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As filed with the Securities and Exchange Commission on May 11, 2016.Registration No. 333-209011

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 5 TOFORM S-1

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

Oncobiologics, Inc.(Exact name of registrant as specified in its charter)

Delaware 2836 38-3982704(State or other jurisdiction ofincorporation or organization)

(Primary Standard IndustrialClassification Code Number)

(I.R.S. EmployerIdentification Number)

7 Clarke Drive Cranbury, New Jersey 08512

(609) 619-3990(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Pankaj Mohan, Ph.D. Chairman, President and Chief Executive Officer

Oncobiologics, Inc. 7 Clarke Drive

Cranbury, New Jersey 08512 (609) 619-3990

(Name, address, including zip code, and telephone number, including area code, of agent for service)Copies to:

Yvan-Claude PierreDaniel I. Goldberg

Divakar GuptaCooley LLP

1114 Avenue of the AmericasNew York, New York 10036

(212) 479-6000

Stuart M. CableEdwin M. O’Connor

Seo SalimiGoodwin Procter LLP

Exchange Place53 State Street

Boston, Massachusetts 02109(617) 570-1000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of thisRegistration Statement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under theSecurities Act of 1933, check the following box. ☒If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the followingbox and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering. ☐If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 ofthe Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒

(Do not check if a smaller reportingcompany)

Smaller reporting company ☐

(1) Estimated solely for the purpose of computing the amount of registration fee pursuant to Rule 457(o) under the Securities Act of 1933, asamended, or the Securities Act.

(2) Includes the offering price of units that the underwriters have the option to purchase to cover over-allotments, if any.

(3) Each unit will consist of one share of common stock, one-half of a Series A warrant to purchase one share of common stock and one-half of aSeries B warrant to purchase one share of common stock.

(4) Pursuant to Rule 416 of the Securities Act, the securities being registered hereunder include such additional securities as may be issued after thedate hereof as a result of share splits, share dividends or similar transactions.

(5) No fee required pursuant to Rule 457(g) under the Securities Act.

(6) We have calculated the proposed maximum aggregate offering price of the common stock underlying the Series A warrants by assuming that suchwarrants are exercisable to purchase common stock at a price per share equal to $6.60.

(7) We have calculated the proposed maximum aggregate offering price of the common stock underlying the Series B warrants by assuming that suchwarrants are exercisable to purchase common stock at a price per share equal to $8.50.

(8) The Registrant previously paid a registration fee of $11,580.50 with the initial filing of this registration statement.

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

Proposed maximum aggregate

offering price

Amount of registration

fee

Units of common stock, $0.01 par value per share, Series A warrants and Series B warrants $ 40,250,005 $ 4,053.18Common stock, $0.01 par value per share, included in the units — —Series A warrants included in the units — —Common stock, $0.01 par value per share, underlying the Series A warrants included in the units

$ 22,137,503 $ 2,229.25Series B warrants included in the units — —Common stock, $0.01 par value per share, underlying the Series B warrants included in the units

$ 28,510,420 $ 2,871.00Total $ 90,897,928 $ 9,153.43

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effectivedate until the Registrant shall file a further amendment which specifically states that this Registration Statement shallthereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the RegistrationStatement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

(1) (1)

(2)(3)

(3)(4)(5)

(3)(5)

(3)(4)(6)

(3)(5)

(3)(4)(7)

(8)

(1) See “Underwriting” beginning on page 145 for additional disclosure regarding underwriting discounts, commissions and estimatedoffering expenses.

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until theregistration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not anoffer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where such offer or sale isnot permitted.

SUBJECT TO COMPLETION, DATED MAY 11, 2016

PRELIMINARY PROSPECTUS

5,833,334 Units

This is the initial public offering of securities of Oncobiologics, Inc. We are offering to sell 5,833,334 units, each unit consisting ofone share of our common stock, one-half of a Series A warrant and one-half of a Series B warrant. Each whole Series A warrantentitles the holder to purchase one share of our common stock at an initial exercise price of $6.60, subject to adjustment. Eachwhole Series B warrant entitles the holder to purchase one share of our common stock at an initial exercise price of $8.50,subject to adjustment. We currently expect the initial public offering price to be $6.00 per unit.

Our common stock has been approved for listing on the NASDAQ Global Market under the symbol “ONS.” We have applied forthe listing of our units, Series A warrants and Series B warrants on the NASDAQ Global Market under the symbols “ONSIU,”“ONSIW” and “ONSIZ,” respectively.

The Series A warrants, Series B warrants and shares of our common stock will trade together as units only during the first 30days following the date of this prospectus, and thereafter, the units will automatically separate and the common stock, Series Awarrants and Series B warrants will trade separately, unless Jefferies LLC and Barclays Capital Inc., as representatives of theunderwriters, determine that an earlier date is acceptable based upon, among other things, its assessment of the relativestrengths of the securities markets and small capitalization companies in general, and the trading pattern of, and demand for, oursecurities in particular.

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reportingrequirements for this prospectus and future filings.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 11.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved ofthese securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminaloffense.

PER UNIT TOTALPublic Offering Price $ $

Underwriting Discounts and Commissions $ $

Proceeds to Oncobiologics, Inc. (Before Expenses) $ $

Certain of our existing and new investors have indicated an interest in purchasing up to an aggregate of approximately $20.0million of units in this offering at the initial public offering price. However, because indications of interest are not bindingagreements or commitments to purchase, the underwriters may determine to sell more, fewer or no units in this offering to any ofthese investors, or any of these investors may determine to purchase more, fewer or no units in this offering.

In addition, Sabby Healthcare Master Fund, Ltd., an existing stockholder, has indicated an interest in purchasing $5.0 million ofour units at the initial public offering price in a private placement that would close concurrently with this offering. This indication ofinterest is not a binding agreement or commitment to purchase, and we could determine to sell more, less or no units to thisstockholder and this stockholder could determine to purchase more, less or no units in the proposed concurrent privateplacement. The underwriters will serve as placement agents for such concurrent private placement and receive a placementagent fee equal to a percentage of the total purchase price of the private placement units, which percentage will be equal to thepercentage discount the underwriters will receive on units sold in this offering. The closing of this offering is not conditioned uponthe closing of such concurrent private placement.

Delivery of the units is expected to be made on or about , 2016. We have granted the underwriters an option for a periodof 30 days to purchase an additional 875,000 units. If the underwriters exercise the option in full, the total underwriting discountsand commissions payable by us will be $ , and the total proceeds to us, before expenses, will be $ .

Joint Book-Running Managers

Jefferies BarclaysLead Manager

Cantor Fitzgerald & Co.Preliminary Prospectus dated , 2016

(1)

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Prospectus Summary 1Risk Factors 11Special Note Regarding Forward-Looking Statements 53Market and Industry Data 54Use of Proceeds 55Dividend Policy 56Capitalization 57Dilution 59Selected Consolidated Financial Data 61Management’s Discussion and Analysis of Financial Condition and Results of Operations 63Business 78Management 102Executive Compensation 110Certain Relationships and Related Party Transactions 123Principal Stockholders 129Description of Securities 131Shares Eligible for Future Sale 137Material U.S. Federal Income and Estate Tax Considerations 140Underwriting 145Legal Matters 151Experts 151Where You Can Find Additional Information 151Index to Consolidated Financial Statements F-1

We are responsible for the information contained in this prospectus and in any free-writing prospectus we prepare orauthorize. We have not authorized anyone to provide you with different information, and we take no responsibility for anyother information others may give you. We are not, and the underwriters are not, making an offer to sell these securities inany jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in thisprospectus is accurate as of any date other than the date on the cover of this prospectus.

Persons who come into possession of this prospectus and any applicable free writing prospectus in jurisdictions outsidethe United States are required to inform themselves about and to observe any restrictions as to this offering and thedistribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

Our name “Oncobiologics,” the Oncobiologics logo and other trademarks or service marks of Oncobiologics, Inc.appearing in this prospectus are the property of Oncobiologics, Inc. Other trademarks, service marks or trade namesappearing in this prospectus are the property of their respective owners. We do not intend our use or display of othercompanies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of usby, these other companies.

Convenience translations between Swiss Francs, or CHF, and U.S. dollars provided herein are based on the noon buyingrate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal ReserveBank of New York on December 31, 2015, or CHF 1.0017 = $1.00. We do not represent that CHF were, could have been,or could be, converted into U.S. dollars at such rate or at any other rate.

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(1) According to recent filings with the Securities and Exchange Commission, where available, and manufacturers’ reports.

(2) We currently have an arrangement with Zhejiang Huahai Pharmaceutical Co., Ltd., or Huahai, for the co-development andjoint commercialization of ONS-3010 in certain major developed markets, including the United States and EU. AssumingHuahai funds its proportionate share of development costs incurred after completion of the “Phase-3 Ready Package” forONS-3010, we will have a 49% value ownership interest with Huahai having a 51% value ownership interest in ONS-3010.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary provides an overview ofselected information and does not contain all of the information you should consider before investing in oursecurities. You should read this entire prospectus carefully, especially the section titled “Risk Factors” and ourconsolidated financial statements and related notes included elsewhere in this prospectus, before making aninvestment decision. Except as otherwise indicated or unless the context otherwise requires, references to“company,” “we,” “us,” “our” or “Oncobiologics,” refer to Oncobiologics, Inc. and its consolidated subsidiary.

Overview

We are a clinical-stage biopharmaceutical company focused on identifying, developing, manufacturing andcommercializing complex biosimilar therapeutics. Our current focus is on technically challenging and commerciallyattractive monoclonal antibodies, or mAbs, in the disease areas of immunology and oncology. A mAb is a type ofprotein that is produced by a single clone of cells or cell line and made to bind to a specific substance in the body.Our strategy is to cost-effectively develop these biosimilars on an accelerated timeline, which is fundamental to oursuccess and we believe positions us to be a leading biosimilar company. We have leveraged our team’sbiopharmaceutical expertise to establish fully integrated in-house development and manufacturing capabilities,which we refer to as our BioSymphony Platform. We believe this platform addresses the numerous complextechnical and regulatory challenges in developing and commercializing mAb biosimilars and was designed toprovide significant pricing flexibility. Since inception, we have advanced two product candidates into clinical trials:ONS-3010, a Phase 3-ready biosimilar to adalimumab (Humira ), and ONS-1045, a Phase 3-ready biosimilar tobevacizumab (Avastin ). Additionally, we have identified multiple other biosimilar product candidates, including sixthat are in active preclinical development, one of which is expected to be ready to enter clinical trials in 2016.

Our BioSymphony Platform

Escalating healthcare costs and healthcare reform initiatives have been major drivers for the advancement of thebiosimilar market. Our BioSymphony Platform is designed to address the technical challenges and regulatorydynamics of the complex biologics industry by developing high quality mAb biosimilars on an accelerated timelineand in an efficient and cost-effective manner. The BioSymphony Platform, driven by our entrepreneurial culture,leverages our fully integrated in-house 48,000 square foot development and manufacturing facility and our team’sclinical and regulatory expertise. We believe this model enables significant pricing flexibility, providing us withcompetitive advantages, and positions us to be a leading biosimilar company.

Our Pipeline

We are currently developing a portfolio of eight commercially attractive mAb biosimilars, for which the correspondingreference products generated an aggregate of approximately $37.8 billion in global revenue in 2015. We have alsoidentified two mAb biosimilars for which we expect to initiate development by the end of 2016. Our current pipelineof mAb biosimilars for which we have completed clone selection is described in the following chart.

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■ ONS-3010 is our adalimumab (Humira) biosimilar. Humira is a subcutaneous injectable mAb that binds totumor necrosis factor-alpha, or TNFα. We have successfully completed a randomized, double-blind,single-dose and single-center Phase 1 clinical trial comparing ONS-3010 to Humira in three treatmentarms. This Phase 1 clinical trial was performed at the Center for Human Drug Research in Leiden, TheNetherlands under the auspices of the Stichting Beoordeling Ethiek Biomedisch Onderzoek. In this trial,ONS-3010 met its primary and secondary endpoints, demonstrating a similar pharmacokinetic (meaninghow the body affects the molecule), or PK, profile, as well as an immunogenicity profile equivalent to bothU.S.- and E.U.-Humira across all three treatment arms. In addition, ONS-3010 demonstrated a rate ofinjection site reactions lower than that of Humira. We have received regulatory feedback and agreementon our Phase 3 clinical trial design in the sensitive plaque psoriasis patient population from the U.S. Foodand Drug Administration, or FDA, the European Medical Agency, or EMA, and national agencies such asthe Medicines and Healthcare Products Regulatory Agency, or MHRA, and the Swedish regulatoryauthority. We have also completed a site feasibility study to identify global sites (North and South America,Europe, Australia and New Zealand) in preparation for the commencement of our planned Phase 3 clinicaltrial in 2016. Humira is currently approved in the United States for the following indications: rheumatoid arthritis,juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, adult crohn’s disease, pediatriccrohn’s disease, ulcerative colitis, plaque psoriasis, and hidradenitis suppurativa. We initially intend toseek approval of ONS-3010 for the treatment of plaque psoriasis, and will seek to expand such approvalto the same indications as Humira as appropriate. We have informed the regulatory authorities of ourintent to seek extrapolation to all approved Humira indications, and have also discussed ourinterchangeability study design with the FDA. We intend to deliver ONS-3010 in the same manner asHumira, via subcutaneous injection.

■ ONS-1045 is our bevacizumab (Avastin) biosimilar. Avastin is a mAb administered by infusion thatinterferes with tumor growth by binding to vascular endothelial growth factor, or VEGF, a protein thatstimulates the formation of new blood vessels. We have completed a randomized, double-blind, single-dose and single-center Phase 1 clinical trial. This Phase 1 trial was performed at the Center for HumanDrug Research in Leiden, The Netherlands under the auspices of the Stichting Beoordeling EthiekBiomedisch Onderzoek. In this trial, ONS-1045 met its primary and secondary endpoints demonstrating asimilar PK profile, as well as an immunogenicity profile equivalent to both U.S.- and EU-Avastin. We havecompleted the next series of our regulatory interactions with the FDA, EMA, MHRA and the Danish Healthand Medicines Agency to obtain further guidance on our confirmatory trial design and have gainedagreement on the sensitive patient population in non-squamous non-small cell lung cancer. We have alsobegun preparatory planning with the intention to discuss our Japanese development strategy with Japan’sPharmaceuticals and Medical Devices Agency in 2016 and initiated a site feasibility study (targeting Northand South America, Europe and Asia) to ready ONS-1045 for a global Phase 3 clinical trial. Avastin is currently approved in the United States for the following indications: metastatic colorectalcancer, with intravenous 5-fluorouracil-based chemotherapy for first- or second-line treatment; metastaticcolorectal cancer, with fluoropyrimidine-, irinotecan- or fluoropyrimidine-oxaliplatin-based chemotherapyfor second-line treatment in patients who have progressed on a first-line Avastin containing regimen; non-squamous non-small cell lung cancer, with carboplatin and paclitaxel for first line treatment ofunresectable, locally advanced, recurrent or metastatic disease; glioblastoma, as a single agent for adultpatients with progressive disease following prior therapy; metastatic renal cell carcinoma with interferonalfa; cervical cancer, in combination with paclitaxel and cisplatin or paclitaxel and topotecan in persistent,recurrent, or metastatic disease; platinum-resistant recurrent epithelial ovarian, fallopian tube or primaryperitoneal cancer, in combination with paclitaxel, pegylated liposomal doxorubicin or topotecan. Weinitially intend to seek approval of ONS-1045 for the treatment of non-squamous non-small cell lungcancer, and will seek to expand such approval to the same indications as Avastin when appropriate. Wehave informed the regulatory authorities of our intent to seek extrapolation to all approved Avastinindications, and have also discussed our study design with the FDA. We intend to deliver ONS-1045 inthe same manner as Avastin, via infusion.

■ ONS-1050 is our trastuzumab (Herceptin) biosimilar. Herceptin is a mAb administered by infusion thatbinds to human epidermal growth factor receptor 2, or HER2. A clone with a “highly similar” profile toHerceptin has been chosen for further process development. Extensive analytical characterization and in

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■ In addition to the product candidates we are currently advancing through clinical development, we areleveraging our BioSymphony Platform to develop additional preclinical product candidates. Furtherdevelopment of such preclinical product candidates is subject to ongoing commercial analysis, amongother items. We have not yet determined the initial indications for which we will seek approval for suchpreclinical product candidates. Our strategy will be to seek initial approval for an approved indication ofthe reference product, which will be determined in consultation with regulatory authorities regardingclinical trial and study design, and then seek to expand such approval to the same indications as thereference product. We also intend to deliver our biosimilars in the same manner as the reference product.■ ONS-4010, a biosimilar to denosumab (Prolia /Xgeva ), has cell lines developed with clone

selection completed. We have completed preliminary characterization and reverse engineering of theamino acid sequences of the reference product. We plan to complete process development, and beready to commence our Phase 1 clinical trial, in 2017. Prolia is a subcutaneous injectable that iscurrently approved in the United States for treatment (i) of postmenopausal women with osteoporosisat high risk for fracture, (ii) to increase bone mass in men with osteoporosis at high risk for fracture,(iii) to increase bone mass in men at high risk for fracture receiving androgen deprivation therapy fornonmetastatic prostate cancer and (iv) to increase bone mass in women at high risk for fracturereceiving adjuvant aromatase inhibitor therapy for breast cancer. Xgeva is a subcutaneous injectablecurrently approved in the United States for prevention of skeletal-related events in patients with bonemetastases from solid tumors, treatment of adults and skeletally mature adolescents with giant celltumor of bone that is unresectable or where surgical resection is likely to result in severe morbidity,and treatment of hypercalcemia of malignancy refractory to bisphosphonate therapy.

■ ONS-1055, a biosimilar to cetuximab (Erbitux ), has cell lines developed with clone selection nearingcompletion. We have completed preliminary characterization and reverse engineering of the aminoacid sequences of the reference product. We plan to complete lab scale similarity in 2016. Accordingto recent filings with the Securities and Exchange Commission, 2015 worldwide sales of Erbituxwere approximately $2.0 billion.

■ ONS-3030, a biosimilar to tocilizumab (Actemra /Roactemra ), ONS-3035, a biosimilar togolimumab (Simponi ), and ONS-3040, a biosimilar to ustekinumab (Stelara ), are in earlydevelopment. According to manufacturers’ reports, 2015 worldwide sales of Actemra/Roactemra,Simponi and Stelara were $1.5 billion, $1.3 billion and $2.5 billion, respectively. We are focused onreverse engineering the reference product characteristics and developing cell lines for cloneselection. In 2016, we anticipate completing clone selection for ONS-3030, and reference productcharacterization for each of ONS-3035 and ONS-3040.

■ rapidly advancing our lead product candidates through late-stage clinical development and continuing toadvance our preclinical pipeline;

■ employing our expertise in product development to further expand our pipeline;

■ cost effectively developing and manufacturing mAb biosimilars in an accelerated timeframe;■ continuing to invest in and expand our in-house manufacturing capabilities; and■ maximizing the value of our pipeline by retaining development and commercialization rights in the United

States and continuing to selectively out-license to ex-U.S. markets.

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vitro functionality studies comparing ONS-1050 to Herceptin are underway to support the biosimilarityassessment required to be ready to initiate a Phase 1 clinical trial in 2016.Herceptin currently approved in the United States for the following indications: treatment of HER2-overexpressing breast cancer and treatment of HER2-overexpressing metastatic gastric orgastroesophageal junction adenocarcinoma. We have not yet determined the indication for which we willinitially seek approval of ONS-1050, although it will be for one of the indications for which Herceptin isapproved. It is our intent to then seek to expand such approval to the same indications as Herceptin viaextrapolation. We intend to deliver ONS-1050 in the same manner as Herceptin, via infusion.

Our Strategy

Our goal is to utilize the BioSymphony Platform to identify, develop, manufacture and commercialize technicallychallenging and commercially attractive mAbs on an accelerated timeline in a cost-effective manner, initially in thedisease areas of immunology and oncology. The key elements of our strategy include:

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■ Agility and Speed — we are committed to effective execution of the development process with a focus onsimplification leading to efficient decision-making.

■ Technical Excellence — our leadership team and team of scientific experts have implemented a state-of-the-art technology platform to enable application of scientific rigor in our development and manufacturingprocesses.

■ Industry Experience — our team cumulatively has decades of experience in identifying, developing,manufacturing and commercializing complex biologics.

■ We have a limited operating history, have incurred significant losses since our inception and expect tocontinue to incur significant losses for the foreseeable future and will need to raise substantial additionalfunding, even with the net proceeds expected from this offering and the concurrent private placement, ifany.

■ Our independent registered public accounting firm has expressed substantial doubt about our ability tocontinue as a going concern.

■ We are heavily dependent on the success of our two most advanced product candidates, ONS-3010 andONS-1045. All of our other product candidates are still in various stages of preclinical development. If weare unable to obtain regulatory approval for, or successfully commercialize, ONS-3010 and ONS-1045,our business will be harmed.

■ If we infringe or are alleged to infringe intellectual property rights of third parties, our business could beharmed. Third-party claims of intellectual property infringement may prevent or delay our developmentand commercialization efforts.

■ The evolving regulatory approval processes of the FDA, EMA and comparable foreign authorities arelengthy, time-consuming, rigorous and inherently unpredictable. If we and our collaboration partners areultimately unable to obtain regulatory approval for our product candidates, our business will be harmed. Toour knowledge, there have been only two biosimilar product applications approved by the FDA under the351(k) pathway to date.

■ Clinical development of biosimilars is different and can be more complex than clinical developmentprograms for the reference products.

■ We expect to depend on third parties for the commercialization of our biosimilar product candidates incertain major markets for ONS-3010, ONS-1045 and ONS-1050 outside the United States, and theirfailure to commercialize in those markets could harm our business and operating results. We may not besuccessful in identifying contract counterparties, and we may not be able to reach agreements with suchparties on terms that are as favorable to our company as we would anticipate.

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Our Team

We have assembled a team of industry veterans, with decades of cumulative experience in biologics developmentand commercialization at such organizations as Bristol-Myers Squibb Company, Genentech, Inc., Hoffman-LaRoche, NPS Pharmaceuticals, Inc. and Savient Pharmaceuticals, Inc. Our leadership team has also beeninstrumental in obtaining global regulatory approval for multiple complex biologics at leading multinationalbiopharmaceutical companies. Our Chairman, President and Chief Executive Officer, Pankaj Mohan, Ph.D., servedas a Senior Manager at Eli Lilly and Company, head of Business Operations and Portfolio Management of BiologicsProcess and Product Development at Bristol-Myers Squibb Company and Director of Bioprocess Engineering atGenentech, Inc. In addition, our scientific team has specific experience in process development for complexbiologics, protein manufacturing and analytical research and development, which are essential components for thedevelopment and manufacturing of complex biosimilars.

Our Culture and Mission

We are focused on identifying, developing and manufacturing complex biosimilar mAb therapeutics in the areas ofimmunology and oncology. We are dedicated to bringing cost-effective treatment options to patients and theirfamilies living with cancer and other serious diseases. The foundation of our BioSymphony Platform is ourcollaborative culture, which is based on the following core values:

Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “RiskFactors” immediately following this prospectus summary. These risks include, among others, the following:

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■ We are required to co-fund the development of, and proportionately share in the revenue from, thecommercialization of ONS-3010 in the United States, Canada, EU, Japan, Australia and New Zealandunder a joint participation agreement with Huahai. We may also be required to form a joint venture tofurther co-develop and commercialize ONS-3010 with Huahai in the agreed countries, if so requested byHuahai.

■ If we fail to comply with our obligations in the agreements under which we license intellectual property andother rights from third parties or otherwise experience disruptions to our business relationships with ourlicensors, we could lose license rights that are important to our business.

■ We currently have no issued patents. If we are unable to obtain and maintain effective patent rights for ourproduct candidates or any future product candidates, we may not be able to prevent competitors fromusing technologies we consider important in our successful development and commercialization of ourproduct candidates, resulting in loss of any potential competitive advantage our patents may haveotherwise afforded us.

■ We face intense competition and rapid technological change and the possibility that our competitors maydevelop therapies that are similar, more advanced or more effective than ours. Other biosimilars or“biobetters” of the reference products we are targeting may be approved and successfully commercializedbefore ours, which may adversely affect our financial condition and our ability to successfullycommercialize our product candidates.

■ We currently have no marketing and sales organization. If we are unable to establish sales and marketingcapabilities in jurisdictions for which we choose to retain commercialization rights, we may be unable togenerate any revenue.

■ We may need to enter into alliances with other companies that can provide capabilities and funds for thedevelopment and commercialization of our product candidates. If we are unsuccessful in forming ormaintaining these alliances on favorable terms, our business could be harmed.

■ We are highly dependent on the services of our key executives and personnel, including our Chairman,President and Chief Executive Officer, Pankaj Mohan, Ph.D., and if we are not able to retain thesemembers of our management or recruit additional management, clinical and scientific personnel, ourbusiness will suffer.

■ Due to the speculative nature of warrants, there is no guarantee that it will ever be profitable for holders ofthe Series A warrants and Series B warrants to exercise such warrants.

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If we are unable to adequately address these and other risks we face, our business, financial condition, operatingresults and prospects may be harmed.

Implications of Being an Emerging Growth CompanyAs a company with less than $1.0 billion in revenues during our last fiscal year, we are an “emerging growthcompany” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in April 2012, andtherefore we intend to take advantage of certain exemptions from various public company reporting requirements,including not being required to have our internal control over financial reporting audited by our independentregistered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosureobligations regarding executive compensation in our periodic reports and proxy statements and exemptions from therequirements of holding a nonbinding advisory vote on executive compensation and any golden parachutepayments not previously approved. We may take advantage of these exemptions for up to five years or until we areno longer an “emerging growth company.” We would cease to be an “emerging growth company” if we have morethan $1.0 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates as of the last day of our second fiscal quarter or issue more than $1.0 billion of non-convertible debt over athree-year period. We may choose to take advantage of some, but not all, of the available benefits under the JOBSAct. We have taken advantage of some reduced reporting burdens in this prospectus. Accordingly, the informationcontained herein may be different than the information you receive from other public companies in which you holdstock.

In addition, the JOBS Act provides that an “emerging growth company” can take advantage of an extendedtransition period for complying with new or revised accounting standards. This provision allows an emerging growthcompany to delay the adoption of some accounting standards until those standards would otherwise apply to privatecompanies. We have irrevocably elected not to avail ourselves of delayed adoption of new or revised accountingstandards and, therefore, we will be subject to the same requirements to adopt new or revised accounting standardsas other public companies that are not “emerging growth companies.”

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Recent Developments

In January 2016, we issued and sold an aggregate of 87,287 shares of our common stock to five accreditedinvestors at a purchase price of $29.05 per share, for aggregate net proceeds of approximately $2.5 million. All ofthe investors who purchased shares in this offering became party to the co-sale agreement, as amended, and theinvestors’ rights agreement, as amended.

On April 26, 2016, we entered into an amendment of that certain investors’ rights agreement dated March 10, 2014,as amended, and agreed, under certain circumstances, to issue certain of the investors upon the closing of thisoffering three-year warrants to purchase an aggregate of 1,520,284 shares of our common stock. Such warrants arenot exercisable until 180 days after effectiveness of the registration statement for this offering, and have an initialexercise price of $0.01 per share, which may increase to $1.00 per share under certain circumstances.

Concurrent Private Placement

Sabby Healthcare Master Fund, Ltd., or Sabby, an existing stockholder, has indicated an interest in purchasing $5.0million of our units at the initial public offering price in a private placement that would close concurrently with thisoffering. This indication of interest is not a binding agreement or commitment to purchase, and we could determineto sell more, less or no units to this stockholder and this stockholder could determine to purchase more, less or nounits in the proposed concurrent private placement. The units that may be sold in the proposed concurrent privateplacement will constitute restricted securities under the Securities Act of 1933, as amended. The underwriters willserve as placement agents for such concurrent private placement and will receive a placement agent fee equal to apercentage of the total purchase price of the private placement units, which percentage will be equal to thepercentage discount the underwriters will receive on units sold in this offering. The closing of this offering is notconditioned upon the closing of such concurrent private placement.

Corporate Information

We initially incorporated in January 2010 in New Jersey as Oncobiologics, Inc., and in October 2015, wereincorporated in Delaware by merging with and into a Delaware corporation. Our headquarters are located at7 Clarke Drive, Cranbury, New Jersey, 08512, and our telephone number at that location is (609) 619-3990. Ourwebsite address is www.oncobiologics.com. The information contained on, or that can be accessed through, ourwebsite is not part of, and is not incorporated by reference into this prospectus and should not be considered to bepart of this prospectus.

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THE OFFERING

Securities offered by us 5,833,334 units, each consisting of one share of common stock,one-half of a Series A warrant and one-half of a Series Bwarrant. Each whole Series A warrant entitles the holder topurchase one share of our common stock at an initial exerciseprice of $6.60, subject to adjustment. Each whole Series Awarrant will be exercisable 30 days after the date of thisprospectus or on such date the underwriters separate the units,whichever date is earlier and will expire at 5:00 p.m. New YorkCity time on February , 2017. Each whole Series B warrantentitles the holder to purchase one share of our common stockat an initial exercise price of $8.50, subject to adjustment. Eachwhole Series B warrant will be exercisable 30 days after the dateof this prospectus or on such date the underwriters separate theunits, whichever date is earlier, and will expire at 5:00 p.m. NewYork City time on May , 2018.

Concurrent private placement Sabby has indicated an interest in purchasing approximately$5.0 million of our units at a price per unit equal to the initialpublic offering price (or 833,332 units based on the assumedinitial public offering price of $6.00 per unit) in a privateplacement that would close concurrently with this offering. See“Certain Relationships and Related Party Transactions — Concurrent Private Placement.”

Common stock to be outstandingimmediately after this offering 21,969,446 shares (including shares included in the units but

excluding shares underlying the warrants included in the unitsand any securities that may be issued in the concurrent privateplacement, if any).

Over-allotment option 875,000 units

Use of proceeds We estimate that the net proceeds from this offering will beapproximately $29.8 million, or approximately $34.6 million if theunderwriters exercise in full their over-allotment option topurchase additional units, at an assumed initial public offeringprice of $6.00 per unit, after deducting underwriting discountsand commissions and estimated offering expenses payable byus. Our estimated net proceeds do not include the exercise ofthe Series A and Series B warrants included in the units nor anyproceeds that we may receive from the concurrent privateplacement, if any. We intend to use the net proceeds from thisoffering to: fund our most advanced biosimilar productcandidates through or ready them for entry into clinicaldevelopment; fund our other research and developmentactivities; and the remainder for working capital and generalcorporate purposes. We may also use a portion of the netproceeds to acquire complementary businesses, products ortechnologies, although, we have no present commitments oragreements for any specific acquisitions.

Risk factors You should read the section titled “Risk Factors” together with allthe other information included in this prospectus before decidingto invest in our securities.

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■ 249,510 shares of common stock issuable upon the exercise of PSUs whose terms provide for settlementin shares of common stock or cash at our discretion, with a weighted-average exercise price of $6.35;

■ 1,066,193 shares issuable upon vesting of restricted stock unit awards, or RSUs, granted under our 2015Equity Incentive Plan, or the 2015 Plan;

■ 180,184 shares of common stock reserved for future issuance under the 2015 Plan, as well as anyautomatic increases in the number of shares of common stock reserved for future issuance under thisplan;

■ 289,855 shares of common stock reserved for future issuance under our 2016 Employee Stock PurchasePlan, or the ESPP, as well as any automatic increases in the number of shares of common stock reservedfor future issuance under this plan, which will become effective upon the execution of the underwritingagreement related to this offering; and

■ 1,520,284 shares of our common stock issuable upon the exercise of warrants to be issued upon theclosing of this offering.

■ the issuance and sale of an aggregate of 87,287 shares of common stock in January 2016;

■ the conversion of all outstanding shares of Series A preferred stock (with an aggregate liquidationpreference of $11,819,000 and a conversion price equal to the initial public offering price) into 1,969,818shares of common stock immediately prior to the closing of this offering (assuming an initial public offeringprice of $6.00 per share of common stock included in the units sold in this offering);

■ the reclassification of 1,739,130 shares of redeemable common stock to common stock upon lapse of acontractual redemption right;

■ effectiveness of our amended and restated certificate of incorporation, which we will file in connection withthe closing of this offering, and our amended and restated bylaws;

■ no exercise of any outstanding PSUs or vesting or settlement of RSUs after December 31, 2015;■ no exercise of the underwriters’ over-allotment option to purchase 875,000 units;

■ no exercise of the Series A warrants and the Series B warrants included in the units sold in this offering;and

■ no sale of securities in the proposed concurrent private placement.

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Trading commencement and separation ofcommon stock, Series A warrants andSeries B warrants The units will begin trading on or promptly after the date of this

prospectus. The units will automatically separate and each of theshares of common stock, Series A warrants and Series Bwarrants underlying the units will begin trading separately nolater than the 30th day after the date of this prospectus.

Proposed symbols and listing Our common stock has been approved for listing on theNASDAQ Global Market under the symbol “ONS.” We haveapplied for the listing of our units, Series A warrants and SeriesB warrants on the NASDAQ Global Market under the symbols“ONSIU,” “ONSIW” and “ONSIZ,” respectively.

Certain of our existing and new investors have indicated an interest in purchasing up to an aggregate ofapproximately $20.0 million of units in this offering at the initial public offering price. However, because indications ofinterest are not binding agreements or commitments to purchase, the underwriters may determine to sell more,fewer or no units in this offering to any of these investors, or any of these investors may determine to purchasemore, fewer or no units in this offering. Certain of these investors have agreed to a 60-day lock-up agreement withthe underwriters in respect of any units they may acquire in this offering.

The number of shares of common stock to be outstanding after this offering is based on 16,136,112 shares ofcommon stock outstanding as of December 31, 2015, and excludes the following:

Unless otherwise noted, all information in this prospectus reflects a 1-for-3.45 reverse split of our common stock thatwas effected on April 26, 2016 and assumes:

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(1) See Note 3 to our annual and interim consolidated financial statements, respectively, included elsewhere in this prospectusfor an explanation of the calculations of our basic and diluted net loss per common share, pro forma net loss per commonshare and the weighted-average number of shares used in the computation of the per share amounts.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following table summarizes our consolidated financial data. We derived the consolidated statements ofoperations data for the years ended September 30, 2014 and 2015 from our audited consolidated financialstatements included elsewhere in this prospectus. The consolidated statements of operations data for the threemonths ended December 31, 2014 and 2015 and the consolidated balance sheet data as of December 31, 2015have been derived from our unaudited interim financial statements included elsewhere in this prospectus and havebeen prepared on the same basis as the audited financial statements. In the opinion of management, the unauditeddata reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation ofthe financial information in those statements. Our historical results are not necessarily indicative of the results thatmay be expected in the future, and our interim period results are not necessarily indicative of results to be expectedfor a full year or any other interim period. You should read this data together with our consolidated financialstatements and related notes thereto, and the sections titled “Selected Consolidated Financial Data” and“Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere inthis prospectus.

Year Ended September 30, Three Months Ended December 31,2014 2015 2014 2015

(Unaudited)Consolidated Statements of Operations Data:

Collaboration revenues $ 9,050,542 $ 5,219,237 $ 2,934,555 $ 994,894

Operating expenses:

Research and development 14,124,631 38,876,040 5,840,030 12,733,976General and administrative 7,318,314 12,905,823 1,237,839 4,674,155

21,442,945 51,781,863 7,077,869 17,408,131

Loss from operations (12,392,403 (46,562,626 (4,143,314 (16,413,237Interest expense 901,052 2,297,339 357,580 398,975Loss before income taxes (13,293,455 (48,859,965 (4,500,894 (16,812,212Income tax expense (benefit) 439,018 (190,111 406,363 52,000Net loss (13,732,473 (48,669,854 (4,907,257 (16,864,212

Less: Net loss attributable to noncontrolling interests — (1,276,571 — —

Net loss attributable to Oncobiologics, Inc. (13,732,473 (47,393,283 (4,907,257 (16,864,212Accretion of redeemable preferred stock and

noncontrolling interests (3,588,996 (4,306,488 (1,071,164 (939,539Deemed dividends upon the repurchase of

Series A redeemable preferred stock andredeemable noncontrolling interests (3,336,855 (1,298,631 (1,230,998 —

Net loss attributable to common stockholders ofOncobiologics, Inc. $(20,658,324 $(52,998,402 $ (7,209,419 $ (17,803,751

Per share information:

Net loss per share of common stock, basic and diluted $ (2.43 $ (5.43 $ (0.77 $ (1.36

Weighted-average shares outstanding, basicand diluted 8,509,654 9,753,616 9,377,450 13,061,557

Pro forma net loss per share of common stock – basic and diluted (unaudited) $ (3.35 $ (1.12

Pro forma weighted-average shares outstanding (unaudited) 14,143,696 15,031,375

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(1) The pro forma column reflects (i) the issuance of 87,287 shares of common stock for aggregate net proceeds ofapproximately $2.5 million in January 2016, (ii) cash proceeds of approximately $2.7 million received subsequent toDecember 31, 2015 related to stock issued in December 2015, (iii) the conversion of 11,819 shares of Series A preferredstock into 1,969,818 shares of common stock immediately prior to the closing of this offering (assuming an initial publicoffering price of $6.00 per share of common stock included in the units sold in this offering) and (iv) the reclassification of1,739,130 shares of redeemable common stock to common stock upon lapse of a contractual redemption right.

(2) The pro forma as adjusted column further reflects the receipt of $29.8 million in net proceeds from our sale of units in thisoffering at an assumed initial public offering price of $6.00 per unit, after deducting estimated underwriting discounts andcommissions and estimated offering expenses payable by us.

(3) A $1.00 increase (decrease) in the assumed initial public offering price of $6.00 per unit would increase (decrease) each ofcash, working capital, total assets and total stockholders’ equity on a pro forma as adjusted basis by approximately $5.4million, assuming that the number of units offered by us, as set forth on the cover page of this prospectus, remains the same,and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.Similarly, an increase (decrease) by 1,000,000 units in the number of units offered by us would increase (decrease) each ofcash, working capital, total assets and total stockholders’ equity on a pro forma as adjusted basis by approximately $5.6million, assuming that the assumed initial public offering price remains the same, and after deducting estimated underwritingdiscounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted informationdiscussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of thisoffering determined at pricing.

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As of December 31, 2015(Unaudited)

Actual Pro formaPro forma

as adjusted

Consolidated Balance Sheet Data:Cash $ 5,582,255 $ 10,806,901 $ 40,556,905Working capital (deficit) (25,087,988 (22,562,819 7,187,185Total assets 31,322,869 33,797,518 61,572,678Debt obligations, current and long-term 15,488,800 15,488,800 15,488,800Redeemable common stock 16,366,212 — —Total stockholders’ equity (deficit) (30,914,816 (12,023,435 17,726,569

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(1) (2)(3)

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■ continue preclinical studies and clinical development of our identified product candidates;

■ expand the number of our current clinical trials for our product candidates;

■ advance our programs into larger global clinical trials;

■ initiate additional preclinical, clinical or other studies for our product candidates;

■ change or add clinical research service providers, testing laboratories, device suppliers, legal service providersor other vendors or suppliers;

■ invest in, and maintain, our development and manufacturing facilities and infrastructure;

■ seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials;

■ establish a sales, marketing and distribution infrastructure to commercialize any products for which we mayobtain marketing approval;

■ seek to identify, assess, acquire or develop other biosimilar product candidates that may be complementary toour product candidates;

■ make upfront, milestone, royalty or other payments under any license agreements;

■ seek to create, maintain, protect and expand our intellectual property portfolio;

■ engage in litigation, including patent litigation, with originator companies or others that may hold patents to thereference products for which we are developing biosimilars, or to methods of manufacture or methods of use wemay employ in the production of our biosimilars;

■ seek to attract and retain skilled personnel;

■ create additional infrastructure to support our operations as a public company and our product development andplanned future commercialization efforts; and

■ experience any delays or encounter issues with any of the above, including but not limited to failed clinical trials,conflicting results, safety issues or regulatory challenges that may require longer follow-up of existing studies,additional major studies or additional supportive studies in order to pursue marketing approval.

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RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the risks described below, as wellas the other information in this prospectus and any related free writing prospectus, including our consolidated financialstatements and the related notes thereto and the section titled “Management’s Discussion and Analysis of FinancialCondition and Results of Operations,” before deciding whether to invest in our securities. The occurrence of any of theevents or developments described below could harm our business, financial condition, results of operations and growthprospects. In such an event, the market price of our securities could decline and you may lose all or part of yourinvestment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also mayimpair our business operations.

Risks Related to Our Financial Condition and Capital RequirementsWe have a limited operating history, have incurred significant losses and negative cash flows from operationssince our inception and expect to continue to incur significant losses and negative cash flows from operationsfor the foreseeable future.

We are a biopharmaceutical company with a limited operating history and we have incurred net losses in each year sinceour inception in January 5, 2010, including net losses of $13.7 million and $47.4 million for the years endedSeptember 30, 2014 and 2015, respectively, and $16.9 million for the three months ended December 31, 2015.

We have devoted substantially all of our financial resources to identify, develop and manufacture our product candidates,including conducting, among other things, analytical characterization, process development and manufacture, formulationand clinical trials, regulatory filing and communication activities and providing general and administrative support for theseoperations. To date, we have financed our operations primarily through the sale of equity securities and debt financings,as well as to a limited degree, payments under our co-development and license agreements with Zhejiang HuahaiPharmaceutical Co., Ltd., or Huahai, Laboratorios Liomont, S.A. de C.V., or Liomont, and IPCA Laboratories Limited, orIPCA. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability toobtain funding through equity or debt financing or strategic licensing or co-development collaborations.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. Weanticipate that our expenses will increase substantially if and as we:

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■ completing preclinical and clinical development of our product candidates;

■ developing and testing of our product candidate formulations;

■ obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials,including any delays as a result of petitions by reference product sponsors, or RPSs, or patent holders;

■ obtaining extensions of approvals for our product candidates to other indications for which the reference productis approved and commercialized;

■ developing a sustainable and scalable manufacturing process for any approved product candidates to supportclinical development and the market demand for any such approved product candidates;

■ launching and commercializing product candidates for which we obtain regulatory and marketing approval,either directly or with collaboration partners;

■ obtaining adequate third-party coverage and reimbursements for our products;

■ obtaining market acceptance of our product candidates as viable treatment options, including with respect to theefficacy, safety and biosimilarity of our product candidates to the reference products;

■ addressing any competing technological and market developments;

■ identifying, assessing and developing, or acquiring and in-licensing, new product candidates;

■ negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

■ establishing through litigation or otherwise that we are not violating the intellectual property rights of innovatorsof reference products for which we are developing biosimilars, or that of other third parties;

■ maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, tradesecrets and know-how; and

■ attracting, hiring and retaining qualified personnel.

■ the size of the markets in the territories for which we gain regulatory approval;

■ the number of biosimilar and other competitors in such markets;

■ the market acceptance of our products, or biosimilars in general, over the reference products;

■ novel therapies for the approved indications in our biosimilar market that erode uptake;

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Our failure to become and remain profitable would decrease the value of the company and could impair our ability to raisecapital, maintain our research and development efforts, expand our business or continue our operations. A decline in thevalue of our company could also cause you to lose all or part of your investment.

Our independent registered public accounting firm has expressed substantial doubt about our ability to continueas a going concern.

As described in their audit report, our auditors have included an explanatory paragraph that states that we have incurredrecurring losses and negative cash flows from operations since inception and have an accumulated deficit at September30, 2015 of $94.1 million and $14.2 million of indebtedness that is due on demand. These matters raise substantial doubtabout our ability to continue as a going concern. Our consolidated financial statements do not include any adjustmentsthat might result from the outcome of this uncertainty. If we cannot continue as a viable entity, our securityholders maylose some or all of their investment in us.

We have never generated any revenue from product sales and may never be profitable.

Although we have received upfront and milestone payments from our license and collaboration agreements, we have noproducts approved for commercialization and have never generated any revenue from product sales. Our ability togenerate revenue and achieve profitability depends on our ability, alone or with strategic collaboration partners, tosuccessfully complete the development of, and obtain the regulatory and marketing approvals necessary tocommercialize, one or more of our product candidates. We cannot predict when we will begin generating revenue fromproduct sales, as this depends heavily on our success in many areas, including but not limited to:

Even if one or more of the product candidates is approved for commercialization, we anticipate incurring significant coststo commercialize any such product. Our expenses could increase beyond our expectations if we are required by the U.S.Food and Drug Administration, or the FDA, the European Medicines Agency, or the EMA, other regulatory agencies,domestic or foreign, or by any unfavorable outcomes in intellectual property litigation filed against us, to change ourmanufacturing processes or assays or to perform clinical, preclinical or other types of studies in addition to those that wecurrently anticipate. In cases where we are successful in obtaining regulatory approvals to market one or more of ourproduct candidates, our revenue will be dependent, in part, upon:

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■ the accepted price for the product and the ability to get reimbursement at any price;

■ the nature and degree of competition from originators and other biosimilar companies (including competitionfrom large pharmaceutical companies entering the biosimilar market that may be able to gain advantages in thesale of biosimilar products based on brand recognition and/or existing relationships with providers, pharmacybenefit managers and payors);

■ the quality and performance of our products compared to the reference products or other competing products,including the relative safety and efficacy; and

■ whether we own, or have partnered, the commercial rights for that territory.

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If the market for our product candidates, or our share of that market, is not as large as we expect, the number ofindications approved by regulatory authorities is narrower than we expect or the target population for treatment isnarrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales ofsuch products to become profitable. If we are unable to successfully complete development and obtain regulatoryapproval for our lead product candidates, namely ONS-3010, ONS-1045 and ONS-1050, our business will be harmed.

Even if this offering and the concurrent private placement are successful, we expect that we will need to raisesubstantial additional funding. This additional funding may not be available on acceptable terms or at all. Failureto obtain this necessary capital when needed may force us to delay, limit or terminate our product developmentefforts or other operations.

We are currently advancing our product candidates through preclinical and clinical development. Developing productcandidates is an expensive, risky and lengthy process, and we expect our expenses to increase in connection with ourongoing activities, particularly as we continue the research and development of, continue and initiate clinical trials of, andseek marketing approval for, our product candidates, in particular ONS-3010, ONS-1045 and ONS-1050. Furthermore,upon the closing of this offering, we expect to incur additional costs associated with operating as a public company.

As of December 31, 2015, our cash was $5.6 million. We expect that our existing cash along with the net proceeds fromthis offering will be sufficient to fund our current operations for the next 12 months. Even if this offering and the concurrentprivate placement are successful, we expect that we will require substantial additional capital to commercialize ONS-3010,and to commence clinical trials, obtain regulatory approval for, and to commercialize, our product candidates, including ourother preclinical product candidates and our future product candidates. However, our operating plan may change as aresult of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, throughpublic or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as othercollaborations, strategic alliances and licensing arrangements, or a combination of these approaches. In any event, we willrequire additional capital to pursue preclinical and clinical activities, pursue regulatory approval for, and to commercialize,our longer term pipeline product candidates. Even if we believe we have sufficient funds for our current or future operatingplans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affectour ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing willbe available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing maynegatively impact the holdings or the rights of our stockholders, and the issuance of additional securities, whether equityor debt, by us or the possibility of such issuance may cause the market price of our securities to decline. The incurrence ofindebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictivecovenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or licenseintellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stagethan would be desirable and we may be required to relinquish rights to some of our technologies or product candidates orotherwise agree to terms unfavorable to us, any of which may harm our business, operating results and prospects. Even ifwe believe we have sufficient funds for our current or future operating plans, we may seek additional capital if marketconditions are favorable or for specific strategic considerations.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one ormore of our development programs or the commercialization of any product candidates. We may also be unable toexpand our operations or otherwise capitalize on our business opportunities, as desired, which could harm our business,financial condition and results of operations.

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Raising additional capital may cause dilution to our securityholders, including purchasers of units in this offeringand the concurrent private placement, if any, restrict our operations or require us to relinquish rights to ourtechnologies or product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through acombination of equity and debt financings, as well as selectively continuing to enter into collaborations, strategic alliancesand licensing arrangements. We do not currently have any committed external source of funds. To the extent that we raiseadditional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and theterms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder.Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specificactions, such as incurring additional debt, making capital expenditures or declaring dividends, and may be secured by allor a portion of our assets.

If we raise funds by selectively continuing to enter into collaborations, strategic alliances or licensing arrangements withthird parties, we may have to relinquish additional valuable rights to our technologies, future revenue streams, researchprograms or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raiseadditional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminateour product development or future commercialization efforts or grant rights to develop and market product candidates thatwe would otherwise prefer to develop and market ourselves. If we are unable to raise additional funds throughcollaborations, strategic alliances or licensing arrangements, we may be required to terminate product development orfuture commercialization efforts or to cease operations altogether.

Risks Related to the Discovery and Development of Our Product CandidatesWe are heavily dependent on the success of our two most advanced product candidates, ONS-3010 and ONS-1045. All of our other product candidates are still in various stages of preclinical development. If we are unable toobtain regulatory approval for, or successfully commercialize, ONS-3010 and ONS-1045, our business will beharmed.

Biosimilar product development is a highly speculative undertaking and involves a substantial degree of risk. We haveinitiated preparatory activities for our confirmatory Phase 3 clinical trial of ONS-3010, our adalimumab (Humira) biosimilarcandidate, and ONS-1045, our bevacizumab (Avastin) biosimilar candidate. It may be several years, if ever, before wecomplete Phase 3 clinical trials and have a product candidate ready to file for market approval with the relevant regulatoryagencies. Although we expect to use the proceeds from this offering to advance development of ONS-3010 throughPhase 3 clinical trials, we may require additional funds to do so. Further, even if the concurrent private placement occurs,we will need to raise substantial additional capital, either through equity or debt issuances or through strategiccollaborations to advance our other product candidates, including ONS-1045, into clinical trials. If we obtain regulatoryapproval to market a biosimilar product candidate, our future revenue will depend upon the size of any markets in whichour product candidates may receive approval and our ability to achieve sufficient market acceptance, pricing,reimbursement from third-party payors and adequate market share for our product candidates in those markets. Even ifone or more of our product candidates gain regulatory approval and are commercialized, we may never becomeprofitable.

To date, we have invested substantially all of our efforts and financial resources to identify, develop and manufacture ourproduct candidates. Our future success is dependent on our ability to develop, obtain regulatory approval for, andcommercialize and obtain adequate third-party coverage and reimbursement for one or more product candidates. Wecurrently do not have any approved products and generate no revenue from sales of any products, and we may never beable to develop or commercialize a marketable product.

Our product candidates are in varying stages of development and will require significant additional investment before wegenerate any revenue from product sales, if at all. Notably, we must continue clinical development, including managingpreclinical and clinical manufacturing activities, obtain regulatory approvals, manufacture adequate commercial supplies,build a commercial organization and conduct significant marketing efforts. We have initiated Phase 3 preparatory activitiesfor ONS-3010 and ONS-1045, and we expect to be ready to commence a Phase 1 clinical trial of ONS-1050 in 2016. Weare not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDAor comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our productcandidates. We have not submitted any marketing applications for our product candidates to the FDA or comparableforeign regulatory authorities and any application we submit may not be approved.

We plan to seek regulatory approval to commercialize our product candidates in the United States, the European Union,or the EU, and in additional foreign countries where we or our partners have commercial rights. To obtain regulatoryapproval, we and our collaboration partners must comply with numerous and varying regulatory requirements of suchcountries

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regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales and pricing anddistribution of our product candidates. Even if we are successful in obtaining approval in one jurisdiction, we cannotensure that we will obtain approval in any other jurisdictions. If we are unable to obtain approval for our productcandidates in multiple jurisdictions, our revenue and results of operations could be negatively impacted.

We cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval.Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. If we donot receive regulatory approvals for our product candidates, we may not be able to continue our operations.

The development, manufacture and commercialization of biosimilar products under various global regulatorypathways pose unique risks. To our knowledge, there have been only two biosimilar product applicationsapproved by the FDA under the 351(k) pathway to date.United States Regulatory Framework for Biosimilars

We and our collaboration partners intend to pursue market authorization globally. In the United States an abbreviatedpathway for approval of biosimilar products was established by the Biologics Price Competition and Innovation Act of2009, or BPCIA, enacted on March 23, 2010, as part of the Patient Protection and Affordable Care Act. The BPCIAestablished this abbreviated pathway under section 351(k) of the Public Health Service Act, or PHSA. Subsequent to theenactment of the BPCIA, the FDA issued draft guidance regarding the demonstration of biosimilarity as well as thesubmission and review of biosimilar applications. To our knowledge, there have been only two biosimilar productapplications approved by the FDA under the 351(k) pathway to date. Moreover, market acceptance of biosimilar productsin the United States is unclear. Numerous states are considering or have already enacted laws that regulate or restrict thesubstitution by state pharmacies of biosimilars for reference products already licensed by the FDA. Market success ofbiosimilar products will depend on demonstrating to patients, physicians, payors and relevant authorities that suchproducts are similar in quality, safety and efficacy as compared to the reference product.

The BPCIA requires a biosimilar applicant to demonstrate biosimilarity with respect to a reference product that has beenapproved by FDA in the United States. Biosimilars approved in the EU and other non-U.S. jurisdictions may not beapproved in the United States without additional “bridging” studies demonstrating biosimilarity to an FDA-approvedreference product. Biosimilars approved in the United States may also not be approved in foreign jurisdictions withoutadditional bridging studies. The requirements for such bridging studies are not well defined, which may delay the globalmarketing of our product candidates.

We will continue to analyze and incorporate into our biosimilar development plans any final regulations or guidance issuedby the FDA, pharmacy substitution policies enacted by state governments and other applicable requirements establishedby relevant authorities. The costs of development and approval, along with the probability of success for our biosimilarproduct candidates, will be dependent upon application of any laws and regulations issued by the relevant regulatoryauthorities.

Biosimilar products may also be subject to extensive patent clearances and patent infringement litigation, which may delayand could prevent the commercial launch of a product. Moreover, the BPCIA prohibits the FDA from accepting anapplication for a biosimilar candidate to a reference product within four years of the reference product’s licensure by theFDA. In addition, the BPCIA provides reference biologics with 12 years of exclusivity from the date of their licensure,during which time the FDA cannot approve any application for a biosimilar candidate to the reference product. Forexample, the FDA would not be able to grant approval of any application submitted for an adalimumab (Humira) biosimilar,a bevacizumab (Avastin) biosimilar or a trastuzumab (Herceptin) biosimilar, until 12 years after the original biologicslicense application or the BLAs, for these drugs were approved, which occurred on December 31, 2002 in the case ofHumira, February 26, 2004 in the case of Avastin and September 25, 1998 in the case of Herceptin. However, in the past,legislative proposals have been introduced to cut this 12-year period of exclusivity down to seven years and prohibitadditional periods of exclusivity due to minor changes in product formulations, a practice often referred to as“evergreening.” In addition, the Federal Circuit has recently interpreted the BPCIA as requiring (under certaincircumstances) the biosimilar applicant to give the RPS 180 days’ notice of commercial launch after receiving approvalfrom FDA. This could result in an additional six months of market exclusivity for the reference product. Patent infringementlitigation under the BPCIA may also be complex and time-consuming. RPSs may seek preliminary injunctions barringlaunch during the pendency of such litigation, which could substantially delay market entry.

The BPCIA is complex and only beginning to be interpreted and implemented by the FDA and courts. As a result, itsultimate impact, implementation and meaning are evolving and subject to significant uncertainty. Future implementationdecisions by the FDA or court decisions could result in delays in the development or commercialization of our productcandidates or increased costs to assure regulatory compliance and could adversely affect our operating results byrestricting or significantly delaying our ability to market new biosimilar products.

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Regulatory Framework for Biosimilars Outside the United States

In 2004, the European Parliament issued legislation allowing the approval of biosimilar therapeutics. Since then, theEuropean Commission has granted marketing authorizations for more than 21 biosimilars pursuant to a set of general andproduct class-specific guidelines for biosimilar approvals issued over the past few years. Because of their extensiveexperience in the review and approval of biosimilars, the EU has more final guidelines than the FDA, including specificproduct data requirements needed to support approval.

Generally speaking, under current EU regulations, an application for regulatory approval of a biosimilar drug cannot besubmitted in the EU until expiration of an eight year data exclusivity period for the reference product, measured from thedate of the reference product’s initial marketing authorization. Furthermore, once approved, the biosimilar cannot bemarketed until expiration of a 10-year period following the initial marketing authorization of the reference product, such 10-year period being extendible to 11 years if the reference product received approval of an additional therapeutic indicationwithin the first eight years following its initial marketing authorization, representing a significant clinical benefit incomparison with existing therapies. However, we understand that reference products approved prior to November 20,2005 (which would include, for example, Humira, approved in the EU on August 9, 2003) are subject to a 10-year period ofdata exclusivity. While the data exclusivity periods for Humira have now expired in the EU, the reference product ispresently still subject to unexpired patents.

In the EU, the approval of a biosimilar for marketing is based on an opinion issued by the EMA and a decision issued bythe European Commission. Therefore, the marketing approval will cover the entire European Economic Area, or EEA.However, substitution of a biosimilar for the reference product is a decision that is made at the Member State level.Additionally, a number of countries do not permit the automatic substitution of biosimilars for the reference product.Therefore, even if we obtain marketing approval for the entire EEA, we may not receive substitution in one or moreEuropean nations, thereby restricting our ability to market our products in those jurisdictions.

Other regions, including Canada, Mexico, China, Japan and Korea, also have their own legislation outlining a regulatorypathway for the approval of biosimilars. In some cases, other countries have either adopted European guidance(Singapore and Malaysia) or are following guidance issued by the World Health Organization (Cuba and Brazil). Whilethere is overlap in the regulatory requirements across regions, there are also some areas of non-overlap. Additionally, wecannot predict whether countries that we may wish to market in, which do not yet have an established or tested regulatoryframework, could decide to issue regulations or guidance and/or adopt a more conservative viewpoint than other regions.Therefore, it is possible that even if we obtain agreement from one health authority to an accelerated or optimizeddevelopment plan, we will need to defer to the most conservative view to ensure global harmonization of the developmentplan. Also, for regions where regulatory authorities do not yet have sufficient experience in the review and approval of abiosimilar product, these authorities may rely on the approval from another region such as the United States or the EU,which could delay our approval in that region.

Due to our limited resources and access to capital, we have, and will continue to need to, prioritize developmentof certain product candidates; and these decisions may prove to have been wrong and may harm our business.

Because we have limited resources and access to capital to fund our operations, we must decide which productcandidates to pursue and the amount of resources to allocate to each. We are currently primarily focused on thedevelopment of mAb biosimilars and, in particular, ONS-3010, ONS-1045 and ONS-1050. Our decisions concerning theallocation of research, collaboration, management and financial resources toward particular product candidates ortherapeutic areas may not lead to the development of viable commercial products and may divert resources away frombetter opportunities. Similarly, our potential decisions to delay, terminate or collaborate with third parties in respect tocertain product development programs may also prove not to be optimal and could cause us to miss valuableopportunities. If we make incorrect determinations regarding the market potential of our product candidates or misreadtrends in the biosimilar industry, our business, financial condition and results of operations could be harmed.

The evolving regulatory approval processes of the FDA, EMA and comparable foreign authorities are lengthy,time-consuming, rigorous and inherently unpredictable. If we and our collaboration partners are ultimately unableto obtain regulatory approval for our product candidates, our business will be harmed.

The research, development, testing, manufacturing, labeling, packaging, approval, promotion, advertising, storage,marketing, distribution, post-approval monitoring and reporting and export and import of biologic products are subject toextensive regulation by the FDA and other regulatory authorities in the United States, by the EMA and CompetentAuthorities in the EEA, and by other regulatory authorities in other countries, where regulations differ from country tocountry. We are not permitted to market our product candidates in the United States until we receive approval from theFDA, or in the EEA until we receive European Commission or EEA Competent Authority approvals.

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■ the data collected from clinical trials of our product candidates may not be sufficient to support the submission ofa BLA, a biosimilar product application under the 351(k) pathway of the PHSA, a biosimilar marketingauthorization under Article 6 of Regulation (EC) No. 726/2004 and/or Article 10(4) of Directive 2001/83/EC in theEEA or other submission or to obtain regulatory approval in the United States, the EEA or elsewhere;

■ the FDA, EMA or other foreign regulatory authorities may disagree with the design or implementation of ourclinical trials;

■ the population studied in the clinical trial may not be sufficiently representative to assure safety in the fullpopulation for which we seek approval;

■ the FDA, EMA or other foreign regulatory authorities may disagree with our interpretation of data from analyticaland bioanalytical studies, preclinical studies or clinical trials;

■ we may be unable to demonstrate to the FDA, EMA or other foreign regulatory authorities that our productcandidate is highly similar to biological reference products already licensed by the regulatory authority pursuantto marketing applications, notwithstanding minor differences in clinically inactive components;

■ we may be unable to extrapolate or obtain approval of other indication for which the reference product isapproved by the FDA, EMA or other foreign regulatory authority to other indications for which the referenceproduct is approved;

■ we may be unable to obtain an interchangeability designation by the FDA or other foreign regulatory authorityfor our product candidate, which may deter physicians, providers and payors from prescribing our productcandidates;

■ the FDA or comparable foreign regulatory authorities may fail to deem our manufacturing processes, testprocedures and specifications or our manufacturing facilities adequate for approval; and

■ the approval policies or regulations of the FDA, EMA or other foreign regulatory authorities may significantlychange in a manner rendering our clinical data insufficient for approval.

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The exact amount of time required to obtain approval by the FDA and comparable foreign authorities is unpredictable,may take years following the completion of clinical trials and depends upon numerous factors, which may not be within ourcontrol. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval maychange during the course of a product candidate’s clinical development and may vary among jurisdictions, which couldcause delays in the approval or the decision not to approve an application. We have not obtained regulatory approval forany of our product candidates, and it is possible that none of our current or future product candidates will ever obtainregulatory approval.

Applications for our product candidates could fail to receive regulatory approval for many reasons, including but not limitedto the following:

This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in our failure toobtain regulatory approval to market any of our product candidates, which would significantly harm our business.Moreover, any delays in the commencement or completion of clinical testing could significantly impact our productdevelopment costs and commercial return potential, and could result in the need for additional financing.

In addition, if we change the regulatory pathway through which we intend to seek approval of any of our productcandidates, or alter their composition or method of manufacturing, we may have to conduct additional clinical trials, whichmay delay our ability to submit a marketing application for the product. Even if we or our collaboration partners were toobtain approval for any of our product candidates, regulatory agencies may limit the scope of such approval for fewer ormore limited indications than we request, may grant approval contingent on the completion of costly additional clinicaltrials or may approve a product candidate with a label that does not include the labeling claims necessary or desirable forthe successful commercialization of that product candidate. Any of the foregoing could harm the commercial prospects forour product candidates.

If we are not able to demonstrate the biosimilarity of our product candidates to the satisfaction of regulatoryauthorities, we will not obtain regulatory approval for commercial sale of our product candidates and our futureresults of operations will be adversely affected.

Our future results of operations depend heavily on our ability to obtain regulatory approval for and to commercialize ourbiosimilar product candidates. To obtain regulatory approval for the commercial sale of these product candidates, we willbe required to demonstrate to the satisfaction of regulatory authorities, among other relevant groups such as physiciansand payors, that our biosimilar product candidates are highly similar to biological reference products already licensed bythe regulatory authority pursuant to marketing applications, notwithstanding minor differences in clinically inactive

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■ inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation ofhuman clinical trials;

■ delays in reaching a consensus with regulatory agencies on study design;■ delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs,

and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantlyamong different CROs and clinical trial sites;

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components, and that there are no clinically meaningful differences as compared to the marketed reference products interms of the safety, purity and potency of such reference products. Each jurisdiction may apply different criteria to assessbiosimilarity, based on a preponderance of the data that can be interpreted subjectively in some cases.

Although we have had several interactions with both the FDA and EMA for our lead product candidates and will continueto meet with regulators as necessary, we cannot be assured that results from our scientific studies will meet the rigorousrequirements for approval. In addition, we cannot be certain of potential future changes to regulatory requirements thatmay require additional work before approval can be granted. It is also uncertain if regulatory authorities will grant the fullreference label to our biosimilar product candidates when they are approved. For example, an infliximab (Remicade )biosimilar molecule was approved in the EU for the full reference label but did not receive the full reference label whenapproved in Canada. A similar outcome could occur with respect to one or more of our product candidates, which wouldhave a negative impact on our ability to commercialize our products.

The structure of complex mAb biologics is inherently variable and highly dependent on the processes andconditions used to manufacture them. If we are unable to develop manufacturing processes that achieve arequisite degree of biosimilarity to the reference product, and within a range of variability considered acceptableby regulatory authorities, we may not be able to obtain regulatory approval for our products.

MAb biologics are inherently heterogeneous and their structures are highly dependent on the cell line and productionprocess conditions. Products from one production facility can differ within an acceptable range from those produced inanother facility. Similarly, physicochemical differences can also exist among different lots produced within a single facility.The physicochemical complexity and size of biologic therapeutics create significant technical and scientific challenges inthe context of their replication as biosimilar products.

The inherent variability in the protein structure from one production lot to another is a fundamental consideration withrespect to establishing biosimilarity to a reference product to support regulatory approval requirements. For example, theglycosylation of the protein, meaning the manner in which sugar molecules are attached to the protein when it isproduced, can be critical to the half-life, efficacy, immunogenicity and safety of the therapeutic and is therefore a keyconsideration for biosimilarity. Also, small changes in the structure or folding of the protein backbone of a mAb can impactits affinity, specificity and immunogenicity. Defining and understanding the variability of a reference product in order tomatch its glycosylation profile and other critical quality attributes requires significant skill in cell biology, protein purificationand analytical protein chemistry. Furthermore, manufacturing proteins with reliable and consistent product quality at scaleis challenging and highly dependent on the skill of the cell biologist and process scientist.

There are extraordinary technical challenges in developing complex mAb biologics that not only must achieve anacceptable degree of similarity to the reference product in terms of structural characteristics, but also the ability to developmanufacturing processes that can replicate the necessary structural characteristics within an acceptable range ofvariability sufficient to satisfy regulatory authorities.

Given the challenges caused by the inherent variability in protein production, we may not be successful in developing ourproduct candidates if regulators conclude that we have not achieved a sufficient level of biosimilarity to the referenceproduct, or that the processes we use to manufacture our product candidates are unable to produce our productcandidates within an acceptable range of variability. These challenges may result in a failure to obtain regulatory approvalfor our products and could harm our business.

Clinical drug development is a lengthy and expensive process and we may encounter substantial delays in ourclinical trials or may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we and ourcollaboration partners must conduct clinical trials to demonstrate the safety and efficacy of the product candidates inhumans.

We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure ofone or more clinical trials can occur at any stage of testing, and our future clinical trials may not be successful. Events thatmay prevent successful or timely completion of clinical development include but are not limited to:

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■ delays in obtaining required Institutional Review Board, or IRB, approval at each clinical trial site;

■ imposition of a clinical hold by regulatory agencies, after review of an investigational new drug, or IND,application or amendment or equivalent filing, or an inspection of our clinical trial operations or trial sites, or as aresult of adverse events reported during a clinical trial;

■ delays in recruiting suitable patients to participate in our clinical trials;

■ difficulty collaborating with patient groups and investigators;

■ failure by our CROs, other third parties or us to adhere to clinical trial requirements;

■ failure to perform in accordance with the FDA’s good clinical practice, or GCP, requirements or applicableregulatory guidelines in other countries;

■ delays in having subjects complete participation in a study or return for post-treatment follow-up, or subjectsdropping out of a study;

■ occurrence of adverse events associated with the product candidate that are viewed to outweigh its potentialbenefits;

■ changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

■ the cost of clinical trials of our product candidates being greater than we anticipate;

■ inability to obtain sufficient quantities of reference product for the comparator arm of our studies;

■ clinical trials of our product candidates producing negative or inconclusive results, which may result in usdeciding or regulators requiring us to conduct additional clinical trials or abandon product developmentprograms; and

■ delays in manufacturing, testing, releasing, validating or importing/exporting and/or distributing sufficient stablequantities of our product candidates and reference products for use in clinical trials or the inability to do any ofthe foregoing.

■ finding eligible patients willing to participate in clinical trials for biosimilar drugs;

■ finding investigators willing to participate in biosimilar trials and who have access to appropriate patients;

■ competition for sites and patients where new and competitive therapies are being tested;

■ designing, enrolling and completing a clinical trial to demonstrate biosimilarity and, where appropriate,interchangeability; and

■ working with investigators that are not as experienced in conducting biosimilarity or interchangeability trials, orwith the regulations applicable to such clinical trials.

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Any inability to successfully complete preclinical studies and clinical development could result in additional costs to us orimpair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our productcandidates, we may need to conduct additional clinical trials to bridge our modified product candidates to earlier versions.

Clinical development of biosimilars is different and can be more complex than clinical development programs forthe reference products.

Clinical trials to show comparability of a biosimilar candidate to an approved reference product are new and differ from theclinical trials to gain approval for a new biologic. This may lead to difficulties in designing, initiating and enrolling trials forour product candidates. Some of these difficulties include:

These requirements and difficulties may lead to data quality issues or an inability to start or finish a clinical trial, or maylead to significant delays, which in turn may lead to the inability to produce data for approval of our biosimilar productcandidates.

The results of previous clinical trials may not be predictive of future results, and the results of our current andplanned clinical trials may not satisfy the requirements of the FDA, EMA or other foreign regulatory agencies.

Clinical failure can occur at any stage of clinical development. Clinical trials may produce negative or inconclusive results,and we or any of our current and future collaborators may decide, or regulators may require us, to conduct additionalclinical or preclinical testing. We will be required to demonstrate with substantial evidence through well-controlled clinicaltrials that our product candidates are as safe and effective for use in a specific patient population as the respectivereference products before we can seek regulatory approvals for their commercial sale. Success in early clinical trials doesnot mean that future larger registration clinical trials will be successful because product candidates in later-stage clinicaltrials may fail to demonstrate equivalent safety and efficacy to the satisfaction of the FDA, EMA and other foreignregulatory agencies despite having progressed through initial clinical trials. Product candidates that have shown promising

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■ regulatory authorities may withdraw approvals of such product;

■ regulatory authorities may require additional warnings on the label;

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results in early clinical trials may still fail in subsequent confirmatory clinical trials. Similarly, the outcome of preclinicaltesting and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinicaltrial do not necessarily predict final results. A number of companies in the pharmaceutical industry, including those withgreater resources and experience than us, have suffered significant setbacks in advanced clinical trials, even afterobtaining promising results in earlier clinical trials.

In addition, the design of a clinical trial can determine whether its results will support approval of a product and flaws in thedesign of a clinical trial may not become apparent until the clinical trial is well advanced. We may be unable to design andexecute a clinical trial to support regulatory approval. In some instances, there can be significant variability in safety orefficacy results between different trials of the same product candidate due to numerous factors, including but not limited tochanges in trial protocols, differences in size and type of the patient populations, adherence to the dosing regimen and therate of dropout among clinical trial participants.

Further, our product candidates may not be approved even if they achieve their primary endpoints in Phase 3 clinical trialsor registration trials. The FDA, EMA and other foreign regulatory agencies may disagree with our trial design and ourinterpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory authorities may changethe requirements for the approval of a product candidate even after reviewing and providing comments or advice on aprotocol for a Phase 3 clinical trial that has the potential to result in FDA or other agencies’ approval. We initially intend toseek approval for ONS-3010 for the treatment of plaque psoriasis and ONS-1045 for the treatment of non-squamous, non-small cell lung cancer. We have not yet determined the indication for which we will seek initial approval for ONS-1050 orour preclinical biosimilar product candidates. We plan to extrapolate to all indications in the approved product labeling ofthe reference product based on the sensitive population agreed by the FDA and EMA in the confirmatory clinical study.During review of the registration application, our justification for the extrapolation may not be accepted. Any of theregulatory authorities may approve a product candidate for fewer indications than we request or may grant approvalcontingent on the performance of costly post-marketing clinical trials. In addition, the FDA, EMA and other foreignregulatory agencies may not approve the additional indication extrapolations that we believe would be necessary ordesirable for the successful commercialization of our product candidates.

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

As with most pharmaceutical products, use of our product candidates could be associated with side effects or adverseevents, which can vary in severity and frequency. Side effects or adverse events associated with the use of our productcandidates may be observed at any time, including in clinical trials or when a product is commercialized. Undesirable sideeffects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trialsand could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other foreignauthorities. Results of our studies could reveal a high and unacceptable severity and prevalence of side effects, toxicity orother safety issues, and could require us to perform additional studies or halt development or sale of these productcandidates or expose us to product liability lawsuits that will harm our business. In such an event, we may be required byregulatory agencies to conduct additional animal or human studies regarding the safety and efficacy of our productcandidates that we have not planned or anticipated or our studies could be suspended or terminated, and the FDA orcomparable foreign regulatory authorities could order us to cease further development of or deny or withdraw approval ofour product candidates for any or all targeted indications. There can be no assurance that we will resolve any issuesrelated to any product-related adverse events to the satisfaction of the FDA or any other regulatory agency in a timelymanner, if ever, which could harm our business, prospects and financial condition.

Additionally, product quality characteristics have been shown to be sensitive to changes in process conditions,manufacturing techniques, equipment or sites and other related considerations, and as such, any manufacturing processchanges we implement prior to or after regulatory approval could impact product safety.

Additionally, if one or more of our product candidates receives marketing approval, and we or others later identifyundesirable side effects caused by such products, a number of potentially significant negative consequences could result,including but not limited to:

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■ we may be required to create a Risk Evaluation and Mitigation Strategy plan, which could include a medicationguide outlining the risks of such side effects for distribution to patients, a communication plan for healthcareproviders and/or other elements to assure safe use;

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

■ our reputation may suffer.

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

If we receive approval, regulatory agencies including the FDA, EMA and other foreign regulatory agency regulationsrequire that we report certain information about adverse medical events if those products may have caused or contributedto those adverse events. The timing of our obligation to report would be triggered by the date we become aware of theadverse event as well as the nature of the event. We may fail to report adverse events we become aware of within theprescribed timeframe. We may also fail to appreciate that we have become aware of a reportable adverse event,especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in timefrom the use of our products. If we fail to comply with our reporting obligations, the FDA, EMA or other foreign regulatoryagencies could take action including but not limited to criminal prosecution, the imposition of civil monetary penalties,seizure of our products or delay in approval or clearance of future products.

If other biosimilars of adalimumab (Humira), bevacizumab (Avastin) or trastuzumab (Herceptin) are determined tobe interchangeable and our biosimilar product candidates for these reference products are not, our businesswould suffer.

The FDA or other relevant regulatory authorities may determine that a proposed biosimilar product is “interchangeable”with a reference product, meaning that the biosimilar product may be substituted for the reference product without theintervention of the healthcare provider who prescribed the reference product, if the application includes sufficientinformation to show that the product is biosimilar to the reference product and that it can be expected to produce the sameclinical result as the reference product in any given patient. If the biosimilar product may be administered more than onceto a patient, the applicant must demonstrate that the risk in terms of safety or diminished efficacy of alternating orswitching between the biosimilar product and the reference product is not greater than the risk of using the referenceproduct without such alternation or switch. To make a final determination of biosimilarity or interchangeability, regulatoryauthorities may require additional confirmatory information beyond what we plan to initially submit in our applications forapproval, such as more in-depth analytical characterization, animal testing or further clinical trials. Provision of sufficientinformation for approval may prove difficult and expensive.

We cannot predict whether any of our biosimilar product candidates will meet regulatory authority requirements forapproval as a biosimilar product or as an interchangeable product in any jurisdiction. Furthermore, legislation governinginterchangeability could differ by jurisdiction on a state or national level worldwide.

The concept of “interchangeability” is important in the U.S. market, potentially the largest global market for biosimilars,because the first biosimilar determined to be interchangeable with a particular reference product for any condition of use iseligible for a period of market exclusivity with respect to other interchangeable biosimilars. The FDA may not designate asecond or subsequent biosimilar product as interchangeable with the reference product until the earlier of: (1) one yearafter the first commercial marketing of the first interchangeable product; (2) 18 months after resolution of a patentinfringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the firstinterchangeable product; (3) 42 months after approval of the first interchangeable product, if a patent infringement suitinstituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeableproduct is still ongoing; or (4) 18 months after approval of the first interchangeable product if the applicant that submittedthe application for the first interchangeable product has not been sued under 42 U.S.C. § 262(l)(6). Thus, a determinationthat another company’s product is interchangeable with the reference biologic before we obtain such a designation maydelay the potential determination that our products are interchangeable with the reference product, which could harm ourresults of operations and delay, prevent or limit our ability to generate revenue.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required tolimit commercialization of our current or future product candidates, and our existing insurance coverage may notbe sufficient to satisfy any liability that may arise.

Drug-related side effects could affect patient recruitment for clinical trials, the ability of enrolled patients to complete ourstudies or result in potential product liability claims. We currently carry product liability insurance in the amount of $10.0million per product candidate and we are required to maintain product liability insurance pursuant to certain of our licenseagreements. We may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protectus

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against losses due to liability. A successful product liability claim or series of claims brought against us could negativelyimpact our results of operations and business. In addition, regardless of merit or eventual outcome, product liability claimsmay result in impairment of our business reputation, withdrawal of clinical trial participants, costs due to related litigation,distraction of management’s attention from our primary business, initiation of investigations by regulators, substantialmonetary awards to patients or other claimants, the inability to commercialize our product candidates and decreaseddemand for our product candidates, if approved for commercial sale. Furthermore, we may also not be able to takeadvantage of limitations on product liability lawsuits that apply to generic drug products, which could increase ourexposure to liability for products deemed to be dangerous or defective.

Failure to obtain regulatory approval in any targeted jurisdiction would prevent us from marketing our productsto a larger patient population and reduce our commercial opportunities.

We and our collaboration partners have not initiated marketing efforts in any jurisdiction. Subject to product approvals andrelevant patent expirations, we or our collaboration partners intend to first market our products in the EU and Japanfollowed by the United States.

In order to market our products in the EU, the United States and other jurisdictions, we and our collaboration partnersmust obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The EMA isresponsible for the regulation and recommendation for approval of human medicines in the EU. This procedure results in asingle marketing authorization that is valid in all EU countries, as well as in Iceland, Liechtenstein and Norway. The timerequired to obtain approval abroad may differ from that required to obtain FDA approval. The foreign regulatory approvalprocess may include all of the risks associated with obtaining FDA approval and we may not obtain foreign regulatoryapprovals on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in othercountries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in otherforeign countries or by the FDA. We or our collaboration partners may not be able to file for regulatory approvals and maynot receive necessary approvals to commercialize our products within the EU, the United States or in other jurisdictions.Failure to obtain these approvals would harm our business, financial condition and results of operations.

Approval in the United States requires a demonstration of biosimilarity to a U.S.-approved reference product. EMAapproval requires a demonstration of biosimilarity to an EMA-approved reference product. Accordingly, for our globalclinical program, bridging studies will be required in order to use the clinical testing in one jurisdiction in another. Thebridging studies must demonstrate that the data demonstrating biosimilarity against the EMA-approved reference productare sufficient to demonstrate biosimilarity to the FDA-approved reference product, and vice versa. The need for suchbridging studies may delay or limit our ability to market our products globally.

Even if we obtain regulatory approval for a product candidate, our products will remain subject to regulatoryscrutiny.

If our product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing,labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies andsubmission of safety, efficacy and other post-market information, including both federal and state requirements in theUnited States and requirements of comparable foreign regulatory authorities.

Manufacturers and manufacturing facilities are required to comply with extensive FDA, and comparable foreign regulatoryauthority, requirements, including ensuring that quality control and manufacturing procedures conform to current GoodManufacturing Practices, or cGMP, regulations. As such, we will be subject to continual review and inspections to assesscompliance with cGMP and adherence to commitments made in any non-disclosure agreement, BLA or marketingauthorization application, or MAA. Accordingly, we and our collaborators and suppliers must continue to expend time,money and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

Any regulatory approvals that we or our collaboration partners receive for our product candidates may be subject tolimitations on the approved indicated uses for which the product may be marketed or to the conditions of approval or maycontain requirements for potentially costly additional clinical trials and surveillance to monitor the safety and efficacy of theproduct candidate. We will be required to report certain adverse reactions and production problems, if any, to the FDA andcomparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays inproduct development or commercialization or increased costs to assure compliance. We will have to comply withrequirements concerning advertising and promotion for our products. Promotional communications with respect toprescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the informationin the product’s approved label. As such, we are not allowed to promote our products for indications or uses for which theydo not have approval. If our product candidates are approved, we must submit new or supplemental applications andobtain

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■ issue untitled and warning letters;

■ impose civil or criminal penalties;

■ suspend or withdraw regulatory approval;

■ suspend any of our ongoing clinical trials;

■ refuse to approve pending applications or supplements to approved applications submitted by us;

■ impose restrictions on our operations, including closing our manufacturing facilities; or

■ seize or detain products or require a product recall.

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approval for certain changes to the approved products, product labeling or manufacturing process. We could also beasked to conduct post-marketing clinical trials to verify the safety and efficacy of our products in general or in specificpatient subsets. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal ofmarketing approval.

If a regulatory agency discovers previously unknown problems with an approved product, such as adverse events ofunanticipated severity or frequency or problems with our manufacturing facilities or disagrees with the promotion,marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, includingrequiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, aregulatory agency or enforcement authority may, among other things:

Any government investigation of alleged violations of law could require us to expend significant time and resources inresponse and could generate negative publicity. Any failure to comply with ongoing regulatory requirements maysignificantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatorysanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will benegatively impacted.

Adverse events involving a reference product, or other biosimilars of such reference product, may adverselyaffect our business.

In the event that use of a reference product, or other biosimilar for such reference product, results in unanticipated sideeffects or other adverse events, it is likely that our biosimilar product candidate will be viewed comparably and maybecome subject to the same scrutiny and regulatory sanctions as the reference product or other biosimilar, as applicable.Discovery of such unanticipated side effects or other adverse events in a reference product may result in changes to itsapproved labeling or indications, or even withdrawal of the reference product from the market. Additionally, if a biosimilaris approved for the same reference product as one of our product candidates and unanticipated side effects or otheradverse events are associated with such third-party biosimilar in the future, the development and market for our productcandidate could be adversely affected.

As a result, we may become subject to regulatory supervisions, clinical holds, product recalls or other regulatory actionsfor matters outside of our control that affect the reference product, or other biosimilar, as applicable, if and until we areable to demonstrate to the satisfaction of our regulators that our biosimilar product candidate is not subject to the sameissues leading to the regulatory action as the reference product or other biosimilar, as applicable.

We may elect to seek licensure of our biosimilar products under the 351(a) (novel biologic) approval pathwayinstead of the 351(k) (biosimilar) approval pathway. This approval pathway may require us to undertake moreexpensive clinical trials and may present greater risk of failure than the 351(k) (biosimilar) approval pathway.

While we have elected to proceed under the 351(k) (biosimilar) approval pathway for ONS-3010, ONS-1045 and ONS-1050, we may elect for future products to pursue a 351(a) (novel biologic) approval pathway for a variety of clinical,regulatory and business reasons. The 351(a) (novel biologic) approval pathway generally requires three study phases (ascontrasted with the two-study phases generally accepted by FDA for an application submitted under the 351(k) (biosimilar)pathway). Moreover, the 351(a) pathway generally does not allow for the possibility that a clinical trial in one indication canbe extrapolated to multiple indications as is generally the case under the 351(k) (biosimilar) approval pathway. Pursuinglicensure under the 351(a) (novel biologic) approval pathway may present disadvantages in terms of the requirements foradditional clinical and nonclinical trials, clinical trial cost and failure risk, as well as the likelihood that multiple clinical trialswould be required to obtain approval for all of the indications approved for the reference drug.

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■ settling patent lawsuits with biosimilar companies, resulting in such patents remaining an obstacle for biosimilarapproval by others;

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Risks Related to Commercialization of Our Product CandidatesWe face intense competition and rapid technological change and the possibility that our competitors maydevelop therapies that are similar, more advanced or more effective than ours. Other biosimilars or “biobetters”of the reference products we are targeting may be approved and successfully commercialized before ours, whichmay adversely affect our financial condition and our ability to successfully commercialize our productcandidates.

We expect to enter highly competitive pharmaceutical markets. Successful competitors in the pharmaceutical marketshave demonstrated the ability to effectively discover, obtain patents, develop, test and obtain regulatory approvals forproducts, as well as an ability to effectively commercialize, market and promote approved products. Numerouscompanies, universities and other research institutions are engaged in developing, patenting, manufacturing andmarketing of products competitive with those that we are developing. Many of these potential competitors are large,experienced pharmaceutical companies that enjoy significant competitive advantages, such as substantially greaterfinancial, research and development, manufacturing, personnel and marketing resources. These companies also havegreater brand recognition and more experience in conducting preclinical testing and clinical trials of product candidatesand obtaining FDA and other regulatory approvals of products.

We have competitors both in the United States and internationally, including major multinational pharmaceuticalcompanies, specialty pharmaceutical companies and biotechnology companies. Some of the pharmaceutical andbiotechnology companies we expect to compete with include, for example, Sandoz International GmbH, or Sandoz,Hospira, Inc., or Hospira, Amgen Inc., Pfizer Inc., Boehringer Ingelheim GmbH, or Boehringer, Teva PharmaceuticalIndustries, Ltd., Samsung Bioepis, Ltd. (a Merck/Biogen/Samsung biosimilar venture) and Hanwha Chemical Corporation,as well as other smaller companies such as Coherus Biosciences, Inc. and Celltrion, Inc. We are currently aware thatsuch competitors are engaged in the development of biosimilar product candidates to adalimumab (Humira), bevacizumab(Avastin) and trastuzumab (Herceptin), and expect that some of these competitors will commercialize their biosimilarproducts prior to us, which could materially harm our ability to gain market share.

Many of our competitors have substantially greater financial, technical and other resources, such as larger research anddevelopment staff and experienced marketing and manufacturing organizations. Additional mergers and acquisitions in thepharmaceutical industry may result in even more resources being concentrated in our competitors. As a result, thesecompanies may obtain regulatory approval more rapidly than we are able to and may be more effective in selling andmarketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularlythrough collaborative arrangements with large, established companies. Our competitors may succeed in developing,acquiring or licensing on an exclusive basis, products that are more effective or less costly than any product candidatethat we may develop; they may also obtain patent protection that could block our products; and they may obtain regulatoryapproval, product commercialization and market penetration earlier than we do. Biosimilar product candidates developedby our competitors may render our potential product candidates uneconomical, less desirable or obsolete, and we may notbe successful in marketing our product candidates against competitors. Competitors may also assert in their marketing ormedical education programs that their biosimilar products demonstrate a higher degree of biosimilarity to the referenceproducts than do ours or other competitor’s biosimilar products, thereby seeking to influence healthcare practitioners toselect their biosimilar products rather than ours or other competitors. Competitors may also develop “biobetter” versions ofreference products we are targeting. A biobetter is a product that contains alterations to the reference product’s chemicalstructure or delivery system that provide a clinical benefit over the original reference product. Biobetters developed by ourcompetitors may compete advantageously against our products and limit our market success.

We expect other companies to seek approval to manufacture and market biosimilar versions of Humira, Avastin andHerceptin, in some cases, in advance of our commercialization timeline. If other biosimilars of Humira, Avastin orHerceptin are approved and successfully commercialized before ONS-3010, ONS-1045 or ONS-1050, respectively, wemay never achieve significant market share for these products, our revenue would be reduced and, as a result, ourbusiness, prospects and financial condition could be harmed.

If efforts by developers and manufacturers of reference products to delay or limit the use of biosimilars aresuccessful, our sales of biosimilar products may suffer.

Many developers and manufacturers of reference products have increasingly used legislative, regulatory and other meansto delay regulatory approval and to seek to restrict competition from manufacturers of biosimilars. These efforts mayinclude or have included:

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■ submitting Citizen Petitions to request the FDA Commissioner to take administrative action with respect toprospective and submitted biosimilar applications;

■ appealing denials of Citizen Petitions in United States federal district courts and seeking injunctive relief toreverse approval of biosimilar applications;

■ restricting access to reference brand products for equivalence and biosimilarity testing that interferes with timelybiosimilar development plans;

■ attempting to influence potential market share by conducting medical education with physicians, payors,regulators and patients claiming that biosimilar products are too complex for biosimilar approval or are toodissimilar from reference products to be trusted as safe and effective alternatives;

■ implementing payor market access tactics that benefit their brands at the expense of biosimilars;

■ seeking state law restrictions on the substitution of biosimilar products at the pharmacy without the interventionof a physician or through other restrictive means such as excessive recordkeeping requirements or patient andphysician notification;

■ seeking federal or state regulatory restrictions on the use of the same nonproprietary name as the referencebrand product for a biosimilar or interchangeable biologic;

■ seeking changes to the United States Pharmacopeia, an industry-recognized compilation of drug and biologicstandards;

■ obtaining new patents covering existing products or processes that could extend patent exclusivity for a numberof years or otherwise delay the launch of biosimilars; and

■ influencing legislatures so that they attach special patent extension amendments to unrelated federal legislation.

■ the safety and efficacy of the product as demonstrated to be “highly similar” in clinical trials, and potentialadvantages over competing treatments and the reference product;

■ labeling or naming imposed by FDA or other regulatory agencies that suggest clinical differences between theproduct and the reference product;

■ the publication of unfavorable safety or efficacy data concerning our product by third-parties;

■ the prevalence and severity of any side effects, including any limitations or warnings contained in a product’sapproved labeling;

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If an improved version of a reference product, such as Humira, Avastin or Herceptin, is developed or if the marketfor the reference product significantly declines, sales or potential sales of our biosimilar product candidates maysuffer.

Originator companies may develop improved, or “biobetter,” versions of a reference product or change the productformulation as part of a life cycle extension strategy and may obtain regulatory approval of the improved version under anew or supplemental BLA filed with the applicable regulatory authority. If the originator company succeeds in obtaining anapproval of an improved biologic product, it may capture a significant share of the collective reference product market inthe applicable jurisdiction and significantly reduce the market for the reference product and thereby the potential size ofthe market for our biosimilar product candidates. In addition, the improved product may be protected by additional patentrights that may subject our follow-on biosimilar product to claims of infringement.

Biologic reference products may also face competition as technological advances are made that may offer patients a moreconvenient form of administration or increased efficacy or as new products are introduced. As new products are approvedthat compete with the reference products to our biosimilar product candidates, sales of the reference products may beadversely impacted or rendered obsolete. If the market for the reference product is impacted, we may lose significantmarket share or experience limited market potential for our approved biosimilar products or product candidates, and thevalue of our product pipeline could be negatively impacted. As a result of the above factors, our business, prospects andfinancial condition could be harmed.

The commercial success of any current or future product candidate will depend upon the degree of marketacceptance by physicians, patients, third-party payors and others in the medical community.

Even with the requisite approvals from the FDA and comparable foreign regulatory authorities, the commercial success ofour product candidates will depend in part on the medical community, patients and third-party payors accepting ourproduct candidates as medically useful, cost-effective and safe. Any product that we bring to the market may not gainmarket acceptance by physicians, patients, third-party payors and others in the medical community. The degree of marketacceptance of any of our product candidates, if approved for commercial sale, will depend on a number of factors,including but not limited to:

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■ the clinical indications for which approval is granted;

■ whether we achieve an interchangeability designation in the United States, and if such designation has amaterial effect on the perception of equivalence;

■ the possibility that a competitor may achieve interchangeability and we may not;

■ relative convenience and ease of administration as compared to the reference product;

■ the extent to which our product may be more or less similar to the reference product than competing biosimilarproduct candidates;

■ recognition and acceptance of our product candidates over our competitors’ products;

■ prevalence of the disease or condition for which the product is approved;

■ the cost of treatment, particularly in relation to competing treatments;

■ the willingness of the target patient population to try biosimilar therapies and of physicians to prescribe thesetherapies;

■ the strength of marketing and distribution support and timing of market introduction of competitive products;

■ the extent to which the product is approved for inclusion on formularies of hospitals and managed careorganizations;

■ publicity concerning our products or competing products and treatments;

■ the extent to which third-party payors provide coverage and adequate reimbursement for our productcandidates, if approved; and

■ our ability to maintain compliance with regulatory requirements.

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Moreover, the market success of a biosimilar product, including widespread patient and doctor acceptance, may ultimatelydepend on whether it receives an interchangeability designation. This is particularly true if one or more competingbiosimilars receives such a designation. Future laws and drug formulary rules requiring or facilitating automaticsubstitution of biosimilars for reference products at the pharmacy level may also be limited to biosimilars that havereceived an interchangeable designation.

The labeling requirements for a biosimilar product have not been fully developed and there is uncertainty as to how muchof the reference product label a biosimilar applicant may or must copy, and the extent to which the applicant mustdistinguish its product from the reference product. The naming of biosimilars is also subject to significant uncertainty, andit is unclear whether biosimilar products will be required to bear names that distinguish them from their reference products.Differences between the labels and names of the biosimilar and reference product may make it more difficult for us toachieve market uptake for our product.

Even if our product candidate displays an equivalent or more favorable efficacy and safety profile in preclinical and clinicaltrials, market acceptance of the product candidate will not be fully known until after it is launched and may be negativelyaffected by a potential poor safety experience and the track record of other biosimilar product candidates. If marketacceptance of our product is less than that of the reference product or competing biosimilars, the price of the product mayneed to be reduced or we may need to implement additional marketing endeavors in order to accrue market share, whichwill negatively affect profitability. Our efforts to educate the medical community and third-party payors on the benefits ofour product candidates may require significant resources, may be under-resourced compared to large well-fundedpharmaceutical entities and may never be successful. If our product candidates are approved but fail to achieve anadequate level of acceptance by physicians, patients, third-party payors and others in the medical community, we will notbe able to generate sufficient revenue to become or remain profitable.

We currently have no marketing and sales organization. If we are unable to establish sales and marketingcapabilities in jurisdictions for which we choose to retain commercialization rights, we may be unable to generateany revenue.

