial in August 2014, the dosing of the third patient in the trial in September 2014 and the receipt of Orphan Drug designation for AVXS-101 from the FDA in September 2014, as well as discussions with potential strategic acquirers of the Company. The interpolated value was determined to be reasonable using additional PWERM analysis. Based on the above, the Company derived the fair value of its common stock to be $4.69 per share as of September 30, 2014.

    December 31, 2014 Valuation

          In order to estimate the value of the Company's common stock as of December 31, 2014, the Company determined the aggregate equity value of its business interpolating the implied equity value from the August 11, 2014 valuation (see above) and the $15.94 price per common share paid in an arms-length transaction between stockholders of the Company in May 2015. In deriving this value, consideration was given to significant events and developments between these two valuation dates, including the dosing of the second patient in the Phase 1 clinical trial in August 2014, the dosing of the third patient in the trial in September 2014, the receipt of Orphan Drug designation for AVXS-101 from the FDA in September 2014, and the dosing of the fourth patient in the trial in December 2014, as well as discussions with potential strategic acquirers of the Company and the likelihood of achieving a liquidity event, such as an initial public offering, or a sale of the Company

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