We currently have no marketing or sales organization. Our products have not yet been approved for sale, and we, as acompany, have no experience selling and marketing our product candidates. To successfully commercialize any productsthat may result from our development programs, we will need to develop these capabilities, either on our own or withothers. If our product candidates receive regulatory approval, we intend to establish a sales and marketing organizationwith technical expertise and supporting distribution capabilities to commercialize our product candidates in major marketswhere we may choose to retain commercialization rights. Doing so will be expensive, difficult and time-consuming. Anyfailure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact thecommercialization of our products.

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Further, given our lack of prior experience in marketing and selling biosimilar products, our initial estimate of the size of therequired sales force may be materially more or less than the size of the sales force actually required to effectivelycommercialize our product candidates. As such, we may be required to hire substantially more sales representatives andmedical support liaisons to adequately support the commercialization of our product candidates or we may incur excesscosts as a result of hiring more sales representatives than necessary. With respect to certain geographical markets, wemay enter into collaborations with other entities to utilize their local marketing and distribution capabilities, but we may beunable to enter into such agreements on favorable terms, if at all. If our future collaboration partners do not commitsufficient resources to commercialize our future products, if any, and we are unable to develop the necessary marketingcapabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. If we are unableto establish sales and marketing capabilities for any approved product, whether on our own or through collaborations, ourresults of operations will be negatively impacted.

We may need to enter into alliances with other companies that can provide capabilities and funds for thedevelopment and commercialization of our product candidates. If we are unsuccessful in forming or maintainingthese alliances on favorable terms, our business could be harmed.

Because we have limited or no internal capabilities for late-stage product development, manufacturing, sales, marketingand distribution, we have found it necessary to enter into alliances with other companies. For example, we have enteredinto service agreements with inVentiv Health Clinical, LLC to assist us in conducting our Phase 1 and Phase 3 clinicaltrials for ONS-3010 and ONS-1045. Aside from our joint participation agreement with Huahai for ONS-3010, we do nothave any agreements for the development and commercialization of our biosimilar product candidates for any major ex-U.S. markets, such as the EU and Japan. To date, we only have such agreements for smaller ex-U.S. markets. Inparticular, we have entered into a co-development and license agreement with Huahai to co-develop ONS-3010 and ONS-1045 for Huahai to commercialize in the greater China region. We have also entered into a license agreement withLiomont to develop and commercialize ONS-3010 and ONS-1045 in Mexico. Further, we have entered into license andcollaboration agreements with IPCA to develop and commercialize ONS-3010, ONS-1045 and ONS-1050 in India, Sri-Lanka, Myanmar, Nepal and Bhutan. In the future, we may also find it necessary to form other alliances or joint ventureswith major pharmaceutical companies to jointly develop and/or commercialize specific biosimilar product candidates. Insuch alliances, we would expect our collaboration partners to provide substantial capabilities in regulatory affairs, as wellas sales and marketing. We may not be successful in entering into any such alliances. Even if we do succeed in securingsuch alliances, we may not be able to maintain them if, for example, development or approval of a product candidate isdelayed or sales of an approved product are disappointing. If we are unable to secure or maintain such alliances we maynot have the capabilities necessary to continue or complete development of our product candidates and bring them tomarket, which may have an adverse effect on our business.

In addition to commercialization capabilities, we may depend on our alliances with other companies to provide substantialadditional funding for development and potential commercialization of our product candidates. We may not be able toobtain funding on favorable terms from these alliances, and if we are not successful in doing so, we may not havesufficient funds to develop a particular product candidate internally or to bring product candidates to market. Failure tobring our product candidates to market will prevent us from generating sales revenue, and this will substantially harm ourbusiness. Furthermore, any delay in entering into these alliances could delay the development and commercialization ofour product candidates and reduce their competitiveness even if they reach the market. As a result, our business andoperating results may be harmed.

Policies and practices governing the naming of biosimilar product candidates are neither fully established norfully harmonized and are subject to debate and change. Failure to achieve a nonproprietary name sufficientlyclose to the reference product or be competitively disadvantaged in this regard, could adversely affect thecommercial performance of our biosimilar product candidate.

United States Adopted Name, or USAN, and International Nonproprietary Names, or INN, two important bodies involved innonproprietary nomenclature, have no policy for the naming of biosimilar product candidates, and products are named ona case by case basis. Non-glycosylated proteins can follow the approach established for small molecule generics, which isto retain the same nonproprietary name if it is synthesized by a different route provided the substance is the same.Glycosylated proteins from different sources are given distinct names, as these proteins are expected to differ in theirglycosylation profile. The same approach is valid for all other modifications to the protein that can occur in a cell after thecell has finished making the protein. A system currently under discussion at the World Health Organization that wouldenable the clear definition of all similar biotherapeutic proteins would include the INN of the reference product in the firstpart of the name, and some form of biological qualifier that could uniquely identify the substance. Currently the FDA andEMA have final authority regarding names in the United States and the EU, respectively, and it is unclear how they will

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handle nonproprietary nomenclature in the future. However, recent draft FDA guidance has recommended an approach todistinguish product manufacturers of the reference biologic, biosimilars, interchangeables, and related biologics byestablishing nonproprietary names that are distinct from the reference product. For the reference biologic, FDA intends touse as a “core name” the name adopted by the USAN Council for the drug substance. For a biosimilar, interchangeable,or related biologic, the core name is the name of the drug substance contained in the relevant previously licensed product.Under FDA’s proposed approach, the nonproprietary name designated for reference biologics, related biologics, andbiosimilars will include a unique suffix in addition to the core name. FDA is seeking comment on whether thenonproprietary name for an interchangeable product should include a unique suffix, or should share the same suffix as itsreference product. This policy could suggest to payors, providers and patients that our biosimilar product is different fromthe reference product, which may negatively affect the price we can charge, our sales and market share, which couldharm our business. Notably, by affixing a random four letter suffix to the USAN, there is a potential for misuse that couldcause misreporting of adverse events or otherwise to the wrong biosimilar product. If our biosimilars were wronglyreported as having caused adverse events or other negative outcomes, it could affect our brand and negatively harm ourbusiness.

The third-party coverage and reimbursement status of newly approved products is uncertain. Failure to obtain ormaintain adequate coverage and reimbursement for new or current products could limit our ability to marketthose products and decrease our ability to generate revenue.

Pricing, coverage and reimbursement of our biosimilar product candidates, if approved, may not be adequate to supportour commercial infrastructure. Our per-patient prices may not be sufficient to recover our development and manufacturingcosts and potentially achieve profitability. The availability and adequacy of coverage and reimbursement by governmentaland private payors are essential for most patients to be able to afford expensive treatments such as ours, if approved.Accordingly, sales of our product candidates will depend substantially, both domestically and abroad, on the extent towhich the costs of our product candidates will be paid for by health maintenance, managed care, pharmacy benefit andsimilar healthcare management organizations or reimbursed by government authorities, private health insurers and otherthird-party payors. If coverage and reimbursement are not available, or are available only at insufficient levels, we may notbe able to successfully commercialize our product candidates. Coverage decisions may depend upon clinical andeconomic standards that disfavor new drug products when more established or lower cost therapeutic alternatives arealready available or subsequently become available. Even if coverage is provided, the approved reimbursement amountmay not be adequate to allow us to establish or maintain pricing sufficient to realize a return on our investment.

There is significant uncertainty related to third-party coverage and reimbursement of newly approved products. In theUnited States, third-party payors, including private and governmental payors such as the Medicare and Medicaidprograms, play an important role in determining the extent to which new drugs and biologics will be covered andreimbursed. The Medicare program covers certain individuals aged 65 or older or those who are disabled or suffering fromend-stage renal disease. The Medicaid program, which varies from state to state, covers certain individuals and familieswho have limited financial means and/or certain disabilities. The Medicare and Medicaid programs increasingly are usedas models for how private payors and other governmental payors develop their coverage and reimbursement policies fordrugs and biologics. It is difficult to predict at this time what third-party payors will decide with respect to the coverage andreimbursement for our biosimilar product candidates, if approved. In addition, in the United States, no uniform policy ofcoverage and reimbursement for biologics exists among third-party payors. Therefore, coverage and reimbursement forbiologics can differ significantly from payor to payor. As a result, the process for seeking favorable coveragedeterminations often is time-consuming and costly and may require us to provide scientific and clinical support for the useof our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and privatepayors for any approved products that we develop could have an adverse effect on our operating results, our ability toraise capital needed to commercialize products and our overall financial condition.

Outside the United States, pharmaceutical businesses are generally subject to extensive governmental price controls andother market regulations. We believe the increasing emphasis on cost-containment initiatives in the EU, Canada and othercountries has and will continue to put pressure on the pricing and usage of our product candidates. In many countries, theprices of medical products are subject to varying price control mechanisms as part of national health systems. Othercountries allow companies to fix their own prices for medical products, but monitor and control company profits. Additionalforeign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for ourproduct candidates. Accordingly, in markets outside the United States, the reimbursement for our products may bereduced compared with the United States and may be insufficient to generate commercially reasonable revenue andprofits.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to control healthcarecosts may cause such organizations to limit both coverage and the level of reimbursement for new products approvedand,

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as a result, they may not cover or provide adequate payment for our product candidates. While cost containment practicesgenerally benefit biosimilars, severe cost containment practices may adversely affect our product sales. We expect toexperience pricing pressures in connection with the sale of any of our product candidates due to the trend towardmanaged healthcare, the increasing influence of health maintenance organizations and additional legislative changes.

Our biosimilar product candidates, if approved, will face price competition from both the respective referenceproducts and other biosimilars. This price competition could exceed our capacity to respond, negativelyimpacting our market share and revenue as well as adversely affecting the overall financial health andattractiveness of the market for the biosimilar.

Successful competitors in the biosimilar market will likely have the ability to effectively compete on price through payorsand their third-party administrators who exert downward pricing pressure. It is possible our competitors’ compliance withprice discounting demands in exchange for market share could exceed our capacity to respond in kind and reduce marketprices beyond our expectations. In addition, the RPS may compete effectively on price and limit our ability to accruemarket share. Such practices may limit our and our collaboration partners’ ability to increase market share and will alsoimpact profitability.

Risks Related to Our Reliance on Third PartiesWe rely on third parties to conduct our preclinical and clinical trials and perform other tasks for us. If these thirdparties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatoryrequirements, we may not be able to obtain regulatory approval for or commercialize our product candidates andour business could be harmed.

We have relied upon and plan to continue to rely upon CROs to monitor and manage data for our ongoing preclinical andclinical programs. We rely on these parties for execution of our preclinical and clinical trials and we can only control certainaspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted inaccordance with the applicable protocol, legal, regulatory and scientific requirements and standards and our reliance onthe CROs does not relieve us of our regulatory responsibilities. We and our CROs and other vendors are required tocomply with cGMP, GCP, and Good Laboratory Practices, or GLP, which are regulations and guidelines enforced by theFDA, the Competent Authorities of the Member States of the EEA and comparable foreign regulatory authorities for all ofour product candidates in clinical development. Regulatory authorities enforce these regulations through periodicinspections of study sponsors, principal investigators, study sites and other contractors. If we, any of our CROs, serviceproviders or investigators fail to comply with applicable regulations or GCPs, the data generated in our preclinical andclinical trials may be deemed unreliable and the FDA, EMA or comparable foreign regulatory authorities may require us toperform additional preclinical and clinical trials before approving our marketing applications. We cannot assure you thatupon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trialscomply with GCP requirements. In addition, our clinical trials must be conducted with products produced under cGMPregulations. Failure to comply by any of the participating parties or ourselves with these regulations may require us torepeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if ourCROs or any other participating parties violate federal or state fraud and abuse or false claims laws and regulations orhealthcare privacy and security laws.

If any of our relationships with any of these third-party CROs terminate, we may not be able to enter into arrangementswith alternative CROs or do so on commercially reasonable terms. In addition, our CROs are not our employees, andexcept for remedies available to us under our agreements with such CROs, we cannot control whether or not they devotesufficient time and resources to our on-going preclinical and clinical programs. If CROs do not successfully carry out theircontractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of thedata they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or for otherreasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approvalfor or successfully commercialize our product candidates. CROs may also generate higher costs than anticipated. As aresult, our results of operations and the commercial prospects for our product candidates would be harmed, our costscould increase and our ability to generate revenue could be delayed.

Changing or adding additional CROs involves additional cost and requires management time and focus. In addition, thereis a natural transition period when a new CRO commences work. As a result, delays may occur, which can negativelyimpact our ability to meet our desired clinical development timelines. We may encounter challenges or delays in the futureand these delays or challenges may have an adverse effect on our business, financial condition and prospects.

We manufacture bulk drug substance for preclinical and clinical supplies of our product candidates in our in-house facility. We also intend to manufacture bulk drug substance for commercial sale in our facility. Ourbusiness could be harmed if our facility is damaged or we otherwise fail to manufacture our product candidatesat the necessary quantity or quality levels.

If we are unable to manufacture sufficient supplies of our product candidates, our development efforts would be delayed,which would adversely affect our business and prospects. In addition, our failure to comply with applicable regulations

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■ failure to establish contracts with fill-finish contract manufacturing organization or CMOs, and device vendors;

■ product loss due to contamination, equipment failure or improper installation or operation of equipment orvendor or operator error;

■ failure to maintain fermentation or other manufacturing conditions necessary to achieving biosimilarity to thereference product;

■ infringing intellectual property rights of third parties relating to manufacturing and quality testing;

■ failure to achieve or maintain compliance with FDA’s requirements for acceptance of our manufacturing facilities;and

■ labor shortages, natural disasters and power failures.

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could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawalof approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any ofwhich could significantly and adversely affect supplies of our product candidates or any other product candidates orproducts that we may develop.

If any of our product candidates are approved, in order to produce the quantities necessary to meet anticipated marketdemand, we may need to increase our manufacturing capacity. If we are unable to produce our product candidates and insufficient quantities to meet the requirements for the launch of these products or to meet future demand, our revenue andgross margins could be adversely affected.

Our manufacturing depends on our suppliers. For single-use technology, we depend on specialty-manufactured bags andour reliability on the supply of such bags can impact manufacturing. In addition, the quality of such bags may vary, and incertain rare circumstances, the bag components may leak into the product, which would make the product unsuitable. Wealso depend on the timely supply and quality of all raw materials, which are crucial to the successful manufacturing of ourproducts. Further, we depend on our fill-finish partners to ensure quality products and our partners’ failure to deliver aconsistent supply of high-quality products is a risk to the business.

We have never manufactured commercial scale quantities in our facilities and we may face challenges in ensuring aconsistent supply for global markets.

Any adverse developments affecting the manufacturing operations of our biosimilar product candidates couldsubstantially increase our costs and limit supply for our product candidates.

The process of manufacturing our product candidates is complex, highly regulated and subject to several risks, includingbut not limited to:

Even minor deviations from normal manufacturing processes for any of our product candidates could result in reducedproduction yields, product defects and other supply disruptions. In addition, if we require a change in CMO, this will addtime along with financial and personnel resources to change manufacturing sites. If microbial, viral or other contaminationsare discovered in our product candidates or in our manufacturing facilities, our facilities may need to be closed for anextended period of time to investigate and remedy the contamination.

Any adverse developments affecting manufacturing operations for our product candidates may result in shipment delays,inventory shortages, lot failures, withdrawals or recalls or other interruptions in the supply of our product candidates. Wemay also have to take inventory write-offs and incur other charges and expenses for product candidates that fail to meetspecifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.

We expect to depend on third parties for the commercialization of our biosimilar product candidates in certainmajor markets for ONS-3010, ONS-1045 and ONS-1050 outside the United States, and their failure tocommercialize in those markets could harm our business and operating results.

One prong of our strategy is to maximize the value of our pipeline by retaining development and commercialization rightsin the United States and continuing to selectively out-license to ex-U.S. markets. Accordingly, we will need to identify third-parties and then negotiate the terms of the development and commercialization agreements for major ex-U.S. markets,such as the EU and Japan. We may not be successful in identifying contract counterparties, and we may not be able toreach agreements with such parties on terms that are as favorable to our company as we would anticipate. Although wecurrently have in place licensing agreements for commercialization of ONS-3010 and ONS-1045, these are for smallermarkets where we would not otherwise intend to commercialize our biosimilar product candidates, such as China, Mexicoand India, among others. If these entities fail to exercise commercially reasonable efforts to market and sell our productsin their respective licensed jurisdictions or are otherwise ineffective in doing so, our business will be harmed and we maynot be able to adequately remedy the harm through negotiation, litigation, arbitration or termination of the licenseagreements.

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Moreover, any disputes with our collaboration partners concerning the adequacy of their commercialization efforts willsubstantially divert the attention of our senior management from other business activities and will require us to incursubstantial legal costs to fund litigation or arbitration proceedings.

In the event that any of our license agreements terminate, we may need to find another partner in those markets tocommercialize and in certain instances, manufacture our biosimilar product candidates. Further, upon any suchtermination, our contract counterparties may still have the right to commercialize these biosimilar product candidates insuch markets, which may affect our ability to commercialize in the same markets.

We are required to co-fund the development of, and proportionately share in the revenue from, thecommercialization of ONS-3010 in the United States, Canada, EU, Japan, Australia and New Zealand under a jointparticipation agreement with Huahai. We may also be required to form a joint venture to further co-develop andcommercialize ONS-3010 with Huahai in the agreed countries, if so requested by Huahai.

We currently have a joint participation arrangement with Huahai that provides for the co-funding of the development ofONS-3010 in the United States, Canada, EU, Japan, Australia and New Zealand and the proportionate sharing of therevenue from commercialization of ONS-3010 in such countries. We could also be required to further co-develop andcommercialize ONS-3010 with Huahai in the agreed countries pursuant to a joint venture, if so requested by Huahai, ascontemplated by our joint participation agreement. Although we had the option to terminate this joint participationagreement by exercising our option to pay Huahai a total of $28.0 million, including an $11.0 million initial payment, wedid not make the $11.0 million initial payment within the time frame required. Under the joint participation agreement,assuming Huahai funds its proportionate share of development costs incurred after completion of the “Phase-3 ReadyPackage” for ONS-3010, we will have a 49% value ownership interest with Huahai having a 51% value ownership interestin ONS-3010. Accordingly, our share of any potential revenues from the successful commercialization of ONS-3010 in theagreed countries, including major markets such as the United States and EU, would also be in proportion to suchownership interests. While we anticipate that we will each act in accordance with the terms of our agreement for the jointdevelopment and commercialization of ONS-3010, we cannot control Huahai, nor can we predict with any certainty thatour interests will be aligned and that we will successfully collaborate.

We entered into a new lease for additional manufacturing and research and development space and our businessmay be interrupted if these facilities are not ready for occupation in time to implement our expansion efforts,which could impact our ability to advance our early-stage preclinical pipeline and any future product candidates.

We have entered into a lease for a new facility in our current industrial complex, which commenced in March 2016. Weintend to build-out this facility as an additional state-of-the-art development infrastructure, which we will occupy in phasesas needed. There can be no assurance that the new space will be prepared and ready in time for our move-in. Further, theexpansion could disrupt our current development and manufacturing operations, resulting in an inability to meet ourdeadlines and leading to a slow realization of the efficiencies and capacity anticipated from such expansion. Adverseconsequences resulting from a delay in the expansion could harm our relationships with our license and collaborationpartners, and further affect our ability to develop and commercialize our biosimilar product candidates. In addition, suchexpansions of our manufacturing and research and development capabilities may increase our costs. Any of the abovecould delay regulatory approval and commercialization of our current early-stage preclinical and future biosimilar productcandidates. All of the foregoing could result in substantial costs to us and could result in material interruption to ourbusiness and operations.

We currently engage single source suppliers for clinical trial services and multiple source suppliers for fill-finishmanufacturing and product testing of our biosimilar product candidates. The loss of any of these suppliers, orany future single source suppliers, could harm our business.

Our clinical stage biosimilar product candidates are currently fill-finished by Hospira and Ajinomoto Althea, Inc., or Althea.As such, we are heavily dependent on Hospira and Althea for supplying us with finished product candidates. Although webelieve that there are alternate sources for this service, we cannot assure you that identifying and establishing newrelationships would not result in significant delay in the development of our biosimilar product candidates. Additionally, wemay not be able to enter into arrangements with alternative vendors on commercially reasonable terms, or at all. A delayin the development of our biosimilar product candidates or having to enter into a new agreement with a different third partyon less favorable terms than we have with our current suppliers could negatively impact our business.

We are subject to significant regulation with respect to manufacturing our product candidates. Ourmanufacturing facilities may not continue to meet regulatory requirements or may not be able to meet supplydemands.

Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical trials must bemanufactured in accordance with cGMP and other applicable regulations. These regulations govern manufacturingprocesses and procedures (including record keeping) and the implementation and operation of quality systems to control

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and assure the quality of investigational products and products approved for sale. Poor control of production processescan lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our productcandidates that may not be detectable in final product testing. We must supply all necessary documentation in support ofa BLA or MAA on a timely basis and must adhere to GLP and cGMP regulations enforced by the FDA and other regulatoryagencies through their facilities inspection program. We have never produced a commercially approved pharmaceuticalproduct at our facilities and therefore have not obtained the requisite regulatory authority approvals to do so. Our facilitiesand quality systems must pass a pre-approval inspection for compliance with the applicable regulations as a condition ofregulatory approval of our product candidates or any of our other potential products. In addition, the regulatory authoritiesmay, at any time, audit or inspect our manufacturing facility or our associated quality systems for compliance with theregulations applicable to the activities being conducted. If our facilities do not pass a pre-approval facility inspection,regulatory approval of the products may not be granted or may be substantially delayed until any violations are correctedto the satisfaction of the regulatory authority, if ever.

The regulatory authorities also may, at any time following approval of a product for sale, audit our manufacturing facilities.If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our productspecifications or applicable regulations occurs independent of such an inspection or audit, the relevant regulatory authoritymay require remedial measures that may be costly and time-consuming for us to implement and that may include thetemporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of ourfacility. Any such remedial measures could harm our business.

If we fail to maintain regulatory compliance, the FDA or other applicable regulatory authority can impose regulatorysanctions including, among other things, refusal to approve a pending application for a new biologic product, withdrawal ofan approval or suspension of production. As a result, our business, financial condition and results of operations may beharmed.

These factors could cause us to incur higher costs and could cause the delay or termination of clinical trials, regulatorysubmissions, required approvals or commercialization of our product candidates.

Risks Related to Intellectual PropertyIf we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.Third-party claims of intellectual property infringement may prevent or delay our development andcommercialization efforts.

Our commercial success depends in large part on avoiding infringement of the patents and proprietary rights of thirdparties. There have been many lawsuits and other proceedings involving patent and other intellectual property rights in thepharmaceutical industry, including patent infringement lawsuits, interferences, oppositions and reexamination proceedingsbefore the U.S. Patent and Trademark Office, or USPTO, and corresponding foreign patent offices. Numerous U.S. andforeign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which weare developing product candidates. As the pharmaceutical industry expands and more patents are issued, the riskincreases that our product candidates may be subject to claims of infringement of the patent rights of third parties.

Our research, development and commercialization activities may infringe or otherwise violate or be claimed to infringe orotherwise violate patents owned or controlled by other parties. The companies that originated the products for which weintend to introduce biosimilar versions, such as AbbVie, Inc., or AbbVie, and Genentech, Inc., or Genentech, as well asother competitors (including other companies developing biosimilars) have developed worldwide patent portfolios ofvarying sizes and breadth, many of which are in fields relating to our business, and it may not always be clear to industryparticipants, including us, which patents cover various types of products, formulations, manufacturing processes ormethods of use.

Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to compositions, formulations, methods of manufacture or methods fortreatment related to the use or manufacture of our product candidates. We have conducted patent searches for third-partypatents with respect to each of our lead product candidates, and are aware of third-party patent families with claims that, ifvalid and enforceable, could be construed to cover such product candidates or their respective methods of manufacture oruse. Some of these patents have expiration dates that could extend reference product exclusivity past our anticipatedproduct launch dates. We cannot guarantee that any of our analyses are complete and thorough, nor can we be sure thatwe have identified each and every patent and pending application in the United States and abroad that is relevant ornecessary to the commercialization of our product candidates. Moreover, because patent applications can take manyyears to issue,

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there may be currently pending patent applications that may later result in issued patents covering our product candidates.We have not yet completed freedom to operate analysis on our early-stage pipeline or products we are evaluating forinclusion in our future biosimilar product pipeline and therefore, we do not know whether or to what extent these productsmay be subject to unexpired patents. The existence of any patent with valid and enforceable claims covering one or moreof our product candidates could cause substantial delays in our ability to introduce a biosimilar candidate into the U.S.market if the term of such patent extends beyond our desired product launch date.

There may also be patent applications that have been filed but not published and if such applications issue as patents,they could be asserted against us. For example, in most cases, a patent filed today would not become known to industryparticipants for at least 18 months given patent rules applicable in most jurisdictions that do not require publication ofpatent applications until 18 months after filing. Moreover, we may face claims from non-practicing third-party entities thathave no relevant product revenue and against whom our own patent portfolio may have no deterrent effect. In addition,the scope of patent claims is subject to interpretation by the courts, and the interpretation is not always uniform. If we aresued for patent infringement, we would need to demonstrate that our product candidates, products or methods either donot infringe the asserted patent claims or that the claims are invalid and/or unenforceable, and we may not be successful.Proving that a patent is invalid or unenforceable is difficult. For example, in the United States, proving invalidity requires ashowing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Inproceedings before courts in the EU, the burden of proving invalidity of a patent also usually rests on the party alleginginvalidity. Even if we are successful in litigation, we may incur substantial costs and the time and attention of ourmanagement and scientific personnel could be diverted, which could harm our business. In addition, we may not havesufficient resources to bring these actions to a successful conclusion.

Third parties could bring claims against us that would cause us to incur substantial expenses and, if successful against us,could cause us to pay substantial monetary damages. The outcome of intellectual property litigation is subject touncertainties that cannot be adequately quantified in advance. If a patent infringement suit were brought against us, wecould be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that isthe subject of the suit. Ultimately, we could be prevented from commercializing a product or be forced to cease someaspect of our business operations if, as a result of actual or threatened patent infringement claims, we are unable to enterinto licenses on commercially acceptable terms or at all. If, as a result of patent infringement claims or to avoid potentialclaims, we choose or are required to seek licenses from third parties, these licenses may not be available on acceptableterms or at all. Even if we are able to obtain a license, the license may obligate us to pay substantial license fees orroyalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining accessto the same intellectual property.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability tofurther develop and commercialize one or more of our product candidates. Defense of these claims, regardless of theirmerit, would likely involve substantial litigation expense and would likely be a substantial diversion of employee resourcesfrom our business. In the event of a successful claim of infringement against us, we may, in addition to being blocked fromthe market, have to pay substantial monetary damages, including treble damages and attorneys’ fees for willfulinfringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which maybe impossible or require substantial time and monetary expenditure.

In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings,including interference, derivation or post-grant proceedings declared or granted by the USPTO and similar proceedings inforeign countries, regarding intellectual property rights with respect to our current or future products. An unfavorableoutcome in any such proceedings could require us to cease using the related technology or to attempt to license rights toit from the prevailing party or could cause us to lose valuable intellectual property rights. Our business could be harmed ifthe prevailing party does not offer us a license on commercially reasonable terms, if any license is offered at all. Litigationor other proceedings may fail and, even if successful, may result in substantial costs and distract our management andother employees. We may also become involved in disputes with others regarding the ownership of intellectual propertyrights.

Third parties may submit applications for patent term extensions in the United States or other jurisdictions where similarextensions are available and/or Supplementary Protection Certificates in the EU states (including Switzerland) seeking toextend certain patent protection that, if approved, may interfere with or delay the launch of one or more of our biosimilarproduct candidates.

The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Patentlitigation and other proceedings may fail, and even if successful, may result in substantial costs and distract ourmanagement and other employees. The companies that originated the products for which we intend to introduce biosimilar

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versions, as well as other competitors (including other biosimilar companies) may be able to sustain the costs of suchlitigation or proceedings more effectively than we can because of their substantially greater financial resources.Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our abilityto compete in the marketplace.

So called “submarine” patents may be granted to our competitors that may significantly alter our launch timingexpectations, reduce our projected market size, cause us to modify our product or process or block us from themarket altogether.

The term “submarine” patent has been used in the pharmaceutical industry and in other industries to denote a patentissuing from a U.S. application with an effective filing date prior to June 8, 1995 that was not published, publically knownor available prior to its grant. Submarine patents add substantial risk and uncertainty to our business. Submarine patentsmay be issued to our competitors covering our biosimilar product candidates or our pipeline candidates and thereby causesignificant market entry delay, defeat our ability to market our product candidates or cause us to abandon developmentand/or commercialization of a product candidate.

The issuance of one or more submarine patents may harm our business by causing substantial delays in our ability tointroduce a biosimilar candidate into the U.S. market.

We may not identify relevant patents or may incorrectly interpret the relevance, scope or expiration of a patent,which might adversely affect our ability to develop and market our products.

We cannot guarantee that any of our patent searches or analyses, including but not limited to the identification of relevantpatents, the scope of patent claims or the expiration of relevant patents, are complete and thorough, nor can we be certainthat we have identified each and every patent and pending application in the United States and abroad that is relevant toor necessary for the commercialization of our product candidates in any jurisdiction.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and thepatent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may beincorrect, which may negatively impact our ability to market our products or pipeline candidates. We may incorrectlydetermine that our products are not covered by a third party patent. Further, we may conclude that a well-informed court orother tribunal would find the claims of a relevant third-party patent to be invalid based on prior art, enablement, writtendescription, or other ground, and that conclusion may be incorrect, which may negatively impact our ability to market ourproducts or pipeline molecules.

Many patents may cover a marketed product, including but not limited to the composition of the product, methods of use,formulations, cell line constructs, vectors, growth media, production processes and purification processes. Theidentification of all patents and their expiration dates relevant to the production and sale of a reference product isextraordinarily complex and requires sophisticated legal knowledge in the relevant jurisdiction. It may be impossible toidentify all patents in all jurisdictions relevant to a marketed product. We may not identify all relevant patents, or incorrectlydetermine their expiration dates, which may negatively impact our ability to develop and market our products.

Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop, market andcommercialize our products.

We may become involved in lawsuits to protect or enforce any future patents, which could be expensive, time-consuming and unsuccessful.

Although we have no issued patents, when and if we do obtain issued patents, we may discover that competitors areinfringing those patents. Expensive and time-consuming litigation may be required to enforce our patents. If we or one ofour collaboration partners were to initiate legal proceedings against a third party to enforce a patent covering one of ourproduct candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/orunenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceabilityare commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutoryrequirements, including but not limited to lack of novelty, obviousness or non-enablement. Grounds for an unenforceabilityassertion could include an allegation that someone involved in the prosecution of the patent withheld relevant or materialinformation related to the patentability of the invention from the USPTO or made a misleading statement duringprosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable, and there is a riskthat a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have theright to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents isupheld, the court will construe the patent’s claims narrowly and decide that we do not have the right to stop the other partyfrom using the invention at issue on the grounds that our patent claims do not cover the invention. An adverse outcome ina

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litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or othercompetitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitiveproducts. Any of these occurrences could adversely affect our competitive business position, business prospects andfinancial condition. Even if we establish infringement, the court may decide not to grant an injunction against furtherinfringing activity and instead award only monetary damages, which may or may not be an adequate remedy.

Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalidor unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to themarks in question. In this case, we could ultimately be forced to cease use of such trademarks.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation,there is a risk that some of our confidential information could be compromised by disclosure during any litigation we initiateto enforce our patents. There could also be public announcements of the results of hearings, motions or other interimproceedings or developments. If securities analysts or investors perceive these results to be negative, it could have anegative impact on the market price of our securities. Moreover, there can be no assurance that we will have sufficientfinancial or other resources to file and pursue such infringement claims, which typically last for years before they areconcluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of theattention of our management and scientific personnel could outweigh any benefit we receive as a result of theproceedings.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully usedor disclosed confidential information of third parties or that our employees have wrongfully used or disclosedalleged trade secrets of their former employers.

We employ individuals and retain independent contractors and consultants and members on our board of directors whowere previously employed at universities or other pharmaceutical companies, including our competitors or potentialcompetitors. For example, our Chairman, President and Chief Executive Officer, Pankaj Mohan, Ph.D., our Chief MedicalOfficer, Kenneth M. Bahrt, M.D., our Senior Vice President of Business Strategy & Development, Stephen J. McAndrew,Ph.D., our Senior Vice President of Process Development & Manufacturing, Scott Gangloff, and our Vice President ofRegulatory Affairs, Elizabeth A. Yamashita, are former employees of Bristol-Myers Squibb Company. Further, Dr. Mohanand Dr. Bahrt are former employees of Genentech, which is the reference product sponsor of bevacizumab (Avastin), forwhich we seek to develop ONS-1045 as a biosimilar, and trastuzumab (Herceptin), for which we seek to develop ONS-1050 as a biosimilar, and Kogan Bao, Ph.D., our new Vice President of Analytical Sciences, is a former employee ofAmgen, Inc., which is the reference product sponsor of denosumab (Prolia/Xgeva), for which we seek to develop ONS-4010 as a biosimilar. Additionally, Dr. McAndrew was a former employee of Roche. Two members of our board ofdirectors, Scott Canute and Dr. Mohan, were former employees of Eli Lilly and Company and Ms. Yamashita was a formeremployee of ImClone Systems Inc., a subsidiary of Eli Lilly and Company, which is the reference product sponsor ofcetuximab (Erbitux), for which we seek to develop ONS-1055 as a biosimilar. Although we try to ensure that ouremployees, consultants and independent contractors do not use the proprietary information or know-how of others in theirwork for us and we are not currently subject to any claims that they have done so, we may in the future be subject to suchclaims. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition topaying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impactour business. Even if we are successful in defending against such claims, litigation could result in substantial costs and bea distraction to management and other employees.

In addition, while we typically require our employees, consultants and contractors who may be involved in thedevelopment of intellectual property to execute agreements assigning such intellectual property to us, we may beunsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard asour own, which may result in claims by or against us asserting ownership of such intellectual property. If we fail inprosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectualproperty rights. Even if we are successful in prosecuting or defending against such claims, litigation could result insubstantial costs and be a distraction to our senior management and scientific personnel.

We currently have no issued patents. If we are unable to obtain and maintain effective patent rights for ourproduct candidates or any future product candidates, we may not be able to prevent competitors from usingtechnologies we consider important in our successful development and commercialization of our productcandidates, resulting in loss of any potential competitive advantage our patents may have otherwise afforded us.

While our principal focus in matters relating to intellectual property is to avoid infringing the valid and enforceable rights ofthird parties, we also rely upon a combination of patents, trade secret protection and confidentiality agreements to protectour own intellectual property related to our product candidates and development programs. Our ability to enjoy any

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competitive advantages afforded by our own intellectual property depends in large part on our ability to obtain andmaintain patents and other intellectual property protection in the United States and in other countries with respect tovarious proprietary elements of our product candidates, such as, for example, our product formulations and processes formanufacturing our products and our ability to maintain and control the confidentiality of our trade secrets and confidentialinformation critical to our business.

We have sought to protect our proprietary position by filing patent applications in the United States and abroad related toour products that are important to our business. This process is expensive and time-consuming, and we may not be ableto file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is alsopossible that we will fail to identify patentable aspects of our research and development output before it is too late toobtain patent protection. There is no guarantee that any patent application we file will result in an issued patent havingclaims that protect our products; and, as a result, we may not be able to effectively prevent others from commercializingcompetitive products. Additionally, while the basic requirements for patentability are similar across jurisdictions, eachjurisdiction has its own specific requirements for patentability. We cannot guarantee that we will obtain identical or similarpatent protection covering our products in all jurisdictions where we file patent applications.

The patent positions of biopharmaceutical companies generally are highly uncertain and involve complex legal and factualquestions for which legal principles remain unresolved. As a result, the patent applications that we own or license may failto result in issued patents with claims that cover our product candidates in the United States or in other foreign countriesfor many reasons. There is no assurance that all potentially relevant prior art relating to our patents and patentapplications has been found, considered or cited during patent prosecution, which can be used to invalidate a patent orprevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if suchpatents cover our product candidates, third parties may challenge their validity, enforceability or scope, which may result insuch patent claims being narrowed, found unenforceable or invalidated. Furthermore, even if they are unchallenged, ourpatents and patent applications may not adequately protect our intellectual property, provide exclusivity for our productcandidates or prevent others from designing around our claims. Any of these outcomes could impair our ability to preventcompetitors from using the technologies claimed in any patents issued to us, which may have an adverse impact on ourbusiness.

Patents granted by the European Patent Office may be opposed by any person within nine months from the publication oftheir grant and, in addition, may be challenged before national courts at any time. Furthermore, even if they areunchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent othersfrom designing around our claims. If the breadth or strength of protection provided by the patents and patent applicationswe hold, license or pursue with respect to our product candidates is threatened, it could threaten our ability to prevent thirdparties from using the same technologies that we use in our product candidates. In addition, recent changes to the patentlaws of the United States provide additional procedures for third parties to challenge the validity of issued patents basedon patent applications filed after March 15, 2013. If the breadth or strength of protection provided by the patents andpatent applications we hold or pursue with respect to our current or future product candidates is challenged, then it couldthreaten our ability to prevent competitive products from using our proprietary technology. Further, because patentapplications in the United States and most other countries are confidential for a period of time, typically for 18 months afterfiling, we cannot be certain that we were the first to either (i) file any patent application related to our product candidates or(ii) invent any of the inventions claimed in our patents or patent applications. Furthermore, for applications filed beforeMarch 16, 2013 or patents issuing from such applications, an interference proceeding can be provoked by a third party orinstituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims ofour applications and patents. If third parties have filed such applications after March 15, 2013, a derivation proceeding inthe United States can be initiated by such third parties to determine whether our invention was derived from theirs.

We do not have any issued patents, but we have filed patent applications, which are currently pending, directed to variousaspects of our product candidates. We cannot offer any assurances about which, if any, patents will be issued, the breadthof any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened or infringedby third parties. Any successful actions by third parties to challenge the validity or enforceability of any patents that maybe issued to us could deprive us of the ability to prevent others from using the technologies claimed in such issuedpatents. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a productcandidate under patent protection could be reduced.

While our business is based primarily on the timing of our biosimilar product launches to occur after the expiration ofrelevant patents, we have filed two patent applications directed to our own proprietary formulations and processes for ourproduct candidates when we have believed securing such patents may afford a competitive advantage. For example, thecompanies that originated Humira and Avastin (AbbVie and Genentech, respectively) own patents directed to formulations

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for these products. Rather than wait for the expiration of these formulation patents, we have developed our ownproprietary formulations for these products that we believe are not covered by valid claims of third party patents, includingAbbVie or Genentech’s formulation patents; and we have filed patent applications directed to our formulations. We cannotguarantee that our proprietary formulations will avoid infringement of third party patents. Moreover, because competitorsmay be able to develop their own proprietary product formulations, it is uncertain whether issuance of any of our pendingpatent applications directed to formulations of adalimumab (Humira) and bevacizumab (Avastin) would cover theformulations of any competitors. For example, we are aware that Sandoz is developing biosimilar versions of adalimumab(Humira) and has filed patent applications directed to formulations of adalimumab (Humira). We are also aware thatBoehringer is developing a biosimilar version of adalimumab (Humira) and has filed a patent application directed toformulations of adalimumab (Humira). We have also filed patent applications, none of which have yet issued, directed toaspects of our downstream manufacturing processes for various biosimilars, including ONS-3010. In contrast to our patentapplications directed to formulations of ONS-3010, the proprietary technologies embodied in our process-related patentfilings, while directed to inventions we believe may provide us with competitive advantage, were not developed by us toavoid third-party patents. As in the case of our formulation patent filings, it is highly uncertain and we cannot predictwhether our patent filings on process enhancements will afford us a competitive advantage against third parties.

Obtaining and maintaining our patent protection depends on compliance with various procedural requirements,document submissions, fee payment and other requirements imposed by governmental patent agencies. Ourpatent protection could be reduced or eliminated for non-compliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural,documentary, fee payment and other provisions during the patent process. In many cases, an inadvertent lapse can becured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations inwhich noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or completeloss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier thanwould otherwise have been the case.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, defending and enforcing patents on product candidates in all countries throughout the world would beprohibitively expensive, and our intellectual property rights in some countries outside the United States can be lessextensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectualproperty rights to the same extent as federal and state laws in the United States. Further, licensing partners may choosenot to file patent applications in certain jurisdictions in which we may obtain commercial rights, thereby precluding thepossibility of later obtaining patent protection in these countries. Consequently, we may not be able to prevent third partiesfrom practicing our inventions in all countries outside the United States or importing products made using our inventionsinto the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have notobtained patent protection to develop their own products and may also export infringing products to territories where wehave patent protection, but the ability to enforce our patents is not as strong as that in the United States. These productsmay compete with our products and our patents or other intellectual property rights may not be effective or sufficient toprevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreignjurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcementof patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop theinfringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedingsto enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divertour efforts and attention from other aspects of our business, could put our patents at risk of being invalidated orinterpreted narrowly and our patent applications at risk of not being approved, and could provoke third parties to assertclaims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any,may not be commercially meaningful. Governments of some foreign countries may force us to license our patents to thirdparties on terms that are not commercially reasonable or acceptable to us. Accordingly, our efforts to enforce ourintellectual property rights around the world may be inadequate to obtain a significant commercial advantage from theintellectual property that we develop or license.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protectour product candidates.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property,particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological andlegal complexity. Therefore, obtaining and enforcing biopharmaceutical patents is costly, time-consuming and inherently

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uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reformlegislation, including the Leahy-Smith America Invents Act, or the America Invents Act, signed into law on September 16,2011.

As of March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted apatent when two or more patent applications claiming the same invention are filed by different parties. A third party thatfiles a patent application in the USPTO before us could therefore be awarded a patent covering an invention of ours evenif we had made the invention before it was made by the third party. The change to “first-to-file” from “first-to-invent” is oneof the changes to the patent laws of the United States resulting from the America Invents Act. Among some of the othersignificant changes to the patent laws are changes that limit where a patentee may file a patent infringement suit andprovide opportunities for third parties to challenge any issued patent in the USPTO via procedures including post-grantand inter partes review. These adversarial actions at the USPTO review patent claims without the presumption of validityafforded to U.S. patents in lawsuits in U.S. federal courts, and use a lower burden of proof than used in litigation in U.S.federal courts. Therefore, it is generally considered easier for a competitor or third party to have a patent invalidated in aPatent Office post-grant review or inter partes review proceeding than invalidated in a litigation in a U.S. federal court. Ifany of our patents are challenged by a third party in such a USPTO proceeding, there is no guarantee that we or ourlicensors or collaborators will be successful in defending the patent, which would result in a loss of the challenged patentright. It is not yet clear what, if any, impact the America Invents Act will have on the operation of our business. However,the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution ofour patent applications and the enforcement or defense of any issued patents, all of which could harm our business andfinancial condition.

Further, recent court rulings in cases such as Association for Molecular Pathology v. Myriad Genetics, Inc. (Myriad I);BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litig., (Myriad II); and Promega Corp. v. Life Technologies Corp.have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patentowners in certain situations.

In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events hascreated uncertainty with respect to the value of patents, once obtained. Depending on future actions by the United StatesCongress, the Federal Courts and the USPTO, the laws and regulations governing patents could change in unpredictableways that would weaken our ability to obtain new patents or to enforce existing patents and patents that we might obtain inthe future.

If we are unable to maintain effective proprietary rights for our product candidates or any future productcandidates, we may not be able to compete effectively in our markets.

While we have filed patent applications to protect certain aspects of our own proprietary formulation and processdevelopments, we also rely on trade secret protection and confidentiality agreements to protect proprietary scientific,business and technical information and know-how that is not or may not be patentable or that we elect not to patent.However, confidential information and trade secrets can be difficult to protect. Moreover, the information embodied in ourtrade secrets and confidential information may be independently and legitimately developed or discovered by third partieswithout any improper use of or reference to information or trade secrets. We seek to protect the scientific, technical andbusiness information supporting our operations, as well as the confidential information relating specifically to our productcandidates by entering into confidentiality agreements with parties to whom we need to disclose our confidentialinformation, such as, our employees, consultants, board members, contractors, potential collaborators and financialinvestors. However we cannot be certain that such agreements have been entered into with all relevant parties. We alsoseek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of ourpremises and physical and electronic security of our information technology systems, but it is possible that these securitymeasures could be breached. While we have confidence in these individuals, organizations and systems, agreements orsecurity measures may be breached and we may not have adequate remedies for any breach. Our confidentialinformation and trade secrets thus may become known by our competitors in ways we cannot prove or remedy.

Although we expect all of our employees and consultants to assign their inventions to us, and all of our employees,consultants, advisors and any third parties who have access to our proprietary know-how, information or technology toenter into confidentiality agreements, we cannot provide any assurances that all such agreements have been dulyexecuted. We cannot guarantee that our trade secrets and other confidential proprietary information will not be disclosedor that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalentinformation and techniques. For example, any of these parties may breach the agreements and disclose our proprietaryinformation, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

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■ the scope of rights granted under the license agreement and other interpretation-related issues;■ the extent to which our technology and processes infringe on intellectual property of the licensor that is not

subject to the licensing agreement;

■ the sublicensing of patents and other rights;

■ our diligence obligations under the license agreement and what activities satisfy those diligence obligations;■ the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our

licensors and us and our collaborators; and

■ the priority of invention of patented technology.

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Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and may harm ourbusiness. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficientrecourse against third parties for misappropriating any trade secret. We cannot guarantee that our employees, formeremployees or consultants will not file patent applications claiming our inventions. Because of the “first-to-file” laws in theUnited States, such unauthorized patent application filings may defeat our attempts to obtain patents on our owninventions.

We may be subject to claims challenging the inventorship of our patent filings and other intellectual property.

We may in the future be subject to claims that former employees, collaborators or other third parties have an interest inour patent applications or patents we may be granted or other intellectual property as an inventor or co-inventor. Forexample, we may have inventorship or ownership disputes arise from conflicting obligations of consultants or others whoare involved in developing our product candidates. Litigation may be necessary to defend against these and other claimschallenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages,we may lose valuable intellectual property rights, such as exclusive ownership of or right to use valuable intellectualproperty. Such an outcome could harm our business. Even if we are successful in defending against such claims, litigationcould result in substantial costs and be a distraction to management and other employees.

If we fail to comply with our obligations in the agreements under which we license intellectual property and otherrights from third parties or otherwise experience disruptions to our business relationships with our licensors, wecould lose license rights that are important to our business.

We are party to a non-exclusive intellectual property license agreement with Selexis SA, or Selexis, pertaining to cell lineexpression technology, that is important to our business, and we expect to enter into additional license agreements in thefuture. Our license agreement with Selexis imposes, and we expect that future license agreements will impose, variousmilestone payments, royalty payments and other obligations on us. If we fail to comply with our obligations under theseagreements or if we are subject to a bankruptcy, we may be required to make certain payments to the licensor of ourlicense or the licensor may have the right to terminate the license, in which event we would not be able to develop ormarket products covered by the license. Additionally, the milestone and other payments associated with these licenses willmake it less profitable for us to develop our product candidates.

In the event we breach any of our obligations under these agreements, we may incur significant liability to our licensingpartners. Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:

If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain ourcurrent licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize theaffected product candidates and that could harm our business.

We may not be successful in obtaining or maintaining necessary rights to our product candidates throughacquisitions and in-licenses.

We currently have rights to certain intellectual property through licenses from third parties, including Selexis, to developONS-3010 and ONS-1045. Because we may find that our programs require the use of proprietary rights held by thirdparties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights.We may be unable to acquire or in-license compositions, methods of use, processes or other third party intellectualproperty rights from third parties that we identify as necessary for our product candidates. The licensing and acquisition ofthird-party intellectual property rights is a competitive area, and a number of more established companies are alsopursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. Theseestablished companies may have a competitive advantage over us due to their size, financial resources and greaterclinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor maybe unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual propertyrights on terms that would allow us to make an appropriate return on our investment.

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■ Disclosure of the Biosimilar Application. Within 20 days after receiving a notice from the FDA that itsapplication has been accepted for review, a 351(k) biosimilar applicant provides a copy of its applicationinformation to the RPS. Providing of this information begins the patent dance. If the 351(k) biosimilar applicantchooses not to disclose such information, or opts out of later steps of the patent dance, the RPS may bring animmediate suit for patent infringement that will proceed under the conventional procedural rules for patentinfringement actions.

■ Identification of Pertinent Patents. Within 60 days of the date of receipt of the application, the RPS mustidentify the patents owned or controlled by it that it reasonably believes could be asserted against the biosimilarapplicant.

■ Statement by the Biosimilar Applicant. Following the receipt of the RPS’s patent list, the biosimilar applicantmust state either that it will not market its product until the relevant patents have expired or alternatively provideits arguments of stating why the patents are invalid, unenforceable or would not be infringed by the proposedbiosimilar product candidate. The biosimilar applicant may also provide the RPS with a list of patents itreasonably believes the RPS could assert against the biosimilar product.

■ Statement by the RPS. In the event the biosimilar applicant has asserted that the patents are invalid,unenforceable or would not be infringed by the proposed follow-on product, the RPS must provide the biosimilarapplicant with a response within 60 days. The response must provide the legal and factual basis of the opinionthat such patent will be infringed by the commercial marketing of the proposed biosimilar.

■ Patent Resolution Negotiations. If the RPS provides its detailed views that the proposed biosimilar wouldinfringe valid and enforceable patents, then the parties are required to engage in good faith negotiations toidentify which of the identified patents will be the subject of a patent infringement action. If the parties agree onthe patents to be litigated, the RPS must bring an action for patent infringement within 30 days.

■ Simultaneous Exchange of Patents. If those negotiations do not result in an agreement within 15 days, thenthe biosimilar applicant must notify the RPS of how many patents (but not the identity of those patents) that itwishes to litigate. Within five days, the parties are then required to exchange lists identifying the patents to belitigated. The number of patents identified by the RPS may not exceed the number provided by the biosimilarapplicant. However, if the biosimilar applicant previously indicated that no patents should be litigated, then theRPS may identify one patent.

■ Commencement of Patent Litigation. The RPS must then commence patent infringement litigation within 30days. That litigation will involve all of the patents on the RPS’s list and all of the patents on the biosimilarapplicant’s list. The biosimilar applicant must then notify the FDA of the litigation. The FDA must then publish anotice of the litigation in the Federal Register.

■ Notice of Commercial Marketing. If the biosimilar applicant opts out of the patent dance, the BPCIA requiresthe biosimilar applicant to provide notice to the RPS after FDA licensure, and at least 180 days in advance of itsfirst commercial marketing of its proposed follow-on biologic. It is not clear whether the biosimilar applicant mustgive notice if it complies with the patent dance, but courts may interpret the BPCIA to require such notice. Ifnotice is not given, the RPS may immediately commence a patent infringement action on any patent that was

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If we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existingintellectual property rights we have, we may have to abandon development of that program and our business and financialcondition could suffer.

Our ability to market our products in the United States may be significantly delayed or prevented by the BPCIApatent dispute resolution mechanism.

The BPCIA created a new, elaborate and complex patent dispute resolution mechanism for biosimilars that could preventus from launching our product candidates in the United States or could substantially delay such launches. Thismechanism has been referred to as the “patent dance.” Uncertainty over how courts will construe the patent dance, forexample whether it is the exclusive pathway for litigation involving 351(k) biosimilar applications, may cause ourassumptions regarding the scope, timing and expense of patent litigation to be incorrect, and may cause delays in thelaunch of products subject to such litigation.

Currently, the patent dance is not mandatory, although this may change in the future. The patent dance mandates patentdisclosure and briefing requirements that are demanding and time-sensitive. The following is an overview of the patentexchange and patent briefing procedures:

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■ we may not be successful in identifying potential product candidates that pass our strict screening criteria;

■ we may not be able to overcome technological hurdles to development or a product candidate may not becapable of producing commercial quantities at an acceptable cost, or at all;

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listed (or listable) by the RPS during the dance, but not part of the first wave of patents being litigated. The RPSis allowed to seek a preliminary injunction blocking such marketing based upon any such patents. The litigantsare required to “reasonably cooperate to expedite such further discovery as is needed” with respect to thepreliminary injunction motion.

Biosimilar companies such as ours have the option of applying for U.S. regulatory approval for our products under either atraditional 351(a) BLA approval route, or under the recently enacted streamlined 351(k) approval route established by theBPCIA. The factors underpinning such a decision are extremely complex and involve, among other things, balancing legalrisk (in terms of, e.g., the degree and timing of exposure to potential patent litigation by the RPS) against regulatory risks(in terms of, e.g., the development costs and the differing scope of regulatory approval that may be afforded under 351(a)rather than 351(k)).

A significant legal risk in pursuing regulatory approval under the 351(k) regulatory approval route is that the above-summarized patent exchange process established by the BPCIA could result in the initiation of patent infringementlitigation prior to FDA approval of a 351(k) application, and such litigation could result in blocking the market entry of ourproducts. In particular, while the 351(k) route is more attractive to us (rather than 351(a)) for reasons related todevelopment time and costs and the potential broader scope of eventual regulatory approval for our biosimilar productcandidates, the countervailing risk in such a regulatory choice is that the complex patent exchange process mandated bythe BPCIA could ultimately prevent or substantially delay us from launching our products in the United States.

Preparing for and conducting the patent exchange, briefing and negotiation process outlined above will requireextraordinarily sophisticated legal counseling and extensive planning, all under extremely tight deadlines. Moreover, it maybe difficult for us to secure such legal support if large, well-funded RPSs have already entered into engagements withhighly qualified law firms or if the most highly qualified law firms choose not to represent biosimilar applicants due to theirlong standing relationships with RPSs.

Furthermore, we could be at a serious disadvantage in this process as an RPS, such as AbbVie (in the case of ONS-3010) or Genentech (in the case of ONS-1045 or ONS-1050), may be able to apply substantially greater legal andfinancial resources to this process than we could.

Whether courts will view the BPCIA process as the sole avenue for a biosimilar entity and the RPS to identify andpotentially litigate such patents remains uncertain, although a Federal Circuit panel has recently held that a biosimilarapplicant may opt out of the patent dance. A binding and non-reviewable judicial determination to that effect couldincrease patent infringement risks for companies, including ours, seeking to introduce biosimilar versions of referenceproducts.

If we file a 351(k) regulatory approval application for one or more of our products, we may consider it necessary oradvisable to adopt the strategy of selecting one or more patents of the RPS to litigate in the above described BPCIAprocess (for example in the third and seventh steps of the process, as outlined above), either to assert our non-infringement of such patents or to challenge their validity; but we may ultimately not be successful in that strategy andcould be prevented from marketing the product in the United States.

The complex, untested and uncertain rules of the BPCIA patent provisions, coupled with the inherent uncertaintysurrounding the legal interpretation of any RPS patents that might be asserted against us in this new process, maysignificantly delay or defeat our ability to market our products in the United States.

Risks Related to Our Business OperationsWe may not be successful in our efforts to identify, develop or commercialize additional product candidates.

Although a substantial amount of our effort will focus on the continued clinical testing, potential approval andcommercialization of our existing product candidates, the success of our business also depends upon our ability toidentify, develop and commercialize additional product candidates. Research programs to identify new product candidatesrequire substantial technical, financial and human resources. We may focus our efforts and resources on potentialprograms or product candidates that ultimately prove to be unsuccessful. Our development efforts may fail to yieldadditional product candidates suitable for clinical development and commercialization for a number of reasons, includingbut not limited to the following:

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■ we may not be successful in identifying a reference product as to which we can determine how to create abiosimilar;

■ we may not be able to assemble sufficient resources to acquire or discover additional product candidates;

■ our product candidates may not succeed in preclinical or clinical testing;

■ our potential product candidates may fail to show sufficient biosimilarity to reference molecules; and

■ competitors may develop alternatives that render our product candidates obsolete or less attractive or themarket for a product candidate may change such that a product candidate may not justify further development.

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If any of these events occur, we may be forced to abandon our development efforts for a program or programs or we maynot be able to identify, develop or commercialize additional product candidates, which would harm our business and couldpotentially cause us to cease operations.

We will incur significant increased costs as a result of operating as a public company, and our management willbe required to devote substantial time to new compliance initiatives.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a privatecompany. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequentlyimplemented by the Securities and Exchange Commission, or SEC, and the NASDAQ Global Market, or NASDAQ, haveimposed various requirements on public companies. In July 2010, the Dodd-Frank Wall Street Reform and ConsumerProtection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executivecompensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations inthese areas such as “say on pay” and pay parity. Recent legislation permits smaller “emerging growth companies” such asus to implement many of these requirements over a longer period and up to five years from the pricing of this offering. Weintend to take advantage of this new legislation but cannot guarantee that we will not be required to implement theserequirements sooner than budgeted or planned and thereby incur unexpected expenses. Stockholder activism, the currentpolitical environment and the current high level of government intervention and regulatory reform may lead to substantialnew regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner inwhich we operate our business in ways we cannot currently anticipate. Our management and other personnel will need todevote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase ourlegal and financial compliance costs and will make some activities more time-consuming and costly. For example, weexpect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liabilityinsurance and we may be required to incur substantial costs to maintain our current levels of such coverage.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reportingand disclosure controls and procedures. In particular, we will be required to perform system and process evaluation andtesting of our internal controls over financial reporting to allow management to report, commencing in our annual report onForm 10-K for the year ending September 30, 2017, on the effectiveness of our internal controls over financial reporting, ifthen required by Section 404 of the Sarbanes-Oxley Act, or Section 404. Our testing may reveal deficiencies in ourinternal controls over financial reporting that are deemed to be material weaknesses. Our compliance with Section 404 willrequire that we incur substantial accounting expense and expend significant management efforts. We currently do nothave an internal audit group and rely on independent contractors for control monitoring and for the preparation and reviewof our consolidated financial statements. We are actively seeking additional accounting and financial staff with appropriatepublic company experience and technical accounting knowledge to augment our current staff. Moreover, if we are not ableto comply with the requirements of Section 404 in a timely manner or if we identify or our independent registered publicaccounting firm identifies deficiencies in our internal controls over financial reporting that are deemed to be materialweaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations byNASDAQ, the SEC or other regulatory authorities, which would require additional financial and management resources.

New laws and regulations as well as changes to existing laws and regulations affecting public companies, including theprovisions of the Sarbanes-Oxley Act and rules adopted by the SEC and by NASDAQ, would likely result in increasedcosts to us as we respond to their requirements.

We are highly dependent on the services of our key executives and personnel, including our Chairman, Presidentand Chief Executive Officer, Pankaj Mohan, Ph.D., and if we are not able to retain these members of ourmanagement or recruit additional management, clinical and scientific personnel, our business will suffer.

We are highly dependent on the principal members of our management and scientific and technical staff, particularly, ourChairman, President and Chief Executive Officer, Dr. Mohan. The loss of service of any of our management or keyscientific and technical staff could harm our business. In addition, we are dependent on our continued ability to attract,retain and

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motivate highly qualified additional management, clinical and scientific personnel. If we are not able to retain ourmanagement and to attract, on acceptable terms, additional qualified personnel necessary for the continued developmentof our business, we may not be able to sustain our operations or grow.

We may not be able to attract or retain qualified personnel in the future due to the intense competition for qualifiedpersonnel among biotechnology, pharmaceutical and other businesses. Our industry has experienced a high rate ofturnover of management personnel in recent years. If we are not able to attract, retain and motivate necessary personnelto accomplish our business objectives, we may experience constraints that will significantly impede the achievement ofour development objectives, our ability to raise additional capital and our ability to implement our business strategy.

Our future performance will also depend, in part, on our ability to successfully integrate newly hired executive officers intoour management team and our ability to develop an effective working relationship among senior management. Our failureto integrate these individuals and create effective working relationships among them and other members of managementcould result in inefficiencies in the development and commercialization of our product candidates, harming futureregulatory approvals, sales of our product candidates and our results of operations. Additionally, we do not currentlymaintain “key person” life insurance on the lives of our executives or any of our employees.

We will need to expand our organization and we may experience difficulties in managing this growth, which coulddisrupt our operations.

As of March 31, 2016, we had 89 full-time employees. As our development and commercialization plans and strategiesdevelop, we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources. Ourmanagement may need to divert a disproportionate amount of its attention away from our day-to-day operations anddevote a substantial amount of time to managing these growth activities. We may not be able to effectively manage theexpansion of our operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss ofbusiness opportunities, loss of employees and reduced productivity among remaining employees. Our expected growthcould require significant capital expenditures and may divert financial resources from other projects, such as thedevelopment of our current and potential future product candidates. If our management is unable to effectively manageour growth, our expenses may increase more than expected, our ability to generate and grow revenue could be reducedand we may not be able to implement our business strategy. Our future financial performance and our ability tocommercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage anyfuture growth.

Two members of our board of directors, including our Chief Executive Officer, are directors of SonnetBiotherapeutics, Inc. In addition, there is significant overlap between our current stockholders and theshareholders of Sonnet. Their interests may conflict with those of our other stockholders.

On April 6, 2015, pursuant to a contribution agreement, we contributed certain of our assets, unrelated to our biosimilarbusiness, to Sonnet Biotherapeutics, Inc., or Sonnet, a company focused on the development of bi- or tri-specific antibodyfragments that have potential utility in oncology, in exchange for all of Sonnet’s outstanding equity interests. We thendistributed the equity interests to our stockholders on a pro rata basis. Two of our current directors, Pankaj Mohan, Ph.D.,who is also our Chairman, President and Chief Executive Officer, and Donald J. Griffith, our former Chief Financial Officer,currently serve as members of the board of directors of Sonnet. In addition, Mr. Griffith serves as the President, ChiefExecutive Officer and Treasurer of Sonnet. Neither Dr. Mohan nor Mr. Griffith intend to resign from their respectivepositions in Sonnet. In addition, Dr. Mohan currently holds approximately 57% of the outstanding capital stock of Sonnet.These relationships could result in conflicts of interest between their obligations to our company and Sonnet. In addition,there is significant overlap between our current stockholders and the shareholders of Sonnet. Sonnet’s interests and theinterests of its shareholders may be different from ours or those of our other stockholders and this could result in conflicts.The resolution of any of these conflicts may not always be in our or your best interest.

Healthcare legislative reform measures may harm our business and results of operations.

In the United States, there have been and continue to be a number of legislative initiatives to improve the access to andquality of healthcare, and to contain healthcare costs. For example, in March 2010, the Patient Protection and AffordableCare Act, as amended by the Health Care and Education Reconciliation Act of 2010, or together, the PPACA, was passed,which substantially changes the way health care is financed by both governmental and private insurers and significantlyimpacts the U.S. pharmaceutical industry. The PPACA, among other things, imposes a new methodology by which rebatesowed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused,instilled, implanted or injected, increases the minimum Medicaid rebates owed by manufacturers under the Medicaid DrugRebate Program, extends the rebate program to individuals enrolled in Medicaid managed care organizations, adds aprovision to increase the Medicaid rebate for line extensions or reformulated drugs, establishes annual fees and taxes on

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■ the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly andwillfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce,reward, or in return for either the referral of an individual for, or the purchase, recommendation, order orfurnishing of an item or service reimbursable, in whole or in part, under a federal healthcare program, such asthe Medicare and Medicaid programs;

■ federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act,which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presentedclaims for payment from Medicare, Medicaid or other government health programs that are false or fraudulentand which may apply to entities that provide coding and billing advice to customers;

■ the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additionalfederal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefitprogram and making false statements relating to healthcare matters;

■ HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and itsimplementing regulations, which imposes certain requirements, including mandatory contractual terms, relatingto the privacy, security and transmission of individually identifiable health information on health plans, certainhealthcare providers, and healthcare clearinghouses, and their business associates;

■ the federal legislation commonly referred to as the Physician Payments Sunshine Act under the PPACA, whichrequires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is availableunder Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to reportannually to the Centers for Medicare & Medicaid Services information related to payments and other transfers ofvalue made by such manufacturers to physicians and teaching hospitals and ownership and investmentinterests held by physicians and their immediate family members and applicable group purchasingorganizations; and

■ analogous state and foreign laws and regulations, such as anti-kickback and false claims laws that may apply toitems or services reimbursed by any third-party payor, including commercial insurers; state laws that require

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manufacturers and importers of certain branded prescription drugs and biologic agents, and promotes a new MedicarePart D coverage gap discount program. The PPACA also expands eligibility for Medicaid programs and introduced a newPatient Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinicaleffectiveness research, along with funding for such research.

In addition, other legislative changes have been proposed and adopted in the United States since the PPACA wasenacted. For example, on August 2, 2011, the Budget Control Act of 2011, among other things, created measures forspending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeteddeficit reduction of at least $1.2 trillion for the years 2012 through 2021, was unable to reach required goals, therebytriggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions ofMedicare payments to providers up to 2% per fiscal year, which went into effect on April 1, 2013 and will stay in effectthrough 2024 unless additional Congressional action is taken. Additionally, on January 2, 2013, President Obama signedinto law the American Taxpayer Relief Act of 2012, which among other things, further reduced Medicare payments tocertain providers, including physicians, hospitals and cancer treatment centers.

We expect that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result inmore rigorous coverage criteria and lower reimbursement, and additional downward pressure on the price that we receivefor any approved product. Any reduction in reimbursement from Medicare or other government-funded programs mayresult in a similar reduction in payments from private payors. The implementation of cost containment measures or otherhealthcare reforms could result in reduced demand for our product candidates or additional pricing pressures, and mayprevent us from being able to generate revenue, attain profitability or commercialize our drugs.

We may be subject, directly or indirectly, to federal and state healthcare laws and regulations, including fraud andabuse, false claims, physician payment transparency and health information privacy and security laws. If we areunable to comply or have not fully complied with such laws, we could face substantial penalties.

If we obtain FDA approval for any of our product candidates and begin commercializing those products in the UnitedStates, our operations may be directly or indirectly through our customers subject to various federal and state fraud andabuse laws, including without limitation, the federal Anti-Kickback Statute, the federal False Claims Act and physiciansunshine laws and regulations. These laws may impact, among other things, our proposed sales, marketing and educationprograms. In addition, we may be subject to patient data privacy and security regulation by both the federal governmentand the states in which we conduct our business. The healthcare laws that may affect our ability to operate include but arenot limited to:

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■ multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and importrestrictions, employment laws, regulatory requirements and other governmental approvals, permits andlicenses;

■ failure by us or our collaboration partners to obtain and maintain regulatory approvals for the use of our productsin various countries;

■ additional potentially relevant third-party patent rights;

■ complexities and difficulties in obtaining protection and enforcing our intellectual property;

■ difficulties in staffing and managing foreign operations by us or our collaboration partners;

■ complexities associated with managing multiple payor reimbursement regimes, government payors or patientself-pay systems by our collaboration partners;

■ limits in our or our collaboration partners’ ability to penetrate international markets;

■ financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local andregional financial crises on demand and payment for our products and exposure to foreign currency exchangerate fluctuations;

■ natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak ofdisease, boycotts, curtailment of trade and other business restrictions;

■ certain expenses including, among others, expenses for travel, translation and insurance; and

■ regulatory and compliance risks that relate to maintaining accurate information and control over sales andactivities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, its books and recordsprovisions or its anti-bribery provisions.

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pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines andthe relevant compliance guidance promulgated by the federal government or otherwise restrict payments thatmay be made to healthcare providers and other potential referral sources; state laws that require drugmanufacturers to report information related to payments and other transfers of value to physicians and otherhealthcare providers or marketing expenditures; and state laws governing the privacy and security of healthinformation in certain circumstances, many of which differ from each other in significant ways and may not havethe same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it ispossible that some of our business activities could be subject to challenge under one or more of such laws. In addition,recent healthcare reform legislation has strengthened these laws. For example, the PPACA, among other things, amendsthe intent requirement of the federal anti-kickback and criminal healthcare fraud statutes. A person or entity no longerneeds to have actual knowledge of these statutes or specific intent to violate them in order to commit a violation.Moreover, the PPACA provides that the government may assert that a claim including items or services resulting from aviolation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False ClaimsAct.

If our operations are found to be in violation of any of the laws described above or any other governmental regulations thatapply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion fromparticipation in government healthcare programs, such as Medicare and Medicaid, imprisonment, disgorgement,contractual damages, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of ouroperations, any of which could adversely affect our ability to operate our business and our results of operations. Defendingagainst any such actions can be costly, time-consuming and may require significant financial and personnel resources.Therefore, even if we are successful in defending against any such actions that may be brought against us, our businessmay be impaired.

The international aspects of our business expose us to business, regulatory, political, operational, financial andeconomic risks associated with doing business outside of the United States.

We currently have limited international operations of our own and have a number of international collaborations. Doingbusiness internationally involves a number of risks, including but not limited to:

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to finesor penalties or incur costs that could harm our business.

Our research, development and manufacturing activities and our third-party suppliers’ activities involve the controlledstorage, use and disposal of hazardous materials, including the components of our product candidates and otherhazardous compounds. We and our suppliers are subject to laws and regulations governing the use, manufacture,storage, handling and disposal of these hazardous materials. In some cases, these hazardous materials and variouswastes resulting from their

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■ the success of competitive products or technologies;

■ adverse results or delays in preclinical or clinical trials;

■ any inability to obtain additional funding;

■ any delay in filing an IND, BLA or other regulatory submission for any of our product candidates and anyadverse development or perceived adverse development with respect to the applicable regulatory agency’sreview of that IND, BLA or other regulatory submission;

■ the perception of limited market sizes or pricing for our product candidates;

■ failure to successfully develop and commercialize our product candidates;■ post-marketing safety issues relating to our product candidates or biosimilars generally;

■ failure to maintain our existing strategic collaborations or enter into new collaborations;

■ failure by us or our licensors and strategic collaboration partners to prosecute, maintain or enforce ourintellectual property rights;

■ changes in laws or regulations applicable to our products;

■ any inability to obtain adequate product supply for our product candidates or the inability to do so at acceptableprices;

■ adverse regulatory decisions;

■ introduction of new products, services or technologies by our competitors, including biosimilars, interchangeablebiosimilars, and biobetter versions of the same molecules we are targeting;

■ failure to meet or exceed financial projections we may provide to the public;

■ failure to meet or exceed the financial projections of the investment community;

■ the perception of the pharmaceutical industry by the public, legislatures, regulators and the investmentcommunity;

■ announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us,our strategic collaboration partners or our competitors;

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use are stored at our facilities pending their use and disposal. We cannot eliminate the risk of contamination, which couldcause an interruption of our commercialization efforts, research, development and manufacturing efforts and businessoperations, and environmental damage resulting in costly clean-up and liabilities under applicable laws and regulationsgoverning the use, storage, handling and disposal of these materials and specified waste products. Although we believethat the safety procedures utilized by us for handling and disposing of these materials generally comply with the standardsprescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidentalcontamination or injury from these materials. In such an event, we may be held liable for any resulting damages and suchliability could exceed our resources and state or federal or other applicable authorities may curtail our use of certainmaterials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, changefrequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot becertain of our future compliance. We do not currently carry biological or hazardous waste insurance coverage.

Risks Related to this Offering and Ownership of Our SecuritiesAn active trading market for our securities may not develop or be sustainable, and you may not be able to resellyour units.

Prior to this offering, there has not been a public market for our securities. The initial public offering price for the units willbe determined by negotiations between us and the representatives of the underwriters and may not be indicative of pricesthat will prevail in the trading market for the units, or the shares of common stock or warrants included in the units. Anactive trading market for our securities may not develop, or be sustained, following this offering. If an active market for oursecurities does not develop, you may not be able to sell your units, or the shares of common stock or warrants included inthe units, quickly or at the market price. We cannot predict the prices at which our securities will trade and you may not beable to resell your units, or the shares of common stock or warrants included in the units.

The trading price of our securities is likely to be volatile, and purchasers of our securities could incur substantiallosses.

The market price of our securities is likely to be volatile. The stock market in general and the market in which we operatehave experienced extreme volatility that has often been unrelated to the operating performance of particular companies.As a result of this volatility, investors may not be able to sell their securities at or above the initial public offering price. Themarket price of our securities could be subject to wide fluctuations in response to a variety of factors, including but notlimited to:

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■ disputes or other developments relating to proprietary rights, including patents, litigation matters and our abilityto obtain patent protection for our technologies;

■ additions or departures of key scientific or management personnel;

■ significant lawsuits, including stockholder litigation and litigation filed by us or filed against us pertaining topatent infringement or other violations of intellectual property rights;

■ the outcomes of any citizens petitions filed by parties seeking to restrict or limit the approval of biosimilarproducts;

■ if securities or industry analysts do not publish research or reports about our business or if they issue anadverse or misleading opinion regarding our stock;

■ changes in the market valuations of similar companies;

■ general economic, industry or market conditions;

■ sales of our securities by us or our stockholders in the future;

■ trading volume of our securities;

■ issuance of patents to third parties that could prevent our ability to commercialize our product candidates;

■ reductions in the prices of reference products that could reduce the overall market opportunity for our productcandidates intended as biosimilars to such reference products;

■ the loss of one or more employees constituting our leadership team;

■ changes in biosimilar regulatory requirements that could make it more difficult for us to develop our productcandidates; and

■ the other factors described in this “Risk Factors” section.

■ our ability to successfully develop, market and sell ONS-3010, ONS-1045, ONS-1050 and our other productcandidates;

■ the cost of clinical development for ONS-3010, ONS-1045 and ONS-1050;

■ the success of competitive products or technologies;

■ results of clinical trials of our product candidates or those of our competitors;

■ developments or disputes concerning patent applications, issued patents or other proprietary rights;

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In addition, biopharmaceutical companies in particular have experienced extreme price and volume fluctuations that haveoften been unrelated or disproportionate to the operating performance of these companies. Broad market and industryfactors may negatively affect the market price of our securities, regardless of our actual operating performance.

Our principal stockholders and management own a significant percentage of our stock and will be able to exertsignificant control over matters subject to stockholder approval, preventing new investors from influencingsignificant corporate decisions.

As of March 31, 2016, our executive officers, directors and 5% stockholders and their affiliates beneficially ownedapproximately 58.8% of our voting stock and, upon closing of this offering, that same group will beneficially ownapproximately 43.2% of our outstanding voting stock (assuming no exercise of the underwriters’ option to purchaseadditional shares and excluding units purchased by any such holders in this offering and the concurrent private placement,if any). In addition, such holders may further increase their ownership in our company pursuant to the directed unitprogram. At our request, the underwriters have reserved 291,666 units, or 5% of the units being offered by this prospectus(excluding the units that may be issued upon the underwriters’ exercise of their over-allotment option to purchaseadditional units), for sale at the initial public offering price to our employees, executive officers, directors, stockholders andothers through a directed unit program. The interests of this group of securityholders may not coincide with the interests ofother securityholders. Therefore, even after this offering and the concurrent private placement, if any, thesesecurityholders will have the ability to influence us through their ownership positions, which may prevent or discourageunsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as one of oursecurityholders.

Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors orsecurities analysts, each of which may cause our stock price to fluctuate or decline.

Our quarterly operating results may fluctuate significantly, which makes it difficult for us to predict our future operatingresults. These fluctuations may occur due to a variety of factors, many of which are out of our control and may be difficultto predict, including but not limited to:

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■ the recruitment or departure of key personnel;■ the level of expenses related to any of our product candidates or clinical development programs;

■ the results of our efforts to discover, develop, manufacture, acquire or in-license additional product candidates;■ actual or anticipated changes in estimates as to financial results, development timelines or recommendations by

securities analysts;

■ variations in our financial results or those of companies that are perceived to be similar to us;■ market conditions in the pharmaceutical and biotechnology sectors;■ general economic, industry and market conditions; and■ the other factors described in this “Risk Factors” section.

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If our quarterly operating results fall below the expectations of investors or securities analysts, the market price of oursecurities could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, causethe price of our securities to fluctuate substantially. We believe that quarterly comparisons of our financial results are notnecessarily meaningful and should not be relied upon as an indication of our future performance.

If securities or industry analysts do not publish research, or publish unfavorable research, about our business,the market price of our securities and trading volume could decline.

The trading market for our securities will depend in part on the research and reports that securities or industry analystspublish about us or our business, our market and our competitors. We do not have any control over these analysts. If oneor more of the analysts who cover us downgrade our securities or change their opinion of our securities, the market priceof our securities would likely decline. If one or more of these analysts cease coverage of our company or fail to regularlypublish reports on us, we could lose visibility in the financial markets, which could cause the market price of our securitiesor trading volume to decline.

We are an “emerging growth company” and, due to the reduced reporting requirements applicable to emerginggrowth companies, certain investors may find investing in our securities less attractive.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.For as long as we continue to be an emerging growth company, we may take advantage of exemptions from variousreporting requirements that are applicable to other public companies that are not emerging growth companies, includingnot being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligationsregarding executive compensation in this prospectus and our periodic reports and proxy statements and exemptions fromthe requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of anygolden parachute payments not previously approved. We could be an emerging growth company for up to five years,although circumstances could cause us to lose that status earlier, including if the market value of our common stock heldby non-affiliates exceeds $700 million as of March 31 (the end of our second fiscal quarter) of any fiscal year before thattime or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that time, in which caseswe would no longer be an emerging growth company as of the following September 30 (the last day of our fiscal year) or,if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease tobe an emerging growth company immediately. We cannot predict if investors will find our securities less attractive becausewe may rely on this exemption. If some investors find our securities less attractive as a result, there may be a less activetrading market for our securities and the market price of our securities may be more volatile.

We will incur costs and demands upon management as a result of complying with the laws and regulationsaffecting public companies in the United States, which may harm our operating results.

As a public company listed in the United States, we will incur significant additional legal, accounting and other expenses.In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, includingregulations implemented by the SEC and NASDAQ, may increase legal and financial compliance costs and make someactivities more time-consuming. These laws, regulations and standards are subject to varying interpretations, and as aresult, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result inincreased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If, notwithstanding our efforts to comply with new laws, regulations andstandards, we fail to comply, regulatory authorities may initiate legal proceedings against us, and our business may beharmed.

Further, failure to comply with these laws, regulations and standards might also make it more difficult for us to obtaincertain types of insurance, including director and officer liability insurance, and we might be forced to accept reduced

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policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of theseevents could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, oncommittees of our board of directors or as members of senior management.

If you purchase units in this offering, you will incur immediate and substantial dilution in the book value of yourunits.

Investors purchasing units in this offering will pay a price per unit that substantially exceeds the pro forma book value pershare forming part of the unit. As a result, investors purchasing units in this offering will incur immediate dilution of $5.19per share forming part of the unit, based on an assumed initial public offering price of $6.00 per unit, and our pro formanet tangible book value per share as of December 31, 2015. For information on how the foregoing amounts werecalculated, see the section titled “Dilution.”

This dilution is due to the substantially lower price paid by our investors who purchased our securities prior to this offeringas compared to the price offered to the public in this offering. As a result of the dilution to investors purchasing units in thisoffering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of ourliquidation.

Sales of a substantial number of our common stock in the public market could cause the price of our securitiesto fall.

If our existing stockholders sell or indicate an intention to sell substantial amounts of our common stock in the publicmarket after the lock-up and other legal restrictions on resale discussed in this prospectus lapse, the market price of oursecurities could decline. Based upon the number of shares of common stock, on an as-converted basis, outstanding as ofDecember 31, 2015, upon the closing of this offering we will have outstanding a total of 21,969,446 shares of commonstock, including 5,833,334 shares of common stock included in the units but excluding the 5,833,334 shares underlyingthe Series A warrants and Series B warrants included in the units, and assuming no exercise of the underwriters’ option topurchase additional units and excluding any securities that may be issued in the concurrent private placement, if any. Ofthese shares, as of the date of this prospectus, all of the shares forming part of the unit sold in this offering, including anyshares forming part of the unit sold upon exercise of the underwriters’ option to purchase additional units, will be freelytradable, without restriction, in the public market immediately following this offering, except for any shares forming part ofthe unit purchased by certain of our existing and new investors who have indicated an interest in purchasing up to anaggregate of approximately $20.0 million of units, of which some have entered into a 60-day lock-up agreement with theunderwriters or by our affiliates, as defined in Rule 144 under the Securities Act of 1933, as amended, or the SecuritiesAct, in respect of such units if acquired.

The lock-up agreements pertaining to shares of common stock held prior to this offering will expire 180 days from the dateof this prospectus. After such lock-up agreements expire, based upon the number of shares of common stock, on an as-converted basis, outstanding as of December 31, 2015, 16,136,112 shares of common stock will be eligible for sale in thepublic market, of which approximately 9,483,074 shares are held by directors, executive officers and 5% stockholders andtheir affiliates, and will be subject to the manner of sale, volume limitations and public reporting requirements of Rule 144under the Securities Act. Jefferies LLC and Barclays Capital Inc. may however, in their sole discretion, permit our officers,directors and other stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of thelock-up agreements.

After this offering, the holders of approximately 4,078,029 shares of our common stock, or approximately 25.3% of ouroutstanding common stock as of December 31, 2015, will be entitled to rights with respect to the registration of theirshares under the Securities Act, subject to the lock-up agreements described above. The shares of common stockissuable upon the exercise of warrants to acquire an aggregate of 1,520,284 shares of our common stock to be issued tocertain investors upon the closing of this offering will also be entitled to rights with respect to registration under theSecurities Act. Registration of any of these shares under the Securities Act would result in the shares becoming freelytradable without restriction under the Securities Act, except for shares purchased by affiliates. Any sales of securities bythese stockholders could have a negative impact on the market price of our securities.

Due to the speculative nature of warrants, there is no guarantee that it will ever be profitable for holders of theSeries A warrants and Series B warrants to exercise such warrants.

The Series A warrants and Series B warrants included in the units offered hereby represent the right to acquire shares ofcommon stock at a fixed price for a limited period of time beginning 30 days after the date of this prospectus or the dateon which Jefferies LLC and Barclays Capital Inc., as representatives of the underwriters, separate the units, whicheverdate is earlier. If not exercised prior to their expiration dates, such warrants expire and have no further value. In the eventthe price of a share of our common stock price does not exceed the exercise price of the warrants during the period whenthe warrants are exercisable, such warrants may not have any value. Moreover, following this offering, the market value ofthe

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warrants is uncertain and there can be no assurance that the market value of the warrants will equal or exceed their initialpublic offering price. There can be no assurance that the market price of our common stock will ever equal or exceed theexercise price of the warrants, and, consequently, whether it will ever be profitable for holders of the Series A and Series Bwarrants included in the units offered hereby to exercise such warrants. See the section titled “Description of Securities — Series A Warrants and Series B Warrants Issued as Part of the Units” for more information regarding the Series Awarrants and Series B warrants included in the units.

Future sales and issuances of our common stock or rights to purchase securities, including pursuant to ourequity incentive plans or exercise of warrants, could result in additional dilution of the percentage ownership ofour stockholders and could cause the market price of our securities to fall.

We will need additional capital in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertiblesecurities 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 bematerially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, andnew investors could gain rights superior to our existing stockholders.

Pursuant to the 2015 Equity Incentive Plan, or the 2015 Plan, our management is authorized to grant stock options andother equity-based awards to our employees, directors and consultants. Under the 2015 Plan, the number of shares of ourcommon stock initially reserved for issuance was 1,246,377 shares. The number of shares available for future grant underthe 2015 Plan will be increased by (i) the number of shares pursuant to outstanding awards under the 2015 Plan that areforfeited or lapse unexercised and which following the effective date are not issued under the 2015 Plan, (ii) 3% of theshares of stock outstanding on the 60th day following the date of the underwriting agreement for this offering and (iii) anannual increase on January 1 beginning in 2017 and ending in 2025, equal to 3% of the shares of stock outstanding as ofDecember 31st of the immediately preceding year, or such smaller number of shares as determined by our board ofdirectors. Pursuant to the 2016 Employee Stock Purchase Plan, or the ESPP, which will become effective upon theexecution of the underwriting agreement related to this offering, upon implementation of an offering under the ESPP,eligible employees will be able to acquire shares of our common stock at a discount to the prevailing market price, and anaggregate of 289,855 shares will initially be available for issuance under the ESPP. The number of shares available forissuance under the ESPP will automatically increase on the first day of each fiscal year beginning in 2016 and ending in2025, equal to the lesser of (i) 1% of the shares of common stock outstanding on December 31st of the immediatelypreceding calendar year, (ii) 510,145 shares of common stock, subject to adjustments as provided in the ESPP or(iii) such smaller number of shares as determined by our board of directors. If our board of directors does not elect toreduce the annual increases in the number of shares available for future grant under the 2015 Plan or the ESPP, ourstockholders may experience additional dilution, which could cause the market price of our securities to fall.

Following the closing of this offering, we could have outstanding warrants to acquire an aggregate of 1,520,284 shares ofour common stock, which have an initial exercise price of $0.01 per share, which may increase to $1.00 per share undercertain circumstances. Issuance of shares of common stock upon exercise of these warrants may result in additionaldilution to investors in this offering.

We will have broad discretion in the use of the net proceeds from this offering and may invest or spend theproceeds in ways with which you do not agree and in ways that may not yield a return.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any ofthe purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of yourinvestment decision to assess whether the net proceeds are being used appropriately. Because of the number andvariability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary from theircurrently intended use. The failure by our management to apply these funds effectively could harm our business. Pendingtheir use, we may invest the net proceeds from this offering in investment-grade, interest-bearing securities. Theseinvestments may not yield a favorable return to our securityholders.

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

We have incurred substantial losses during our history and do not expect to become profitable in the near future, and wemay never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forwardto offset future taxable income, if any, until such unused losses expire. Under Sections 382 and 383 of the InternalRevenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greaterthan 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, thecorporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes

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■ establishing a classified board of directors so that not all members of our board of directors are elected at onetime;

■ permitting the board of directors to establish the number of directors and fill any vacancies and newly createddirectorships;

■ providing that directors may only be removed for cause;

■ prohibits cumulative voting for directors;

■ requiring super-majority voting to amend some provisions in our amended and restated certificate ofincorporation and amended and restated bylaws;

■ authorizing the issuance of “blank check” preferred stock that our board of directors could use to implement astockholder rights plan;

■ eliminating the ability of stockholders to call special meetings of stockholders; and

■ prohibiting stockholder action by written consent, which requires all stockholder actions to be taken at a meetingof our stockholders.

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(such as research tax credits) to offset its post-change income or taxes may be limited. We may have experiencedownership changes in the past and may experience ownership changes in the future as a result of this offering and/orsubsequent shifts in our stock ownership (some of which shifts are outside our control). As a result, if we earn net taxableincome, our ability to use our pre-change NOLs to offset such taxable income will be subject to limitations. Similarprovisions 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, which could accelerate orpermanently increase state taxes owed. As a result, even if we attain profitability, we may be unable to use a materialportion of our NOLs and other tax attributes, which could adversely affect our future cash flows.

We do not intend to pay dividends on our capital stock, and as such any returns will be limited to the value of oursecurities.

We have never declared or paid any cash dividends on our capital stock. We currently anticipate that we will retain futureearnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cashdividends for the foreseeable future. Any return to securityholders will therefore be limited to the appreciation of theirsecurities.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well asprovisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost ofacquiring us, even if doing so would benefit our securityholders or remove our current management.

Our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisionsthat may have the effect of delaying or preventing a change in control of us or changes in our management. Our charterdocuments will also contain other provisions that could have an anti-takeover effect, such as:

These provisions, alone or together, could delay, deter or prevent hostile takeovers and changes in control or changes inour management.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DelawareGeneral Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stockto merge or combine with us.

Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware lawthat has the effect of delaying or deterring a change in control could limit the opportunity for our securityholders to receivea premium for their securities and could also affect the price that some investors are willing to pay for our securities.

Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State ofDelaware will be the exclusive forum for substantially all disputes between us and our stockholders, which couldlimit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers oremployees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is theexclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciaryduty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended andrestated certificate of incorporation or our amended and restated bylaws; or any action asserting a claim against us that isgoverned by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a claim ina judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may

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discourage such lawsuits against us and our directors, officers and other employees. If a court were to find the choice offorum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable inan action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm ourbusiness and financial condition.

If we fail to develop and maintain proper and effective internal controls over financial reporting, the accuracy andtimeliness of our financial reporting may be adversely affected.

We will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectivenessof our internal control over financial reporting for the first fiscal year beginning after the effective date of this offering. Thisassessment will need to include disclosure of any material weaknesses identified by our management in our internalcontrol over financial reporting. Our independent registered public accounting firm will not be required to attest to theeffectiveness of our internal control over financial reporting until our first annual report required to be filed with the SECfollowing the later of the date we are deemed to be an “accelerated filer” or a “large accelerated filer,” each as defined inthe Securities Exchange Act of 1934, as amended, or the Exchange Act, or the date we are no longer an “emerginggrowth company,” as defined in the JOBS Act. We will be required to disclose changes made in our internal control andprocedures on a quarterly basis. To comply with the requirements of being a public company, we may need to undertakevarious actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.We are beginning the costly and challenging process of compiling the system and processing documentation necessary toperform the evaluation needed to comply with Section 404, and we may not be able to complete our evaluation, testingand any required remediation in a timely fashion.

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■ the timing and the success of the design of the clinical trials and planned clinical trials of ONS-3010, ONS-1045and ONS-1050;

■ whether the results of our clinical trials will be sufficient to support domestic or global regulatory approvals;

■ our ability to obtain and maintain regulatory approval of our current and future biosimilar product candidates;

■ our expectations regarding the potential market size and the size of the patient populations for our biosimilarproduct candidates, if approved, for commercial use;

■ our ability to fund our working capital requirements;

■ the implementation of our business model and strategic plans for our business and biosimilar productcandidates;

■ the initiation, timing, progress and results of future preclinical studies and clinical trials and our research anddevelopment programs;

■ developments or disputes concerning our intellectual property or other proprietary rights;

■ our ability to maintain and establish collaborations or obtain additional funding;

■ the rate and degree of market acceptance of our current and future biosimilar product candidates;

■ our expectation that our existing capital resources and the net proceeds from this offering will be sufficient toenable us to complete our planned clinical trial;

■ our expectations regarding government and third-party payor coverage and reimbursement;

■ our ability to compete in the markets we serve; and

■ the factors that may impact our financial results.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements about us and our industry that involve substantial risks anduncertainties. All statements other than statements of historical facts contained in this prospectus, including statementsregarding our future financial condition, business strategy and plans, and objectives of management for future operations,are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,”“anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,”“may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similarexpressions that are predictions of or indicate future events and future trends, or the negative of these terms or othercomparable terminology.

We have based these forward-looking statements largely on our current expectations and projections about future eventsand financial trends that we believe may affect our financial condition, results of operations, business strategy andfinancial needs. These forward-looking statements are subject to a number of known and unknown risks, uncertainties andassumptions, including risks described in the section titled “Risk Factors” and elsewhere in this prospectus, regarding,among other things:

These risks are not exhaustive. Other sections of this prospectus may include additional factors that could harm ourbusiness and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. Newrisk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can weassess the impact of all factors on our business or the extent to which any factor, or combination of factors, may causeactual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that theevents and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe thatthe expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels ofactivity, performance or achievements. Except as required by law, we undertake no obligation to update publicly anyforward-looking statements for any reason after the date of this prospectus or to conform these statements to actualresults or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to theregistration statement of which this prospectus is a part with the understanding that our actual future results, levels ofactivity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the market in which weoperate, including our general expectations and market position, market opportunity and market size, is based oninformation from various sources including the independent industry publication set forth below and is subject to a numberof assumptions and limitations. Although we are responsible for all of the disclosure contained in this prospectus and webelieve the information from the industry publication and other third-party sources included in this prospectus is reliable,such information is inherently imprecise. The industry in which we operate is subject to a high degree of uncertainty andrisk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors couldcause results to differ materially from those expressed in the estimates made by the independent parties and by us.

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■ approximately $20.0 million to advance clinical development of ONS-3010 through Phase 3 clinical trials;

■ approximately $5.0 million to fund our other ongoing research and development activities, including advancingdevelopment of ONS-1045 to be ready to enter a Phase 3 clinical trial, and advancing development of ONS-1050 and ONS-4010 to be ready to enter Phase 1 clinical trials; and

■ the remainder for working capital and general corporate purposes.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from the sale of 5,833,334 units that we are selling in this offering ofapproximately $29.8 million at an assumed initial public offering price of $6.00 per unit, after deducting estimatedunderwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise infull their over-allotment option to purchase 875,000 additional units, we estimate that our net proceeds will beapproximately $34.6 million, after deducting estimated underwriting discounts and commissions and estimated offeringexpenses payable by us. Such amounts do not include $5.0 million in proceeds from the concurrent private placement.Because we have not entered into any definitive agreements with Sabby related to the concurrent private placement, therecan be no guarantee that the concurrent private placement will take place or that the terms of the concurrent privateplacement will be consistent with those assumed in this prospectus. For more information, please see “CertainRelationships and Related Party Transactions — Concurrent Private Placement.” The private placement with Sabby iscontingent upon, and will occur concurrently with, the closing of this offering, if at all.

A $1.00 increase (decrease) in the assumed initial public offering price of $6.00 per unit would increase (decrease) thenet proceeds to us from this offering by approximately $5.4 million, assuming the number of units offered by us, as setforth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissionsand estimated offering expenses payable by us. We may also increase or decrease the number of units we are offering.Similarly, an increase (decrease) of 1,000,000 units in the number of units offered by us would increase (decrease) the netproceeds to us from this offering by approximately $5.6 million, assuming that the assumed initial public offering priceremains the same, and after deducting estimated underwriting discounts and commissions and estimated offeringexpenses payable by us. We do not expect that a change in the initial price to the public or the number of units by theseamounts would have a material effect on our uses of the proceeds from this offering, although it may accelerate the time atwhich we will need to seek additional capital.

We currently intend to use the net proceeds from this offering as follows:

However, due to the uncertainties inherent in the product development process, it is difficult to estimate with certainty theexact amounts of the net proceeds from this offering that may be used for the above purposes. Our management will havebroad discretion over the use of the net proceeds from this offering. The amounts and timing of our expenditures willdepend upon numerous factors including the results of our research and development efforts, the timing and success ofpreclinical studies and any ongoing clinical trials or clinical trials we may commence in the future, the timing of regulatorysubmissions and the amount of cash obtained through current and any future collaborations.

We believe opportunities may exist from time to time to expand our current business through acquisitions or in-licenses ofcomplementary companies, medicines or technologies. While we have no current agreements, commitments orunderstandings for any specific acquisitions or in-licenses at this time, we may use a portion of the net proceeds for thesepurposes.

Pending the use of the proceeds from this offering as described above, we intend to invest the net proceeds in interest-bearing investment-grade securities or government securities.

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DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock, and we do not currently intend to pay any cashdividends on our capital stock in the foreseeable future. We currently intend to retain all available funds and any futureearnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cashdividends in the foreseeable future. Any future determination related to dividend policy will be made at the discretion of ourboard of directors subject to applicable laws, and will depend upon, among other factors, our results of operations,financial condition, contractual restrictions and capital requirements. Our future ability to pay cash dividends on our stockmay also be limited by the terms of any future debt, issuances of preferred securities or terms of future credit facilities.

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■ an actual basis;

■ a pro forma basis to give effect to (i) the issuance of 87,287 shares of common stock for aggregate netproceeds of approximately $2.5 million in January 2016, (ii) cash proceeds of approximately $2.7 millionreceived subsequent to December 31, 2015 related to stock issued in December 2015, (iii) the conversion of11,819 shares of Series A preferred stock into 1,969,818 shares of common stock immediately prior to theclosing of this offering (assuming an initial public offering price of $6.00 per share of common stock included inthe units sold in this offering) and (iv) the reclassification of 1,739,130 shares of redeemable common stock tocommon stock upon lapse of a contractual redemption right; and

■ a pro forma as adjusted basis, to give further effect to (i) the sale of 5,833,334 units in this offering at anassumed initial public offering price of $6.00 per unit, after deducting estimated underwriting discounts andcommissions, and estimated offering expenses payable by us and (ii) the filing of our amended and restatedcertificate of incorporation.

(1) A $1.00 increase (decrease) in the assumed initial public offering price of $6.00 per unit, would increase (decrease) each of cash,additional paid-in capital, total stockholders’ equity and total capitalization by approximately $5.4 million, assuming that the numberof units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimatedunderwriting discounts and commissions and estimated offering expenses payable by us. Similarly, an increase (decrease) of1,000,000 units in the number of units offered by us would increase (decrease) cash, additional paid-in capital, total stockholders’equity and total capitalization by approximately $5.6 million, assuming an initial public offering price of $6.00 per unit, and afterdeducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma asadjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price andother terms of this offering determined at pricing.

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CAPITALIZATION

The following table sets forth our cash and capitalization as of December 31, 2015 on:

Actual data as of December 31, 2015 in the table below is derived from our unaudited consolidated financial statements.The pro forma data included in the table below is also unaudited. You should read this table together with the section titled“Selected Consolidated Financial Data,” our consolidated financial statements and the related notes thereto appearingelsewhere in this prospectus and the section titled “Management’s Discussion and Analysis of Financial Condition andResults of Operations” in this prospectus.

As of December 31, 2015(Unaudited)

Actual Pro formaPro forma

as adjustedCash $ 5,582,255 $ 10,806,901 $ 40,556,905Debt obligations, current and long term 15,488,800 15,488,800 15,488,800Redeemable common stock 16,366,212 — —Stockholders’ equity (deficit):

Series A preferred stock, par value $0.01 per share:10,000,000 shares authorized, 11,819 shares issued andoutstanding actual; no shares issued and outstanding proforma and pro forma as adjusted 118 — —

Common stock, par value $0.01 per share; 100,000,000 shares authorized, 12,339,877 shares issued and outstanding actual; 16,136,112 issued and outstanding pro forma; and 21,969,446 shares issued and outstanding pro forma as adjusted 123,399 161,361 219,694

Additional paid-in capital 79,890,165 98,743,702 128,435,373Accumulated deficit (110,928,498 (110,928,498 (110,928,498

Total stockholders’ equity (deficit) (30,914,816 (12,023,435 17,726,569Total capitalization $ 940,196 $ 3,465,365 $ 33,215,369

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■ 249,510 shares of common stock issuable upon the exercise of PSUs whose terms provide for settlement inshares of common stock or cash at our discretion, with a weighted-average exercise price of $6.35;

■ 1,066,193 shares issuable upon vesting of restricted stock unit awards, or RSUs, granted under the 2015 Plan;

■ 180,184 shares of common stock reserved for future issuance under the 2015 Plan, as well as any automaticincreases in the number of shares of common stock reserved for future issuance under this plan;

■ 289,855 shares of common stock reserved for future issuance under the ESPP, as well as any automaticincreases in the number of shares of common stock reserved for future issuance under this plan, which willbecome effective upon the execution of the underwriting agreement related to this offering; and

■ 1,520,284 shares of our common stock issuable upon the exercise of warrants to be issued upon the closing ofthis offering.

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The number of shares of common stock in the table above excludes the following:

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DILUTION

If you invest in our units, your interest will be diluted to the extent of the difference between the initial public offering priceper unit assuming no value is attributable to the Series A warrants and Series B warrants included in the units sold in thisoffering, and the pro forma as adjusted net tangible book value per share of our common stock included in the units sold inthis offering, immediately after the closing of this offering. Such calculation does not reflect any dilution associated with thesale and exercise of the Series A warrants or Series B warrants issued as part of the units, which would cause the actualdilution to our public securityholders to be higher, particularly where a cashless exercise is utilized. Such calculation alsodoes not reflect the sale of $5.0 million of units to Sabby at a price per unit equal to the initial public offering price (or833,332 units based on the assumed initial public offering price of $6.00 per unit) in the concurrent private placement, ifany.

As of December 31, 2015, we had a historical net tangible book value (deficit) of $(30.9) million, or $(2.51) per share ofcommon stock. Our historical net tangible book value (deficit) represents total tangible assets less our total liabilities.Historical net tangible book value per share is our historical net tangible book value (deficit) divided by the number ofshares of common stock outstanding as of December 31, 2015.

Our pro forma net tangible book value (deficit) was $(12.0) million, or $(0.75) per share. Pro forma net tangible book value(deficit) per share represents our total tangible assets less our total liabilities, divided by the number of outstanding sharesof common stock, after giving effect to (i) the issuance of 87,287 shares of common stock for aggregate net proceeds ofapproximately $2.5 million in January 2016, (ii) cash proceeds of approximately $2.7 million received subsequent toDecember 31, 2015 related to stock issued in December 2015, (iii) the conversion of 11,819 shares of Series A preferredstock into 1,969,818 shares of common stock immediately prior to the closing of this offering (assuming an initial publicoffering price of $6.00 per share of common stock included in the units sold in this offering) and (iv) the reclassification of1,739,130 shares of redeemable common stock to common stock upon lapse of a contractual redemption right.

After giving further effect to the sale of 5,833,334 units in this offering at an assumed initial public offering price of $6.00per unit, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us,our pro forma as adjusted net tangible book value (deficit) as of December 31, 2015 would have been approximately$17.7 million, or $0.81 per share of common stock included in the units sold in this offering. This represents an immediateincrease in pro forma as adjusted net tangible book value (deficit) of $1.56 per share to our existing stockholders and animmediate dilution of $5.19 per share to new investors purchasing units in this offering.

The following table illustrates this dilution on a per share basis to new investors, assuming no value is attributed to theSeries A warrants and the Series B warrants issued as part of each unit:

Assumed initial public offering price per share $ 6.00Historical net tangible book value (deficit) per share at December 31, 2015 $ (2.51Increase per share attributable to pro forma adjustments 1.76

Pro forma net tangible book value (deficit) per share at December 31, 2015 (0.75Increase in pro forma net tangible book value (deficit) per share attributable to this offering 1.56

Pro forma as adjusted net tangible book value per share after this offering 0.81

Dilution in net tangible book value per share to new investors in this offering $ 5.19

A $1.00 increase (decrease) in the assumed initial public offering price of $6.00 per unit would increase (decrease) ourpro forma as adjusted net tangible book value per share after this offering by $0.24 per share and the dilution to newinvestors by $0.76 per share, assuming the number of units offered by us, as set forth on the cover page of thisprospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimatedoffering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 units in the number of units offered byus would increase (decrease) the pro forma as adjusted net tangible book value by $0.20 per share and the dilution tonew investors by $0.20 per share, assuming the assumed initial public offering price remains the same, and afterdeducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise in full their over-allotment option to purchase 875,000 additional units from us, the pro formaas adjusted net tangible book value per share after giving effect to this offering would be $0.99 per share, representing animmediate increase to existing stockholders of $1.74 per share and immediate dilution to investors in this offering of $5.01per share.

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■ the total number of shares of common stock purchased from us by our existing stockholders and by newinvestors purchasing units that include shares of common stock in this offering;

■ the total consideration paid to us by our existing stockholders and by new investors purchasing units thatinclude shares of common stock in this offering, assuming an initial public offering price of $6.00 per unit, beforededucting estimated underwriting discounts and commissions and estimated offering expenses payable by us inconnection with this offering; and

■ the average price per share paid by existing stockholders and by new investors purchasing units that includeshares of common stock in this offering.

(1) Includes shares included in the units sold in this offering.

■ 249,510 shares of common stock issuable upon the exercise of PSUs whose terms provide for settlement inshares of common stock or cash at our discretion, with a weighted-average exercise price of $6.35;

■ 1,066,193 shares issuable upon vesting of restricted stock unit awards, or RSUs, granted under the 2015 Plan;

■ 180,184 shares of common stock reserved for future issuance under the 2015 Plan, as well as any automaticincreases in the number of shares of common stock reserved for future issuance under this plan;

■ 289,855 shares of common stock reserved for future issuance under the ESPP, as well as any automaticincreases in the number of shares of common stock reserved for future issuance under this plan, which willbecome effective upon the execution of the underwriting agreement related to this offering; and

■ 1,520,284 shares of our common stock issuable upon the exercise of warrants to be issued upon the closing ofthis offering.

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The following table summarizes, as of December 31, 2015, on a pro forma as adjusted basis described above:

Shares Purchased Total Consideration Average Price Per ShareNumber Percent Amount Percent

Existing Stockholders 16,136,112 73 $ 81,394,129 70 $5.04New Investors 5,833,334 27 35,000,004 30 $6.00

Total 21,969,446 100 $116,394,133 100 $5.30

The total number of shares of common stock reflected in the discussion and tables above is based on (i) 12,339,877shares of common stock outstanding as of December 31, 2015 on an actual basis, (ii) the issuance of 87,287 shares ofcommon stock for aggregate net proceeds of approximately $2.5 million in January 2016, (iii) cash proceeds ofapproximately $2.7 million received subsequent to December 31, 2015 related to stock issued in December 2015, (iv) theconversion of 11,819 shares of Series A preferred stock into 1,969,818 shares of common stock immediately prior to theclosing of this offering (assuming an initial public offering price of $6.00 per share of common stock included in the unitssold in this offering) and (v) the reclassification of 1,739,130 shares of redeemable common stock to common stock uponlapse of a contractual redemption right, and excludes the following outstanding as of December 31, 2015:

A $1.00 increase (decrease) in the assumed initial public offering price of $6.00 per unit would increase (decrease) totalconsideration paid by new investors by approximately $5.8 million and increase (decrease) the total consideration paid tous by new investors by approximately 3%, assuming the number of units offered by us, as set forth on the cover page ofthis prospectus, remains the same, and before deducting estimated underwriting discounts and commissions andestimated offering expenses payable by us.

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% %(1)

% %

(1) See Note 3 to our annual and interim consolidated financial statements, included elsewhere in this prospectus for an explanation of

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SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected consolidated financial data together with the section titled “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements andthe related notes included in this prospectus. The selected consolidated financial data included in this section are notintended to replace the consolidated financial statements and related notes included elsewhere in this prospectus.

The consolidated statements of operations data for the years ended September 30, 2014 and 2015 and the consolidatedbalance sheet data as of September 30, 2014 and 2015 are derived from our audited consolidated financial statementsincluded elsewhere in this prospectus. The consolidated statements of operations data for the three months endedDecember 31, 2014 and 2015 and the consolidated balance sheet data as of December 31, 2015 have been derived fromour unaudited interim financial statements included elsewhere in this prospectus and have been prepared on the samebasis as the audited financial statements. In the opinion of management, the unaudited data reflects all adjustments,consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information in thosestatements. Our historical results are not necessarily indicative of the results to be expected in the future, and our interimperiod results are not necessarily indicative of results to be expected for a full year or any other interim period.

Year Ended September 30, Three Months Ended December 31,2014 2015 2014 2015

(Unaudited)Consolidated Statements of Operations Data:

Collaboration revenues $ 9,050,542 $ 5,219,237 $ 2,934,555 $ 994,894

Operating expenses:

Research and development 14,124,631 38,876,040 5,840,030 12,733,976General and administrative 7,318,314 12,905,823 1,237,839 4,674,155

21,442,945 51,781,863 7,077,869 17,408,131

Loss from operations (12,392,403 (46,562,626 (4,143,314 (16,413,237Interest expense 901,052 2,297,339 357,580 398,975Loss before income taxes (13,293,455 (48,859,965 (4,500,894 (16,812,212Income tax expense (benefit) 439,018 (190,111 406,363 52,000Net loss (13,732,473 (48,669,854 (4,907,257 (16,864,212

Less: Net loss attributable to noncontrollinginterests — (1,276,571 — —

Net loss attributable to Oncobiologics, Inc. (13,732,473 (47,393,283 (4,907,257 (16,864,212Accretion of redeemable preferred stock and

noncontrolling interests (3,588,996 (4,306,488 (1,071,164 (939,539Deemed dividends upon the repurchase of Series A

redeemable preferred stock and redeemablenoncontrolling interests (3,336,855 (1,298,631 (1,230,998 —

Net loss attributable to common stockholders ofOncobiologics, Inc. $(20,658,324 $(52,998,402 $ (7,209,419 $ (17,803,751

Per share information:

Net loss per share of common stock, basic and diluted $ (2,43 $ (5.43 $ (0.77 $ (1.36Weighted-average shares outstanding, basic and

diluted 8,509,654 9,753,616 9,377,450 13,061,557

Pro forma net loss per share of common stock – basic and diluted (unaudited) $ (3.35 $ (1.12

Pro forma weighted-average shares outstanding(unaudited) 14,143,696 15,031,375

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the calculations of our basic and diluted net loss per common share, pro forma net loss per common share and the weighted-average number of shares used in the computation of the per share amounts.

As of September 30, As of December 31,20152014 2015

(Unaudited)Consolidated Balance Sheet Data:Cash $ 2,349,313 $ 9,070,975 $ 5,582,255Working capital (deficit) (17,063,539 (21,877,366 (25,087,988Total assets 11,603,707 35,008,621 31,322,869Debt obligations, current and long-term 15,168,532 21,961,828 15,488,800Redeemable preferred stock, common stock and noncontrolling

interests 24,704,011 27,321,311 16,366,212Total stockholders’ equity (deficit) (45,151,218 (54,873,803 (30,914,816

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with ourconsolidated financial statements and related notes thereto included elsewhere in this prospectus. Some of theinformation contained in this discussion and analysis or set forth elsewhere in this prospectus, including information withrespect to our plans and strategy for our business and related financing, includes forward-looking statements that involverisks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of thisprospectus, our actual results could differ materially from the results described in or implied by the forward-lookingstatements contained in the following discussion and analysis.

Overview

We are a clinical-stage biopharmaceutical company focused on identifying, developing, manufacturing andcommercializing complex biosimilar therapeutics. Our current focus is on technically challenging and commerciallyattractive monoclonal antibodies, or mAbs, in the disease areas of immunology and oncology. A mAb is a type of proteinthat is produced by a single clone of cells or cell line and made to bind to a specific substance in the body. Our strategy isto cost-effectively develop these biosimilars on an accelerated timeline, which is fundamental to our success and webelieve positions us to be a leading biosimilar company. We have leveraged our team’s biopharmaceutical expertise toestablish fully integrated in-house development and manufacturing capabilities, which we refer to as our BioSymphonyPlatform. We believe this platform addresses the numerous complex technical and regulatory challenges in developingand commercializing mAb biosimilars and was designed to provide significant pricing flexibility. Since inception, we haveadvanced two product candidates into clinical trials: ONS-3010, a Phase 3-ready biosimilar to adalimumab (Humira ), andONS-1045, a Phase 3-ready biosimilar to bevacizumab (Avastin ). Additionally, we have identified multiple otherbiosimilar product candidates, including six that are in pre-clinical development, one of which is expected to be ready toenter clinical trials in 2016.

Through December 31, 2015, we have funded substantially all of our operations through the sale and issuance ofapproximately $103.5 million of our common stock, preferred stock and debt. Through December 31, 2015, we have alsoreceived $23.5 million pursuant to our collaboration and licensing agreements.

As described in their audit report, our auditors have included an explanatory paragraph that states that we have incurredrecurring losses and negative cash flows from operations since inception and have an accumulated deficit at September30, 2015 of $94.1 million and $14.2 million of indebtedness that is due on demand. These matters raise substantial doubtabout our ability to continue as a going concern. Our consolidated financial statements do not include any adjustmentsthat might be necessary if we are unable to continue as a going concern.

We will need to raise substantial additional financing in the future to fund our operations. We believe our existing cashtogether with the proceeds from this offering, will provide adequate financial resources to fund our planned operationsthrough at least the next 12 months. We will need to raise substantial additional capital or enter into strategic collaborationarrangements in order to commercialize ONS-3010, commence any Phase 3 clinical trials of ONS-1045 and continue todevelop our other pipeline candidates. We plan to finance our future operations with a combination of proceeds from theissuance of equity securities, the issuance of additional debt, potential strategic collaborations and revenues from potentialfuture product sales, if any. There are no assurances that we will be successful in obtaining an adequate level of financingfor the commercialization of ONS-3010, or the development or commercialization of ONS-1045 or any other current orfuture biosimilar product candidates. If we are unable to secure adequate additional funding, our business, operatingresults, financial condition and cash flows may be materially and adversely affected.

We do not have any products approved for sale and we have only generated revenue from our collaboration agreements.We have incurred operating losses and negative operating cash flows since inception and there is no assurance that wewill ever achieve profitable operations, and if achieved, that profitable operations will be sustained. Our net losses were$13.7 million and $47.4 million for the years ended September 30, 2014 and 2015, respectively, and $16.9 million for thethree months ended December 31, 2015. In addition, development activities, clinical and preclinical testing andcommercialization of our product candidates will require significant additional financing.

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Reincorporation in Delaware

In October 2015, we reincorporated in Delaware by merging with and into Oncobiologics, Inc., a newly formed Delawarecorporation, with the Delaware corporation surviving the merger. As a result of the merger, each share of our issued andoutstanding common stock converted into and became a share of common stock of the Delaware corporation on a 1-for-1basis, each issued and outstanding share of our Series A redeemable preferred stock converted into 289 shares ofcommon stock and approximately 1.4035 shares of Series A preferred stock of the Delaware corporation, and each issuedand outstanding share of Series B redeemable preferred stock converted into 289 shares of common stock andapproximately 1.2867 shares of Series A preferred stock of the Delaware corporation. Additionally, in October 2015,effective upon our reincorporation and in connection with the dissolution of our business development subsidiary, ParilisBiopharmaceuticals, LLC, or Parilis, we issued 226,663 shares of common stock and 1,626 shares of Series A preferredstock to the holders of outstanding units in Parilis in exchange for all such units.

Collaboration and License Agreements

From time to time, we enter into collaboration and license agreements for the research and development, manufactureand/or commercialization of our biosimilar products and/or biosimilar product candidates. These agreements generallyprovide for non-refundable upfront license fees, development and commercial performance milestone payments, costsharing, royalty payments and/or profit sharing. For additional information relating to our agreements, see “Business —Collaboration and License Agreements.”

Selexis SA

In October 2011, we entered into a research license agreement with Selexis SA, or Selexis, pursuant to which weacquired a non-exclusive license to conduct research internally or in collaboration with third parties to developrecombinant proteins from mammalian cells created lines using the Selexis expression technology, or the SelexisTechnology. The original research license had a three-year term, but on October 9, 2014, was extended for an additionalthree-year term through October 9, 2017. We may sublicense our rights with Selexis’ prior written consent but areprohibited from making commercial use of the Selexis Technology or the resultant recombinant proteins comprising ourbiosimilars in humans, or from filing an investigational new drug, absent a commercial license agreement with Selexiscovering the particular biosimilar product candidate developed under the research license. In connection with the entryinto the research license, we paid Selexis an initial fee and agreed to make additional annual maintenance payments ofthe same amount for each of the three years that the research license agreement term was extended.

Selexis also granted us a non-transferrable option to obtain a perpetual, non-exclusive, worldwide commercial licenseunder the Selexis Technology to manufacture, or have manufactured, a recombinant protein produced by a cell linedeveloped using the Selexis Technology for clinical testing and commercial sale. We exercised this option in April 2013and entered into three commercial license agreements with Selexis for our ONS-3010, ONS-1045 and ONS-1050biosimilar candidates. We paid an upfront licensing fee to Selexis for each commercial license and also agreed to pay afixed milestone payment for each licensed product. In addition, we are required to pay a single-digit royalty on a finalproduct-by-final product and country-by-country basis, based on worldwide net sales of such final products by us or any ofour affiliates or sublicensees during the royalty term. At any time during the term, we have the right to terminate our royaltypayment obligation by providing written notice to Selexis and paying Selexis a royalty termination fee.

IPCA Laboratories Limited — Humira (ONS-3010), Avastin (ONS-1045) and Herceptin (ONS-1050)

In August 2013, we entered into a strategic license agreement with IPCA Laboratories Limited, or IPCA, under which wegranted IPCA and its affiliates a license for the research, development, manufacture, use or sale of ONS-3010 and, byamendment in May 2014, ONS-1045. The license is exclusive with respect to India, Sri Lanka and Myanmar, and non-exclusive with respect to Nepal and Bhutan. Under the terms of the August 2013 agreement, we received an upfrontpayment from IPCA, and are eligible to earn additional regulatory milestone payments for each of ONS-3010 and ONS-1045. In addition, we are eligible to receive royalties at a low teens percentage rate of annual net sales of products byIPCA and its affiliates in the agreed territory.

In January 2014, we entered into an agreement with IPCA to assist IPCA in establishing its research, development andmanufacturing capabilities for mAbs and biologics, including, in part, through collaborative development, manufacture andcommercialization of ONS-1050 (our Herceptin biosimilar), in the agreed territory (as specified below). The agreed territoryfor ONS-1050 includes the Republics of India, Sri Lanka, Myanmar, Nepal and Bhutan, while the agreed territory for anyproduct candidates developed independent of our involvement is global without geographical restriction. We also agreedto

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assist IPCA with its research and development program. Under the terms of the January 2014 agreement, we are eligibleto receive development payments and commercialization fees. In addition, we are eligible to receive royalties from IPCA ata mid-single digit rate on annual net sales of ONS-1050 commercialized by IPCA and its affiliates in the agreed territory.

As of December 31, 2015, we have received an aggregate of $5.0 million of payments from IPCA under our variousagreements.

Liomont — Humira (ONS-3010) and Avastin (ONS-1045)

In June 2014, we entered into a strategic license agreement with Laboratories Liomont, S.A. de C.V., or Liomont, underwhich we granted Liomont and its affiliates an exclusive, sublicenseable license in Mexico for the research, development,manufacture, use or sale of the ONS-3010 and ONS-1045 biosimilar product candidates in Mexico. Under the terms of theagreement, we received an upfront payment from Liomont, and we are eligible to earn milestone payments for each ofONS-3010 and ONS-1045. In addition, we are eligible to receive tiered royalties at upper single-digit to low teenspercentage rates of annual net sales of products by Liomont and its affiliates in Mexico. As of December 31, 2015, wehave received an aggregate of $2.5 million of upfront and milestone payments from Liomont.

Huahai — Humira (ONS-3010) and Avastin (ONS-1045)

In May 2013, we entered into a series of agreements with Zhejiang Huahai Pharmaceutical Co., Ltd., or Huahai, to forman alliance for the purpose of developing and obtaining regulatory approval for, and commercial launch and marketing oflicensed products in an agreed territory, as described below. The agreements include a strategic alliance agreement,which sets out the governance framework for the relationship, along with a joint participation agreement regarding jointdevelopment and commercialization of ONS-3010, and a co-development and license agreement for each of ONS-3010and ONS-1045. As of December 31, 2015, we have received an aggregate of $16.0 million of upfront and milestonepayments from Huahai.

As contemplated by the strategic alliance agreement, we entered into a joint participation agreement with Huahai wherewe agreed to co-fund the development and share the value ownership interest of ONS-3010 in the United States, Canada,European Union, Japan, Australia and New Zealand. Under the agreement as amended, we are responsible forcompleting a defined “Phase-3 Ready Package” at our expense, for which the portion of the funds received from Huahai todate under this joint participation agreement was used.

In December 2014, we received an option to reacquire all rights to ONS-3010 from Huahai, which would have terminatedthe joint participation agreement. We had to exercise the option prior to December 23, 2015 and pay Huahai a total of$28.0 million, consisting of an $11.0 million initial payment due within seven days of exercise, and four additionalinstallment payments of $4.25 million payable over the course of the following year. We did not make the $11.0 millioninitial payment within the time frame required.

In the event Huahai funds its proportionate share of development costs incurred after completion of the “Phase-3 ReadyPackages,” Huahai would be entitled to retain its 51% value ownership, with us entitled to retain our 49% value ownership,of ONS-3010 in the agreed territories. Similarly, revenues from commercialization of ONS-3010 in the agreed countries(including major markets such as the United States and the EU, among others), would also be shared based on suchproportional ownership interests. In the event that Huahai does not fund its proportionate share of such developmentcosts, the joint participation agreement provides for a proportionate adjustment to our respective value ownership interestsbased on our respective investments in such development costs, which would increase our value ownership interest inONS-3010. Under the joint participation agreement, we could also be required to form a joint venture to further developand commercialize ONS-3010 with Huahai in the agreed countries, if so requested by Huahai.

In conjunction with the strategic alliance agreement, we also entered into a co-development and license agreement withHuahai, under which we granted Huahai and its affiliates an exclusive license, in the territory (as specified below) for theresearch, development, manufacture, use or sale of ONS-3010 or ONS-1045 in China, including, the People’s Republic ofChina, Hong Kong, Macau and Taiwan. We will each bear our respective costs under the development plans. Huahaiagreed to carry out all clinical, manufacturing and regulatory requirements necessary for approval of the products in theagreed territory. Under the terms of the agreement, we received an upfront payment from Huahai for ONS-3010, and havereceived regulatory milestone payments for each of ONS-3010 and ONS-1045.

Components of Our Results of OperationsCollaboration Revenue

To date, we have derived revenue only from activities pursuant to our collaboration and licensing agreements. We havenot generated any revenue from commercial product sales. For the foreseeable future, we expect all of our revenue, ifany, will

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■ expenses incurred under agreements with contract research organizations, or CROs, as well as investigativesites and consultants that conduct our preclinical studies and clinical trials;

■ manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trialmaterials and commercial materials, including manufacturing validation batches;

■ outsourced professional scientific development services;

■ employee-related expenses, which include salaries, benefits and stock-based compensation;

■ payments made under a third-party assignment agreement, under which we acquired intellectual property;

■ expenses relating to regulatory activities, including filing fees paid to regulatory agencies;

■ laboratory materials and supplies used to support our research activities; and

■ allocated expenses for utilities and other facility-related costs.

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be generated from our collaboration and licensing agreements. If any of our biosimilar product candidates currently underdevelopment are approved for commercial sale, we may generate revenue from product sales, or alternatively, we maychoose to select a collaborator to commercialize our product candidates.

The following table sets forth a summary of revenue recognized from our collaboration and licensing agreements for theyears ended September 30, 2014 and 2015 and for the three months ended December 31, 2014 and 2015:

Year ended September 30, Three months ended December 31,2014 2015 2014 2015

IPCA Collaboration $1,439,472 $1,702,377 $ 586,078 $ 105,433Liomont Collaboration 34,091 341,280 54,582 595,566Huahai Collaboration 7,576,979 3,175,580 2,293,895 293,895

$9,050,542 $5,219,237 $ 2,934,555 $ 994,894

The following table summarizes the milestone payments and recognition of deferred revenues from our collaboration andlicensing agreements during the years ended September 30, 2014 and 2015 and for the three months endedDecember 31, 2014 and 2015:

Year ended September 30, Three months ended December 31,2014 2015 2014 2015

Milestone payments $7,000,000 $2,500,000 $ 2,500,000 $ 500,000Recognition of deferred revenues 1,300,542 1,919,237 434,555 494,894Research and development payments 750,000 800,000 — —

$9,050,542 $5,219,237 $ 2,934,555 $ 994,894

Each of our collaboration and licensing agreements is considered to be a multiple-element arrangement for accountingpurposes. We determined that there are two deliverables; specifically, the license to our biosimilar product candidate andthe related research and development services that we are obligated to provide. We concluded that these deliverablesshould be accounted for as a single unit of accounting. We determined that the upfront license payments received shouldbe deferred and recognized as revenue on a straight-line basis through the estimated period of completion of ourobligations under the agreement. We recognize revenues from the achievement of milestones if the milestone event issubstantive and achievability of the milestone was not reasonably assured at the inception of the agreement.

Research and Development Expenses

Research and development expense consists of expenses incurred in connection with the discovery and development ofour biosimilar product candidates. We expense research and development costs as incurred. These expenses include:

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■ the number of clinical sites included in the trials;■ the length of time required to enroll suitable patients;■ the number of patients that ultimately participate in the trials;■ the number of doses patients receive;■ the duration of patient follow-up;■ the results of our clinical trials;■ the establishment of commercial manufacturing capabilities;■ the receipt of marketing approvals; and■ the commercialization of product candidates.

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The successful development of our biosimilar product candidates is highly uncertain. At this time, we cannot reasonablyestimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of thedevelopment of, or when, if ever, material net cash inflows may commence from any of our other biosimilar productcandidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost ofclinical trials, which vary significantly over the life of a project as a result of many factors, including:

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We maynever succeed in achieving regulatory approval for any of our biosimilar product candidates. We may obtain unexpectedresults from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some biosimilar productcandidates or focus on others. A change in the outcome of any of these variables with respect to the development of abiosimilar product candidate could mean a significant change in the costs and timing associated with the development ofthat biosimilar product candidate. For example, if the U.S. Food and Drug Administration, or FDA, or other regulatoryauthorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experiencesignificant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financialresources and time on the completion of clinical development. Biosimilar product commercialization will take several yearsand millions of dollars in development costs.

Research and development activities are central to our business model. Biosimilar product candidates in later stages ofclinical development generally have higher development costs than those in earlier stages of clinical development,primarily due to the increased size and duration of later-stage clinical trials. We expect our research and developmentexpenses to increase significantly over the next several years as we increase personnel costs, including stock-basedcompensation, conduct clinical trials and prepare regulatory filings for our biosimilar product candidates.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for personnel in executive,administrative, finance and legal functions, including stock-based compensation, travel expenses and recruiting expenses.Other general and administrative expenses include facility related costs, patent filing and prosecution costs andprofessional fees for business development, legal, auditing and tax services and insurance costs.

We anticipate that our general and administrative expenses will increase as a result of increased payroll, expandedinfrastructure and higher consulting, legal and tax-related services associated with maintaining compliance with stockexchange listing and Securities and Exchange Commission, or SEC, requirements, accounting and investor relationscosts, and director and officer insurance premiums associated with being a public company. We also anticipate that ourgeneral and administrative expenses will increase in support of our clinical trials as we expand and progress ourdevelopment programs. Additionally, if and when we believe a regulatory approval of a biosimilar product candidateappears likely, we anticipate an increase in payroll and expense as a result of our preparation for commercial operations,particularly as it relates to the sales and marketing of our biosimilar product.

Interest Expense

Interest expense consists of cash paid and non-cash interest expense related to our bank loans, notes with current andformer stockholders, equipment loans and capital lease obligations.

Income Taxes

During the years ended September 30, 2014 and 2015, we sold New Jersey state net operating losses, or NOLs, andresearch credits of $9.9 million and NOLs of $4.8 million, respectively, resulting in the recognition of income tax benefitsof $0.8 million and $0.7 million, respectively. In addition during the years ended September 30, 2014 and 2015, and forthe three months ended December 31, 2014 and 2015, we incurred $1.3 million, $0.5 million, $0.4 million and $0.1 million,respectively, of foreign withholding taxes in connection with our collaboration and licensing agreements.

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Since inception, we have not recorded any U.S. federal or state income tax benefits (excluding the sale of New Jerseystate NOLs and research credits) for the net losses we have incurred in each year or on our earned research anddevelopment tax credits, due to our uncertainty of realizing a benefit from those items. As of September 30, 2015, we hadfederal and state NOL carryforwards of $52.9 million and $36.9 million, respectively, that will begin to expire in 2030 and2032, respectively. As of September 30, 2015, we had federal foreign tax credit carryforwards of $2.6 million available toreduce future tax liabilities, which begin to expire at various dates starting in 2023. As of September 30, 2015, we also hadfederal and state research and development tax credit carryforwards of $4.2 million and $1.7 million, respectively, whichbegin to expire in 2021.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation thatundergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income.We have not completed a study to assess whether an ownership change has occurred in the past. Our existing NOLs maybe subject to limitations arising from previous ownership changes, and if we undergo an ownership change in connectionwith or after this offering, our ability to utilize NOLs could be further limited by Section 382 of the Code. Future changes inour stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 ofthe Code. Our NOLs are also subject to international regulations, which could restrict our ability to utilize our NOLs.Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations.There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseenreasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

Results of OperationsComparison of Three Months Ended December 31, 2014 and 2015

The following table summarizes our results of operations for the three months ended December 31, 2014 and 2015:

Three Months Ended December 31,2014 2015 Change

(Unaudited)Collaboration revenues $ 2,934,555 $ 994,894 $ (1,939,661

Operating expenses:Research and development 5,840,030 12,733,976 6,893,946General and administrative 1,237,839 4,674,155 3,436,316

7,077,869 17,408,131 10,330,262

Loss from operations (4,143,314 (16,413,237 (12,269,923

Interest expense 357,580 398,975 41,395

Loss before income taxes (4,500,894 (16,812,212 (12,311,318Income tax expense 406,363 52,000 (354,363

Net loss $ (4,907,257 $ (16,864,212 $(11,956,955

Collaboration Revenues

Our collaboration revenues decreased $1.9 million, to $1.0 million, for the three months ended December 31, 2015, ascompared to $2.9 million for the three months ended December 31, 2014. The change is primarily attributable to the $2.0million decrease in milestone payments offset by a $60,000 increase in the amortization of deferred revenue.

Research and Development Expenses

We do not currently utilize a formal time allocation system to capture expenses on a project-by-project basis because weare organized and record expense by functional department and our employees may allocate time to more than onedevelopment project. Accordingly, we do not allocate expenses to individual projects or product candidates, although wedo allocate some portion of our research and development expenses by functional area and by compound, as shownbelow.

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The following table summarizes our research and development expenses by functional area for the three months endedDecember 31, 2014 and 2015 and for the period from January 5, 2010 (inception) through December 31, 2015:

Three months ended December 31,

Period from January 5, 2010

(inception) through December 31, 20152014 2015

(Unaudited)Preclinical and clinical development $3,524,528 $ 7,007,033 $ 40,174,156Compensation and related benefits 2,193,204 3,815,357 27,366,937Stock-based compensation 84,275 1,356,408 7,907,386Regulatory filings and other 38,023 555,178 2,765,050

Total research and development expenses $5,840,030 $ 12,733,976 $ 78,213,529

The following table summarizes our research and development expenses by compound for the three months endedDecember 31, 2014 and 2015 and for the period from January 5, 2010 (inception) through December 31, 2015:

Three months ended December 31,

Period from January 5, 2010

(inception) through December 31, 20152014 2015

(Unaudited)ONS-3010 $1,547,912 $ 4,208,306 $ 19,405,507ONS-1045 1,718,730 2,740,735 17,652,009Other research and development 295,909 613,169 5,881,689Personnel related and stock-based compensation 2,277,479 5,171,766 35,274,324

Total research and development expenses $5,840,030 $ 12,733,976 $ 78,213,529

Research and development expenses were $5.8 million for the year three months ended December 31, 2014, comparedto $12.7 million for the three months ended December 31, 2015. Our preclinical and clinical development costs increased$3.5 million, which was primarily attributable to the timing of our Phase 1 clinical trials of ONS-3010 and ONS-1045,preparation for our planned Phase 3 clinical trials of ONS-3010 and ONS-1045, and related internal manufacturing andtesting costs, respectively. We had an increase in compensation costs of $1.6 million due to increased headcount as welaunched our in-house manufacturing facility in 2015. We also had a $0.5 million increase in research and developmentexpense primarily due to government filing fees for our product candidates. In addition, we had an increase in stock-basedcompensation of $1.3 million upon the re-measurement of our Performance Stock Units, or PSUs.

General and Administrative Expenses

General and administrative expenses were $1.2 million for the three months ended December 31, 2014, compared to $4.7million for the three months ended December 31, 2015. The increase of $3.5 million was primarily attributable to anincrease of $1.6 million in professional service fees as we initiated our compliance efforts in anticipation of becoming apublicly traded company; a $0.4 million increase in compensation expenses as we increased our headcount; a $0.2 millionincrease in our facility costs and related rent as we expanded the space in which we lease our offices; and a $1.1 millionincrease in stock-based compensation upon the re-measurement of our PSUs.

Interest Expense

Interest expense remained consistent at $0.4 million during each of the three months ended December 31, 2014 and 2015primarily due to the increase in capital lease obligations offset by reductions in stockholder notes and other debtobligations.

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Comparison of Years Ended September 30, 2014 and 2015

The following table summarizes our results of operations for the years ended September 30, 2014 and 2015:

Year Ended September 30,2014 2015 Change

Collaboration revenues $ 9,050,542 $ 5,219,237 $ (3,831,305

Operating expenses:Research and development 14,124,631 38,876,040 24,751,409General and administrative 7,318,314 12,905,823 5,587,509

21,442,945 51,781,863 30,338,918

Loss from operations (12,392,403 (46,562,626 (34,170,223Interest expense 901,052 2,297,339 1,396,287Loss before income taxes (13,293,455 (48,859,965 (35,566,510Income tax expense (benefit) 439,018 (190,111 (629,129Net loss $ (13,732,473 $ (48,669,854 $ (34,937,381

Collaboration Revenues

Our collaboration revenues decreased $3.8 million, to $5.2 million, for the year ended September 30, 2015, as comparedto the year ended September 30, 2014. The change is primarily attributable to the $4.5 million decrease in milestonepayments offset by a $0.6 million increase in the amortization of deferred revenue.

Research and Development Expenses

The following table summarizes our research and development expenses by functional area for the years endedSeptember 30, 2014 and 2015 and for the period from January 5, 2010 (date of inception) through September 30, 2015:

Year ended September 30,Period from

January 5, 2010(inception) throughSeptember 30, 20152014 2015

Preclinical and clinical development $ 6,715,346 $ 21,714,405 $ 33,167,123Compensation and related benefits 6,424,884 10,202,065 23,477,173Stock-based compensation 671,745 5,817,830 6,625,385Regulatory filings and other 312,656 1,141,740 2,209,872

Total research and development expenses $ 14,124,631 $ 38,876,040 $ 65,479,553

The following table summarizes our research and development expenses by compound for the years ended September30, 2014 and 2015 and for the period from January 5, 2010 (date of inception) through September 30, 2015:

Year ended September 30,Period from

January 5, 2010 (inception) through September 30, 20152014 2015

ONS-3010 $ 4,641,138 $ 6,942,002 $ 15,197,201ONS-1045 1,819,446 12,763,886 14,911,274Other research and development 567,418 3,150,257 5,268,520Personnel related and stock-based compensation 7,096,629 16,019,895 30,102,558

Total research and development expenses $ 14,124,631 $ 38,876,040 $ 65,479,553

Research and development expenses were $14.1 million for the year ended September 30, 2014, compared to $38.9million for the year ended September 30, 2015. Our preclinical and clinical development costs increased $15.0 million,which was primarily attributable to the timing of our Phase 1 clinical trials of ONS-3010 and ONS-1045, our Phase 3clinical trials of ONS-3010, and related internal manufacturing and testing costs, respectively. We had an increase in

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compensation costs of $3.8 million due to increased headcount as we launched our in-house manufacturing facility in2015. We also had a $0.8 million increase in research and development expense primarily due to government filing feesfor our product candidates. In addition we had an increase in stock-based compensation of $5.1 million upon the re-measurement of our PSUs.

General and Administrative Expenses

General and administrative expenses were $7.3 million for the year ended September 30, 2014, compared to $12.9 millionfor the year ended September 30, 2015. The increase of $5.6 million was primarily attributable to an increase of $2.1million in professional service fees as we initiated our compliance efforts in anticipation of becoming a publicly tradedcompany; a $1.1 million increase in compensation expenses as we increased our headcount; a $0.1 million increase inour facility costs and related rent as we expanded the space in which we lease our offices; and a $2.1 million increase instock-based compensation upon the re-measurement of our PSUs.

Interest Expense

Interest expense was $0.9 million for the year ended September 30, 2014, compared to $2.3 million for the year endedSeptember 30, 2015. The increase of $1.4 million was primarily attributable to the $10.9 million in additional borrowingsduring 2015.

Liquidity and Capital Resources

We have not generated any revenue from biosimilar product sales. Since inception, we have incurred net losses andnegative cash flows from our operations. Through December 31, 2015, we have funded substantially all of our operationsthrough the sale and issuance of $103.5 million net proceeds of our common stock, and sales of our preferred stock andborrowings under debt facilities. Through December 31, 2015, we have also received an aggregate of $23.5 millionpursuant to our collaboration and licensing agreements. As of December 31, 2015, we had an accumulated deficit of$110.9 million and had a cash balance of $5.6 million. In addition, we had $10.1 million of indebtedness that is due ondemand.

As described in their audit report, our auditors have included an explanatory paragraph that states that we have incurredrecurring losses and negative cash flows from operations since inception and have an accumulated deficit at September30, 2015 of $94.1 million and $14.2 million of indebtedness that is due on demand. These matters raise substantial doubtabout our ability to continue as a going concern. Our consolidated financial statements do not include any adjustmentsrelated to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities thatmight result from the outcome of this uncertainty. We anticipate incurring additional losses until such time, if ever, that wecan generate significant sales of our product candidates currently in development. We will need substantial additionalfinancing to fund our operations and to commercially develop our product candidates. Management is currently evaluatingdifferent strategies to obtain the required funding for future operations. These strategies may include, but are not limitedto: private placements of equity and/or debt, payments from potential strategic research and development, licensingand/or marketing arrangements with pharmaceutical companies, and public offerings of equity and/or debt securities.There can be no assurance that these future funding efforts will be successful.

Our future operations are highly dependent on a combination of factors, including (i) the timely and successful completionof additional financing discussed above, (ii) our ability to complete revenue-generating partnerships with pharmaceuticalcompanies, (iii) the success of our research and development, (iv) the development of competitive therapies by otherbiotechnology and pharmaceutical companies, and, ultimately, (v) regulatory approval and market acceptance of ourproposed future products.

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Cash Flows

The following table summarizes our cash flows for each of the periods presented:

Year Ended September 30, Three months ended December 31,2014 2015 2014 2015

(Unaudited)Net cash used in operating activities $ (7,020,469 $(27,476,200 $ (3,666,423 $ (12,012,281Net cash used in investing activities (2,366,772 (8,804,244 (527,877 (364,242Net cash provided by financing activities 11,474,146 43,002,106 3,670,527 8,887,803Net increase (decrease) in cash $ 2,086,905 $ 6,721,662 $ (523,773 $ (3,488,720

Operating Activities.

During the three months ended December 31, 2014, we used $3.7 million in operating activities, primarily resulting fromour net loss of $4.9 million that was offset by $0.4 million of noncash items and $0.8 million in net cash provided bychanges in our operating assets and liabilities. The noncash items were primarily comprised of depreciation andamortization of our fixed assets, stock-based compensation, and the re-measurement of our PSU awards. The change inour operating assets and liabilities were primarily due to increases in deferred revenue upon receipt of upfront paymentsunder our collaboration and licensing arrangements, and increases in accounts payable and accrued expenses related toour Phase 1 clinical trials and the timing of our vendor payments. These inflows were offset primarily from an increase inaccounts receivable from our collaboration agreements.

During the three months ended December 31, 2015, we used $12.0 million in operating activities, primarily resulting fromour net loss of $16.9 million that was offset by $3.1 million of noncash items. The change in our operating assets andliabilities were primarily due to increases in accounts payable and accrued expenses related to our Phase 3 clinical trialsand the timing of our vendor payments. These inflows were offset by increases in prepaid expenses related to the timingin which we recognize research and development expenses, and the amortization of deferred revenues.

During the year ended September 30, 2014, we used $7.0 million of cash in operating activities, primarily resulting fromour net loss of $13.7 million that was offset by $4.8 million of noncash items and $1.9 million in net cash provided bychanges in our operating assets and liabilities. The noncash items were primarily comprised of depreciation andamortization of our fixed assets, stock-based compensation, and the re-measurement of our PSU awards. The change inour operating assets and liabilities were primarily due to receipt of upfront payments under our collaboration and licensingagreements and prepayments to certain vendors. We also had increases in accrued expenses related to accruedcompensation, research and development, and professional fees and our income taxes payable in connection with foreigntax withholdings.

During the year ended September 30, 2015, we used $27.5 million of cash in operating activities, primarily resulting fromour net loss of $48.7 million that was offset by $13.0 million of noncash items and $8.2 million in net cash provided bychanges in our operating assets and liabilities. The noncash items were primarily comprised of depreciation andamortization of our fixed assets and the re-measurement of our PSU awards. The change in our operating assets andliabilities were primarily due to an $8.8 million increase in accounts payable and accrued expenses, which increased dueto the timing in which we paid our research and development vendors. We also received $2.5 million in upfront fees andmilestone payments under our collaboration and licensing agreements. These increases were offset by the prepaymentsof certain expenses and other assets.

Investing Activities.

During the three months ended December 31, 2014 and 2015 and the years ended September 30, 2014 and 2015, weused cash of $0.5 million, $0.4 million, $2.4 million and $8.8 million, respectively, in investing activities for the purchase ofproperty and equipment. The increase in purchases of property and equipment during the year ended September 30,2015 was primarily attributable to the launching of our manufacturing facility, which resulted in significant increases in ourlaboratory equipment and leasehold improvements.

Financing Activities.

During the three months ended December 31, 2014, net cash provided by financing activities was $3.7 million, primarilyattributable to $4.0 million in net proceeds from the issuance of stockholder notes offset by $0.3 million in debt payments.

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■ the number and characteristics of the biosimilar product candidates we pursue;

■ the scope, progress, results and costs of researching and developing our biosimilar product candidates, andconducting preclinical studies and clinical trials;

■ the timing of, and the costs involved in, obtaining regulatory approvals for our biosimilar product candidates;

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During the three months ended December 31, 2015, net cash provided by financing activities was $8.9 million, primarilyattributable to $11.3 million in net proceeds from the sale of our common stock and $4.3 million in proceeds from thecollection of subscriptions receivable. We also received $0.2 million from Sonnet in connection with their note receivable.These inflows were offset by $6.5 million in debt payments and $0.4 million upon the deconsolidation of Sonnet.

During the year ended September 30, 2014, net cash provided by financing activities was $11.5 million, primarilyattributable to the proceeds received from the issuance of our redeemable common stock, Series B redeemable preferredstock, common stock and debt of $10.9 million, $0.3 million, $0.1 million and $8.5 million, respectively. These cash inflowswere offset by debt payments and the June 2014 buyback of our Series A redeemable preferred stock of $4.1 million and$4.1 million, respectively.

During the year ended September 30, 2015, net cash provided by financing activities was $43.0 million, primarilyattributable to the proceeds received from the issuance of our common stock and debt of $41.2 million, $10.9 million,respectively. These cash inflows were offset by debt payments and the partial repurchase of outstanding shares of SeriesA redeemable preferred stock of $9.3 million and $0.2 million, respectively.

Funding Requirements

We plan to focus in the near term on the development, regulatory approval and potential commercialization of ourbiosimilar product candidates. We anticipate we will incur net losses and negative cash flow from operations for the nextseveral years as we complete clinical development and continue research and development. In addition, we plan tocontinue to invest in discovery efforts to explore additional biosimilar product candidates, potentially build commercialcapabilities and expand our corporate infrastructure. We may not be able to complete the development and initiatecommercialization of these programs if, among other things, our clinical trials are not successful or if the FDA does notapprove our biosimilar products arising out of our current clinical trials when we expect, or at all.

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, clinical costs,external research and development services, laboratory and related supplies, legal and other regulatory expenses, andadministrative and overhead costs. Our future funding requirements will be heavily determined by the resources needed tosupport development of our biosimilar product candidates.

Following this offering, we will be a publicly traded company and will incur significant legal, accounting and other expensesthat we were not required to incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules adopted by the SEC and The NASDAQ Stock Market LLC, requires public companies toimplement specified corporate governance practices that are currently inapplicable to us as a private company. We expectthese rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

We believe our existing cash together with the proceeds from this offering, will provide adequate financial resources tofund our planned operations through at least the next 12 months. We have based this estimate on assumptions that mayprove to be wrong, and we could utilize our available capital resources sooner than we expect. We will need to raisesubstantial additional capital in order to receive approval for and commercialize ONS-3010, commence any Phase 3clinical trials of ONS-1045 and commence clinical trials for any of our other pipeline candidates. We plan to finance ourfuture operations with a combination of proceeds from the issuance of equity securities, the issuance of additional debt,potential strategic collaborations and revenues from potential future product sales, if any. If we raise additional capitalthrough the sale of equity or convertible debt securities, your ownership will be diluted, and the terms of these securitiesmay include liquidation or other preferences that adversely affect your rights as a holder of our common stock. There areno assurances that we will be successful in obtaining an adequate level of financing for the development andcommercialization of ONS-3010, ONS-1045 or any other current or future biosimilar product candidates. If we are unableto secure adequate additional funding, our business, operating results, financial condition and cash flows may bematerially and adversely affected.

Because of the numerous risks and uncertainties associated with research, development and commercialization ofbiosimilar products, we are unable to estimate the exact amount of our working capital requirements. Our future fundingrequirements will depend on many factors, including:

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■ the cost of manufacturing our biosimilar product candidates and any drugs we successfully commercialize;■ our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial

terms of such agreements;■ the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including

litigation costs and the outcome of such litigation; and■ the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future

biosimilar product candidates, if any.

(1) Operating lease obligations reflect our obligation to make payments in connection with the lease for our office and manufacturingfacility located in Cranbury, New Jersey.

(2) Debt obligations reflect outstanding principal obligations due to investors on notes payable and institutions and financingorganizations for non-lease related equipment.

(3) Capital lease obligations reflect our outstanding principal payment obligations in connection with leased equipment used in ourmanufacturing facility.

(4) This table does not include (a) any milestone payments that may become payable to third parties under license agreements as thetiming and likelihood of such payments are not known with certainty, (b) any royalty payments to third parties as the amounts, timingand likelihood of such payments are not known, and (c) contracts that are entered into in the ordinary course of business that arenot material in the aggregate in any period presented above.

(5) We entered into an operating lease for a facility located in Cranbury, New Jersey with a 10-year term, which commenced onMarch 1, 2016. Not included in the table are the future minimum lease payments of $7,247,800.

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See “Risk Factors” for additional risks associated with our substantial capital requirements.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations at September 30, 2015 and the effect such obligations areexpected to have on our liquidity and cash flows in future periods:

Payments Due by Period

TotalLess Than

1 Year1 − 3 Years

3 – 5 Years

More Than 5 Years

Operating lease commitments $ 5,027,353 $ 888,710 $ 1,731,526 $ 1,763,368 $ 643,749Debt obligations 19,953,048 14,956,842 3,355,273 1,032,926 608,007Capital leases 2,082,222 862,849 1,219,373 — —

Total $ 27,062,623 $ 16,708,401 $ 6,306,172 $ 2,796,294 $ 1,251,756

Under our license agreement with Selexis, we are obligated to pay milestone payments, as well as a royalty at a single-digit percentage of net sales of any covered product we successfully commercialize.

We also have employment agreements with certain employees, which require the funding of a specific level of payments ifcertain events, such as a change in control or termination without cause, occur.

In addition, in the course of normal business operations, we have agreements with contract service providers to assist inthe performance of our research and development and manufacturing activities. Expenditures to CROs represent asignificant cost in clinical development. We can elect to discontinue the work under these agreements at any time. Wecould also enter into additional collaborative research and licensing, contract research, manufacturing, and supplieragreements in the future, which may require upfront payments and even long-term commitments of cash.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, asdefined in the rules and regulations of the SEC.

Quantitative and Qualitative Disclosures about Market Risks

We are exposed to market risks in the ordinary course of our business. As of December 31, 2015, we had $5.6 million ofcash, and we had $15.5 million of debt obligations. Our cash is deposited in accounts at two financial institutions, andamounts may exceed federally insured limits. We do not believe we are exposed to significant credit risk due to thefinancial strength of the depository institutions in which the cash is held. As a result, a change in market interest rateswould not have a material impact on our financial position or results of operations.

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(1)(5)

(2)

(3)

(4)

■ the delivered item has value to the customer on a stand-alone basis; and

■ if the arrangement includes a general right of return relative to the delivered item, delivery or performance of theundelivered item is considered probable and substantially in our control.

■ vendors in connection with preclinical development activities;

■ the production of preclinical and clinical trial materials;

■ CROs in connection with clinical trials; and

■ investigative sites in connection with clinical trials.

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Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. Thepreparation of our consolidated financial statements and related disclosures requires us to make estimates and judgmentsthat affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of theconsolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Webase our estimates on historical experience, known trends and events and various other factors that we believe to bereasonable under the circumstances, the results of which form the basis for making judgments about the carrying valuesof assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions onan ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

While our significant accounting policies are described in more detail in the notes to our audited consolidated financialstatements appearing elsewhere in this prospectus, we believe that the following accounting policies are those mostcritical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We generate revenue primarily through collaboration and licensing agreements that contain multiple deliverables,generally a license and research and development services. Revenue recognition for arrangements with multiple elementsrequires the determination of whether an arrangement involving multiple deliverables contains more than one unit ofaccounting. A delivered item within an arrangement is considered a separate unit of accounting only if both of the followingcriteria are met:

If both of the criteria above are not met, then separate accounting for the individual deliverables is not appropriate.Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognizedgenerally over the greater of the term of the arrangement or the expected period of performance, either on a straight-linebasis or on a modified proportional performance method. We record amounts received prior to satisfying the revenuerecognition criteria as deferred revenue on our balance sheet. We classify amounts expected to be recognized as revenuein the next twelve months following the balance sheet date as current liabilities.

Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accruedresearch and development expenses. This process involves reviewing open contracts and purchase orders,communicating with our applicable personnel to identify services that have been performed on our behalf and estimatingthe level of service performed and the associated cost incurred for the service when we have not yet been invoiced orotherwise notified of actual costs. The majority of our service providers require advance payments; however, some invoiceus in arrears for services performed, on a pre-determined schedule or when contractual milestones are met. We makeestimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on factsand circumstances known to us at that time. We periodically confirm the accuracy of the estimates with the serviceproviders and makes adjustments if necessary. Examples of estimated accrued research and development expensesinclude fees paid to:

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and effortsexpended pursuant to quotes and contracts with multiple research institutions and CROs that conduct and managepreclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, varyfrom contract to contract and may result in uneven payment flows. There may be instances in which payments made toour vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under someof these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trialmilestones. In accruing service fees, we estimate the time period over which services will be performed and the level ofeffort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from theestimate, we adjust the accrual or prepaid accordingly. Although we do not expect our estimates to be materially differentfrom

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amounts actually incurred, our understanding of the status and timing of services performed relative to the actual statusand timing of services performed may vary and may result in reporting amounts that are too high or too low in anyparticular period. To date, we have not made any material adjustments to our prior estimates of accrued research anddevelopment expenses.

Stock-Based Compensation and PSU Obligation

As of September 30, 2014 and 2015, our outstanding stock-based compensation awards were substantially comprised ofPSUs, which were liability classified as the PSUs settled in cash and therefore were subject to remeasurement until theaward is settled or extinguished.

In December 2015, we completed a tender-offer to holders of outstanding PSUs to amend the terms of such outstandingawards to provide for settlement in shares of our common stock or cash, at our discretion. As a result of this modification,the PSUs are equity classified as of December 31, 2015. Concurrent with the amendment, several PSU holders cancelledan aggregate of 434,780 PSUs in exchange for 391,304 restricted stock units, or RSUs. During the three months endedDecember 31, 2015, we issued an additional 674,905 RSUs.

Because the exercisability of the PSUs occurs upon a corporate valuation of $400 million, the fair value of the PSUs areestimated using a Monte Carlo simulation model. The inputs used in preparing the Monte Carlo simulation model include(i) volatility of our common stock, (ii) risk free interest rate, (iii) base price of the PSUs, (iv) fair value of our common stockand enterprise value, and (v) derived service period.

The most significant input affecting the estimated fair value of the PSUs is the fair value of our common stock. As ofSeptember 30, 2015 and December 2015, the fair value of our common stock was $25.79 and $29.05 per share,respectively, and based on contemporaneous, arms-length transactions with new investors purchasing our common stock.

As of September 30, 2014, we were required to estimate the fair value of our common stock underlying our PSU awards.We have engaged an independent third-party valuation firm to assist management in estimating the fair value of ourcommon stock. We estimated the fair value of our common stock using methodologies, approaches and assumptionsconsistent with the AICPA Practice Guide. In addition, management considered various objective and subjective factors,along with input from the independent third-party valuation firm, to estimate the fair value of our common stock. As ofSeptember 30, 2014, the estimated fair value of our common stock was $7.62 per share.

We believe that the receipt of the results from our Phase 1 clinical trial of ONS-3010 in early 2015, and the continuedadvancement of our other biosimilar product candidate development programs were the main drivers behind the increasein our price per share from September 30, 2014 to September 30, 2015.

Using the above common stock fair values, the estimated fair value of the PSUs was $3.45, $22.22 and $25.70 per PSUas of September 30, 2014 and 2015 and December 31, 2015, respectively. The increase in the fair value of the PSUs isdriven by the increase in the fair value of our common stock and related increase in the enterprise value of our company.The grant-date fair value of the RSUs equals the fair value of our common stock of $29.05 per share.

For the years ended September 30, 2014 and 2015 and for the three months ended December 31, 2014 and 2015, wehad compensation related to our equity and liability awards as follows:

Year ended September 30, Three months ended December 31,2014 2015 2014 2015

Research and development $ 671,745 $ 5,817,830 $ 84,275 $ 1,356,408General and administrative 3,286,735 5,360,028 61,399 1,133,626

$3,958,480 $11,177,858 $ 145,674 $ 2,490,034

Year ended September 30, Three months ended December 31,2014 2015 2014 2015

Equity-classified compensation $2,764,878 $ 8,925 $ 2,231 $ 98,172Liability-classified compensation 1,193,602 11,168,933 143,443 2,391,862

$3,958,480 $11,177,858 $ 145,674 $ 2,490,034

Internal Controls and ProceduresWe will be required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, or Section 404, to furnish a report bymanagement on, among other things, the effectiveness of our internal control over financial reporting for the year following

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our first annual report required to be filed with the SEC. This assessment will need to include disclosure of any materialweaknesses identified by management over our internal control over financial reporting. However, our independentregistered public accounting firm will not be required to report on the effectiveness of our internal control over financialreporting pursuant to Section 404(b) until the later of the year following our first annual report required to be filed with theSEC, or the date we are no longer an “emerging growth company” if we take advantage of the exemptions contained inthe Jumpstart Our Business Startups Act of 2012, or JOBS Act.

We have not initiated the costly and challenging process of compiling the system and processing documentationnecessary to perform the evaluation needed to comply with Section 404. We may not be able to complete our evaluation,testing or any required remediation in a timely fashion. During the evaluation and testing process, if we identify one ormore material weaknesses in our internal control over financial reporting, we will be unable to assert that our internalcontrols are designed and operating effectively, which could result in a loss of investor confidence in the accuracy andcompleteness of our financial reports. This could cause the market price of our securities to decline, and we may besubject to investigation or sanctions by the SEC.

JOBS Act Accounting Election

The JOBS Act, permits an “emerging growth company” such as us to take advantage of an extended transition period tocomply with new or revised accounting standards applicable to public companies until those standards would otherwiseapply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply withnew or revised accounting standards when they are required to be adopted by public companies that are not emerginggrowth companies.

Recently Issued and Adopted Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Updates, or ASU, 2015-03, Interest — Imputation of Interest (Subtopic 835-30). The update requires debt issuance costs related to a recognizeddebt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. Theguidance is effective for fiscal years beginning after December 15, 2015. We early adopted this guidance for all periodspresented.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as aGoing Concern. The amendments in this update will explicitly require a company’s management to assess an entity’sability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The newstandard will be effective in the first annual period ending after December 15, 2016. Early application is permitted. We arecurrently evaluating the potential impact of the adoption of this standard, but we believe its adoption will have no impact onour consolidated results of operations, financial position or cash flows.

In May 2014, the FASB issued ASU, No. 2014-09, Revenue from Contracts with Customers. This guidance requires anentity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflectsthe consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance alsorequires an entity to disclose sufficient information to enable users of financial statements to understand the nature,amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative andquantitative information is required about:

Contracts with customers — including revenue and impairments recognized, disaggregation of revenue andinformation about contract balances and performance obligations (including the transaction price allocated to theremaining performance obligations).

Significant judgments and changes in judgments — determining the timing of satisfaction of performance obligations(over time or at a point in time), and determining the transaction price and amounts allocated to performanceobligations.

Certain assets — assets recognized from the costs to obtain or fulfill a contract.

In July 2015, the FASB delayed the effective date of this guidance. As a result, this guidance will be effective for annualreporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlierapplication is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reportingperiods within that reporting period. We are currently evaluating the impact that this guidance will have on ourconsolidated results of operations, financial position and cash flows.

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BUSINESS

Overview

We are a clinical-stage biopharmaceutical company focused on identifying, developing, manufacturing andcommercializing complex biosimilar therapeutics. Our current focus is on technically challenging and commerciallyattractive monoclonal antibodies, or mAbs, in the disease areas of immunology and oncology. A mAb is a type of proteinthat is produced by a single clone of cells or cell line and made to bind to a specific substance in the body. Our strategy isto cost-effectively develop these biosimilars on an accelerated timeline, which is fundamental to our success and webelieve positions us to be a leading biosimilar company. We have leveraged our team’s biopharmaceutical expertise toestablish fully integrated in-house development and manufacturing capabilities, which we refer to as our BioSymphonyPlatform. We believe this platform addresses the numerous complex technical and regulatory challenges in developingand commercializing mAb biosimilars and was designed to provide significant pricing flexibility. Since inception, we haveadvanced two product candidates into clinical trials: ONS-3010, a Phase 3-ready biosimilar to adalimumab (Humira ), andONS-1045, a Phase 3-ready biosimilar to bevacizumab (Avastin ). Additionally, we have identified multiple otherbiosimilar product candidates, including six that are in active preclinical development, one of which is expected to be readyto enter clinical trials in 2016.

Escalating healthcare costs and healthcare reform have been major drivers for the advancement of the biosimilar marketas payors continue to seek ways to reduce costs. By gaining the “highly similar” regulatory designation for an approvedbiologic, or a reference product, less-expensive biosimilars provide the opportunity to reduce treatment costs withoutsacrificing the quality of care. We believe the significant pricing flexibility provided by our BioSymphony Platform gives usan additional competitive advantage in potentially capturing market share. The loss of multiple reference product patentexclusivities in the coming years will create significant opportunities for the biosimilar industry. There are more than 30reference products facing loss of patent exclusivity in one or more major markets through 2020. According to the SNSReport, mAbs are the largest segment of the biologic market, and worldwide sales of mAb biosimilars are expected togrow from approximately $1.4 billion in 2015 to $56.5 billion by 2030.

Our most advanced product candidate, ONS-3010, an adalimumab (Humira) biosimilar, targets the tumor necrosis factoralpha, or TNFα, which is a potent inflammation mediator. In the first quarter of 2015, ONS-3010 met its primary andsecondary endpoints in a Phase 1 clinical trial. In addition, ONS-3010 demonstrated a rate of injection site reactions lowerthan that of Humira. We have initiated Phase 3 preparatory activities for ONS-3010 and expect to commence enrollment in2016 upon receipt of the necessary regulatory authorizations. Our second product candidate, ONS-1045, a bevacizumab(Avastin) biosimilar, interferes with tumor growth by binding to vascular endothelial growth factor, or VEGF, a protein thatstimulates the formation of new blood vessels. In October 2015, ONS-1045 met its primary and secondary endpoints in aPhase 1 clinical trial and we are advancing development of ONS-1045 to be Phase-3 ready in 2016.

In addition to our clinical candidates, we have six preclinical biosimilar product candidates in active development. Ourmost advanced preclinical product candidate, ONS-1050, a trastuzumab (Herceptin ) biosimilar, interferes with the humanepidermal growth factor receptor 2, or HER2, a protein that stimulates cell proliferation, and when overexpressed, cancause certain cancers. ONS-4010 is a biosimilar to denosumab (Prolia /Xgeva ), which is a fully human mAb with affinityand specificity for human RANKL (receptor activator of nuclear factor kappa-B ligand), and used for the treatment ofosteoporosis, treatment-induced bone loss, bone metastases and giant cell tumor of the bone. We expect to be ready tocommence Phase 1 clinical trials of ONS-1050 in 2016 and ONS-4010 in 2017, pending successful completion ofcomparative analytical and in vitro functional studies and receipt of necessary regulatory authorizations. In addition tothese preclinical products, we plan to expand our pipeline of complex biosimilar product candidates as additional productsapproach the loss of their respective patent exclusivities.

We were founded by a team of industry veterans with decades of cumulative experience in biologics development andcommercialization. Our leadership team has been instrumental in obtaining global regulatory approval for multiple complexbiologics at leading multinational biopharmaceutical companies. In addition, our scientific team has specific experience inprocess development for complex biologics, protein manufacturing and analytical research and development, which areessential components for the development and manufacturing of complex biosimilars.

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■ Rapidly advancing our lead product candidates through late-stage clinical development and continuingto advance our preclinical pipeline. ONS-3010 and ONS-1045 are our most advanced clinical-stage productcandidates. In the first quarter of 2015, ONS-3010 met its primary and secondary study endpoints in a Phase 1clinical trial and we are preparing to commence enrollment in a confirmatory Phase 3 clinical trial in 2016. Oursecond product candidate, ONS-1045, met its primary and secondary study endpoints in a Phase 1 clinical trialin October 2015 and we expect ONS-1045 to be Phase-3 ready in 2016. In addition to our advanced productcandidates, we have identified six preclinical candidates. Our most advanced preclinical candidates, ONS-1050and ONS-4010, are expected to be ready to commence Phase 1 clinical trials in 2016 and 2017, respectively,pending successful completion of comparative analytical and in vitro functional studies.

■ Employing our expertise in product development to further expand our pipeline. We use acomprehensive approach to identify both near-term and future biosimilar targets that will further enhance andsustain our growth. In particular, we periodically evaluate approved complex biologics using multi-facetedselection criteria to identify reference products that we believe have potential for significant commercialopportunity.

■ Cost effectively developing and manufacturing mAb biosimilars in an accelerated timeframe. Ourinternal capabilities allow us to employ a seamless transition between development and manufacturing,significantly reducing the time and cost of biosimilar development. We employ single-use technology thatreduces costs of manufactured goods as compared to traditional manufacturing methods. These integrativefeatures of our in-house capabilities permit us to initiate current good manufacturing practice, or cGMP,manufacturing within six weeks of completion of process development compared to traditional technologytransfers that can take six months or more. We believe that these cost reductions will enable significant pricingflexibility, and will be fundamental to establishing long-term leadership in the biosimilar industry.

■ Continuing to invest in and expand our in-house manufacturing capabilities. We believe our in-housemanufacturing capabilities offer us competitive advantages in the biosimilar industry. Our current manufacturingfacilities and infrastructure are sufficient to support the clinical development of our current pipeline and thecommercialization of our two most advanced product candidates. Further, given the modular nature of ourfacilities and infrastructure, we believe we can rapidly and cost effectively expand our capacity to support ourfuture manufacturing needs as we continue to expand our pipeline of product candidates.

■ Maximizing the value of our pipeline by retaining development and commercialization rights in theUnited States and continuing to selectively out-license to ex-U.S. markets. The United States is thelargest potential biosimilar market in the world. We currently intend to retain U.S.-rights to select productcandidates while entering into additional strategic collaborations and partnerships with biotechnology andpharmaceutical companies in other regions. We believe this strategy will maximize the commercial value of ourdevelopment programs.

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Our Strategy

Our goal is to utilize the BioSymphony Platform to identify, develop, manufacture and commercialize technicallychallenging and commercially attractive mAb biosimilars on an accelerated timeline in a cost-effective manner, initially inthe disease areas of immunology and oncology. The key elements of our strategy include:

The Biosimilar IndustryBackground

Biologic products are produced by living cells and have been approved for the treatment of various disease states.Biosimilars are the approved “copies” of such reference products. According to a recent report from ESPICOM, aninternational health research and publishing company, the 2014 global biologics market represented approximately $175billion in sales, with virtually the entire market composed of branded biologic products. Additionally, more than 280potential novel biologic therapies have been identified in the clinical pipeline, almost half of which are being evaluated foroncology indications. Multiple patents for many commercially successful biologic products are expected to expire duringthe next five years, providing an unprecedented opportunity for reductions in the cost of biologics through the introductionof biosimilars. There are over 30 biologic products that face loss of market exclusivity in at least one major market through2020. According to published reports, global sales of biologics are estimated to reach more than $200 billion by the end of2016. Biologic reference products with estimated global sales of $100 billion will come off patent by 2020, and between2009 and 2019, $50.0 billion of the market value of biologics in the United States alone will lose patent protection. Thereare currently 45 mAbs on the market worldwide, with revenues in excess of $40.0 billion. The overall biosimilar market isprojected to reach global sales of approximately $7.8 billion ($2.3 billion of which is associated with mAbs) during 2016,

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eventually accounting for approximately $118 billion by 2030 ($56.5 billion of which is associated with mAbs). Asdemonstrated in the following graphic, revenue from global sales of mAbs are expected to account for nearly 29% of theglobal sales in 2016, with European sales expected to account for 24%.

“The Biosimilar Drugs Market: Opportunities, Challenges, Strategies & Forecasts”; SNS Research Ltd.

A major driver for the advancement of the biosimilar market is the increasing and disproportionate amount of healthcarespending by governments and private payors on biologic therapeutics. The high costs for biologic treatments have led toan increasing financial burden on these payors. We believe this market dynamic has created opportunities for biosimilardevelopers in two key respects. First, the high costs of branded biologic products have created a growing demand forlower-cost biosimilars that can offer patients the same benefits as the reference products without sacrificing quality ofcare. Express Scripts projects U.S. healthcare savings of approximately $250 billion between 2014 and 2024 if biosimilarsfor just 11 existing biologic drugs that are the most likely candidates for biosimilars were to come to market. Second,because biosimilars, especially complex biosimilars, are more costly and challenging to develop and manufacture than thegeneric versions of small-molecule drugs, we expect fewer companies will be able to successfully overcome the technicaland regulatory complexities of biosimilar development.

Technical Challenges

Unlike small molecules, such as aspirin, or simple biologics, such as human growth hormone, mAbs are much larger andcorrespondingly complex. MAbs consist of four polypeptide chains of amino acids and perform a vast array of functionswithin living organisms. The specific amino acid sequence of each mAb dictates the folding of the protein into a specificthree-dimensional structure that determines its activity. The following image compares a mAb to human growth hormoneand aspirin. The complexity of a molecule increases with its size as defined by molecular weight, or number of atoms.

MAbs are derived from living cells and are produced through a series of complex processing steps that define their overallstructure. Accordingly, they cannot be chemically synthesized nor fully characterized by a few analytical techniques. MAbsare also known to contain sugar side-chains, which are attached through a process referred to as glycosylation. Thesesugar chains confer structural stability, improve solubility, and can impact the function of the protein in vivo.

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■ Reference Product: A protein therapeutic exists as a mixture of various molecular forms that together impart itsmechanism of action. In order to understand the structure and function of the reference product, the biosimilardeveloper must conduct many analytical studies to reverse engineer the multiple quality attributes that governthe reference product’s protein structure and function. Due to the inherent variability that results from cellularproduction techniques, many production lots of reference product must be analyzed to understand the batch tobatch variability and set the target product profile for the biosimilar candidate.

■ Similarity: Biosimilar developers must create their own cell line and unique manufacturing process as they donot have access to the reference product manufacturer’s cell lines or manufacturing know-how. As a result, onlysimilar, but not exact, copies of the reference product are feasible. During production, mAbs commonly candegrade to form aggregates, when two or more mAb units bind to each other to form larger structures. Theselarger structures can lead to changes in activity, or immunogenicity (provoke an immune response). Finally,mAbs may also undergo other chemical degradation events during purification and during storage, each ofwhich can impact potency. Producing biomolecules that are highly similar to the reference product requires asignificant interdisciplinary effort that involves a number of iterative cycles between cell line and processdevelopment, and analytical characterization.

■ Manufacturing: The quality profile of a biologic can change when the manufacturing process scale is increasedto commercial size or when processes are modified to fit a facility. The ability to manufacture highly similarmolecules must be demonstrated reproducibly at commercial scale. In order to enable pricing flexibility, themanufacturer must minimize costs related to depreciation of its capital investment, raw materials andoperations, while maintaining high quality and yield.

■ demonstrating to regulators that specific analytical differences of the biosimilar do not have clinical impact;

■ complying with individual regulatory authority requirements for in vivo preclinical studies to enable developmentand registration in planned markets;

■ anticipating and responding to changes in regulatory requirements that could involve additional technical work;■ demonstrating extrapolation for an indication that can drive market share;

■ addressing questions during regulatory review of marketing applications to prevent a delay in approval; and■ designing global clinical trials to meet the different regulatory requirements to avoid duplicative studies and

additional expense.

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The complexities of mAbs require a specialized skill set for development. A biosimilar developer must have the necessaryexpertise in cell and molecular biology, protein biochemistry and biochemical engineering to overcome the followingparticular technical challenges:

Regulatory Challenges

The regulatory requirements for the development of biosimilars in many countries, including the United States, Canada,the EU and Japan, differ from the requirements for developing the reference products. For example, the analytical datapackage required to initiate clinical trials of biosimilars is more exhaustive due to the prerequisite to generate initialsimilarity data to the reference product. This process requires multiple qualified methods to ensure that the data generatedfor similarity testing are reproducible and comprehensive. On the other hand, the non-clinical and clinical programs forbiosimilars tend to be more streamlined than for innovator molecules if shown to be analytically similar at the outset andcan be supported by the reference product data. The regulatory expectations surrounding biosimilars are still evolving asnew draft and final guidance documents are being made public across regulatory authorities.

Regulatory hurdles associated with biosimilar development include:

Any deficiency in regulatory approach could result in inconsistencies in the final data package for the submission andcould lead to a delay or rejection of a product candidate’s approval in certain markets.

Our BioSymphony Platform

Escalating healthcare costs and healthcare reform initiatives have been major drivers for the advancement of thebiosimilar market. Our BioSymphony Platform is designed to address the technical challenges and regulatory dynamics ofthe complex biologics industry by developing high quality mAb biosimilars on an accelerated timeline and in an efficientand cost-effective manner. The BioSymphony Platform, driven by our entrepreneurial culture, leverages our fullyintegrated in-house 48,000 square foot development and manufacturing facility and our team’s clinical and regulatoryexpertise. We believe this model enables significant pricing flexibility, providing us with competitive advantages, andpositions us to be a leading biosimilar company. The key elements of our BioSymphony Platform are depicted in the figurebelow.

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■ Reference Product Characterization and Cell Line Development: We initially reverse engineer the amino acidsequence and identify the critical quality attributes of the reference product that in turn provides the criteria forthe clone selection process. We utilize automated technologies to enable thousands of clones to be screened inan accelerated timeline.

■ Bioprocess: We utilize high-throughput mini bioreactors to assess the screened clones and media componentsto determine which clone and bioreaction process will produce a biosimilar candidate with the closest match tothe reference product. We have developed purification technology, including a platform of chromatographytechniques that are strategically combined to maximize product-yield while meeting the critical quality attributesof the reference product.

■ Formulation: The formulation that best preserves the stability of the biosimilar candidate may be different thanthe actual formulation of the reference product. We use high-throughput techniques to screen and evaluatemany formulation variations to identify the most effective stable formulation.

■ Analytical Characterization and In Vitro Similarity: We utilize numerous advanced analytical techniques andinstruments to enable us to interpret the chemical and structural similarity between our biosimilar candidate andthe reference product. We apply a rigorous analytical approach to characterize attributes such as structure

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MAb development presents high technical hurdles, and the success of our development efforts is dependent on anexperienced and knowledgeable workforce. We were founded by a team of industry veterans with decades of cumulativeexperience in biologics development and commercialization. Our team has been instrumental in obtaining globalregulatory approval for multiple complex biologics at leading multinational biopharmaceutical companies. We have hiredaccomplished scientists, engineers and business leaders since our inception, who together foster an entrepreneurialculture that has enabled agility, teamwork and rapid decision-making at Oncobiologics. Together, this has resulted in ahighly collaborative approach, which has been critical to the efficient and sustainable operation of our BioSymphonyPlatform.

Technical PlatformIn-House CMC Development Capabilities

We have established a research and development laboratory, which we believe enables the rapid development of high-quality mAb biosimilars. By establishing this infrastructure in-house, we have shortened the typical time required toperform the mandatory interdisciplinary iterative steps to develop mAb biosimilar products, which we believe reduces thecost of development. Our platform provides us with a differentiated approach to the following compulsory steps required todevelop biosimilars:

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(primary, secondary and tertiary), size and glycosylation, among others. We test up to approximately 60 qualityattributes with approximately 45 analytical methods. The biological characterization assays support establishingthe in vitro similarity. Our in-house capabilities provide an expeditious and thorough assessment of biochemical,biophysical and functional attributes.

To pursue development and commercialization of additional mAb biosimilar candidates, we are expanding ourdevelopment capacity by an additional 82,000 square feet in our current industrial complex. We intend to build-outadditional state-of-the-art development infrastructure, which we will occupy in phases as needed. We also plan to add toour scientific team as our development programs expand.

In-House Manufacturing Capability

We have established a state-of-the-art manufacturing facility capable of simultaneously producing multiple biosimilarcandidates. Our manufacturing platform utilizes single-use technology, which eliminates the need for rigorous cleaningand sterilization procedures, and related operational requirements necessary for manufacture in traditional stainless-steelbased facilities, including the use of the largest single-use bioreactor available. We have been able to construct single-usebased antibody manufacturing plants in approximately four months as compared to the few years required for de novobiotechnology manufacturing facilities. We have developed and execute a quality system that meets U.S. and EUstandards and have successfully completed two Qualified Person, or QP, audits resulting in cGMP declaration for bothPhase 1 and Phase 3 manufacturing. We believe we have sufficient manufacturing capacity until 2018 and will be able toexpand capacity in our current location once we build-out our new development infrastructure.

Development-Manufacturing Integration

We believe we have successfully and seamlessly unified our development capabilities and manufacturing processes tominimize time lapses and risks that are frequently encountered in drug development. Our internal processes eliminate theneed to transfer technology and processes to third-party manufacturers. Technology transfers are commonly performedthrough formal procedures consisting of the transfer of know-how, followed by manufacturing process gap assessments,and then finally replication and scale-up of the development process at manufacturing scale. These technology transferproceedings can take upwards of six months or longer, and could have an adverse effect on product quality. Our platformgives us the ability to initiate manufacturing within approximately six weeks of process development completion.

Regulatory and Clinical Approach for a Successful Global Launch

The regulatory requirements for the development of complex biosimilars are significantly different from those for novelbiologic therapeutics. These biosimilar regulatory expectations are still evolving with new drafts and final guidance beingmade public by regulatory authorities worldwide. Due to the limited number of biosimilar regulatory approvals anddeveloping guidance, prior regulatory feedback may not reflect the current expectations of the applicable regulatoryauthorities. We have developed a global regulatory risk mitigation strategy that we believe allows us to ask the rightquestions at the right time, enables us to ask probing questions to explore regulatory boundaries, provides the potential toset precedence and assures alignment with regulatory authorities. We believe the key prongs to this strategy include:checking in at certain key milestones to confirm continued acceptability, adjusting our programs with an understanding ofevolving requirements, approaching key health authority agencies to discuss development plans and reviewing regulatoryguidance and published information.

Our interactions with the U.S. Food and Drug Administration, or FDA, and European Medicines Agency, or EMA, provideus with better understanding of relevant regulatory requirements and build our overall regulatory knowledge base for otherupcoming product candidates. We augment these interactions by meeting with key health authorities, selected based onknown expertise with biotechnology products or the established rapporteur to the reference product. These additionalinteractions are used to provide national input for risk mitigation for the clinical trial applications and also additional expertinput on our development programs. This knowledge creates efficiencies in our development program by reducing theneed to duplicate experiments or clinical trials. We have also retained a regional expert regulatory consultant in Japan,and may do so for other countries as well, to obtain advice on how to approach the regulatory agencies to optimally designour global development plans to meet the relevant local and regional regulatory requirements.

An important aspect of our regulatory development strategy is to design our confirmatory trials to maximize the potentialcommercial success in order to meet the requirements for extrapolation to other indications and to enable us to seek aninterchangeability designation for at least some of our current and future product candidates. Our goal is to develop trialdesigns that will enable us to extrapolate to all approved indications without additional clinical data. We will also assessthe ability for our product candidates that are either self-administered or used chronically in order to seek aninterchangeability designation, which allows substitution for the reference product by a pharmacist without the interventionof the healthcare

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(1) According to recent filings with the Securities and Exchange Commission, where available, EvaluatePharma and manufacturers’reports.

(2) We currently have an arrangement with Huahai for the co-development and joint commercialization of ONS-3010 in certain majordeveloped markets, including the United States and EU. Assuming Huahai funds its proportionate share of development costsincurred after completion of the “Phase-3 Ready Package” for ONS-3010, we will have a 49% value ownership interest with Huahaihaving a 51% value ownership interest in ONS-3010.

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provider who prescribed the reference product. We have recently completed discussions with the FDA on seeking bothbiosimilarity and interchangeability designation for ONS-3010, our Humira biosimilar. We may also develop trial designs todemonstrate clinical advantages of our biosimilar product candidates over reference products.

Data from in vivo animal studies may not be required to initiate human clinical trials for biosimilars, and as such we onlyconduct animal studies if it is deemed necessary to meet regulatory requirements or to address safety questions. Ourapproach to confirm that there is no clinically meaningful impact of any observed analytical differences is to conduct aPhase 1 clinical trial, followed by a single Phase 3 confirmatory clinical trial in a sensitive population. Based on regulatoryguidance as well as our recent interactions with regulatory bodies, we believe this approach will continue to be acceptableto the regulatory bodies. Because regulatory bodies generally do not require a repeat of the original efficacy and safetytrials, we continue to explore the potential of novel approaches to trial design that can confirm similarity in shorter durationof treatment and/or with smaller patient numbers, which can result in shortened timelines to registration. In certain cases,we may even be able to demonstrate that our biosimilar product candidates are more effective or safer than the referenceproducts.

Our People and Culture

MAb development presents high technical hurdles, and the success of our development efforts is dependent on anexperienced and knowledgeable work-force. We were founded by a team of industry veterans, with decades of cumulativeexperience in biologics development and commercialization at some of the leading biopharmaceutical companiesincluding Eli Lilly and Company, Bristol-Myers Squibb Company and Genentech, Inc. Our leadership team has built aplatform with the goal of expeditiously identifying, developing, manufacturing and commercializing mAb biosimilars in anefficient and cost-effective manner. We have fostered a culture of agility, collaboration and efficient decision-making with afocus on scientific rigor, which we believe forms the core of our BioSymphony Platform.

Our Product Candidate Portfolio

We are currently developing a portfolio of eight commercially attractive mAb biosimilars, for which the correspondingreference products generated an aggregate of approximately $37.8 billion in global revenue in 2015. We have alsoidentified two mAb biosimilars for which we expect to initiate development by the end of 2016. The product candidates inour pipeline were selected on the basis of an internal evaluation process that relies on a weighted criteria comprised of thefollowing factors: (i) future commercial potential; (ii) alignment of the reference product’s patent expiry against the requisitedevelopment timelines; (iii) probability of technical success; and (iv) global competitive landscape. Our current pipeline ofmAb biosimilars for which we have completed clone selection is described in the following chart.

ONS-3010 — Adalimumab (Humira) Biosimilar

Humira, the reference product for ONS-3010, is a subcutaneous injectable mAb that binds to TNFα. TNFα belongs to afamily of pro-inflammatory cytokines, or soluble protein mediators, that are key initiators of immune-mediated inflammationin many different diseases, such as rheumatoid arthritis, psoriatic arthritis, psoriasis, ankylosing spondylitis, Crohn’sdisease and ulcerative colitis. Several biologic agents, including Humira, have been developed to inhibit the inflammatoryactivity of TNFs in the context of these diseases and are collectively referred to as the anti-TNF class of therapeutics.

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Market Opportunity

Worldwide sales of Humira were $14.1 billion in 2015, with approximately $8.4 billion in the United States and projected togrow to $18.0 billion worldwide by 2020, and is one of the world’s best selling drugs. Humira has been approved by theFDA and the EMA for the treatment of nine and 12 indications, respectively. Humira is currently approved in the UnitedStates for the following indications: rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, ankylosingspondylitis, adult crohn’s disease, pediatric crohn’s disease, ulcerative colitis, plaque psoriasis, and hidradenitissuppurativa. We initially intend to seek approval of ONS-3010, a subcutaneous injectable, for the treatment of plaquepsoriasis, and will pursue extrapolation of ONS-3010 across all eligible approved indications in order to maximize thecommercial potential for ONS-3010. We have also designed our Phase 3 clinical trial for ONS-3010 in a way that webelieve will enable us to also seek an interchangeability designation in the United States. We have discussed ourapproach with the FDA and the EMA.

Chemistry Manufacturing Controls, or CMC, Status

We have manufactured and characterized a master cell bank from a selected clone and demonstrated its stability inaccordance with global regulatory guidelines. We have also completed development of the ONS-3010 commercialmanufacturing process. A novel formulation of similar stability was developed and in place prior to the Phase 1 clinical trialand this same formulation will be used for the planned Phase 3 clinical trial.

We have confirmed that the amino acid sequence of ONS-3010 matches Humira. Extensive analytical characterizationand in vitro studies comparing ONS-3010 to both the U.S. and the EU versions of Humira were completed and arepresentative overlay demonstrating equivalent potency is shown in the following figure. Luminescence is a highlysensitive method for assaying cell proliferation and cytotoxicity. Potency is measured based on a comparison of the dosedependent response of the test article to the reference article. Based on the result of this assay and numerous analyticaland in vitro characterization data, we initiated a Phase 1 clinical trial to assess pharmacokinetics, or PK, and safety. PKmeans how the body affects the molecule.

Comparative Potency of ONS-3010 versus Humira (U.S. and EU) ONS-3010 (triangles), U.S.-Humira (squares), EU-Humira (circles).

Using our commercial scale process at our manufacturing facility, we are manufacturing sufficient supply of ONS-3010 forPhase 3 clinical testing. We have contracted with a large U.S.-based pharmaceutical fill-finish facility to package ONS-3010 into a single-use, pre-filled syringe. We have also selected a partner for the development of an auto-injector to beused as an additional commercial delivery device.

Clinical Development Status and Clinical Trial Data

We have successfully completed a randomized, double-blind, single-dose and single-center Phase 1 clinical trialcomparing ONS-3010 to Humira in 198 subjects receiving a 40 mg dose in three treatment arms: ONS-3010, U.S.-Humiraand EU-Humira. This Phase 1 clinical trial was performed at the Center for Human Drug Research in Leiden, TheNetherlands

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under the auspices of the Stichting Beoordeling Ethiek Biomedisch Onderzoek. In this trial, ONS-3010 met its primary andsecondary endpoints, demonstrating a similar PK profile, as well as an immunogenicity profile equivalent to both U.S.- andE.U.-Humira across all three treatment arms. ONS-3010 was well tolerated and demonstrated a favorable safety profile,which was similar to the safety profile for both U.S.- and E.U.-Humira, and demonstrated a lower injection site reactionrate than both U.S.- and E.U.-Humira. The following figure demonstrates the mean concentration-time profile of U.S.-Humira, EU-Humira and ONS-3010. The vertical line at day one denotes dosing. These results suggest a high degree ofsimilarity between the three products.

Primary PK Endpoint (AUC )

The following figure demonstrates the effect of anti-drug antibodies on the concentrations (AUC, or area under the curve)for the three products. There were no significant differences in either the amount of anti-drug antibodies formed or theireffect on concentration between the three products, which again suggest a high degree of similarity between the threeproducts.

Effect of ADA-result on AUC0-inf

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The following table reports the most frequently reported adverse events regardless of relationship. The most frequentoccurring adverse event was local administration site irritation (either burning sensation or pain upon injection at theinjection site), which was observed less frequently in the ONS-3010 treatment group.

Adverse EventONS-3010

N (%)EU-Humira

N (%)U.S.-Humira

N (%)

Burning sensation 12 (18.2 29 (43.9 31 (47.0Headache 29 (43.9 20 (30.3 27 (39.4Nasopharyngitis 12 (18.2 19 (28.8 12 (18.2

Regulatory Status and Development Plan

Prior to commencement of our Phase 1 clinical trial in 2014, we received feedback from both FDA and EMA, whichprovided guidance for the design of the clinical trial and our similarity testing approach. Since completion of the Phase 1clinical trial, we had additional regulatory meetings with the FDA and the EMA, as well as other national regulatoryagencies such as the Medicines and Healthcare Products Regulatory Agency, or MHRA, and the Swedish regulatoryauthority, and obtained further guidance on the Phase 3 clinical trial design in plaque psoriasis and the general similaritydevelopment plan for registration. We have completed a site feasibility study to identify global sites (North and SouthAmerica, Europe, Australia and New Zealand) in preparation for the commencement of our planned Phase 3 clinical trial in2016.

ONS-1045 — Bevacizumab (Avastin) Biosimilar

Avastin, the reference product for ONS-1045, is a mAb administered by infusion that interferes with tumor growth bybinding to VEGF, a protein that stimulates the formation of new blood vessels.

Market Opportunity

Worldwide sales of Avastin were approximately $7.0 billion in 2014 and 2015. Furthermore, worldwide sales of Avastin areprojected to grow to $7.4 billion by end of 2019. Avastin has been approved by the FDA and the EMA for the treatment ofseven and eight indications, respectively. Avastin is currently approved in the United States for the following indications:metastatic colorectal cancer, with intravenous 5-fluorouracil-based chemotherapy for first- or second-line treatment;metastatic colorectal cancer, with fluoropyrimidine- irinotecan- or fluoropyrimidine-oxaliplatin-based chemotherapy forsecond-line treatment in patients who have progressed on a first-line Avastin containing regimen; non-squamous non-small cell lung cancer, with carboplatin and paclitaxel for first line treatment of unresectable, locally advanced, recurrent ormetastatic disease; glioblastoma, as a single agent for adult patients with progressive disease following prior therapy;metastatic renal cell carcinoma with interferon alfa; cervical cancer, in combination with paclitaxel and cisplatin orpaclitaxel and topotecan in persistent, recurrent, or metastatic disease; platinum-resistant recurrent epithelial ovarian,fallopian tube or primary peritoneal cancer, in combination with paclitaxel, pegylated liposomal doxorubicin or topotecan.We initially intend to seek approval of ONS-1045, which will be delivered by infusion, for the treatment of non-squamousnon-small cell lung cancer, and will pursue extrapolation of ONS-1045 across all of these approved indications, in order tomaximize the commercial potential for ONS-1045.

CMC Status

We have manufactured and characterized a master cell bank from a selected clone and demonstrated its stability inaccordance with global regulatory guidelines. In addition, we have completed development of the ONS-1045 commercialmanufacturing process.

We have confirmed that the amino acid sequence of ONS-1045 matches Avastin. Extensive analytical characterizationand in vitro studies comparing ONS-1045 to both the U.S. and the EU-Avastin were completed and a representativeoverlay demonstrating equivalent potency is shown in the following figure.

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Comparative Potency of ONS-1045 versus Avastin (U.S. and EU)ONS-1045 (triangles), U.S.-Avastin (circles), EU-Avastin (squares)

In preparation for producing Phase 3 clinical supplies, we are manufacturing ONS-1045 using our commercial scaleprocess at our manufacturing facility. These batches will be filled into vials at a contracted U.S.-based commercial fill-finishfacility.

Clinical Development

We have completed a randomized, double-blind, single-dose and single-center Phase 1 clinical trial comparing ONS-1045to U.S.-licensed Avastin and EU-licensed Avastin in 135 subjects. This Phase 1 trial was performed at the Center forHuman Drug Research in Leiden, The Netherlands under the auspices of the Stichting Beoordeling Ethiek BiomedischOnderzoek. PK data, safety and immunogenicity were collected for a total of 98 days after a single 2.0 mg/kg dose. In thistrial, ONS-1045 met its primary and secondary endpoints demonstrating a similar PK profile, as well as an immunogenicityprofile equivalent to both U.S.- and EU-Avastin. Safety was comparable across all three groups. Immunogenicity was lowwith only one subject in the EU-licensed Avastin arm developing an anti-drug antibody, or ADA, at day 98. No neutralizingantibodies were detected in any arm. The following figure demonstrates the concentration-time profile of ONS-1045, U.S.-licensed Avastin, and EU-licensed Avastin as the mean. The vertical line at time zero denotes dosing. These resultssuggest a high degree of similarity between the three products.

Primary PK Endpoint (AUC )

Regulatory Status and Development Plan

Prior to the commencement of a Phase 1 clinical trial in 2015, we received feedback from both the FDA and the EMA,which provided guidance for the clinical trial design and similarity testing approach. We have completed the next series ofour regulatory interactions to obtain further guidance on our confirmatory trial design. Based on input from the FDA, EMA,MHRA and the Danish Health and Medicines Agency, we believe we have designed the appropriate confirmatory trial. We

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have also begun preparatory planning with the intention to discuss our Japanese development strategy with Japan’sPharmaceuticals and Medical Devices Agency in 2016.

We have initiated a site feasibility study (targeting North and South America, Europe and Asia) in order to advance ONS-1045 to be Phase-3 ready in 2016.

ONS-1050 — Trastuzumab (Herceptin) Biosimilar

Trastuzumab (Herceptin), the reference product for ONS-1050, is a mAb administered by infusion that binds to HER2.Herceptin has been shown to inhibit the proliferation of human tumor cells that overexpress HER2.

Market Opportunity

According to the Roche Annual Report for 2015, worldwide sales of Herceptin totaled approximately $6.8 billion in 2015.Herceptin is currently approved for HER2+ breast cancer and HER2+ metastatic gastric cancer in both the United Statesand the EU, as well as HER2+ gastroesophageal junction cancer in the United States. Worldwide sales of Herceptin areprojected to grow to $7.1 billion by end of 2016. We have not yet determined the indication for which we will initially seekapproval of ONS-1050. However, we will pursue extrapolation of ONS-1050 across all of these approved indications, inorder to maximize the commercial potential for ONS-1050, and will deliver ONS-1050 by infusion.

CMC Status

A clone with a highly similar profile to Herceptin has been chosen for further process development. We havedemonstrated the stability of the cell line, and characterization of the master cell bank is planned to be completed in thefirst half of 2016. Manufacturing process development for ONS-1050 is nearing completion. We have confirmed that theamino acid sequence of ONS-1050 matches Herceptin. Extensive analytical characterization and in vitro functionalitystudies comparing ONS-1050 to Herceptin are underway and expected to be completed in 2016 to support thebiosimilarity assessment required to initiate clinical trials. A representative overlay demonstrating equivalent potency ofONS-1050 to U.S. and EU-Herceptin is shown in the following figure.

Comparative Potency of ONS-1050 versus Herceptin (U.S. and EU). ONS-1050 (squares), U.S.-Herceptin (circles), EU-Herceptin (triangles)

We are planning to manufacture ONS-1050 for a Phase 1 PK study using our commercial scale process at ourmanufacturing facility. This batch is expected to be vialed at a U.S. pharmaceutical filling facility.

Regulatory Status and Development Plans

We received initial EMA guidance in the second quarter 2014 that supports our approach to the initial Phase 1 trial design.In accordance with our regulatory strategy and in advance of initiating Phase 1 clinical trials, we plan to interact with FDA,as well as other national regulatory agencies such as MHRA and the Federal Institute for Drugs and Medical Devices, toalso obtain further guidance on study design. We expect to be ready to commence our Phase 1 clinical trial during 2016.

Preclinical Biosimilar Pipeline

In addition to the product candidates we are currently advancing through clinical development, we are leveraging ourBioSymphony Platform to develop additional preclinical candidates. Further development of such preclinical productcandidates is subject to ongoing commercial analysis, among other items. We have not yet determined the initial

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indications for which we will seek approval for such preclinical product candidates. Our strategy will be to seek initialapproval for an approved indication of the reference product, which will be determined in consultation with regulatoryauthorities regarding clinical trial and study design, and then seek to expand such approval to the same indications as thereference product. We also intend to deliver our biosimilars in the same manner as the reference product.

Two biosimilar product candidates, ONS-4010, a biosimilar to denosumab (Prolia /Xgeva ), and ONS-1055, a biosimilarto cetuximab (Erbitux ), have cell lines developed and ONS-4010 has clone selection completed. Denosumab is a fullyhuman mAb with affinity and specificity for human RANKL. Prolia is a subcutaneous injectable currently approved in theUnited States for treatment (i) of postmenopausal women with osteoporosis at high risk for fracture, (ii) to increase bonemass in men with osteoporosis at high risk for fracture, (iii) to increase bone mass in men at high risk for fracture receivingandrogen deprivation therapy for nonmetastatic prostate cancer and (iv) to increase bone mass in women at high risk forfracture receiving adjuvant aromatase inhibitor therapy for breast cancer. Xgeva is a subcutaneous injectable currentlyapproved in the United States for prevention of skeletal-related events in patients with bone metastases from solid tumors,treatment of adults and skeletally mature adolescents with giant cell tumor of bone that is unresectable or where surgicalresection is likely to result in severe morbidity, and treatment of hypercalcemia of malignancy refractory to bisphosphonatetherapy. Erbitux, administered by infusion, is currently approved in the United States for the following head and neckcancer treatments: locally or regionally advanced squamous cell carcinoma of the head and neck in combination withradiation therapy, recurrent locoregional disease or metastatic squamous cell carcinoma of the head and neck incombination with platinum-based therapy with 5-FU, and recurrent or metastatic squamous cell carcinoma of the head andneck progressing after platinum-based therapy; and for the following colorectal cancer treatments: K-Ras wild-type,EGFR-expressing, metastatic colorectal cancer as determined by FDA-approved tests in combination with FOLFIRI forfirst-line treatment, in combination with irinotecan in patients who are refractory to irinotecan-based chemotherapy, and asa single agent in patients who have failed oxaliplatin- and irinotecan-based chemotherapy or who are intolerant toirinotecan. We have completed preliminary characterization and the reverse engineering of the amino acid sequences ofthe reference products. We plan to complete process development and be ready to commence our Phase 1 clinical trialfor ONS-4010 in 2017. We plan to complete lab scale similarity of ONS-1055 in 2016. According to recent filings with theSecurities and Exchange Commission, 2015 worldwide sales of Erbitux were approximately $2.0 billion.

Three additional biosimilar product candidates, ONS-3030, a biosimilar to tocilizumab (Actemra /Roactemra ), ONS-3035, a biosimilar to golimumab (Simponi ), and ONS-3040, a biosimilar to ustekinumab (Stelara ), are in earlydevelopment. According to manufacturers’ reports, 2015 worldwide sales of Actemra/Roactemra, Simponi and Stelarawere $1.5 billion, $1.3 billion and $2.5 billion, respectively. We are focused on reverse engineering the reference productcharacteristics and developing cell lines for clone selection. We anticipate completing clone selection in 2016 for ONS-3030, and reference product characterization in 2016 for each of ONS-3035 and ONS-3040.

Commercialization, Sales and Marketing

Our commercialization strategy is to maximize the revenue potential of our biosimilar product candidates along withseeking and effecting selective licensing opportunities to fund the development of our assets. We currently intend to retainU.S. rights to select product candidates while entering into additional strategic collaborations and partnerships withbiotechnology and pharmaceutical companies in other regions to maximize the commercial value of our pipeline. Ourintent is to enter into partnerships that result in economic and transactional efficiencies by including upfront and post-Phase 1 development payments that would, in large part, offset global Phase 3 clinical development costs for eachbiosimilar product candidate. For example, we have a joint participation agreement in place for ONS-3010 with ZhejiangHuahai Pharmaceutical Co., Ltd., or Huahai, whereby we share post-Phase 1 development costs with Huahai, andproportionately share the revenues from commercialization of ONS-3010 in the United States, Canada, EU, Japan,Australia and New Zealand. We could also be required to form a joint venture to further develop and commercialize ONS-3010 with Huahai in the agreed countries, if so requested by Huahai. However, we do not have any other developmentand commercialization agreements for the United States or for major ex-U.S. markets, such as the EU and Japan. In 2012and 2013, we established early country-specific partnerships for ONS-3010 and ONS-1045 in China with Huahai, in Indiawith IPCA Laboratories Limited, or IPCA, and in Mexico with Laboratories Liomont, S.A. de C.V., or Liomont. In each ofthese smaller ex-U.S. markets, we have identified potential synergies between our partner’s strategy to enter the biologicsmarketplace and access to our biosimilar development platform. These partnerships have resulted in $23.5 million inpayments to us as of December 31, 2015, and are expected to result in high single-digit or low teens royalty streams fortwo of our licensed products, ONS-3010 and ONS-1045.

The United States and the EU are expected to be the largest and economically most attractive biosimilar markets and weplan to retain U.S. marketing and commercialization rights to our product candidates and actively pursue licensing

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partnerships for the EU. We intend to build our commercialization infrastructure through an option to outsource the salesand marketing work force via a contract sales organization. As such, we have engaged a consulting company to evaluateour options and to assist with the development of a U.S. sales and marketing strategy. We also recently entered into astrategic collaboration agreement with Premier Healthcare Alliance, L.P., or Premier, a developer of a network of U.S.hospitals and healthcare providers, focused on data-gathering and cost-reduction strategies to improve the outcome of itsmembers. Under the agreement, we are partnering with Premier to share knowledge and strategize about how to mostefficiently deliver our innovative and cost-effective mAb biosimilars in the U.S. market. We currently focus on those criticalsuccess factors associated with commercial success, namely the identification and interactions between (i) payors, (ii)providers, (iii) pharmacy benefit management organizations, (iv) patients and (v) physicians. We are currently developinga strategic roadmap that entails (i) developing and validating our commercialization strategy; (ii) exploring/establishing adistribution and commercialization relationship; and (iii) eventually developing our own sales and marketing force.

We believe that the U.S. biosimilar market adoption and penetration rates for each biosimilar will be determined primarilyby four key factors: (1) the prevalence of payor incentives to drive substitution, (2) the physician and patient shareinfluence relative to the payor in the prescribing decision, (3) rapidity of feedback on the safety and efficacy of the drugbased on the totality of the patient response and (4) patient criticality (the degree of severity in the patient’s condition).

Collaboration and License Agreements

We enter into collaboration and license agreements in the ordinary course of our business. We have in-licensed certaintechnology from Selexis SA, or Selexis, that we are using to research and develop our biosimilar product candidates. Forbiosimilar product candidates developed using the Selexis technology, we enter into commercial license agreements withSelexis that give us rights to commercialize, file INDs and enter into collaborative arrangements with third parties for thefurther development and commercialization of such biosimilar product candidates. Our commercialization strategy is toretain U.S. rights to select biosimilar product candidates while entering into additional strategic collaborations andpartnerships in other regions to maximize the commercial value of our pipeline. Although we do not yet have any suchagreements for major ex-U.S. markets, such as the EU or Japan, we have licensing and collaboration agreements withselect partners for smaller ex-U.S. markets where we would not otherwise intend to commercialize our biosimilar productcandidates, including India, Mexico and China, which agreements have collectively provided an aggregate of $23.5 millionin payments as of December 31, 2015.

Selexis — Humira (ONS-3010), Avastin (ONS-1045) and Herceptin (ONS-1050)

In October 2011, we entered into a research license agreement with Selexis SA, or Selexis, pursuant to which weacquired a non-exclusive license to conduct research internally or in collaboration with third parties to developrecombinant proteins from mammalian cells lines created using the Selexis expression technology, or the SelexisTechnology. The original research license had a three-year term, but on October 9, 2014, was extended for an additionalthree-year term through October 9, 2017. We may sublicense our rights with Selexis’ prior written consent but areprohibited from making commercial use of the Selexis Technology or the resultant recombinant proteins comprising ourbiosimilars in humans, or from filing an investigational new drug, or IND, absent a commercial license agreement withSelexis covering the particular biosimilar product candidate developed under the research license.

In connection with the entry into the research license, we paid Selexis an initial fee of CHF 100,000 (approximately $0.1million) and agreed to make additional annual maintenance payments of the same amount for each of the three years thatthe research license agreement term was extended. As of September 30, 2015, we have paid Selexis an aggregate ofapproximately $0.4 million under the research license agreement.

Selexis also granted us a non-transferrable option to obtain a perpetual, non-exclusive, worldwide commercial licenseunder the Selexis Technology to manufacture, or have manufactured, a recombinant protein produced by a cell linedeveloped using the Selexis Technology for clinical testing and commercial sale. We exercised this option in April 2013and entered into three commercial license agreements as described more fully below.

Either party may terminate the research license in the event of an uncured material breach by the other party or in theevent the other party becomes subject to specified bankruptcy, winding up or similar circumstances. Either party mayterminate the research license under designated circumstances if the Selexis Technology infringes third party proprietaryrights. Although we have the right to terminate the research license at any time for our convenience, we agreed with ourother collaborator parties to whom we have sublicensed the Selexis Technology not to exercise such right without theirconsent, which agreements are described below.

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Commercial License Agreements

On April 11, 2013, following the exercise of our option to enter a commercial license under the Selexis research license,we entered into commercial license agreements with Selexis for each of the ONS-3010, ONS-1045 and ONS-1050biosimilar product candidates that were developed under the research license (which agreements were subsequentlyamended on May 21, 2014). Under the terms of each commercial license agreement, we acquired a non-exclusiveworldwide license under the Selexis Technology to use the cell lines developed under the research license and relatedmaterials, to manufacture and commercialize licensed and final products, with a limited right to sublicense.

We were required to pay an upfront licensing fee of CHF 65,000 (approximately $0.1 million) to Selexis for eachcommercial license and also agreed to pay up to CHF 365,000 (approximately $0.4 million) in milestone payments foreach licensed product. In addition, we are required to pay a single-digit royalty on a final product-by-final product andcountry-by-country basis, based on worldwide net sales of such final products by us or any of our affiliates or sublicenseesduring the royalty term. The royalty term for each final product in each country is the period commencing from the firstcommercial sale of the applicable final product in the applicable country and ending on the expiration of the specifiedpatent coverage. At any time during the term, we have the right to terminate our royalty payment obligation by providingwritten notice to Selexis and paying Selexis a royalty termination fee of CHF 1,750,000 (approximately $1.8 million). As ofSeptember 30, 2015, we have paid Selexis an aggregate of approximately $0.3 million under the commercial licenseagreements.

Each of our commercial agreements with Selexis will expire in its entirety upon the expiration of all applicable Selexispatent rights. The licensed patent rights consist of two patent families. The first patent family relates to methods oftransferring cells, and is filed in the United States, Australia, Canada, Europe, Japan and Singapore. This patent family willbegin to expire worldwide in 2022. The second patent family claims DNA compositions of matter useful for having proteinproduction increasing activity. This patent family is filed in the United States, Australia, Canada, China, Europe, HongKong, Israel, India, Japan, South Korea, Russia, Singapore and South Africa. This patent family will begin to expireworldwide in 2025. Either party may terminate the related agreement in the event of an uncured material breach by theother party or in the event the other party becomes subject to specified bankruptcy, winding up or similar circumstances.Either party may also terminate the related agreement under designated circumstances if the Selexis Technology infringesthird-party intellectual property rights. In addition, we have the right to terminate each of the commercial agreements atany time for our convenience; however, with respect to the agreements relating to ONS-3010 and ONS-1045, this right issubject to Liomont’s consent pursuant to a corresponding letter we executed in conjunction with the standby agreemententered into between Selexis and Liomont on November 11, 2014. The standby agreement permits Liomont to assumethe license under the applicable commercial agreement for Mexico upon specified triggering events involving ourbankruptcy, insolvency or similar circumstances.

Ex-U.S. Collaboration and License Agreements

Aside from our joint participation agreement in place for ONS-3010 with Huahai, whereby we agreed to share post-Phase1 development costs, and proportionately share the revenues from commercialization of ONS-3010 in the United States,Canada, EU and Japan, among other markets, and under which we could be required to form a joint venture with Huahaifor ONS-3010 if so requested by Huahai, we do not have any commercial license or development agreements for theUnited States or for major ex-U.S. markets, such as the EU or Japan. We currently have collaboration and licenseagreements for smaller ex-U.S. markets where we would not otherwise intend to commercialize our biosimilar productcandidates, which we entered into to help offset some of our development costs. Collectively, such agreements haveprovided an aggregate of $23.5 million in payments as of December 31, 2015 for our most advanced biosimilar productcandidates. Our contracts include agreements with IPCA (for ONS-3010, ONS-1045 and ONS-1050 in India and otherregional markets), Liomont (for ONS-3010 and ONS-1045 in Mexico), and Huahai (for ONS-3010 and ONS-1045 inChina). Our arrangements with these partners generally include a strategic license for a defined territory for agreedbiosimilar product candidates, and may also include agreements to assist with research and development to assist ourcontract counterparty in establishing their own mAb research, development and manufacturing capabilities. Under ourexisting strategic licensing agreements, we generally received an upfront payment upon execution, and have the ability toearn additional regular milestone payments and the right to receive royalties (generally a mid-single digit to low-teenspercentage rate) based on net sales in the agreed territory. Our existing agreements to assist with research anddevelopment also included an upfront payment upon execution, and we have the ability to earn additional regularmilestone payments, and the right to receive royalties (generally a mid-single digit to low-teens percentage rate) based onnet sales in the agreed territory.

Generally, our agreements expire on a product-by-product basis on the date of the expiration of the royalty revenue termfor all products in the territory. The royalty revenue term is 10 years from the date of first commercial sale and any renewalis

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subject to good faith negotiation. The license term for the agreed territory is perpetual. Either party may terminate theagreement in its entirety or with respect to a particular product if the other party materially breaches the agreement,subject to specified notice and cure periods. In addition, we have the right to terminate the agreement in connection withany interference, opposition or challenge of our patent rights. If the agreement is terminated due to our breach, ourcontract counterparty is generally free to use all applicable technology and know-how that we have provided under theagreement.

As noted above, our collaboration agreements with Huahai also includes a joint participation agreement, which providesfor the co-funding of development of ONS-3010 in the United States, Canada, EU, Japan, Australia and New Zealand andthe proportionate sharing of the revenues from commercialization of ONS-3010 in the agreed countries, and also providesfor the formation of a joint venture with Huahai to further develop and commercialize ONS-3010 with Huahai in the agreedcountries, if so requested by Huahai. We had the option to terminate this joint participation agreement by exercising theoption prior to December 23, 2015 and paying Huahai a total of $28.0 million, consisting of an $11.0 million initial paymentwithin seven business days of exercise, and four additional installment payments of $4.25 million payable over the courseof the following year. We did not make the $11.0 million initial payment within the time frame required.

In the event Huahai funds its proportionate share of development costs incurred after completion of the “Phase-3 ReadyPackage,” Huahai would be entitled to retain its 51% value ownership, with us entitled to retain our 49% value ownership,of ONS-3010 in the agreed countries. Similarly, revenues from the commercialization of ONS-3010 in the agreed countries(including major markets such as the United States and the EU, among others), would also be shared based on suchproportional ownership interests. In the event that Huahai does not fund its proportionate share of such developmentcosts, the joint participation agreement provides for a proportionate adjustment to our respective value ownership interestsbased on our respective investments in such development costs, which would increase our value ownership interest inONS-3010.

Throughout the term of the joint participation agreement, we and our affiliates are prohibited from, directly or indirectly,conducting or having conducted or funding any discovery, research, development, regulatory, manufacturing orcommercialization activity, alone or in collaboration with a third party, of any biosimilar product having the same referenceproduct as the ONS-3010 compound or corresponding products, for use in the United States, Canada, EU, Japan,Australia and New Zealand, other than ONS-3010 with Huahai pursuant to the joint participation agreement.

Unless terminated early upon mutual agreement of the parties, or due to a material breach of either party that is uncured,the joint participation agreement will terminate upon entry into a mutually acceptable collaboration agreement between usand Huahai for ongoing development and commercialization of ONS-3010 in the agreed countries, or we and Huahaienter into an agreed license with a third party for such ongoing development and commercialization of ONS-3010 in theagreed countries. If the joint participation agreement is terminated for cause due to our breach, we could be required torefund Huahai any amounts funded by Huahai to develop ONS-3010, as well as pay Huahai a 6% royalty on net salesmade by us or an affiliate, as well as 25% of revenues we receive from a sublicensee for commercial sales of ONS-3010until the aggregate of such payments is equal to 10 times the amount Huahai funded for the development of ONS-3010.Furthermore, if we were to file a voluntary petition in bankruptcy, or have an involuntary petition filed that we could notdismiss within 120 days, then Huahai would be granted an exclusive license to continue the development andcommercialization of ONS-3010 in the agreed countries.

As of December 31, 2015, we have received an aggregate of $5.0 million of payments from IPCA under our variousagreements, an aggregate of $2.5 million of payments from Liomont under our various agreements, and an aggregate of$16.0 million of payments from Huahai under our various agreements, $10.0 million of which were pursuant to the jointparticipation agreement.

CompetitionBiosimilars have become a significant growth area for the biopharmaceutical industry, attracting large pharmaceuticalcompanies as well as small niche players. Biosimilars of complex mAbs have limited competition to those industry playerswho have a high technical capability. The large players who have successfully taken mAb products into Phase 3 clinicaltrials include Pfizer Inc., or Pfizer, Amgen Inc., or Amgen, Sandoz, Inc., or Sandoz, Boehringer Ingelheim, or Boehringer,and Samsung Bioepis, Ltd., or Bioepis, while smaller niche players with clinical assets include us, Coherus Biosciences,Inc., or Coherus, Momenta Pharmaceuticals, Inc. and Celltrion, Inc., or Celltrion, as well as other regional developers.Additionally, companies developing novel products with similar indications, and the innovator companies that areimplementing protection strategies are expected to influence our ability to penetrate and maintain market share.Competition from generic small molecule manufacturers may also arise although these companies are less likely to havethe technical, regulatory and clinical expertise required to succeed in this market unless they partner or acquireexperienced biotech entities.

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Our principal mAb biosimilar competitors include both companies with biologic reference products, as well as those withbiosimilar products, such as AbbVie Inc. (the holder of rights to Humira), Genentech Inc. (the holder of rights to theAvastin), Pfizer (pipeline, which includes five biosimilar candidates), Amgen (pipeline, which includes six biosimilarcandidates), Sandoz (as a biosimilar company with the only currently FDA-approved biosimilar product), Bioepis andMerck & Co., Inc., or Merck (through their collaboration to develop and commercialize biosimilar candidates), Coherus(pipeline, which includes two Phase 3 biosimilar candidates), Bioepis (pipeline, which includes six biosimilar candidates)and Celltrion (pipeline, which includes two biosimilar candidates). Many of our competitors, either alone or with theirstrategic partners, have substantially greater financial, technical and human resources than we do and greater experiencein the discovery and development of mAb product candidates, obtaining FDA and other regulatory approvals of treatmentsand commercializing those treatments. Accordingly, our competitors may be more successful than us in obtaining approvalfor mAb biosimilars and achieving widespread market acceptance. Our competitors’ treatments may be more effectivelymarketed and sold than any products we may commercialize that may cause limited market share before we can recoverthe expenses of developing and commercializing any of our product candidates.

Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources beingconcentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to besignificant competitors, particularly through collaborative arrangements with large and established companies. Theseactivities may lead to consolidated efforts that allow for more rapid development of mAb biosimilar candidates than us.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, theability to work with specific clinical contract organizations due to conflict of interest, and also the conduct of trials in theability to recruit clinical trial sites and subjects for our clinical trials.

We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy,safety, price and the availability of reimbursement from government and other third-party payors. Our commercialopportunity could be reduced or eliminated if our competitors develop and commercialize products that are viewed assafer, more convenient or less expensive than any products that we may develop. Our competitors also may obtain FDAor other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in ourcompetitors establishing a strong market position before we are able to enter the market.

Intellectual PropertyOur commercial success depends in part on our ability to avoid infringing the proprietary rights of third parties, our abilityto obtain and maintain proprietary protection for our technologies where applicable and to prevent others from infringingour proprietary rights. We seek to protect our proprietary technologies by, among other methods, evaluating relevantpatents, establishing defensive positions, monitoring EU oppositions and pending intellectual property rights, preparinglitigation strategies in view of the U.S. legislative framework and filing U.S. and international patent applications ontechnologies, inventions and improvements that are important to our business. As of February 8, 2016, we own twopending international applications that were filed under the Patent Cooperation Treaty, or PCT, which relate to formulationsdeveloped for ONS-3010, as well as methods of antibody purification. We also own six provisional patent applicationsrelated to methods for purifying antibodies to separate isoforms, reducing high molecular weight species, and modulatingafucosylated species, as well as buffer formulations for enhanced antibody stability and methods for determining theamino acid sequence of antibodies. Any patents that may eventually issue claiming priority to these six provisional patentapplications are expected to expire in 2036 and 2037. The PCT is an international patent law treaty that provides a unifiedprocedure for filing patent applications to protect inventions in each of its contracting states. Thus, a single PCTapplication can be converted into a patent application in any of the more than 145 PCT contracting states, and isconsidered a simple, cost-effective means for seeking patent protection in numerous regions or countries. Thisnationalization (converting into an application in any of the contracting states) typically occurs 18 months after the PCTapplication filing date. Accordingly, we anticipate that our PCT application will be nationalized in April 2016. We have notyet determined the countries in which we will pursue national patent protection. If granted, patents issuing from our twoPCT applications are expected to expire in 2034 and 2036, absent any adjustment or extensions. We also rely on tradesecrets, know-how and continuing technological innovation to develop and maintain our proprietary position.

The term of individual patents depends upon the legal term of the patents in countries in which they are obtained. In mostcountries, including the United States, the patent term is generally 20 years from the earliest date of filing a non-provisional patent application in the applicable country. In the United States, a patent’s term may, in certain cases, belengthened by patent term adjustment, which compensates a patentee for administrative delays by the United StatesPatent and Trademark Office in examining and granting a patent or may be shortened if a patent is terminally disclaimedover a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.

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RegulatoryGovernment Regulation and Product Approval

Government authorities at the federal, state and local level in the United States and in other countries extensivelyregulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping,labeling, advertising, promotion, distribution, marketing, import and export of biopharmaceutical products such as ourproduct candidates. The processes for obtaining regulatory approvals in the United States and in foreign countries, alongwith subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time andfinancial resources.

FDA Approval Process for Biosimilars

All of our current product candidates are subject to regulation in the United States by the FDA as biological products, orbiologics. The FDA subjects biologics to extensive pre- and post-market regulation. The Public Health Service Act, orPHSA as amended by the Patient Protection and Affordable Care Act, or Affordable Care Act, and the Biologics PriceCompetition and Innovation Act, or BPCIA, govern the regulatory pathway for biosimilar products. In addition, other federaland state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage,recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, samplingand import and export of biologics. Failure to comply with applicable U.S. requirements may subject a company to avariety of administrative or judicial sanctions, such as FDA refusal to approve a pending biologics license application, orBLA, withdrawal of approvals, clinical holds, untitled and warning letters, product recalls, product seizures, total or partialsuspension of production or distribution, injunctions, fines, civil penalties or criminal penalties.

Under the BPCIA, a biologic may be demonstrated to be “biosimilar” if data show that the product is “highly similar” to areference product. This is demonstrated through extensive analytical studies, animal studies (if deemed necessary), andclinical trials in a sensitive patient population to confirm that “residual uncertainties” do not have clinically meaningfulimpact. Developing the data to satisfy FDA pre-market approval requirements typically takes many years and the actualtime required may vary substantially based upon the type, complexity and novelty of the product or disease.

Similar to innovator products, FDA requires submission of an Investigational New Drug application, or IND, prior to testingbiosimilar investigational products in humans. The IND is composed of the clinical protocol and other documentation suchas non-clinical and CMC data to assure the safe conduct of the study. The sponsor submits an IND to FDA to place theIND into effect. A 30-day waiting period after the submission of the IND is required prior to the commencement of clinicaltesting. If during the 30-day waiting period the FDA does not raise concerns or questions related to the safety of theproposed clinical trials or other data submitted, the clinical trial may begin.

Prior to IND submission of a biosimilar candidate, if previous human data are not available or if the analytical data warrant,in vivo preclinical tests may be required to assess the safety of the product. Other preclinical tests include laboratoryevaluation of product chemistry, formulation and in vitro functional testing. This preclinical work is highly dependent on thedevelopment of robust analytical tests. An IND must become effective before United States clinical trials may begin.

Clinical trials for biosimilars involve the administration of the new investigational product to healthy volunteers or patientswith the condition under investigation, all under the supervision of a qualified investigator. Clinical trials must beconducted: (i) in compliance with federal regulations; (ii) in compliance with good clinical practice, or GCP, an internationalstandard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administratorsand monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoringsafety and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequentprotocol amendments must be submitted to the FDA as part of the IND.

The FDA may order the temporary or permanent discontinuation of a clinical trial at any time or impose other sanctions if,among other things, it believes that the clinical trial either is not being conducted in accordance with FDA requirements orpresents an unreasonable and significant risk to the clinical trial patients. The study protocol and informed consentinformation for patients in clinical trials must also be submitted to an institutional review board, or IRB, for approval. AnIRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply withthe IRB’s requirements or may impose other conditions. The study sponsor may also suspend a clinical trial at any time onvarious grounds, including a determination that the subjects or patients are being exposed to an unacceptable health risk.

Clinical trials for biosimilar development are typically conducted in two sequential phases. In Phase 1, the investigationalproduct is initially compared to the reference product by dosing healthy human subjects or patients to assess PK,pharmacological actions, and safety. In the case of some products for severe or life-threatening diseases, such as cancer

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treatments, initial human testing may be conducted in the intended patient population. A Phase 3 clinical trial is thenundertaken to obtain additional information about clinical efficacy and safety, typically at geographically dispersed clinicaltrial sites. These Phase 3 clinical trials are intended to demonstrate that any residual uncertainty about biosimilarity whichmay exist after conducting prior trials does not have clinical impact in light of the totality of the evidence for the productcandidate. Well-designed and well-conducted trials conducted outside of the United States in accordance with GCP mayalso be acceptable to the FDA in support of product licensing if the FDA is able to validate the data from the study throughan onsite inspection, if necessary. Other clinical study designs may be acceptable to regulators if justified.

After successful completion of the required clinical testing in accordance with all applicable regulatory requirements,detailed information regarding the investigational product is prepared and submitted to the FDA in the form of a BLArequesting approval to market the product for one or more of the reference product’s indications. FDA review and approvalof the BLA is required before marketing of the product may begin in the United States. The BLA must include the results ofall preclinical, clinical and other testing and a detailed compilation of data relating to the product’s pharmacology and CMCand must demonstrate the safety, purity and potency of the product based on these results. The cost of preparing andsubmitting a BLA is substantial. Under Biosimilar User Fee Act of 2012, or BsUFA, the sponsor must submit initial andannual biological product development fees, an application fee at the time of submission of the BLA and establishmentand product fees if the product is approved. These fees are typically increased annually and will total several milliondollars over the product’s market life.

The FDA has 60 days from its receipt of a BLA to determine whether the application will be accepted for filing based onthe agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission isaccepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review ofbiosimilar BLAs. The FDA’s stated goal for 2016 is to review 85% of original biosimilar biologic applications within tenmonths from the receipt date of the application. Although the FDA can meet its user fee performance goals, the reviewprocess is often extended by requests for additional information or clarification. The FDA reviews a biosimilar BLA todetermine, among other things, whether the product candidate has no clinically meaningful differences from the referenceproduct, and the manufacturing process and facility meet standards designed to assure the product candidate’s continuedsafety, purity and potency. Before approving a BLA, the FDA will typically inspect one or more clinical sites to assurecompliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the product candidate ismanufactured. The FDA will not approve the product candidate unless it verifies compliance with cGMP and the BLAcontains adequate data that provide substantial evidence that the product candidate is comparable to the referenceproduct.

After the FDA evaluates the BLA and the manufacturing facilities, it issues either an approval letter or a completeresponse letter. A complete response letter generally outlines the deficiencies in the submission and may requiresubstantial additional testing or information in order for the FDA to reconsider the application. If, or when, thosedeficiencies have been addressed to the FDA’s satisfaction, the FDA will issue an approval letter. For 2016, the FDA hascommitted to reviewing 85% of resubmissions of biosimilar BLAs within six months of receipt. FDA approval is neverguaranteed, and the FDA will not approve a BLA if applicable regulatory criteria are not satisfied.

The approval of our product candidates may be significantly more limited than requested in the application, includinglimitations on the dosage forms (if multiple forms are filed) or the indications for use, which could restrict the commercialvalue of the product. In addition, as a condition of BLA approval, the FDA may require a risk evaluation and mitigationstrategy, or REMS, minimize any risk associated with the product. REMS can include medication guides, communicationplans for healthcare professionals and Elements To Assure Safe Use, or ETASU. ETASU can include, but are not limitedto, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, specialmonitoring and the use of patient registries. The requirement for a REMS can materially affect the potential market andprofitability of the product. Moreover, product approval may require, as a condition of approval, post-approval testing andsurveillance to monitor the product’s safety or efficacy. Once granted, product approvals may be withdrawn if compliancewith regulatory standards is not maintained or problems are identified following initial marketing.

Abbreviated Licensure Pathway of Biologics as Biosimilar or Interchangeable under 351(k)

The BPCIA amended the PHSA by adding section 351(k) that created an abbreviated approval pathway for biologicsshown to be highly similar to an FDA-licensed reference biologic. Under the BPCIA, a biologic may be demonstrated to be“biosimilar” if data show that, among other things, the product is “highly similar” to a reference product. This isdemonstrated through extensive analytical studies, animal studies (when deemed necessary), and clinical trials in asensitive patient population to confirm that “residual uncertainties” do not have clinically meaningful impact. Developing

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the data to satisfy FDA pre-market approval requirements typically takes many years and the actual time required mayvary substantially based upon the type, complexity and novelty of the product or disease. In addition, an applicationsubmitted under the 351(k) pathway must include information demonstrating that the proposed biosimilar product andreference product have the same route of administration, dosage form and the strength and the biosimilar product utilizesthe same mechanism of action for the condition(s) of use approved in the proposed labeling to the extent themechanism(s) of action are known for the reference product.

Biosimilarity under the BPCIA means that the biologic is highly similar to the reference product notwithstanding minordifferences in clinically inactive components and that there are no clinically meaningful differences between the biologicand the reference product in terms of the safety, purity and potency of the product. Therefore, in addition to a completeCMC data submission as required for a 351(a) BLA, an application submitted under section 351(k) is required to includedata supporting the analytical similarity of the proposed biosimilar product to the reference product.

If a manufacturer intends to use data from an animal study or a clinical study comparing its proposed biosimilar product toa non-U.S.-licensed product to address, in part, the requirements under section 351(k), the sponsor must provideadequate data or information to scientifically justify the relevance of these comparative data to an assessment ofbiosimilarity and establish an acceptable bridge to the U.S.-licensed reference product. The type of bridging data that isrequired includes data from analytical studies that directly compare all three products, i.e., the proposed biosimilarproduct, the U.S.-licensed reference product and the non-U.S.-licensed comparator product, and is likely to also includebridging clinical PK and/or PD study data for all three products. FDA makes a final determination about the adequacy ofthe scientific justification and bridge during the review of the application.

Moreover, the BPCIA provides for a designation of “interchangeability” between the reference and biosimilar products,whereby the biosimilar may be substituted for the reference product without the intervention of the healthcare providerwho prescribed the reference product. After the assessment of biosimilarity, the higher standard of interchangeability mustbe demonstrated by information sufficient to show that the proposed product is expected to produce the same clinicalresult as the reference product in any given patient and for a product that is administered more than once to an individual,the risk to the patient in terms of safety or diminished efficacy of alternating or switching between the biosimilar and thereference product is no greater than the risk of using the reference product without such alternation or switch. FDA’simplementation of the 351(k) approval pathway is still evolving, and the acceptance for filing and review of a 351(k)application is subject to the same refusals to file or approve that are described above for 351(a) BLAs. In addition, theFDA may accept a 351(k) application for filing but deny approval on the basis that the sponsor has not demonstratedbiosimilarity, in which case the sponsor may choose to conduct further analytical, preclinical or clinical trials todemonstrate such biosimilarity under section 351(k) or submit a BLA for licensure as a new biologic under section 351(a).

The timing of final FDA approval of a biosimilar for commercial distribution depends on a variety of factors, includingwhether the manufacturer of the reference product is entitled to one or more statutory exclusivity periods, during whichtime the FDA is prohibited from approving, or accepting applications for, any product candidates that are purportedlybiosimilar to the reference product. The FDA cannot approve a biosimilar application for 12 years from the date of firstlicensure of the reference product. Additionally, a biosimilar product sponsor may not submit an application under the351(k) pathway for four years from the date of first licensure of the reference product. “First licensure” typically means theinitial date the particular product at issue was licensed in the United States. Date of first licensure does not include thedate of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for asupplement for the biological product or for a subsequent application by the same sponsor or manufacturer of thebiological product (or licensor, predecessor in interest, or other related entity) for a change (not including a modification tothe structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosageform, delivery system, delivery device or strength, or for a modification to the structure of the biological product that doesnot result in a change in safety, purity, or potency. Therefore, one must determine whether a subsequent application for anew product includes a modification to the structure of a previously licensed product that results in a change in safety,purity, or potency to assess whether the licensure of the new product is a first licensure that triggers its own period ofexclusivity. Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biologicalproduct is determined on a case-by-case basis with data submitted by the sponsor.

A reference product may also be entitled to exclusivity under other statutory provisions. For example, a reference productdesignated as an orphan drug may be entitled to seven years of exclusivity, in which case no product that is biosimilar tothe reference product may be approved until either the end of the 12-year biologic reference product exclusivity period orthe end of the seven year orphan drug exclusivity period, whichever occurs later. In certain circumstances, a regulatoryexclusivity period can extend beyond the life of a patent and thus block §351(k) applications from being approved on or

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after the patent expiration date. In addition, the FDA may under certain circumstances extend the exclusivity period for thereference product by an additional six months if the FDA requests, and the manufacturer undertakes, studies on the effectof its product in children, a so-called pediatric extension.

The first biosimilar product determined to be interchangeable with a reference product for any condition of use is alsoentitled to a period of exclusivity, during which time the FDA may not determine that another product is interchangeablewith the reference product for any condition of use. This exclusivity period extends until the earlier of: (i) one year after thefirst commercial marketing of the first interchangeable product; (ii) 18 months after resolution of a patent infringement suitagainst the applicant that submitted the application for the first approved interchangeable product, based on a final courtdecision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; (iii) 42 monthsafter approval of the first interchangeable product, if a patent infringement suit instituted against the applicant thatsubmitted the application for the first interchangeable product is still ongoing; or (iv) 18 months after approval of the firstinterchangeable product if the applicant that submitted the application for the first interchangeable product has not beensued for patent infringement.

Post-Approval Regulatory Requirements

Once a BLA is approved, a product will be subject to continuing post-approval regulatory requirements relating torecordkeeping, periodic reporting, testing requirements, manufacturing, distribution, advertising and promotion andreporting of adverse experiences with the product. For instance, the FDA closely regulates post-approval marketing andpromotion concerning communications for direct-to-consumer advertising, off-label promotion, industry-sponsoredscientific and educational activities and promotional activities involving the internet. Failure to comply with theseregulations can result in significant penalties, including the issuance of untitled and warning letters directing a company tocorrect deviations from FDA standards, a requirement that future advertising and promotional materials be pre-cleared bythe FDA and federal and state civil and criminal investigations and prosecutions.

Biologics, like other pharmaceutical products, may be marketed only for the approved indications and in accordance withthe provisions of the approved conditions specified in the BLA. After approval, changes to the information submitted in theBLA may require submission to the FDA. Generally, there are three types of filing mechanisms to the approvedapplication: prior approval supplement, changes being effected supplement and annual report. The filing type is dictatedby the assessment of the potential to impact quality, efficacy and/or safety and each holds specific review and/or approvaltimelines. For example, a new indication would be filed as a prior approval supplement because assessment of efficacyand safety would be necessary with the targeted 10 month review clock. Whereas, a minor change in manufacturingprocess, which, among other things, would not affect specification limits or modifications in potency, sensitivity, specificityor purity of the product, may be filed in the BLA annual report, and can be implemented once the company’s quality unithas approved the use through appropriate documentation. There are also continuing annual user fee requirements for anymarketed products and the establishments at which such products are manufactured, as well as new application fees forsupplemental applications with clinical data.

Adverse event reporting and submission of periodic safety reports are required following FDA approval of a BLA. As acondition of the BLA approval, the FDA also may require additional information that may include additional analytical orclinical studies and a REMS or other conditions to assess and/or monitor the quality and safety of the approved product.

All manufacturing operations, including manufacturing, testing, packaging, labeling, storage and distribution proceduresmust continue to meet cGMP requirements after approval. Product manufacturers and certain of their subcontractors arealso required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjectsentities to periodic inspections by the FDA, during which the agency inspects manufacturing facilities to assesscompliance with cGMP. Accordingly, manufacturers must have dedicated resources in the areas of production, qualitycontrol, and quality assurance to maintain compliance with cGMP.

Discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequencyor with manufacturing processes or failure to comply with regulatory requirements, may result in the withdrawal of theproduct approval, product recall or marketing restrictions through labeling changes or product removals. A change in thesafety profile may result in revisions to the approved labeling to update safety information; post-market studies or clinicaltrials to assess new safety risks; or distribution restrictions or other requirements under a REMS program.

Other U.S. Healthcare Laws and Compliance Requirements

Although we currently do not have any products on the market, if our product candidates are approved and we begincommercialization, we will be subject to additional healthcare regulation and enforcement by the federal government andthe states and foreign governments in which we conduct our business. These laws include, without limitation, state andfederal anti-kickback, fraud and abuse, false claims, privacy and security and physician sunshine laws and regulations.

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The federal Anti-Kickback Statute prohibits, among other things, any person or entity from knowingly and willfully offering,soliciting, receiving or providing remuneration, directly or indirectly, in cash or in kind, either to induce or award the referralof an individual, for an item or service or the purchasing, recommending or ordering of a good or service, for whichpayment may be made under federal healthcare programs such as the Medicare and Medicaid programs. The Anti-Kickback Statute is subject to evolving interpretations. In the past, the government has enforced the Anti-Kickback Statuteto reach large settlements with healthcare companies based on, in certain cases, sham consulting and other financialarrangements with physicians. Further, the Affordable Care Act, among other things, amends the intent requirement of thefederal Anti-Kickback Statute and the criminal statute governing healthcare fraud statutes. A person or entity no longerneeds to have actual knowledge of these statutes or specific intent to violate them in order to commit a violation. Inaddition, the Affordable Care Act provides that the government may assert that a claim including items or servicesresulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of thefederal False Claims Act or federal civil money penalties statute. The majority of states also have anti-kickback laws thatestablish similar prohibitions and in some cases may apply to items or services reimbursed by any third-party payor,including commercial insurers.

Additionally, the federal false claims and civil monetary penalties laws, including the civil False Claims Act prohibit, amongother things, knowingly presenting or causing the presentation of a false, fictitious or fraudulent claim for payment to theU.S. government, or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federalgovernment. Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by aprivate individual in the name of the government. Violations of the False Claims Act can result in very significant monetarypenalties and treble damages. The federal government has used the False Claims Act, and the accompanying threat ofsignificant liability, in its investigation and prosecution of pharmaceutical and biotechnology companies throughout thecountry, for example, in connection with the promotion of products for unapproved uses and other illegal sales andmarketing practices. The government has obtained multi-million and multi-billion dollar settlements under the False ClaimsAct in addition to individual criminal convictions under applicable criminal statutes. Given the significant size of actual andpotential settlements, it is expected that the government will continue to devote substantial resources to investigatinghealthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminalstatutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme todefraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealingfrom a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly andwillfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statementin 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, or HITECH, and itsimplementing regulations, imposes requirements regarding the privacy and security of individually identifiable healthinformation, including mandatory contractual terms, for covered entities, or certain healthcare providers, health plans, andhealthcare clearinghouses, and their business associates. HITECH also increased the civil and criminal penalties that maybe imposed against covered entities and business associates, and gave state attorneys general new authority to file civilactions for damages or injunctions in federal courts to enforce HIPAA.

In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians andother healthcare providers. The Affordable Care Act, among other things, via the Physician Payments Sunshine Act,imposes new reporting requirements on certain manufacturers of drugs, devices, biologics, and medical supplies for whichpayment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, forpayments made by them to physicians and teaching hospitals, as well as ownership and investment interests held byphysicians and their immediate family members. Failure to submit required information to the Centers for Medicare &Medicaid Services, or CMS, may result in civil monetary penalties of up to an aggregate of $150,000 per year (or up to anaggregate of $1.0 million per year for “knowing failures”), for all payments, transfers of value or ownership or investmentinterests that are not timely, accurately and completely reported in an annual submission. Such manufacturers mustsubmit reports by the 90th day of each subsequent calendar year.

Certain states also mandate implementation of commercial compliance programs, impose restrictions on pharmaceuticalmanufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and other remunerationto physicians. Additionally, analogous state and foreign laws and regulations, such as state anti-kickback and false claimslaws, 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 laws may also apply that require pharmaceutical

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companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant complianceguidance promulgated by the federal government, as well as state and foreign laws governing the privacy and security ofhealth information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thuscomplicating compliance efforts.

The shifting commercial compliance environment and the need to build and maintain robust systems to comply withdifferent compliance and/or reporting requirements in multiple jurisdictions increase the possibility that a healthcarecompany may violate one or more of the requirements. If our operations are found to be in violation of any of such laws orany other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil andcriminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federaland state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our businessand our financial results.

Healthcare Reform

The Affordable Care Act has had, and is expected to continue to have, a significant impact on the healthcare industry. TheAffordable Care Act was designed to expand coverage for the uninsured while at the same time containing overallhealthcare costs. With regard to pharmaceutical products, among other things, the Affordable Care Act expanded andincreased industry rebates for drugs covered under Medicaid programs and made changes to the coverage requirementsunder the Medicare prescription drug benefit. We continue to evaluate the effect that the Affordable Care Act has on ourbusiness. In the coming years, additional legislative and regulatory changes could be made to governmental healthprograms that could significantly impact pharmaceutical companies and the success of our product candidates. TheAffordable Care Act, as well as other federal, state and foreign healthcare reform measures that have been and may beadopted in the future, could harm our future revenues.

International Regulation

In addition to regulations in the United States, foreign regulations also govern clinical trials, commercial sales anddistribution of product candidates within their jurisdiction. The regulatory approval process varies from country to countryand the time to approval may be longer or shorter than that required for FDA approval. In the European Union, theapproval of a biosimilar for marketing is based on an opinion issued by the European Medicines Agency and a decisionissued by the European Commission. However, substitution of a biosimilar for the innovator is a decision that is made atthe local (national) level on a country-by-country basis. Additionally, a number of European countries do not permit theautomatic substitution of biosimilars for the reference product. Many countries, such as Canada, Japan, China, Brazil,Mexico and Korea, also have their own legislation outlining a regulatory pathway for the development and approval ofbiosimilars. In some cases, countries have either adopted European guidance or are following guidance issued by theWorld Health Organization. Although similarities are apparent across these various regulatory guidances, there is also thepotential for additional country-specific requirements.

Pharmaceutical Coverage, Pricing and Reimbursement

In the United States and other countries, sales of any products for which we receive regulatory approval for commercialsale will depend in part on the availability of coverage and reimbursement from third-party payors, including governmenthealth administrative authorities, managed care providers, private health insurers and other organizations. Third-partypayors are increasingly examining the medical necessity and cost effectiveness of medical products and services inaddition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newlyapproved therapeutics. A payor’s decision to provide coverage for a drug product does not imply that an adequatereimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does notassure that other payors will also provide coverage for the drug product. Adequate third-party reimbursement may not beavailable to enable us to maintain price levels sufficient to realize an appropriate return on our investment in productdevelopment. In addition, the U.S. government, state legislatures and foreign governments have continued implementingcost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements forsubstitution of generic products. Adoption of price controls and cost-containment measures and adoption of morerestrictive policies in jurisdictions with existing controls and measures could further limit our net revenue and results.Decreases in third-party reimbursement for our product candidates or a decision by a third-party payor to not cover ourproduct candidates could reduce physician utilization of our products and have a material adverse effect on our sales,results of operations and financial condition.

EmployeesAs of March 31, 2016, we had 89 full-time employees, 47 of whom were primarily engaged in research and developmentactivities and 19 of whom had an M.D. or Ph.D. degree. None of our employees are represented by a labor union orcovered by a collective bargaining agreement.

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Facilities

We occupy approximately 48,000 square feet of office and laboratory space in Cranbury, New Jersey, under a lease thatexpires in June 2021. Additionally, we have entered into a lease for approximately 82,000 square feet of occupiable officeand laboratory space in Cranbury, New Jersey, with lease payments that commenced in March 2016 and expire inMarch 2026.

Legal Proceedings

From time to time, we may become involved in litigation relating to claims arising from the ordinary course of business.Our management believes that there are currently no claims or actions pending against us, the ultimate disposition ofwhich would have a material adverse effect on our results of operations, financial condition or cash flows.

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(1) Member of the Audit Committee

(2) Member of the Compensation Committee

(3) Member of the Nominating and Corporate Governance Committee

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding our executive officers and directors as of March 31, 2016:

Name Age Position(s)

Executive OfficersPankaj Mohan, Ph.D. 52 Chairman, President and Chief Executive OfficerKenneth M. Bahrt, M.D. 63 Chief Medical OfficerKogan Bao, Ph.D. 47 Vice President, Analytical SciencesScott A. Gangloff 42 Senior Vice President, Development & ManufacturingLawrence A. Kenyon 50 Chief Financial Officer and SecretaryStephen J. McAndrew, Ph.D. 62 Senior Vice President, Business Strategy & DevelopmentElizabeth A. Yamashita 55 Vice President, Regulatory AffairsNon-Employee DirectorsTodd C. Brady, M.D., Ph.D. 44 DirectorScott Canute 55 DirectorAlbert D. Dyrness 53 DirectorDonald J. Griffith 67 DirectorKurt J. Hilzinger 55 DirectorRobin Smith Hoke 53 Director

Executive Officers

Pankaj Mohan, Ph.D. Dr. Mohan has served as our Chairman, President and Chief Executive Officer sinceJanuary 2011. Prior to founding our company, from May 2008 to December 2010, Dr. Mohan served as head of BusinessOperations and Portfolio Management of Biologics Process and Product Development at Bristol-Myers Squibb Company,a biopharmaceutical company. From June 2006 to May 2008, Dr. Mohan served as a Director of Bioprocess Engineeringat Genentech, Inc., a biotechnology company. Prior to that, from May 1996 to May 2006, Dr. Mohan served as a seniormanager at Eli Lilly and Company, a pharmaceutical company. From May 1993 to April 1996, Dr. Mohan served asAssistant Professor (Lecturer/Fellow) at the Advanced Centre for Biochemical Engineering, University College London,London, United Kingdom. From August 1987 to December 1989, Dr. Mohan served as a Scientific Officer for theDepartment of Atomic Energy for the Government of India. Dr. Mohan has served as a member of the board of directors ofSonnet Biotherapeutics, Inc., a privately held biopharmaceutical company, since its inception in April 2015. Dr. Mohanreceived a Ph.D. in Biochemical Engineering from the School of Chemical Engineering, University of Birmingham,Birmingham, United Kingdom, a Masters in Financial Management from Middlesex University Business School, London,United Kingdom, an Executive Management Program (AMP) from Fuqua School of Business at Duke University and aBachelor of Chemical Engineering from the Indian Institute of Technology in Roorkee, India.

We believe Dr. Mohan’s experience on our board of directors and as our Chairman, President and Chief Executive Officer,as well as his experience in the biopharmaceutical industry, qualifies him to serve on our board of directors.

Kenneth M. Bahrt, M.D. Dr. Bahrt has served as our Chief Medical Officer since June 2015. Prior to joining us, fromFebruary 2014 to May 2015, Dr. Bahrt served as the Vice President of U.S. Medical Affairs at NPS Pharmaceuticals, Inc.,a biopharmaceutical company. From August 2011 to January 2014, Dr. Bahrt served as Senior Vice President and ChiefMedical Officer at Savient Pharmaceuticals, Inc., a biopharmaceutical company. Prior to that, from September 2009 toAugust 2011, Dr. Bahrt served as the Therapeutic Head of Immunology Medical Affairs at Genentech, Inc. From July 2007to September 2009, Dr. Bahrt served as the Global Medical Director for Immunology at Hoffman-La Roche, a Swisshealthcare company. Prior to this, Dr. Bahrt held positions of increasing responsibility at Bristol Myers Squibb, Pfizer, and

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Daiichi. Prior to joining the pharmaceutical industry, Dr. Bahrt was in clinical practice. Dr. Bahrt is a board-certified Internistand Rheumatologist and a Fellow of the American College of Rheumatology. Dr. Bahrt received an M.D. fromHahnemann University and a Bachelor’s degree in Biology from Muhlenberg College.

Kogan Bao, Ph.D. Dr. Bao has served as our Vice President of Analytical Sciences since January 2016. Prior to joiningus, Dr. Bao served as Analytical Similarity Leader at Amgen, Inc. from October 2013 to January 2016 with responsibilityfor the overall analytical strategy and plan for drug development of several biosimilar assets as well as serving as theprimary author for regulatory submissions. From December 2003 to June 2013, Dr. Bao served in roles of increasingresponsibility at Allergan, Inc., establishing the pre-formulation and biophysical characterization groups to support early-and late-stage development of biologics as well as providing support for commercial products. Prior to that, Dr. Bao servedas a post-doctoral fellow at Stanford University in the Department of Biochemistry from 2002 to 2003. Dr. Bao received aPh.D. in Biochemistry and Biophysics from Oregon State University and an A.B. from the University of California,Berkeley.

Scott A. Gangloff. Mr. Gangloff has served as our Senior Vice President, Development & Manufacturing sinceJanuary 2015. Prior to that, Mr. Gangloff served as our Vice President of Process Development and Manufacturing fromJanuary 2013 to January 2015 and as our Executive Director of Process Development and Manufacturing from May 2011to January 2013. Prior to joining us, Mr. Gangloff held various process engineering and manufacturing roles at Bristol-Myers Squibb Company, serving as Associate Director, Process Scale-up from January 2006 to May 2011 with oversightof clinical manufacturing, Manager of Biologics Scale-Up Facility from June 2004 to January 2006, and roles of increasingresponsibility in cell culture development and process engineering from July 1998 to June 2004. From January 1996 toJuly 1998, Mr. Gangloff served as Process Engineer at Jacobs Engineering Group Inc., a technical professional servicesfirm. Mr. Gangloff received a Masters of Engineering in Chemical Engineering from Lehigh University and a Bachelor ofChemical Engineering from Villanova University.

Lawrence A. Kenyon. Mr. Kenyon has served as our Chief Financial Officer and Secretary since September 2015. Priorto that, from February 2014 to September 2015, Mr. Kenyon served as the Chief Financial Officer of Arno Therapeutics,Inc., a biopharmaceutical company focused on the development of therapeutics for cancer and other life threateningdiseases, and also as Chief Operating Officer from July 2014 to September 2015. From December 2011 to March 2013,Mr. Kenyon served as the Interim President & Chief Executive Officer, Chief Financial Officer and Secretary of TamirBiotechnology, Inc., a publicly held biopharmaceutical company engaged in the development of oncology and anti-infective therapeutics. Prior to that, from December 2008 to July 2010, Mr. Kenyon was the Executive Vice President,Finance and, commencing in March 2009, the Chief Financial Officer of, Par Pharmaceutical Companies, Inc., a publiclyheld generic and branded specialty pharmaceutical company, or Par. Prior to joining Par, Mr. Kenyon was the ChiefFinancial Officer and Secretary of Alfacell Corporation, or Alfacell, from January 2007 through February 2009 and alsoserved at various times during this period as Alfacell’s Executive Vice President, Chief Operating Officer and President,and was a member of Alfacell’s board of directors from November 2007 to April 2009. Prior to joining Alfacell, Mr. Kenyonserved as the Executive Vice President, Chief Financial Officer and Corporate Secretary at NeoPharm, Inc., a publiclytraded biopharmaceutical company, from 2000 to 2006. Mr. Kenyon received a B.A. in Accounting from the University ofWisconsin-Whitewater and is a Certified Public Accountant in Illinois.

Stephen J. McAndrew, Ph.D. Dr. McAndrew served initially as our Vice President of Business Development fromFebruary 2012 through March 2014, and as our Senior Vice President, Business Strategy & Development sinceMarch 2014. Prior to joining us, from March 2011 to February 2012, Dr. McAndrew served as the President of SJMBioPharm Consulting, a biopharmaceutical consulting company. From December 2009 to March 2011, Dr. McAndrewserved as Vice President of Scientific Commercial Development at Taconic Biosciences, Inc., a contract research andbiotechnology company, and from August 2007 to December 2009, Dr. McAndrew served as Vice President of BusinessDevelopment at Caliper Life Sciences, Inc., a biotechnology company. Prior to that, from January 2004 to August 2007,Dr. McAndrew served as Vice President of Business Development at Xenogen Biosciences Corporation, a provider of invivo drug discovery services. From January 2001 to December 2003, Dr. McAndrew served as Vice President ofPharmaceutical Business Development at Lexicon Pharmaceuticals, Inc., a biopharmaceutical drug-developmentcompany. Prior to that, from March 1993 to December 2001, Dr. McAndrew served in various positions of increasingresponsibility at Bristol-Myers Squibb Company, including as Director of Biotechnology Licensing. Dr. McAndrew receiveda Ph.D. in Cellular and Molecular Biology from Ohio University, an M.S. in Molecular Genetics from the State University ofNew York at Albany and a B.S. from the State University of New York at Oswego.

Elizabeth A. Yamashita. Ms. Yamashita has served as our Vice President of Regulatory Affairs since July 2015 and,prior to that, our Vice President of Regulatory and Clinical Affairs since April 2014. Prior to joining us, from October 2012to January 2014, Ms. Yamashita served as Group Vice President of Regulatory Affairs at Savient Pharmaceuticals, Inc., a

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biopharmaceutical company, and also as Vice President, CMC Regulatory from June 2011 to October 2012. FromMay 2006 to June 2011, Ms. Yamashita served as Principal Fellow, CMC Regulatory Strategy and Vice PresidentRegulatory CMC & Operations at ImClone Systems Inc., a biopharmaceutical company. Prior to that, Ms. Yamashita wasemployed by Bristol-Myers Squibb Company for 24 years and from 2000 to 2006, Ms. Yamashita served as the GroupDirector of Global Regulatory Sciences, CMC. Ms. Yamashita received a Regulatory Affairs Certification from theRegulatory Affairs Professional Society and a B.S. in Chemistry from the University of Rochester.

Non-Employee Directors

Todd C. Brady, M.D., Ph.D. Dr. Brady has served as a member of our board of directors since September 2014. SinceJanuary 2012, Dr. Brady also has served as Chief Executive Officer and President of Aldeyra Therapeutics, Inc., abiotechnology company, and has served as a member of its board of directors since September 2005. Dr. Brady furtherhas served as a member of the board of directors of Evoke Pharma, Inc., a biotechnology company, since June 2007, ofNovadigm Therapeutics, Inc., a biotechnology company, since December 2007 and of Cantex Pharmaceuticals, Inc., abiotechnology company, since August 2006. From 2004 to 2013, Dr. Brady served as an entrepreneur-in-residence andprincipal at Domain Associates, a healthcare venture capital firm. Dr. Brady received an M.D. from Duke UniversityMedical School, a Ph.D. from Duke University Graduate School and an A.B. from Dartmouth College.

We believe Dr. Brady’s experience as a Chief Executive Officer in a biotechnology company and as a director of publiclytraded biotechnology companies, as well as his experience as a venture capital investor in the industry, qualifies him toserve on our board of directors.

Scott Canute. Mr. Canute has served as a member of our board of directors since October 2011. Mr. Canute also hasserved as a member of the technical advisory board of Moderna Therapeutics, Inc., a physical therapy company, sinceOctober 2012, and further has served as a member of the board of directors of Proteon Therapeutics, Inc., abiopharmaceutical company, since July 2015 and Flexion Therapeutics, Inc., a pharmaceutical company, sinceMarch 2015. In addition, Mr. Canute formerly served as a member of the board of directors of InspirationBiopharmaceuticals, Inc., a biopharmaceutical company, from September 2012 to September 2013 and AlloCure Inc., abiotechnology company, from October 2012 to October 2014. From March 2010 to July 2011, Mr. Canute served as thePresident of Global Manufacturing and Corporate Operations of Genzyme Corporation, a biotechnology company. Prior tothat, from 1982 to 2007, Mr. Canute served in various management positions at Eli Lilly and Company, including as thePresident of Global Manufacturing Operations from 2004 to 2007, Vice President of Global Manufacturing from 2001 to2004, Vice President of Global Pharmaceutical Manufacturing from 1999 to 2001 and General Manager of EuropeanManufacturing Operations from 1998 to 1999. Mr. Canute received an M.B.A. from Harvard Business School and a B.S. inChemical Engineering from the University of Michigan.

We believe Mr. Canute’s experience in the biopharmaceutical industry, as well as his experience as a member on theboards of director of multiple companies in the industry, qualifies him to serve on our board of directors.

Albert D. Dyrness. Mr. Dyrness has served as a member of our board of directors since December 2015. Mr. Dyrnessco-founded ADVENT Engineering Services, Inc., a privately held engineering consulting firm, in 1988, and since that time,he has served in several roles, most recently as the Principal and Managing Director of the Life Sciences Division since1995. Mr. Dryness is a recognized industry leader in bio-process engineering, with expertise in upstream, downstream andfill-finish processes, member of the American Society of Mechanical Engineers Bioprocess Equipment Standard, or ASMEBPE, and has served as the Vice Chairperson for the ASME BPE System Design subcommittee since 2013. Mr. Dyrnessis also an Industrial Advisory Board Member of the University of the Pacific’s Bioengineering program. Mr. Dyrnessreceived an M.S. in Mechanical Engineering from Massachusetts Institute of Technology and holds professionalengineering licenses in the State of California for both Chemical Engineering and Mechanical Engineering.

We believe Mr. Dyrness’ experience in the design, start-up and qualification of systems, and equipment used forproducing and developing biologics and pharmaceutics, as well as in the life sciences sector, qualifies him to serve on ourboard of directors.

Donald J. Griffith. Mr. Griffith has served as a member of our board of directors since August 2011. Mr. Griffith servedas our Chief Financial Officer and Secretary from May 2011 through September 2015. Mr. Griffith currently serves asChairman, President, Chief Executive Officer and Treasurer of Sonnet Biotherapeutics, Inc. and also serves as a memberof its board of directors. From May 1991 to May 2011, Mr. Griffith served as a partner at Stolz & Griffith, LLC, a NewJersey accounting firm. Prior to that, Mr. Griffith was employed in the accounting group at Exxon Mobil Corporation.Mr. Griffith is an active member of the New Jersey Society of CPAs and the American Institute of CPAs. Mr. Griffithreceived an M.B.A. from Fairleigh Dickenson University and a B.B.A. in Business Administration from the City College ofNew York.

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■ The Class I directors will be Albert D. Dyrness, Kurt J. Hilzinger and Robin Smith Hoke, and their terms willexpire at the annual meeting of stockholders to be held in 2017;

■ The Class II directors will be Todd C. Brady, M.D., Ph.D. and Donald J. Griffith, and their terms will expire at theannual meeting of stockholders to be held in 2018; and

■ The Class III directors will be Scott Canute and Pankaj Mohan, Ph.D., and their terms will expire at the annualmeeting of stockholders to be held in 2019.

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We believe Mr. Griffith’s experience on our board of directors, as well as his extensive financial and accountingexperience, qualifies him to serve on our board of directors.

Kurt J. Hilzinger. Mr. Hilzinger has served as a member of our board of directors since December 2015. Since 2007,Mr. Hilzinger has served as a partner at Court Square Capital Partners L.P., an independent private equity firm, where heis responsible for investing in the healthcare sector. Since July 2003, Mr. Hilzinger also has served in various capacities asa member of the board of directors at Humana, Inc., a managed care company, including serving as Lead Director fromAugust 2010 to January 2014, and as Chairman since January 2014. In addition, Mr. Hilzinger also has served severalroles at AmerisourceBergen Corporation, a healthcare company, including as a member of the board of directors fromMarch 2004 to November 2007, as the President and Chief Operating Officer from October 2002 to November 2007 andas the Executive Vice President and Chief Operating Officer from August 2001 to October 2002. Mr. Hilzinger also serveson the Visiting Committee at the Ross School of Business at the University of Michigan. Mr. Hilzinger received a B.B.A. inAccounting from the University of Michigan and is a Certified Public Accountant in Michigan.

We believe Mr. Hilzinger’s experience and financial expertise in the healthcare sector qualifies him to serve on our boardof directors.

Robin Smith Hoke. Ms. Hoke has served as a member of our board of directors since December 2015. Since July 2012,Ms. Hoke has been acting as a consultant providing pharmaceutical and healthcare advisory services to multi-national,mid-tier and emerging companies and private equity firms. Previously, Ms. Hoke served in various roles at RicercaBiosciences, LLC, a preclinical contract research organization, including as a member of the board of directors fromFebruary 2013 to December 2015, as well as the Chair of the board of directors and the Interim Chief Executive Officerfrom August 2013 to February 2014. Prior to that, Ms. Hoke served as the President for GeneralMedix Pharmaceuticals,Inc., a privately held specialty injectable company, from July 2007 to June 2012. Ms. Hoke also served as the Senior VicePresident, Global Business Development and Strategic Initiatives, Generic Pharmaceuticals, at Cardinal Health, Inc., ahealthcare company, from 2005 to 2007, and served as General Counsel from 2001 to 2005. Previously, Ms. Hoke was in-house counsel at Abbott Laboratories, a healthcare company, and a business partner at the law firm of Kegler, Brown, Hill& Ritter Co., LP. Ms. Hoke received a B.S. from Michigan State University and a J.D. from Thomas M. Cooley Law School.

We believe Ms. Hoke’s healthcare and pharmaceutical experience qualifies her to serve on our board of directors.

Family Relationships

There are no family relationships among our directors and executive officers.

Board Composition

Our board of directors will consist of seven members upon the closing of this offering. In accordance with our amendedand restated certificate of incorporation to be filed in connection with this offering, immediately prior to this offering, ourboard of directors will be divided into three classes. At each annual general meeting of stockholders, the successors todirectors whose terms then expire will be elected to serve from the time of election and qualification until the third annualmeeting following election. Our directors will be divided among the three classes as follows:

We expect that any additional directorships resulting from an increase in the number of directors will be distributed amongthe three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of ourboard of directors into three classes with staggered three-year terms may delay or prevent a change of our managementor a change in control.

Director Independence

Under the listing requirements and rules of the NASDAQ Global Market, or NASDAQ, independent directors mustcomprise a majority of our board of directors as a listed company within one year of the closing of this offering.

Our board of directors has undertaken a review of its composition, the composition of its committees and theindependence of each director. Based upon information requested from and provided by each director concerning his/herbackground,

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■ selecting a qualified firm to serve as the independent registered public accounting firm to audit our consolidatedfinancial statements;

■ helping to ensure the independence and performance of the independent registered public accounting firm;

■ discussing the scope and results of the audit with the independent registered public accounting firm, andreviewing, with management and the independent accountants, our interim and year-end operating results;

■ developing procedures for employees to submit concerns anonymously about questionable accounting or auditmatters;

■ reviewing our policies on risk assessment and risk management;

■ reviewing related party transactions;

■ obtaining and reviewing a report by the independent registered public accounting firm at least annually, thatdescribes our internal quality-control procedures, any material issues with such procedures, and any stepstaken to deal with such issues when required by applicable law; and

■ approving (or, as permitted, pre-approving) all audit and all permissible non-audit services, other than deminimis non-audit services, to be performed by the independent registered public accounting firm.

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employment and affiliations, including family relationships, our board of directors has determined that Todd C. Brady, M.D.,Ph.D., Scott Canute, Albert D. Dyrness, Kurt J. Hilzinger and Robin Smith Hoke do not have any relationships that wouldinterfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of thesedirectors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listingrequirements and rules of the NASDAQ. In making this determination, our board of directors considered the current andprior relationships that each non-employee director has with our company and all other facts and circumstances our boardof directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock byeach non-employee director.

Board Committees

Our board of directors has established an audit committee, a compensation committee and a nominating and corporategovernance committee, as well as other committees, which currently include a finance committee, culture committee anda science and technology committee. Our board of directors may establish other committees to facilitate the managementof our business. The composition and functions of each committee are described below. Members serve on thesecommittees until their resignation or until otherwise determined by our board of directors.

Audit Committee

Our audit committee consists of Todd C. Brady, M.D., Ph.D., Kurt J. Hilzinger and Robin Smith Hoke. Our board ofdirectors has determined that Todd C. Brady, M.D., Ph.D., Kurt J. Hilzinger and Robin Smith Hoke are independent underthe NASDAQ listing standards and Rule 10A-3(b)(1) of the Exchange Act. The chair of our audit committee is Kurt J.Hilzinger. Our board of directors has determined that Kurt J. Hilzinger is an “audit committee financial expert” within themeaning of SEC regulations. Our board of directors has also determined that each member of our audit committee canread and understand fundamental financial statements in accordance with applicable requirements. In arriving at thesedeterminations, the board of directors has examined each audit committee member’s scope of experience and the natureof their employment in the corporate finance sector.

The primary purpose of the audit committee is to discharge the responsibilities of our board of directors with respect to ouraccounting, financial and other reporting and internal control practices and to oversee our independent registeredaccounting firm. Specific responsibilities of our audit committee include:

Compensation Committee

Our compensation committee consists of Scott Canute, Albert D. Dyrness and Kurt J. Hilzinger. Our board of directors hasdetermined that Scott Canute, Albert D. Dyrness and Kurt J. Hilzinger are independent under the NASDAQ listingstandards, are “non-employee directors” as defined in Rule 16b-3 promulgated under the Exchange Act and are “outsidedirectors” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, or Section162(m). The chair of our compensation committee is Scott Canute.

The primary purpose of our compensation committee is to discharge the responsibilities of our board of directors tooversee our compensation policies, plans and programs and to review and determine the compensation to be paid to ourexecutive officers, directors and other senior management, as appropriate. Specific responsibilities of our compensationcommittee include:

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■ reviewing and approving, or recommending that our board of directors approve, the compensation of ourexecutive officers;

■ reviewing and recommending to our board of directors the compensation of our directors;

■ reviewing and approving, or recommending that our board of directors approve, the terms of compensatoryarrangements with our executive officers;

■ administering our stock and equity incentive plans;

■ selecting independent compensation consultants and assessing whether there are any conflicts of interest withany of the committees compensation advisers;

■ reviewing and approving, or recommending that our board of directors approve, incentive compensation andequity plans, severance agreements, change in control protections and any other compensatory arrangementsfor our executive officers and other senior management, as appropriate; and

■ reviewing and establishing general policies relating to compensation and benefits of our employees andreviewing our overall compensation philosophy.

■ identifying, evaluating and selecting, or recommending that our board of directors approve, nominees forelection to our board of directors;

■ evaluating the performance of our board of directors and of individual directors;

■ considering and making recommendations to our board of directors regarding the composition of thecommittees of the board of directors;

■ reviewing developments in corporate governance practices;

■ evaluating the adequacy of our corporate governance practices and reporting;

■ reviewing management succession plans;

■ developing and making recommendations to our board of directors regarding corporate governance guidelinesand matters; and

■ overseeing an annual evaluation of the board of directors’ performance.

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Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Todd C. Brady, M.D., Ph.D., Albert D. Dyrness andRobin Smith Hoke. The chair of our nominating and corporate governance committee is Robin Smith Hoke. Each memberof the nominating and corporate governance committee is independent within the meaning of applicable listing standards,is a non-employee director and is free from any relationship that would interfere with the exercise of his or herindependent judgment, as determined by the board of directors in accordance with the applicable NASDAQ listingstandards.

Specific responsibilities of our nominating and corporate governance committee include:

As noted above, our board may from time to time establish other committees for the benefit of the company. Currently, ourboard has established a culture committee, a finance committee and a science and technology committee. We believethese committees, which may have members from both our board of directors and management, will foster an exchangeof ideas and create a culture of collaboration that leverages the skills of our directors, management and employees.

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee is currently, or has been at any time, one of our officers oremployees. None of our executive officers currently serves, or has served during the last year, as a member of the boardof directors or compensation committee of any entity that has one or more executive officers serving as a member of ourboard of directors or compensation committee other than Dr. Mohan, who currently serves on the board of directors ofSonnet Biotherapeutics, Inc., or Sonnet, for which Mr. Griffith, another member of our board of directors, also serves aschairman, president, chief executive officer and treasurer. For more information regarding Sonnet, please see “CertainRelationships and Related Party Transactions — Sonnet Biotherapeutics, Inc.”

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our employees and officers (including ourprincipal executive officer, principal financial officer and principal accounting officer or controller), or persons performingsimilar functions and agents and representatives, including directors and consultants. The full text of our code of business

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(1) Represents the annual cash fees per terms of director engagement letters.

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conduct and ethics will be posted on our website at www.oncobiologics.com. We intend to disclose future amendments tocertain provisions of our code of business conduct and ethics, or waivers of such provisions applicable to any principalexecutive officer, principal financial officer, principal accounting officer or controller, or persons performing similarfunctions, and our directors, on our website identified above.

Non-Employee Director CompensationWe have entered into director engagement letters with two of our non-employee directors, Dr. Brady and Mr. Canute.Pursuant to Dr. Brady’s director engagement letter, he is eligible to receive a fee of $100,000 per year for his service paidin cash and a grant of PSUs with respect to 57,971 shares of our common stock. The PSUs have not been granted toDr. Brady. Pursuant to Mr. Canute’s director engagement letter, he is eligible to receive a fee of $100,000 per year for hisservice paid in cash. Mr. Canute also received a grant of 115,942 shares of restricted stock on December 19, 2011, whichwere subject to a four year vesting schedule and he is eligible to receive equity awards as determined by the board ofdirectors in its sole discretion. In June 2014, we conducted a buyback of certain of our outstanding securities (see “CertainRelationships and Related Party Transactions — June 2014 Buyback”). Specifically, we offered restricted stockholdersapproximately $1.73 per share to forfeit their restricted shares payable in the form of a 0% promissory note dueDecember 31, 2015, as amended. In connection therewith, Mr. Canute received a 0% promissory note with an aggregateprincipal amount of $200,000 due December 31, 2015, as amended, in exchange for his 115,942 shares of restrictedstock. All outstanding amounts have been paid in full. Although we do not have a written policy, we generally reimburseour directors for their reasonable out-of-pocket expenses incurred in attending board of directors meetings and withrespect to our business.

The following table sets forth information concerning the compensation earned for service on our board of directors by ourdirectors during the year ended September 30, 2015. Mr. Griffith, our former Chief Financial Officer and Secretary is also adirector, but he did not receive any additional compensation for service as a director during the year ended September 30,2015. Dr. Mohan, our President and Chief Executive Officer, is also Chairman of our board but he does not receive anyadditional compensation for service as a director. Dr. Mohan’s compensation as an executive officer is set forth belowunder “Executive Compensation — Summary Compensation Table.”

Name

Fees Earned or Paid

in Cash($)

Total($)

Todd C. Brady, M.D., Ph.D. 100,000 100,000Scott Canute 100,000 100,000

Non-Employee Director Compensation PolicyWe have adopted a non-employee director compensation policy pursuant to which our non-employee directors will beeligible to receive compensation for service on our board of directors and committees of our board of directors, whichtakes effect in connection with this offering.Equity CompensationInitial Grant

Each new non-employee director who joins our board of directors will be granted a non-statutory stock option to purchase7,246 shares of common stock under the 2015 Plan, vesting annually over three years from the grant date, subject tocontinued service as a director through the applicable vesting date.

Annual Grant

On the date of each annual meeting of our stockholders, each current non-employee director will be granted an annualnon-statutory stock option to purchase 4,348 shares of common stock under the 2015 Plan, vesting on the firstanniversary of the grant date, subject to continued service as a director though the applicable vesting date. The exerciseprice per share of each stock option granted under the non-employee director compensation policy will be the fair marketvalue of a share of our common stock, as determined in accordance with the 2015 Plan, on the date of the option grant.Each stock option will have a term of ten years from the date of grant, subject to earlier termination in connection with atermination of the non-employee director’s continuous service with us.

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Cash Compensation

Each non-employee director will receive an annual cash retainer of $35,000 for serving on our board of directors. Thechairperson of our board of directors will receive an additional annual cash retainer of $30,000.

The chairperson and members of the three principal standing committees of our board of directors will be entitled to thefollowing annual cash retainers:

Board Committee Chairperson Fee Member FeeAudit Committee $ 15,000 $ 7,500Compensation Committee 10,000 5,000Nominating and Corporate Governance Committee 8,000 4,000

All annual cash compensation amounts will be payable in equal quarterly installments in arrears, on the last day of eachfiscal quarter for which the service occurred, pro-rated based on the days served in the applicable fiscal quarter.

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■ Pankaj Mohan, Ph.D., our Chairman, President and Chief Executive Officer;

■ Kenneth M. Bahrt, M.D., our Chief Medical Officer; and■ Elizabeth A. Yamashita, our Vice President, Regulatory Affairs.

(1) Discretionary bonus amounts for fiscal year ended September 30, 2015 have not yet been determined. Bonus amounts potentiallypayable are discussed below under “— Narrative to Summary Compensation Table — Annual Base Salary and Bonus.”

(2) In accordance with SEC rules, this column reflects the aggregate grant date fair value of the performance stock unit, or PSU,awards granted during fiscal year 2015 computed in accordance with Financial Accounting Standard Board Accounting StandardsCodification Topic 718, or ASC 718, for stock-based compensation transactions. The PSU awards are a form of stock appreciationright that originally were settled in cash. Assumptions used in the calculation of these amounts are included in Note 4 to ourconsolidated financial statements appearing elsewhere in this prospectus. These amounts do not reflect the actual economic valuethat would be realized by the named executive officer upon the exercise of the PSUs. Effective December 31, 2015, Dr. Bahrt’s andMs. Yamashita’s PSUs were cancelled, and they each received a grant of restricted stock units issued under the 2015 Plan.

(3) Amounts in this column reflect the payment of term life and disability insurance premiums, along with 401(k) matching contributions.All of these benefits are provided to the named executive officers on the same terms as provided to all of our regular full-timeemployees. For more information regarding these benefits, see below under “— Perquisites, Health, Welfare and RetirementBenefits.” We also reimbursed Dr. Mohan for cell phone expenses. Dr. Mohan is also entitled to a car allowance of up to $8,400pursuant to his employment letter, however, such amounts were not paid nor accrued in the year ended September 30, 2015.

(4) Dr. Bahrt joined our company in June 2015.

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EXECUTIVE COMPENSATION

Our named executive officers for the year ended September 30, 2015, which consist of our principal executive officer andour two other most highly compensated executive officers, are:

Summary Compensation Table

The following table provides information regarding the compensation earned by our named executive officers for the yearended September 30, 2015.

Name and Principal Position YearSalary

($)Bonus

($)

Equity Plan Awards

($)

All Other Compensation

($)Total

($)Pankaj Mohan, Ph.D.

Chairman, President and Chief ExecutiveOfficer 2015 290,004 — 29,839 319,843

Kenneth M. Bahrt, M.D. Chief Medical Officer 2015 65,542 644,000 6,881 716,423

Elizabeth A. Yamashita Vice President, Regulatory Affairs 2015 235,746 — 15,809 251,555

Narrative to Summary Compensation Table

We review compensation annually for all employees, including our named executive officers. In setting executive basesalaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in themarket, the historical compensation levels of our executives, individual performance as compared to our expectations andobjectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests ofour stockholders and a long-term commitment to our company.

The independent members of our board of directors have historically determined our executive officers’ compensation,and typically review and discuss management’s proposed compensation with the chief executive officer for all executivesother than the chief executive officer. Based on those discussions and its discretion, the independent members of theboard of directors then recommend, and the full board then approves, the compensation for each executive officer.

Annual Base Salary and Bonus

The compensation of our named executive officers is generally determined and approved at the beginning of eachcalendar year or, if later, in connection with the commencement of employment of the executive. The base salaries arereviewed periodically by our board of directors.

We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations foreach fiscal year. From time to time our board of directors or compensation committee may approve discretionary bonusesfor our named executive officers based on individual performance, company performance or as otherwise determinedappropriate.

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Long-Term Incentives

Our equity-based incentive awards are designed to align our interests and the interests of our stockholders with those ofour employees and consultants, including our named executive officers.

Our 2011 Stock Incentive Plan, or our 2011 Plan, authorizes us to make grants to eligible recipients of non-qualified stockoptions, incentive stock options, restricted stock awards, restricted stock unit awards and equity or cash-basedperformance awards. All of our awards outstanding under this plan are in the form of PSUs. We initially granted restrictedstock and stock options under the 2011 Plan to employees, subject to time-based vesting restrictions. We converted tousing PSUs subject to both time-based and performance-based vesting as the primary incentive for long-termcompensation to our named executive officers because they are able to profit from performance stock units only if ourstock price increases and the performance conditions are achieved. PSUs are a form of stock appreciation right, generallysubject to a four year time-based vesting schedule with 50% vesting on each of the third and fourth anniversaries of therecipient’s hire date, and grant the award recipient the right to receive, upon exercise, a cash amount equal to thedifference between the fair market value of a share of our common stock and the exercise price of the PSU, lessapplicable withholding taxes. PSUs may only be exercised during their 10-year term on or following the achievement oftime-based vesting and specified performance conditions, including the occurrence of a change in control, the closing ofthis offering, or, subject to the discretion of our board of directors, our achieving an enterprise value of at least $400million. In addition, PSUs may be subject to additional acceleration of time-based vesting restrictions upon certaintermination and change in control events. In November 2015, we commenced a tender-offer to all the holders of ouroutstanding PSUs except PSUs held by our officers and one director to amend the terms of such outstanding awards toincrease the exercise price to an amount equal to the fair market value of a share of our common stock on the date ofgrant of the PSU, remove the right to be paid dividend equivalents and provide for settlement in shares of our commonstock or cash, at our discretion. We closed the tender-offer on December 21, 2015. Effective December 31, 2015, Dr.Bahrt’s and Ms. Yamashita’s PSUs were cancelled, and Dr. Mohan, Dr. Bahrt and Ms. Yamashita each received a grant ofrestricted stock units, or RSUs, issued under the 2015 Plan. All of the RSUs are subject to performance-based vestingsuch that the RSUs will vest upon the first to occur of a change in control of the company and the date that is six monthsfollowing the effective date of the registration statement of which this prospectus forms a part, in each case subject to therecipient’s continued service with us through such event. In addition, certain of the RSUs are subject to additional time-based vesting restrictions that will be satisfied if the executive remains in continuous service with us through certain datesas follows: (i) 50% of the RSUs granted to Dr. Mohan will satisfy the time-based vesting restrictions on each of the firstand second anniversaries of the grant date and (ii) 50% of the RSUs granted to Dr. Bahrt and Ms. Yamashita will satisfythe time-based vesting restrictions on each of the third and fourth anniversaries of their original hire dates.

We may grant equity awards at such times as our board of directors determines appropriate. Our executives generally areawarded an initial grant in connection with their commencement of employment. Additional grants may occur periodicallyin order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives forexceptional performance.

Agreements with our Named Executive Officers

Below are written descriptions of our employment agreement with Dr. Mohan and offer letter agreements with our othernamed executive officers.

Dr. Mohan. We entered into an employment agreement with Dr. Mohan for full-time services in January 2011 setting forththe terms of his employment as Chief Executive Officer. Pursuant to the agreement, Dr. Mohan was entitled to an initialannual base salary of $230,000 upon his commencement of full time services with us and an increased annual basesalary of $290,000 after the initiation of revenue, an annual discretionary bonus equal to the greater of 8% of EBITDAduring a fiscal year or 33% of the total incentive pay pool allocated to company employees and directors with respect to afiscal year, and reimbursement for an automobile down payment, allowance and expenses. We also pay all premiumsassociated with Dr. Mohan’s health insurance. Dr. Mohan is currently employed by and performing services for us on afull-time basis. The term of Dr. Mohan’s employment agreement will continue until the earlier of a sale of the company, thecompany’s initial public offering of stock, or another similar liquidity event with respect to the company. Dr. Mohan’semployment agreement provides that we may terminate Dr. Mohan’s employment with us and the term of the agreementat any time (i) with cause, (ii) without cause on thirty (30) days written notice, or (iii) due to Dr. Mohan’s disability uponwritten notice to Dr. Mohan. Dr. Mohan may terminate his employment with us and the term of the employment agreementat any time (i) with good reason upon written notice, or (ii) without good reason upon thirty (30) days written notice. Dr.Mohan’s employment with us and his employment agreement will automatically terminate upon his death or the end of theterm of

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the agreement. Dr. Mohan is additionally entitled to certain severance and change in control benefits pursuant to hisagreement, the terms of which are described below under “— Potential Payments upon Termination or Change of Control.”

On February 22, 2016, we entered into a new employment agreement with Dr. Mohan that takes effect in connection withthis offering. Under Dr. Mohan’s new employment agreement, Dr. Mohan is entitled to an initial annual base salary of$490,000, is eligible to receive an annual performance bonus of up to 50% of his annual base salary as determined by ourboard of directors, and is also eligible for reimbursement for an automobile down payment and expenses. Dr. Mohan isalso entitled to a one-time lump sum performance bonus of $990,000 contingent upon the closing of this offering. Dr.Mohan is currently employed by and performing services for us on a full-time basis. His employment agreement does nothave a specified term and his employment may be terminated by us or by Dr. Mohan at any time, with or without cause.Dr. Mohan is also entitled to certain severance and change in control benefits pursuant to his employment agreement, theterms of which are described below under “— Potential Payments upon Termination or Change of Control.”

Dr. Bahrt. We entered into an employment offer letter agreement with Dr. Bahrt for full-time services in June 2015 settingforth the terms of his employment. Pursuant to the agreement, Dr. Bahrt was entitled to an initial annual base salary of$250,000, a target annual discretionary bonus equal to $100,000 and the grant of 28,985 PSUs that vest over a four yearperiod subject to Dr. Bahrt’s continued service with us. Dr. Bahrt is currently employed by and performing services for uson a full-time basis. Dr. Bahrt is employed by us on an at-will basis. His employment offer letter agreement does not havea specified term and his employment may be terminated by us or Dr. Bahrt at any time, with or without cause. Dr. Bahrt isnot entitled to any additional compensation or benefits under his employment offer letter agreement upon termination ofhis employment or a change of control. Dr. Bahrt’s PSUs were cancelled in December 2015, and he was awarded a grantof RSUs pursuant to the terms of the 2015 Plan.

On February 22, 2016, we entered into a new employment agreement with Dr. Bahrt that takes effect in connection withthis offering. Under Dr. Bahrt’s new employment agreement, Dr. Bahrt is entitled to an initial annual base salary of$400,000 and is eligible to receive an annual performance bonus of up to 40% of his base salary as determined by ourboard of directors. Dr. Bahrt is currently employed by and performing services for us on a full-time basis. His employmentagreement does not have a specified term and his employment may be terminated by us or by Dr. Bahrt at any time, withor without cause. Dr. Bahrt is additionally entitled to certain severance and change in control benefits pursuant to hisemployment agreement, the terms of which are described below under “— Potential Payments upon Termination orChange of Control.”

Ms. Yamashita. We entered into an employment offer letter agreement with Ms. Yamashita for full-time services inMarch 2014 setting forth the terms of her employment. Pursuant to the agreement, Ms. Yamashita was entitled to an initialannual base salary of $230,000, which was increased to $235,000 in August 2015, a target annual discretionary bonusequal to 50% of her annual base salary in the event that sufficient revenue was generated and the grant of 43,478 PSUsthat vest over a four year period subject to Ms. Yamashita’s continued service with us. Ms. Yamashita is currentlyemployed by and performing services for us on a full-time basis. Ms. Yamashita is employed by us on an at-will basis. Heremployment offer letter agreement does not have a specified term and her employment may be terminated by us orMs. Yamashita at any time, with or without cause. Ms. Yamashita is not entitled to any additional compensation or benefitsunder her employment offer letter agreement upon termination of her employment or a change of control. Ms. Yamashita’sPSUs were cancelled in December 2015, and she was awarded a grant of RSUs pursuant to the terms of the 2015 Plan.

On February 24, 2016, we entered into a new employment agreement with Ms. Yamashita that takes effect in connectionwith this offering. Under Ms. Yamashita’s new employment agreement, Ms. Yamashita is entitled to an initial annual basesalary of $255,000 and is eligible to receive an annual performance bonus of up to 40% of her annual base salary asdetermined by our board of directors. Ms. Yamashita is currently employed by and performing services for us on a full-timebasis. Her employment agreement does not have a specified term and her employment may be terminated by us or byMs. Yamashita at any time, with or without cause. Ms. Yamashita is also entitled to certain severance and change incontrol benefits pursuant to her employment agreement, the terms of which are described below under “— PotentialPayments upon Termination or Change of Control.”

Potential Payments upon Termination or Change of Control

Regardless of the manner in which a named executive officer’s service terminates, the named executive officer is entitledto receive amounts earned during his or her term of service, including salary and unused vacation pay.

Dr. Mohan. Pursuant to Dr. Mohan’s employment agreement that takes effect in connection with this offering, if he isterminated without cause or if he resigns for good reason, subject to his execution of a separation agreement with aneffective release of claims in favor of us and continued compliance with certain restrictive covenants set forth in such

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■ “cause” generally means, (i) a material breach of any covenant or condition under the employment agreementor any other agreement between us and the named executive; (ii) any act constituting dishonesty, fraud,immoral or disreputable conduct; (iii) any conduct which constitutes a felony under applicable law; (iv) materialviolation of any of our policies or any act of misconduct; (v) refusal to follow or implement a clear andreasonable directive from us; (vi) negligence or incompetence in the performance of the named executive’sduties or failure to perform such duties in a manner satisfactory to us after the expiration of 10 days without cureafter written notice of such failure; or (vii) breach of fiduciary duty.

■ “good reason” means the occurrence, without the named executive’s consent, of any of the following events: (i)a material reduction in the named executive’s base salary under the employment agreement of at least 25%; (ii)a material breach of the employment agreement by us; (iii) a material reduction in the named executive’s duties,

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employment agreement and a proprietary information, inventions, non-solicitation and non-competition agreement, orPIIA, he is entitled to continued payment of his base salary for 12 months following the termination, 100% of his targetbonus for the calendar year of termination paid in a lump sum, employee benefit coverage for up to 12 months, full vestingof 50% of his then unvested equity awards, and reimbursement of expenses owed to him through the date of histermination.

Pursuant to the employment agreement, if Dr. Mohan’s employment is terminated by us or any successor entity (providedsuch successor entity either assumes Dr. Mohan’s equity awards or substitutes similar equity awards) without cause or ifhe resigns for good reason within two months prior to or within 12 months following a change in control (as defined in the2015 Plan), subject to his execution of a separation agreement with an effective release of claims in favor of us andcontinued compliance with certain restrictive covenants set forth in such employment agreement and the PIIA, he isentitled to continued payment of his base salary for 18 months, 150% of his annual target bonus for the calendar year oftermination paid in a lump sum, employee benefit coverage for up to 18 months, and reimbursement of expenses owed tohim through the date of his termination. Additionally, 100% of his then unvested equity awards shall become fully vested.

Dr. Bahrt. Pursuant to Dr. Bahrt’s employment agreement that takes effect in connection with this offering, if he isterminated without cause or if he resigns for good reason, subject to his execution of a separation agreement with aneffective release of claims in favor of us and continued compliance with certain restrictive covenants set forth in suchemployment agreement and the PIIA, he is entitled to continued payment of his base salary for 12 months following thetermination, employee benefit coverage for up to 12 months, full vesting of 50% of his then unvested equity awards, andreimbursement of expenses owed to him through the date of his termination.

Pursuant to the employment agreement, if Dr. Bahrt’s employment is terminated by us or any successor entity (providedsuch successor entity either assumes Dr. Bahrt’s equity awards or substitutes similar equity awards) without cause or if heresigns for good reason within two months prior to or within 12 months following a change in control (as defined in the2015 Plan), subject to his execution of a separation agreement with an effective release of claims in favor of us andcontinued compliance with certain restrictive covenants set forth in such employment agreement and the PIIA, he isentitled to continued payment of his base salary for 12 months, 100% of his annual target bonus for the calendar year oftermination paid in a lump sum, employee benefit coverage for up to 12 months, and reimbursement of expenses owed tohim through the date of his termination. Additionally, 100% of his then unvested equity awards shall become fully vested.

Ms. Yamashita. Pursuant to Ms. Yamashita’s employment agreement that takes effect in connection with this offering, ifshe is terminated without cause or if she resigns for good reason, subject to her execution of a separation agreement withan effective release of claims in favor of us and continued compliance with certain restrictive covenants set forth in suchemployment agreement and the PIIA, she is entitled to continued payment of her base salary for six months following thetermination, employee benefit coverage for up to six months, full vesting of 50% of her then unvested equity awards, andreimbursement of expenses owed to her through the date of her termination.

Pursuant to the employment agreement, if Ms. Yamashita’s employment is terminated by us or any successor entity(provided such successor entity either assumes Ms. Yamashita’s equity awards or substitutes similar equity awards)without cause or if she resigns for good reason within two months prior to or within 12 months following a change incontrol (as defined in the 2015 Plan), subject to her execution of a separation agreement with an effective release ofclaims in favor of us and continued compliance with certain restrictive covenants set forth in such employment agreementand the PIIA, she is entitled to continued payment of her base salary for six months, 50% of her annual target bonus forthe calendar year of termination paid in a lump sum, employee benefit coverage for up to six months, and reimbursementof expenses owed to her through the date of her termination. Additionally, 100% of her then unvested equity awards shallbecome fully vested.

For purposes of Dr. Mohan’s, Dr. Bahrt’s and Ms. Yamashita’s employment agreements that take effect in connection withthis offering:

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(1) All of the outstanding equity awards as of September 30, 2015 are PSUs that were granted under and subject to the terms of the2011 Stock Incentive Plan, described below under “— Equity Benefit Plans.” None of our named executive officers held any otherstock awards at the end of 2015. Except as otherwise indicated, each PSU award is subject to performance-based and time-basedvesting, subject to the executive’s continuous service with us through the time-based vesting dates and the potential vestingacceleration of the time-based vesting conditions upon a change in control and certain terminations of employment, as describedabove under “— Narrative to Summary Compensation Table” and below under “Equity Benefit Plans — 2011 Stock Incentive Plan.”Effective December 31, 2015, all such outstanding PSUs were cancelled, and our named executive officers received grants ofRSUs issued under the 2015 Plan.

(2) As of September 30, 2015, these PSUs were subject to both time-based and performance-based vesting conditions: the time-basedvesting restrictions will lapse with respect to 50% of the PSUs on June 22, 2018 and 50% of the PSUs on June 22, 2019, subject toDr. Bahrt’s continuous service with us through such date. In addition, 100% of the PSUs may not be exercised unless and until thereis a change in control, an initial public offering of our stock or our achieving an enterprise value of at least $400 million, subject tothe discretion of the board of directors, within the term of the PSU. Effective December 31, 2015, Dr. Bahrt’s PSUs were cancelledand forfeited, and he received a grant of RSUs issued under the 2015 Plan, subject to both performance and time-based vesting.The RSUs will satisfy the performance-based vesting restrictions upon the first to occur of a change in control of the company andthe date that is six months following the effective date of the registration statement of which this prospectus forms a part, in eachcase subject to Dr. Bahrt’s continued service with us through such event. Of these RSUs, 50% will satisfy the time-based vestingrestrictions on each of June 22, 2018 and 2019, subject to Dr. Bahrt’s continuous service with us through such dates; provided that100% will satisfy the time-based vesting restrictions upon the occurrence of a change in control, subject to Dr. Bahrt’s continuousservice with us through such date.

(3) As of September 30, 2015, these PSUs were subject to both time-based and performance-based vesting conditions: the time-basedvesting restrictions will lapse with respect to 50% of the PSUs on April 7, 2017 and 50% of the PSUs on April 7, 2018, subject to Ms.Yamashita’s continuous service with us through such date. In addition, 100% of the PSUs may not be exercised unless and untilthere is a change in control, an initial public offering of our stock or our achieving an enterprise value of at least $400 million, subjectto the discretion of the board of directors, within the term of the PSU. Effective December 31, 2015, Ms. Yamashita’s PSUs werecancelled and forfeited, and she received a grant of RSUs issued under the 2015 Plan, subject to both performance and time-basedvesting. The RSUs will satisfy the performance-based vesting restrictions upon the first to occur of a change in control of thecompany and the date that is six months following the effective date of the registration statement of which this prospectus forms apart, in each case subject to Ms. Yamashita’s continued service with us through such event. Of these RSUs, 50% will satisfy thetime-based vesting restrictions on each of April 7, 2017 and 2018, subject to Ms. Yamashita’s continued service with us throughsuch dates; provided that 100% will satisfy the time-based vesting restrictions upon the occurrence of a change in control, subject toMs. Yamashita’s continuous service with us through such date.

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authority and responsibilities relative to his or her duties, authority, and responsibilities in effect immediately priorto such reduction; or (iv) the relocation of the named executive’s principal place of employment in a manner thatlengthens his or her one-way commute distance by 50 or more miles from his or her then-current principal placeof employment immediately prior to such relocation; provided, however, that none of the events described in thissentence will constitute good reason unless and until (x) the named executive first notifies us in writingdescribing in reasonable detail the condition(s) that constitutes good reason within 30 days of its occurrence,(y) we fail to cure the condition(s) within 30 days after our receipt of written notice, and (z) the named executivevoluntarily terminates his or her employment within 30 days after the end of 30-day cure period.

Outstanding Equity Awards at Fiscal Year-End.The following table sets forth certain information regarding equity awards granted to our named executive officers thatremain outstanding as of September 30, 2015.

Equity Awards

Grant Date

Number of Securities Underlying

Unexercised PSUs

Exercisable (#)

Equity Incentive Plan

Awards:Number of Securities Underlying Unexercised

Unearned PSUs (#)

Exercise Price ($)

Expiration Date

Pankaj Mohan, Ph.D. — — — — —Kenneth M. Bahrt, M.D. 6/22/2015 28,985 — 3.45 6/22/2025Elizabeth A. Yamashita 6/30/2015 48,695 — 3.45 6/30/2024

Option Exercises and Stock VestedOur named executive officers did not exercise any stock option or PSUs during the fiscal year ended September 30, 2015.

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Option Repricings, Modifications and Cancellations

We did not engage in any repricings or other modifications or cancellations to any of our named executive officers’outstanding equity awards during the year ended September 30, 2015. In November, 2015, we commenced a tender-offerto all the holders of our outstanding PSUs except our officers and one director to amend the terms of such outstandingawards to increase the exercise price to an amount equal to the fair market value of a share of our common stock on thedate of grant of the PSU, remove the right to be paid dividend equivalents and provide for settlement in shares of ourcommon stock or cash, at our discretion. We closed the tender-offer on December 21, 2015. Effective December 31,2015, Dr. Bahrt’s and Ms. Yamashita’s PSUs were cancelled and forfeited, and they each received a grant of restrictedstock units issued under the 2015 Plan subject to the vesting conditions described above under “— Outstanding EquityAwards at Fiscal Year-end.”

Perquisites, Health, Welfare and Retirement Benefits

Our named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision,group life, disability and accidental death and dismemberment insurance plans, in each case on the same basis as all ofour other employees, subject to the terms and eligibility requirements of those plans. We pay a portion of the healthinsurance premiums for all of our employees. We also provide a 401(k) plan to our employees, including our employeenamed executive officers, as discussed in the section below titled “— 401(k) Plan.”

We generally do not provide perquisites or personal benefits to our named executive officers, but we do provide anautomobile allowance and reimbursement of cell phone expenses for Dr. Mohan. In addition, we pay the premiums forterm life insurance and disability insurance for all of our employees, including our employee named executive officers. Ourboard of directors may elect to adopt qualified or non-qualified benefit plans in the future if it determines that doing so is inour best interests.

401(k) Plan

We maintain a defined contribution employee retirement plan, or 401(k) plan, for our employees. Our named executiveofficers are eligible to participate in the 401(k) plan on the same basis as our other employees. The 401(k) plan isintended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code. The 401(k) plan providesthat each participant may contribute up to the lesser of 100% of his or her compensation or the statutory limit, which is$18,000 for calendar year 2015. Participants that are 50 years or older can also make “catch-up” contributions, which incalendar year 2015 may be up to an additional $5,500 above the statutory limit. We currently make matching contributionsup to 3% of base salary into the 401(k) plan on behalf of participants. Participant contributions are held and invested,pursuant to the participant’s instructions, by the plan’s trustee.

Pension Benefits

Our named executive officers did not participate in, or otherwise receive any benefits under, any defined benefit pensionor retirement plan sponsored by us during 2015.

Nonqualified Deferred Compensation

None of our named executive officers participate in or have account balances in nonqualified defined contribution plans orother nonqualified deferred compensation plans maintained by us. Our board of directors may elect to provide our officersand other employees with non-qualified defined contribution or other nonqualified deferred compensation benefits in thefuture if it determines that doing so is in our best interests.

Equity Benefit Plans

2015 Equity Incentive Plan

On December 4, 2015 our board of directors adopted, and on December 7, 2015, our stockholders approved, our 2015Equity Incentive Plan, or the 2015 Plan. The 2015 Plan provides for the grant of statutory stock options within the meaningof Section 422 of the Internal Revenue Code, or the ISOs, to our employees and for the grant of nonstatutory stockoptions, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stockawards and other forms of equity compensation to our employees, including officers, directors and consultants. The 2015Plan also provides for the grant of performance cash awards to our employees, consultants and directors.

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Authorized Shares. The maximum number of shares of our common stock that may be issued under the 2015 Plan is1,246,377 shares. The number of shares of our common stock reserved for issuance under the 2015 Plan willautomatically increase on the date that is sixty (60) calendar days following the date of the underwriting agreement for thisoffering, by an amount of shares of our common stock equal to 3% of the total number of shares of our common stockoutstanding on such sixtieth (60th) day. In addition, the number of shares of our common stock reserved for issuanceunder the 2015 Plan will automatically increase on January 1 of each year, beginning January 1, 2017 and continuingthrough and including January 1, 2025, by an amount equal to 3% of the total number of shares of our capital stockoutstanding on December 31st of the preceding calendar year; or a lesser number of shares determined by our board ofdirectors. The maximum number of shares of our common stock that may be issued upon the exercise of ISOs under the2015 Plan is 4,927,536. As of December 31, 2015, RSUs representing 1,066,193 shares of our common stock wereoutstanding under the 2015 Plan and 180,184 shares remained available for grant under the 2015 Plan. No awards havebeen granted under the 2015 Plan other than RSUs.

Shares issued under the 2015 Plan may be authorized but unissued or reacquired shares of our common stock. Sharessubject to stock awards granted under the 2015 Plan that expire or terminate without being exercised in full, or that arepaid out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2015 Plan.Additionally, shares issued pursuant to stock awards under the 2015 Plan that we repurchase or that are forfeited, as wellas shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations related to a stockaward, become available for future grant under the 2015 Plan.

Plan Administration. Our board of directors, or a duly authorized committee of our board of directors, administers the2015 Plan. Our board of directors has delegated its authority to administer the 2015 Plan to our compensation committee.Our board of directors may also delegate to one or more of our officers the authority to (1) designate employees (otherthan officers) to receive specified stock awards and (2) determine the number of shares subject to such stock awards.Under the 2015 Plan, the board of directors has the authority to determine the terms of awards, including recipients, theexercise, purchase or strike price of stock awards, if any, the number of shares subject to each stock award, the fairmarket value of a share of our common stock, the vesting schedule applicable to the awards, together with any vestingacceleration, the form of consideration, if any, payable upon exercise or settlement of the award and the terms of theaward agreements.

Our plan administrator may also modify outstanding awards under the 2015 Plan with the consent of any adverselyaffected participant. Our plan administrator has the authority to reprice any outstanding option or stock appreciation right,cancel any outstanding stock award in exchange for new stock awards, cash or other consideration or take any otheraction that is treated as a repricing under generally accepted accounting principles.

Stock Options. ISOs and NSOs are granted pursuant to stock option agreements adopted by the plan administrator. Theplan administrator determines the exercise price for stock options, within the terms and conditions of the 2015 Plan,provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of ourcommon stock on the date of grant. Options granted under the 2015 Plan vest at the rate specified by the planadministrator.

The plan administrator determines the term of stock options granted under the 2015 Plan, up to a maximum of 10 years.Unless the terms of an option holder’s stock option agreement provide otherwise, if an option holder’s service relationshipwith us, or any of our affiliates, ceases for any reason other than disability, death or cause, the option holder may generallyexercise any vested options for a period of three months following the option holder’s cessation of service. The optionterm may be extended in the event that exercise of the option or sale of the underlying shares following such a terminationof service is prohibited by applicable securities laws or by our insider trading policy. If an option holder’s servicerelationship with us or any of our affiliates ceases due to disability or death, or an option holder dies within a certain periodfollowing cessation of service, the option holder or a beneficiary may generally exercise any vested options for a period of12 months in the event of disability and 18 months in the event of death. Options generally terminate immediately uponthe termination of the individual for cause. In no event may an option be exercised beyond the expiration of its term.

The plan administrator will determine acceptable consideration for the purchase of common stock issued upon theexercise of a stock option, which may include the following methods: (1) cash, check, bank draft or money order; (2) abroker-assisted cashless exercise procedure; (3) the tender of shares of our common stock previously owned by theoption holder; (4) if the option is a nonstatutory stock option, by a net exercise arrangement; and (5) other legalconsideration set forth in the applicable award agreement.

In general, options are not transferable except by will, the laws of descent and distribution, or as otherwise provided by theplan administrator under the 2015 Plan. An option holder may designate a beneficiary, however, who may exercise theoption following the option holder’s death.

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Tax Limitations on Incentive Stock Options. The aggregate fair market value, determined at the time of grant, of ourcommon stock with respect to incentive stock options that are exercisable for the first time by an option holder during anycalendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit willgenerally be treated as nonstatutory stock options. No incentive stock option may be granted to any person who, at thetime of grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that ofany of our affiliates unless (1) the option exercise price is at least 110% of the fair market value of the stock subject to theoption on the date of grant and (2) the term of the incentive stock option does not exceed five years from the date of grant.

Restricted Stock Unit Awards. RSUs are granted pursuant to RSU award agreements adopted by the plan administrator.RSU awards may be granted in consideration for any form of legal consideration that may be acceptable to our board ofdirectors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, acombination of cash and stock as deemed appropriate by the plan administrator or in any other form of consideration setforth in the RSU award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by aRSU award. Except as otherwise provided in the applicable award agreement, RSUs that have not vested will be forfeitedupon the participant’s cessation of continuous service for any reason.

Restricted Stock Awards. Restricted stock awards are granted pursuant to restricted stock award agreements adopted bythe plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or moneyorder, past services to us or any other form of legal consideration that may be acceptable to our board of directors andpermissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards,including vesting and forfeiture terms. Common stock acquired under a restricted stock award may, but need not, besubject to a share repurchase option in our favor in accordance with a vesting schedule to be determined by the planadministrator. Rights to acquire shares under a restricted stock award may be transferred only upon such terms andconditions as set by the plan administrator. Except as otherwise provided in the applicable award agreement, restrictedstock awards that have not vested will be forfeited upon the participant’s cessation of continuous service for any reason.

Stock Appreciation Rights. Stock appreciation rights are granted pursuant to stock appreciation grant agreementsadopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stockappreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date ofgrant. Upon the exercise of a stock appreciation right, we will pay the participant an amount equal to the product of (1) theexcess, if any, of the per share fair market value of our common stock on the date of exercise over the purchase price orstrike price and (2) the number of shares of common stock with respect to which the stock appreciation right is exercised.This amount may be paid in shares of our common stock, in cash, in any combination of cash and shares of our commonstock or in any other form of consideration, as determined by the plan administrator and set forth in the award agreement.A stock appreciation right granted under the 2015 Plan vests at the rate specified in the stock appreciation rightagreement as determined by the plan administrator.

The plan administrator determines the term of stock appreciation rights granted under the 2015 Plan, which may be up toa maximum of 10 years. Unless the terms of a participant’s stock appreciation right agreement provides otherwise, if aparticipant’s service relationship with us or any of our affiliates ceases for any reason other than cause, disability or death,the participant may generally exercise any vested stock appreciation right for a period of three months following thecessation of service. The term of the stock appreciation right may be further extended in the event that exercise of thestock appreciation right following such a termination of service is prohibited by applicable securities laws or by our insidertrading policy. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or aparticipant dies within a certain period following cessation of service, the participant (or, if applicable, a beneficiary) maygenerally exercise any vested stock appreciation right for a period of 12 months (in the case of disability) or 18 months (inthe case of death). Stock appreciation rights generally terminate immediately upon the occurrence of the event giving riseto the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond theexpiration of its term.

Section 162(m) limits. Certain limits apply when we make awards under the 2015 Plan that are intended to comply withSection 162(m) of the Code. These limitations are intended to give us the flexibility to grant compensation that will not besubject to the $1,000,000 annual limitation on the income tax deductibility imposed by Section 162(m) of the Code. In thecase of stock options, stock appreciation rights and other stock awards whose value is determined by reference to anincrease over an exercise price or strike price of at least 100% of the fair market value of our common stock on the date ofgrant, such awards will not cover more than 434,783 shares of our common stock in any calendar year. Additionally, noparticipant may be granted in a calendar year a performance stock award covering more than 434,783 shares of ourcommon stock or a performance cash award having a maximum value in excess of $1,500,000 under the 2015 Plan.

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Performance Awards. The 2015 Plan permits the grant of performance-based stock and cash awards that may qualify asperformance-based compensation that is not subject to the $1,000,000 limitation on the income tax deductibility imposedby Section 162(m) of the Code. Our compensation committee may structure awards so that the stock or cash will beissued or paid only following the achievement of certain pre-established performance goals during a designatedperformance period.

Our compensation committee may establish performance goals by selecting from one or more of the followingperformance criteria: (1) earnings (including earnings per share and net earnings); (2) earnings before interest, taxes anddepreciation; (3) earnings before interest, taxes, depreciation and amortization; (4) earnings before interest, taxes,depreciation, amortization and legal settlements; (5) earnings before interest, taxes, depreciation, amortization, legalsettlements and other income (expense); (6) earnings before interest, taxes, depreciation, amortization, legal settlements,other income (expense) and stock-based compensation; (7) earnings before interest, taxes, depreciation, amortization,legal settlements, other income (expense), stock-based compensation and changes in deferred revenue; (8) earningsbefore interest, taxes, depreciation, amortization, legal settlements, other income (expense), stock-based compensation,other non-cash expenses and changes in deferred revenue; (9) total stockholder return; (10) return on equity or averagestockholder’s equity; (11) return on assets, investment, or capital employed; (12) stock price; (13) margin (including grossmargin); (14) income (before or after taxes); (15) operating income; (16) operating income after taxes; (17) pre-tax profit;(18) operating cash flow; (19) sales or revenue targets; (20) increases in revenue or product revenue; (21) expenses andcost reduction goals; (22) improvement in or attainment of working capital levels; (23) economic value added (or anequivalent metric); (24) market share; (25) cash flow; (26) cash flow per share; (27) cash balance; (28) cash burn; (29)cash collections; (30) share price performance; (31) debt reduction; (32) implementation or completion of projects orprocesses (including, without limitation, clinical trial initiation, clinical trial enrollment and dates, clinical trial results,regulatory filing submissions, regulatory filing acceptances, regulatory or advisory committee interactions, regulatoryapprovals, new and supplemental indications for existing products, and product supply); (33) stockholders’ equity; (34)capital expenditures; (35) debt levels; (36) operating profit or net operating profit; (37) workforce diversity; (38) growth ofnet income or operating income; (39) billings; (40) bookings; (41) employee retention; (42) initiation of phases of clinicaltrials and/or studies by specific dates; (43) acquisition of new customers, including institutional accounts; (44) customerretention and/or repeat order rate; (45) number of institutional customer accounts (46) budget management; (47)improvements in sample and test processing times; (48) regulatory milestones; (49) progress of internal research orclinical programs; (50) progress of partnered programs; (51) partner satisfaction; (52) milestones related to samplesreceived and/or tests run; (53) expansion of sales in additional geographies or markets; (54) research progress, includingthe development of programs; (55) submission to, or approval by, a regulatory body (including, but not limited to the U.S.Food and Drug Administration) of an applicable filing or a product; (56) timely completion of clinical trials; (57) milestonesrelated to samples received and/or tests or panels run; (58) expansion of sales in additional geographies or markets; (59)research progress, including the development of programs; (60) patient samples processed and billed; (61) sampleprocessing operating metrics (including, without limitation, failure rate maximums and reduction of repeat rates); (62)strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property; and (63) and to theextent that an award is not intended to comply with Section 162(m) of the Code, other measures of performance selectedby the board.

Our compensation committee may establish performance goals on a company-wide basis, with respect to one or morebusiness units, divisions, affiliates or business segments, and in either absolute terms or relative to the performance ofone or more comparable companies or the performance of one or more relevant indices. Unless otherwise specified byour board of directors (i) in the award agreement at the time the award is granted or (ii) in such other document settingforth the performance goals at the time the performance goals are established, our compensation committee willappropriately make adjustments in the method of calculating the attainment of the performance goals as follows: (1) toexclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects ofchanges to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporatetax rates; (5) to exclude the effects of any items of an unusual nature or of infrequency of occurrence as determined undergenerally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assumethat any business divested by us achieved performance objectives at targeted levels during the balance of a performanceperiod following such divestiture; (8) to exclude the effect of any change in the outstanding shares of our common stock byreason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off,combination or exchange of shares or other similar corporate change or any distributions to common stockholders otherthan regular cash dividends; (9) to exclude the effects of stock-based compensation and the award of bonuses under ourbonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to beexpensed under generally accepted accounting principles; (11) to exclude the goodwill and intangible asset impairmentcharges that are

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■ arrange for the assumption, continuation or substitution of a stock award by a surviving or acquiring entity orparent company;

■ arrange for the assignment of any reacquisition or repurchase rights held by us to the surviving or acquiringentity or parent company;

■ accelerate the vesting of the stock award and provide for its termination prior to the effective time of thecorporate transaction;

■ arrange for the lapse of any reacquisition or repurchase right held by us;

■ cancel or arrange for the cancellation of the stock award in exchange for such cash consideration, if any, as ourboard of directors may deem appropriate; or

■ make a payment equal to the excess of (1) the value of the property the participant would have received uponexercise of the stock award over (2) the exercise price otherwise payable in connection with the stock award.

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required to be recorded under generally accepted accounting principles; (12) to exclude the effect of any other unusual,non-recurring gain or loss or other extraordinary item; and (13) to exclude the effects of the timing of acceptance forreview and/or approval of submission to the FDA or any other regulatory body. In addition, to the extent set forth in anaward agreement, our compensation committee retains the discretion to reduce or eliminate the compensation oreconomic benefit due upon attainment of the goals. The performance goals may differ from participant to participant andfrom award to award.

Other Stock Awards. The plan administrator may grant other awards based in whole or in part by reference to ourcommon stock. The plan administrator will set the number of shares under the stock award and all other terms andconditions of such awards.

Changes to Capital Structure. In the event there is a specified type of change in our capital structure, such as a stocksplit, reverse stock split or recapitalization, appropriate adjustments will be made to (1) the class and maximum number ofshares reserved for issuance under the 2015 Plan, (2) the class and maximum number of shares by which the sharereserve may increase automatically each year, (3) the class and maximum number of shares that may be issued upon theexercise of incentive stock options, (4) the class and maximum number of shares subject to stock awards that can begranted in a calendar year (as established under the 2015 Plan pursuant to Section 162(m) of the Code) and (5) the classand number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.

Corporate Transactions. In the event of certain specified significant corporate transactions, the plan administrator has thediscretion to take any of the following actions with respect to stock awards:

Our plan administrator is not obligated to treat all stock awards, even those that are of the same type, in the same manner.

Under the 2015 Plan, a corporate transaction is generally the consummation of (1) a sale or other disposition of all orsubstantially all of our consolidated assets, (2) a sale or other disposition of at least 50% of our outstanding securities,(3) a merger, consolidation or similar transaction following which we are not the surviving corporation or (4) a merger,consolidation or similar transaction following which we are the surviving corporation but the shares of our common stockoutstanding immediately prior to such transaction are converted or exchanged into other property by virtue of thetransaction.

Change in Control. The plan administrator may provide, in an individual award agreement or in any other writtenagreement between a participant and us that the stock award will be subject to additional acceleration of vesting andexercisability in the event of a change in control. For example, certain of our employees may receive an award agreementthat provides for vesting acceleration upon a change in control or upon the individual’s termination without cause orresignation for good reason (including a material reduction in the individual’s base salary, duties, responsibilities orauthority, or a material relocation of the individual’s principal place of employment with us) in connection with a change incontrol. Under the 2015 Plan, a change in control is generally (i) the acquisition by a person or entity of more than 50% ofour combined voting power other than by merger, consolidation or similar transaction; (ii) a consummated merger,consolidation or similar transaction immediately after which our stockholders cease to own more than 50% of thecombined voting power of the surviving entity; or (iii) a consummated sale, lease or exclusive license or other dispositionof all or substantially of our consolidated assets. The RSU award agreements for the named executive officers holdingRSUs provide for full vesting of the time-based vesting restrictions upon the occurrence of a change in control subject totheir continuous service with us through such event.

Transferability. A participant may not transfer stock awards under the 2015 Plan other than by will, the laws of descentand distribution or as otherwise provided under the 2015 Plan.

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Plan Amendment or Termination. Our board of directors has the authority to amend, suspend or terminate the 2015 Plan,provided that such action does not materially impair the existing rights of any participant without such participant’s writtenconsent. No incentive stock options may be granted after the tenth anniversary of the date our board of directors adoptedthe 2015 Plan. No stock awards may be granted under the 2015 Plan while it is suspended or after it is terminated.

2011 Stock Incentive Plan

In October 2011, our board of directors adopted, and in December 2011 our stockholders approved, our 2011 StockIncentive Plan, or the 2011 Plan. The 2011 Plan provides for the grant of ISOs to our employees, and for the grant ofNSOs, restricted stock, restricted stock units and performance stock and cash awards to our officers, directors, employeesand consultants.

Authorized Shares. We have reserved an aggregate of 1,159,420 shares of our common stock for issuance under the2011 Plan. As of December 31, 2015, PSUs representing 249,510 shares of our common stock were outstanding underthe 2011 Plan at a weighted average base price of $6.35 per share. Effective as of the effective date of the 2015 Plan, nofurther awards may be granted under our 2011 Plan, but all outstanding stock awards will continue to be governed by theirexisting terms.

Administration. Our board of directors, or a committee thereof appointed by our board of directors, administers our 2011Plan and the awards granted under it. Our board of directors delegated its authority to administer our 2011 Plan to ourChief Executive Officer with respect to awards granted to any employee or service provider other than the chief executiveofficer.

Corporate Transactions. Our 2011 Plan provides that the administrator may provide that, in the event of a change incontrol transaction, options outstanding as of the date of the change in control that are not fully vested will become fullyvested and exercisable, and the administrator has discretion to provide, with respect to any outstanding award under the2011 Plan, that the securities of another entity be substituted for the common stock subject to the award and to makeequitable adjustments to the award in the administrator’s discretion. In addition, our form of award agreement for PSUgrants provides that PSUs are subject to time-based vesting and that PSUs will become exercisable upon the occurrenceof a change in control, an initial public offering of our stock or our achieving an enterprise value of at least $400 million. Inaddition, the PSU award agreement provides that the time-based vesting restrictions will accelerate and the PSUs willbecome fully vested if the recipient’s employment is terminated other than for cause as a result of a change in control and,if the recipient’s employment terminates due to death, disability or retirement, then the PSUs will fully vest on the earlier ofthe one-year anniversary of termination or the expiration of the remaining time-based vesting period.

For these purposes, a change in control means (i) any corporation, person or other entity, other than us, one of ourmajority-owned subsidiaries or an employee benefit plan sponsored by us, becomes the beneficial owner of stockrepresenting more than 50% of the combined voting power of our then outstanding securities, (ii) our stockholdersapproving a definitive agreement to merge or consolidate the company with or into another corporation other than amajority-owned subsidiary, or to sell or otherwise dispose of all or substantially all of our assets and the persons who weremembers of our Board prior to such approval do not represent a majority of the directors of the surviving, resulting oracquiring entity or its parent, (iii) our stockholders approve a plan of liquidation of the company, or (iv) within any 24consecutive month period, persons who were members of our board of directors immediately prior to the 24 month period,together with persons who were first elected as directors during the 24 month period by or upon the recommendation ofpersons who were members of our board of directors immediately prior to the 24 month period and who constituted amajority of our board of directors at the time of such election, cease to constitute a majority of our board of directors.

Plan Amendment and Termination. Our board of directors may at any time amend, alter or discontinue our 2011 Plan.However, our board of directors must obtain approval of our stockholders for any amendment requiring such approvalunder federal tax or federal securities laws. In addition, our board of directors may not materially impair the rights of aholder of any award previously granted under our 2011 Plan without the consent of the holder of such award, except anyamendment to avoid an expense charge to us or an affiliate, to comply with applicable law or to permit us or an affiliate adeduction under applicable law. Our 2011 Plan will terminate in August 2022 or, if earlier, a date determined by our boardof directors.

2016 Employee Stock Purchase Plan

In January 2016, our board of directors adopted, and our stockholders approved, our 2016 Employee Stock PurchasePlan, or the ESPP. The ESPP will become effective immediately upon the execution and delivery of the underwritingagreement related to this offering but we have no current plans to grant purchase rights under the ESPP. The purpose ofthe ESPP is

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to secure the services of new employees, to retain the services of existing employees and to provide incentives for suchindividuals to exert maximum efforts toward our success and that of our affiliates. The ESPP is intended to qualify as an“employee stock purchase plan” within the meaning of Section 423 of the Code.

Share Reserve. Following this offering, the ESPP authorizes the issuance of 289,855 shares of our common stockpursuant to purchase rights granted to our employees or to employees of any of our designated affiliates. The number ofshares of our common stock reserved for issuance will automatically increase on January 1st of each calendar year, fromJanuary 2017 (assuming the ESPP becomes effective in 2016) through January 1, 2026, by the lesser of (1) 1% of thetotal number of shares of our common stock outstanding on December 31st of the preceding calendar year and(2) 510,145 shares; provided, that prior to the date of any such increase, our board of directors may determine that suchincrease will be less than the amount set forth in clauses (1) and (2). As of the date hereof, no shares of our commonstock have been purchased under the ESPP.

Administration. Our board of directors has delegated its concurrent authority to administer the ESPP to our compensationcommittee. The ESPP is implemented through a series of offerings under which eligible employees are granted purchaserights to purchase shares of our common stock on specified dates during such offerings. Under the ESPP, we may specifyofferings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. Eachoffering will have one or more purchase dates on which shares of our common stock will be purchased for employeesparticipating in the offering. An offering under the ESPP may be terminated under certain circumstances.

Payroll Deductions. Generally, all regular employees, including executive officers, employed by us or by any of ourdesignated affiliates, may participate in the ESPP and may contribute, normally through payroll deductions, up to 15% oftheir earnings (as defined in the ESPP) for the purchase of our common stock under the ESPP. Unless otherwisedetermined by our board of directors, common stock will be purchased for the accounts of employees participating in theESPP at a price per share equal to the lower of (a) 85% of the fair market value of a share of our common stock on thefirst date of an offering or (b) 85% of the fair market value of a share of our common stock on the date of purchase.

Limitations. Employees may have to satisfy one or more of the following service requirements before participating in theESPP, as determined by our board of directors, including: (1) being customarily employed for more than 20 hours perweek; (2) being customarily employed for more than five months per calendar year; or (3) continuous employment with usor one of our affiliates for a period of time (not to exceed two years). No employee may purchase shares under the ESPPat a rate in excess of $25,000 worth of our common stock based on the fair market value per share of our common stockat the beginning of an offering for each year such a purchase right is outstanding. Finally, no employee will be eligible forthe grant of any purchase rights under the ESPP if immediately after such rights are granted, such employee has votingpower over 5% or more of our outstanding capital stock measured by vote or value pursuant to Section 424(d) of theCode.

Changes to Capital Structure. In the event that there occurs a change in our capital structure through such actions as astock split, merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in propertyother than cash, large nonrecurring cash dividend, liquidating dividend, combination of shares, exchange of shares,change in corporate structure or similar transaction, the board of directors will make appropriate adjustments to (1) thenumber of shares reserved under the ESPP, (2) the maximum number of shares by which the share reserve may increaseautomatically each year and (3) the number of shares and purchase price of all outstanding purchase rights.

Corporate Transactions. In the event of certain significant corporate transactions, including: (1) a sale of all orsubstantially all of our assets, (2) the sale or disposition of 50% of our outstanding securities, (3) the consummation of amerger or consolidation where we do not survive the transactions and (4) the consummation of a merger or consolidationwhere we do survive the transaction but the shares of our common stock outstanding immediately prior to suchtransaction are converted or exchanged into other property by virtue of the transaction, any then-outstanding rights topurchase our stock under the ESPP may be assumed, continued or substituted for by any surviving or acquiring entity (orits parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue or substitutefor such purchase rights, then the participants’ accumulated payroll contributions will be used to purchase shares of ourcommon stock within 10 business days s prior to such corporate transaction, and such purchase rights will terminateimmediately.

ESPP Amendments, Termination. Our board of directors has the authority to amend or terminate our ESPP, provided thatexcept in certain circumstances such amendment or termination may not materially impair any outstanding purchaserights without the holder’s consent. We will obtain stockholder approval of any amendment to our ESPP as required byapplicable law or listing requirements.

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■ any breach of the director’s duty of loyalty to the corporation or its stockholders;

■ any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

■ unlawful payments of dividends or unlawful stock repurchases or redemptions; or

■ any transaction from which the director derived an improper personal benefit. Such limitation of liability does notapply to liabilities arising under federal securities laws and does not affect the availability of equitable remediessuch as injunctive relief or rescission.

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Limitations on Liability and Indemnification Matters

Upon the closing of this offering, our certificate of incorporation will contain provisions that limit the liability of our currentand former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides thatdirectors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors,except liability for:

Our amended and restated certificate of incorporation and our amended and restated bylaws will provide that we arerequired to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Delaware law.Our amended and restated bylaws will also provide that, upon satisfaction of certain conditions, we shall advanceexpenses incurred by a director in advance of the final disposition of any action or proceeding, and permit us to secureinsurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in thatcapacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delawarelaw. Our amended and restated certificate of incorporation and amended and restated bylaws will also provide our boardof directors with discretion to indemnify our officers and employees when determined appropriate by the board. We haveentered and expect to continue to enter into agreements to indemnify our directors, executive officers and otheremployees as determined by the board of directors. With certain exceptions, these agreements provide for indemnificationfor related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred byany of these individuals in any action or proceeding. We believe that these certificate of incorporation and bylawprovisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.We also maintain customary directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation andamended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach oftheir fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, eventhough an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may beadversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers asrequired by these indemnification provisions.

At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for whichindemnification is sought and we are not aware of any threatened litigation that may result in claims for indemnification.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers orpersons controlling us, we have been informed that in the opinion of the SEC such indemnification is against public policyas expressed in the Securities Act and is therefore unenforceable.

Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract witha broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executestrades pursuant to parameters established by the director or officer when entering into the plan, without further directionfrom them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at anytime. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when theyare not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy.Prior to 180 days after the date of this offering (subject to early termination), the sale of any shares under such plan wouldbe subject to the lock-up agreement that the director or officer has entered into with the underwriters.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a summary of transactions since October 1, 2012 to which we have been a party, in which the amountinvolved exceeded or will exceed $120,000 and in which any of our directors, executive officers or holders of more than5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect materialinterest other than compensation and other arrangements that are described in the section titled “ExecutiveCompensation.”

We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactionsdescribed below were comparable to terms available or the amounts that would be paid or received, as applicable, inarm’s-length transactions.

Financings

Common Stock

Founders

In December 2012, Dr. Mohan, our Chairman, President and Chief Executive Officer, and his wife, Swati Mohan, a holderof more than 5% of our capital stock at such time, agreed to cancel an aggregate of 666,666 shares of our then issuedand outstanding common stock held by them in exchange for nominal consideration.

In December 2012, we then issued 666,666 shares of our common stock to a third party associated with IndiaInfrastructure Private Limited, or IIPL, for services provided.

Strides Pharma, Inc.

In March 2014, we issued and sold to Strides Pharma, Inc., or Strides, 1,159,420 shares of our common stock at apurchase price of $6.04 per share, or $7,000,000. Following this investment, Strides became a beneficial owner of morethan 5% of our outstanding capital stock. In June 2014, we issued and sold to Strides an additional 579,710 shares of ourcommon stock at a purchase price of $6.90 per share, or $4,000,000. In connection with such issuances, we entered intoan investors’ rights agreement and a co-sale agreement with Strides. Upon the closing of this offering, certain provisionsof the investors’ rights agreement will terminate and the continuing provisions are described below. The co-saleagreement will automatically terminate effective upon the completion of this offering. In connection with the Stridesinvestment, we were required to repurchase outstanding capital stock in order to reduce our fully diluted common stock to11,594,203 shares after giving effect to its investment in our common stock. We refer to this repurchase as a “buyback.”

In October 2014, we issued a 12% $2,000,000 convertible promissory note to Strides, with a stated maturity date ofDecember 31, 2016. The note is convertible at any time into shares of our common stock at a conversion price of $20.70per share. In October 2015, we repaid $1,000,000 of the principal amount, and Strides has elected to receive payment incash for the remainder rather than any equity conversion.

In December 2014, we issued a 12% $2,000,000 convertible promissory note to Strides, which matured on March 31,2015. This note was convertible at any time into shares of our common stock at a conversion price equal to 50% of the fairmarket value of our common stock on the conversion date. We repaid this note in full at maturity and it is no longeroutstanding.

Mezzanine Financings

In June, July and September 2015, we issued and sold an aggregate of 1,765,511 shares of our common stock to nineinstitutional investors at a purchase price of $25.79 per share, for aggregate gross proceeds of $45,530,484. Theseinvestors became party to the Strides investors’ rights agreement, as amended, and the co-sale agreement, as amended.

In December 2015 and January 2016, we issued and sold an aggregate of 573,388 shares of our common stock to 19accredited investors at a purchase price of $29.05 per share, for aggregate net proceeds of approximately $16.6 million.These investors became party to the Strides investors’ rights agreement, as amended, and the co-sale agreement, asamended.

The foregoing mezzanine financings include the issuance and sale to Proximare Lifesciences Fund LLC, a New Jerseysingle purpose fund, of an aggregate of 197,003 shares of our common stock at a purchase price of $25.79 per share, foraggregate gross proceeds of approximately $5.1 million, and the issuance and sale to Proximare Lifesciences Fund 2LLC, a New Jersey single purpose fund, an aggregate of 172,121 shares of our common stock at a purchase price of $29.05 per share, for aggregate gross proceeds of approximately $5.0 million. Three of our directors, Messrs. Canute andHilzinger and

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Ms. Hoke, have invested an aggregate of $2.0 million in our company through investments in these funds. Uponcompletion of this offering and pursuant to the documents governing such funds, these directors are expected to receiveshares of our common stock pro rata to their investments in such funds upon distribution of all of the shares of ourcommon stock held by such funds as follows: Mr. Canute, 57,408 shares; Mr. Hilzinger, 18,517 shares; Ms. Hoke, 1,938shares.

Series A Redeemable Preferred Stock

From March 2011 to May 2013, we issued and sold an aggregate of 6,995 shares of Series A redeemable preferred stockat $1,000 per share. Certain of our directors and executive officers, including some of their immediate family members,participated in these offerings as described below.

In October 2012, Mr. Canute, a member of our board of directors, purchased 100 additional shares of our Series Aredeemable preferred stock for an aggregate purchase price of $100,000, bringing his aggregate investment to 1,150shares.

In May 2013, Dr. Brady, a member of our board of directors, purchased 100 shares of our Series A redeemable preferredstock for an aggregate purchase price of $100,000.

In October 2015, upon our reincorporation in Delaware, each outstanding share of our Series A redeemable preferredstock held by holders that did not elect to participate in the June 2014 buyback described below, converted into andbecame approximately 289 shares of common stock and approximately 1.4035 shares of Series A preferred stock.Accordingly, the following related parties received such shares upon conversion of the following amounts of our Series Aredeemable preferred stock held by them:

Related Party

# of Shares of Series A

Redeemable Preferred Stock

Converted

# of Shares of Common Stock Received Upon

Conversion

# of Shares of DE Series A

Preferred Stock Received Upon

Conversion

Mr. Canute 250 shares 72,463 shares 351 shares Dr. Brady 100 shares 28,985 shares 141 shares Dr. Mohan’s immediate family 150 shares 43,478 shares 212 shares Mr. Gangloff’s immediate family 55 shares 15,942 shares 79 shares Mr. Griffith’s immediate family 35 shares 10,144 shares 50 shares

June 2014 Buyback

In June 2014, as required by the Strides investment in our common stock described above under “— Common Stock —Strides Pharma, Inc.” we undertook a buyback of our then outstanding Series A redeemable preferred stock, commonstock and restricted stock awards to reduce our fully diluted common stock to 11,594,203 shares after giving effect toStrides’ investment in our common stock. No related parties participated in the buyback of common stock.

Series A Redeemable Preferred

In the June 2014 buyback, we offered Series A redeemable preferred stockholders $2,000 per share, payable in cash aspayment for their shares of Series A redeemable preferred stock, and a 4% promissory note due September 1, 2015, aspayment for accrued but unpaid dividends on such shares (increasing to 6% if unpaid at maturity). However, certainholders elected to receive a 4% promissory note for payment for some of their shares in lieu of the $2,000 per share cashpayment. These holders included Dr. Mohan, a member of our board of directors, for 50 of his repurchased shares,Mr. Canute, a member of our board of directors, for 188 of his repurchased shares, and Mr. Griffith, a member of ourboard of directors, for 43 of his repurchased shares.

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In the June 2014 buyback, we acquired an aggregate of 3,314 shares of our Series A redeemable preferred stock, whichincluded the following shares repurchased from related parties:

Related Party

# of Series A Redeemable

Preferred Stock Repurchased Cash Received

Principal Amount of

4% Promissory Notes Received

Dr. Mohan 175 $ — $ 423,003Mr. Canute 900 $ 500,000 $ 1,511,384Mr. Griffith and his immediate family 165 $ 130,000 $ 247,068Mr. Gangloff’s immediate family 45 $ 90,000 $ 12,580Mr. Dyrness’ affiliate 100 $ 200,000 $ 35,107

In November 2014, we bought back an additional 25 shares of Series A redeemable preferred stock from Dr. Mohan for$50,000 in cash. Dr. Mohan did not receive an additional 4% note for the accrued dividend on such shares as suchamounts were reflected in the note received in June 2014.

Restricted Stock

In the June 2014 buyback, we offered holders of restricted stock $1.73 per share to forfeit their shares of restricted stockpayable in the form of a 0% promissory note due December 31, 2015, as amended. In connection therewith, Mr. Canutereceived a 0% promissory note with an aggregate principal amount of $200,000 due December 31, 2015, as amended, inexchange for 115,942 shares of restricted stock. All outstanding amounts have been paid in full.

Loans and Guarantees

In March 2015, Mr. Canute, a member of our board of directors, extended a short-term loan to our company of$1,000,000. Accordingly, we issued a promissory note to Mr. Canute for the principal amount of $1,000,000, which notebore stated interest at a rate of 2% per month, with a stated maturity date of June 20, 2015. This note was repaid in full inOctober 2015 and is no longer outstanding.

Our Chairman, President and Chief Executive Officer, Dr. Mohan, personally guaranteed our outstanding bank loans, aswell as one of our equipment financing leases. In addition, since founding our company, Dr. Mohan has regularly extendedshort-term interest-free loans to our company, and deferred payment of his compensation (both salary and bonuses) inorder to address our liquidity needs. As of September 30, 2014 and September 30, 2015, amounts owed to Dr. Mohanamounted to $200,315 and $117,506, respectively. We did not accrue any interest on amounts owed to Dr. Mohan withrespect to the loans and all outstanding amounts have been repaid in full.

Employment and Other Compensation Arrangements, Equity Plan Awards

We have entered into employment agreements with certain of our executive officers in connection with their employment.For more information regarding the executives’ existing offer letters, see the section titled “Executive Compensation — Employment Agreements.”

We also have established certain equity plans, pursuant to which we grant equity awards to our employees and directors.For more information regarding these plans, see the section titled “Executive Compensation — Equity Benefit Plans.”

Performance Stock Units

We previously granted our employees, including our executive officers, options to purchase shares of our common stockor restricted stock under our 2011 Plan. In June 2014, we converted most of these outstanding equity awards into anaggregate of 711,430 performance stock units, or PSUs. The PSUs as issued are subject to time-based vesting, with 50%of the award vesting three-years after the original grant date, and the remaining 50% vesting four-years after the grantdate and were to be settled in cash. The PSUs may only be exercised during their 10-year term on or following theachievement of specified performance conditions, including the occurrence of a change in control, the closing of thisoffering, or, subject to the discretion of our board of directors, our achieving an enterprise value of at least $400 million. Inaddition, PSUs may be subject to additional acceleration of time-based vesting restrictions upon certain termination andchange in control events. The following related parties received PSUs in such conversion as follows:

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Related Party Restricted Stock PSUsMr. Gangloff 115,942 129,855Mr. Griffith 144,927 162,318Dr. McAndrew 57,971 64,927Ms. Yamashita 43,478 48,695

On June 22, 2015, in connection with his employment with us, we granted Dr. Bahrt, our Chief Medical Officer, 28,985PSUs on the terms noted above.

In December 2015, Messrs. Bahrt, Gangloff, Griffith and McAndrew, and Ms. Yamashita forfeited their PSUs and weregranted restricted stock units, or RSUs, under our 2015 Plan. The RSUs granted to Mr. Gangloff and Mr. Griffith aresubject to performance-based vesting restrictions and will satisfy such conditions upon the first to occur of a change incontrol of the company and the date that is six months following the effective date of the registration statement of whichthis prospectus forms a part, in each case subject to the recipient’s continued service with us through such event. TheRSUs granted to Dr. Bahrt, Dr. McAndrew and Ms. Yamashita are subject to the same performance-based vestingrestrictions but are also subject to additional time-based vesting restrictions, with 50% of their RSUs satisfying the time-based vesting restrictions on each of the third and fourth anniversaries of their original hire dates, subject to theircontinuous service with us through the applicable dates. The time-based vesting restrictions will be satisfied upon achange in control of the company, provided the executive remains in continuous service with us through such date.

Parilis Biopharmaceuticals, LLC

In December 2012, our former subsidiary, Parilis Biopharmaceuticals, LLC, or Parilis, of which we were the sole member,issued 100 of its Series A Units to Dr. Brady, who became a director of our company in September 2014, at a purchaseprice of $1,000 per share, or an aggregate of $100,000 (bringing his total investment in Parilis to 200 Series A Units).

In September 2015, we terminated the license and business development agreements with Parilis, and reachedagreement with the remaining holders of outstanding Series A and Series A Hybrid Units of Parilis to exchange theirsecurities for securities in our company. These holders included Dr. Brady. Accordingly, in September 2015, we enteredinto an exchange and release agreement pursuant to which they received an aggregate of 226,663 shares of our commonstock and an aggregate of 1,626 shares of our Series A preferred stock effective upon our reincorporation in Delaware inOctober 2015. Accordingly, in October 2015, Dr. Brady received an aggregate of 28,985 shares of our common stock and257 shares of our Series A preferred stock in exchange for his 200 Series A Units of Parilis.

Sonnet Biotherapeutics, Inc.

In April 2015, we spun-off certain assets unrelated to our biosimilar business through a pro rata distribution to ourstockholders. Accordingly, we entered into a contribution agreement with a newly-formed entity, Sonnet Biotherapeutics,Inc., or Sonnet, pursuant to which we contributed certain assets relating to our innovation business to Sonnet in exchangefor these assets. We then immediately distributed all the issued and outstanding shares of Sonnet common stock to ourstockholders on a pro rata basis, which stockholders included our executive officers, directors and holders of more than5% of our outstanding capital stock. Accordingly, immediately following the distribution, the stockholders of Sonnet wereidentical to our stockholders as of April 6, 2015.

We continued to provide funding and certain services and assistance to Sonnet for a transition period that ran from thespin-off date through September 2015, including the transfer of nine of our employees who had been involved in Sonnet’sbusiness to Sonnet. In October 2015, Sonnet issued us a promissory note for the principal amount of $826,561, whichreflects the funding we have provided them through September 30, 2015. This note bears interest at the annual rate of3%, and matures September 30, 2016, although Sonnet may prepay at any time. Sonnet paid 10% of the outstandingbalance upon execution of the note in October 2015. As of December 31, 2015, the balance was $639,173.

Dr. Mohan and Mr. Griffith are members of the board of directors of Sonnet. In addition, Mr. Griffith is the President, ChiefExecutive Officer and Chief Financial Officer of Sonnet.

Concurrent Private PlacementSabby, an existing stockholder, has indicated an interest in purchasing approximately $5.0 million of our units at the initialpublic offering price (or 833,332 units based on the assumed initial public offering price of $6.00 per unit) in a proposedprivate placement that would close concurrently with this offering. This indication of interest is not a binding agreement or

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commitment to purchase, and we could determine to sell more, less or no units to this stockholder and this stockholdercould determine to purchase more, less or no units in the proposed concurrent private placement. The units that may besold in the proposed concurrent private placement would not be registered under the Securities Act. We will pay theunderwriters as placement agents in the proposed concurrent private placement an aggregate cash fee equal to 7.0% ofthe gross sales price of the units sold in the concurrent private placement. The closing of this offering is not conditionedupon the closing of such concurrent private placement although the concurrent private placement is expected to becontingent upon, and will occur concurrently with, the closing of this offering. As of March 31, 2016, Sabby beneficiallyowned approximately 2.4% of our common stock (based upon 16,136,112 shares of common stock outstanding, which(i) includes 14,079,007 shares of common stock outstanding as of December 31, 2015, which includes redeemablecommon stock, (ii) includes 87,287 shares of common stock issued in January 2016, and (iii) gives effect to theconversion of all outstanding shares of Series A redeemable preferred stock (with an aggregate liquidation preference of$11,819,000 and a conversion price equal to the initial public offering price) into 1,969,818 shares of common stockimmediately prior to the closing of this offering (assuming an initial public offering price of $6.00 per share of commonstock included in the units sold in this offering)). Immediately following this offering and the concurrent private placement,based on the assumed amounts in this prospectus, Sabby would beneficially own approximately 8.7% of our commonstock. The sale of units to Sabby in the concurrent private placement will not be registered in this offering.

Investors’ Rights Agreement

In connection with our common stock financings, we entered into an investors’ rights agreement containing registrationrights, among other things, with certain holders of our common stock. On April 26, 2016, we amended the investors’ rightsagreement and agreed, under certain circumstances, to issue certain of the investors upon the closing of this offeringthree-year warrants to purchase an aggregate of 1,520,284 shares of our common stock. The terms of such warrants aremore fully described in “Description of Securities — Warrants.” As a party to the investors’ rights agreement, Sabby wouldalso have registration rights with respect to the shares included in the units, as well as the shares issuable upon exerciseof the warrants included in the units that Sabby has indicated an interest in acquiring in the concurrent private placement.The registration rights granted under the investors’ rights agreement will terminate upon the closing of a qualifiedliquidation event and at such time as a particular stockholder is able to sell all of its shares pursuant to Rule 144 of theSecurities Act. The registration rights are more fully described in “Description of Securities — Registration Rights.”

Directed Unit Program

At our request, the underwriters have reserved 291,666 units, or 5% of the units being offered by this prospectus(excluding the units that may be issued upon the underwriters’ exercise of their over-allotment option to purchaseadditional units), for sale at the initial public offering price to our employees, executive officers, directors, stockholders andbusiness associates, as well as to persons related to the company and our affiliates and their friends and family through adirected unit program. The number of units available for sale to the general public in the public offering will be reduced bythe number of units these individuals purchase. Any reserved units that are not so purchased will be offered by theunderwriters to the general public on the same basis as the other units offered hereby. Directors and officers whopurchase these units will be subject to a 180-day lock-up period with respect to these units. We have agreed to indemnifythe underwriter conducting the directed unit program against certain liabilities and expenses, including liabilities under theSecurities Act, in connection with the directed unit program.

Indemnification Agreements

Our amended and restated certificate of incorporation will contain provisions limiting the liability of directors, and ouramended and restated bylaws will provide that we will indemnify each of our directors to the fullest extent permitted underDelaware law. Our amended and restated certificate of incorporation and amended and restated bylaws will also provideour board of directors with discretion to indemnify our officers and employees when determined appropriate by the board.In addition, we have entered into an indemnification agreement with each of our directors and executive officers thatrequires us to indemnify our directors and executive officers. For more information regarding these agreements, see thesection titled “Executive Compensation — Limitations on Liability and Indemnification Matters.”

Related-Party Transaction Policy

We intend to adopt a formal written policy that our executive officers, directors, holders of more than 5% of any class ofour voting securities, and any member of the immediate family of and any entity affiliated with any of the foregoingpersons, are not permitted to enter into a related-party transaction with us without the prior consent of our auditcommittee, or other

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independent members of our board of directors in the event it is inappropriate for our audit committee to review suchtransaction due to a conflict of interest. Any request for us to enter into a transaction with an executive officer, director,principal stockholder or any of their immediate family members or affiliates, in which the amount involved exceeds$120,000 must first be presented to our audit committee for review, consideration and approval. In approving or rejectingany such proposal, our audit committee will consider the relevant facts and circumstances available and deemed relevantto our audit committee, including, but not limited to, whether the transaction will be on terms no less favorable than termsgenerally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related-party’s interest in the transaction.

All of the transactions described in this section were entered into prior to the adoption of this policy.

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■ each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstandingshares of common stock;

■ each of our directors;

■ each of our named executive officers; and

■ all of our directors and executive officers as a group.

* Represents beneficial ownership of less than one percent (1%) of the outstanding common stock.

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PRINCIPAL STOCKHOLDERSThe following table sets forth certain information relating to the beneficial ownership of our common stock as of March 31,2016, by:

The percentage of shares beneficially owned before the offering shown in the table is based upon 16,136,112 shares ofcommon stock outstanding, which includes (i) 14,079,007 shares of common stock outstanding as of December 31, 2015,which includes redeemable common stock, (ii) 87,287 shares of common stock issued in January 2016, and (iii) giveseffect to the conversion of all outstanding shares of Series A redeemable preferred stock (with an aggregate liquidationpreference of $11,819,000 and a conversion price equal to the initial public offering price) into 1,969,818 shares ofcommon stock immediately prior to the closing of this offering (assuming an initial public offering price of $6.00 per shareof common stock included in the units sold in this offering). The table does not give effect to any units that may beacquired pursuant to the directed unit program or any shares issuable upon the exercise of the Series A warrants or theSeries B warrants included in the units sold in this offering or any units that may be sold in the concurrent privateplacement, if any. The information relating to the number and percentage of shares beneficially owned after the offeringassumes the sale by us of 5,833,334 units in this offering. The percentage ownership information assumes no exercise ofthe underwriters’ over-allotment option to purchase additional units and does not include the common stock issuable uponthe exercise of the Series A warrants or the Series B warrants included in the units to be sold in the offering or any unitsthat may be sold in the concurrent private placement, if any.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over whicha person exercises sole or shared voting or investment power. Unless otherwise indicated, the persons or entitiesidentified in this table have sole voting and investment power with respect to all shares shown beneficially owned by them,subject to applicable community property laws. Shares of common stock issuable upon vesting of outstanding equityawards that are exercisable or subject to vesting within 60 days after March 31, 2016 are deemed beneficially owned andsuch shares are used in computing the percentage ownership of the person holding the awards, but are not deemedoutstanding for the purpose of computing the percentage ownership of any other person. The information contained in thefollowing table is not necessarily indicative of beneficial ownership for any other purpose, and the inclusion of any sharesin the table does not constitute an admission of beneficial ownership of those shares.

As otherwise noted below, the address for persons listed in the table is c/o Oncobiologics, Inc., 7 Clarke Drive, Cranbury,New Jersey 08512.

Percentage of Shares Beneficially Owned

Name of Beneficial Owner Number Before Offering After OfferingFive Percent Stockholders (other than directors and officers):Strides Pharma (UK) Limited 1,739,130 10.8 7.9

Named Executive Officers and Directors:Pankaj Mohan, Ph.D., Chairman, President and Chief Executive Officer 7,488,678 46.4 34.1Kenneth M. Bahrt, M.D., Chief Medical Officer — — —Elizabeth A. Yamashita, Vice President, Regulatory Affairs — — —Todd C. Brady, M.D., Ph.D., Director 124,273Scott Canute, Director 130,963Albert D. Dyrness, Director — — —Donald J. Griffith, Director — — —Kurt J. Hilzinger, Director — — —Robin Smith Hoke, Director — — —All executive officers and directors as a group (13 persons) 7,743,914 48.0 35.3

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(1) % %

(2) % %(3)

(4)

(5) * *(6) * *

(7)

(8)

(9)

(10)

% %

(1) The address for Strides Pharma (UK) Limited is Unit 4, Metro Centre, Tolpits Lane, Watford, Hertfordshire, WD189SS, UnitedKingdom. Strides Pharma (UK) Limited is a wholly-owned step-down subsidiary of Strides Shasun Limited, a public company listedin India. Strides Pharma (UK) Limited acquired the shares of Oncobiologics from Strides Pharma Inc., another wholly-ownedsubsidiary of Strides Shasun Limited in October 2015. Strides Pharma (UK) Limited has only voting and investment power overthese shares and these decisions are made by its board of directors and not any particular individual. Strides Shasun Limitedprovides guidance to Strides Pharma (UK) Limited as and when sought.

(2) Includes 30,572 shares held directly by Dr. Mohan’s child, 492,753 shares held directly by Dr. Mohan’s spouse and 86,956 sharesheld in a family trust for which Dr. Mohan’s spouse serves as trustee. Includes 17,666 shares of common stock issuable uponconversion of 106 shares of Series A preferred stock held by Dr. Mohan’s child with a liquidation preference of $1,000 per share(assuming an initial public offering price of $6.00 per unit). Does not include 405,797 restricted stock unit awards, or RSUs, held byDr. Mohan.

(3) Does not include 28,985 RSUs held by Dr. Bahrt.

(4) Does not include 43,478 RSUs held by Ms. Yamashita.

(5) Includes 66,333 shares of common stock issuable upon conversion of 398 shares of Series A preferred stock held by Dr. Brady witha liquidation preference of $1,000 per share (assuming an initial public offering price of $6.00 per unit). Does not include 57,971RSUs held by Dr. Brady.

(6) Includes 58,500 shares of common stock issuable upon conversion of 351 shares of Series A preferred stock held by Mr. Canutewith a liquidation preference of $1,000 per share (assuming an initial public offering price of $6.00 per unit). Does not include(x) 57,971 RSUs held by Mr. Canute nor (y) 57,406 shares held in a special purpose fund, Proximare Lifesciences Fund LLC, overwhich he does not have voting or investment control.

(7) Does not include 7,246 RSUs held by Mr. Dyrness.

(8) Does not include 144,927 RSUs held by Mr. Griffith.

(9) Does not include (x) 7,246 RSUs held by Mr. Hilzinger nor (y) 18,517 shares held in special purpose funds, Proximare LifesciencesFund LLC and Proximare Lifesciences Fund 2 LLC, over which he does not have voting or investment control.

(10) Does not include (x) 7,246 RSUs held by Ms. Hoke nor (y) 1,938 shares held in a special purpose fund, Proximare LifesciencesFund LLC, over which she does not have voting or investment control.

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DESCRIPTION OF SECURITIES

Upon the closing of this offering and the filing of our amended and restated certificate of incorporation, our authorizedcapital stock will consist of 200,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares ofpreferred stock, par value $0.01 per share. The following is a summary of the rights of our common and preferred stockand some of the provisions of our amended and restated certificate of incorporation and amended and restated bylaws,which will each become effective upon the closing of this offering, the investors’ rights agreement and relevant provisionsof Delaware General Corporation Law. Because it is only a summary, it does not contain all the information that may beimportant to you. For a complete description you should refer to our amended and restated certificate of incorporation,amended and restated bylaws and investors’ rights agreement, copies of which have been filed as exhibits to theregistration statement of which this prospectus is a part, as well as the relevant provisions of Delaware GeneralCorporation Law.

Units

Each unit offered consists of one share of our common stock, one-half of a Series A warrant to purchase one share of ourcommon stock and one-half of a Series B warrant to purchase one share of our common stock. We anticipate that theunits will begin trading on or promptly after the date of this prospectus. The units will automatically separate 30 days afterthe date of this prospectus, and the shares of common stock, Series A warrants and Series B warrants underlying theunits will begin trading separately, unless Jefferies LLC and Barclays Capital Inc., as representatives of the underwriters,determine that an earlier date is acceptable (based upon, among other things, their assessment of the relative strengths ofthe securities markets and small capitalization companies in general, and the trading pattern of, and demand for, oursecurities in particular). If Jefferies LLC and Barclays Capital Inc. permit separate trading of the common stock, Series Awarrants and Series B warrants prior to June , 2016, we will issue a press release and file a Current Report on Form8-K with the Securities and Exchange Commission announcing when such separate trading will begin.

Common Stock

As of December 31, 2015, there were 14,079,007 shares of common stock outstanding, which includes redeemablecommon stock. After giving effect to (i) the issuance of an aggregate of 87,287 shares of our common stock inJanuary 2016 and (ii) the conversion of all outstanding shares of Series A preferred stock (with an aggregate liquidationpreference of $11,819,000 and a conversion price equal to the initial public offering price) into 1,969,818 shares ofcommon stock immediately prior to the closing of this offering (assuming an initial public offering price of $6.00 per shareof common stock included in the units sold in this offering), there would have been 16,136,112 shares of common stockoutstanding on that date held by 94 stockholders of record.

Voting Rights

Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders.The affirmative vote of holders of 66 ⁄3% of the voting power of all of the then-outstanding shares of capital stock, votingas a single class, will be required to amend certain provisions of our amended and restated certificate of incorporation,including provisions relating to amending our amended and restated bylaws, the classified board, the size of our board,removal of directors, director liability, vacancies on our board, special meetings, stockholder notices, actions by writtenconsent and exclusive jurisdiction.

Dividends

Subject to preferences that may apply to any outstanding preferred stock, holders of our common stock are entitled toreceive ratably any dividends that our board of directors may declare out of funds legally available for that purpose on anon-cumulative basis.

Liquidation

In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in allassets remaining after payment of liabilities and the liquidation preference of any outstanding preferred stock.

Rights and Preferences

Holders of our common stock have no preemptive, conversion, subscription or other rights, and there are no redemptionor sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of ourcommon stock are subject to and may be adversely affected by the rights of the holders of shares of any series of ourpreferred stock that we may designate in the future.

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Series A Warrants and Series B Warrants Issued as Part of the Units

Each whole Series A warrant entitles the holder to purchase one share of our common stock at an initial exercise price of$6.60, or 110% of the initial public offering price per unit, subject to adjustment. Each whole Series A warrant will beexercisable 30 days after the date of this prospectus, or the date on which Jefferies LLC and Barclays Capital Inc., asrepresentatives of the underwriters, separate the units, whichever date is earlier and will expire at 5:00 p.m. New York Citytime on February , 2017. Series A warrants will not be rounded up to the next whole Series A warrant and only wholeSeries A warrants will be exercisable for a full share of our common stock.

Each whole Series B warrant entitles the holder to purchase one share of our common stock at an initial exercise price of$8.50, or 142% of the initial public offering price per unit, subject to adjustment. Each whole Series B warrant will beexercisable 30 days after the date of this prospectus, or the date on which Jefferies LLC and Barclays Capital Inc., asrepresentatives of the underwriters, separate the units, whichever date is earlier and will expire at 5:00 p.m. New York Citytime on May , 2018. Series B warrants will not be rounded up to the next whole Series B warrant and only whole SeriesB warrants will be exercisable for a full share of our common stock.

The Series A warrants and Series B warrants will be issued in registered form, in each case pursuant to a warrantagreement between American Stock Transfer & Trust Company, LLC, as warrant agent, and us.

We have applied to list the Series A warrants and the Series B warrants on the NASDAQ Global Market under the symbol“ONSIW” and “ONSIZ,” respectively.

The exercise price and number of shares issuable upon exercise of the Series A warrants and Series B warrants may beadjusted upon the occurrence of certain events, including but not limited to any stock split, stock dividend, extraordinarydividend, recapitalization, reorganization, merger or consolidation. However, neither the Series A warrants nor Series Bwarrants will be adjusted for issuances of common stock or securities convertible or exercisable into common stock at aprice below the then current exercise price of such warrant.

If, at any time a Series A warrant or Series B warrant is outstanding, we consummate any fundamental transaction, asdescribed in such warrants and generally including any consolidation or merger with or into another corporation, theconsummation of a transaction whereby another entity acquires more than 50% of our outstanding common stock, or thesale or other disposition of all or substantially all of our assets, or other transaction in which our common stock areconverted into or exchanged for other securities or other consideration, the holder of any such warrants will thereafterreceive upon exercise of such warrants, the securities or other consideration to which a holder of the number of commonstock then deliverable upon the exercise or conversion of such Series A warrants or Series B warrants would have beenentitled upon such consolidation or merger or other transaction.

The number of shares of our common stock that may be acquired by any holder upon any exercise of the Series Awarrants or Series B warrants, as the case may be, will be limited to the extent necessary to insure that, following suchexercise (or other issuance), the total number of common stock then beneficially owned by such holder and its affiliatesand any other persons whose beneficial ownership of common stock would be aggregated with the holder’s for purposesof Section 13(d) of the Securities Exchange Act of 1934, as amended, does not exceed 9.99% of the total number ofissued and outstanding shares of our common stock (including for such purpose the common stock issuable upon suchexercise), which we refer to as the beneficial ownership limitation; provided, however, that if a holder and/or its affiliatesalready own 9.99% on the date of this offering then the beneficial ownership limitation will not apply to such holder. Aholder may elect to increase or decrease this beneficial ownership limitation from 9.99% to any other percentage of thetotal number of issued and outstanding shares of our common stock (including for such purpose the common stockissuable upon such exercise) upon providing us with not less than 61 days’ prior written notice, and any such increase willapply only to such holder.

The Series A warrants and Series B warrants may be exercised, at the option of each holder, in whole or in part, uponsurrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exerciseform on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment ofthe exercise price for the number of common stock purchased upon such exercise, by certified check payable to us or bywire transfer of immediately available funds to an account designated by us. Subject to applicable laws, the Series Awarrants and Series B warrants may be transferred at the option of the holders upon surrender of the warrants to ustogether with the appropriate instruments of transfer.

Neither the Series A warrant holders nor Series B warrant holders will have the rights or privileges of holders of commonstock and any voting rights until they exercise their warrants and receive common stock. After the issuance of commonstock upon exercise of such warrants, each holder will be entitled to one vote for each common stock held of record on all

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matters to be voted on by stockholders. If we fail to issue a holder of our Series A warrants or Series B warrants, withinthree business days after receipt of an applicable exercise notice, a certificate for the number of shares of our commonstock to which such holder is entitled, then such holder can rescind the applicable exercise of such Series A warrant orSeries B warrant. If we are otherwise unable to issue and deliver the number of shares of our common stock that a holderis entitled to under the Series A warrant or Series B warrant, as applicable, we have no obligation to pay such holder anycash or other consideration to settle such Series A warrant or Series B warrant, as applicable.

Under the terms of the warrant agreement, we have agreed to use our reasonable best efforts to maintain theeffectiveness of the registration statement and current prospectus relating to common stock issuable upon exercise of thewarrants at any time that the Series A warrants or Series B warrants are exercisable. During any period that we fail tohave maintained an effective registration statement covering the common stock underlying such warrants, the holder mayexercise such warrants on a cashless basis.

Preferred Stock

Immediately prior to the closing of this offering, all outstanding shares of our preferred stock will convert into shares ofcommon stock. Upon the closing of this offering and the filing of our amended and restated certificate of incorporation, ourboard of directors will have the authority, without further action by our stockholders, to issue up to 10,000,000 shares ofpreferred stock in one or more series and to fix the number, rights, preferences, privileges and restrictions thereof. Theserights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption,liquidation preferences and sinking fund terms, and the number of shares constituting any series or the designation ofsuch series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock couldadversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividendpayments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying,deferring or preventing a change in control or other corporate action. We have no current plan to issue any shares ofpreferred stock.

Common Stock Equivalents

As of the closing of this offering, we will have RSUs outstanding for an aggregate of 1,096,460 shares of our commonstock and warrants to acquire an aggregate of 1,520,284 shares of our common stock at an exercise price of $0.01 pershare, and the Series A warrants and Series B warrants to acquire an aggregate of 5,833,334 shares of our commonstock being issued as part of the units offered hereby.

Warrants

Pursuant to the investors’ rights agreement, we have agreed, under certain circumstances, to issue warrants to acquire anaggregate of 1,520,284 shares of our common stock upon the closing of this offering. The warrants have a term of three-years, an initial exercise price of $0.01 per share and are not exercisable until 180 days after effectiveness of theregistration statement for this offering. If on the date such warrants become exercisable, the market value of the commonstock owned by the investors equals or exceeds the purchase price of those shares acquired by the investor at the timethey became a party to the investors’ rights agreement, then the exercise price will increase to $1.00 per share.

Stockholder Registration Rights

After the closing of this offering, certain holders of shares of our common stock, including certain holders of 5% of ourcapital stock, entities in which certain of our directors have invested and Sabby, which has indicated an interest inpurchasing $5.0 million of our units at the initial public offering price in the concurrent private placement, will be entitled tocertain rights with respect to registration of such shares under the Securities Act including any shares issued uponexercise of warrants held by them. These shares are referred to as registrable securities. The holders of these registrablesecurities possess registration rights pursuant to the terms of the investors’ rights agreement and are described inadditional detail below.

The registration of shares of our common stock pursuant to the exercise of the registration rights described below wouldenable the holders to trade these shares without restriction under the Securities Act when the applicable registrationstatement is declared effective. We will pay the registration expenses, other than underwriting discounts, sellingcommissions and stock transfer taxes, of the shares registered pursuant to the demand, piggyback and Form S-3registrations described below.

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■ before such date, the board of directors of the corporation approved either the business combination or thetransaction that resulted in the stockholder becoming an interested stockholder;

■ upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, theinterested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time thetransaction began, excluding for purposes of determining the voting stock outstanding (but not the outstandingvoting stock owned by the interested stockholder) those shares owned (1) by persons who are directors andalso officers and (2) employee stock plans in which employee participants do not have the right to determineconfidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; and

■ on or after such date, the business combination is approved by the board of directors and authorized at anannual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least66 ⁄3% of the outstanding voting stock that is not owned by the interested stockholder.

■ any merger or consolidation involving the corporation and the interested stockholder;

■ any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving theinterested stockholder;

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Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, tolimit the number of shares the holders may include. The demand, piggyback and Form S-3 registration rights describedbelow will expire three years after the effective date of the registration statement, of which this prospectus forms a part, orwith respect to any particular holder, at such time that such holder can sell its shares under Rule 144 of the Securities Actduring any three-month period.

Demand Registration Rights

The holders of the registrable securities will be entitled to certain demand registration rights. At any time beginning 180days following the closing of this offering, the holders of the registrable securities then outstanding may make a writtenrequest that we register all or a portion of their shares, subject to certain specified exceptions. Such request forregistration must cover securities the aggregate offering price of which, before payment of underwriting discounts,commissions and other expenses related to such registration, would exceed $5,000,000.

Piggyback Registration Rights

In connection with this offering, the holders of registrable securities were entitled to, and the necessary percentage ofholders waived, their rights to notice of this offering and to include their shares of registrable securities in this offering. Ifwe propose to register for offer and sale any of our securities under the Securities Act in another offering, either for ourown account or for the account of other security holders, the holders of these shares will be entitled to certain “piggyback”registration rights allowing them to include their shares in such registration, subject to certain marketing and otherlimitations. As a result, whenever we propose to file a registration statement under the Securities Act, including aregistration statement on Form S-3 as discussed below, other than with respect to a demand registration or a registrationstatement on Forms S-4 or S-8 or related to stock issued upon conversion of debt securities, the holders of these sharesare entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on thenumber of shares included in the registration, to include their shares in the registration.

Form S-3 Registration Rights

The holders of the registrable securities will be entitled to certain Form S-3 registration rights. Any holder of these sharescan make a request that we register for offer and sale their shares on Form S-3 if we are qualified to file a registrationstatement on Form S-3, subject to certain specified exceptions. Such request for registration on Form S-3 must coversecurities the aggregate offering price of which, before payment of the underwriting discounts and commissions, equals orexceeds $1,000,000. We will not be required to effect more than two registrations on Form S-3 within any 12-monthperiod.

Anti-Takeover Provisions of Delaware Law and Our Charter Documents

Section 203 of the Delaware General Corporation Law

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation fromengaging in any business combination with any interested stockholder for a period of three years after the date that suchstockholder became an interested stockholder, with the following exceptions:

In general, Section 203 defines a “business combination” to include the following:

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■ subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of anystock of the corporation to the interested stockholder;

■ any transaction involving the corporation that has the effect of increasing the proportionate share of the stock orany class or series of the corporation beneficially owned by the interested stockholder;

■ the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or otherfinancial benefits by or through the corporation; and

■ in general, Section 203 defines an “interested stockholder” as an entity or person who, together with theperson’s affiliates and associates, beneficially owns, or within three years prior to the time of determination ofinterested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.

■ permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferencesand privileges as they may designate, including the right to approve an acquisition or other change in control;

■ provide that the authorized number of directors may be changed only by resolution of our board of directors;

■ provide that our board of directors will be classified into three classes of directors;

■ provide that, subject to the rights of any series of preferred stock to elect directors, directors may only beremoved for cause, which removal may be effected, subject to any limitation imposed by law, by the holders ofat least a majority of the voting power of all of our then-outstanding shares of the capital stock entitled to votegenerally at an election of directors;

■ provide that all vacancies, including newly created directorships, may, except as otherwise required by law, befilled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

■ require that any action to be taken by our stockholders must be effected at a duly called annual or specialmeeting of stockholders and not be taken by written consent or electronic transmission;

■ provide that stockholders seeking to present proposals before a meeting of stockholders or to nominatecandidates for election as directors at a meeting of stockholders must provide advance notice in writing, andalso specify requirements as to the form and content of a stockholder’s notice;

■ provide that special meetings of our stockholders may be called only by the chairman of our board of directors,our chief executive officer or president or by our board of directors pursuant to a resolution adopted by amajority of the total number of authorized directors; and

■ not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of commonstock entitled to vote in any election of directors to elect all of the directors standing for election, if they shouldso choose.

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The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, maydiscourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell theirstock at a price above the prevailing market price.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

Among other things, our amended and restated certificate of incorporation and amended and restated bylaws will:

The amendment of any of these provisions would require approval by the holders of at least 66 ⁄3% of the voting power ofall of our then-outstanding common stock entitled to vote generally in the election of directors, voting together as a singleclass.

The combination of these provisions will make it more difficult for our existing stockholders to replace our board ofdirectors as well as for another party to obtain control of us by replacing our board of directors. Because our board ofdirectors has the power to retain and discharge our officers, these provisions could also make it more difficult for existingstockholders or another party to effect a change in management. In addition, the authorization of undesignated preferredstock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences thatcould impede the success of any attempt to change our control.

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directorsand its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are alsodesigned to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights.However, such provisions could have the effect of discouraging others from making tender offers for our shares and mayhave the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibitfluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that the

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benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of anunfriendly or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouragingtakeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.

Choice of Forum

Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware willbe the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach offiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, ourcertificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairsdoctrine. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has beenchallenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings describedabove, a court could find the choice of forum provisions contained in our amended and restated certificate of incorporationto be inapplicable or unenforceable.

Listing

Our common stock has been approved for listing on the NASDAQ Global Market under the symbol “ONS.” We haveapplied for the listing of our units, Series A warrants and Series B warrants on the NASDAQ Global Market under thesymbols “ONSIU,” “ONSIW” and “ONSIZ,” respectively.

Transfer Agent, Registrar and Warrant Agent

The transfer agent and registrar for our common stock and the warrant agent for the Series A warrants and Series Bwarrants included in the units offered hereby is American Stock Transfer & Trust Company, LLC. Its address is6201 15th Avenue, Brooklyn, New York 11219.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our securities, and a liquid trading market for our securities maynot develop or be sustained after this offering. Future sales of our securities, including shares issued upon the exercise ofoutstanding warrants or vesting of restricted stock unit awards, or RSUs, in the public market after the completion of thisoffering and the concurrent private placement, if any, or the perception that those sales may occur, could adversely affectthe prevailing market price for our securities from time to time or impair our ability to raise equity capital in the future. Asdescribed below, only a limited number of shares of our common stock will be available for sale in the public market for aperiod of several months after the completion of this offering due to contractual and legal restrictions on resale describedbelow. Future sales of our securities in the public market either before (to the extent permitted) or after restrictions lapse,or the perception that those sales may occur, could adversely affect the prevailing market price of our securities at suchtime and our ability to raise equity capital at a time and price we deem appropriate.

Sale of Restricted Shares

Based on the number of shares of our common stock outstanding as of December 31, 2015 and after taking into accountthe issuance of an aggregate of 87,287 shares of our common stock in January 2016, upon the closing of this offering andassuming (1) the conversion of all 11,819 outstanding shares of our preferred stock into 1,969,818 shares of commonstock immediately prior to the closing of this offering, assuming an initial public offering price of $6.00 per share ofcommon stock included in the units sold in this offering, and (2) no exercise of the underwriters’ option to purchase875,000 units to cover over-allotments or the sale of any units in the concurrent private placement, we will haveoutstanding an aggregate of 21,969,446 shares of common stock. All of the 5,833,334 shares of common stock includedin the units to be sold in this offering will be freely tradable in the public market without restriction or further registrationunder the Securities Act, except for any shares included in the units sold in this offering to certain of our existing and newinvestors who have entered into a 60-day lock-up agreement with the underwriters in respect of such shares, shares heldby any of our “affiliates” as such term is defined in Rule 144 of the Securities Act, or subject to lock-up agreements,including units purchased in connection with the directed unit program. All remaining shares of common stock held byexisting stockholders immediately prior to the consummation of this offering, including shares issued upon vesting ofRSUs, will be “restricted securities” as such term is defined in Rule 144. These restricted securities were issued and soldby us in private transactions and are eligible for public sale only if registered under the Securities Act or if they qualify foran exemption from registration under the Securities Act, including the exemptions provided by Rule 144 or Rule 701,which rules are summarized below.

Based on the number of shares of our common stock outstanding as of December 31, 2015, in connection with thisoffering, the shares of our common stock (excluding the shares included in the units sold in this offering and except asindicated above) that will generally become available for sale in the public market are as follows:

Approximate Number of Shares First Date Available for Sale into Public Market

16,136,112 shares 181 days after the date of this prospectus, subject in some cases to applicablevolume, manner of sale and other limitations under Rule 144 and Rule 701.

We may issue securities from time to time as consideration for future acquisitions, investments or other corporatepurposes. In the event that any such acquisition, investment or other transaction is significant, the number of securitiesthat we may issue may in turn be significant. We may also grant registration rights covering those securities issued inconnection with any such acquisition and investment.

In addition, the shares of common stock reserved for future issuance under our 2011 Plan, 2015 Plan and ESPP willbecome eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, thelock-up agreements, a registration statement under the Securities Act or an exemption from registration, including Rule144 and Rule 701.

Lock-Up Agreements

In connection with this offering, we, our directors, our executive officers and holders of substantially all of our otheroutstanding shares of common stock or securities convertible into or exchangeable for shares of our common stockoutstanding immediately prior to the closing of this offering, have agreed, subject to certain exceptions, with theunderwriters not to directly or indirectly offer, sell, contract to sell, pledge, grant any option to purchase, make any shortsale or otherwise dispose of or hedge any shares of our common stock or any options to purchase shares of our commonstock, or any securities convertible into or exchangeable for shares of common stock during the period from the date ofthe

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■ 1% of the number of common shares then outstanding, which will equal approximately shares of common stockimmediately after the closing of this offering and the concurrent private placement, if any (calculated as ofDecember 31, 2015 on the basis of the assumptions described above and assuming no exercise of theunderwriter’s option to purchase additional shares and no exercise of outstanding options); or

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lock-up agreement continuing through the date 180 days after the date of this prospectus, except with the prior writtenconsent of Jefferies LLC and Barclays Capital Inc. and certain other exceptions. Additionally, certain of our existing andnew investors have indicated an interest in purchasing up to an aggregate of approximately $20.0 million of units in thisoffering at the initial public offering price. However, because indications of interest are not binding agreements orcommitments to purchase, the underwriters may determine to sell more, fewer or no units in this offering to any of theseinvestors, or any of these investors may determine to purchase more, fewer or no units in this offering. Certain of theseinvestors have agreed to a 60-day lock-up agreement with the underwriters in respect of any units they may acquire in thisoffering. Subject to certain exceptions, these investors will not, directly or indirectly, offer, sell, contract to sell, pledge,grant any option to purchase, make any short sale, or otherwise dispose or hedge any shares of our common stock, anyoptions to purchase shares of our common stock, or any securities convertible into, or exchangeable for shares ofcommon stock for a period of 60 days after the date of this prospectus, except with the prior written consent of JefferiesLLC and Barclays Capital Inc. and certain other exceptions.

In addition to the restrictions contained in the lock-up agreements described above, we have entered into agreements withcertain securityholders, including the investors’ rights agreement and our standard form of option agreement, that containmarket stand-off provisions imposing restrictions on the ability of such securityholders to offer, sell or transfer our equitysecurities for a period of 180 days following the date of this prospectus.

Prior to the completion of the offering, certain of our employees, including our executive officers, and/or directors mayenter into written trading plans that are intended to comply with Rule 10b5-1 under the Exchange Act. Sales under thesetrading plans would not be permitted until the expiration of the lock-up agreements relating to the offering describedabove.

Following the lock-up periods set forth in the agreements described above, and assuming that the representatives of theunderwriters do not release any parties from these agreements and that there is no extension of the lock-up period, all ofthe shares of our common stock that are restricted securities or are held by our affiliates as of the date of this prospectuswill be eligible for sale in the public market in compliance with Rule 144 under the Securities Act.

Additionally, participants in the directed unit program and any directors or officers and their affiliates that purchasecommon stock from the underwriters in the offering have agreed with the underwriters that, for a period of 180 daysfollowing the date of this prospectus, subject to certain exceptions, they will not, directly or indirectly, offer, sell, contract tosell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of or hedge any shares of commonstock.

Rule 144

In general, persons who have beneficially owned restricted shares of our common stock for at least six months, and anyaffiliate of the company who owns either restricted or unrestricted shares of our common stock, are entitled to sell theirsecurities without registration with the SEC under an exemption from registration provided by Rule 144 under theSecurities Act.

In general, under Rule 144, as currently in effect, once we have been subject to the public company reportingrequirements of the Exchange Act for at least 90 days, and we are current in our Exchange Act reporting at the time ofsale, a person (or persons whose shares are required to be aggregated) who is not deemed to have been one of our“affiliates” for purposes of Rule 144 at any time during the 90 days preceding a sale and who has beneficially ownedrestricted securities within the meaning of Rule 144 for at least six months, including the holding period of any prior ownerother than one of our “affiliates,” is entitled to sell those shares in the public market (subject to the lock-up agreementreferred to above, if applicable) without complying with the manner of sale, volume limitations or notice provisions of Rule144, but subject to compliance with the public information requirements of Rule 144. If such a person has beneficiallyowned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than“affiliates,” then such person is entitled to sell such shares in the public market without complying with any of therequirements of Rule 144 (subject to the lock-up agreement referred to above, if applicable). In general, under Rule 144,as currently in effect, once we have been subject to the public company reporting requirements of the Exchange Act for atleast 90 days, our “affiliates,” as defined in Rule 144, who have beneficially owned the shares proposed to be sold for atleast six months, are entitled to sell in the public market, upon expiration of any applicable lock-up agreements and withinany three-month period, a number of those shares of our common stock that does not exceed the greater of:

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■ the average weekly trading volume of our securities on the NASDAQ Global Market, or NASDAQ, during thefour calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

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Such sales under Rule 144 by our “affiliates” or persons selling shares on behalf of our “affiliates” are also subject tocertain manner of sale provisions, notice requirements and to the availability of current public information about us.Notwithstanding the availability of Rule 144, the holders of substantially all of our restricted securities have entered intolock-up agreements as referenced above and their restricted securities will become eligible for sale (subject to the abovelimitations under Rule 144) upon the expiration of the restrictions set forth in those agreements.

Rule 701

In general, under Rule 701 as currently in effect, any of our employees, directors, officers, consultants or advisors whoacquired common stock from us in connection with a written compensatory stock or option plan or other written agreementin compliance with Rule 701 under the Securities Act before the effective date of the registration statement of which thisprospectus is a part (to the extent such common stock is not subject to a lock-up agreement) and who are not our“affiliates” as defined in Rule 144 during the immediately preceding 90 days, is entitled to rely on Rule 701 to resell suchshares beginning 90 days after the date of this prospectus in reliance on Rule 144, but without complying with the notice,manner of sale, public information requirements or volume limitation provisions of Rule 144. Persons who are our“affiliates” may resell those shares beginning 90 days after the date of this prospectus without compliance with Rule 144’sminimum holding period requirements (subject to the terms of the lock-up agreement referred to below, if applicable).

Registration Rights

Based on the number of shares outstanding as of December 31, 2015 and after taking into account the issuance of anaggregate of (x) 87,287 shares of our common stock in January 2016 and (y) the conversion of all 11,819 outstandingshares of Series A preferred stock into 1,969,818 shares of common stock immediately prior to the closing of this offering(assuming an initial public offering price of $6.00 per share of common stock included in the units sold in this offering),after the consummation of this offering but excluding any units that may be sold in the concurrent private placement, theholders of approximately 4,078,029 shares of our common stock, or their transferees, will, subject to any lock-upagreements they have entered into, be entitled to certain rights with respect to the registration of the offer and sale ofthose shares under the Securities Act. The holders of shares of common stock issuable upon the exercise of warrants toacquire an aggregate of 1,520,284 shares of our common stock to be issued to certain investors upon the closing of thisoffering will also be entitled to rights with respect to registration under the Securities Act. For a description of theseregistration rights, please see the section titled “Description of Securities — Stockholder Registration Rights.” If the offerand sale of these shares are registered, they will be freely tradable without restriction under the Securities Act immediatelyupon the effectiveness of the registration. As a party to the investors’ rights agreement, Sabby would also haveregistration rights with respect to the shares included in the units, as well as the shares issuable upon exercise of thewarrants included in the units that Sabby has indicated an interest in acquiring in the concurrent private placement.

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■ an individual who is a citizen or resident of the United States;■ a corporation (or other entity treated as a corporation) created or organized in the United States or under the

laws of the United States or of any state thereof or the District of Columbia;■ an estate, the income of which is subject to U.S. federal income tax regardless of its source; or■ a trust if (1) a court within the United States can exercise primary supervision over the trust’s administration and

one or more U.S. persons have the authority to control all of the trust’s substantial decisions or (2) the trust hasa valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

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MATERIAL U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS

The following is a general discussion of the material U.S. federal income and estate tax consequences of the acquisition,ownership and disposition of units by “U.S. Holders” and “Non-U.S. Holders” (each as defined below). This discussion isfor general information purposes only and does not consider all aspects of U.S. federal income taxation that may berelevant to particular holders in light of their individual circumstances or to certain types of holders subject to special taxrules, including partnerships or other pass-through entities for U.S. federal income tax purposes, banks, financialinstitutions or other financial services entities, foreign governments or governmental entities, brokers or dealers insecurities or currencies, insurance companies, tax-exempt organizations, pension plans, real estate investment trusts,controlled foreign corporations, passive foreign investment companies, corporations that accumulate earnings to avoidU.S. federal income tax, persons who use or are required to use mark-to-market accounting, persons that hold units aspart of a “straddle,” a “hedge,” a “conversion transaction,” “synthetic security,” integrated investment or other risk reductionstrategy, certain former citizens or permanent residents of the United States, persons who hold or receive units pursuantto the exercise of an employee stock option or otherwise as compensation, or investors in pass-through entities (or entitiesthat are treated as disregarded entities for U.S. federal income tax purposes). In addition, this discussion does notaddress, except to the extent discussed below, the effects of any applicable gift or estate tax, and this discussion does notaddress the potential application of alternative minimum tax, or any tax considerations that may apply to holders of unitsunder state, local or non-U.S. tax laws and any other U.S. federal tax laws.

This discussion is based on the Internal Revenue Code of 1986, as amended, or the Code, and applicable TreasuryRegulations, rulings, administrative pronouncements and judicial decisions that are issued and available as of the date ofthis registration statement, all of which are subject to change or differing interpretations at any time with possibleretroactive effect. We have not sought, and will not seek, any ruling from the Internal Revenue Service, or the IRS, withrespect to the tax consequences discussed herein, and there can be no assurance that the IRS will not take a positioncontrary to the tax consequences discussed below or that any position taken by the IRS would not be sustained. Thisdiscussion is limited to a holder who will hold units as capital assets within the meaning of the Code (generally, propertyheld for investment). For purposes of this discussion, the term “U.S. Holder” means a beneficial owner of units that is:

A Non-U.S. Holder is a beneficial owner that is not a partnership (or entity or arrangement treated as a partnership forU.S. federal income tax purposes) and is not a U.S. Holder. If a partnership (or entity or arrangement treated as apartnership for U.S. federal income tax purposes) is a beneficial owner of units, the tax treatment of such partnership anda partner in such partnership generally will depend upon the status of the partner and the activities of the partnership. Ifyou are a partner of a partnership holding our shares, you should consult your tax advisor regarding the tax consequencesof the purchase, ownership and disposition of units.

THIS SUMMARY IS NOT INTENDED TO BE TAX ADVICE. PROSPECTIVE INVESTORS SHOULD CONSULT THEIRTAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OFACQUIRING, OWNING AND DISPOSING OF OUR UNITS, AS WELL AS ANY TAX CONSEQUENCES ARISINGUNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS AND ANY OTHER U.S. FEDERAL TAX LAWS.

Tax Classification of a Unit

There is no authority directly addressing the treatment, for U.S. federal income tax purposes, of securities with termssubstantially the same as the units, and, therefore, such treatment is not entirely clear. We intend to treat each unit forU.S. federal income tax purposes as a unit consisting of one share of common stock, one-half of a Series A warrant andone-half of a Series B warrant. Pursuant to this treatment, each holder of a unit must allocate the purchase price paid bysuch holder for such unit between the ordinary share and the warrants based on their respective relative fair marketvalues. In addition, pursuant to this treatment, a holder’s initial tax basis in the ordinary share and the warrants included ineach unit should equal the portion of the purchase price of the unit allocated thereto.

Our view of the characterization of the units described above and a holder’s purchase price allocation are not, however,binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the

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units, no assurance can be given that the IRS or the courts will agree with the characterization described above or thediscussion below. Accordingly, prospective investors are urged to consult their own tax advisors regarding the U.S. federaltax consequences of an investment in a unit (including alternative characterizations of a unit) and with respect to any taxconsequences arising under the laws of any state, local or non-United States taxing jurisdiction. Unless otherwise stated,the following discussions are based on the assumption that the characterization of the units and the allocation describedabove are accepted for U.S. federal income tax purposes.

U.S. HoldersExercise or Lapse of Warrants

Except with respect to any cash paid in connection with the exercise of a warrant, a U.S. Holder will not recognize taxableincome, gain or loss upon the exercise of a warrant. Such U.S. Holder’s adjusted tax basis in our common stock receivedby such holder generally will be an amount equal to the sum of the U.S. Holder’s initial investment in the warrant (i.e., theportion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “— TaxClassification of a Unit”) and the exercise price (i.e., the exercise price for each one-half of a Series A warrant and theexercise price for each one-half of a Series B warrant). The holding period for our common stock received pursuant to theexercise of a warrant will begin on the date following the date of exercise and will not include the period during which theU.S. Holder held the warrant.

If a warrant is allowed to lapse unexercised, a U.S. Holder will recognize a capital loss in an amount equal to its tax basisin the warrant. Such loss will be long-term capital loss if the warrant has been held for more than one year as of the datethe warrant lapsed. The deductibility of capital losses is subject to limitations.

If we were to make a distribution in cash or other property with respect to our common stock after the issuance of thewarrants, then we may, in certain circumstances, make a corresponding distribution to a warrant holder at the time whensuch warrants are exercised. While the U.S. federal income tax treatment of such payment is unclear and other taxtreatments are possible, we intend to treat any such payment as a distribution with respect to our common stock at thetime when it is paid. See “Distributions on Our Common Stock” below.

Distributions on Our Common Stock

In general, distributions, if any, paid on our common stock to a U.S. Holder will constitute dividends for U.S. federalincome tax purposes to the extent paid from current and accumulated earnings and profits, as determined for U.S. federalincome tax purposes. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return ofcapital and will first reduce a U.S. Holder's adjusted tax basis in our common stock, but not below zero. Any excess will betreated as capital gain from the sale of our common stock in the manner described under “Disposition of Our CommonStock” below. Dividends received by certain non-corporate U.S. Holders (including individuals) may be eligible for taxationat preferential rates provided certain holding period and other requirements are satisfied. Distributions received bycorporate U.S. Holders of our common stock constituting dividends for U.S. federal income tax purposes generally will beeligible for the dividends-received deduction so long as certain holding period and other requirements are satisfied. Noassurance can be given that we will have sufficient earnings and profits to cause dividends to be eligible for a dividendsreceived deduction.

Gain on Sale, Exchange or Other Disposition of Our Common Stock and Warrants

Upon the sale, certain qualifying redemptions, or other taxable disposition of shares of our common stock, or a sale orother taxable disposition of the warrants, a U.S. Holder generally will recognize capital gain or loss equal to the difference,if any, between (i) the amount of cash and the fair market value of any property received upon such taxable dispositionand (ii) the U.S. Holder’s adjusted tax basis in the shares of our common stock or warrants sold or otherwise disposed of.Such capital gain or loss will be long-term capital gain or loss if a U.S. Holder’s holding period in the shares of commonstock or warrants, as applicable, is more than one year at the time of the taxable disposition. Long-term capital gainsrecognized by certain non-corporate U.S. Holders (including individuals) may be eligible for taxation at preferential rates.Deductions for capital losses are subject to limitations under the Code.

Additional Tax on Passive Income

Individuals, estates and certain trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicaresurtax on “net investment income” including, among other things, dividends and net gain from disposition of property(other than property held in certain trades or businesses). U.S. Holders should consult their own tax advisors regardingthe effect, if any, of this tax on their ownership and disposition of shares of our common stock and warrants.

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Information Reporting and Backup Withholding

Unless U.S. Holders are exempt recipients, such as corporations, information reporting and backup withholding may applywith respect to payments of dividends (including constructive distributions) on our common stock and to certain paymentsof proceeds on the sale or other disposition of our common stock and warrants if U.S. Holders fail to supply accuratetaxpayer identification numbers or otherwise fail to comply with applicable U.S. information reporting or certificationrequirements. The current backup withholding rate is 28%.

Non-U.S. HoldersExercise or Lapse of Warrants

Except with respect to any cash received upon exercise of a warrant, a Non-U.S. Holder will generally not be required torecognize taxable income gain or loss upon the exercise of a warrant. Such Non-U.S. Holder’s adjusted tax basis in ourcommon stock received by such holder generally will be an amount equal to the sum of the Non-U.S. Holder’s initialinvestment in the warrant (i.e., the portion of the Non-U.S. Holder’s purchase price for a unit that is allocated to thewarrant, as described above under “— Tax Classification of a Unit”) and the exercise price (i.e., the exercise price for eachone-half of a Series A warrant and the exercise price for each one-half of a Series B warrant). The holding period for ourcommon stock received pursuant to the exercise of a warrant will begin on the date following the date of exercise and willnot include the period during which the Non-U.S. Holder held the warrant.

If a warrant is allowed to lapse unexercised, a Non-U.S. Holder will recognize a capital loss in an amount equal to its taxbasis in the warrant. Such loss will be long-term capital loss if the warrant has been held for more than one year as of thedate the warrant lapsed. The deductibility of capital losses is subject to limitations.

If we were to make a distribution in cash or other property with respect to our common stock after the issuance of thewarrants, then we may, in certain circumstances, make a corresponding distribution to a warrant holder at the time whensuch warrants are exercised. While the U.S. federal income tax treatment of such payment is unclear and other taxtreatments are possible, we intend to treat any such payment as a distribution with respect to our common stock at thetime when it is paid. See “Distributions on Our Common Stock” below.

Distributions on Our Common StockIn general, subject to the discussion below under the headings “Information Reporting and Backup Withholding” and“Foreign Accounts,” distributions, if any, paid on our common stock to a Non-U.S. Holder (to the extent paid out of ourcurrent or accumulated earnings and profits, as determined under U.S. federal income tax principles) will constitutedividends and be subject to U.S. withholding tax at a rate equal to 30% of the gross amount of the dividend, or a lowerrate prescribed by an applicable income tax treaty, unless the dividends are effectively connected with a trade or businesscarried on by the Non-U.S. Holder within the United States. The portion of any distribution that exceeds our current andaccumulated earnings and profits will be treated first as reducing the Non-U.S. Holder’s basis in its shares of commonstock, but not below zero, and to the extent it exceeds the Non-U.S. Holder’s basis, as gain from the sale or exchange ofour common stock (see “Gain on Sale, Exchange or Other Taxable Disposition of Common Stock” below).

A Non-U.S. Holder who claims the benefit of an applicable income tax treaty generally will be required to satisfy certaincertification and other requirements prior to the distribution date. Such Non-U.S. Holders must generally provide us or ourpaying agent with a properly executed IRS Form W-8BEN or IRS Form W-8BEN-E (or other appropriate form) claiming anexemption from or reduction in withholding under an applicable income tax treaty. Such certificate must be provided beforethe payment of dividends and must be updated periodically. If tax is withheld in an amount in excess of the amountapplicable under an income tax treaty, a refund of the excess amount may generally be obtained by a Non-U.S. Holder bytimely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regardingtheir entitlement to benefits under an applicable income tax treaty.

Dividends that are effectively connected with a Non-U.S. Holder’s conduct of a U.S. trade or business generally will not besubject to the 30% U.S. withholding tax if the Non-U.S. Holder files the required forms, including IRS Form W-8ECI, withus or our paying agent. Instead, such a Non-U.S. Holder generally will be subject to U.S. federal income tax on thosedividends on a net income basis at regular graduated rates in the same manner as if the Non-U.S. Holder were a residentof the United States (except to the extent provided in an applicable income tax treaty, which may require that suchdividends be attributable to a U.S. permanent establishment or fixed base in order to be subject to tax as describedherein). A corporate Non-U.S. Holder that receives effectively connected dividends may be subject to an additional branchprofits tax at a rate of 30% (or such lower rate as may be prescribed by an applicable income tax treaty) on its effectivelyconnected earnings and profits, as adjusted under the Code.

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(1) the gain is effectively connected with a trade or business carried on by the Non-U.S. Holder within the United States(and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base ofthe Non-U.S. Holder);

(2) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year ofdisposition and certain other conditions are met; or

(3) we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at anytime during the shorter of the five year period ending on the date of disposition or the period that the Non-U.S. Holderheld the common stock or warrants, and, in the case where shares of our common stock are regularly traded on anestablished securities market, the Non-U.S. Holder owns, or is treated as owning, more than 5% of our commonstock at any time during the foregoing period (including for this purpose any interest in us which is convertible intoour common stock, which may include warrants).

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Gain on Sale, Exchange or Other Disposition of Our Common Stock and Warrants

In general, subject to the discussion below under the headings “Information Reporting and Backup Withholding” and“Foreign Accounts,” a non-U.S. holder will not be subject to U.S. federal income tax or withholding tax on any gain realizedupon such holder’s sale, exchange or other disposition of shares of our common stock or warrants unless:

Net gain realized by a Non-U.S. Holder that is described in clause (1) above generally will be subject to the regulargraduated U.S. federal income tax rates in the same manner as if the Non-U.S. Holder were a resident of the UnitedStates. Any gains of a corporate Non-U.S. Holder described in clause (1) above may also be subject to an additional“branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on itseffectively connected earnings and profits, as adjusted under the Code.

Gain realized by an individual Non-U.S. Holder described in clause (2) above will be subject to a flat 30% tax, which gainmay be offset by U.S. source capital losses, even though the individual is not considered a resident of the United States.

For purposes of clause (3) above, a corporation generally is a United States real property holding corporation, orUSRPHC, if the fair market value of its United States real property interests equals or exceeds 50% of the sum of the fairmarket value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Webelieve that we are not, and we do not anticipate that we will become, a USRPHC. However, because the determination ofwhether we are a USRPHC depends on the fair market value of our U.S. real property interests relative to the fair marketvalue of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even ifwe became a USRPHC, a Non-U.S. Holder would not be subject to U.S. federal income tax on a sale, exchange or othertaxable disposition of our common stock by reason of our status as an USRPHC so long as our common stock is regularlytraded on an established securities market (within the meaning of the applicable regulations) and such Non-U.S. Holderdoes not own and is not deemed to own (directly, indirectly or constructively) more than 5% of our outstanding commonstock at any time during the shorter of the five year period ending on the date of disposition and such holder’s holdingperiod. However, no assurance can be provided that our common stock will be regularly traded on an establishedsecurities market for purposes of the rules described above. Prospective investors are encouraged to consult their own taxadvisors regarding the possible consequences to them if we are, or were to become, a USRPHC.

Information Reporting and Backup Withholding

Generally, we must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid, the name andaddress of the recipient, and the amount, if any, of tax withheld. These information reporting requirements apply even ifwithholding was not required because the dividends were effectively connected with the Non-U.S. Holder’s conduct of atrade or business within the United States or withholding was reduced by an applicable income tax treaty. Underapplicable income tax treaties or other agreements, the IRS may make its reports available to the tax authorities in theNon-U.S. Holder’s country of residence or country in which the Non-U.S. Holder was established.

Dividends paid to a Non-U.S. Holder that is not an exempt recipient generally will be subject to backup withholding,currently at a rate of 28%, unless the Non-U.S. Holder certifies to the payor as to its foreign status, which certification maygenerally be made on an applicable IRS Form W-8.

Proceeds from the sale or other disposition of common stock or warrants by a Non-U.S. Holder effected by or through aU.S. office of a broker will generally be subject to information reporting and backup withholding, currently at a rate of 28%,unless the Non-U.S. Holder certifies to the withholding agent under penalties of perjury as to, among other things, itsname, address and status as a Non-U.S. Holder or otherwise establishes an exemption. Payment of disposition proceeds

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effected outside the United States by or through a non-U.S. office of a non-U.S. broker generally will not be subject toinformation reporting or backup withholding if the payment is not received in the United States. Information reporting, butgenerally not backup withholding, will apply to such a payment if the broker has certain connections with the United Statesunless the broker has documentary evidence in its records that the beneficial owner thereof is a Non-U.S. Holder andspecified conditions are met or an exemption is otherwise established.

Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules from a payment to aNon-U.S. Holder that results in an overpayment of taxes generally will be refunded, or credited against the holder’s U.S.federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

Foreign Accounts

A U.S. federal withholding tax of 30% may apply to dividends on, and the gross proceeds of, a disposition of our commonstock (or a disposition of warrants) paid to a “foreign financial institution” (as specially defined under applicable rules)unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collectand provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution(which includes certain equity holders of such institution, as well as certain account holders that are foreign entities withU.S. owners) or otherwise qualifies for an exemption from these rules. This U.S. federal withholding tax of 30% will alsoapply to payments of dividends on, and the gross proceeds of, a disposition of our common stock (or a disposition ofwarrants) paid to a non-financial foreign entity (as specifically defined by applicable rules), unless such entity eithercertifies it does not have any substantial direct or indirect U.S. owners or provides the withholding agent with a certificationidentifying substantial direct and indirect U.S. owners of the entity or otherwise qualifies for an exemption from these rules.The withholding tax described above will not apply if the foreign financial institution or non-financial foreign entityotherwise qualifies for an exemption from the rules. Under certain circumstances, a Non-U.S. Holder might be eligible forrefunds or credits of such taxes. The United States has entered into agreements with certain countries that modify thesegeneral rules for entities resident in those countries. Prospective investors are encouraged to consult with their own taxadvisors regarding the possible implications of these rules on their investment in our common stock.

The withholding provisions described above currently apply to payments of dividends on our common stock and will applyto payments of gross proceeds from a sale or other disposition of our common stock by a foreign financial institution on orafter January 1, 2019.

U.S. Federal Estate Tax

An individual who at the time of death is not a citizen or resident of the United States and who is treated as the owner of,or has made certain lifetime transfers of, an interest in our common stock will be required to include the value thereof inhis or her taxable estate for U.S. federal estate tax purposes, and may be subject to U.S. federal estate tax unless anapplicable estate tax treaty provides otherwise. The test for whether an individual is a resident of the United States forU.S. federal estate tax purposes differs from the test used for U.S. federal income tax purposes. Some individuals,therefore, may be “Non-U.S. Holders” for U.S. federal income tax purposes, but not for U.S. federal estate tax purposes,and vice versa.

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UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement, dated , 2016, between us,Jefferies LLC and Barclays Capital Inc., as the representatives of the underwriters named below, we have agreed to sell tothe underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the respectivenumber of units shown opposite its name below:

UnderwriterNumber of

Units

Jefferies LLC Barclays Capital Inc.Cantor Fitzgerald & Co.

Total 5,833,334

The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditionsprecedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legalmatters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the units if any ofthem are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments ofthe nondefaulting underwriters may be increased or the underwriting agreement may be terminated. We have agreed toindemnify the underwriters and certain of their controlling persons against certain liabilities, including liabilities under theSecurities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.

The underwriters have advised us that, following the pricing of this offering, they currently intend to make a market in oursecurities as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and theunderwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly,no assurance can be given as to the liquidity of the trading market for the units, that you will be able to sell any of thecommon stock or warrants held by you at a particular time or that the prices that you receive when you sell will befavorable.

The underwriters are offering the units subject to their acceptance of the units from us and subject to prior sale. Theunderwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commission and Expenses

The underwriters have advised us that they propose to offer the units to the public at the initial public offering price setforth on the cover page of this prospectus and to certain dealers, which may include the underwriters, at that price less aconcession not in excess of $ per unit. The underwriters may allow, and certain dealers may reallow, a discount fromthe concession not in excess of $ per unit to certain brokers and dealers. Certain of the underwriters may sell sharesthrough one or more of their affiliates as selling agents. After the offering, the initial public offering price, concession andreallowance to dealers may be reduced by the representatives. No such reduction will change the amount of proceeds tobe received by us as set forth on the cover page of this prospectus.

The following table shows the public offering price, the underwriting discounts and commissions that we are to pay theunderwriters and the proceeds, before expenses, to us in connection with this offering. Such amounts are shownassuming both no exercise and full exercise of the underwriters’ option to purchase additional units.

Total

Per Unit

WithoutOption toPurchaseAdditional

Units

WithOption toPurchaseAdditional

Units

Public offering price $ $ $ Underwriting discounts and commissions paid by us $ $ $Proceeds to us, before expenses $ $ $

We estimate expenses payable by us in connection with this offering, other than the underwriting discounts andcommissions referred to above, will be approximately $2.8 million. We have also agreed to reimburse the underwriters for

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certain expenses, including an amount not to exceed $35,000 in connection with the clearance of this offering with theFinancial Industry Regulatory Authority, as set forth in the underwriting agreement.

Determination of Offering Price

Prior to this offering, there has not been a public market for our units, common stock or warrants. Consequently, the initialpublic offering price for our units will be determined by negotiations between us and the representatives. Among thefactors to be considered in these negotiations will be prevailing market conditions, our financial information, marketvaluations of other companies that we and the underwriters believe to be comparable to us, estimates of our businesspotential, the present state of our development and other factors deemed relevant.

We offer no assurances that the initial public offering price will correspond to the price at which the units, common stock orwarrants will trade in the public market subsequent to the offering or that an active trading market for the common stockwill develop and continue after the offering.

Listing

Our common stock has been approved for listing on the NASDAQ Global Market under the symbol “ONS.” We haveapplied for the listing of our units, Series A warrants and Series B warrants on the NASDAQ Global Market under thesymbols “ONSIU,” “ONSIW” and “ONSIZ,” respectively.

Stamp Taxes

If you purchase units offered in this prospectus, you may be required to pay stamp taxes and other charges under thelaws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

Option to Purchase Additional Units

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase, fromtime to time, in whole or in part, up to an aggregate 875,000 units from us at the public offering price set forth on the coverpage of this prospectus, less underwriting discounts and commissions. If the underwriters exercise this option, eachunderwriter will be obligated, subject to specified conditions, to purchase a number of additional shares proportionate tothat underwriter’s initial purchase commitment as indicated in the table above. This option may be exercised only if theunderwriters sell more units than the total number set forth on the cover page of this prospectus.

Directed Unit Program

At our request, the underwriters have reserved 291,666 units, or 5% of the units being offered by this prospectus(excluding the units that may be issued upon the underwriters’ exercise of their over-allotment option to purchaseadditional units) for sale at the initial public offering price, to employees, executive officers, directors, stockholders,business associates, persons related to the company and our affiliates and their friends and family through a directed unitprogram. The number of units available for sale to the general public in the public offering will be reduced by the numberof units these individuals purchase. Any reserved units that are not so purchased will be offered by the underwriters to thegeneral public on the same basis as the other units offered hereby. Each person buying units through the directed unitprogram will be subject to the same 180-day lock-up period described above. We have agreed to indemnify theunderwriter conducting the directed unit program against certain liabilities and expenses, including liabilities under theSecurities Act, in connection with the directed unit program.

No Sales of Similar Securities

We, our officers, directors and holders of all or substantially all our outstanding capital stock have agreed, subject tospecified exceptions, not to directly or indirectly, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter intoany transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actualdisposition or effective economic disposition due to cash settlement or otherwise) by such shareholder or any affiliate ofsuch shareholder or any person in privity with such shareholder or any affiliate of such shareholder), directly or indirectly,including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission,or the SEC, in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalentposition within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules andregulations of the SEC promulgated thereunder with respect to, any shares of capital stock of the Company or anysecurities

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convertible into, or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any suchtransaction, for a period from the date hereof until 180 days after the date of the underwriting agreement. Additionally,certain of our existing and new investors have indicated an interest in purchasing up to an aggregate of approximately$20.0 million of units in this offering at the initial public offering price. However, because indications of interest are notbinding agreements or commitments to purchase, the underwriters may determine to sell more, fewer or no units in thisoffering to any of these investors, or any of these investors may determine to purchase more, fewer or no units in thisoffering. Any units purchased by certain of these investors in this offering will be subject to a 60-day lock-up agreementwith the underwriters. These lock-up agreements are described in the section titled “Shares Eligible for Future Sale.”

Jefferies LLC and Barclays Capital Inc. may, in their discretion and at any time or from time to time before the terminationof the 60-day or 180-day periods, as applicable, release all or any portion of the securities subject to lock-up agreements.There are no existing agreements between the underwriters and any of our stockholders who will execute a lock-upagreement, providing consent to the sale of shares prior to the expiration of the lock-up periods.

StabilizationThe underwriters have advised us that they, pursuant to Regulation M under the Securities Exchange Act of 1934, asamended, certain persons participating in the offering may engage in short sale transactions, stabilizing transactions,syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may havethe effect of stabilizing or maintaining the market price of the units at a level above that which might otherwise prevail inthe open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.

“Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional unitsin this offering. The underwriters may close out any covered short position by either exercising their option to purchaseadditional units or purchasing units in the open market. In determining the source of units to close out the covered shortposition, the underwriters will consider, among other things, the price of units available for purchase in the open market ascompared to the price at which they may purchase units through the option to purchase additional units.

“Naked” short sales are sales in excess of the option to purchase additional units. The underwriters must close out anynaked short position by purchasing units in the open market. A naked short position is more likely to be created if theunderwriters are concerned that there may be downward pressure on the price of the units in the open market after pricingthat could adversely affect investors who purchase in this offering.

A stabilizing bid is a bid for the purchase of units on behalf of the underwriters for the purpose of fixing or maintaining theprice of the units. A syndicate covering transaction is the bid for or the purchase of units on behalf of the underwriters toreduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions,the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the marketprice of our units or preventing or retarding a decline in the market price of our units. As a result, the price of our units maybe higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting theunderwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering ifthe unit originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore havenot been effectively placed by such syndicate member.

Neither we, nor any of the underwriters make any representation or prediction as to the direction or magnitude of anyeffect that the transactions described above may have on the price of our units. The underwriters are not obligated toengage in these activities and, if commenced, any of the activities may be discontinued at any time.

Electronic DistributionA prospectus in electronic format may be made available by e-mail or on the websites or through online servicesmaintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offeringterms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific numberof units for sale to online brokerage account holders. Any such allocation for online distributions will be made by theunderwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on theunderwriters’ websites and any information contained in any other website maintained by any of the underwriters is notpart of this prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied uponby investors.

Other Activities and RelationshipsThe underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which mayinclude securities trading, commercial and investment banking, financial advisory, investment management, investment

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■ a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act;■ a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an

accountant’s certificate to the Company which complies with the requirements of section 708(8)(c)(i) or (ii) of theCorporations Act and related regulations before the offer has been made;

■ a person associated with the Company under Section 708(12) of the Corporations Act; or■ a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act.

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research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their affiliateshave, from time to time, performed, and may in the future perform, various commercial and investment banking andfinancial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and certain of their affiliates may make or holda broad array of investments and actively trade debt and equity securities (or related derivative securities) and financialinstruments (including bank loans) for their own account and for the accounts of their customers, and such investment andsecurities activities may involve securities and/or instruments issued by us and our affiliates. If the underwriters or theirrespective affiliates have a lending relationship with us, they routinely hedge their credit exposure to us consistent withtheir customary risk management policies. The underwriters and their respective affiliates may hedge such exposure byentering into transactions which consist of either the purchase of credit default swaps or the creation of short positions inour securities or the securities of our affiliates, including potentially the units offered hereby. Any such short positions couldadversely affect future trading prices of the units offered hereby. The underwriters and certain of their respective affiliatesmay also communicate independent investment recommendations, market color or trading ideas and/or publish or expressindependent research views in respect of such securities or instruments and may at any time hold, or recommend toclients that they acquire, long and/or short positions in such securities and instruments.

Selling RestrictionsAustralia

This prospectus is not a disclosure document for the purposes of Australia’s Corporations Act 2001 (Cth) of Australia, orCorporations Act, has not been lodged with the Australian Securities & Investments Commission and is only directed tothe categories of exempt persons set out below. Accordingly, if you receive this prospectus in Australia:

You confirm and warrant that you are either:

To the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated personor professional investor under the Corporations Act any offer made to you under this prospectus is void and incapable ofacceptance.

You warrant and agree that you will not offer any of the securities issued to you pursuant to this prospectus for resale inAustralia within 12 months of those securities being issued unless any such resale offer is exempt from the requirement toissue a disclosure document under section 708 of the Corporations Act.

Canada

The offering of our units in Canada is being made on a private placement basis in reliance on exemptions from theprospectus requirements under the securities laws of each applicable Canadian province and territory where the units maybe offered and sold, and therein may only be made with investors that are purchasing as principal and that qualify as bothan accredited investor, as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptionsand as a permitted client, as such term is defined in National Instrument 31-103 Registration Requirements, Exemptionsand Ongoing Registrant Obligation. Any offer and sale of our units in any province or territory of Canada may only bemade through a dealer that is properly registered under the securities legislation of the applicable province or territorywherein our units are offered and/or sold or, alternatively, by a dealer that qualifies under and is relying upon an exemptionfrom the registration requirements therein.

Any resale of our units by an investor resident in Canada must be made in accordance with applicable Canadiansecurities laws, which may require resales to be made in accordance with prospectus and registration requirements,statutory exemptions from the prospectus and registration requirements or under a discretionary exemption from theprospectus and registration requirements granted by the applicable Canadian securities regulatory authority. These resalerestrictions may under certain circumstances apply to resales of our units outside of Canada.

Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documentsevidencing or relating in any way to the sale of the securities described herein (including for greater certainty anypurchase

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■ to any legal entity which is a “qualified investor” as defined in the Prospectus Directive;■ to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD

Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the ProspectusDirective), as permitted under the Prospectus Directive, subject to obtaining the prior consent of theunderwriters or the underwriters nominated by us for any such offer; or

■ in any other circumstances falling within Article 3(2) of the Prospectus Directive,

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confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaqueinvestisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou serapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus decertitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.

European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each,a “Relevant Member State”), an offer to the public of any units which are the subject of the offering contemplated by thisprospectus may not be made in that Relevant Member State except that an offer to the public in that Relevant MemberState of any units may be made at any time under the following exemptions under the Prospectus Directive, if they havebeen implemented in that Relevant Member State:

provided that no such offer of units shall require us or any of the underwriters to publish a prospectus pursuant to Article 3of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer units to the public” in relation to the units in any RelevantMember State means the communication in any form and by any means of sufficient information on the terms of the offerand the units to be offered so as to enable an investor to decide to purchase or subscribe to the units, as the same maybe varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant MemberState and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevantimplementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive2010/73/EU.

Hong Kong

No securities have been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of anydocument, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal oragent; or to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”)and any rules made under that Ordinance; or in other circumstances which do not result in the document being a“prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong (“CO”) or which do not constitute an offer orinvitation to the public for the purpose of the CO or the SFO. No document, invitation or advertisement relating to thesecurities has been issued or may be issued or may be in the possession of any person for the purpose of issue (in eachcase whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or readby, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect tosecurities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professionalinvestors” as defined in the SFO and any rules made under that Ordinance.

This prospectus has not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus maynot be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members ofthe public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of thesecurities, to confirm that he is aware of the restriction on offers of the securities described in this prospectus and therelevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances thatcontravene any such restrictions.

Japan

The offering has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (LawNo. 25 of 1948 of Japan, as amended), or FIEL, and the Initial Purchaser will not offer or sell any securities, directly orindirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any personresident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offeringor resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemptionfrom the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws,regulations and ministerial guidelines of Japan.

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■ a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business ofwhich is to hold investments and the entire share capital of which is owned by one or more individuals, each ofwhom is an accredited investor; or

■ a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and eachbeneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) ofthe SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall notbe transferred within six months after that corporation or that trust has acquired the units pursuant to an offermade under Section 275 of the SFA except:

■ to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arisingfrom an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

■ where no consideration is or will be given for the transfer;

■ where the transfer is by operation of law;

■ as specified in Section 276(7) of the SFA; or

■ as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures)Regulations 2005 of Singapore.

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Singapore

This prospectus has not been and will not be lodged or registered as a prospectus with the Monetary Authority ofSingapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, orinvitation for subscription or purchase, of the units may not be circulated or distributed, nor may the units be offered orsold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons inSingapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 ofSingapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A),and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and inaccordance with the conditions of, any other applicable provision of the SFA.

Where the units is subscribed or purchased under Section 275 of the SFA by a relevant person which is:

Switzerland

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or onany other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard tothe disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or thedisclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stockexchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing materialrelating to the securities or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this prospectus nor any other offering or marketing material relating to the offering, the Company or the securitieshave been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filedwith, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, andthe offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective InvestmentSchemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under theCISA does not extend to acquirers of securities.

United Kingdom

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualifiedinvestors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals fallingwithin Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the“Order”) and/or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom itmay lawfully be communicated (each such person being referred to as a “relevant person”).

This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or inpart) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is nota relevant person should not act or rely on this document or any of its contents.

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LEGAL MATTERS

The validity of the issuance of our securities offered in this prospectus will be passed upon for us by Cooley LLP,New York, New York. Certain legal matters in connection with this offering will be passed upon for the underwriters byGoodwin Procter LLP, New York, New York.

EXPERTS

The consolidated financial statements of Oncobiologics, Inc. as of September 30, 2014 and 2015 and for the years thenended have been included in this prospectus in reliance upon the report of KPMG LLP, independent registered publicaccounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.The audit report covering the September 30, 2015 consolidated financial statements contains an explanatory paragraphthat states that the Company has incurred recurring losses and negative cash flows from operations since inception andhas an accumulated deficit at September 30, 2015 of $94.1 million and $14.2 million of indebtedness that is due ondemand, which raises substantial doubt about the Company’s ability to continue as a going concern. The consolidatedfinancial statements do not include any adjustments that might result from the outcome of that uncertainty.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securitiesbeing offered by this prospectus. This prospectus does not contain all of the information in the registration statement andits exhibits. For further information about us and the securities offered by this prospectus, we refer you to the registrationstatement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any otherdocument referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or otherdocument filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by thisreference.

You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website athttp://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at100 F Street, NE, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writingto the Public Reference Section of the SEC at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

Upon the closing of this offering, we will be subject to the information reporting requirements of the Exchange Act, and wewill file reports, proxy statements and other information with the SEC. These reports, proxy statements and otherinformation will be available for inspection and copying at the public reference room and web site of the SEC referred toabove. We also maintain a website at www.oncobiologics.com, at which you may access these materials free of charge assoon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information containedon, or that can be accessed through, our website is not a part of this prospectus. Investors should not rely on any suchinformation in deciding whether to purchase our securities. We have included our website address in this prospectussolely as an inactive textual reference.

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ONCOBIOLOGICS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Audited Financial Statements

Report of Independent Registered Public Accounting Firm F-2

Consolidated Balance Sheets as of September 30, 2014 and 2015 F-3

Consolidated Statements of Operations for the Years Ended September 30, 2014 and 2015 F-4

Consolidated Statements of Redeemable Preferred Stock, Common Stock, Noncontrolling Interests andStockholders’ Equity (Deficit) for the Years Ended September 30, 2014 and 2015 F-5

Consolidated Statements of Cash Flows for the Years Ended September 30, 2014 and 2015 F-7

Notes to Consolidated Financial Statements F-8

Unaudited Interim Financial Statements

Consolidated Balance Sheets as of September 30, 2015 and December 31, 2015 F-28

Consolidated Statements of Operations for the Three Months Ended December 31, 2014 and 2015 F-29

Consolidated Statements of Redeemable Preferred Stock, Common Stock, Noncontrolling Interests andStockholders’ Equity (Deficit) for the Three Months Ended December 31, 2015 F-30

Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2014 and 2015 F-31

Notes to Interim Consolidated Financial Statements F-32

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders Oncobiologics, Inc.:

We have audited the accompanying consolidated balance sheets of Oncobiologics, Inc. and Subsidiaries (the Company)as of September 30, 2014 and 2015, and the related consolidated statements of operations, redeemable preferred stock,common stock, noncontrolling interests and stockholders’ equity (deficit), and cash flows for years then ended. Theconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall financial statement presentation. Webelieve that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financialposition of Oncobiologics, Inc. and subsidiaries as of September 30, 2014 and 2015, and the results of their operationsand their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a goingconcern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred recurring losses andnegative cash flows from operations since inception and has an accumulated deficit at September 30, 2015 of $94.1million and $14.2 million of indebtedness that is due on demand, which raises substantial doubt about its ability tocontinue as a going concern. Management’s plan in regards to these matters are also described in Note 2. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KPMG LLP

Philadelphia, Pennsylvania

November 16, 2015, except as to the recapitalization described in Note 3, which is as of April 26, 2016

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Oncobiologics, Inc. Consolidated Balance Sheets

September 30,2014 2015

AssetsCurrent assets:

Cash $ 2,349,313 $ 9,070,975Accounts receivable — 20,000Stock subscription receivable — 4,280,149Prepaid and other current assets 797,279 1,793,109

Total current assets 3,146,592 15,164,233Property and equipment, net 8,009,564 17,759,938Restricted cash 211,452 213,663Deferred offering costs — 960,563Other assets 236,099 910,224

Total assets $ 11,603,707 $ 35,008,621Liabilities, redeemable preferred stock, common stock, noncontrolling interests and stockholders’

equity (deficit)Current liabilities:

Current portion of debt $ 725,706 $ 742,646Current portion of capital lease obligations 132,090 862,849Current portion of stockholder notes 10,624,784 14,214,196Accounts payable 3,101,445 11,563,055Accrued expenses 2,560,279 5,924,648Income taxes payable 1,564,411 1,754,629Deferred revenue 1,501,416 1,979,576

Total current liabilities 20,210,131 37,041,599Long-term debt 3,653,038 2,922,764Capital lease obligations 32,914 1,219,373Stockholder notes — 2,000,000Deferred revenue 6,313,342 6,365,945Stock-based compensation liability 1,557,789 12,726,722Other liabilities 283,700 284,710

Total liabilities 32,050,914 62,561,113Commitments (Note 9)Redeemable preferred stock, common stock and noncontrolling interests:

Redeemable preferred stock, no par value:Series A – 8,000 shares authorized; 3,681 and 3,568 shares issued and outstanding at September 30,

2014 and 2015, respectively; (liquidation preference of $5,072,653 at September 30, 2015) 4,787,996 5,072,653Series B – 4,000 shares authorized; 4,000 shares issued and outstanding; (liquidation preference of

$5,118,208 at September 30, 2015) 4,589,872 5,118,208Redeemable common stock – 1,739,130 shares issued and outstanding 12,225,096 15,426,673Redeemable noncontrolling interests 3,101,047 1,703,777

Total redeemable preferred stock, common stock and noncontrolling interests 24,704,011 27,321,311Stockholders’ equity (deficit):

Common stock, no par value; 100,000,000 shares authorized; 7,670,783 and 9,436,294 shares issued and outstanding at September 30, 2014 and 2015, respectively; actual — 39,844,900

Additional paid-in capital — —Accumulated deficit (45,151,218 (94,064,286

Total Oncobiologics, Inc. stockholders’ equity (deficit) (45,151,218 (54,219,386Noncontrolling interests — (654,417

Total stockholders’ equity (deficit) (45,151,218 (54,873,803Total liabilities, redeemable preferred stock, common stock, noncontrolling interests and stockholders’

equity (deficit) $ 11,603,707 $ 35,008,621

See accompanying notes to consolidated financial statements

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Oncobiologics, Inc. Consolidated Statements of Operations

Year Ended September 30,2014 2015

Collaboration revenues $ 9,050,542 $ 5,219,237

Operating expenses:Research and development 14,124,631 38,876,040General and administrative 7,318,314 12,905,823

21,442,945 51,781,863

Loss from operations (12,392,403 (46,562,626Interest expense 901,052 2,297,339

Loss before income taxes (13,293,455 (48,859,965Income tax expense (benefit) 439,018 (190,111

Net loss (13,732,473 (48,669,854Less: Net loss attributable to noncontrolling interests — (1,276,571

Net loss attributable to Oncobiologics, Inc. (13,732,473 (47,393,283Accretion of redeemable preferred stock and noncontrolling interests (3,588,996 (4,306,488Deemed dividends upon the repurchase of Series A redeemable preferred stock and

redeemable noncontrolling interests (3,336,855 (1,298,631

Net loss attributable to common stockholders of Oncobiologics, Inc. $ (20,658,324 $ (52,998,402

Per share information:Net loss per share of common stock, basic and diluted $ (2.43 $ (5.43

Weighted-average shares outstanding, basic and diluted 8,509,654 9,753,616

Pro forma net loss per share of common stock – basic and diluted (unaudited) $ (3.35

Pro forma weighted average shares outstanding (unaudited) 14,143,696

See accompanying notes to consolidated financial statements

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Oncobiologics, Inc. Consolidated Statements of Redeemable Preferred Stock, Common Stock, Noncontrolling Interests and Stockholders’ Equity (Deficit)

Redeemable Preferred Stock, Common Stock and Noncontrolling Interests Stockholders’ Equity (Deficit)Preferred Stock

Common Stock Noncontrolling Interests

Common Stock Accumulated Deficit

Noncontrolling Interests

TotalStockholders’ Equity (Deficit)

Series A Series BShares Amount Shares Amount Shares Amount Shares Amount

Balance at October 1, 2013 6,995 $ 8,226,922 3,600 $ 3,067,039 — $ — $ 2,829,733 9,665,786 $ — $ (22,608,182 $ — $ (22,608,182Sale of redeemable common stock,

net of issuance costs — — — — 1,739,130 10,895,000 — — — — — —

Sale of Series B redeemablepreferred stock and commonstock, net of issuance costs — — 400 252,000 — — — 115,942 148,000 — — 148,000

Issuance of restricted stock — — — — — — — 90,869 — — — —Repurchase of restricted stock in

exchange for notes payable — — — — — — — (636,376 (148,000 (949,750 — (1,097,750

Exchange of restricted stock forperformance-based stock units — — — — — — — (602,463 — — — —

Reclassification of equity classifiedstock-based compensation — — — — — — — — — (364,187 — (364,187

Employee tax witholdings related to the vesting of restricted stock — — — — — — — (2,831 — (23,153 — (23,153

Repurchase of common stock — — — — — — — (960,144 — (3,312,500 — (3,312,500Repurchase of Series A redeemable

preferred stock and deemed dividends (3,314 (4,155,679 — — — — — — — (3,336,855 — (3,336,855

Stock-based compensation expense — — — — — — — — 2,764,878 — — 2,764,878

Accretion of redeemable preferredstock, common stock andnoncontrolling interests — 716,753 — 1,270,833 — 1,330,096 271,314 — (2,764,878 (824,118 — (3,588,996

Net loss — — — — — — — — — (13,732,473 — (13,732,473Balance at September 30, 2014 3,681 4,787,996 4,000 4,589,872 1,739,130 12,225,096 3,101,047 7,670,783 — (45,151,218 — (45,151,218

See accompanying notes to consolidated financial statements

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Oncobiologics, Inc.Consolidated Statements of Redeemable Preferred Stock, Common Stock, Noncontrolling Interests and Stockholders’ Equity (Deficit)

(Continued)

Redeemable Preferred Stock, Common Stock and Noncontrolling Interests Stockholders’ Equity (Deficit)Preferred Stock

Common Stock NoncontrollingInterests

Common Stock AccumulatedDeficit

NoncontrollingInterests

TotalStockholders’Equity (Deficit)

Series A Series BShares Amount Shares Amount Shares Amount Shares Amount

Distribution of common stock inSonnet Biotherapeutics, Inc. tostockholders — — — — — — — — — (221,154 221,154 —

Contributions to noncontrollinginterests — — — — — — — — — — 401,000 401,000

Repurchase of Series A redeemable preferred stock and deemed dividends (113 (142,370 — — — — — — — (83,631 — (83,631

Repurchase of redeemablenoncontrolling interests anddeemed dividends — — — — — — (1,546,818 — — (1,215,000 — (1,215,000

Forfeitures of restricted stock — — — — — — — — — — — —Sale of common stock, net of

issuance costs — — — — — — — 1,765,511 44,142,463 — — 44,142,463Accretion of redeemable preferred

stock, common stock andnoncontrolling interests — 427,027 — 528,336 — 3,201,577 149,548 — (4,306,488 — — (4,306,488

Stock-based compensation expense — — — — — — — — 8,925 — — 8,925

Net loss — — — — — — — — — (47,393,283 (1,276,571 (48,669,854Balance at September 30, 2015 3,568 $ 5,072,653 4,000 $ 5,118,208 1,739,130 $ 15,426,673 $ 1,703,777 9,436,294 $ 39,844,900 $ (94,064,286 $ (654,417 $ (54,873,803

See accompanying notes to consolidated financial statements

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Oncobiologics, Inc. Consolidated Statements of Cash Flows

Year Ended September 30,2014 2015

Operating activities:Net loss $ (13,732,473 $ (48,669,854Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 878,477 1,824,600Non-cash interest expense 12,264 12,264Stock-based compensation 3,958,480 11,177,858Changes in operating assets and liabilities:

Accounts receivable — (20,000Prepaid expenses and other current assets (719,302 (1,021,852Other assets (84,330 (322,729Accounts payable (96,403 6,580,722Accrued expenses 598,266 2,240,800Income taxes payable 1,084,921 190,218Deferred revenue 949,458 530,763Other liabilities 130,173 1,010

Net cash used in operating activities (7,020,469 (27,476,200Investing activities:

Purchase of property and equipment (2,366,772 (8,804,244Net cash used in investing activities (2,366,772 (8,804,244

Financing activities:Proceeds from the sale of Series B redeemable preferred stock 252,000 —Repurchase of Series A redeemable preferred stock (4,128,000 (226,001Proceeds from the sale of redeemable common stock 10,895,000 —Proceeds from the sale of common stock 148,000 41,249,998Proceeds from the sale of equity in noncontrolling interest — 401,000Payments of capital leases obligations (193,973 (686,676Proceeds from debt 2,460,434 —Repayment of debt (753,531 (725,598Proceeds from stockholder notes 6,000,000 10,880,252Repayment of stockholder notes (3,125,000 (7,888,658Change in restricted cash (3,383 (2,211Payment of employee tax witholdings related to the vesting of restricted stock (23,153 —Payment of financing costs (54,248 —Net cash provided by financing activities 11,474,146 43,002,106

Net increase in cash 2,086,905 6,721,662Cash at beginning of year 262,408 2,349,313Cash at end of year $ 2,349,313 $ 9,070,975Supplemental disclosure of cash flow informationCash paid for interest $ 817,965 $ 1,402,209Cash paid for taxes $ 1,750 $ 2,250Supplemental schedule of noncash investing activities:

Purchases of property and equipment in accounts payable and accrued expenses $ (215,907 $ (2,770,730Supplemental schedule of noncash financing activities:

Accretion of redeemable preferred stock $ 3,588,996 $ 4,306,488Deemed dividend upon repurchase of Series A redeemable preferred stock in excess of

carrying value $ (3,336,855 $ (1,298,631Reclassification of equity classified stock-based compensation $ (364,187 $ —Issuance of notes upon repurchase of restricted stock and common stock $ 4,410,250 $ —Issuance of subscription receivable upon sale of common stock $ — $ (4,280,149Distribution of common stock in Sonnet Biotherapeutics Inc. to stockholders $ — $ (221,154Issuance of capital lease obligations in connection with purchase of property and

equipment $ 215,908 $ 2,603,894Deferred offering costs and common stock issuance costs in accounts payable and accrued

expenses $ — $ 2,310,961

See accompanying notes to consolidated financial statements

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Oncobiologics, Inc. Notes to Consolidated Financial Statements

1. Organization and Description of Business

Oncobiologics, Inc. (“Oncobiologics” or the “Company”) was incorporated in New Jersey on January 5, 2010 and startedoperations in July 2011. Oncobiologics is a clinical-stage biopharmaceutical company focused on identifying, developing,manufacturing and commercializing complex biosimilar therapeutics in the disease areas of immunology and oncology.The Company has established fully integrated in-house development and manufacturing capabilities that addresses thenumerous complex technical and regulatory challenges in developing and commercializing mAb biosimilars. Sinceinception, the Company has advanced two product candidates into clinical trials: a Phase 3-ready biosimilar toadalimumab (Humira ) and a Phase 3-ready biosimilar to bevacizumab (Avastin ). Additionally, the Company has sixpreclinical biosimilar product candidates under active development, two of which are expected to enter clinical trials in2016.

During 2011, the Company formed Parilis Biopharmaceuticals, LLC (“Parilis”), a New Jersey Limited Liability Company towhich the Company owns 100% of Parilis’s common member units. The Company entered into a licensing arrangementwhereby Parilis was issued an exclusive right to commercialize the Company’s Humira biosimilar product.

In April 2015, the Company spun-off certain assets unrelated to its biosimilar business through a pro rata distribution to itsstockholders through a newly-formed subsidiary, Sonnet Biotherapeutics, Inc. (“Sonnet”). Concurrent with the Company’scontribution of the assets relating to the innovation business of Sonnet, the Company distributed all of its shares of Sonnetto Oncobiologic’s stockholders.

In October 2015, the Company reincorporated in Delaware through the merger with and into Oncobiologics, Inc., a newlyformed Delaware corporation, with the Delaware corporation surviving the merger. As a result of the merger, each share ofthe Company’s issued and outstanding common stock converted into and became a share of common stock of theDelaware corporation on a 1-for-1 basis, each share of Series A redeemable preferred stock converted into 289 shares ofcommon stock and approximately 1.4035 shares of Series A preferred stock of the Delaware corporation, and each shareof the Company’s Series B redeemable preferred stock converted into 289 shares of common stock and approximately1.2867 shares of Series A preferred stock of the Delaware corporation. Additionally, effective upon the reincorporation andin connection with the dissolution of Parilis, the Company issued 226,663 shares of common stock and 1,626 shares ofSeries A preferred stock to the holders of outstanding Parilis preferred member units in exchange for all such units.

2. Liquidity

The Company has incurred substantial losses and negative cash flows from operations since its inception and has anaccumulated deficit of $94.1 million and $14.2 million of indebtedness that is due on demand, each as of September 30,2015. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Theaccompanying financial statements have been prepared on a going concern basis, which contemplates the realization ofassets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not includeany adjustments related to the recoverability and classification of recorded asset amounts or the amounts andclassification of liabilities that might result from the outcome of this uncertainty.

The Company has substantial indebtedness that includes $14.2 million in notes payable to stockholders that are payableon demand. There can be no assurance that note holders will not exercise their right to demand repayment.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of itsproducts currently in development. Substantial additional financing will be needed by the Company to fund its operationsand to commercially develop its product candidates. Management is currently evaluating different strategies to obtain therequired funding for future operations. These strategies may include, but are not limited to: private placements of equityand/or debt, payments from potential strategic research and development, licensing and/or marketing arrangements withpharmaceutical companies, and public offerings of equity and/or debt securities. There can be no assurance that thesefuture funding efforts will be successful.

The Company’s future operations are highly dependent on a combination of factors, including (i) the timely and successfulcompletion of additional financing discussed above; (ii) the Company’s ability to complete revenue-generatingpartnerships with pharmaceutical companies; (iii) the success of its research and development; (iv) the development ofcompetitive therapies by other biotechnology and pharmaceutical companies, and, ultimately; (v) regulatory approval andmarket acceptance of the Company’s proposed future products.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

3. Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentationThe accompanying consolidated financial statements have been prepared in conformity with U.S. generally acceptedaccounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found inthe Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial AccountingStandards Board (“FASB”).

The consolidated financial statements include the accounts of the Company’s subsidiaries and affiliates in which theCompany holds a controlling financial interest as of the financial statement date. As the Company has been the primaryfunding source for Sonnet since its distribution to the Company’s stockholders, the operations and financial position ofSonnet are included in the consolidated financial statements of the Company. Participation of the stockholders in the netassets and losses of Sonnet are reflected in the line items “Noncontrolling interests” in the Company’s consolidatedbalance sheets and “Net loss attributable to the noncontrolling interests” in the Company’s consolidated statements ofoperations. Noncontrolling interests adjusts the Company’s consolidated results of operations to exclude all of the lossesof Sonnet as Oncobiologics has no direct equity ownership in Sonnet. Changes in underlying net book value of Sonnetdue to equity issuances are reflected as equity transaction in the Company’s consolidated statements of stockholders’equity (deficit).

Parilis previously issued Series A and Series A Hybrid Redeemable Preferred Units (“Preferred Units”) to investors otherthan Oncobiologics. Prior to October 2015, the Preferred Units were redeemable both at the option of the Parilis Preferredholders and upon the occurrence of an event that was not solely within the Company’s control. Because redemption ofPreferred Units was outside of the Company’s control, the noncontrolling interests is presented on the consolidatedbalance sheets under the caption redeemable noncontrolling interests and carried at its current redemption value. As ofand for the years ended September 30, 2014 and 2015, the redeemable noncontrolling interests is presented at itscarrying amount and adjusted for dividends to and contributions from the noncontrolling interests with an offsetting chargeto common stock or, in the absence of common stock, a charge to accumulated deficit.

Use of estimatesThe preparation of the consolidated financial statements in conformity with GAAP requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reportingperiod. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding the estimates orjudgments used in the preparation of the consolidated financial statements, actual results may materially vary from theseestimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in theconsolidated financial statements in the period they are determined to be necessary.

RecapitalizationOn April 26, 2016, the Company filed a certificate of amendment to amend its certificate of incorporation effecting a 1-for-3.45 reverse split of the Company’s common stock. All references in the consolidated financial statements to the numberof shares and per-share amounts of common stock have been retroactively restated to reflect the reverse split.

Restricted cashAs of September 30, 2014 and 2015, the Company had $211,452 and $213,663, respectively, in certificates of depositwith a maturity date of August 2017 and are related to the requirements of the Company’s bank loan.

Fair Value of financial instrumentAt September 30, 2014 and 2015, the Company’s financial instruments included accounts payable, accrued expenses,stockholder notes, debt and stock-based compensation liability. The carrying amount of accounts payable and accruedexpenses approximates fair value due to the short-term maturities of these instruments. The stockholder notes and debtapproximates fair value as the interest rates are reflective of the rate the Company could obtain on debt with similar termsand conditions. The carrying value of the stock-based compensation liability is the estimated fair value of the liability(note 11).

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

Property and equipment

Property and equipment are recorded at cost. Depreciation and amortization is determined using the straight-line methodover the estimated useful lives ranging from 3 to 10 years. Leasehold improvements are amortized over the life of thelease or the estimated useful life of the assets, whichever is shorter. Expenditures for maintenance and repairs areexpensed as incurred while renewals and betterments are capitalized. When property and equipment is sold or otherwisedisposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain orloss is reflected in operations.

Long-lived assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carryingamount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison ofthe carrying amount of an asset to future net cash flows expected to be generated. Impairment charges are recognized atthe amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of arereported at the lower of the carrying amount or the fair value less costs to sell. The Company has not recognized anyimpairment or disposition of long-lived assets.

Deferred offering costsThe Company capitalizes costs that are directly associated with in-process equity financings until such financings areconsummated at which time such costs are recorded against the gross proceeds of the offering.

Stock-based compensation

The Company measures equity classified stock-based awards granted to employees and directors based on the estimatedfair value on the date of grant and recognizes compensation expense of those awards, net of estimated forfeitures, on astraight-line basis over the requisite service period, which is generally the vesting period of the respective award.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model,which is described more fully in note 11. The fair value of each restricted stock award is measured as the fair value pershare of the Company’s common stock on the date of grant.

Stock-based awards granted to consultants and non-employees are measured based on the fair value of the award on thedate on which the related services are completed. Compensation expense is recognized over the period during whichservices are rendered by such consultants and non-employees until completed. At the end of each financial reportingperiod prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value ofthe Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model.

Stock-based awards that are settled in cash are accounted for as liabilities and are remeasured at each reporting perioduntil the obligations are satisfied. Stock-based compensation liabilities are valued through the use of a Monte Carlosimulation model.

Revenue recognition

The Company’s revenue is generated primarily through collaboration research and license agreements. The terms ofthese agreements generally contain multiple deliverables which may include (i) licenses, (ii) research and developmentactivities, (iii) clinical manufacturing, and (iv) product supply. The payment terms of these agreements may includenonrefundable upfront fees, payments for research and development activities, payments based upon the achievement ofcertain milestones, royalty payments based on product sales derived from the collaboration, and payments for supplyingproduct.

The Company considers whether the deliverables under the arrangement represent separate units of accounting. Indetermining the units of accounting, management evaluates certain criteria, including whether the deliverables havestand-alone value. The consideration received is allocated to the separate units of accounting using the relative sellingprice method, and the applicable revenue recognition criteria are applied to each of the separate units.

The Company typically receives upfront, nonrefundable payments when licensing its intellectual property. For intellectualproperty licenses that do not have stand-alone value from the other deliverables to be provided, the upfront fee is deferredand revenue is recognized over the contractual or estimated performance period, which is typically the term of theresearch

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

and development obligations. The periods over which revenue is recognized are subject to estimates by management andmay change over the course of the research and development agreement. Such a change could have a material impacton the amount of revenue the Company records in future periods. Payments or reimbursements resulting from theCompany’s research and development efforts are recognized as the services are performed. Amounts received prior tosatisfying the above revenue recognition criteria are recorded as deferred revenue.

The Company recognizes revenue from milestone payments when: (i) the milestone event is substantive and itsachievability was not reasonably assured at the inception of the agreement, and (ii) the Company does not have ongoingperformance obligations related to the achievement of the milestone earned. Milestone payments are consideredsubstantive if all of the following conditions are met: the milestone payment (a) is commensurate with either theCompany’s performance to achieve the milestone or the enhancement of the value of the delivered item or items as aresult of a specific outcome resulting from the Company’s performance to achieve the milestone, (b) relates solely to pastperformance, and (c) is reasonable relative to all of the deliverables and payment terms (including other potentialmilestone consideration) within the arrangement.

Research and developmentResearch and development costs are expensed as incurred and consist primarily of funds paid to third parties for theprovision of services for product candidate development, clinical and preclinical development and related supply andmanufacturing costs, and regulatory compliance costs. At the end of the reporting period, the Company comparespayments made to third-party service providers to the estimated progress toward completion of the research ordevelopment objectives. Such estimates are subject to change as additional information becomes available. Dependingon the timing of payments to the service providers and the progress that the Company estimates has been made as aresult of the service provided, the Company may record net prepaid or accrued expense relating to these costs.

Upfront milestone payments made to third parties who perform research and development services on the Company’sbehalf are expensed as services are rendered. Costs incurred in obtaining technology licenses are charged to researchand development expense as acquired in-process research and development if the technology licensed has not reachedtechnological feasibility and has no alternative future use.

Income taxesThe Company accounts for income taxes using the asset and liability method. Under the asset and liability method,deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between thefinancial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assetsand liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which thosetemporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a changein tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded tothe extent it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Accretion of redeemable preferred stock, redeemable common stock and redeemable noncontrollinginterestsAccretion of redeemable preferred stock includes the accretion of dividends and issuance costs of the Company’s SeriesA and Series B redeemable preferred stock and the redeemable common stock. The carrying values of the Series A andSeries B redeemable preferred stock, redeemable common stock and redeemable noncontrolling interests are beingaccreted to their respective redemption values, using the effective interest method, from the date of issuance to theearliest date the holders can demand redemption. Increases to the carrying value of redeemable preferred stock, commonstock, and noncontrolling interests are charged to common stock or, in the absence of common stock, charged toaccumulated deficit. Upon repurchase of redeemable preferred stock and redeemable noncontrolling interests, the excessconsideration paid over the carrying value at the time of repurchase is accounted for as a deemed dividends to thepreferred stockholders.

Net loss per shareBasic and diluted net loss per common share is determined by dividing net loss applicable to common stockholders by theweighted-average common shares during the period. For all periods presented, the outstanding shares of Series A andSeries B redeemable preferred stock have been excluded from the calculation because their effects would be anti-dilutive.Therefore the weighted-average shares used to calculate both basic and diluted loss per share are the same.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average sharesoutstanding as of September 30, 2014 and 2015, as they would be antidilutive:

September 30,2014 2015

Series A redeemable preferred stock 1,066,956 1,034,181Series B redeemable preferred stock 1,159,418 1,159,418Unvested shares of restricted common stock 32,463 —Convertible stockholder note — 96,618

Amounts in the table above reflect the common stock equivalents of the noted instruments.

The unaudited pro forma net loss per common share is computed using the weighted-average number of common sharesoutstanding and assumes the issuance of 1,034,181, 1,159,418 and 226,663 shares of common stock issued to Series Aand Series B redeemable preferred stockholders and Parilis Preferred Unit holders, respectively, in connection with thereincorporation of the Company in October 2015. The pro forma weighted-average shares outstanding also assumes thereincorporation and the issuance of 1,969,818 shares of common stock upon settlement of the Series A liquidation valueof $11,819,000, assuming the initial public offering price of $6.00 per share of common stock included in the units sold inthis offering. The pro forma weighted-average shares outstanding of 14,143,696 was used to compute the pro forma netloss per common share.

The following table summarizes the calculation of unaudited pro forma basic and diluted net loss per common share:

Numerator:Net loss applicable to common stockholders of Oncobiologics, Inc. $ (52,998,402Effect of pro forma adjustments:

Accretion of redeemable preferred stock and noncontrolling interests 4,306,488Deemed dividends 1,298,631

Pro forma net loss attributable to common stockholders of Oncobiologics, Inc. $ (47,393,283

Denominator:Weighted-average common shares outstanding 9,753,616Effect of pro forma adjustments:

Exchange of Series A and Series B redeemable preferred stock 2,193,599Exchange of Parilis Preferred Units 226,663Conversion of Series A Preferred Stock liquidation value 1,969,818

Shares used in computing unaudited pro forma weighted-average basic and diluted common sharesoutstanding 14,143,696

Unaudited pro forma basic and diluted net loss per common share $ (3.35

Recent accounting pronouncements

In April 2015, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Updates (‘‘ASU’’) 2015-03, Interest — Imputation of Interest (Subtopic 835-30). The update requires debt issuance costs related to a recognizeddebt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. Theguidance is effective for fiscal years beginning after December 15, 2015. The Company early adopted this guidance for allperiods presented.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as aGoing Concern. The amendments in this update will explicitly require a company’s management to assess an entity’sability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The newstandard will

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■ Contracts with customers — including revenue and impairments recognized, disaggregation of revenue andinformation about contract balances and performance obligations (including the transaction price allocated tothe remaining performance obligations).

■ Significant judgments and changes in judgments — determining the timing of satisfaction of performanceobligations (over time or at a point in time), and determining the transaction price and amounts allocated toperformance obligations.

■ Certain assets — assets recognized from the costs to obtain or fulfill a contract.

■ Level 1 — Quoted prices in active markets for identical assets or liabilities.

■ Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets forsimilar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities,or other inputs that are observable or can be corroborated by observable market data.

■ Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant todetermining the fair value of the assets or liabilities, including pricing models, discounted cash flowmethodologies and similar techniques.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

be effective in the first annual period ending after December 15, 2016. Early application is permitted. The Company iscurrently evaluating the potential impact of the adoption of this standard, but believes its adoption will have no impact onits consolidated results of operations, financial position and cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This guidance requires anentity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflectsthe consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance alsorequires an entity to disclose sufficient information to enable users of financial statements to understand the nature,amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative andquantitative information is required about:

In July 2015, the FASB delayed the effective date of this guidance. As a result, this guidance will be effective for annualreporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlierapplication is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reportingperiods within that reporting period. The Company is currently evaluating the impact that this guidance will have on itsconsolidated results of operations, financial position and cash flows.

4. Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that wouldbe received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for theasset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels ofthe fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of anyinput that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observableinputs and minimize the use of unobservable inputs.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis:

September 30, 2014(Level 1) (Level 2) (Level 3)

LiabilitiesStock-based compensation liability $ — $ — $ 1,557,789

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

September 30, 2015(Level 1) (Level 2) (Level 3)

LiabilitiesStock-based compensation liability $ — $ — $12,726,722

The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the stock-based compensation liability for the years ended September 30, 2014 and 2015:

Balance at October 1, 2013 $ —Issued 364,187Change in fair value 1,193,602Balance at September 30, 2014 1,557,789Change in fair value 11,168,933Balance at September 30, 2015 $ 12,726,722

The Company has issued stock-based performance units (“PSUs”), which generally have a ten year life from the date ofgrant and vest 50% after the third anniversary from issuance and the remaining 50% on the fourth anniversary. In addition,the PSUs are exercisable upon the earlier of (i) a change in control, (ii) consummation of an initial public offering, or (iii) acorporate valuation in excess of $400 million and at the discretion by the Company’s Board of Directors. Upon exercise,the PSU holder receives a cash payment for the difference between the current per share value of the Company and thebase price of the PSU. Given the cash settlement, the PSUs are liability classified and re-measured at each reporting datewith changes in fair value recorded within the Company’s consolidated statements of operations.

The PSUs contain a market condition as the exercisability of the awards are based on the Company achieving a marketvalue of $400 million during the relevant performance period. The fair value of the market condition is valued using aMonte Carlo simulation model. The significant assumptions used in preparing the Monte Carlo simulation model include(i) volatility of the Company’s common stock, (ii) risk free interest rate, (iii) base price of the PSUs, (iv) fair value of theCompany’s common stock and enterprise value of the Company, and (v) derived service period.

The fair value of the PSUs of $3.45 and $22.22 per PSU at September 30, 2014 and 2015, respectively, was derivedusing the following assumptions:

September 30,2014 2015

Risk-free interest rate 1.8% 1.4%Derived service period 5 years 5 yearsExpected volatility 60% 60%Annual dividend yield 0% 0%Fair value of common stock $7.62 per share $25.79 per share

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

5. Property and Equipment

Property and equipment, net, consists of:

September 30,2014 2015

Laboratory equipment $ 6,847,970 $ 10,936,364Leasehold improvements 2,756,291 9,889,521Computer software and hardware 224,150 402,075Construction in process — 175,425

9,828,411 21,403,385Less: accumulated depreciation and amortization (1,818,847 (3,643,447

$ 8,009,564 $ 17,759,938

Depreciation and amortization expense for the years ended September 30, 2014 and 2015 was $878,477 and $1,824,600,respectively.

At September 30, 2014 and 2015, $926,231 and $3,530,301, respectively, represents laboratory equipment under capitalleases. The term of the leases are between 11 and 36 months and qualify as capital leases. The leases bear interestbetween 8.6% and 21.4%. At September 30, 2014 and 2015, $206,663 and $407,210 respectively, of accumulateddepreciation related to this leased equipment has been recognized.

The following is a schedule of future minimum lease payments under capital leases as of September 30, 2015:

2016 $ 1,087,1922017 1,053,7482018 295,010

2,435,950Less: amounts representing interest (353,728Less: current portion (862,849

Capital lease obligations, excluding current portion $ 1,219,373

6. Accrued Expenses

Accrued expenses consists of:

September 30,2014 2015

Compensation $ 1,907,684 $ 2,321,508Research and development 170,513 951,759Interest payable 106,940 806,475Deferred offering costs — 657,892Professional fees 131,668 594,572Director fees 239,420 414,421Other accrued expenses 4,054 178,021

$ 2,560,279 $ 5,924,648

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

7. Stockholder Notes

September 30,2014 2015

Series A repurchase notes $ 3,014,534 $ 800,534Parilis Series A repurchase notes — 2,275,818Restricted stock repurchase notes 1,097,750 1,097,750Common stock repurchase note 2,812,500 2,812,500Convertible note — 2,000,000Working capital notes 3,700,000 7,227,594

10,624,784 16,214,196Less current portion (10,624,784 (14,214,196

Stockholder notes, excluding current portion $ — $ 2,000,000

In June 2014, the Company, upon the repurchase of its Series A redeemable preferred stock, issued $3,364,534 in notesto the investors as settlement of cumulative unpaid dividends. The notes bear interest at 4.0% and were originally due inJune 2015. Pursuant to the terms of the notes, the interest rate increased to 6% as a result of nonpayment and are due ondemand. During the years ended September 30, 2014, and 2015, $350,000 and $64,000 of the notes were offset againstadvances previously made to the Company’s CEO. Additionally, $100,000 of the notes were offset against advancespreviously made to an investor. The Company made principal payments of $2,050,000 during the year endedSeptember 30, 2015.

In October 2014, the Company, upon the repurchase of 1,215 Parilis Preferred Units, issued $2,761,818 in notes to theinvestors at a price of $2,000 per unit and $331,818 in cumulative unpaid dividends. During the year endedSeptember 30, 2015, the Company made $486,000 in principal payments. The notes bear interest at 4.0% and, as ofSeptember 30, 2015, are due upon demand.

In June 2014, the Company repurchased shares of its restricted stock in exchange for $1,097,750 in notes payable. Thenotes bear interest at rates ranging from 0%-4% and are due on demand as of September 30, 2015.

In June 2014, the Company repurchased 960,144 shares of its common stock in exchange for a $3,312,500 note payable.The note does not bear interest and is due on demand. During the year ended September 30, 2014, the Company made$500,000 in principal payments.

In October and December 2014, the Company issued convertible promissory notes to a redeemable common stockinvestor, each in the amount of $2,000,000 and bearing interest at 12%. The December note was paid in full during theyear ended September 30, 2015. The October note matures in December 2016 and is convertible at any time into sharesof the Company’s common stock at a conversion price of $20.70 per share. Upon issuance, the Company determinedthere was no beneficial conversion feature as the conversion price exceeded the estimated fair value of the underlyingcommon stock to be issued upon conversion.

During the years ended September 30, 2014 and 2015, the Company borrowed $6,000,000 and $6,880,252, respectively,from stockholders for working capital purposes. During the years ended September 30, 2014 and 2015, the Companymade principal payments of $2,625,000 and $3,352,658, respectively. The notes bear interest from 0% to 24% per annumwith a weighted-average interest rate of 14.5%. Certain notes are secured by future revenue streams from existinglicensing agreements. In addition, one of the notes is collateralized by 0.3 million common shares of the Company’sfounding stockholder and Chief Executive Officer (“CEO”). The notes are due on demand as of September 30, 2015.

During the years ended September 30, 2014 and 2015, the Company recognized interest expense related to thestockholder notes of $541,914 and $1,869,113, respectively.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

8. Debt

September 30,2014 2015

Term loans-Bank $ 3,935,574 $ 3,404,759Equipment loans 528,876 334,093Unamortized debt discount (85,706 (73,442

4,378,744 3,665,410Less current portion 725,706 742,646

Long-term debt, excluding current portion $ 3,653,038 $ 2,922,764

The term bank loans bear interest at the prime rate plus 2.75% and are adjusted monthly. The original term of the loansrange from 7 – 10 years. Minimum monthly payments of principal and interest under the terms of the loans are $62,654and are collateralized by equipment, a secured interest in the personal residence of the founding stockholder and CEO, anunconditional personal guarantee by the founding stockholder and CEO and a $200,000 certificate of deposit. TheCompany maintains a life insurance policy on its founding stockholder and CEO in which the bank is the primarybeneficiary. The loans contain certain non-financial covenants.

The equipment loans bear interest at rates ranging from 11%-18% with the original term of the loans ranging from 1-5years. Minimum monthly payments of principal and interest under the equipment loans are $26,539 and are collateralizedby the related equipment purchased and an unconditional personal guarantee by the founding stockholder and CEO.

Interest expense on the above loans for the years ended September 30, 2014 and 2015 was $276,496 and $287,280,respectively.

Future maturities of debt at September 30, 2015 are as follows:

2016 $ 742,6462017 717,7942018 637,4792019 509,8642020 523,062Thereafter 608,007

$ 3,738,852

9. Commitments

Selexis Commercial License Agreements

In April 2013, the Company entered into commercial license agreements with Selexis for each of the ONS-3010, ONS-1045 and ONS-1050 biosimilar product candidates (which agreements were subsequently amended on May 21, 2014).Under the terms of each commercial license agreement, the Company acquired a non-exclusive worldwide license underthe Selexis Technology to use the applicable Selexis expression technology along with the resulting Selexis materials/ celllines, each developed under the research license, to manufacture and commercialize licensed and final products, with alimited right to sublicense.

The Company paid an upfront licensing fee to Selexis for each commercial license and also agreed to pay a fixedmilestone payment for each licensed product. In addition, the Company is required to pay a low single-digit royalty on afinal product-by-final product and country-by-country basis, based on worldwide net sales of such final products by theCompany or any of the Company’s affiliates or sublicensees during the royalty term. The royalty term for each finalproduct in each country is the period commencing from the first commercial sale of the applicable final product in theapplicable country and ending on the expiration of the specified patent coverage. At any time during the term, theCompany has the right to terminate its royalty payment obligation by providing written notice to Selexis and paying Selexisa royalty termination fee.

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10. Redeemable Preferred Stock, Common Stock, Noncontrolling Interests and Stockholders’ Equity(Deficit)

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

Each of the Company’s commercial agreements with Selexis will expire upon the expiration of all applicable Selexis patentrights. Either party may terminate the related agreement in the event of an uncured material breach by the other party or inthe event the other party becomes subject to specified bankruptcy, winding up or similar circumstances. Either party mayalso terminate the related agreement under designated circumstances if the Selexis Technology infringes third-partyintellectual property rights. In addition, the Company has the right to terminate each of the commercial agreements at anytime at its convenience; however, with respect to the agreements relating to ONS-3010 and ONS-1045, this right is subjectto the licensee’s consent pursuant to a corresponding letter the Company executed in conjunction with the standbyagreement entered into between Selexis and Liomont in November 2014.

The standby agreement permits Liomont to assume the license under the applicable commercial agreement for Mexicoupon specified triggering events involving our bankruptcy, insolvency or similar circumstances.

Technology License

The Company entered into a technology license agreement which will require milestone payments of $375,000 (based onan exchange rate on September 30, 2015 for converting Swiss Francs to U.S. dollars) to the licensor by the Companyupon achievement of certain clinical milestones and pay a single digit royalty on net sales by the Company utilizing suchtechnology. The Company also has the contractual right to buy out the royalty payments at a future date.

Leases

In May 2012, the Company entered into a lease agreement for its office and operating space which, as amended, has aterm ending in June 2021. Rent expense under the leases was $581,464 and $720,875 for the years endedSeptember 30, 2014 and 2015, respectively. The Company recognizes rent expense on a straight-line basis over thelease period and has accrued for rent expense incurred but not yet paid. Landlord allowances for tenant improvements aredeferred and recognized as a reduction to rent expense on a straight line basis and over the remaining lease term. As partof the most recent amendment to the lease agreement in May 2014, the Company increased the amount of space to beleased and, accordingly, agreed to new monthly lease terms for the additional space.

Future minimum rental payments under noncancelable operating leases at September 30, 2015 are as follows:

2016 $ 888,7102017 865,7632018 865,7632019 876,3232020 887,045Thereafter 643,749

$ 5,027,353

Employment Benefit Plan

The Company maintains a defined contribution 401(k) plan in which employees may contribute up to 100% of their salaryand bonus, subject to statutory maximum contribution amounts. The Company matches 100% of the first 3% of employeecontributions. The Company assumes all administrative costs of the Plan. For the years ended September 30, 2014 and2015, the expense relating to the matching contribution was $83,969 and $131,385, respectively.

Common stock

During the year ended September 30, 2015, the Company sold 1,765,511 shares of its common stock at $25.79 per shareunder a mezzanine funding round raising $44,142,463 in net proceeds of which $4,280,149 was received in October 2015.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’sstockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any,subject to the preferential dividend rights of the Series A and Series B redeemable preferred stock (collectively, the“Redeemable Preferred Stock”). The Company may not pay dividends to common stockholders until all dividends accruedor declared but unpaid on the Redeemable Preferred Stock have been paid in full. No dividends had been declaredthrough September 30, 2015.

Redeemable common stock

During the year ended September 30, 2014, the Company sold 1,159,420 and 579,710 shares of its common stock to aninvestor at $6.04 and $6.90 per share, respectively, and net of $105,000 in issuance costs. Pursuant to the terms of thepurchase agreement, in the event that the Company sells its common stock any time prior to the Company engaging in aQualified IPO or Qualified Liquidation Event, as defined, at a price below $6.04 per share and $6.90 per share for1,159,420 and 579,710 shares sold, respectively, the investors are entitled to receive additional shares of common stock.In addition, if the Company fails to engage in a Qualified IPO or Qualified Liquidation Event prior to March 10, 2017, theinvestor shall have the right to require the Company to redeem any or all of the investor’s common stock at a redemptionprice equal to $12.08 per share for 1,159,420 of its shares and $13.80 per share for 579,710 of its shares.

The Redeemable Common Stock is classified outside of stockholders’ equity (deficit) because of the redemption right heldby the investors.

Redeemable preferred stock

The Company has Redeemable Preferred Stock which is classified outside of stockholders’ deficit because the sharescontain redemption features that are not solely within the control of the Company.

Through December 2013, the Company sold 6,995 shares of Series A Participating Preferred Stock (Series A) and 3,600shares of Series B Participating Preferred Stock (Series B). During the year ended September 30, 2014, the Companysold an additional 400 shares of Series B. In connection with the sale of Series B, the Company issued 1,119,565 sharesof common stock. In addition to the rights and preferences described below for the Series A and Series B, the investorsalso received the right to receive an additional 289 shares of common stock for each share of Redeemable PreferredStock upon redemption.

The total purchase of $10,995,000 was allocated on a relative fair value basis between redeemable preferred stock andthe equity instruments resulting in $5,920,000 and $2,280,000 allocated to the initial carrying value of the Series A andSeries B, respectively, with the balance allocated to common stock. Subsequently, the carrying value of the Series A andSeries B are accreted up to their redemption value using the effective interest method.

Dividends

The holders of the Redeemable Preferred Stock are entitled to receive cumulative dividends at an annual rate of $100 pershare. In the event the Company cannot satisfy its redemption obligation to the holders, the annual dividend will increaseto $120 per share. Dividends accrue whether or not earned or declared, irrespective of the availability of profits. Dividendson redeemable preferred stock are payable upon redemption or upon liquidation.

Liquidation preference

In the event of a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, or in the event of aDeemed Liquidation Event, as defined, holders of Series A are entitled to receive, in preference to all other stockholders,an amount equal to the Original Issue Price, as defined in the Certificate of Designation for the Series A, plus any unpaidaccrued dividends. If upon the occurrence of such event, the assets and funds thus distributed among the holders of theSeries A shall be insufficient to pay such holders, then the entire assets and funds of the Company legally available fordistribution shall be distributed ratably among the holders of the Series A in proportion to the respective amount of suchstock owned by each such holder. After payments have been made in full to the holders of Series A, then, to the extentavailable, holders of the Series B are entitled to participate in the distribution of the remaining assets, pro rata based onthe number of shares by each holder.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

Redemption

The holders of redeemable preferred stock have a right to require the Company to redeem all outstanding shares at aredemption price equal to the Original Issue Price plus unpaid accrued dividends. In addition, the holders of RedeemablePreferred Stock will receive 289 shares of common stock for each share of Redeemable Preferred Stock redeemed.

Voting rights

The holders of the Redeemable Preferred Stock have no voting rights outside of matters directly related to each series ofRedeemable Preferred Stock. In addition, the holders of the Redeemable Preferred Stock, as a class, may elect 1 boardmember to represent its interest, respectively.

Repurchase transactions

In June 2014, the Company entered into a series of equity transactions in which it (1) repurchased 3,314 shares of theSeries A, (2) repurchased 960,144 shares of common stock, and (3) settled accrued dividends on the Series A of$864,534.

The Series A repurchase price was $2,000 per share for a total of $6,628,000 of which $4,128,000 was paid in cash withthe balance of $2,500,000 through the issuance of notes payable. The Company also issued $864,534 of notes payablefor the accrued dividends. The Company recorded a deemed dividend of $3,336,855, which represents the totalconsideration paid of $7,492,534 in excess of carrying value of the Series A of $4,155,679.

In June 2014, the Company repurchased 960,144 shares of common stock and issued notes payable at a repurchaseprice of $3.45 per share.

In 2015, the Company purchased an additional 113 shares of Series A and cumulative dividends of $29,370 for $2,000per share upon which the Company recorded a deemed dividend of $83,631, which represents the total considerationpaid of $226,000 in excess of carrying value of the Series A of $142,370.

From October through December 2014, the Company repurchased 1,215 Parilis Preferred Units. The repurchase pricewas $2,000 per share plus unpaid dividends of $331,818 for a total of $2,761,818. The Company recorded a deemeddividend of $1,215,000, which represents the total consideration paid in excess of the carrying value of the redeemablenoncontrolling interest of $1,546,818. Upon repurchase, the Company issued notes to the investors.

11. Stock-Based Compensation

The Company’s 2011 Equity Compensation Plan (the “2011 Plan”) provides for the Company to sell or issue restrictedcommon stock, restricted stock units, performance-based awards, cash-based awards or to grant stock options for thepurchase of common stock. The 2011 Plan is administered by the board of directors or, at the discretion of the board ofdirectors, by a committee of the board. The number of shares of common stock reserved for issuance under the 2011 Planis 1,159,420, which may be granted to officers, employees, consultants and directors of the Company.

As required by the 2011 Plan, the exercise price for stock options granted is not to be less than the fair value of commonshares as determined by the Company as of the date of grant. The term of stock options may not be greater than tenyears. Generally, stock options granted under the 2011 Plan vest 50% on the third anniversary from the grant date and50% on the fourth anniversary. In the event of change in control, any outstanding option shall become fully vested andexercisable.

For restricted stock awards granted to employees, the fair value of the award is the current fair value of the Company’scommon stock on the grant date, while for non-employees, the fair value of the award is re-measured each reportingperiod using the then-current fair value of the Company’s common stock until performance is complete. The restrictedstock awards vest 50% on the third anniversary from the grant date and 50% on the fourth anniversary. In the event ofchange in control, any outstanding unvested share shall become fully vested.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

The Company recorded stock-based compensation expense in the following expense categories of its statements ofoperations for the years ended September 30, 2014 and 2015:

September 30,2014 2015

Research and development $ 671,745 $ 5,817,830General and administrative 3,286,735 5,360,028

$ 3,958,480 $ 11,177,858

September 30,2014 2015

Equity-classified compensation $ 2,764,878 $ 8,925Liability-classified compensation 1,193,602 11,168,933

$ 3,958,480 $ 11,177,858

In June 2014, the Company entered into agreements with certain employees and non-employees to exchange 31,304stock options and 602,464 restricted stock awards for 711,430 PSUs. In addition, the Company repurchased 636,376restricted stock awards in exchange for $1,097,750 of notes payable. Upon issuing the notes payable, the Companyrecognized the unamortized balance of stock-based compensation expense of $1,730,791.

The repurchase of restricted stock in exchange for notes payable was accounted for as a settlement which effectivelyaccelerated vesting of any unvested awards, requiring the immediate recognition of any unrecognized compensation cost.The Company recorded incremental stock-based compensation expense of $792,601 to reflect this settlement. Theexchange of restricted stock and stock options for PSUs was considered a modification with a change in classificationfrom an equity classified award to a liability classified award due to the cash settlement feature of the PSUs. The liabilityrelated to the PSUs is re-measured at each reporting period until the PSUs are exercised or expire. Upon recording theinitial stock-based compensation liability, the Company increased accumulated deficit $364,187, which represents thecumulative stock-based compensation expense recognized to date for the stock options and restricted stock exchangedinto PSUs.

Performance-based stock units

The Company has issued PSUs, which generally have a ten year life from the date of grant and vest 50% after the thirdanniversary from issuance and the remaining 50% on the fourth anniversary. The PSUs are exercisable upon the earlier of(i) a change in control, (ii) consummation of an initial public offering, or (iii) a corporate valuation in excess of $400 millionand at the discretion by the Company’s board of directors. Upon exercise, the PSU holder receives a cash payment for thedifference between the current per share fair value of the Company’s common stock and the base price of the PSU, whichis $3.45 per PSU. Given the cash settlement, the PSUs are liability classified and re-measured at each reporting date withchanges in fair value recorded within the Company’s consolidated statements of operations. See note 4 for discussion offair value of the PSUs.

The following table summarizes the PSU activity for the years ended September 30, 2014 and 2015:

Balance at October 1, 2013 —Issued in exchange for restricted shares and stock options 711,430Additional issuances 16,864Forfeitures (69,796Balance at September 30, 2014 658,498Grants 39,988Forfeitures (11,473Balance at September 30, 2015 687,013

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

Restricted stockThe following table summarizes the activity related to restricted stock grants to employees and non-employees for theyears ended September 30, 2014 and 2015:

EmployeesNon

Employees

WeightedAverage GrantDate Fair Value

Balance at October 1, 2013 657,681 555,217 $ 1.04Granted 90,869 — 5.55Vested (29,565 (2,898 0.69Exchange for PSUs (573,478 (28,986 1.38Repurchased for stockholder notes (115,942 (520,435 1.35Balance at September 30, 2014 29,565 2,898 0.69Vested (29,565 (2,898 0.69Balance at September 30, 2015 — — $ —

At September 30, 2015, there was no unrecognized compensation cost related to non-vested restricted stock.

Of the 32,463 shares of restricted stock that vested during the year ended September 30, 2014, 2,831 shares werewithheld by the Company for income tax withholdings. No shares were withheld by the Company for taxes on therestricted stock that vested during the year ended September 30, 2015.

Stock options

The Company has not granted stock options since December 2011 and there is no unrecognized compensation expenseas of September 30, 2015.

The fair value of stock options granted was estimated using the Black-Scholes option pricing model. As a privatecompany, the expected volatility is based on the historical volatility of a publicly traded set of peer companies. Theexpected term of the Company’s stock options is determined utilizing the “simplified” method. The risk-free interest rate isdetermined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periodsapproximately equal to the expected term of the award.

The following table summarizes stock option activity for the year ended September 30, 2014:

Number ofOptions

WeightedAverage

Exercise PricePer Share

Balance at October 1, 2013 31,304 $ 3.45Exchange for PSUs (31,304 3.45Balance at September 30, 2014 — $ —

12. Collaboration Arrangements

Huahai agreement

In May 2013, the Company entered into strategic license and collaboration arrangement with Zhejiang HuahaiPharmaceutical Co., Ltd (“Huahai”) under which the Company granted Huahai and its affiliates an exclusive license for theresearch, development, manufacture, use or sale of ONS-3010 or ONS-1045 in China, including, the People’s Republic ofChina, Hong Kong, Macau and Taiwan. In addition, the Company granted Huahai a right and license under the SelexisTechnology agreement to establish a production process for the products in the agreed territory and to market theproducts in the agreed territory pursuant to the relevant terms and conditions of the Company’s commercial licenseagreement with Selexis.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

Under the terms of the arrangement, the Company has received $7,500,000 in upfront payments and non-substantivemilestones and received $8,500,000 in substantive milestones. The Company determined that the deliverables under theHuahai arrangement were the exclusive license and the research and development services to be completed by theCompany. Since the license did not have standalone value, the upfront and non-substantive milestones paymentsreceived have been deferred and are being recognized ratably on a straight line basis through December 2019, theexpected date in which the research and development will be completed. Substantive milestones received under theHuahai arrangement are recognized upon achievement.

During the years ended September 30, 2014 and 2015, the Company recognized $1,076,979 and $1,175,580,respectively, of deferred revenues. For the years ended September 30, 2014 and 2015, the Company received andrecognized $6,500,000 and $2,000,000 in substantive milestone payments, respectively. As of September 30, 2014 and2015, deferred revenue included in the Company’s consolidated balance sheet related to the Huahai arrangement was$6,104,110 and $4,928,530, respectively.

IPCA agreements

License and Collaboration Agreement

In August 2013, the Company entered into a strategic license agreement with IPCA Laboratories Limited and its affiliates(“IPCA”) under which the Company granted IPCA a license for the research, development, manufacture, use or sale of theONS-3010 and, by amendment in May 2014, the ONS-1045 biosimilar product candidates with respect to India, Sri-Lanka,and Myanmar, and non-exclusive with respect to Nepal and Bhutan, or collectively, the agreed territory. In addition, theCompany granted IPCA a right and license under the Selexis Technology to enable IPCA to establish an exclusiveproduction process for the products in its agreed territory and to exclusively market the products in the agreed territory.The Company also agreed not to amend or terminate its rights under its commercial license agreement with Selexiswithout IPCA’s prior written consent.

Pursuant to the agreement, the Company agreed to continue the non-clinical and clinical development of each of ONS-3010 and ONS-1045 and corresponding products around the world and to develop and commercialize such productsthrough Phase 3 clinical trials and regulatory approval in the United States and European Union. These obligationscontinue until termination of the agreement or the individual development programs or upon final regulatory approval ofthe last product for such biosimilars in the United States or European Union. The Company agreed to provide IPCA with apre-IND package as submitted to EMEA and FDA, as well as perform preclinical development and characterization ofONS-3010 and ONS-1045 so as to enable IPCA to file an IND to conduct clinical trials and to perform clinical trials.

Under the terms of the agreement, the Company has received upfront and non-substantive milestone payments of$2,400,000, and received $1,000,000 in regulatory milestone payments. In addition, the Company is eligible to receiveroyalties at a low double-digit percentage rate of annual net sales of products by IPCA and its affiliates in the agreedterritory. For each of ONS-3010 and ONS-1045, IPCA agreed to fund a portion of the global costs associated with thePhase 3 clinical trials.

The Company determined that the deliverables under the IPCA arrangement were the exclusive license and the researchand development services to be completed by the Company. Since the license did not have standalone value, the upfrontand non-substantive milestones payments received have been deferred and are being recognized ratably on a straightline basis through December 2019, the expected date in which the research and development will be completed.Substantive milestone payments received under the IPCA arrangement are recognized upon achievement. Costreimbursements from IPCA related to the global costs associated with the Phase 3 clinical trials are recognized whenpayments are received and recorded as a reduction in research and development expense.

During the years ended September 30, 2014 and 2015, the Company recognized deferred revenues of $189,472 and$402,377, respectively. For each of the years ended September 30, 2014 and 2015, the Company received andrecognized a $500,000 substantive milestone payment. As of September 30, 2014 and 2015, deferred revenue included inthe Company’s consolidated balance sheets was $994,739 and $1,792,362, respectively.

Strategic Collaboration and Non-Exclusive License Agreement

In January 2014, the Company entered into a strategic collaboration and license agreement with IPCA to assist IPCA inestablishing its research, development and manufacturing capabilities for monoclonal antibodies and biologics, including,

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■ During the years ended September 30, 2014 and 2015, the Company provided $666,110 and $783,707 of non-interest bearing advances to the Company’s founding stockholder and CEO, of which $550,000 and $395,257was repaid, respectively. Additionally, the CEO has deferred a portion of his salary, bonus, and related benefitsduring the years ended September 30, 2014 and 2015 and applied such deferrals against previous advances.As of September 30, 2015, the Company had accrued compensation payments of $117,506, due to the CEO.

■ In March 2015, a director of the Company loaned $1,000,000 to the Company with an interest rate of 24%. Theloan was repaid in October 2015 and included $128,219 in accrued interest.

■ In June 2014, the Company repurchased 115,942 shares of restricted stock from a director of the Company inexchange for $200,000 stockholder note at a zero interest rate due September 1, 2015. Terms of the grant andrepurchase were the same as non-related parties. Refer to notes 7 and 10.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

in part, through collaborative development, manufacture and commercialization of ONS-1050 in the agreed territory (asspecified below). Under the agreement, the Company granted IPCA and its affiliates a non-exclusive license in the agreedterritory for the research, development, manufacture, use or sale of ONS-1050. The Company also agreed to assist IPCAwith its research and development program. The agreed territory for ONS-1050 includes the Republics of India, Sri-Lanka,and Myanmar, Nepal and Bhutan, while the agreed territory for any product candidates developed independent of theCompany’s involvement is global without geographical restriction. Any further collaboration between for suchindependently developed product candidates will be the subject of a separate written agreement if required by IPCA.

Under the terms of the agreement, the Company receives development payments and commercialization fees. In addition,the Company is eligible to receive royalties from IPCA at a mid-single digit rate on annual net sales of ONS-1050commercialized by IPCA and its affiliates in the agreed territory.

The Company accounts for the agreement with IPCA as a research and development services arrangement andrecognizes revenue under the proportional performance model. For the years ended September 30, 2014 and 2015, theCompany recognized revenue of $750,000 and $800,000, respectively.

Liomont agreementIn June 2014, the Company entered into a strategic license agreement with Laboratorios Liomont, S.A. (“Liomont”), underwhich the Company granted Liomont and its affiliates an exclusive, sublicenseable license in Mexico for the research,development, manufacture, use or sale of the ONS-3010 and ONS-1045 biosimilar product candidates in Mexico. Inaddition, the Company granted Liomont a non-exclusive right and license under the Selexis Technology and relatedintellectual property to enable Liomont to distribute, market and commercialize the products in Mexico. The Company alsoagreed not to amend or terminate its rights under the commercial agreement with Selexis without Liomont’s prior writtenconsent.

Under the terms of the agreement, the Company has received $1,500,000 of upfront payments and $500,000 in non-substantive milestone payments and is eligible to receive up to $3,500,000 in future substantive milestone payments. Foreach of ONS-3010 and ONS-1045, Liomont agreed to fund a portion of the global costs for Phase 3 clinical trials. TheCompany is eligible to receive tiered royalties at upper single-digit to low double-digit percentage rates of annual net salesof products by Liomont and its affiliates in Mexico.

The Company determined that the deliverables under the Liomont arrangement were the exclusive license and theresearch and development services to be completed by the Company. Since the license did not have standalone value,the upfront payments received have been deferred and are being recognized ratably on a straight line basis throughDecember 2019, the expected date in which the research and development will be completed. Cost reimbursements fromLiomont related to the global costs associated with the Phase 3 clinical trials are recognized when payments are receivedand recorded as a reduction in research and development expense.

During the years ended September 30, 2014 and 2015, the Company recognized deferred revenue of $34,091 and$341,280, respectively. As of September 30, 2014 and 2015, deferred revenue included in the Company’s consolidatedbalance sheets was $715,909 and $1,624,629, respectively.

13. Related Party TransactionsDuring the years ended September 30, 2014 and 2015, the following related party transactions occurred:

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■ During the years ended September 30, 2014 and 2015, the Company repurchased 1,250 shares of Series Aredeemable preferred stock and satisfied accrued dividends of $326,354 from three directors of the Company inexchange for $650,000 in cash payments and the issuance of $1,850,000 in stockholder notes. The notes bearinterest at 4% which are due on demand as of September 30, 2015. Under the terms of the agreement, becausethe notes were not paid upon maturity, they now bear interest at 6%. Terms of the share repurchase were thesame as non-related parties. Refer to notes 7 and 10.

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

14. Income Taxes

Income tax expense (benefit) for the years ended September 30, 2014 and 2015 consists of the following:

Year Ended September 30,2014 2015

State tax, including sale of New Jersey losses and credits $ (833,403 (725,969Foreign tax provision 1,272,421 535,858

$ 439,018 $ (190,111

The Company has been eligible to receive cash from the sale of its net operating losses (“NOLs”) and R&D tax creditsunder the State of New Jersey Technology Business Tax Certificate Transfer Program. During the years endedSeptember 30, 2014 and 2015, the Company received $835,153 and $728,218, respectively, from the sale of New JerseyNOLs. In addition, the Company incurred $1.3 million and $0.5 million of foreign withholding taxes in connection with theCompany’s collaboration and licensing agreements during the years ended September 30, 2014 and 2015, respectively.

A reconciliation of income tax expense (benefit) at the statutory U.S. federal income tax rate and the Company’s effectivetax rate is as follows:

Year Ended September 30,2014 2015

U.S. federal statutory rate (34.0 (34.0State taxes, net of federal benefit (5.1 (5.5Foreign withholding tax 9.6 1.1Permanent differences 2.7 1.8Foreign tax credits (9.6 (1.1Research and development credit (11.7 (6.9Change in valuation allowance 51.1 44.6Other 0.3 (0.4

Effective income tax rate 3.3 (0.4

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

The tax effects of the temporary differences that gave rise to deferred taxes were as follows:

Year Ended September 30,2014 2015

Current and long term deferred tax assets:Net operating loss carryforwards $ 7,340,745 $ 20,164,392Stock compensation 1,853,056 6,317,492Deferred revenue 3,121,214 3,333,201Research and development credit carryforward 2,680,441 5,979,964Foreign tax credits 2,067,091 2,602,949Accruals and others 1,040,117 1,072,422

Gross deferred tax assets (18,102,664 (39,470,420Less valuation allowance (17,400,409 (38,694,795

702,255 775,625

Deferred tax liability:Fixed assets (702,255 (775,625

Net deferred tax assets $ — $ —

As of September 30, 2015, the Company has approximately $52.9 million and $36.9 million of Federal and New Jerseynet operating losses that will begin to expire in 2030 and 2032, respectively. As of September 30, 2015, the Company alsohad federal and state research and development tax credit carryforwards of $4.2 million and $1.7 million, respectively,which begin to expire in 2021. As of September 30, 2015, the Company had Federal foreign tax credit carryforwards of$2.6 million available to reduce future tax liabilities, which will begin to expire at various dates starting in 2023. $1.8 millionof the FTC carryforward is included in the balance of unrecognized tax benefits. Realization of the deferred tax asset iscontingent on future taxable income and based upon the level of historical losses, management has concluded that thedeferred tax asset does not meet the more-likely-than-not threshold for realizability. Accordingly, a full valuation allowancecontinues to be recorded against the Company’s deferred tax assets as of September 30, 2014 and 2015.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefitwill more likely-than-not be realized. The determination as to whether the tax benefit will more-likely-than-not be realized isbased upon the technical merits of the tax position as well as consideration of the available facts and circumstances. TheCompany recognizes interest and penalties accrued on any unrecognized tax benefits within the provision for incometaxes in its consolidated statements of operations. As of September 30, 2014 and 2015, the Company does not have anysignificant uncertain tax positions. The Company’s income tax returns for the years from 2011 through 2014 remain openfor examination by the Internal Revenue Service as well as various states and municipalities.

The Company does not recognize tax benefits that are not more-likely-than-not to be supported based upon the technicalmerits of the tax position taken. A reconciliation of the beginning and ending amount of unrecognized tax benefits is asfollows:

Year Ended September 30,2014 2015

Balance at beginning of year $ 479,490 $ 1,564,411Additions based on tax positions related to the current year 1,084,921 190,218

Balance at end of year $ 1,564,411 $ 1,754,629

The Company does not anticipate material change in the unrecognized tax benefits in the next 12 months. Theseunrecognized tax benefits, if recognized, would affect the annual effective tax rate.

Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operatingloss carryforwards may be subject to annual limitations against taxable income in future periods, which could substantially

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Oncobiologics, Inc.Notes to Consolidated Financial Statements

limit the eventual utilization of such carryforwards. The Company has not analyzed the historical or potential impact of itsequity financings on beneficial ownership and therefore no determination has been made whether the net operating losscarry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, therewould be a reduction in the deferred tax assets with an offsetting reduction in the valuation allowance.

15. Subsequent EventsThe Company has evaluated subsequent events from the balance sheet date through the date at which the consolidatedfinancial statements were available to be issued, and determined there are no other items requiring disclosure.

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Oncobiologics, Inc. Consolidated Balance Sheets

(unaudited)

September 30, 2015

December 31, 2015

Pro Forma December 31,

2015AssetsCurrent assets:

Cash $ 9,070,975 $ 5,582,255 $ 10,806,901Accounts receivable 20,000 103,090 103,090Stock subscription receivable 4,280,149 2,749,997 —Related party receivable — 639,173 639,173Prepaid and other current assets 1,793,109 1,651,036 1,651,036

Total current assets 15,164,233 10,725,551 13,200,200Property and equipment, net 17,759,938 17,504,020 17,504,020Restricted cash 213,663 213,663 213,663Deferred offering costs 960,563 1,974,844 1,974,844Other assets 910,224 904,791 904,791

Total assets $ 35,008,621 $ 31,322,869 $ 33,797,518Liabilities, redeemable preferred stock, common stock, noncontrolling interests

and stockholders’ equity (deficit)Current liabilities:

Current portion of debt $ 742,646 $ 751,190 $ 751,190Current portion of capital lease obligations 862,849 864,902 864,902Current portion of stockholder notes 14,214,196 10,140,813 10,140,813Accounts payable 11,563,055 11,667,512 11,616,992Accrued expenses 5,924,648 8,604,917 8,604,917Income taxes payable 1,754,629 1,804,629 1,804,629Deferred revenue 1,979,576 1,979,576 1,979,576

Total current liabilities 37,041,599 35,813,539 35,763,019Long-term debt 2,922,764 2,737,227 2,737,227Capital lease obligations 1,219,373 994,668 994,668Stockholder notes 2,000,000 — —Deferred revenue 6,365,945 5,871,051 5,871,051Stock-based compensation liability 12,726,722 — —Other liabilities 284,710 454,988 454,988

Total liabilities 62,561,113 45,871,473 45,820,953

Redeemable preferred stock, common stock and noncontrolling interests:Redeemable preferred stock, no par value:

Series A – 8,000 shares authorized; 3,568 issued and outstanding atSeptember 30, 2015; No shares authorized, issued or outstanding atDecember 31, 2015 5,072,653 — —

Series B – 4,000 shares authorized, issued and outstanding at September 30,2015; No shares authorized, issued or outstanding at December 31, 2015 5,118,208 — —

Redeemable common stock – 1,739,130 shares issued and outstanding atSeptember 30, 2015 and December 31, 2015 actual 15,426,673 16,366,212 —

Redeemable noncontrolling interests 1,703,777 — —Total redeemable preferred stock, common stock and noncontrolling interests 27,321,311 16,366,212 —

Stockholders’ equity (deficit):Series A preferred stock, par value $0.01 per share: 10,0000,000 shares authorized,

11,819 shares issued and outstanding at December 31, 2015 (liquidation prefence of $11,819,000 at December 31, 2015) — 118 —

Common stock, par value $0.01 per share; 100,000,000 shares authorized at December 31, 2015; 12,339,877 shares issued and outstanding at December 31, 2015 actual and 16,136,112 shares issued and outstanding pro forma — 123,399 161,361

Common stock, no par value; 100,000,000 shares authorized at September 30,2015; 9,436,294 shares issued and outstanding at September 30, 2015; no sharesauthorized issued or outstanding at December 31, 2015 39,844,900 — —

Additional paid-in capital — 79,890,165 98,743,702Accumulated deficit (94,064,286 (110,928,498 (110,928,498

Total Oncobiologics, Inc. stockholders' equity (deficit) (54,219,386 (30,914,816 (12,023,435Non controlling interests (654,417 — —

Total stockholders' equity (deficit) (54,873,803 (30,914,816 (12,023,435Total liabilities, redeemable preferred stock, common stock, noncontrolling

interests and stockholders' equity (deficit) $ 35,008,621 $ 31,322,869 $ 33,797,518

See accompanying notes to unaudited interim consolidated financial statements

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Oncobiologics, Inc. Consolidated Statements of Operations

(unaudited)

Three Months Ended December 31,2014 2015

Collaboration revenues $ 2,934,555 $ 994,894

Operating expenses:Research and development 5,840,030 12,733,976General and administrative 1,237,839 4,674,155

7,077,869 17,408,131

Loss from operations (4,143,314 (16,413,237Interest expense 357,580 398,975

Loss before income taxes (4,500,894 (16,812,212Income tax expense 406,363 52,000

Net loss (4,907,257 (16,864,212Accretion of redeemable preferred stock and noncontrolling interests (1,071,164 (939,539Deemed dividends upon the repurchase of Series A redeemable preferred stock and

redeemable noncontrolling interests (1,230,998 —

Net loss attributable to common stockholders of Oncobiologics, Inc. $ (7,209,419 $ (17,803,751

Per share information:Net loss per share of common stock, basic and diluted $ (0.77 $ (1.36

Weighted-average shares outstanding, basic and diluted 9,377,450 13,061,557

Pro forma net loss per share of common stock – basic and diluted $ (1.12

Pro forma weighted-average shares outstanding 15,031,375

See accompanying notes to unaudited interim consolidated financial statements

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Oncobiologics, Inc. Consolidated Statements of Redeemable Preferred Stock, Common Stock, Noncontrolling Interests and Stockholders' Equity (Deficit)

For the Three Months Ended December 31, 2015 (unaudited)

Redeemable Preferred Stock, Common Stock and Noncontrolling Interests Stockholders’ Equity (Deficit)Preferred Stock

Common Stock Noncontrolling Interests

Series A Preferred Stock Common Stock Additional Paid-in Capital

Accumulated Deficit

Noncontrolling Interests

Total Stockholders’

Equity (Deficit)

Series A Series BShares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Balance at October 1, 2015 3,568 $ 5,072,653 4,000 $ 5,118,208 1,739,130 $15,426,673 $ 1,703,777 — $ — 9,436,294 $ 39,844,900 $ — $ (94,064,286 $ (654,417 $ (54,873,803Deconsolidation of Sonnet

Biotherapeutics, Inc. — — — — — — — — — — — — — 654,417 654,417Employee tax witholdings

related to the vesting ofrestricted stock — — — — — — — — — (2,782 (71,760 — — — (71,760

Reincorporation to a DelawareCorporation (3,568 (5,072,653 (4,000 (5,118,208 — — — 10,193 102 2,193,601 (39,656,869 49,847,628 — — 10,190,861

Issuance of preferred andcommon stock upon thedissolution of Parilis — — — — — — (1,703,777 1,626 16 226,663 2,267 1,701,494 — — 1,703,777

Sale of common stock, net ofissuance costs — — — — — — — — — 486,101 4,861 14,063,826 — — 14,068,687

Reclassification of stock-based compensation liability — — — — — — — — — — — 15,118,584 — — 15,118,584

Stock-based compensationexpense — — — — — — — — — — — 98,172 — — 98,172

Accretion of redeemablecommon stock — — — — — 939,539 — — — — — (939,539 — — (939,539

Net loss — — — — — — — — — — — — (16,864,212 — (16,864,212Balance at December 31,

2015 — $ — — $ — 1,739,130 $16,366,212 $ — 11,819 $ 118 12,339,877 $ 123,399 $79,890,165 $(110,928,498 $ — $ (30,914,816

See accompanying notes to unaudited interim consolidated financial statements

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Oncobiologics, Inc. Consolidated Statements of Cash Flows

(unaudited)

Three Months Ended December 31,2014 2015

Operating activities:Net loss $ (4,907,257 $ (16,864,212Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 222,075 593,977Non-cash interest expense 2,117 3,065Stock-based compensation 145,674 2,490,034Changes in operating assets and liabilities:

Accounts receivable (2,501,360 (83,090Prepaid expenses and other current assets (702,599 142,073Other assets — 5,433Accounts payable 1,594,145 (233,942Accrued expenses 239,224 2,203,188Income taxes payable 226,113 50,000Deferred revenue 2,015,445 (494,894Other liabilities — 176,087

Net cash used in operating activities (3,666,423 (12,012,281

Investing activities:Purchase of property and equipment (527,877 (364,242Net cash used in investing activities (527,877 (364,242

Financing activities:Repurchase of Series A redeemable preferred stock (50,001 —Proceeds from the sale of common stock — 11,318,690Proceeds from subscriptions receivable — 4,280,149Proceeds from future stock issuance — 50,520Payments of capital leases obligations (88,984 (222,652Repayment of debt (189,938 (180,058Proceeds from stockholder notes 4,000,000 —Repayment of stockholder notes — (6,073,383Change in restricted cash (550 —Proceeds from related party receivable — 187,388Deconsolidation of Sonnet Biotherapeutics, Inc. — (401,091Payment of employee tax witholdings related to the vesting of restricted stock — (71,760Net cash provided by financing activities 3,670,527 8,887,803

Net decrease in cash (523,773 (3,488,720Cash at beginning of period 2,349,313 9,070,975Cash at end of period $ 1,825,540 $ 5,582,255

Supplemental disclosure of cash flow informationCash paid for interest $ 265,078 $ 496,296Cash paid for taxes $ 250 $ 2,000Supplemental schedule of noncash investing activities:

Purchases of property and equipment in accounts payable and accrued expenses $ (402,050 $ (200,780

Supplemental schedule of noncash financing activities:Accretion of redeemable preferred stock, common stock and noncontrolling interests $ 1,071,164 $ 939,539Deemed dividend upon repurchase of Series A redeemable preferred stock in excess of

carrying value $ 1,230,998 $ —Issuance of common stock and Series A preferred stock to redeemable preferred

stockholders and noncontrolling interests upon reincorporation $ — $ (11,894,638Reclassification of equity classified stock-based compensation $ — $ (15,118,584Issuance of capital lease obligations in connection with purchase of property and equipment $ 523,293 $ —Issuance of notes payable upon repurchase of redeemable noncontrolling interests $ 2,761,818 $ —Issuance of subscription receivable upon sale of common stock $ — $ (2,749,997Deferred offering costs and common stock issuance costs in accounts payable and accrued

expenses $ — $ (1,014,281

See accompanying notes to unaudited interim consolidated financial statements

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Oncobiologics, Inc. Notes to Unaudited Interim Consolidated Financial Statements

1. Organization and Description of Business

Oncobiologics, Inc. (“Oncobiologics” or the “Company”) was incorporated in New Jersey on January 5, 2010 and startedoperations in July 2011. Oncobiologics is a clinical-stage biopharmaceutical company focused on identifying, developing,manufacturing and commercializing complex biosimilar therapeutics in the disease areas of immunology and oncology.The Company has established fully integrated in-house development and manufacturing capabilities that addresses thenumerous complex technical and regulatory challenges in developing and commercializing mAb biosimilars. Sinceinception, the Company has advanced two product candidates into clinical trials: a Phase 3-ready biosimilar toadalimumab (Humira ) and a Phase 3-ready biosimilar to bevacizumab (Avastin ). Additionally, the Company has sixpreclinical biosimilar product candidates under active development, two of which are expected to enter clinical trials in2016.

In October 2015, the Company reincorporated in Delaware through the merger with and into Oncobiologics, Inc., a newlyformed Delaware corporation, with the Delaware corporation surviving the merger. As a result of the merger, each share ofthe Company’s previously issued and outstanding common stock converted into and became a share of common stock ofthe Delaware corporation on a 1-for-1 basis, each share of the Company’s previously issued and outstanding Series Aredeemable preferred stock converted into 289 shares of common stock and approximately 1.4035 shares of Series Apreferred stock of the Delaware corporation, and each share of the Company’s previously issued and outstanding SeriesB redeemable preferred stock converted into 289 shares of common stock and approximately 1.2867 shares of Series Apreferred stock of the Delaware corporation. The holders of Series A and B preferred stock also received an aggregate of10,193 shares of Series A preferred stock of the Delaware corporation. Additionally, effective upon the reincorporation andin connection with the dissolution of the Company’s business development subsidiary, Parilis Biopharmaceuticals(“Parilis”), the Company issued 226,663 shares of common stock and 1,626 shares of Series A preferred stock to theholders of outstanding Parilis preferred member units in exchange for all such units.

2. Liquidity

The Company has incurred substantial losses and negative cash flows from operations since its inception and has anaccumulated deficit of $94.1 million and $110.9 million as of September 30, 2015 and December 31, 2015, respectively. Inaddition, the Company has $14.2 million and $10.1 million of indebtedness that is due on demand as of September 30,2015 and December 31, 2015, respectively. These factors raise substantial doubt about the Company’s ability to continueas a going concern. The accompanying unaudited interim consolidated financial statements have been prepared on agoing concern basis, which contemplate the realization of assets and satisfaction of liabilities in the normal course ofbusiness. The unaudited interim consolidated financial statements do not include any adjustments related to therecoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might resultfrom the outcome of this uncertainty.

The Company has substantial indebtedness that includes $10.1 million in notes payable to stockholders that are payableon demand. There can be no assurance that note holders will not exercise their right to demand repayment.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of itsproducts currently in development. Substantial additional financing will be needed by the Company to fund its operationsand to commercially develop its product candidates. Management is currently evaluating different strategies to obtain therequired funding for future operations. These strategies may include, but are not limited to: private placements of equityand/or debt, payments from potential strategic research and development, licensing and/or marketing arrangements withpharmaceutical companies, and public offerings of equity and/or debt securities. There can be no assurance that thesefuture funding efforts will be successful.

3. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in conformity with U.S.generally accepted accounting principles (“GAAP”) for interim financial information. Any reference in these notes toapplicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and AccountingStandards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

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■ The issuance of 87,287 shares of common stock in January 2016 for a purchase price of $29.05 per share forapproximately $2.5 million net proceeds.

■ Cash proceeds of approximately $2.7 million received subsequent to December 31, 2015 related to stock issuedin December 2015.

■ The conversion of 11,819 shares of Series A preferred stock into 1,969,818 shares of common stock.

■ The reclassification of 1,739,130 shares of redeemable common stock upon lapse of a contractual redemptionright.

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

In the opinion of management, the accompanying consolidated financial statements include all normal and recurringadjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements)considered necessary to present fairly the Company’s financial position as of December 31, 2015 and its results ofoperations and cash flows for the three months ended December 31, 2014 and 2015. Operating results for the threemonths ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year endingSeptember 30, 2016. The interim financial statements, presented herein, do not contain the required disclosures underGAAP for annual financial statements. The accompanying unaudited interim financial statements should be read inconjunction with the annual audited financial statements and related notes as of and for the year ended September 30,2015.

Recapitalization

On April 26, 2016, the Company filed a certificate of amendment to amend its certificate of incorporation effecting a 1-for-3.45 reverse split of the Company’s common stock. All references in the consolidated financial statements to the numberof shares and per-share amounts of common stock have been retroactively restated to reflect the reverse split.

Unaudited pro forma balance sheet

The unaudited pro forma consolidated balance sheet as of December 31, 2015 assumes the following:

Use of estimates

The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires managementto make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during thereporting period. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding theestimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual resultsmay materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects ofrevisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to benecessary.

Income taxes

For the three months ended December 31, 2014 and 2015, the Company recorded tax expense of $406,363 and$52,000, respectively, which is attributable to the foreign withholding taxes in connection with the Company’s collaborationand licensing agreements.

Net loss per share

Basic and diluted net loss per common share is determined by dividing net loss applicable to common stockholders by theweighted-average common shares outstanding during the period. For all periods presented, the outstanding shares ofpreferred stock have been excluded from the calculation because their effects would be anti-dilutive. Therefore theweighted-average shares used to calculate both basic and diluted loss per share are the same.

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■ Level 1 — Quoted prices in active markets for identical assets or liabilities.

■ Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets forsimilar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities,or other inputs that are observable or can be corroborated by observable market data.

■ Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant todetermining the fair value of the assets or liabilities, including pricing models, discounted cash flowmethodologies and similar techniques.

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average sharesoutstanding as of December 31, 2014 and 2015, as they would be antidilutive:

December 31,2014 2015

Series A redeemable preferred stock 1,059,710 —Series B redeemable preferred stock 1,159,418 —Series A preferred stock — 1,969,818Performance share units — 249,510Restricted stock units — 1,066,193Unvested shares of restricted common stock 32,463 —Convertible stockholder note 96,618 96,618

Amounts in the table above reflect the common stock equivalents of the noted instruments.

The unaudited pro forma net loss per common share is computed using the weighted-average number of common sharesoutstanding and assumes the issuance of 1,969,818 shares of common stock upon settlement of the Series A liquidationvalue of $11,819,000 assuming the initial public offering price of $6.00 per share of common stock included in the unitssold in this offering. The pro forma weighted-average shares outstanding of 15,031,375 was used to compute the proforma net loss per common share.

The following table summarizes the calculation of unaudited pro forma basic and diluted net loss per common share:

Numerator:Net loss applicable to common stockholders of Oncobiologics, Inc. $ (17,803,751Effect of pro forma adjustments:

Accretion of redeemable common stock 939,539

Pro forma net loss attributable to common stockholders of Oncobiologics, Inc. $ (16,864,212

Denominator:Weighted-average common shares outstanding 13,061,557

Conversion of Series A preferred stock liquidation value 1,969,818Shares used in computing unaudited pro forma weighted-average basic and diluted common shares

outstanding 15,031,375

Unaudited pro forma basic and diluted net loss per common share $ (1.12

4. Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that wouldbe received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for theasset or liability in an orderly transaction between market participants on the measurement date. Valuation techniquesused to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels ofthe fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of anyinput that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observableinputs and minimize the use of unobservable inputs.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis:

September 30, 2015(Level 1) (Level 2) (Level 3)

LiabilitiesStock-based compensation liability $ — $ — $ 12,726,722

The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the stock-based compensation liability for the three months ended December 31, 2015:

Balance at October 1, 2015 $ 12,726,722Change in fair value 2,391,862Reclassification to stockholders’ equity (15,118,584Balance at December 31, 2015 $ —

As of December 31, 2015, the Company has no assets or liabilities that were measured at fair value.

The Company has issued stock-based performance units (“PSUs”), which generally have a ten year life from the date ofgrant and vest 50% after the third anniversary from issuance and the remaining 50% on the fourth anniversary. In addition,the PSUs are exercisable upon the earlier of (i) a change in control, (ii) consummation of an initial public offering, or (iii) acorporate valuation in excess of $400 million and at the discretion by the Company’s Board of Directors. Upon exercise,the PSU holder received a cash payment for the difference between the current per share value of the Company and thebase price of the PSU. Given the cash settlement, the PSUs were liability classified and re-measured at each reportingdate with changes in fair value recorded within the Company’s consolidated statements of operations. In December 2015,the PSUs were modified to provide for settlement in common stock or cash, at the Company’s discretion. As a result ofthis modification, the carrying value of the PSUs was reclassified to stockholders’ equity (deficit).

The PSUs contain a market condition as the exercisability of the awards are based on the Company achieving a marketvalue of $400 million during the relevant performance period. The fair value of the market condition is valued using aMonte Carlo simulation model. The significant assumptions used in preparing the Monte Carlo simulation model include(i) volatility of the Company’s common stock, (ii) risk free interest rate, (iii) base price of the PSUs, (iv) fair value of theCompany’s common stock and enterprise value of the Company, and (v) derived service period.

The fair value of the PSUs of $22.22 and $25.70 per PSU at September 30, 2015 and December 31, 2015, respectively,was derived using the following assumptions:

September 30, 2015

December 31, 2015

Risk-free interest rate 1.4% 1.2%Derived service period 5 years 3 yearsExpected volatility 60% 55%Annual dividend yield 0% 0%Fair value of common stock $25.79 per share $29.05 per share

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

5. Property and Equipment

Property and equipment, net, consists of:

September 30, 2015

December 31, 2015

Laboratory equipment $ 10,936,364 $ 10,841,019Leasehold improvements 9,889,521 9,927,614Computer software and hardware 402,075 419,684Construction in process 175,425 484,985

21,403,385 21,673,302Less: accumulated depreciation and amortization (3,643,447 (4,169,282

$ 17,759,938 $ 17,504,020

Depreciation and amortization expense for the three months ended December 31, 2014 and 2015 was $222,075 and$593,977, respectively.

At September 30, 2015 and December 31, 2015, $3,530,301 represents laboratory equipment under capital leases. Theterm of the leases are between 11 and 36 months and qualify as capital leases. The leases bear interest between 8.6%and 21.4%. At September 30, 2015 and December 31, 2015, $407,210 and $538,308, respectively, of accumulateddepreciation related to this leased equipment has been recognized.

6. Accrued Expenses

Accrued expenses consists of:

September 30, 2015

December 31, 2015

Compensation $ 2,321,508 $ 2,535,850Research and development 951,759 2,342,960Interest payable 806,475 671,532Deferred offering costs 657,892 1,434,973Professional fees 594,572 938,426Director fees 414,421 464,422Other accrued expenses 178,021 216,754

$ 5,924,648 $ 8,604,917

7. Redeemable Preferred Stock, Common Stock, Noncontrolling Interests and Stockholders’ Equity(Deficit)

Common stock

During the three months ended December 31, 2015, the Company sold 486,101 shares of its common stock at $29.05 pershare raising $14,068,687 in net proceeds, of which $2,749,997 was received in January 2016.

Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders.Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’sstockholders. Subject to preferences that may apply to any outstanding preferred stock, holders of common stock areentitled to receive ratably any dividends that the Company’s board of directors may declare out of funds legally availablefor that purpose on a non-cumulative basis. No dividends had been declared through December 31, 2015.

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

Series A preferred stock

In the event of a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, or in the event of aDeemed Liquidation Event, as defined, holders of Series A preferred stock (“Series A”) are entitled to receive, inpreference to all other stockholders, an amount equal to the original issue price, as defined in the Articles of Incorporationfor the Series A, plus any unpaid accrued dividends. If upon the occurrence of such event, the assets and funds thusdistributed among the holders of the Series A shall be insufficient to pay such holders, then the entire assets and funds ofthe Company legally available for distribution shall be distributed ratably among the holders of the Series A in proportion tothe respective amount of such stock owned by each such holder.

The Company may redeem the Series A, in whole at any time and from time to time in part, at the option of the Company,for cash, at a redemption price equal to the Original Issuance Price plus any unpaid accrued dividends. The holders of theSeries A have no voting rights outside of matters directly related to Series A preferred stock. Immediately prior to theclosing of an initial public offering, any outstanding shares of Series A will automatically convert into shares of commonstock at a conversion price equal to the initial public offering price per share and divided by the liquidation values of theSeries A.

Deconsolidation of noncontrolling interests

Through September 30, 2015, the Company consolidated the operations of Sonnet Biotherapeutics, Inc. (“Sonnet”), whichwas spun-off to the Company’s stockholders in April 2015, since the Company was the primary funding source to Sonnetthrough September 2015. Effective October 1, 2015, additional capital was contributed to Sonnet by third-party investorstriggering a reconsideration event, which resulted in the Company no longer being considered the primary beneficiary andas a result, the Company has deconsolidated Sonnet. Sonnet issued the Company a $826,561 promissory note whichreflects the funding the Company provided Sonnet through September 30, 2015. The note bears interest at 3.0% andmatures September 30, 2016. There were no gains or losses recognized upon deconsolidation since no equity interestwas owned by the Company.

8. Stock-Based Compensation2011 Equity Incentive Plan

The Company’s 2011 Equity Compensation Plan (the “2011 Plan”) provides for the Company to sell or issue restrictedcommon stock, restricted stock units (“RSUs”), performance-based awards, cash-based awards or to grant stock optionsfor the purchase of common stock. The 2011 Plan is administered by the board of directors or, at the discretion of theboard of directors, by a committee of the board. The number of shares of common stock reserved for issuance under the2011 Plan is 1,159,420, which may be granted to officers, employees, consultants and directors of the Company. As ofDecember 31, 2015, performance-based stock units (“PSUs”) representing 249,510 shares of the Company’s commonstock were outstanding under the 2011 Plan. Upon the adoption of the 2015 Equity Incentive Plan, no future awards underthe 2011 Plan will be issued.

2015 Equity Incentive Plan

In December 2015, the Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides forthe grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performancestock awards and other forms of equity compensation to employees, directors and consultants. The maximum number ofshares of common stock that may be issued under the 2015 Plan is 1,246,377 shares. As of December 31, 2015, RSUsrepresenting 1,066,193 shares of the Company’s common stock were outstanding under the 2015 Plan and 180,184shares remained available for grant under the 2015 Plan.

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

The Company recorded stock-based compensation expense in the following expense categories of its statements ofoperations for the three months ended December 31, 2014 and 2015:

December 31,2014 2015

Research and development $ 84,275 $ 1,356,408General and administrative 61,399 1,133,626

$ 145,674 $ 2,490,034

December 31,2014 2015

Equity-classified compensation $ 2,231 $ 98,172Liability-classified compensation 143,443 2,391,862

$ 145,674 $ 2,490,034

Performance-based stock units

The Company has issued PSUs, which generally have a ten year life from the date of grant and vest 50% after the thirdanniversary from issuance and the remaining 50% on the fourth anniversary. The PSUs are exercisable upon the earlier of(i) a change in control, (ii) consummation of an initial public offering, or (iii) a corporate valuation in excess of $400 millionand at the discretion by the Company’s board of directors. Upon exercise, the PSU holder receives common stock orcash, at the Company’s discretion. See note 4 for discussion of fair value of the PSUs.

The following table summarizes the PSU activity for the three months ended December 31, 2015:

Number of

PSUs

Base Price

Per PSUBalance at October 1, 2015 687,013 $ 3.45Forfeitures (2,723 3.45Exchanged for restricted stock units (434,780 3.45Balance at December 31, 2015 249,510 $ 6.35

In December 2015, the Company completed a tender-offer to holders of outstanding PSUs to amend the terms of suchoutstanding awards to increase the base price to an amount equal to the fair market value of a share of the Company’scommon stock on the date of grant of the PSU, remove the right to be paid dividend equivalents and provide forsettlement in shares of the Company’s common stock or cash, at the Company’s discretion. Upon amending thesettlement terms of the PSUs, the Company reclassified the stock-based compensation liability to additional paid-incapital.

Concurrent with the tender-offer, several PSU holders cancelled an aggregate of 434,780 PSUs in exchange for 391,303restricted stock units (“RSUs”). The Company accounted for the exchange as a modification, and, as a result, recognized$98,172 of additional stock-based compensation during the three months ended December 31, 2015 based on the fairvalue of the RSUs in excess of the fair value of the PSUs exchanged.

As of December 31, 2015, there was $1,100,000 of unamortized expense that will be recognized in future periods.

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))

■ 525,999 RSUs with 50% vesting on each of the first and second anniversaries of the recipient’s grant date

■ 21,738 RSUs with one-third vesting on each of the first, second, and third anniversaries of the recipient’s hiredate

■ 130,434 RSUs with 50% vesting on each of the third and fourth anniversaries of the recipient’s hire date

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Oncobiologics, Inc.Notes to Unaudited Interim Consolidated Financial Statements

Restricted stock units

The following table summarizes the activity related to RSUs granted during the three months ended December 31, 2015:

Number of

RSUsGrant Date Fair Value

Balance at October 1, 2015 — $ —Granted 674,890 29.05Issued in connection with PSU exchange 391,303 29.05Balance at December 31, 2015 1,066,193 $ 29.05

As of December 31, 2015, there were 388,022 RSUs that will vest upon the closing of the Company’s IPO or a change incontrol. The remaining 678,171 RSUs will vest upon an IPO or change in control and over the following time-basedvesting periods:

The closing of an IPO or a change in control are performance conditions that are outside the Company’s control.Therefore, the Company will not recognize any stock-based compensation for the RSUs until the performance conditionshave been achieved. As of December 31, 2015, there was $21,100,000 of unamortized expense.

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5,833,334 Units

PRELIMINARY PROSPECTUS

Jefferies Barclays

Cantor Fitzgerald & Co.

, 2016

Until , 2016 (25 days after the date of this prospectus), all dealers that buy, sell or trade oursecurities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery isin addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect totheir unsold allotments or subscriptions.

■ any breach of the director’s duty of loyalty to us or our stockholders;

■ any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

■ any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or

■ any transaction from which the director derived an improper personal benefit.

■ we may indemnify our directors, officers and employees to the fullest extent permitted by the Delaware GeneralCorporation Law, subject to limited exceptions;

■ we may advance expenses to our directors, officers and employees in connection with a legal proceeding to thefullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and

■ the rights provided in our bylaws are not exclusive.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable bythe registrant in connection with the sale of our securities being registered. All amounts are estimates except for theSecurities and Exchange Commission, or SEC, registration fee, the Financial Industry Regulatory Authority, or FINRA,filing fee and the NASDAQ Global Market, or NASDAQ, listing fee.

ItemAmount to

be paid

SEC registration fee $ 9,153FINRA filing fee 14,135NASDAQ listing fee 125,000Printing and engraving expenses 65,000Legal fees and expenses 1,700,000Accounting fees and expenses 800,000Transfer agent fees and expenses 4,000Miscellaneous expenses 82,712

Total $ 2,800,000

Item 14. Indemnification of Directors and Officers.

As permitted by Section 102 of the Delaware General Corporation Law, we have adopted provisions in our amended andrestated certificate of incorporation and amended and restated bylaws that limit or eliminate the personal liability of ourdirectors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting onbehalf of the corporation, directors exercise an informed business judgment based on all material information reasonablyavailable to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages forbreach of fiduciary duty as a director, except for liability for:

These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Ouramended and restated certificate of incorporation also authorizes us to indemnify our officers, directors and other agentsto the fullest extent permitted under Delaware law.

As permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws provide that:

Our certificate of incorporation, attached as Exhibit 3.1, and our bylaws, attached as Exhibit 3.3, and the amended andrestated certificate of incorporation and bylaws that will be in effect upon completion of this offering and which are filed asExhibits 3.4 and 3.5, provide for the indemnification provisions described above and elsewhere herein. We have enteredinto separate indemnification agreements with our directors and officers that may be broader than the specificindemnification provisions contained in the Delaware General Corporation Law. These indemnification agreementsgenerally require us, among other things, to indemnify our officers and directors against liabilities that may arise by reasonof their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnificationagreements also generally require us to advance any expenses incurred by the directors or officers as a result of any

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(a) In 2013, we issued a total of 1,700 shares of our Series B redeemable preferred stock to one institutional investorand two individual investors for a purchase price of $1,000 per share, or $1,700,000 in the aggregate. Each share ofSeries B redeemable preferred stock converted into shares of our common stock and Series A preferred stock inOctober 2015 in connection with our reincorporation in Delaware.

(b) From March 2013 to May 2013, we issued a total of 605 shares of our Series A redeemable preferred stock to fiveindividual investors for a purchase price of $1,000 per share, or $605,000 in the aggregate. Each share of Series Aredeemable preferred stock converted into shares of our common stock and Series A preferred stock inOctober 2015 in connection with our reincorporation in Delaware.

(c) Between July 2013 and November 2013, we issued 159,420 shares of common stock to two individuals for servicesprovided in connection with sales of redeemable preferred stock. All of these shares of common stock converted intoshares of our common stock in October 2015 in connection with our reincorporation in Delaware.

(d) In March 2014 we sold an aggregate of 1,159,420 shares of our common stock to an institutional investor at apurchase price of $6.04 per share, or $7,000,000. In June 2014, we sold an additional 579,710 shares of ourcommon stock to this investor at a purchase price of $6.90 per share, or $4,000,000. All of these shares of commonstock converted into shares of our common stock in October 2015 in connection with our reincorporation inDelaware.

(e) From June 2014 through November 13, 2015, we issued 711,430 performance stock units, or PSUs, in exchange forshares of restricted stock and stock options granted prior to June 2014, and approximately 56,869 additional PSUsduring the years ended September 30, 2014 and 2015, all of which were granted under our 2011 Equity IncentivePlan. Of the shares of restricted stock included in the exchange, 96,666 shares of restricted stock were grantedsubsequent to November 2012.

(f) In June, July and September 2015, we sold an aggregate of 1,765,511 shares of our common stock to nineinstitutional investors for a purchase price of $25.79 per share or approximately $45.5 million in the aggregate.Citigroup Global Markets, Inc. and Jefferies LLC, each a registered broker-dealer and member of Financial IndustryRegulation Authority, Inc., served as placement agents in this offering. The placement agents earned an aggregate of$1.4 million in commissions with respect to this offering.

(g) In October 2015, in connection with our reincorporation in Delaware, we issued 2,193,601 shares of our commonstock and 10,193 shares of our Series A preferred stock in exchange for all then outstanding shares of commonstock, Series A redeemable preferred stock and Series B redeemable preferred stock.

(h) In October 2015, we issued 226,663 shares of our common stock and 1,626 shares of our Series A preferred stock inexchange for all outstanding Series A and Series A Hybrid Units of our former subsidiary Parilis BiopharmaceuticalsLLC.

(i) In December 2015, we issued 1,066,193 restricted stock unit awards under our 2015 Equity Incentive Plan.

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proceeding against them as to which they could be indemnified. In addition, we have purchased a policy of directors’ andofficers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of ajudgment in some circumstances. These indemnification provisions and the indemnification agreements may besufficiently broad to permit indemnification of our officers and directors for liabilities, including reimbursement of expensesincurred, arising under the Securities Act of 1933, as amended, or the Securities Act.

We have entered into indemnification agreement with our directors and executive officers, in addition to theindemnification provided for in our amended and restated certificate of incorporation and amended and restated bylaws,and intend to enter into indemnification agreements with any new directors and executive officers in the future.

We have purchased and currently intend to maintain insurance on behalf of each and every person who is or was adirector or officer of our company against any loss arising from any claim asserted against him or her and incurred by himor her in any such capacity, subject to certain exclusions.

The form of Underwriting Agreement, attached as Exhibit 1.1 hereto, provides for indemnification by the underwriters of usand our officers who sign this Registration Statement and directors for specified liabilities, including matters arising underthe Securities Act.

Item 15. Recent Sales of Unregistered Securities.

The following list sets forth information as to all securities we have sold since the preceding three years up to the date ofthis document, which were not registered under the Securities Act.

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(j) In December 2015 and January 2016, we sold an aggregate of 573,388 shares of our common stock to 19accredited investors for a purchase price of $29.05 per share or approximately $16.6 million in the aggregate.Jefferies LLC, Arclight Advisors LLC and Alere Financial Partners (a division of Cova Capital Partners, LLC), each aregistered broker-dealer and member of Financial Industry Regulation Authority, Inc., served as placement agents inthis offering. The placement agents earned an aggregate of approximately $62,500 in commissions with respect tothis offering.

(k) In April 2016, we issued 30,421 restricted stock unit awards under our 2015 Equity Incentive Plan.

(l) In April 2016, we entered into an amendment of that certain investors’ rights agreement dated March 10, 2014, asamended, and agreed, under certain circumstances, to issue certain of the accredited investors upon the closing ofthis offering three-year warrants to purchase an aggregate of 1,520,284 shares of our common stock.

(a) Exhibits. See the Exhibit Index attached to this Registration Statement, which is incorporated by reference herein.

(b) Financial Statement Schedules. Schedules not listed above have been omitted because the information required tobe set forth therein is not applicable or is shown in the financial statements or notes thereto.

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registrationstatement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (orthe most recent post-effective amendment thereof) which, individually or in the aggregate, represent afundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, anyincrease or decrease in volume of securities offered (if the total dollar value of securities offered would notexceed that which was registered) and any deviation from the low or high end of the estimated maximumoffering range may be

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We claimed exemption from registration under the Securities Act for the sale and issuance of securities in the transactionsdescribed in paragraphs (a)-(d), (f)-(h), (j) and (l) by virtue of Section 3(a)(9), 4(a)(2) and/or Regulation D promulgatedthereunder as transactions not involving any public offering. All of the purchasers of unregistered securities for which werelied on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as defined under theSecurities Act. We claimed such exemption on the basis that (a) the purchasers in each case represented that theyintended to acquire the securities for investment only and not with a view to the distribution thereof and that they eitherreceived adequate information about the registrant or had access, through employment or other relationships, to suchinformation and (b) appropriate legends were affixed to the stock certificates issued in such transactions.

We claimed exemption from registration under the Securities Act for the sales and issuances of securities in thetransactions described in paragraphs (e), (i) and (k) above under Section 4(a)(2) of the Securities Act in that such salesand issuances did not involve a public offering or under Rule 701 promulgated under the Securities Act, in that they wereoffered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation,as provided by Rule 701.

Item 16. Exhibits and Financial Statement Schedules.

Item 17. Undertakings.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwritingagreement certificates in such denominations and registered in such names as required by the underwriters to permitprompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers andcontrolling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advisedthat in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is,therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment bythe Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successfuldefense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with thesecurities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled bycontrolling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it isagainst public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

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(iii) to include any material information with respect to the plan of distribution not previously disclosed in theregistration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effectiveamendment shall be deemed to be a new registration statement relating to the securities offered therein, and theoffering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered whichremain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser in the initial distributionof the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersignedregistrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities tothe purchaser, if the securities are offered or sold to such purchaser by means of any of the followingcommunications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sellsuch securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to befiled pursuant to Rule 424 (§230.424 of this chapter);

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant orused or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about theundersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(5) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectusfiled as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed bythe Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of thisRegistration Statement as of the time it was declared effective.

(6) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains aform of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, andthe offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, thechanges in volume and price represent no more than a 20% change in the maximum aggregate offering priceset forth in the “Calculation of Registration Fee” table in the effective registration statement; and

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 5 to theRegistration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Cranbury,New Jersey, on May 11, 2016.

ONCOBIOLOGICS, INC.

By: /s/ Pankaj MohanPankaj Mohan, Ph.D.Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 5 to the Registration Statement has beensigned by the following persons in the capacities and on the dates indicated.

Signature Title Date

/s/ Pankaj MohanPankaj Mohan, Ph.D.

Chairman, President and Chief ExecutiveOfficer

(Principal Executive Officer)

May 11, 2016

/s/ Lawrence A. KenyonLawrence A. Kenyon

Chief Financial Officer(Principal Accounting and Financial Officer)

May 11, 2016

*Todd C. Brady, M.D., Ph.D.

Director May 11, 2016

*Scott Canute

Director May 11, 2016

*Albert D. Dyrness

Director May 11, 2016

*Donald J. Griffith

Director May 11, 2016

*Kurt J. Hilzinger

Director May 11, 2016

*Robin Smith Hoke

Director May 11, 2016

*By: /s/ Pankaj Mohan

Pankaj Mohan, Ph.D.Attorney-in-fact

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EXHIBIT INDEX

Exhibit Number Description

1.1 Form of Underwriting Agreement.3.1* Certificate of Incorporation of Oncobiologics, Inc., as presently in effect.

3.2* Certificate of Amendment of Certificate of Incorporation, dated April 26, 2016.

3.3* Bylaws of Oncobiologics, Inc., as presently in effect.3.4* Form of Amended and Restated Certificate of Incorporation of Oncobiologics, Inc., to be in effect upon the

closing of this offering.

3.5* Form of Amended and Restated Bylaws of Oncobiologics, Inc., to be in effect upon the closing of this offering.

4.1 Form of Unit Certificate.

4.2 Form of Series A warrant Certificate (included in Exhibit 4.4).

4.3 Form of Series B warrant Certificate (included in Exhibit 4.4).4.4 Form of Warrant Agreement between Oncobiologics, Inc. and American Stock Transfer & Trust Company

LLC, as Warrant Agent.

5.1 Opinion of Cooley LLP.10.1 Investors’ Rights Agreement by and among Oncobiologics, Inc. and certain of its stockholders, dated

March 10, 2014, as amended.

10.2* 2011 Stock Incentive Plan.

10.3* 2015 Equity Incentive Plan.

10.4* Forms of agreements and award grant notices for 2015 Equity Incentive Plan.

10.5* 2016 Employee Stock Purchase Plan.

10.6* Employment Agreement between Oncobiologics, Inc. and Pankaj Mohan, Ph.D., dated January 1, 2011.

10.7* Offer Letter between Oncobiologics, Inc. and Lawrence A. Kenyon, dated September 3, 2015.

10.8* Offer Letter between Oncobiologics, Inc. and Elizabeth A. Yamashita, dated March 27, 2014.

10.9* Offer Letter between Oncobiologics, Inc. and Kenneth Bahrt, M.D., dated June 14, 2015.

10.10* Letter between Oncobiologics, Inc. and Todd Brady, dated September 12, 2014.

10.11* Letter between Oncobiologics, Inc. and Scott Canute, dated October 10, 2011.10.12* Form of Indemnity Agreement, by and between Oncobiologics, Inc. and each of its directors and executive

officers.10.13†* Research License Agreement by and between Oncobiologics, Inc. and Selexis SA, effective as of October 3,

2011, as amended by Amendment No. 1 dated as of October 9, 2014.10.14†* ONS-3010 Commercial License Agreement by and between Oncobiologics, Inc. and Selexis SA effective as

of April 11, 2013, as amended effective as of May 21, 2014.10.15†* ONS-1045 Commercial License Agreement by and between Oncobiologics, Inc. and Selexis SA effective as

of April 11, 2013, as amended effective as of May 21, 2014.10.16†* ONS-1050 Commercial License Agreement by and between Oncobiologics, Inc. and Selexis SA effective as

of April 11, 2013, as amended effective as of May 21, 2014.10.17* Joint Participation Agreement by and between Oncobiologics, Inc. and Zhejiang Huahai Pharmaceutical Co.,

Ltd., effective as of May 6, 2013, as amended by that Amendment No. 1 and Mutual Termination Agreementre: Joint Participation Agreement, dated December 23, 2014.

10.18* Lease Agreement by and between Oncobiologics, Inc. and Cedar Brook 7 Corporate Center, LP, dated as ofMarch 18, 2011.

10.19* First Amendment to Lease Agreement by and between Oncobiologics, Inc. and Cedar Brook 7 CorporateCenter, LP, dated as of December 2013.

10.20* Second Amendment to Lease Agreement by and between Oncobiologics, Inc. and Cedar Brook 7 CorporateCenter, LP, dated as of July 18, 2014.

10.21* Third Amendment to Lease Agreement by and between Oncobiologics, Inc. and Cedar Brook 7 CorporateCenter, LP, dated as of January 16, 2015.

10.22* Fourth Amendment to Lease Agreement by and between Oncobiologics, Inc. and Cedar Brook 7 CorporateCenter, LP, dated as of February 9, 2015.

† Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibithas been filed separately with the SEC.

* Previously filed.

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Exhibit Number Description

10.23* Fifth Amendment to Lease Agreement by and between Oncobiologics, Inc. and Cedar Brook 7 CorporateCenter, LP, dated as of September 26, 2015.

10.24* Lease Agreement by and between Cedar Brook East Corporate Center, LP and Oncobiologics, Inc., dated asof August 31, 2015.

10.25* Employment Agreement between Oncobiologics, Inc. and Pankaj Mohan, Ph.D., dated February 22, 2016, tobe in effect upon closing of this offering.

10.26* Employment Agreement between Oncobiologics, Inc. and Kenneth Bahrt, M.D., dated February 22, 2016, tobe in effect upon closing of this offering.

10.27* Employment Agreement between Oncobiologics, Inc. and Elizabeth A. Yamashita, dated February 24, 2016,to be in effect upon closing of this offering.

10.28* Employment Agreement between Oncobiologics, Inc. and Lawrence A. Kenyon, dated February 18, 2016, tobe in effect upon closing of this offering.

10.29* Form of Amended and Restated Performance Stock Unit Agreement for 2011 Stock Incentive Plan.

10.30 Form of Warrant to Purchase Common Stock.

23.1 Consent of independent registered public accounting firm.

23.2 Consent of Cooley LLP (included in Exhibit 5.1).

24.1* Power of Attorney (included on signature page to the original filing of the registration statement).

Exhibit 1.1

Oncobiologics, Inc.

[________] Units 1

Each Unit Consisting ofOne Share of Common Stock ($0.01 par value),

One Half of a Series A Warrant to purchase One Share of Common Stockand

One Half of a Series B Warrant to purchase One Share of Common Stock

Underwriting Agreement

New York, New York[____], 2016

Jefferies LLCBarclays Capital Inc.As Representatives of the several Underwriters,c/o Jefferies LLC520 Madison AvenueNew York, New York 10022 c/o Barclays Capital Inc.745 Seventh AvenueNew York, New York 10019 Ladies and Gentlemen:

Oncobiologics, Inc., a corporation organized under the laws of Delaware (the “Company”), proposes to sell to the several underwriters named in Schedule I hereto (the

“Underwriters”), for whom you (the “Representatives”) are acting as representatives, an aggregate of [•] units (the “Underwritten Securities”), each Underwritten Security consisting of (i) oneshare of common stock, $0.01 par value per share (“Common Stock”), of the Company (the “Underwritten Shares”), (ii) one half of a Series A warrant to purchase one share of Common Stock(the “Underwritten Series A Warrants”) and (iii) one half of a Series B warrant to purchase one share of Common Stock (the “Underwritten Series B Warrants” and together with theUnderwritten Series A Warrants, the “Firm Warrants”). In addition, the Company proposes to grant to the Underwriters the option to purchase from the Company up to an additional [•] units(the “Option Securities”), each Option Security consisting of (i) one share of Common Stock (the “Option Shares”), (ii) one half of a Series A warrant to purchase one share of Common Stock(the “Option Series A Warrants”) and (iii) one half of a Series B warrant to purchase one share of Common Stock (the “Option Series B Warrants” and together with the Option Series AWarrants, the “Option Warrants”), to cover over-allotments, if any. The Common Stock issuable upon exercise of the Underwritten Warrants and Option Warrants are collectively referred to asthe “Warrant Shares.” The Underwritten Securities and the Option Securities and, where applicable, the Warrant Shares, are hereinafter collectively sometimes referred to as the “Securities.”The Underwritten Shares and the Option Shares are hereinafter collectively sometimes referred to as the “Shares,” and the Firm Warrants and the Option Warrants are hereinafter collectivelysometimes referred to as the “Warrants.” To the extent there are no additional Underwriters listed on Schedule I other than you, the term Representatives as used herein shall mean you, asUnderwriters, and the terms Representatives and Underwriters shall mean either the singular or plural as the context requires. Certain terms used herein are defined in Section 20 hereof. Theoffering and sale of the Securities contemplated by this Agreement is referred to herein as the “Offering.”

As part of the offering contemplated by this Agreement, Jefferies LLC has agreed to reserve out of the Securities set forth opposite its name on the Schedule II to this Agreement, up to

[____] Underwritten Securities 2, for sale to the Company’s employees, officers, and directors and other parties associated with the Company (collectively, “Participants”), as set forth in theProspectus under

1 Plus an option to purchase from the Company, up to [_____] units to cover over-allotments , if any.2 5% of the Underwritten Securities (excluding the Option Securities that may be issued upon the Underwriters’ exercise of their over-allotment option)

the heading “Underwriting” (the “Directed Unit Program”). The Securities to be sold by Jefferies LLC pursuant to the Directed Unit Program (the “Directed Units ”) will be sold by JefferiesLLC pursuant to this Agreement at the public offering price. Any Directed Units not orally confirmed for purchase by any Participants by 7:30 A.M. New York City time on the business dayfollowing the date on which this Agreement is executed will be offered to the public by Jefferies LLC as set forth in the Prospectus.

1. Representations and Warranties. The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1. (a) The Company has prepared and filed with the Commission a registration statement (file number 333-209011) on Form S-1, including a related preliminary

prospectus, for registration under the Act of the offering and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to the Execution Time,has become effective. The Company may have filed one or more amendments thereto, including a related preliminary prospectus, each of which has previously been furnished toyou. The Company will file with the Commission a final prospectus in accordance with Rule 424(b). As filed, such final prospectus shall contain all information required by the Actand the rules thereunder and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior tothe Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latestPreliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein.

(b) On the Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined

herein) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a “settlement date”), the Prospectus (and any supplement thereto) will, complyin all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date and at the Execution Time, the Registration Statement did notcontain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; andon the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement date, the Prospectus (together with any supplement thereto) will not include any untruestatement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, notmisleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement, or theProspectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through theRepresentatives specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such informationfurnished by any Underwriter consists of the information described as such in Section 8 hereof.

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(c) (i) The Disclosure Package and the price to the public, the number of Underwritten Securities and the number of Option Securities to be included on the cover page

of the Prospectus, when taken together as a whole, (ii) each electronic road show, when taken together as a whole with the Disclosure Package and the price to the public, the numberof Underwritten Securities and the number of Option Securities to be included on the cover page of the Prospectus, and (iii) any individual Written Testing-the-WatersCommunication, when taken together as a whole with the Disclosure Package and the price to the public, the number of Underwritten Securities and the number of Option Securitiesto be included on the cover page of the Prospectus, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statementstherein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the DisclosurePackage based upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it beingunderstood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8 hereof.

(d) (i) At the time of filing the Registration Statement and (ii) as of the Execution Time (with such date being used as the determination date for purposes of this clause

(ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is notnecessary that the Company be considered an Ineligible Issuer.

(e) From the time of initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly

or through any Person authorized to act on its behalf in any Testing-the-Waters Communication) through the Execution Time, the Company has been and is an “emerging growthcompany,” as defined in Section 2(a) of the Act (an “Emerging Growth Company”). Testing-the-Waters Communication” means any oral or written communication with potentialinvestors undertaken in reliance on Section 5(d) of the Act.

(f) The Company (i) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the

Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under the Act or institutions that are accredited investors within the meaning ofRule 501 under the Act and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that theRepresentatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-WatersCommunications other than those listed on Schedule III hereto. "Written Testing-the-Waters Communication" means any Testing-the-Waters Communication that is a writtencommunication within the meaning of Rule 405 under the Act.

(g) Each Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the Registration Statement. The foregoing

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sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company byany Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriterconsists of the information described as such in Section 8 hereof.

(h) Each of the Company and its Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction in

which it is chartered or organized with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in theDisclosure Package and the Prospectus, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires suchqualification, except where the failure to qualify would not reasonably expected to have a Material Adverse Effect.

(i) The Units have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will constitute legal, valid and binding

obligations of the Company, enforceable in accordance with their terms except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership,liquidation, fraudulent conveyance, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles; the Shares to becombined with Warrants to form the Units to be issued and sold by the Company to the Underwriters hereunder have been duly and validly authorized and, when issued and deliveredagainst payment therefor as provided herein, will be duly and validly issued, fully paid and nonassessable and free of statutory and contractual preemptive rights, resale rights, rightsof first refusal and similar rights; the Warrants have been duly and validly authorized and, when executed, issued and delivered against payment therefor as provided herein and in theWarrants, will constitute legal, valid and binding obligations of the Company, enforceable in accordance with their terms except as the enforceability thereof may be limited bybankruptcy, insolvency, reorganization, receivership, liquidation, fraudulent conveyance, moratorium or other similar laws affecting the enforcement of creditors’ rights generally andby general equitable principles; the Warrant Shares have been duly and validly authorized and validly reserved for issuance upon exercise of the Warrants in a number sufficient tomeet the current exercise requirements; upon exercise of the Warrants in accordance with their terms, the Warrant Shares issuable thereupon will be duly and validly issued, fully paidand non-assessable and free of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights. All the outstanding shares of capital stock of eachSubsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and except as otherwise set forth in the Disclosure Package and the Prospectus, alloutstanding shares of capital stock of the Subsidiaries are owned by the Company either directly or through wholly owned Subsidiaries free and clear of any perfected security interestor any other security interests, claims, liens or encumbrances.

(j) There is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit

thereto, which is not described or filed as required (and the Preliminary Prospectus contains in all material respects the same description of the foregoing matters contained in theProspectus); and the statements in the Preliminary Prospectus and the Prospectus under the headings “Business — Intellectual Property,” “Business— Regulatory” and “Material U.S.Federal Income Tax Considerations for Non-U.S. Holders,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurateand fair summaries of such legal matters, agreements, documents or proceedings.

(k) This Agreement has been duly authorized, executed and delivered by the Company. (l) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Disclosure

Package and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended. (m) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated

herein, except (i) such as have been obtained under the Act; (ii) such as are required by the listing rules of the NASDAQ Global Market; (iii) such as are required by the applicablerules of the Financial Industry Regulatory Authority (“FINRA”); and (iv) such as may be required under the blue sky laws of any jurisdiction in connection with

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the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Disclosure Package and the Prospectus.

(n) Neither the issue and sale of the Securities nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof will

conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to,(i) the charter or by-laws of the Company or any of its Subsidiaries; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or otheragreement, obligation, condition, covenant or instrument to which the Company or any of its Subsidiaries is a party or bound or to which its or their property is subject; or (iii) anystatute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its Subsidiaries of any court, regulatory body, administrative agency, governmental body,arbitrator or other authority having jurisdiction over the Company or any of its Subsidiaries or any of its or their properties, except in the cases of clauses (ii) and (iii) for such conflict,breach, violation or imposition as would not reasonably be expected to have a Material Adverse Effect.

(o) No holders of securities of the Company have rights to the registration of such securities under the Registration Statement, except to the extent such registration rights

have been waived in connection with the offering of the securities. (p) The consolidated historical financial statements and schedules of the Company and its consolidated subsidiaries included in the Preliminary Prospectus, the

Prospectus and the Registration Statement present fairly the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated,comply as to form, in all material respects, with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principlesapplied on a consistent basis throughout the periods involved (except as otherwise noted therein). The selected financial data set forth under the caption “Selected Financial Data” inthe Preliminary Prospectus, the Prospectus and Registration Statement fairly present, in all material respects, on the basis stated in the Preliminary Prospectus, the Prospectus and theRegistration Statement, the information included therein.

(q) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries or

its or their property is pending or, to the knowledge of the Company, threatened that would reasonably be expected to have a Material Adverse Effect, except as set forth in orcontemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

(r) Each of the Company and each of its Subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted, except

for intellectual property which is separately addressed in subsection (mm) below and except as would not reasonably be expected to have a Material Adverse Effect.

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(s) Neither the Company nor any Subsidiary is in violation or default of (i) any provision of its charter or bylaws; (ii) the terms of any indenture, contract, lease,

mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property issubject; or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authorityhaving jurisdiction over the Company or such Subsidiary or any of its properties, as applicable, except in the case of clauses (ii) and (iii), for such violation or default as would notreasonably be expected to have a Material Adverse Effect.

(t) KPMG LLP, who have certified certain financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the audited

consolidated financial statements and schedules included in the Disclosure Package and the Prospectus, are independent public accountants with respect to the Company within themeaning of the Act and the applicable published rules and regulations thereunder.

(u) There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in

connection with the execution and delivery of this Agreement or the issuance by the Company or sale by the Company of the Securities. (v) The Company has filed all tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not

reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto))and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any suchassessment, fine or penalty that is currently being contested in good faith or as would not reasonably be expected to have a Material Adverse Effect, except as set forth in orcontemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

(w) No labor problem or dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is threatened or imminent,

and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its Subsidiaries’ principal suppliers, contractors or customers, thatwould reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplementthereto).

(x) The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the

Company reasonably believes are prudent and customary in the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Company orany of its Subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its Subsidiaries are in

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compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company or any of its Subsidiaries under any such policy orinstrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any such Subsidiary has been refusedany insurance coverage sought or applied for; and neither the Company nor any such Subsidiary has a reason to believe that it will not be able to renew its existing insurance coverageas and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected tohave a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

(y) No Subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such

Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s property or assetsto the Company or any other Subsidiary of the Company, except as described in or contemplated by the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

(z) The Company and its Subsidiaries possess all material licenses, certificates, permits and other authorizations required to be issued by all applicable authorities

necessary to conduct their respective businesses, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification ofany such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have aMaterial Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

(aa) The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are

executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformitywith generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specificauthorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.The Company and its Subsidiaries’ internal controls over financial reporting are effective at the reasonable assurance level and the Company and its Subsidiaries are not aware of anymaterial weakness in their internal controls over financial reporting (it being understood that, as of the date hereof, the Company is not required to comply with Section 404 of theSarbanes-Oxley Act (as defined below)).

(bb) The Company and its Subsidiaries maintain “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); and such

disclosure controls and procedures are effective at the reasonable assurance level.

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(cc) The Company has not taken, directly or indirectly, without giving effect to activities by the Underwriters, any action designed to or that would constitute or that would

reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale orresale of the Securities.

(dd) The Company and its Subsidiaries are (i) in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of

human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have received and are in compliancewith all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of anyactual or potential liability under any environmental law, except where such non-compliance with Environmental Laws, failure to receive and hold required permits, licenses or otherapprovals, or liability would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the DisclosurePackage and the Prospectus (exclusive of any supplement thereto). Except as set forth in the Disclosure Package and the Prospectus, neither the Company nor any of its Subsidiarieshas been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

(ee) In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company

and its Subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required forclean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilitiesto third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, reasonably beexpected to have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

(ff) None of the following events has occurred or exists: (i) a failure to fulfill the obligations, if any, under the minimum funding standards of Section 302 of the United

States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations and published interpretations thereunder with respect to a Plan, determinedwithout regard to any waiver of such obligations or extension of any amortization period; (ii) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor,the Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory agency with respect to the employment or compensation ofemployees by any of the Company or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect; (iii) any breach of any contractual obligation, or anyviolation of law or applicable qualification standards, with respect to the employment or compensation of employees by the Company or any of its Subsidiaries that would reasonablybe expected to have a

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Material Adverse Effect. None of the following events has occurred or is reasonably likely to occur: (i) a material increase in the aggregate amount of contributions required to bemade to all Plans in the current fiscal year of the Company and its Subsidiaries compared to the amount of such contributions made in the most recently completed fiscal year of theCompany and its Subsidiaries; (ii) a material increase in the “accumulated post-retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards106) of the Company and its Subsidiaries compared to the amount of such obligations in the most recently completed fiscal year of the Company and its Subsidiaries; (iii) any event orcondition giving rise to a liability under Title IV of ERISA that would reasonably be expected to have a Material Adverse Effect; or (iv) the filing of a claim by one or moreemployees or former employees of the Company or any of its Subsidiaries related to their employment that would reasonably be expected to have a Material Adverse Effect. Forpurposes of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to which the Company or any of itsSubsidiaries may have any liability.

(gg) There is and has been no failure on the part of the Company and any of the Company’s directors or officers, in their capacities as such, to comply with any provision

of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”) that are in effect and with which the Company isrequired to comply as of the effectiveness of the Registration Statement, including Section 402 relating to loans and Sections 302 and 906 relating to certifications.

(hh) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its

Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation or a sanction for violation by such persons of the Foreign Corrupt Practices Actof 1977 or the U.K. Bribery Act 2010, each as may be amended, or similar law of any other relevant jurisdiction, or the rules or regulations thereunder; and the Company and itsSubsidiaries have instituted and maintain policies and procedures to ensure compliance therewith. No part of the proceeds of the offering will be used, directly or indirectly, inviolation of the Foreign Corrupt Practices Act of 1977 or the U.K. Bribery Act 2010, each as may be amended, or similar law of any other relevant jurisdiction, or the rules orregulations thereunder.

(ii) The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting

requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced byany governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or anyarbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

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(jj) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its

Subsidiaries (i) is, or is controlled or 50% or more owned by or is acting on behalf of, an individual or entity that is currently subject to any sanctions administered or enforced by theUnited States (including any administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S. Department of State, or the Bureau ofIndustry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, the United Kingdom (including sanctions administered orenforced by Her Majesty’s Treasury) or other relevant sanctions authority (collectively, “Sanctions” and such persons, “Sanctioned Persons”); (ii) is located, organized or resident in acountry or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (collectively, “Sanctioned Countries” and each,a “Sanctioned Country”); or (iii) will, directly or indirectly, use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, jointventure partner or other individual or entity in any manner that would result in a violation of any Sanctions by, or would result in the imposition of Sanctions against, any individual orentity (including any individual or entity participating in the offering, whether as underwriter, advisor, investor or otherwise).

(kk) Except as has been disclosed to the Underwriters or is not material to the analysis under any Sanctions, neither the Company nor any of its Subsidiaries have engaged

in any dealings or transactions with or for the benefit of a Sanctioned Person, or with or in a Sanctioned Country, in the preceding three years, nor does the Company or any of itsSubsidiaries have any plans to increase its dealings or transactions with or for the benefit of Sanctioned Persons, or with or in Sanctioned Countries.

(ll) The subsidiaries listed on Annex A attached hereto are the only significant subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X (the

“Subsidiaries”). (mm) The Company and its Subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent applications, trade and service marks,

trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “IntellectualProperty”) necessary for the conduct of the Company’s business as now conducted or as proposed in the Disclosure Package and Prospectus to be conducted and (i) to the Company’sknowledge, there are no rights of third parties to any such Intellectual Property; (ii) to the Company’s knowledge, there is no material infringement by third parties of any suchIntellectual Property; (iii) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to anysuch Intellectual Property; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any suchIntellectual Property; (v) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violatesany patent, trademark, copyright, trade secret or other proprietary rights of others; (vi) to the Company’s knowledge, there is no

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U.S. patent or published U.S. patent application which contains claims that dominate or may dominate any Intellectual Property described in the Disclosure Package and theProspectus as being owned by or licensed to the Company or that interferes with the issued or pending claims of any such Intellectual Property; and (vii) there is no prior art of whichthe Company is aware that may render any U.S. patent held by the Company invalid or any U.S. patent application held by the Company unpatentable which has not been disclosed tothe U.S. Patent and Trademark Office.

(nn) Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other

relationship with any bank or lending affiliate of any of the Underwriters and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay anyoutstanding debt owed to any affiliate of any of the Underwriters.

(oo) Except as described in the Registration Statement, the Disclosure Package and the Prospectus, as applicable, the Company and its Subsidiaries (i) are and at all times

have been in compliance in all material respects with all statutes, rules and regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use,distribution, marketing, advertising, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company including,without limitation, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301 et seq.), the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Health Insurance Portabilityand Accountability Act of 1996 (42 U.S.C. §1320d et seq.), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (42 U.S.C. §17921 etseq.), and the Patient Protection and Affordable Care Act of 2010 (Pub. Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. Law 111-152),the regulations promulgated pursuant to such laws, and any successor government programs and comparable state laws, regulations relating to Good Clinical Practice and GoodLaboratory Practice and all other local, state, federal, national, supranational and foreign laws, manual provisions, policies and administrative guidance relating to the regulation of theCompany (collectively, the “Applicable Laws”); (ii) have not received any written notice from any court or arbitrator or governmental or regulatory authority or third party alleging orasserting noncompliance with any Applicable Laws or any licenses, exemptions, certificates, approvals, clearances, authorizations, permits, registrations and supplements oramendments thereto required by any such Applicable Laws (“Authorizations”), except for such non-compliance as would not reasonably be expected, individually or in the aggregate,to have a Material Adverse Effect; (iii) possess all Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any suchAuthorizations, except where the absence of any such Authorization would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; (iv) havenot received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation arbitration or other action from any court or arbitrator or governmental orregulatory authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations nor, to the Company’s knowledge, has anysuch claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action threatened; (v) have not received

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written notice that any court or arbitrator or governmental or regulatory authority has taken, is taking or intends to take, action to limit, suspend, materially modify or revoke anyAuthorizations nor, to the Company’s knowledge, has any such limitation, suspension, modification or revocation threatened; (vi) have filed, obtained, maintained or submitted allmaterial reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and thatall such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and accurate on the date filed in all materialrespects (or were corrected or supplemented by a subsequent submission), except where the failure to so file, obtain, maintain or submit or the failure of such reports, documents,forms, notices, applications, records, claims, submissions and supplements or amendments to be complete or accurate or corrected or supplemented by a subsequentsubmission, would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and (vii) are not a party to any corporate integrity agreements,monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory authority.

(pp) The nonclinical studies and clinical trials conducted by or on behalf of or sponsored by the Company or any of its Subsidiaries, or in which the Company or any of its

Subsidiaries have participated, that are described in the Registration Statement, the Disclosure Package and the Prospectus or the results of which are referred to in the RegistrationStatement, the Disclosure Package and the Prospectus, as applicable, were and, if still pending, are being conducted in all material respects in accordance with standard medical andscientific research procedures and all applicable statutes, rules and regulations of the FDA and comparable drug regulatory agencies outside of the United States to which it is subject(collectively, the “Regulatory Authorities”), including, without limitation, 21 C.F.R. Parts 50, 54, 56, 58, and 312, and current Good Clinical Practice and Good Laboratory Practice;the descriptions in the Registration Statement, the Disclosure Package or the Prospectus of the results of such studies and trials are accurate and complete in all material respects andfairly present the data derived from such trials; the Company has no knowledge of any other trials the results of which are inconsistent with or otherwise call into question the resultsdescribed or referred to in the Registration Statement, Disclosure Package and the Prospectus; the Company and its Subsidiaries have operated and are currently in compliance in allmaterial respects with all applicable statutes, rules and regulations of the Regulatory Authorities; neither the Company nor any Subsidiary have received any written notices,correspondence or other communication from the Regulatory Authorities or any governmental authority requiring the termination or suspension of any nonclinical studies or clinicaltrials that are described in the Registration Statement, the Disclosure Package or the Prospectus or the results of which are referred to in the Registration Statement, DisclosurePackage or the Prospectus, and to the Company’s knowledge, there are no reasonable grounds for same.

(qq) The Company possesses all licenses, exemptions, certificates, approvals, clearances, permits, registrations and other authorizations and supplements or amendments

thereto (collectively, “Permits”) issued by, and has made all declarations and filings with, the applicable federal, state, local or foreign governmental or regulatory authorities that arenecessary for the ownership or lease of its properties or the conduct of

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its businesses as described in the Registration Statement, the Disclosure Package and the Prospectus, or to permit all nonclinical studies and clinical trials conducted by or on behalf ofthe Company, including, without limitation, all necessary FDA and applicable foreign regulatory agency Permits, except as would not be expected to have a Material Adverse Effect;the Company is not in violation of, or in default under, any such Permit; and the Company has not received written notice of any revocation or modification of any such Permit anddoes not have any reason to believe that any such Permit will not be renewed in the ordinary course. The Company (i) is, and at all times has been, in compliance in all materialrespects with all Applicable Laws and (ii) has not received any FDA Form 483, written notice of adverse finding, warning letter, untitled letter or other correspondence or writtennotice from any court or arbitrator or governmental or regulatory authority alleging or asserting non-compliance with (A) any Applicable Laws or (B) any Permits required by anysuch Applicable Laws.

(rr) To the Company’s knowledge, the manufacturing facilities and operations of its suppliers are operated in compliance in all material respects with all applicable

statutes, rules, regulations and policies of the Regulatory Authorities. (ss) None of the Company’s product candidates have received marketing approval from any Regulatory Authority. Furthermore, the Company represents and warrants to each Underwriter that (i) the Registration Statement, the Prospectus, any preliminary prospectus and any Issuer Free

Writing Prospectuses comply, and any further amendments or supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions in which the Prospectus or anypreliminary prospectus and any Issuer Free Writing Prospectus, as amended or supplemented, if applicable, are distributed in connection with the Directed Unit Program, and that (ii) noauthorization, approval, consent, license, order, registration or qualification of or with any government, governmental instrumentality or court, other than such as have been obtained, isnecessary under the securities laws and regulations of foreign jurisdictions in which the Directed Units are offered outside the United States. The Company has not offered, or caused theUnderwriters to offer, Securities to any person pursuant to the Directed Unit Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter thecustomer’s or supplier’s level or type of business with the Company, or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products.

Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Securities

shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter. 2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each

Underwriter agrees, severally and not jointly, to purchase from the

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Company, at a purchase price of $[____] per unit , the amount of the Underwritten Securities set forth opposite such Underwriter’s name in Schedule I hereto.

(b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several

Underwriters to purchase, severally and not jointly, up to [____] Option Securities at the same purchase price per share as the Underwriters shall pay for the Underwritten Securities.Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised in whole or in part at anytime on or before the 30th day after the date of the Prospectus upon written notice by the Representatives to the Company setting forth the number of shares of the Option Securities asto which the several Underwriters are exercising the option and the settlement date. The number of Option Securities to be purchased by each Underwriter shall be the samepercentage of the total number of shares of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subjectto such adjustments as you in your absolute discretion shall make to eliminate any fractional shares.

3. Delivery and Payment. Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 2(b) hereof shall

have been exercised on or before the third Business Day immediately preceding the Closing Date) shall be made at 10:00 AM, New York City time, on [_____ , 20__ ], or at such time on suchlater date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representativesand the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall bemade to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to orupon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Underwritten Securities and the Option Securities shall bemade through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.

If the option provided for in Section 2(b) hereof is exercised after the third Business Day immediately preceding the Closing Date, the Company will deliver the Option

Securities (at the expense of the Company) to the Representatives, at 388 Greenwich Street, New York, New York 10013, on the date specified by the Representatives (which shall be withinthree Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of thepurchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Option Securities occursafter the Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the OptionSecurities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Datepursuant to Section 6 hereof.

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4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus. 5. Agreements. The Company agrees with the several Underwriters that: (a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement to the Prospectus or

any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement towhich you reasonably object. The Company will cause the Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representatives with theCommission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Representatives of such timelyfiling. The Company will promptly advise the Representatives (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuantto Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the Commission; (ii) when, prior to termination of the offering of the Securities, anyamendment to the Registration Statement shall have been filed or become effective; (iii) of any request by the Commission or its staff for any amendment of the RegistrationStatement, or any Rule 462(b) Registration Statement, or for any supplement to the Prospectus or for any additional information; (iv) of the issuance by the Commission of any stoporder suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose; and (v) of thereceipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of anyproceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection tothe use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from suchoccurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its reasonable best efforts to have suchamendment or new registration statement declared effective as soon as practicable.

(b) If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would include any untrue

statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of the circumstances under which they were made at suchtime not misleading, the Company will (i) notify promptly the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend orsupplement the Disclosure Package to correct such statement or omission; and (iii) supply any amendment or supplement to you in such quantities as you may reasonably request.

(c) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances where such requirement may be

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satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state anymaterial fact necessary in order to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, or ifit shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules thereunder, the Company promptly will (i) notify theRepresentatives of any such event; (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement whichwill correct such statement or omission or effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably request.

(d) As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement or statements of the

Company and its Subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158. (e) Upon request, the Company will furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement

(including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter ordealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, theProspectus and each Issuer Free Writing Prospectus and any supplement thereto as the Representatives may reasonably request. The Company will pay the expenses of printing orother production of all documents relating to the offering.

(f) The Company will use its reasonable best efforts to arrange, if necessary, for the qualification of the Securities for sale under the laws of such jurisdictions as the

Representatives may reasonably designate and will use its reasonable best efforts to maintain such qualifications in effect so long as required for the distribution of the Securities;provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it toservice of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.

(g) The Company will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any

transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement orotherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing (orparticipation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalentposition within the meaning of Section 16 of the Exchange Act, any other shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares ofCommon Stock; or publicly announce an intention to effect

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any such transaction, for a period of 180 days after the date of the Underwriting Agreement, provided, however, that the Company may (i) issue and sell Common Stock (or anysecurities convertible into, or exercisable or exchangeable for shares of Common Stock) pursuant to any employee stock option plan, incentive plan, stock ownership plan or dividendreinvestment plan of the Company in effect at the Execution Time, (ii) issue Common Stock issuable upon the conversion or exercise of securities outstanding at the Execution Time,(iii) file one or more registration statements on Form S-8, (iv) issue the Warrant Shares upon exercise of the Warrants, and ( v ) offer, issue and sell shares of Common Stock or anysecurities convertible into, or exercisable, or exchangeable for, Common Stock in connection with any merger, acquisition or strategic investment (including any joint venture,strategic alliance or partnership) as long as (x) the aggregate number of shares of Common Stock issued or issuable does not exceed 10% of the number of shares of Common Stockoutstanding immediately after the issuance and sale of the Securities and (y) each recipient of any such Common Stock issued or issuable agrees to the restrictions on the resale ofsecurities that are consistent with the lock-up letters described in Section 6(l) hereof for the remainder of the 180-day restricted period.

(h) If the Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a lock-up letter described in Section 6(l) hereof for an officer or

director of the Company and provides the Company with notice of the impending release or waiver at least three Business Days before the effective date of the release or waiver, theCompany agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two Business Daysbefore the effective date of the release or waiver.

(i) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the

Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (j) The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the Commission of

the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and eachamendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of suchcopies of the Registration Statement, each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, asmay, in each case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery ofcertificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and deliveryof this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) theregistration of the Securities under the Exchange Act and the listing of the Securities on the NASDAQ Global Market; (vi) any registration or qualification of the Securities for offerand sale

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under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such registration andqualification); (vii) any filings required to be made with FINRA (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such filings,with such fees and expenses of counsel contained in clauses (vi) and (vii) not to exceed $35,000 in the aggregate); (viii) the transportation and other expenses incurred by or on behalfof Company representatives in connection with presentations to prospective purchasers of the Securities, provided, however, that the Company shall only be responsible for one-halfof the cost and expenses of any aircraft chartered in connection with the “road show” for the Securities and the Underwriters shall be responsible for the remaining one-half; (ix) thefees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expensesincident to the performance by the Company of its obligations hereunder.

(k) The Company agrees to pay (i) all fees and disbursements of counsel incurred by the Underwriters in connection with the Directed Unit Program in an amount not to

exceed $10,000; (ii) all costs and expenses incurred by the Underwriters in connection with the printing (or reproduction) and delivery (including postage, air freight charges andcharges for counting and packaging) of copies of the Directed Unit Program material; and (iii) all stamp duties, similar taxes or duties or other taxes, if any, incurred by theUnderwriters in connection with the Directed Unit Program.

(l) The Company agrees that, unless it has or shall have obtained the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees

with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to theSecurities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by theCompany with the Commission or retained by the Company under Rule 433; provided that the prior written consent of the parties hereto shall be deemed to have been given in respectof the Free Writing Prospectuses included in Schedule II hereto and any electronic road show. Any such free writing prospectus consented to by the Representatives or the Companyis hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free WritingProspectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any PermittedFree Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.

(m) The Company will reserve and keep available for the exercise of the Warrants such number of authorized but unissued shares of Common Stock as are sufficient to

permit exercise in full of the Warrants. ( n ) The Company will notify promptly the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (a) completion of

the distribution of the Securities within the meaning of the Act and (b) completion of the 180-day restricted period referred to in Section 5(g) hereof. ( o ) If at any time following the distribution of any Written Testing-the-Waters Communication, any event occurs as a result of which such Written Testing-the-Waters

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Communication would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of thecircumstances under which they were made at such time not misleading, the Company will (i) notify promptly the Representatives so that use of the Written Testing-the-WatersCommunication may cease until it is amended or supplemented; (ii) amend or supplement the Written Testing-the-Waters Communication to correct such statement or omission; and(iii) supply any amendment or supplement to the Representatives in such quantities as may be reasonably requested. Furthermore, the Company covenants with Jefferies LLC that the Company will comply with all applicable securities and other applicable laws, rules and regulations in each foreignjurisdiction in which the Directed Units are offered in connection with the Directed Unit Program.

6. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case

may be, shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, the Closing Date and any settlement datepursuant to Section 3 hereof, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligationshereunder and to the following additional conditions:

(a) The Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b); any material required to be filed by

the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stoporder suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been institutedor threatened.

(b) The Company shall have requested and caused Cooley LLP, counsel for the Company, to have furnished to the Representatives their opinion and negative assurance

letter, each dated the Closing Date and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives. (c) The Company shall have requested and caused Cooley LLP, intellectual property counsel for the Company, to have furnished to the Representatives their intellectual

property opinion, dated the Closing Date and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives. (d) The Company shall have requested and caused Greenbaum Rowe Smith & Davis LLP, New Jersey counsel for the Company, to have furnished to the Representatives

their opinion, dated the Closing Date and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives. (e) The Representatives shall have received from Goodwin Procter LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and

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addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Disclosure Package, the Prospectus (together with anysupplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they requestfor the purpose of enabling them to pass upon such matters.

(f) The Company shall have furnished to the Representatives a certificate of the Company, signed by the Chairman of the Board, Chief Executive Officer or the

President and the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined theRegistration Statement, the Disclosure Package, the Prospectus and any amendment or supplement thereto, as well as each electronic road show used in connection with the offering ofthe Securities, and this Agreement and that:

(i) the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with the same effect as if

made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior tothe Closing Date;

(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for

that purpose have been instituted or, to the Company’s knowledge, threatened; and (iii) since the date of the most recent financial statements included in the Disclosure Package and the Prospectus (exclusive of any supplement thereto),

there has been no Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplementthereto).

(g) The Representatives shall have received from KPMG LLP, independent registered public accounting firm for the Company, at the Execution Time and at the Closing

Date, letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance reasonably satisfactory to the Representatives, containing statements andinformation of the type ordinarily included in accountant’s “comfort letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successorbulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement, the Disclosure Package, and eachfree writing prospectus, if any.

(h) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the

Prospectus (exclusive of any amendment or supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (g) of thisSection 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings,

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business or properties of the Company and its Subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in orcontemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto), the effect of which, in any case referred to in clause (i) or (ii) above, is, in the solejudgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by theRegistration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto).

(i) Prior to the Closing Date, the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives may

reasonably request. (j) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the Company’s debt securities by any “nationally recognized

statistical rating organization” (as defined for purposes of Rule 3(a)(62) under the Exchange Act) or any notice given of any intended or potential decrease in any such rating or of apossible change in any such rating that does not indicate the direction of the possible change.

(k) The Securities , shares and warrants shall have been listed and admitted and authorized for trading on the NASDAQ Global Market, and satisfactory evidence of such

actions shall have been provided to the Representatives. (l) At the Execution Time, the Company shall have furnished to the Representatives a letter substantially in the form of Exhibit A hereto from each officer and director

of the Company and specified stockholders of the Company addressed to the Representatives. If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or

elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of theUnderwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or bytelephone or facsimile confirmed in writing.

The documents required to be delivered by this Section 6 shall be delivered at the office of Goodwin Procter LLP, counsel for the Underwriters, at Goodwin Procter LLP, 620 Eighth

Avenue, New York, New York 10018, on the Closing Date. 7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the

Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company toperform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally

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through Jefferies LLC on demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been reasonably incurred by them in connection withthe proposed purchase and sale of the Securities.

8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates within

the meaning of Rule 405 under the Act and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against anyand all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law orregulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untruestatement of a material fact contained in the Registration Statement for the registration of the Securities as originally filed or in any amendment thereof, or in any Preliminary Prospectus, or theProspectus, any Issuer Free Writing Prospectus, or any Written Testing-the-Waters Communication or in any amendment thereof or supplement thereto or arise out of or are based upon theomission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each suchindemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action;provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement oralleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of anyUnderwriter through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have.

(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration

Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company toeach Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through theRepresentatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwritermay otherwise have. The Company acknowledges that the statements set forth (i) in the last paragraph of the cover page regarding delivery of the Securities and (ii) under the heading“Underwriting”: (a) the list of Underwriters and their respective participation in the sale of the Securities; (b) the sentences related to concessions and reallowances; and (c) theparagraph related to stabilization, syndicate covering transactions and penalty bids in the Preliminary Prospectus and the Prospectus constitute the only information furnished inwriting by or on behalf of the several Underwriters for inclusion in the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus.

(c) The Company agrees to indemnify and hold harmless Jefferies LLC, the directors, officers, employees, affiliates and agents of Jefferies LLC and each person who

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controls Jefferies LLC , within the meaning of either the Act or the Exchange Act (“Jefferies Entities”), from and against any and all losses, claims, damages and liabilities to whichthey may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise (including, without limitation, any legal orother expenses reasonably incurred in connection with defending or investigating any such action or claim), insofar as such losses, claims damages or liabilities (or actions in respectthereof) (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the prospectus wrapper material prepared by or with theconsent of the Company for distribution in foreign jurisdictions in connection with the Directed Unit Program attached to the Prospectus, any preliminary prospectus or any IssuerFree Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make thestatement therein, when considered in conjunction with the Prospectus or any applicable preliminary prospectus, not misleading; (ii) caused by the failure of any Participant to pay forand accept delivery of the securities which immediately following the Effective Date of the Registration Statement, were subject to a properly confirmed agreement to purchase; or(iii) related to, arising out of, or in connection with the Directed Unit Program, except that this clause (iii) shall not apply to the extent that such loss, claim, damage or liability isfinally judicially determined to have resulted primarily from the gross negligence or willful misconduct of the Jefferies Entities.

(d) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect

thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify theindemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in theforfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified partyother than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at theindemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter beresponsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall besatisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shallhave the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel (which, ifthe Company is the indemnifying party, shall be limited to one such separate counsel and one local counsel for any Underwriter together with all persons who control suchUnderwriter within the meaning of the Exchange Act or the Act, and no more than two such separate counsel and two local counsel for all of the Underwriters) if (i) the use of counselchosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, anysuch

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action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/orother indemnified parties which are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactoryto the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize theindemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties,settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification orcontribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (i)includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include an admission of fault.Notwithstanding anything contained herein to the contrary, if indemnity may be sought pursuant to Section 8(c) hereof in respect of such action or proceeding, then in addition to suchseparate firm for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one separate firm (in addition to any localcounsel) for Jefferies LLC, the directors, officers, employees and agents of Jefferies LLC, and all persons, if any, who control Jefferies LLC within the meaning of either the Act or theExchange Act for the defense of any losses, claims, damages and liabilities arising out of the Directed Unit Program.

(e) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any

reason, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurredin connection with investigating or defending the same) (collectively, “Losses”) to which the Company and one or more of the Underwriters may be subject in such proportion as isappropriate to reflect the relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities. If the allocation providedby the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect notonly such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions whichresulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from theoffering (before deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, ineach case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statementof a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Underwriters on the other, theintent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwritersagree that it would not

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be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred toabove. Notwithstanding the provisions of this paragraph (e), in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the totalunderwriting discounts and commissions received by such Underwriter with respect to the offering of the Securities exceeds the amount of any damages that such Underwriter hasotherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this paragraph (e), no personguilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulentmisrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer,employee, affiliate (within the meaning of Rule 405 under the Act) and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person whocontrols the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director ofthe Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (e).

9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or

Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligatedseverally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Securities setforth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the eventthat the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth inSchedule I hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaultingUnderwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the event of a default by any Underwriteras set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes inthe Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of itsliability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder.

10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company prior to delivery of

and payment for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s Common Stock shall have been suspended by the Commission or the NASDAQGlobal Market or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such exchange;

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(ii) a banking moratorium shall have been declared either by Federal or New York State authorities; (iii) there shall have occurred a material disruption in commercial banking or securitiessettlement or clearance services; or (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity orcrisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of theSecurities as contemplated by the Preliminary Prospectus or the Prospectus (exclusive of any supplement thereto).

11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers

and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or theCompany or any of the officers, directors, employees, agents, affiliates within the meaning of Rule 405 under the Act or controlling persons referred to in Section 8 hereof, and will survivedelivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.

12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to

Jefferies LLC, Attention: Jeff Whyte, Esq., Managing Director (fax no.: 1 (646) 786-5061), 520 Madison Avenue, New York, New York 10022 and to Barclays Capital Inc., Attention: BretGanis, Director (fax no.: [______]), 745 Seventh Avenue, New York, New York 10019; or, if sent to the Company, will be mailed, delivered or telefaxed to 1 (609) 228-4113 and confirmed toit at 7 Clarke Drive, Cranbury, New Jersey 08512, attention of Lawrence Kenyon.

13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees,

agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder. 14. No fiduciary duty. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial

transaction between the Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on the other; (b) the Underwriters are acting as principal and not asan agent or fiduciary of the Company; and (c) the Company’s engagement of the Underwriters in connection with the offering and the process leading up to the offering is as independentcontractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whetherany of the Underwriters has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisoryservices of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

15. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of

them, with respect to the subject matter hereof.

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16. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be

performed within the State of New York. 17. Waiver of Jury Trial. The Company and the Underwriters hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury

in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 18. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and

the same agreement. 19. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof. 20. Definitions. The terms that follow, when used in this Agreement, shall have the meanings indicated. “Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated

by law to close in New York City. “Commission” shall mean the Securities and Exchange Commission. “Disclosure Package” shall mean (i) the Preliminary Prospectus that is generally distributed to investors and used to offer the Securities, (ii) the Issuer Free Writing

Prospectuses, if any, identified in Schedule II hereto, and (iii) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the DisclosurePackage.

“Effective Date” shall mean each date and time that the Registration Statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration

Statement became or becomes effective. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. “Execution Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto. “Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405. “Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.

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“Material Adverse Effect” shall mean (i) a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby

or (ii) a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company, taken as a whole, whether or not arising from transactionsin the ordinary course of business.

“Preliminary Prospectus” shall mean any preliminary prospectus referred to in paragraph 1(a) above and any preliminary prospectus included in the Registration Statement at

the Effective Date that omits Rule 430A Information. “Prospectus” shall mean the prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time. “Registration Statement” shall mean the registration statement referred to in paragraph 1(a) above, including exhibits and financial statements and any prospectus supplement

relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Timeand, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as soamended or such Rule 462(b) Registration Statement, as the case may be.

“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”, “Rule 430A” and “Rule 433” refer to such rules under the Act. “Rule 430A Information” shall mean information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it

becomes effective pursuant to Rule 430A. “Rule 462(b) Registration Statement” shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the

registration statement referred to in Section 1(a) hereof.

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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your

acceptance shall represent a binding agreement among the Company and the several Underwriters.

Very truly yours, Oncobiologics, Inc. By: Name: Title:

[Signature Page to Underwriting Agreement]

The foregoing Agreement is herebyconfirmed and accepted as of thedate first above written. Jefferies LLC By: Name: Title: Barclays Capital Inc. By: Name: Title: For themselves and the otherseveral Underwriters named inSchedule I to the foregoingAgreement.

[Signature Page to Underwriting Agreement]

SCHEDULE I

Underwriters Number of Underwritten Securities

to be Purchased Jefferies LLC Barclays Capital Inc. Cantor Fitzgerald & Co. Total

Schedule I

SCHEDULE II

Schedule of Free Writing Prospectuses included in the Disclosure Package

Schedule II

SCHEDULE III

Schedule of Written Testing-the-Waters Communication

Schedule III

[Form of Lock-Up Agreement] EXHIBIT A

Oncobiologics, Inc.Public Offering of Common Stock

, 2015

Jefferies LLCBarclays Capital Inc.As Representatives of the several Underwriters,

c/o Jefferies LLC520 Madison AvenueNew York, New York 10022 c/o Barclays Capital Inc.745 Seventh AvenueNew York, New York 10019 Ladies and Gentlemen:

This letter is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”), between Oncobiologics, Inc., a Delawarecorporation (the “Company”), and each of you as representatives of a group of underwriters named therein (the “Underwriters”), relating to an underwritten public offering of Common Stock,$0.01 par value (the “Common Stock”), of the Company (the “Offering”).

In order to induce you and the other Underwriters to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of Jefferies LLC and

Barclays Capital Inc. (collectively, the “Representatives”), offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably beexpected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersignedor any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with theSecurities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, anyshares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction,for a period from the date hereof until 180 days after the date of the Underwriting Agreement (the “Lock-Up Period”), other than:

Exhibit A-1

(i) sales of Common Stock by the undersigned to the underwriters pursuant to the Underwriting Agreement; (ii) transactions relating to shares of Common Stock or other securities acquired in the Offering or in open market transactions after the completion of the Offering; (iii) transfers of shares of Common Stock or any security convertible into Common Stock as a bona fide gift or charitable contribution; (iv) exercise of stock options or warrants to purchase shares of Common Stock or the vesting of stock awards of Common Stock and any related transfer of shares ofCommon Stock to the Company in connection therewith (x) deemed to occur upon the “cashless” or “net” exercise of such options or warrants or (y) for the purpose ofpaying the exercise price of such options or warrants or for paying taxes due as a result of the exercise of such options or warrants, the vesting of such options, warrants orstock awards, or as a result of the vesting of such shares of Common Stock, it being understood that all shares of Common Stock received upon such exercise, vesting ortransfer will remain subject to the restrictions of this agreement during the Lock-Up Period; (v) transfers to the spouse, domestic partner, parent, child or grandchild or first cousin of the undersigned (each, an “Immediate Family Member”) or to a trust formed forthe direct or indirect benefit of the undersigned or an Immediate Family Member; (vi) transfers by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary, trustee or Immediate Family Member of theundersigned; (vii) transfers pursuant to a divorce settlement agreement or decree or a qualified domestic relations order as defined in the United States Employee Retirement IncomeSecurity Act of 1974, as amended; (viii) transfers of Common Stock or securities convertible into or exchangeable for Common Stock to any affiliate (as such term is defined in Rule 405 of the Securities Actof 1933, as amended), limited partners, general partners, limited liability company members or stockholders of the undersigned, or if the undersigned is a corporation to anywholly owned subsidiary of such corporation; and (ix) the establishment of a trading plan pursuant to Rule 10b-5-1 under the Exchange Act for the transfer of shares of Common Stock or securities convertible into orexchangeable for Common Stock, provided that such plan does not provide for the transfer of shares of Common Stock during the Lock-Up Period and no filing or otherpublic announcement shall be made during the Lock-Up Period;

Exhibit A-2

provided that in the case of clauses (i) and (ii) (a) no filing under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of

Common Stock shall be required, other than Forms 5 and Schedule 13F and (b) no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall bevoluntarily made by the undersigned, in the case of both clauses (a) and (b), during the Lock-Up Period, other than Forms 5 and Schedule 13F; provided further that in the case of any transferor distribution pursuant to clauses (iii), (v), (vi), (vii) and (viii) (a) the recipient agrees to be bound in writing by the same restrictions set forth herein for the duration of the Lock-Up Period,(b) no filing under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of Common Stock shall be required during the Lock-Up Period,other than Forms 5 and Schedule 13F and (c) no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be voluntarily made by the undersigned or thetransferee during the Lock-Up Period, other than Forms 5 and Schedule 13F and (d) any such transfer shall not involve a disposition for value.

If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing restrictions shall be equally applicable to any issuer-directed shares ofCommon Stock the undersigned may purchase in the Offering.

If the undersigned is an officer or director of the Company, (i) the Representatives agree that, at least three business days before the effective date of any release or waiver of the

foregoing restrictions in connection with a transfer of shares of Common Stock, the Representatives will notify the Company of the impending release or waiver, and (ii) the Company hasagreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of therelease or waiver. Any release or waiver granted by the Representatives hereunder to any such officer or director shall only be effective two business days after the publication date of suchpress release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writingto be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.

This agreement shall automatically terminate upon the earliest to occur, if any, of (i) the date that the Company advises the Representatives, in writing, prior to the execution of the

Underwriting Agreement, that it has determined not to proceed with the Offering, (ii) the date of termination of the Underwriting Agreement if prior to the closing of the Offering, or (iii) June30, 2016, if the Offering has not been completed by such date.

Exhibit A-3

Yours very truly,

If an individual, please sign here: Signature: Print Name: Print Address:

If a corporation, a limited partnership or other legal entity, please sign here: [NAME] BY: ITS: By: Name: Title:

Exhibit A-4

[Form of Press Release] EXHIBIT B Oncobiologics, Inc.[Date] Oncobiologics, Inc. (the “Company”) announced today that Jefferies LLC and Barclays Capital Inc., the lead book-running managers in the Company’s recent public sale of shares ofcommon stock, are [waiving] [releasing] a lock-up restriction with respect to shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of theCompany. The [waiver] [release] will take effect on , 20 , and the shares may be sold on or after such date. This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered orsold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

Exhibit B

[Form of Waiver of Lock-up] ADDENDUM

[Letterhead of Representatives]

Oncobiologics, Inc.Public Offering of Common Stock

, 20__

[Name and Address ofOfficer or DirectorRequesting Waiver] Dear Mr./Ms. [Name]:

This letter is being delivered to you in connection with the offering by Oncobiologics, Inc. (the “Company”) of shares of common stock, $0.01 par value (the “Common

Stock”), of the Company and the lock-up letter dated , 20 (the “Lock-up Letter”), executed by you in connection with such offering, and your request for a [waiver] [release] dated , 20 ,with respect to shares of Common Stock (the “Shares”).

Jefferies LLC and Barclays Capital Inc. hereby agree to [waive] [release] the transfer restrictions set forth in the Lock-up Letter, but only with respect to the Shares, effective , 20 ;

provided, however, that such [waiver] [release] is conditioned on the Company announcing the impending [waiver] [release] by press release through a major news service at least two businessdays before effectiveness of such [waiver] [release]. This letter will serve as notice to the Company of the impending [waiver] [release].

Except as expressly [waived] [released] hereby, the Lock-up Letter shall remain in full force and effect.

Yours very truly, [Signature of Jefferies Representative] [Name and title of Jefferies Representative] [Signature of Barclays Representative] [Name and title of Barclays Representative] cc: Company

Addendum

ANNEX A

ANNEX A

[List all significant subsidiaries as defined by Rule 1-02 of Regulation S-X]

Annex A-1

Exhibit 4.1

NUMBER UNITS SEE REVERSE FORCERTAIN DEFINITIONS

ONCOBIOLOGICS, INC.

CUSIP [—]

UNITS CONSISTING OF ONE SHARE OF COMMON STOCK

AND ONE-HALF OF A SERIES A WARRANT TO PURCHASE ONE SHARE OF COMMON STOCKAND ONE-HALF OF A SERIES B WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK

THIS CERTIFIES THAT [—] is the owner of [—] Units. Each Unit (“Unit”) consists of one (1) share of common stock, $0.01 par value per share (“Common Stock”), of Oncobiologics, Inc., a company incorporated under the laws of Delaware (the“Company”), one-half (½) of a Series A warrant, with an estimated exercise price of $ [●] to purchase one share of our common stock and one-half (½) of a Series B warrant, with anestimated exercise price of $ [●] to purchase one share of common stock. Each Series A warrant becomes exercisable during the period commencing on [—], 2016 and ending at 5:00 p.m. New York City time on February [●] 2017 . Each Series B warrant becomesexercisable during the period commencing on [—], 2016 and ending at 5:00 p.m. New York City time on May [●], 2018. The Series A warrants, Series B warrants and shares of our commonstock will trade together as units only during the first 30 days following the date of this prospectus, and thereafter, the units will automatically separate and the common stock, Series Awarrants and Series B warrants will trade separately, unless Jefferies LLC and Barclays Capital Inc., as representatives of the underwriters, determine that an earlier date is acceptable basedupon, among other things, its assessment of the relative strengths of the securities markets and small capitalization companies in general, and the trading pattern of, and demand for, oursecurities in particular . This Unit Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof. This Unit Certificate is not valid unless countersigned by the Transfer Agent and Registrar of the Company. Witness the facsimile signature of its duly authorized officers. By By Pankaj Mohan, Ph.D. Lawrence A. Kenyon Chairman, President and Chief Executive Officer Chief Financial Officer

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Oncobiologics, Inc.

The Company will furnish without charge to each shareholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rightsof each class of stock or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM – as tenants in commonTEN ENT – as tenants by the entiretiesJT TEN – as joint tenants with right of survivorship and not as tenants in commonUNIF GIFT MIN ACT – under Uniform Gifts to Minors Act Additional Abbreviations may also be used though not in the above list. For value received, hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) Units represented by the within Certificate, and hereby irrevocably constitute(s) and appoint(s) Attorney to transfer the said Units on the books of the within named Company with full power of substitution in the premises. Dated: Notice: The signature(s) to this assignment must correspond with the name(s) as written upon the face of the certificate in every particular, without alteration or enlargement or any changewhatever. Signature(s) Guaranteed:

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS ANDCREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

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Exhibit 4.4

WARRANT AGREEMENT

ONCOBIOLOGICS, INC.

AND

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS WARRANT AGENT

THIS WARRANT AGREEMENT (this “Agreement”), dated as of May [●], 2016, is by and between Oncobiologics, Inc., a Delaware corporation (the “Company”), and American

Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as Warrant Agent (the “Warrant Agent”). WHEREAS, the Company is engaged in an initial public offering (the “Offering”) of units (the “Units,” and each a “Unit”), with each unit consisting of (i) one share of common

stock, $0.01 par value per share (the “Common Stock”), of the Company, (ii) one-half of a Series A warrant to purchase one share of Common Stock at a purchase price of $ [●] per share,subject to adjustment as described herein (each, a “Series A Warrant”) and (iii) one-half of a Series B warrant to purchase one share of Common Stock at a purchase price of $ [●] per share,subject to adjustment as described herein (each, a “Series B Warrant,” and, together with the Series A Warrants, hereinafter referred to as the “Warrants”);

WHEREAS, the Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement, as amended, on Form S-1, No. 333-209011 (the

“Registration Statement”) and prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the offer and sale of the Units, theCommon Stock underlying the Units, the Warrants and the Common Stock issuable upon exercise of the Warrants;

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,

transfer, exchange and exercise of the Warrants; WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation

of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants (each a “Holder”); and WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf

of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement. NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts suchappointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.

2. Warrants.

2.1 Form of Warrants. Each Series A Warrant and Series B Warrant shall be issued in registered form only and shall be in substantially the forms attached hereto as Exhibit A and Exhibit

B, respectively, the provisions of which are incorporated herein. Each Warrant shall be signed by, or bear the facsimile signature of, the President, Chief Executive Officer or ChiefFinancial Officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such personsigned the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.

2.2 Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a

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Warrant shall be invalid and of no effect and may not be exercised by the Holder thereof.

2.3 Registration.

2.3.1 Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants.

Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective Holders thereof in such denominations andotherwise in accordance with instructions delivered to the Warrant Agent by the Company.

2.3.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name

such Warrant is registered in the Warrant Register (the “Registered Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstandingany notation of ownership or other writing on the Warrant Certificate (as defined below) made by anyone other than the Company or the Warrant Agent), for the purpose ofany exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

3. Terms and Exercise of Warrants.

3.1 Detachability of Warrants. Each of the Common Stock and the Warrants comprising the Units will begin to trade separately on (i) the first trading day following the 30th day after the

effectiveness of the Registration Statement, or (ii) such earlier date as Jefferies LLC and Barclays Capital Inc., as representatives of the underwriters in the Offering (the“Representatives”), shall determine is acceptable (such date, the “Detachment Date”). In no event will separate trading of the securities comprising the Units commence until theCompany issues a press release announcing when such separate trading will begin.

3.2 Exercise Price.

3.2.1 Series A Warrants. Each Series A Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such Series AWarrant and of this Agreement, to purchase from the Company the number of shares of Common Stock of the Company stated therein, at the price of $ [●] per share, subjectto the adjustments provided herein; provided, however, that only whole Series A Warrants may be exercised.

3.2.2 Series B Warrants. Each Series B Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such Series B

Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock of the Company stated therein, at the price of $ [●] per share, subjectto the adjustments provided herein; provided, however, that only whole Series B Warrants may be exercised.

3.2.3 The term “Exercise Price” as used in this Agreement shall mean the price per share at which the shares of Common Stock may be purchased at the time a whole Series A

Warrant or whole Series B Warrant, as the case may be, is exercised.

3.3 Duration of Warrants.

3.3.1 Series A Warrants. Each Series A Warrant may be exercised, in whole or in part, at any time during the period commencing on the Detachment Date and ending at 5:00pmNew York City time on February [●], 2017.

3.3.2 Series B Warrants. Each Series B Warrant may be exercised, in whole or in part, at any time during the period commencing on the Detachment Date and ending at 5:00pm

New York City time on May [●], 2018.

3.3.3 For purposes of this Agreement, the term “Expiration Date” means February [●], 2017 with respect to the Series A Warrants and May [●], 2018 with respect to the Series BWarrants and the term “Exercise Period” means the period during which the Series A Warrant or Series B Warrant, as the case may be, is exercisable, as described insubsection 3.1, 3.3.1 or 3.3.2 hereof. Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereofunder this Warrant Agreement shall cease at the close of business on the Expiration Date. The Company may extend the duration of the Warrants by delaying the ExpirationDate; provided, however, that the Company will provide notice of not less than 20 days to Registered Holders of such extension and that such extension shall be identical induration among all of the then outstanding Warrants.

3.3.4 The exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below with respect to an effective registration

statement. Any Warrant not exercised on or before the applicable Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under thisAgreement shall cease at 5:00 p.m. New York City time on such Expiration Date.

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3.4 Exercise of Warrants.

3. 4 .1 Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the Warrant Agent, may be exercised by the RegisteredHolder thereof by submitting a duly executed election to purchase attached to the applicable Warrant, at the office of the Warrant Agent in the Borough of Brooklyn, City andState of New York or at the office of its successor as Warrant Agent, in the Borough of Brooklyn, City and State of New York, which may be done by paying, within two (2)days of the date of exercise, in full the Exercise Price for each whole share of Common Stock as to which the Warrant is exercised, in lawful money of the United States ofAmerica, by wire transfer or in good certified check or good bank draft payable to the order of the Company or by Cashless Exercise solely in accordance with Section 3.3.2hereof. The Registered Holder shall not be required to deliver the original Warrant being exercised in order to effect an exercise hereunder. Upon delivery of an exercisenotice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Common Stock with respect to which such Warrant has beenexercised, irrespective of the date such shares of Common Stock are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such shares ofCommon Stock (as the case may be).

***Checks should be payable to American Stock Transfer & Trust Company, LLC. Originals need to be mailed to American Stock Transfer, Attention: [—]. Wired funds forexercise should be wired to:

JP MORGAN CHASE BANKABA # [—]ACCT # [—]ACCT NAME: AMERICAN STOCK TRANSFER & TRUST COAS AGENT FOR WARRANTSATTN: [—] 3.4.2 Cashless Exercise. Notwithstanding anything contained herein to the contrary, if and only if an effective registration statement covering the offer and sale of the sharesof Common Stock that are subject to the exercise notice is not available for the issuance of such shares of Common Stock, the Registered Holder may exercise , by submittinga duly executed election to Cashless Exercise (as defined below) to the Company pursuant to Section 8.2 herein, a Warrant in whole or in part and, in lieu of making the cashpayment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise the“Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

Net Number = (A x B) - (A x C)

B For purposes of the foregoing formula:

A = the total number of shares with respect to which the Warrant is then being exercised.

B = the arithmetic average of the Closing Sale Prices (as defined below) of the Common Stock for the five (5) consecutive Trading Days ending on the date immediatelypreceding the date of the Exercise Notice.

C = the Exercise Price then in effect for the applicable shares of Common Stock at the time of such exercise.

The term “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Nasdaq Global

Market, as reported by Bloomberg, L.P. (“Bloomberg”), or, if the Nasdaq Global Market begins to operate on an extended hours basis and does not designate the closing bid price or the closingtrade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the NasdaqGlobal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securitiesexchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of suchsecurity in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported forsuch security by Bloomberg, the average of the bid prices, or the ask prices, respectively,

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of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Sale Price cannot becalculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by theCompany and the Registered Holder. If the Company and the Registered Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant toSection 8.4 hereof. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculationperiod.

For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, assuming the Registered Holder is not an affiliate of the Company, the shares of

Common Stock issued in a Cashless Exercise shall be deemed to have been acquired by the Registered Holder, and the holding period for the Common Stock shall be deemed to havecommenced, on the date the Warrant was originally issued.

3.4.3 Issuance of Common Stock on Exercise. Assuming funds for exercise are paid on or before the second trading day following the date of receipt by the Company of anexercise notice, then on or before the third trading day following the date upon which the Company has received an exercise notice for a Warrant, the Company shall cause itstransfer agent to (i) provided that the transfer agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit suchaggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through itsDeposit/Withdrawal at Custodian System, or (ii) if the transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to theHolder, or at the Holder’s instruction pursuant to the delivered exercise notice, the Holder’s agent or designee, in each case pursuant to this clause (ii), sent by reputableovernight courier to the address specified in the applicable exercise notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee(as indicated in the applicable exercise notice), for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.

3.4.4 Valid Issuance. All shares of Common Stock issued or issuable upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fullypaid and nonassessable.

3.4.5 Share Delivery Failure. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three (3) trading days after receipt of the applicableexercise notice (the “Share Delivery Deadline”), a certificate for the number of shares of Common Stock to which the Holder is entitled upon Holder’s exercise of a Warrant,or credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of a Warrant (as thecase may be, but in each case without a restrictive legend) (a “Delivery Failure”), then the Holder will have the right to rescind such exercise by giving written notice to theCompany.

3.5 Beneficial Ownership Limitation on Exercises. The Company shall not affect the exercise of any portion of a Warrant, and the Registered Holder of such Warrant shall not have the

right to exercise any portion of such Warrant, to the extent that after giving effect to such exercise, the Registered Holder (together with the Registered Holder’s affiliates, and anypersons acting as a group together with the Holder or any Registered Holder’s affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the shares ofCommon Stock outstanding immediately after giving effect to such exercise, provided, however, that the foregoing limitation on exercise shall not apply to any Registered Holderwho, together with such Registered Holder’s affiliates, and any persons acting as a group together with such Registered Holder and such Registered Holder’s affiliates, owns in excessof the Maximum Percentage immediately prior to the closing of the Offering. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficiallyowned by such Registered Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of a Warrant with respect to which the determination ofsuch sentence is being made, but shall exclude Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of such Warrant beneficially owned bythe Registered Holder and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by theRegistered Holder and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Registered Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of thisparagraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). To the extent that thelimitation contained in this Section 3.4

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applies, the Registered Holder’s submission of an Election to Purchase shall be deemed to be the Registered Holder’s determination of whether a Warrant is exercisable (in relation to

any other securities owned by the Registered Holder together with any affiliates) and of which portion of a Warrant is exercisable, in each case subject to the Maximum Percentage,and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall bedetermined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of the Warrants, in determining the number ofoutstanding shares of Common Stock, the Registered Holder may rely on the number of outstanding shares of Common Stock as reflected in the most recent of (A) the Company’smost recent Form 10-K, Form 10-Q, Form 8-K or other public filing with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) anyother notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of theRegistered Holder, the Company shall within three (3) trading days confirm to the Registered Holder the number of shares of Common Stock then outstanding. In any case, thenumber of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including any Warrant, by theRegistered Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the RegisteredHolder may from time to time increase or decrease the Maximum Percentage to any other percentage of the number of shares of Common Stock outstanding immediately after givingeffect to the issuance of shares of Common Stock upon exercise of a Warrant and the provisions of this Section 3.4 shall continue to apply; provided that (i) any such increase will notbe effective until the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to that Registered Holder. For purposesof clarity, the Common Stock underlying any Warrant in excess of the Maximum Percentage for a Registered Holder shall not be deemed to be beneficially owned by that RegisteredHolder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. The provisions of this paragraph shall be construed and implemented in amanner otherwise than in strict conformity with the terms of this Section 3.4 to the extent necessary to correct this paragraph (or any portion hereof) which may be defective orinconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

4. Adjustments.

4.1 Stock Dividends.

4.1.1 Share Dividends and Splits. If after the date hereof, and subject to the provisions of Section 4.5 below, the number of outstanding shares of Common Stock is increased by astock dividend payable in shares of Common Stock, or by a stock split of the Common Stock or other similar event, then, on the effective date of such stock dividend, stocksplit or similar event (which, for the avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of the Warrants), the number ofshares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock and the ExercisePrice shall be proportionally decreased such that the aggregate Exercise Price, after such adjustments, remains the same for each Warrant.

4.1.2 Other Distributions. If the Company shall declare any distribution (which, for the avoidance of doubt, shall not include any shares of Common Stock issued by the Company

upon exercise of the Warrants) of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, withoutlimitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme ofarrangement or other similar transaction), except to the extent an adjustment was already made pursuant to Section 4.1.1 or 4.2 (a “Distribution”), at any time after theissuance of a Warrant, then, in each such case, the Company shall reserve and put aside the maximum Distribution amount the Holder would have been entitled to receive ifthe Holder had held the number of shares of Common Stock acquirable upon complete exercise of such Warrant (without regard to any limitations on exercise thereof,including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date asof which the record holders of Common Stock are to be determined for the participation in such Distribution. Upon exercise of a Warrant, in whole or in part, the Companyshall, contemporaneously with the delivery of the Common Stock, distribute to the Holder a pro rata portion of such Distribution based on the portion of the Warrant that hasbeen exercised (provided, however, to the extent that the Holder’s right to participate in any such Distributions would result in the Holder exceeding

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the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution at such time and to such extent (or the beneficial ownership of any such

shares of Common Stock as a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of the Holder until suchtime, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (andany Distributions declared or made on such initial Distribution or on any subsequent Distribution to be held similarly in abeyance) to the same extent as if there had been nosuch limitation).

4.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.5 hereof, the number of outstanding shares of Common Stock is decreased by a consolidation,

combination, reverse stock split or reclassification of the Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split,reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding sharesof Common Stock and the Exercise Price shall be proportionally increased such that the aggregate Exercise Price, after such adjustments, remains the same for each Warrant.

4.3 Purchase Rights. If at any time the Company grants, issues or sells any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to therecord holders of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate PurchaseRights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of a Warrant (without regard to anylimitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of suchPurchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such PurchaseRights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage, then theHolder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to suchextent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding theMaximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on anysubsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).

4.4 Fundamental Transactions. If, at any time while the Warrants are outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger orconsolidation of the Company with or into another person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other dispositionof all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company oranother person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has beenaccepted by the holders of 50% or more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects anyreclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into orexchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement orother business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person or group of persons whereby suchother person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other person or other personsmaking or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination) (each, a“Fundamental Transaction”), then, upon any subsequent exercise of a Warrant, the Registered Holder of such Warrant shall be entitled to receive, for each share of Common Stockthat would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 3.4 on the exerciseof the Warrants), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additionalconsideration (the “Alternate Consideration”) which, in all cases, was received as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock forwhich a Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 3.4 on the exercise of the Warrants). If holders ofCommon Stock are given any choice as to the securities, cash or property to be received in a Fundamental

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Transaction, then each Registered Holder shall be given the same choice. Notwithstanding anything to the contrary, (a) if the holders of Common Stock received, as a result of such

Fundamental Transaction, a consideration or Alternate Consideration (whether from the Company or from any other person, and whether such consideration or AlternateConsideration is comprised of cash, securities or other property) (such consideration attributed to one share of Common Stock: the “Fundamental Transaction Consideration PerShare of Common Stock”) with respect to some but not all of their shares of Common Stock (including in the event that they have tendered only some of the shares of Common Stockwhich such shareholders have initially requested to tender) then, upon any subsequent exercise of a Warrant, the Registered Holder of such Warrant shall be entitled to receive suchconsideration on a pro-rata basis, based on the number of shares of Common Stock underlying its Warrant; and (b) in the event that the Fundamental Transaction Consideration PerShare of Common Stock paid as a result of such Fundamental Transaction is paid by the Successor Entity (as defined below) or by any other person other than the Company, then suchSuccessor Entity or the other person shall assume and be responsible to pay the Fundamental Transaction Consideration Per Share of Common Stock upon any subsequent exercise ofa Warrant. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing allobligations of the Company under each Warrant in accordance with the provisions of this Section 4.4 pursuant to agreements in form and substance reasonably satisfactory to theRegistered Holders and approved by the Registered Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of each Registered Holder,deliver to such Registered Holder in exchange for such Registered Holder’s Warrant a written instrument substantially similar in form and substance to such Registered Holder’sWarrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirableand receivable upon exercise of such Warrant (without regard to the limitations on exercise set forth in Section 3.4) prior to such Fundamental Transaction, and with an exercise pricewhich applies the Exercise Price hereunder to such shares of capital stock (but taking into account the relative value of the Common Stock pursuant to such Fundamental Transactionand the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of such Warrantimmediately prior to the consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and besubstituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Agreement and each Warrant referring to the “Company” shall refer instead tothe Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Agreement and each Warrant withthe same effect as if such Successor Entity had been named as the Company herein.

4.5 Calculations. All calculations under this Section 4 shall be made to the nearest cent or the nearest whole share, as the case may be. For purposes of this Section 4, any calculation ofthe number of shares of Common Stock deemed to be issued and outstanding as of a given date shall not include treasury shares, if any. Notwithstanding anything to the contrary inthis Section 4, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, thatany adjustments which by reason of the immediately preceding sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment. Inany case in which this Section 4 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, if the Registered Holder exercises aWarrant after such record date, the Company may elect to defer, until the occurrence of such event, the issuance of Common Stock and other capital stock of the Company in excess ofthe Common Stock and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however,that in such case the Company or the Warrant Agent shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder’s right toreceive such additional shares and/or other capital securities upon the occurrence of the event requiring such adjustment.

4.6 Notices of Changes in Warrant. Upon every adjustment of the Exercise Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written noticethereof to the Warrant Agent, which notice shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable atsuch price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon occurrence of any eventspecified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence of such event to each Warrant holder, at the last address set forth for such holder inthe Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.

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4.7 No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by

reason of any adjustment made pursuant to this Section 4, the holder of any whole Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in ashare, the Company shall, upon such exercise, round to the nearest whole number, the number of shares of Common Stock to be issued to such holder.

4.8 Form of Warrant. The form of Series A Warrant and Series B Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after suchadjustment may state the same Exercise Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.

4.9 Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are strictly applicable, but whichwould require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, ineach such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give itsopinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that anadjustment is necessary, the terms of such adjustment. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in suchopinion.

5. Transfer and Exchange of Warrants.

5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant fortransfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equalaggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to theCompany from time to time upon request.

5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agentshall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants.

5.3 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants requiredto be issued pursuant to the provisions of this Section 5.

6. Other Provisions Relating to Rights of Holders of Warrants.

6.1 No Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, except asotherwise set forth herein or in any Warrant, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice asstockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

6.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity bond orotherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, anddate as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost,stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

6.3 Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that shall be sufficient topermit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

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6.4 Registration of Common Stock. The Company registered the Warrants and the Common Stock underlying the Warrants in the Registration Statement. The Company will use its

reasonable best efforts to maintain the effectiveness of such Registration Statement and the current status of the Prospectus or to file and maintain the effectiveness of anotherregistration statement and another current prospectus covering the Common Stock issuable upon exercise of the Warrants at any time that the Warrants are exercisable. In addition, theCompany agrees to use its reasonable best efforts to register such shares of Common Stock under the blue sky laws of the states of residence of the exercising Warrant holders to theextent an exemption from such registration is not available.

7. Concerning the Warrant Agent and Other Matters.

7.1 Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuanceor delivery of the Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares. Exceptas otherwise required by law, the Company shall not be obligated to honor the exercise of any Warrant by or on behalf of a Registered Holder until all tax consequences (if any) arisingfrom the exercise of such Warrant are resolved in a manner reasonably acceptable to the Company.

7.2 Resignation, Consolidation, or Merger of Warrant Agent.

7.2.1 Appointment of Successor Warrant Agent. The Warrant Agent, or any successor hereafter appointed, may resign its duties and be discharged from all further duties andliabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act orotherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within aperiod of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with suchnotice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of NewYork for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be acorporation in good standing in the State of New York and having its principal office in the Borough of Brooklyn, City and State of New York, and authorized under suchlaws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall bevested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agenthereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expenseof the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and uponrequest of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vestingin and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

7.2.2 Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and

the transfer agent for the Common Stock not later than the effective date of any such appointment.

7.2.3 Merger or Consolidation of Warrant Agent. Any company into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resultingfrom any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

7.3 Fees and Expenses of Warrant Agent.

7.3.1 Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and any transfer agent fees which

are in addition thereto and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent mayreasonably incur in the execution of its duties hereunder.

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7.3.2 Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further

and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

7.4 Liability of Warrant Agent.

7.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact ormatter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be hereinspecifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President, Chief Executive Officer or Chief Financial Officerof the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to theprovisions of this Agreement.

7.4.2 Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant

Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in theexecution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.

7.4.3 Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except

its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in anyWarrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, oramount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make anyrepresentation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether anyshares of Common Stock shall, when issued, be valid and fully paid and nonassessable.

7.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth

and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by theWarrant Agent for the purchase of Common Stock through the exercise of the Warrants.

8. Miscellaneous Provisions.

8.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respectivesuccessors and assigns.

8.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall besufficiently given (i) when so delivered if by hand or overnight delivery, (ii) when sent, if delivered by facsimile (provided confirmation of transmission is mechanically orelectronically generated and kept on file by the sending party) or by electronic mail, or (iii) if sent by certified mail or private courier service within five (5) days after deposit of suchnotice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

Oncobiologics, Inc.7 Clarke DriveCranbury, New Jersey 08512Attention: Lawrence A. Kenyon By Telefax (which constitutes notice): (609) 228-4113 By Email (which constitutes notice): lawrencekenyon@oncobiologics.com

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with copies to (which shall not constitute notice):

Cooley LLP1114 Avenue of the AmericasNew York, New York 10036Attention: Yvan-Claude Pierre and Daniel I. Goldberg

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to the Warrant Agent shall besufficiently given (i) upon receipt if by hand or overnight delivery, (ii) when sent, if delivered by facsimile (provided confirmation of transmission is mechanically orelectronically generated and kept on file by the sending party) or by electronic mail or (iii) if sent by certified mail or private courier service within five (5) days after depositof such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:

American Stock Transfer & Trust Company, LLC6201 15th Avenue, 3rd FloorBrooklyn, New York 11219Attention: Corporate Actions

By Email (which constitutes notice):[—]@amstock.com

8.3 Additional Rights. Notwithstanding the foregoing or anything else herein to the contrary, other than as expressly provided in Section 3.3.5 hereof, if the Company is for any reason

unable to issue and deliver the number of shares of Common Stock to which the Holder is entitled upon Holder’s exercise of a Warrant, as required pursuant to the terms hereof, theCompany shall have no obligation to pay to the Holder any cash or other consideration or otherwise net cash settle this Warrant.

8.4 Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without

giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceedingor claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court forthe Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusivejurisdiction and that such courts represent an inconvenient forum.

8.5 Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto and the

Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. Allcovenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors andassigns and of the Registered Holders of the Warrants.

8.6 Examination of the Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Brooklyn, City of New York

and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.

8.7 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original,and all such counterparts shall together constitute but one and the same instrument.

8.8 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

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8.9 Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of curing any ambiguity, or curing, correcting or

supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters arising under this Agreement as the parties may deemnecessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders. All other modifications or amendments shall require the writtenconsent of the Company and the Registered Holders holding Warrants to purchase at least a majority of the shares of Common Stock underlying the then outstanding Warrants. Noconsideration shall be offered by the Company to any Registered Holder in connection with a modification, amendment or waiver of this Agreement or any Warrant without alsooffering the same consideration to all Registered Holders.

8.10 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this

Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added asa part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

COMPANY: ONCOBIOLOGICS, INC. By: Name: Pankaj Mohan, Ph.D. Title: President and Chief Executive Officer WARRANT AGENT: AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC By: Name: Title:

[Signature Page to Warrant Agreement]

EXHIBIT A

[FORM OF SERIES A WARRANT CERTIFICATE]

Number:

Warrants

THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO

THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FORIN THE WARRANT AGREEMENT DESCRIBED BELOW

ONCOBIOLOGICS, INC.

CUSIP [●]

Warrant Certificate This Warrant Certificate certifies that, or registered assigns, is the registered holder of warrant(s) (the “Warrants” and each, a “Warrant”) to purchase shares of common stock, $0.01

par value per share (the “Common Stock”), of Oncobiologics, Inc., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in theWarrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the“Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” solely as provided for in the Warrant Agreement) of the UnitedStates of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forthherein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement (as defined on thereverse hereof).

Only whole Warrants may be exercised. Each whole Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. The number of shares of Common

Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement. The initial Exercise Price per share of Common Stock for any Warrant is equal to $ [●] per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set

forth in the Warrant Agreement. Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such

Exercise Period, such Warrants shall become void. Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as

though fully set forth at this place. This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.

COMPANY: ONCOBIOLOGICS, INC. By: Name: Pankaj Mohan, Ph.D. Title: President and Chief Executive Officer WARRANT AGENT: AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC By: Name: Title:

[Signature Page to Warrant Certificate]

[Form of Series A Warrant Certificate]

[Reverse]

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock and are issued

or to be issued pursuant to a Warrant Agreement, dated as of May [●], 2016 (the “Warrant Agreement”), duly executed and delivered by the Company to American Stock Transfer & TrustCompany, LLC, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for adescription of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning theRegistered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used inthis Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Warrants may be exercised at any time during the Exercise Period set forth in Section 3.2.1 of the Warrant Agreement. Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering

offer and sale of the Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the Common Stock is current, except through“cashless exercise” as provided for in the Warrant Agreement.

The Warrant Agreement provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the face hereof

may, subject to certain conditions, be adjusted. If, upon exercise of a whole Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, theCompany shall, upon exercise, round to the nearest whole share of Common Stock to be issued to the holder of the Warrant.

Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney

duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another WarrantCertificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and

evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement,without charge except for any tax or other governmental charge imposed in connection therewith.

The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of

ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company northe Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.

Election to Purchase

(To Be Executed Upon Exercise of Warrant)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of common stock, par value $0.01 per share (the “Common

Stock”), of Oncobiologics, Inc., a Delaware corporation (the “Company”) and herewith tenders payment for such shares to the order of the Company in the amount of $___ in accordance withthe terms hereof. The undersigned requests that a certificate for such shares be registered in the name of _____________________, whose address is and that such shares be delivered to whoseaddress is ______________________. If said number of shares is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificaterepresenting the remaining balance of such shares be registered in the name of ___________________, whose address is _______________, and that such Warrant Certificate be delivered to_________________, whose address is ______________________.

In the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 3.3.2 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is

exercisable for shall be determined in accordance with Section 3.3.2 of the Warrant Agreement.

________________a “Cash Exercise” with respect to ____________ Warrant Shares; and/or

________________a “Cashless Exercise” with respect to ____________ Warrant Shares, resulting in a delivery obligation by the Company to theHolder of Common Stock representing the applicable Net Number, subject to adjustment.

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares that this Warrant is exercisable for

would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: Theundersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive CommonStock. If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new WarrantCertificate representing the remaining balance of such shares be registered in the name of_____________________, whose address is_____________________, and that such WarrantCertificate be delivered to_____________________, whose address is_____________________.

Date: ____________, 201__ (Signature) (Address) (Tax Identification Number)

EXHIBIT B

[FORM OF SERIES B WARRANT CERTIFICATE]

Number:

Warrants

THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO

THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FORIN THE WARRANT AGREEMENT DESCRIBED BELOW

ONCOBIOLOGICS, INC.

CUSIP [●]

Warrant Certificate This Warrant Certificate certifies that, or registered assigns, is the registered holder of warrant(s) (the “Warrants” and each, a “Warrant”) to purchase shares of common stock, $0.01

par value per share (the “Common Stock”), of Oncobiologics, Inc., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in theWarrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the“Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” solely as provided for in the Warrant Agreement) of the UnitedStates of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forthherein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement (as defined on thereverse hereof).

Only whole Warrants may be exercised. Each whole Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. The number of shares of Common

Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement. The initial Exercise Price per share of Common Stock for any Warrant is equal to $ [●] per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set

forth in the Warrant Agreement. Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such

Exercise Period, such Warrants shall become void. Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as

though fully set forth at this place. This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.

COMPANY: ONCOBIOLOGICS, INC. By: Name: Pankaj Mohan, Ph.D. Title: President and Chief Executive Officer WARRANT AGENT: AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC By: Name: Title:

[Signature Page to Warrant Certificate]

[Form of Warrant Certificate]

[Reverse]

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive Common Stock and are issued or to be

issued pursuant to a Warrant Agreement, dated as of May [●], 2016 (the “Warrant Agreement”), duly executed and delivered by the Company to American Stock Transfer & Trust Company,LLC, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description ofthe rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the RegisteredHolders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in thisWarrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Warrants may be exercised at any time during the Exercise Period set forth in Section 3.2.2 of the Warrant Agreement. Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering

the offer and sale of shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the shares of Common Stock is current,except through “cashless exercise” as provided for in the Warrant Agreement.

The Warrant Agreement provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the face hereof

may, subject to certain conditions, be adjusted. If, upon exercise of a whole Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, theCompany shall, upon exercise, round to the nearest whole share of Common Stock to be issued to the holder of the Warrant.

Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney

duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another WarrantCertificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and

evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement,without charge except for any tax or other governmental charge imposed in connection therewith.

The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of

ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company northe Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.

Election to Purchase

(To Be Executed Upon Exercise of Warrant)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of common stock, par value $0.01 per share (the “Common

Stock”), of Oncobiologics, Inc., a Delaware corporation (the “Company”) and herewith tenders payment for such shares to the order of the Company in the amount of $___ in accordance withthe terms hereof. The undersigned requests that a certificate for such shares be registered in the name of _____________________, whose address is and that such shares be delivered to whoseaddress is ______________________. If said number of shares is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificaterepresenting the remaining balance of such shares be registered in the name of the undersigned, and that such Warrant Certificate be delivered to _________________, whose address is______________________.

In the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 3.3.2 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is

exercisable for shall be determined in accordance with Section 3.3.2 of the Warrant Agreement.

________________a “Cash Exercise” with respect to ____________ Warrant Shares; and/or

________________a “Cashless Exercise” with respect to ____________ Warrant Shares, resulting in a delivery obligation by the Company to theHolder of Common Stock representing the applicable Net Number, subject to adjustment.

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares that this Warrant is exercisable for

would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: Theundersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive CommonStock. If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new WarrantCertificate representing the remaining balance of such shares be registered in the name of the undersigned, and that such Warrant Certificate be delivered to_____________________, whoseaddress is_____________________.

Date: ____________, 201_ (Signature) (Address) (Tax Identification Number)

Exhibit 5.1

Yvan-Claude Pierre+1 212 479 6721ypierre@cooley.com

May 11 , 2016 Oncobiologics, Inc.7 Clarke DriveCranbury, New Jersey 08512 Ladies and Gentlemen: You have requested our opinion, as counsel to Oncobiologics, Inc., a Delaware corporation (the “Company”), in connection with the filing by the Company of a Registration Statement(No. 333-209011) on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission, including a related prospectus filed with the Registration Statement (the“Prospectus”), covering an underwritten public offering of (i) up to 6,708,334 units (the “Units”) of the Company, including up to 875,000 Units that may be sold pursuant to the exercise of anoption to purchase additional Units, with each Unit consisting of one share of common stock, par value $0.01 per share (the “Common Stock”), of the Company (collectively, the “Shares”),one-half of a Series A warrant to purchase one share of Common Stock (collectively, the “Series A Warrants”) and one-half of a Series B warrant to purchase one share of Common Stock (the“Series B Warrants” and together with the Series A Warrants, the “Warrants”), (ii) up to 3,354,167 shares of Common Stock issuable upon exercise of the Series A Warrants (the “Series AWarrant Shares”) and (iii) up to 3,354,167 shares of Common Stock issuable upon exercise of the Series B Warrants (together with the Series A Warrant Shares, the “Warrant Shares”) . Allof the Units are to be sold by the Company as described in the Registration Statement and the Prospectus. The Warrants are to be issued pursuant to a Warrant Agreement between theCompany and American Stock Trust & Transfer Company, LLC, as warrant agent (the “ Warrant Agreement ”). In connection with this opinion, we have (i) examined and relied upon (a) the Registration Statement and the Prospectus, (b) the Company’s Certificate of Incorporation and Bylaws, asamended, each as currently in effect, (c) the Company’s Amended and Restated Certificate of Incorporation, and Amended and Restated Bylaws, each as filed as an exhibit to the RegistrationStatement and to be in effect immediately following the closing of the offering contemplated by the Registration Statement, (d) the form of the Warrant Agreement filed as an exhibit to theRegistration Statement, including the forms of Series A Warrants and Series B Warrants attached thereto, (e) the form of Unit Certificate filed as an exhibit to the Registration Statement and(f) originals or copies certified to our satisfaction of such records, documents, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us torender the opinion expressed below, and (ii) assumed that the final terms of the sale and issuance of the Units will be authorized by the Board of Directors of the Company or a pricingcommittee thereof in accordance with Sections 152 and 153 of the General Corporation Law of the State of Delaware (the “DGCL”). We have undertaken no independent verification withrespect to such matters. We have assumed the genuineness and authenticity of all documents submitted to us as originals, and the conformity to originals of all documents submitted to us ascopies and the due execution and delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof. As to certain factual matters, we have relied upon acertificate of an officer of the Company and have not sought independently to verify such matters. Our opinion is expressed only with respect to the law of the State of New York and the DGCL. We express no opinion as to whether the laws of any particular jurisdiction are applicable to thesubject matter hereof. We are not rendering any opinion as to compliance with any federal or state antifraud law, rule or regulation relating to securities, or to the sale or issuance thereof. On the basis of the foregoing, and in reliance thereon, we are of the opinion that: (i) the Units and the Warrants, when sold and issued against payment therefor as described in the RegistrationStatement and the Prospectus, will constitute valid and binding obligations of the Company, subject to applicable bankruptcy, insolvency and

Cooley LLP 1114 Avenue of the Americas New York, NY 10036t: (212) 479-6000 f: (212) 479-6275 cooley.com

May 11 , 2016Page Two similar laws affecting creditors’ rights generally and to equitable principles of general applicability; (ii) the Shares, when sold and issued against payment therefor as described in theRegistration Statement and the Prospectus, will be validly issued, fully paid and non-assessable; and (iii) the Warrant Shares, when issued and sold by the Company in accordance with theWarrant Agreement, will be validly issued, fully paid and non-assessable. We consent to the reference to our firm under the caption “Legal Matters” in the Prospectus included in the Registration Statement and to the filing of this opinion as an exhibit to theRegistration Statement. Sincerely, Cooley LLP By: /s/ Yvan-Claude Pierre Yvan-Claude Pierre

Cooley LLP 1114 Avenue of the Americas New York, NY 10036t: (212) 479-6000 f: (212) 479-6275 cooley.com

Exhibit 10.1

EXECUTION COPY

INVESTORS’ RIGHTS AGREEMENT

by and among

ONCOBIOLOGICS, INC.,

STRIDES PHARMA INC.

and

CERTAIN KEY HOLDERS

March 10, 2014

TABLE OF CONTENTS

Page

1. Definitions 1 2. Registration Rights 4 2.1 Demand Registration 4 2.2 Company Registration 6 2.3 Underwriting Requirements 6 2.4 Obligations of the Company 8 2.5 Furnish Information 9 2.6 Expenses of Registration 9 2.7 Delay of Registration 10 2.8 Indemnification 10 2.9 Reports Under Exchange Act 12 2.10 Limitations on Subsequent Registration Rights 12 2.11 “Market Stand-off” Agreement 13 2.12 Restrictions on Transfer 13 2.13 Termination of Registration Rights 15 3. Information and Observer Rights 15 3.1 Delivery of Financial Statements 15 3.2 Inspection 16 3.3 Observer Rights 17 3.4 Termination of Information and Observer Rights 17 3.5 Confidentiality 17 4. Rights to Future Stock Issuances 17 4.1 Right of First Offer 17 4.2 Termination 18 5. Additional Covenants 18 5.1 Insurance 18 5.2 Employee Agreements 19 5.3 Matters Requiring Investor Approval 19 5.4 Matters Requiring Investor Notice 20 5.5 Board Matters 21 5.6 Successor Indemnification 21 5.7 Expenses of Counsel 21 5.8 FCPA 22 5.9 Cooperation of Key Holders 22 5.10 Termination of Covenants 22 6. Miscellaneous 22 6.1 Successors and Assigns 22 6.2 Governing Law 23 6.3 Counterparts 23 6.4 Titles and Subtitles 23 6.5 Notices 23

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6.6 Amendments and Waivers 24 6.7 Severability 24 6.8 Aggregation of Stock 24 6.9 Additional Investors 24 6.10 Entire Agreement 24 6.11 Dispute Resolution 24 6.12 Delays or Omissions 25 Schedule A - Schedule of Key Holders

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INVESTORS’ RIGHTS AGREEMENT

THIS INVESTORS’ RIGHTS AGREEMENT (this “Agreement”), is made as of the 10th day of March, 2014, by and among Oncobiologics, Inc., a New Jersey corporation

(the “Company”), Strides Pharma Inc., a company incorporated under the laws of New Jersey (the “Investor”), and each of the shareholders listed on Schedule A hereto, each of whom isreferred to herein as a “Key Holder”.

RECITALS

WHEREAS, the Company and the Investor are parties to the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”); and WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to induce the Investor to invest funds in the Company pursuant to the Purchase

Agreement, the Investor and the Company hereby agree that this Agreement shall govern the rights of the Investor to cause the Company to register shares of Common Stock issuable to theInvestor, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement;

NOW, THEREFORE, the parties hereby agree as follows:

1. Definitions. For purposes of this Agreement:

1.1 “Adjustment Period” means the time from the date hereof through the date on which the Company has engaged in a Qualified IPO or a Qualified

Liquidation Event. 1.2 “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control

with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that iscontrolled by one or more general partners or managing members of, or shares the same management company with, such Person.

1.3 “Board of Directors” means the Company’s board of directors. 1.4 “Common Stock” means the Company’s common stock, no par value per share. 1.5 “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the

Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement oralleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or anyamendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to

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make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the ExchangeAct, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

1.6 “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common

Stock, including options and warrants. 1.7 “Excepted Securities” means (i) securities of the Company issued upon the conversion or exercise of any currently issued debenture, warrant, option, or

other convertible security and that have not been amended to either reduce their conversion or exercise price and/or to increase the number of shares issuable upon any such exerciseor conversion; (ii) Common Stock issuable upon a stock split, stock dividend, or any subdivision of shares of Common Stock; (iii) shares of Common Stock (or options to purchasesuch shares of Common Stock) issued or issuable to employees or directors of, or consultants to, the Company pursuant to any plan approved by the Board of Directors andshareholders; (iv) securities of the Company issued in connection with business combinations with a business that the Company, in good faith, determines to be synergistic with theCompany; and (v) securities of the Company issued in strategic transactions in which the Board of Directors expects, in good faith, to derive substantial benefits, so long as suchtransactions are not for the principal purpose of raising capital

1.8 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 1.9 “Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option,

stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information aswould be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered isCommon Stock issuable upon conversion of debt securities that are also being registered.

1.10 “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act

subsequently adopted by the SEC. 1.11 “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently

adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC. 1.12 “GAAP” means generally accepted accounting principles in the United States.

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1.13 “Holder” means any holder of Registrable Securities who is a party to this Agreement. 1.14 “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-

law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to herein. 1.15 “Initiating Holder” means the Holder who properly initiates a registration request under this Agreement. 1.16 “Key Employee” means any executive-level employee (including, division director and vice president-level positions) as well as any employee who,

either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement). 1.17 “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to

purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities. 1.18 “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity. 1.19 “Preferred Stock” means, collectively, shares of the Company’s Series A Preferred Stock and Series B Preferred Stock. 1.20 “Qualified IPO” means the closing by the Company of a firm commitment underwritten public offering with a price of at least 4.3 times the Per Share

Purchase Price (as defined in the Purchase Agreement) and gross proceeds to the Company of not less than $50 million. 1.21 “Qualified Liquidation Event” means a merger or consolidation (other than one in which shareholders of the Company own a majority of the voting

power of the outstanding shares of the surviving or acquiring corporation) or a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of theCompany in which the consideration is either all cash or securities that are either registered for sale on an exchange or quotation system or otherwise unrestricted and pursuant towhich the equity value of the Company (exclusive of any liabilities being assumed by the surviving or acquiring corporation) is at least $300 million.

1.22 “Registrable Securities” means the Purchased Shares (as defined in the Purchase Agreement), the Additional Shares (as defined in the Purchase

Agreement) and the Ratchet Shares (as defined in the Purchase Agreement); excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which theapplicable rights under this Agreement are not assigned pursuant to Subsection 6.1, and excluding for purposes of Section 2 any shares for which registration rights have terminatedpursuant to Subsection 2.13 of this Agreement.

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1.23 “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that

are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are RegistrableSecurities.

1.24 “Reporting Event” means the Company’s initial public offering of its Common Stock pursuant to an effective registration statement under the Securities

Act, or equivalent law of another jurisdiction, or upon such date as the Company becomes subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act,including, without limitation, upon consummation of a reverse merger or upon the effectiveness of a registration statement on Form 10 filed by the Company under the Exchange Actor equivalent document.

1.25 “Restricted Securities” means the securities of the Company required to be notated with the legend set forth in Subsection 2.12(b) hereof. 1.26 “Sale of the Company” a merger or consolidation (other than one in which shareholders of the Company own a majority of the voting power of the

outstanding shares of the surviving or acquiring corporation) or a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company inwhich the consideration is either all cash or securities that are either registered for sale on an exchange or quotation system or otherwise unrestricted.

1.27 “SEC” means the Securities and Exchange Commission. 1.28 “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act. 1.29 “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act. 1.30 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 1.31 “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and

fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 2.6. 2. Registration Rights. The Company covenants and agrees as follows:

2.1 Demand Registration. (a) Form S-1 Demand. If at any time after one hundred eighty (180) days after the effective date of the registration statement for a Reporting Event, the

Company receives a request from the Investor that the Company file a Form S-1 registration statement with

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respect to some or all of the Registrable Securities then outstanding, then, provided that the anticipated aggregate offering price, net of Selling Expenses, would exceed $5 million, theCompany shall (x) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holder; and (y) as soon aspracticable, and in any event within thirty (30) days after the date such request is given by the Initiating Holder, file a Form S-1 registration statement under the Securities Act covering allRegistrable Securities that the Initiating Holder requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, asspecified by notice given by each such Holder to the Company within ten (10) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c),2.1(d) and 2.3.

(b) Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from the Investor that the

Company file a Form S-3 registration statement with respect to Registrable Securities then outstanding, provided that the anticipated aggregate offering price, net of Selling Expenses, wouldexceed $1 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holder; and (ii) as soon aspracticable, and in any event within thirty (30) days after the date such request is given by the Initiating Holder, file a Form S-3 registration statement under the Securities Act covering allRegistrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within ten (10) days of the date theDemand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.

(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection 2.1 a certificate signed

by the Company’s chief executive officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company and its shareholders for suchregistration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i)materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information thatthe Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, thenthe Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for aperiod of not more than sixty (60) days after the request of the Initiating Holder is given; provided, however, that the Company may not invoke this right more than twice in any twelve (12)month period; and provided further that the Company shall not register any securities for its own account or that of any other shareholder during such sixty (60) day period other than pursuantto a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; a registration on any form that does notinclude substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or a registration in which the onlyCommon Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

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(d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(a), (i) during the period that is

seventy-five (75) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after theCompany has effected two registrations pursuant to Subsection 2.1(a); or (iii) if the Initiating Holder proposes to dispose of shares of Registrable Securities that may be immediately registeredon Form S-3 pursuant to a request made pursuant to Subsection 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection2.1(b), (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, aCompany-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii)if the Company has effected two registrations pursuant to Subsection 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not becounted as “effected” for purposes of this Subsection 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holderwithdraws its request for such registration, except as a result of a material adverse change to the Company or its operations, and forfeits its right to one demand registration statement pursuantto Subsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection 2.1(d).

2.2 Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for shareholders other than

the Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Companyshall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, theCompany shall, subject to the provisions of Subsection 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. TheCompany shall have the right to terminate or withdraw any registration initiated by it under this Subsection 2.2 before the effective date of such registration, whether or not any Holder haselected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance withSubsection 2.6.

2.3 Underwriting Requirements. (a) If, pursuant to Subsection 2.1, the Initiating Holder intends to distribute the Registrable Securities covered by their request by means of an underwriting,

they shall so advise the Company as a part of their request made pursuant to Subsection 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will beselected by the Initiating Holder, subject only to the reasonable approval of the Company. In such event, the right of any Holder to include such Holder’s Registrable Securities in suchregistration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided

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herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreementin customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Subsection 2.3, if the managing underwriter(s) advise(s) the InitiatingHolder in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holder shall so advise all Holders of Registrable Securities thatotherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of RegistrableSecurities, including the Initiating Holder, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually beagreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all othersecurities are first entirely excluded from the underwriting.

(b) In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Subsection 2.2, the Company shall not be

required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and itsunderwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number ofsecurities, including Registrable Securities, requested by shareholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that theunderwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of suchsecurities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwritersdetermine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall beallocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutuallybe agreed to by all such selling Holders. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities(other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below thirtypercent (30%) of the total number of securities included in such offering, unless such offering is a Reporting Event, in which case the selling Holders may be excluded further if theunderwriters make the determination described above and no other shareholder’s securities are included in such offering. For purposes of the provision in this Subsection 2.3(b) concerningapportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, shareholders, and Affiliates ofsuch Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons,shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned byall Persons included in such “selling Holder,” as defined in this sentence.

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(c) For purposes of Subsection 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in

Subsection 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included. 2.4 Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as

expeditiously as reasonably possible: (a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement

to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to oneyear or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one year period shall be extended for a period of timeequal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii)in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such oneyear period shall be extended for up to one additional year, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such

registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement; (c) furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other

documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities; (d) use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky

laws of such jurisdictions within the United States as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file ageneral consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the SecuritiesAct;

(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with

the underwriter(s) of such offering; (f) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities

exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

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(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such

Registrable Securities, in each case not later than the effective date of such registration; (h) promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration

statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, andproperties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller,underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate duediligence in connection therewith;

(i) notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a

supplement to any prospectus forming a part of such registration statement has been filed; and (j) after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such

registration statement or prospectus. In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall

have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act. 2.5 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the

Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method ofdisposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

2.6 Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to

Section 2 including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the fees and disbursements not toexceed $10,000 of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to payfor any expenses of any registration proceeding begun pursuant to Subsection 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of theRegistrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in thewithdrawn

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registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Subsections 2.1(a) or 2.1(b), as the case may be; providedfurther that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to theHolders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of suchexpenses and shall not forfeit their right to one registration pursuant to Subsections 2.1(a) or 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf

2.7 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this

Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 2.8 Indemnification. If any Registrable Securities are included in a registration statement under this Section 2: (a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and

shareholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, whocontrols such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter,controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from whichDamages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(a) shall not apply to amounts paid in settlement of anysuch claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for anyDamages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any suchHolder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors,

each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for theCompany, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or otherHolder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with writteninformation furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each otheraforementioned Person any legal or other expenses reasonably incurred thereby in connection

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with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in thisSubsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not beunreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 2.8(b) and 2.8(d)exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

(c) Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of the commencement of any action (including any governmental action)

for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8,give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires,participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however,that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the feesand expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual orpotential differing interests between such indemnified party and any other party represented by such counsel in such action.

(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to

indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competentjurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that thisSubsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is providedunder this Subsection 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (aftercontribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements,omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifyingparty and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or allegedomission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, andopportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offeringprice of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning ofSection 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such

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fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by suchHolder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willfulmisconduct or fraud by such Holder.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in

connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. (f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company

and Holders under this Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination ofthis Agreement.

2.9 Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC

that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall: (a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after a Reporting

Event; (b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities

Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and (c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the

Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the Reporting Event), the Securities Act, and the Exchange Act (at anytime after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after theCompany so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securitieswithout registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company soqualifies to use such form).

2.10 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the

Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that (i) would provide tosuch holder the right to include securities in any registration on other than either a pro rata basis with

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respect to the Registrable Securities or on a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that theywish to so include; or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitationshall not apply to any additional Investor who becomes a party to this Agreement in accordance with Subsection 6.9.

2.11 “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the

period commencing on the date of the final prospectus relating a Qualified IPO, and ending on the date specified by the Company and the managing underwriter (such period not to exceed onehundred eighty (180) days ), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant topurchase; or otherwise transfer or dispose of directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) forCommon Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or inpart, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or othersecurities, in cash, or otherwise. The foregoing provisions of this Subsection 2.11 shall apply only to a Qualified IPO, shall not apply to the sale of any shares to an underwriter pursuant to anunderwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trustagrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders onlyif all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all shareholders individually owningmore than five percent (5%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock). The underwriters inconnection with such registration are intended third-party beneficiaries of this Subsection 2.11 and shall have the right, power and authority to enforce the provisions hereof as though theywere a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with thisSubsection 2.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or theunderwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.

2.12 Restrictions on Transfer. (a) The Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer

instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliancewith the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Registrable Securities held by such Holder to agree to take andhold such securities subject to the provisions and upon the conditions specified in this Agreement.

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(b) Each certificate, instrument, or book entry representing (i) the Registrable Securities, and (ii) any other securities issued in respect of the securities

referenced in clause (i), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.12(c))be notated with a legend substantially in the following form:

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTIONFROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THECOMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the

restrictions on transfer set forth in this Subsection 2.12. (c) The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2. Before any

proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereofshall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge,or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whoselegal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the SecuritiesAct; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by thestaff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer ofthe Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer suchRestricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in anytransaction in compliance with SEC Rule 144; or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided thateach transferee agrees in writing to be subject to the terms of this Subsection 2.12. Each certificate, instrument, or book entry representing the Restricted Securities transferred as aboveprovided shall be notated with, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Subsection 2.12(b), except that such certificateinstrument, or book entry shall not be notated with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establishcompliance with any provisions of the Securities Act.

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2.13 Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to

Subsections 2.1 or 2.2 shall terminate upon: (a) the closing of a Qualified Liquidation Event; and (b) such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during

a three-month period without registration. 3. Information and Observer Rights.

3.1 Delivery of Financial Statements. The Company shall deliver to the Investor: (a) as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company (i) a balance sheet as of the end of such

year, (ii) statements of income and of cash flows for such year, and a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the prioryear and as included in the Budget (as defined in Subsection 3.1(d)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources andapplications of funds for such year, and (iii) a statement of shareholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountantsof nationally recognized standing selected by the Company;

(b) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company,

unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of shareholders’ equity as of the end of such fiscal quarter, all prepared inaccordance with the Accounting and Review standards of the American Institute of Certified Public Accountants (the “AICPA”) (except that such financial statements may (i) be subject tonormal year-end audit adjustments; and (ii) not contain all notes thereto that may be required in accordance with the Accounting and Review standards of the AICPA);

(c) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, a

statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, theCommon Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, andthe number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Investor to calculate its percentage equityownership in the Company, and certified by the chief financial officer or chief executive officer of the Company as being true, complete, and correct;

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(d) as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the next fiscal year (collectively,

the “Budget”), approved by the Board of Directors and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptlyafter prepared, any other budgets or revised budgets prepared by the Company;

(e) with respect to (i) the financial statements called for in Subsection 3.1(a), an instrument executed by the chief financial officer and chief executive officer of

the Company certifying that the audited financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods and fairly present the financialcondition of the Company and its results of operation for the periods specified therein, and (ii) the financial statements called for in Subsection 3.1(b), an instrument executed by the chieffinancial officer and chief executive officer of the Company certifying that the financial statements were prepared in accordance with the Accounting and Review standards of the AICPAconsistently applied with prior practice for earlier periods and fairly present the financial condition of the Company and if the Financial Statements were prepared in accordance with GAAPconsistently applied with prior practice for earlier periods, then any difference between the Financial Statements and the Financial Statements prepared in accordance with GAAP for anyapplicable period would be non-material; and

(f) such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as the Investor may from time to time

reasonably request; provided, however, that the Company shall not be obligated under this Subsection 3.1 to provide information (i) that the Company reasonably determines in good faith to bea trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company); or (ii) the disclosure of which would adverselyaffect the attorney-client privilege between the Company and its counsel.

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements

delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries. Notwithstanding anything else in this Subsection 3.1 to the contrary, the Company may cease providing the information set forth in this Subsection 3.1 during the period

starting with the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SECrules applicable to such registration statement and related offering; provided that the Company’s covenants under this Subsection 3.1 shall be reinstated at such time as the Company is nolonger actively employing its commercially reasonable efforts to cause such registration statement to become effective.

3.2 Inspection. The Company shall permit the Investor, at the Investor’s expense, to visit and inspect the Company’s properties; examine its books of account

and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Investor;provided, however, that the Company shall not be obligated pursuant to this Subsection 3.2 to

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provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, inform acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

3.3 Observer Rights. As long as the Investor owns not less than fifty percent (50%) of the shares of the Common Stock it is purchasing under the Purchase

Agreement, the Company shall invite a representative of the Investor to attend all meetings of its Board of Directors in a nonvoting observer capacity and, in this respect, shall give suchrepresentative copies of all notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided,however, that such representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and provided further, that theCompany reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meetingcould adversely affect the attorney-client privilege between the Company and its counsel.

3.4 Termination of Information and Observer Rights. The covenants set forth in Subsection 3.1, Subsection 3.2, and Subsection 3.3 shall terminate and be of

no further force or effect (i) immediately before the consummation of the Qualified IPO, or (ii) upon a Qualified Liquidation Event, whichever event occurs first. 3.5 Confidentiality. The Investor agrees that the Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its

investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registrationstatement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Subsection 3.5 by the Investor), (b) is or hasbeen independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a thirdparty without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that the Investor may disclose confidential information (i) to itsattorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospectivepurchaser of any Registrable Securities from the Investor, if such prospective purchaser agrees to be bound by the provisions of this Subsection 3.5; (iii) to any existing or prospective Affiliate,partner, member, shareholder, or wholly owned subsidiary of the Investor in the ordinary course of business, provided that the Investor informs such Person that such information isconfidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Investor promptly notifies the Companyof such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

4. Rights to Future Stock Issuances.

4.1 Right of First Offer. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the Company proposes to offer or sell any

New Securities, the Company shall first offer such New Securities to the Investor. The Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as itdeems appropriate, among (i) itself and (ii) its Affiliates.

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(a) The Company shall give notice (the “Offer Notice”) to the Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such

New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities. (b) By notification to the Company within twenty (20) days after the Offer Notice is given, the Investor may elect to purchase or otherwise acquire, at the price

and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Common Stock then held by the Investor (including all shares ofCommon Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by the Investor) bearsto the total Common Stock of the Company then held by all holders of the Company’s securities (including all shares of Common Stock issuable (directly or indirectly) upon conversion and/orexercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by all holders of the Company’s securities). The closing of any sale pursuant to this Subsection4.1(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Subsection 4.1(c).

(c) If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b), the Company may, during

the ninety (90) day period following the expiration of the periods provided in Subsection 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person orPersons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of theNew Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived andsuch New Securities shall not be offered unless first reoffered to the Investor in accordance with this Subsection 4.1.

(d) The right of first offer in this Subsection 4.1 shall not be applicable to Excepted Securities. 4.2 Termination. The covenants set forth in Subsection 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the

Qualified IPO, or (ii) upon a Qualified Liquidation Event, whichever event occurs first. 5. Additional Covenants.

5.1 Insurance. The Company shall use its commercially reasonable efforts to obtain, within ninety (90) days of the date hereof, from financially sound and

reputable insurers Directors and Officers liability insurance and term “key-person” insurance on Pankaj Mohan, Ph.D., in an amount and on terms and conditions satisfactory to the Board ofDirectors, and will use commercially reasonable efforts to cause such insurance policies to be maintained

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until such time as the Board of Directors determines that such insurance should be discontinued. The key-person policy shall name the Company as loss payee, and neither policy shall becancelable by the Company without prior approval by the Board of Directors. Each Key Holder hereby covenants and agrees that, to the extent such Key Holder is named under such key-person policy, such Key Holder will execute and deliver to the Company, as reasonably requested, a written notice and consent form with respect to such policy.

5.2 Employee Agreements. The Company will, cause (1) each person now or hereafter employed by it or by any subsidiary (or engaged by the Company or

any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement;and (ii) each Key Employee to enter into a one (1) year noncompetition and nonsolicitation agreement, substantially in the form approved by the Board of Directors. In addition, the Companyshall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and anyemployee, without the unanimous consent of the Board of Directors.

5.3 Matters Requiring Investor Approval. At any time during the Adjustment Period, so long as the Investor and its Affiliates own and hold at least 75% of the

Purchased Shares outstanding, the Company hereby covenants and agrees with the Investor that it shall not, without approval of the Investor, such approval not to be unreasonably withheld ordelayed:

(a) change the principal business of the Company, enter new lines of business, or exit the current line of business of the Company; (b) enter into a Sale of the Company; (c) voluntarily commence a winding up proceeding for insolvency or bankruptcy of the Company or a general assignment for the benefit of its creditors or

consent to the entry of a decree or order for relief from creditors under any applicable law or any admission by the Company of: (i) its inability to pays its debts, or (ii) any other actionconstituting a cause for the involuntary declaration of insolvency or bankruptcy;

(d) issue any equity or debt securities for the purpose of raising capital prior to an initial public offering of the Common Stock, pursuant to which the equity of

the Company is valued at less than $100 million prior to consummation of such offering, as calculated on a fully diluted basis; (e) consummate an initial public offering of the Common Stock, pursuant to which the equity of the Company is valued at less than $300 million prior to

consummation of such offering, as calculated on a fully diluted basis; (f) sell all or substantially all of the Company’s assets or close an existing business or engage any business beyond the scope of the Business Plan (as defined in

the Purchase Agreement);

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(g) sell, transfer, lease or encumber any material part of the Company’s business or assets; (h) amend the Company’s Certificate of Incorporation; (i) change the name of the Company or transfer any Company Intellectual Property (as defined in the Purchase Agreement), unless such transfer is between the

Company and its Affiliates; (j) apply to list the shares of Common Stock on any stock exchange or quotation service; or (k) change the registered office of the Company. 5.4 Matters Requiring Investor Notice. At any time during the Adjustment Period, so long as the Investor and its Affiliates own and hold at least 75% of the

Purchased Shares outstanding, the Company hereby covenants and agrees with the Investor that it shall notify the Investor of the following actions: (a) any acquisition by the Company of any business or division of a third party by way of share purchase, business transfer, slump sale, asset purchase or any

other mode of acquiring a business; (b) formation of joint ventures or partnerships by the Company or creation of a subsidiary by the Company; (c) any increase, decrease, buy back or other alteration, amendment or modification of authorized or issued equity capital of the Company or any alteration,

amendment or modification to the rights of the holders of any equity capital of the Company or the creation of any rights or securities containing anti-dilution protection terms and the detailsof such terms thereof;

(d) any declaration or payment of any dividend or distribution of profits or commissions to the shareholders, employees or directors of the Company; (e) any increase or decrease in the size of the Board of Directors; (f) entering into any transaction between the Company and a Related Party (as defined in the Purchase Agreement); (g) a material amendment or modification to a material compensatory plan, contract or arrangement of a Key Employee, or a material grant or award to any

such Key Employee under any such plan, contract or arrangement; (h) any capital expenditure in excess of $2,000,000;

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(i) an incurrence of any debt of the Company beyond three (3) times current debt as per the most recent audited financial statements, where debt includes

without limitation short and long term debt and guarantees by the Company; (j) any litigation of the Company involving any amount in excess of $2,000,000; and (k) a termination or modification of any material contract or arrangement disclosed in Subsection 2.10 of the Disclosure Schedule to the Purchase Agreement,

or any material contract or arrangement that would have been disclosed in Subsection 2.10 of the Disclosure Schedule to the Purchase Agreement if such contract or arrangement had beenentered into as of the date hereof.

5.5 Board Matters. Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in

accordance with an agreed-upon schedule. 5.6 Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the

continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Companyassume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations arecontained in the Company’s Bylaws, its Certificate of Incorporation, or elsewhere, as the case may be.

5.7 Expenses of Counsel. In the event of a transaction which is a Sale of the Company, the reasonable fees and disbursements, of one counsel for the Investor

(“Investor Counsel”), in their capacities as shareholders, not to exceed $10,000 shall be borne and paid by the Company. At the outset of considering a transaction which, if consummatedwould constitute a Sale of the Company, the Company shall obtain the ability to share with the Investor Counsel (and such counsel’s clients) and shall share the confidential information(including, without limitation, the initial and all subsequent drafts of memoranda of understanding, letters of intent and other transaction documents and related noncompete, employment,consulting and other compensation agreements and plans) pertaining to and memorializing any of the transactions which, individually or when aggregated with others would constitute the Saleof the Company. The Company shall be obligated to share (and cause the Company’s counsel and investment bankers to share) such materials when distributed to the Company’s executivesand/or any one or more of the other parties to such transaction(s). In the event that Investor Counsel deems it appropriate, in its reasonable discretion, to enter into a joint defense agreement orother arrangement to enhance the ability of the parties to protect their communications and other reviewed materials under the attorney client privilege, the Company shall, and shall direct itscounsel to, execute and deliver to Investor Counsel and its clients such an agreement in form and substance reasonably acceptable to Investor Counsel. In the event that one or more of the otherparty or parties to such transactions require the clients of Investor Counsel to enter into a confidentiality agreement and/or joint defense agreement in order to receive such information, then theCompany shall share whatever information can be shared

21

without entry into such agreement and shall, at the same time, in good faith work expeditiously to enable Investor Counsel and its clients to negotiate and enter into the appropriateagreement(s) without undue burden to the clients of Investor Counsel.

5.8 FCPA. The Company represents that it shall not (and shall not permit any of its subsidiaries or affiliates or any of its or their respective directors, officers,

managers, employees, independent contractors, representatives or agents to) promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, toany third party, including any Non-U.S. Official (as (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”)), in each case, in violation of theFCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to)cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or affiliates, or any of their respective directors, officers, managers,employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company furtherrepresents that it shall (and shall cause each of its subsidiaries and affiliates to) maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems andbilling systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. Upon request, the Company agrees to provideresponsive information and/or certifications concerning its compliance with applicable anti-corruption laws. The Company shall promptly notify the Investor if the Company becomes aware ofany Enforcement Action (as defined in the Purchase Agreement). The Company shall, and shall cause any direct or indirect subsidiary or entity controlled by it, whether now in existence orformed in the future, to comply with the FCPA. The Company shall use its best efforts to cause any direct or indirect subsidiary, whether now in existence or formed in the future to, comply inall material respects with all applicable laws.

5.9 Cooperation of Key Holders. The Key Holders shall use commercially reasonable efforts to (a) participate with or otherwise support the Company in its

marketing, investor relations or other activities with respect to the issuance of any equity or debt securities by the Company for the purpose of raising capital, and (b) to cause the Company toconsummate an initial public offering of the Common Stock.

5.10 Termination of Covenants. The covenants set forth in this Section 5, except for Subsections 5.6 and 5.7, shall terminate and be of no further force or effect

(i) immediately before the consummation of the Qualified IPO or (ii) upon a Qualified Liquidation Event, whichever event occurs first. 6. Miscellaneous.

6.1 Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable

Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate FamilyMembers; or (iii) after such transfer, holds at least 1,000,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other

22

recapitalizations); provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and theRegistrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to theterms and conditions of this Agreement, including the provisions of Subsection 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, theholdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or suchHolder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually forassignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of thisAgreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to conferupon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except asexpressly provided herein.

6.2 Governing Law. This Agreement shall be governed by the internal law of the State of New York. 6.3 Counterparts. This Agreement may be executed in two (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 other transmission method and any counterpart so delivered shall bedeemed to have been duly and validly delivered and be valid and effective for all purposes.

6.4 Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this

Agreement. 6.5 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon

the earlier of actual receipt or (a) personal delivery to the party to be notified; (b) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sentduring normal business hours, then on the recipient’s next business day; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d)one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. Allcommunications shall be sent to the respective parties at their addresses as set forth on the signature pages hereto or Schedule A (as applicable) hereto, or to the principal office of the Companyand to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given inaccordance with this Subsection 6.5. If notice is given to the Company, a copy shall also be sent to W. Raymond Felton, Greenbaum, Rowe, Smith & Davis LLP, 99 Wood Avenue South,Iselin, NJ 08830-2712 and if notice is given to the Investor, a copy shall also be given to Rick Werner, Haynes and Boone, LLP, 30 Rockefeller Plaza, 26th Floor, New York, NY 10112.

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6.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either

generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities thenoutstanding; provided that the Company may in its sole discretion waive compliance with Subsection 2.12(c) (and the Company’s failure to object promptly in writing after notification of aproposed assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on suchparty’s own behalf, without the consent of any other party. Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not bewaived with respect to the Investor without the written consent of the Investor. The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to anyparty hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Subsection 6.6 shall be bindingon all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or moreinstances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

6.7 Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any

respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed andconstrued so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

6.8 Aggregation of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the

availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate. 6.9 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Common Stock after the date

hereof, any purchaser of such shares may become a party to this Agreement, upon written consent of the Investor, by executing and delivering a joinder agreement to this Agreement, andthereafter shall be deemed an “Investor” for all purposes hereunder.

6.10 Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the

parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. 6.11 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of New York and to the jurisdiction

of the United States District Court for the Southern District of New York for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not tocommence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of New York or the United States District Court for the Southern

24

District of New York, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subjectpersonally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenientforum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OFTHIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER ISINTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THISTRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHERCOMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BESUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITSLEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.

Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the Southern District of New York or any court of the Stateof New York having subject matter jurisdiction.

6.12 Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or

default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of oracquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breachor default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

COMPANY: ONCOBIOLOGICS, INC. By: /s/ Pankaj Mohan Name: Pankaj Mohan Title: Chief Executive Officer Address: 7 Clarke Drive Cranbury, New Jersey 08512 INVESTOR: STRIDES PHARMA INC. By: /s/ Joe Thomas Name: Joe Thomas (print) Title: Director Address: 201 South Main Street, Suite 3,

Lambertville, New Jersey 08530 KEY HOLDERS: Signature: /s/ Pankaj Mohan Name: Pankaj Mohan

SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT

SCHEDULE A

Key Holders

Pankaj Mohan, Ph.D., MBAc/o Oncobiologics, Inc.7 Clarke DriveCranbury, New Jersey 08512

AMENDMENT NO. 1 TO INVESTORS’ RIGHTS AGREEMENT THIS AMENDMENT NO. 1 TO INVESTORS’ RIGHTS AGREEMENT (this “Amendment”) is made as of the _26 day of June, 2014, by and among Oncobiologics, Inc., a New

Jersey corporation (the “Company”), Strides Pharma, Inc., a company incorporated under the laws of New Jersey (the “Investor”), and the Key Holder signatory to this Amendment. WHEREAS, on March 10, 2013, the Company and the Investor entered into that certain Securities Purchase Agreement (the “First Purchase Agreement”), pursuant to which the

Investor agreed to purchase shares of Common Stock; and WHEREAS, in connection with the First Purchase Agreement, the Company, the Investor, and the Key Holder entered into that certain Investors’ Rights Agreement (the “Investors’

Rights Agreement”), dated as of March 10, 2013; WHEREAS, the Company and the Investor are parties to that certain Securities Purchase Agreement (the “Second Purchase Agreement”), of even date hereof, pursuant to which the

Investor has agreed to purchase additional shares of Common Stock; WHEREAS, in connection with the Second Purchase Agreement, the parties to the Investors’ Rights Agreement desire to amend the Investors’ Rights Agreement to make

conforming changes and to acknowledge that the shares of Common Stock purchased by the Investor pursuant to the Second Purchase Agreement are subject to the Investors’ RightsAgreement and the rights of the Investor thereunder;

WHEREAS, each of the Company, the Key Holder holding the majority of the Registrable Securities outstanding as of the date hereof, and the Investor is willing to give its consent

to amend the Investors’ Rights Agreement pursuant to Section 6.6 of the Investors’ Rights Agreement as expressly provided herein; and WHEREAS, all capitalized terms used but not otherwise .defined herein shall have the meanings ascribed to such terms in the Investors’ Rights Agreement. NOW, THEREFORE, the Company, the Key Holders and the Investor agree as follows: 1. Amendments.

1.1 In the recitals of the Investors’ Rights Agreement, the following recital is hereby deleted:

“WHEREAS, the Company and the Investor are parties to the Securities Purchase Agreement of even date herewith (the “Purchase Agreement”); and”

and replaced in its entirety by the following:

“WHEREAS, the Company and the Investor are parties to the Securities Purchase Agreement, dated as of March 10, 2014 (the “First Purchase

Agreement”), and the Securities Purchase Agreement, dated as of June __, 2014 (the “Second Purchase Agreement”, and together with the First Purchase Agreement, the“Purchase Agreement”) pursuant to which the Investor has agreed to purchase shares of Common Stock; and” 1.2 Definitions. The following definitions in Section 1 of the Investors’ Rights Agreement is amended and replaced in its entirety by the following:

“Qualified IPO” means the closing by the Company of a firm commitment underwritten public offering with a price of at least $7.50 per share of Common Stock (as adjustedfor stock dividends, splits, combinations and similar events) and gross proceeds to the Company of not less than $50 million.”

2. Acknowledgement. The parties hereby acknowledge and agree that any shares of Common Stock acquired by the Investor pursuant to the Second Purchase Agreement are

Registrable Securities under the Investors’ Rights Agreement, subject to the terms and conditions stated therein. 3. Miscellaneous.

3.1 Continuing Effect. Except as expressly set forth in this Amendment, all of the terms and conditions of the Investors’ Rights Agreement shall remain unmodified and

in full force and effect after the execution of this Amendment and shall not be in any way changed, modified or superseded by the terms set forth herein. 3.2 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 3.3 Governing Law. This Amendment shall be governed by the internal law of the State of New York. 3.4 Titles and Subtitles. The titles and subtitles used in this Amendment are used for convenience only and are not to be considered in construing or interpreting this

Amendment. 3.5 Counterparts. This Amendment may be executed in two (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 other transmission method and any counterpart so delivered shall bedeemed to have been duly and validly delivered and be valid and effective for all purposes.

[Remainder of Page Intentionally Left Blank]

2.

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Investors’ Rights Agreement as of the date first written above.

COMPANY: ONCOBIOLOGICS, INC. By: /s/ Pankaj Mohan PhD MBA Name: Pankaj Mohan PhD MBA (print) Title: CEO Address: 7 Clarke Drive, Cranbury, New Jersey 08512 INVESTOR: STRIDES PHARMA INC. By: /s/ Joe Thomas Name: Joe Thomas (print) Title: Director Address: 201 South Main Street, Suite 3,

Lambertville, New Jersey 08530 KEY HOLDER: Signature: /s/ Pankaj Mohan PhD MBA Name: Pankaj Mohan, PhD., MBA

ONCOBIOLOGICS, INC.

AMENDMENT AND WAIVER

This Amendment and Waiver (this “Amendment”) by the undersigned holders (the “Investors”) of shares of common stock, no par value per share (the “Common Stock”), of Oncobiologics,Inc., a New Jersey corporation (together with any successor thereto, the “Company”), is entered into as of September 28, 2015.

RECITALS

WHEREAS, the Company has entered into a Securities Purchase Agreement with each of the Investors for the sale and issuance of Common Stock, of an aggregate purchase price of up to$67,000,000 (each a “Purchase Agreement” and together, the “Purchase Agreements”); WHEREAS, the Company has entered into that certain Investors’ Rights Agreement, by and among Strides Pharma Inc. (“Strides”) and Dr. Pankaj Mohan, dated as of March 10, 2014 (the“Rights Agreement”); WHEREAS, the Company has entered into a Joinder Agreement with each of the Investors other than Strides, joining each such Investor as a party to the Rights Agreement, as an “Investor”thereunder; WHEREAS, the Company intends to file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission in connection with a proposed initial public offering of itsCommon Stock, which will be offered on an underwritten basis (the “Proposed IPO”); WHEREAS, the Rights Agreement provides the parties thereto with certain rights with respect to the Common Stock that terminate upon the consummation of the Proposed IPO; WHEREAS, the underwriters of the Proposed IPO have directed the Company to amend the definition of “Qualified IPO”; WHEREAS, pursuant to Section 2.2 of the Rights Agreement, each Investor (as defined in the Rights Agreement) is entitled to receive notice of the filing by the Company of any registrationstatement under the Securities Act of 1933, as amended, for the purposes of a public offering of Common Stock of the Company (the “Notice Rights”) and, under certain circumstances, holdrights (the “Registration Rights”) with respect to the registration of their Registrable Securities in connection therewith, including the Proposed IPO; WHEREAS, each Investor agrees to (i) amend the definition of Qualified IPO, (ii) waive its Notice Rights and Registration Rights pursuant to Section 2.2 of the Rights Agreement inconnection with the Proposed IPO and (iii) clarify certain other provisions of the Rights Agreement; WHEREAS, pursuant to Section 6.6 of the Rights Agreement, the Rights Agreement may be amended with the written consent of the Company and the holders of a majority of the RegistrableSecurities outstanding (the “Rights Agreement Threshold”); and

WHEREAS, the undersigned represent the Rights Agreement Threshold.

AGREEMENT

Pursuant to Section 6.6 of the Rights Agreement, the undersigned parties hereby agree: a) to amend and restate Section 1.2 of the Rights Agreement as follows:

“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including,without limitation, any general partner, managing member, officer or director of such Person or any venture capital, private equity or similar investment fund now or hereafter existing thatis controlled by one or more general partners or managing members of, or shares the same management company with, such Person.;

b) to amend and restate Section 1.20 of the Rights Agreement as follows:

“Qualified IPO” means the closing by the Company of a firm commitment underwritten public offering with gross proceeds to the Company of not less than $50 million.;

c) to waive its Notice Rights and Registration Rights pursuant to Section 2.2 of the Rights Agreement with respect to the Proposed IPO; d) that the term “Registrable Securities” as used in the Rights Agreement shall be amended to include, in addition to all shares of equity securities currently included in the definition of

“Registrable Securities”, all securities purchased by Investors pursuant to the Purchase Agreements such that each Investor shall be considered a “Holder” under the Rights Agreement; e) that for the avoidance of doubt, a customary arrangement in connection with the deposit of Registrable Securities in a non-margin custodial account shall not be deemed a sale, transfer or

pledge for purposes of Section 2.12 of the Rights Agreement, so long as such Registrable Securities are in certificated form (it being understood that the Company may require theexchange of any such certificated securities for book-entry shares upon an underwritten public offering);

f) that notwithstanding anything in this Agreement or in the Rights Agreement to the contrary, the terms of Section 4 of the Rights Agreement may not be amended, modified or terminated

with respect to any Investor without the written consent of such Investor; g) that for the purposes of Sections 5.3 and 5.4 of the Rights Agreement, the applicable covenants shall terminate (i) with respect to all of the Investors, at such time as all Investors and their

respective affiliates, in the aggregate, own and hold less than fifty percent (50%) of the aggregate shares purchased and sold pursuant to the Purchase Agreements (as defined herein) andthe Purchase Agreement (as defined in the Rights Agreement) and (ii) with respect to each individual Investor, at such time as such Investor and its respective affiliates, in the aggregate,own and hold less than seventy-five percent (75%) of the shares purchased

5.

by such Investor pursuant to the Purchase Agreements (as defined herein) or the Purchase Agreement (as defined in the Rights Agreement), as applicable;

h) that for the purposes of Section 6.6 of the Rights Agreement exclusively, the term “Investor” shall mean the Investors collectively holding a majority of Registrable Securities held by all

of the Investors; and i) that for the purpose of Section 6.9 of the Rights Agreement exclusively, the term “Investor” shall mean the Investors collectively holding a majority of Registrable Securities held by all of

the Investors. j) to add the following text as a new Section 5.11 of the Rights Agreement:

“5.11. Additional Matters Requiring Investor Approval. The Company hereby covenants and agrees with each Investor that (i) so long as the Investor, together with its affiliates, continuesto own and hold at least seventy-five percent (75%) of the shares purchased by such Investor pursuant to the Purchase Agreements (as defined herein) or the Purchase Agreement (asdefined in the Rights Agreement), as applicable, and (ii) all Investors and their respective affiliates, in the aggregate, own and hold at least fifty-percent (50%) of the aggregate sharespurchased and sold pursuant to the Purchase Agreements (as defined herein) and the Purchase Agreement (as defined in the Rights Agreement), the Company shall not (by amendment,merger, consolidation or otherwise), without approval of such Investor:

a. redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any share or shares of Preferred Stock or Common Stock; provided, however,

that this restriction shall not apply to (i) the repurchase of shares of Common Stock from employees, officers, directors, consultants or other persons performing services for theCompany or any subsidiary pursuant to agreements under which the Company has the option to repurchase such shares upon the occurrence of certain events, such as thetermination of employment or service, or pursuant to a right of first refusal, (ii) the redemption of any share or shares of Preferred Stock in accordance with Section 3 of theCertificate of Designation adopted with respect to each of the Series A Preferred Stock and Series B Preferred Stock (the “Certificates of Designation”) or (iii) a redemption,repurchase or acquisition on a pro-rata basis for all classes of stock of the Company;

b. pay or declare any dividend on any shares of capital stock of the Company other than (i) the dividend obligations of the Company in accordance with Section 1 of the Certificates

of Designation, or (ii) dividends payable on a pro-rata basis to all classes of stock of the Company; c. amend, alter or repeal any provision of the Company’s Certificate of Incorporation (including any Certificates of Designation) or Bylaws so as to materially increase the rights of

the holders of Preferred Stock; or d. enter into or modify any transaction or agreement between the Company and any of its shareholders with respect to the rights that have been granted (or that have not been

granted) to any shareholder of the Company.”

6.

MISCELLANEOUS

Except as set forth above, all the terms and provisions of the Rights Agreement shall continue in full force and effect. This Amendment may be executed in one or more counterparts (including via PDF copy), each of which shall be deemed an original, and all of which together shall constitute one instrument.

(Signature Pages Follow)

7.

IN WITNESS WHEREOF, each of the undersigned hereby executes this Amendment as of the date first above written.

ONCOBIOLOGICS, INC.: By: /s/ Pankaj Mohan, Ph.D. Name: Pankaj Mohan, Ph.D. Title: President and Chief Executive Officer

INVESTOR: By: Name: Title:

8.

ONCOBIOLOGICS, INC.

AMENDMENT AND WAIVER NO. 2

This Amendment and Waiver No. 2 (this “Amendment”) by the undersigned holders (the “Investors”) of shares of common stock, $0.01 par value per share (the “Common Stock”), ofOncobiologics, Inc., a Delaware corporation (together with any successor thereto, the “Company”), is entered into as of April 26, 2016. Capitalized terms used herein and not defined shallhave the respective meanings ascribed to such terms in the Rights Agreement, as amended to date (as defined below).

RECITALS

WHEREAS, the Company has entered into that certain Investors’ Rights Agreement, by and among Strides Pharma (“Strides”) and Dr. Pankaj Mohan, dated as of March 10, 2014 (as amendedto date, the “Rights Agreement”); WHEREAS, Strides has assigned its shares of Common Stock to Strides Pharma Limited;

WHEREAS, the Company has entered into a Joinder Agreement with each of the Investors other than Strides Pharma Limited, joining each such Investor as a party to the Rights Agreement, asan “Investor” thereunder; WHEREAS, the Company has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission in connection with a proposed initial public offering of itsCommon Stock, which will be offered on a firm commitment underwritten basis (the “Proposed IPO”);

WHEREAS, the Rights Agreement provides the parties thereto with certain rights with respect to the Common Stock that terminate upon the consummation of the Proposed IPO;

WHEREAS, the underwriters of the Proposed IPO have directed the Company to amend thedefinition of “Qualified IPO”;

WHEREAS, each Investor agrees to the removal and deletion of Section 5.3(e) of the Rights Agreement in connection with the Proposed IPO;

WHEREAS, pursuant to Section 5.3(h) and Section 5.11(d) of the Rights Agreement, each Investor agrees to the filing with the Secretary of State of the State of Delaware a Certificate ofAmendment of the Company’s Certificate of Incorporation substantially in the form attached to this Amendment as Exhibit A (the “Certificate of Amendment”) to effect a reverse stock split ofthe Company’s Common Stock;

WHEREAS, the Company agrees, in consideration for the execution and delivery of this Amendment, to provide certain of the Investors with warrants to purchase shares of Common Stockunder certain circumstances;

WHEREAS, pursuant to Section 6.6 of the Rights Agreement, the Rights Agreement may be amended with the written consent of the Company and the holders of a majority of the RegistrableSecurities outstanding (the “Rights Agreement Threshold”);

WHEREAS, each Investor agrees to amend Section 6.6 of the Rights Agreement as provided herein; and

WHEREAS, the undersigned represent the Rights Agreement Threshold; NOW, THEREFORE, in consideration of the foregoing and the agreements hereinafter set forth, and intending to belegally bound hereby, the parties hereto agree as follows:

AGREEMENT

Pursuant to Section 6.6 of the Rights Agreement, the undersigned parties hereby agree:

a) to amend and restate Section 1.20 of the Rights Agreement as follows:

“Qualified IPO” means the closing by the Company of a firm commitment underwritten public offering.;

b) to the removal and deletion of Section 5.3(e) of the Rights Agreement;

c) to the filing with the Secretary of State of the State of Delaware a Certificate of Amendment pursuant to Section 5.3(h) of the Rights Agreement pursuant to which the Board of Directorsmay effect a reverse stock split of the Company’s Common Stock in a ratio of 1-for-3.45;

d) to add the following section as Section 5.12 of the Rights Agreement:

“5.12. IPO Warrant Shares. In the event of a Qualified IPO in which the pre-money valuation (on a fully diluted basis) of the Company immediately prior to the Qualified IPO is less than$300 million, then each Investor, who invested at a pre-money valuation (on a fully diluted basis) of the Company in excess of $300 million shall receive, upon the consummation of theQualified IPO, a warrant, substantially in the form attached to this Amendment as Exhibit B (the “Warrant”), to purchase that number of shares of Common Stock equal to 65% of thenumber of shares of Common Stock purchased by such Investor at a pre-money valuation (on a fully diluted basis) of at least $300 million (the “Warrant Shares”); provided, that suchnumber of warrant shares shall be adjusted for any forward or reverse stock split effected by the Company. Each Investor hereby acknowledges that their existing lock-up agreement shallinclude the Warrant and the Warrant Shares.

For the avoidance of doubt, if an Investor invested $100,000 and purchased 11,876 shares of Common Stock for a purchase price of $8.42 per share, based on a pre-money valuation (on afully diluted basis) of $395 million, and assuming a pre-money valuation (on a fully diluted basis) of the Company of $200 million immediately prior to the Qualified IPO, then suchinvestor shall receive at the closing of such Qualified IPO a warrant to purchase 7,719 shares of Common Stock at an exercise price of $0.01 per share.

Further, if an Investor invested $100,000 and purchased 13,378 shares of Common Stock for a purchase price of $7.475 per share, based on a pre-money valuation (on a fully dilutedbasis) of the Company of $300 million, and assuming a pre-money valuation (on a fully diluted basis) of $200 million immediately prior to the Qualified IPO, then such Investor shallreceive at the closing of such Qualified IPO a warrant to purchase 8,696 shares of Common Stock at an exercise price of $0.01 per share.

Assuming in each case above, that a reverse stock split of 1-for-3.45 is effected by the Company, then the warrant to purchase 7,719 and 8,696, respectively, will be 2,237 and 2,520,respectively.”

e) to amend Section 6.6 of the Rights Agreement to delete the following sentence:

“Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to the Investor without thewritten consent of the Investor.”; and

f) to add the following section as Section 6.13 of the Rights Agreement:

“Notwithstanding the foregoing, (i) this Agreement, except for Section 2, Subsection 3.5, Section 5.12 and Section 6, as amended, shall terminate and be of no further force or effectimmediately before the consummation of the Proposed IPO and (ii) this Agreement, in the event of a Qualified Liquidation Event, shall terminate in its entirety and be of no further forceor effect.”

MISCELLANEOUS

Except as set forth above, all the terms and provisions of the Rights Agreement shall continue in full force and effect.

This Amendment may be executed in one or more counterparts (including via PDF copy), each of which shall be deemed an original, and all of which together shall constitute one instrument.

(Signature Pages Follow)

IN WITNESS WHEREOF, each of the undersigned hereby executes this Amendment as of the date first above written.

ONCOBIOLOGICS, INC.: By: /s/ Pankaj Mohan, Ph.D.

Name: Pankaj Mohan, Ph.D. Title: President and Chief Executive Officer

INVESTOR: By: Name: Title:

Oncobiologics, Inc. — Signature Page to Amendment and Waiver No. 2 to the Investors' Rights Agreement

Exhibit A

Form of Certificate of Amendment

Exhibit B

Form of Warrant

Exhibit 10.30

EXHIBIT B

NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARESUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERREDEXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION ORQUALIFICATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THISINVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLYSATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATESECURITIES OR BLUE SKY LAWS. THIS WARRANT IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN THE RIGHTS AGREEMENT (DEFINEDHEREIN). THIS WARRANT IS NOT EXERCISABLE PRIOR TO NOVEMBER [·], 2016. VOID AFTER 5:30 P.M., NEW YORK TIME, NOVEMBER [·], 2019.

ONCOBIOLOGICS, INC.

FORM OF WARRANT TO PURCHASE COMMON STOCK

Warrant No.: 2016-_____Number of Shares of Common Stock: [·]Date of Issuance: May [·], 2016 (“Issuance Date”)

Oncobiologics, Inc., a Delaware corporation (the “Company”), certifies that, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, [·], the

registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then ineffect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), atany time or times on or after November [·], 2016 (the “Exercisability Date”)1, but not after November [·] , 20192, 5:30 p.m., New York Time, on the Expiration Date (as defined below), [·]([·]) fully paid and nonassessable shares of Common Stock (the “Warrant Shares”). This Warrant is one of a series of warrants to purchase shares of Common Stock (collectively, the“Warrants”) issued on May [·], 2016 (the “Issuance Date”), pursuant to that certain Investors’ Rights Agreement, by and between the Company and the Holder and certain other Investors,dated March 10, 2014, as amended through the date hereof (the “Rights Agreement”). In addition to the defined terms set forth in Section 13 herein, capitalized terms that are not otherwisedefined herein shall have the meanings assigned to such terms in the Rights Agreement.

1. EXERCISE OF WARRANT.

(a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant

may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part (but not as to fractional shares), by (i) delivery of a written notice, in the form attached heretoas Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant and (ii) within three Trading Days of the date said Exercise Notice is delivered to the Company, paymentto the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”)in cash or wire transfer of immediately available funds (a “Cash Exercise”) (the items under (i) and (ii) above, the “Exercise Delivery Documents”). The Holder shall not be required tosurrender this Warrant in order to effect an exercise hereunder; provided, however,

1Date which is 6 months after the effective date of the Registration Statement.2 Date which is 3 years from the Exercisability Date.

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that in the event that this Warrant is exercised in full or for the remaining unexercised portion hereof, the Holder shall deliver this Warrant to the Company for cancellation within a reasonabletime after such exercise. No ink-original Exercise Notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice be required.On or before the Trading Day following the date on which the Company has received the Exercise Notice (the date upon which the Company has received the Exercise Notice, the “ExerciseDate”), the Company shall transmit by facsimile or e-mail transmission an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer agentfor the Common Stock (the “Transfer Agent”). The Company shall deliver any objection to the Exercise Delivery Documents on or before the second Trading Day following the date onwhich the Company has received all of the Exercise Notice. On or before the third Trading Day following the date on which the Company has received all of the Exercise Notice (the “ShareDelivery Date”), the Company shall cause the Transfer Agent to credit the account of the Holder’s prime broker with the Depository Trust Company System (as directed by such Holder) withthe number of Warrant Shares to which the Holder is entitled, provided, however, the Company shall not be required to deliver such Warrant Shares if the Company has not received theAggregate Exercise Price for such Warrant Shares on or before the Share Delivery Date. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to havebecome the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares to such Holder’s primebroker account with the Depository Trust Company System. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Sharesrepresented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no eventlater than five Trading Days after any such submission and at its own expense, issue a new Warrant (in accordance with Section 6(e)) representing the right to purchase the number of WarrantShares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant has been and/or is exercised. The Companyshall pay any and all taxes that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant; provided, however, that the Company shall not berequired to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrants in a name other than that of the Holder or an affiliatethereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.Notwithstanding the foregoing, if there is no effective registration statement with respect to the Warrant Shares, and the Holder chooses to exercise the warrant for cash not in accordance withSection 1(d) herein, then the Holder shall receive certificated shares with the appropriate restrictive legends, including as required by the Securities Act or under any state securities or blue skylaws.

(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.01 per share of Common Stock, subject to adjustment as provided herein;

provided however, if upon the Exercisability Date, the aggregate market value of Common Stock the Holder initially purchased at the time as such Holder became a party to the RightsAgreement (subject to any stock split or similar transaction) (the “Initial Shares”) is equal to or greater than the aggregate purchase price of the Initial Shares paid by the Holder, then theExercise Price shall automatically increase, with no further action by the Holder or the Company, to $1.00 per share of Common Stock, subject to adjustment as provided herein.

(c) Failure to Timely Deliver Shares. In addition to any other rights available to a Holder, if the Company fails to deliver the Warrant Shares to the Holder by

the fifth Trading Day after the Exercise Date, then the Holder will have the right to rescind such exercise by giving written notice to the Company.

(d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, exercise this Warrant in whole or inpart and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive uponsuch exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

Net Number = (A x B) - (A x C)

B

For purposes of the foregoing formula:

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A = the total number of shares with respect to which this Warrant is then being exercised.

B = the Weighted Average Price of the shares of Common Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice.

C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, assuming the Holder is not an affiliate of the Company, it is intended that the

Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on thedate the Holder is deemed to have acquired this Warrant.

(e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares to be issued

pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12 herein. (f) Limitations on Exercises. (1) The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this Warrant,

to the extent that after giving effect to such exercise, such Holder (together with such Holder’s affiliates and any other Persons acting as a group together) would beneficially own in excess of9.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregatenumber of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant withrespect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portionof this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficiallyowned by such Person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), it being acknowledged that the Company is not representing to the Holder that such calculation is incompliance with Section 13(d) of the Exchange Act, and the Holder is solely responsible for any schedules required to be filed in accordance therewith. For purposes of this Warrant, indetermining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recentForm 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by theCompany or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oralrequest of the Holder, where such request indicates that it is being made pursuant to this Warrant, the Company shall within five Trading Days confirm orally and in writing to the Holder thenumber of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including the Warrants, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By writtennotice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided, that (i) any such increase will not be effectiveuntil the 61st day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of Warrants. The provisions ofthis paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to correct this paragraph (or any portion hereof) whichmay be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to suchlimitation.

(g) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any

fraction of a share that the Holder

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would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theWeighted Average Price.

2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from

time to time as follows:

(a) Adjustment upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by anystock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effectimmediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the IssuanceDate combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effectimmediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(a) shallbecome effective at the close of business on the date the subdivision or combination becomes effective.

(b) Other Events. If any event occurs of the type contemplated by the provisions of Section 2(a) but not expressly provided for by such provisions (except

with respect to any awards granted by the Company’s Board of Directors (the “Board”) pursuant to Company’s 2015 Equity Incentive Plan, or any other similar incentive plans authorized bythe Board), then the Board will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of the Holder; provided, that no suchadjustment pursuant to this Section 2(b) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

(c) Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the par value of the Company’s Common

Stock.

3. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

(a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time prior to the Expiration Date the Company grants, issues or sellsany Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “PurchaseRights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder hadheld the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the dateon which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to bedetermined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holderexceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as aresult of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in theHolder exceeding the Maximum Percentage, at which time the Holder shall be granted such right to the same extent as if there had been no such limitation).

(b) Fundamental Transactions. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that

from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every rightand power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Companyherein. Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any timeafter the consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property purchasable upon the exercise of theWarrant prior to such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription

4

rights), if any, that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been exercised immediately prior to suchFundamental Transaction, as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of anyFundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a“Corporate Event”), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon an exercise of this Warrant within 90 days after theconsummation of the Fundamental Transaction but, in any event, prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property)purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or otherpurchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had the Warrant been exercised immediately priorto such Fundamental Transaction and shall be applied without regard to any limitations on the exercise of this Warrant. Provision made pursuant to the preceding sentence shall be in a formand substance reasonably satisfactory to the Required Holders. The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and CorporateEvents and shall be applied without regard to any limitations on the exercise of this Warrant.

4. RESERVATION OF WARRANT SHARES. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but

unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of shares ofCommon Stock which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive or any other contingent purchase rights of Persons other than the Holder(taking into account the adjustments and restrictions in Section 2). Such reservation shall comply with the provisions of Section 1. The Company covenants that all shares of Common Stockso issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid andnonassessable. The Company will take all such actions as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed. If, notwithstanding the foregoing, and not inlimitation thereof, at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy itsobligation to reserve for issuance upon exercise of this Warrant at least a number of shares of Common Stock equal to the maximum number of shares of Common Stock as shall from time totime be necessary to effect the exercise of all this Warrant (without regard to any limitations on exercise contained herein) (the “Required Reserve Amount”) (an “Authorized ShareFailure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company toreserve the Required Reserve Amount for this entire Warrant.

5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as a

holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrantbe construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withholdconsent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receivedividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. Inaddition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as astockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

6. REGISTRATION AND REISSUANCE OF WARRANTS.

(a) Registration of Warrant. The Company shall register this Warrant, upon the records to be maintained by the Company for that purpose (the “Warrant

Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose ofany exercise hereof or any distribution to the Holder, and for all other

5

purposes, absent actual notice to the contrary. The Company shall also register any transfer, exchange, reissuance or cancellation of any portion of this Warrant in the Warrant Register.

(b) Transfer of Warrant. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be

required by applicable securities laws. Subject to applicable securities laws, if this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company together with allapplicable transfer taxes, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 6(e)), registered as the Holder mayrequest, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant isbeing transferred, a new Warrant (in accordance with Section 6(e)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred. Notwithstanding theforegoing, any transfer of this Warrant shall be subject to same terms and conditions as the Initial Shares as set forth in section 2.12 of the Rights Agreement

(c) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or

mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form or the provision of reasonablesecurity by the Holder to the Company and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (inaccordance with Section 6(e)) representing the right to purchase the Warrant Shares then underlying this Warrant.

(d) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company

together with all applicable transfer taxes, for a new Warrant or Warrants (in accordance with Section 6(e)) representing in the aggregate the right to purchase the number of Warrant Sharesthen underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender;provided, however, that the Company shall not be required to issue Warrants for fractional shares of Common Stock hereunder.

(e) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall (i) be

of like tenor with this Warrant, (ii) represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a newWarrant being issued pursuant to Section 6(b) or Section 6(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the othernew Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) have an issuance date, as indicated on the face of suchnew Warrant which is the same as the Issuance Date and (iv) have the same rights and conditions as this Warrant.

7. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the

information set forth in the Warrant Register. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including, in reasonable detail, adescription of such action and the reason or reasons therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon anyadjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least 20 days prior to the date on which the Company closes itsbooks or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, ConvertibleSecurities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock or (C) for determining rights to vote withrespect to any Fundamental Transaction, dissolution or liquidation; provided, that in each case, such information shall be made known to the public prior to or in conjunction with such noticebeing provided to the Holder.

8. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or

through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid theobservance or performance of any of the terms of this Warrant, and will

6

at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing,the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall use all reasonableefforts to take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon theexercise of this Warrant and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares ofCommon Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of theWarrants then outstanding (without regard to any limitations on exercise).

9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein

prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. No such amendment shall be effective to theextent that it applies to less than all of the holders of the Warrants then outstanding.

10. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity,

interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Investors and shall not be construed against any

person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Companyshall submit the disputed determinations or arithmetic calculations via facsimile within three Trading Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, tothe Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within five Trading Days of such disputeddetermination or arithmetic calculation being submitted to the Holder, then the Company shall, within three Trading Days submit via facsimile (a) the disputed determination of the ExercisePrice to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’sindependent, outside accountant. The Company shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Companyand the Holder of the results no later than 10 Trading Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination orcalculation, as the case may be, shall be binding upon all parties absent demonstrable error. The expenses of the investment bank and accountant will be borne by the Company unless theinvestment bank or accountant determines that the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares by the Holder was incorrect, in which case theexpenses of the investment bank and accountant will be borne by the Holder.

13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to

all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of theHolder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder maycause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatenedbreach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to seek an injunction restraining any breach. Notwithstanding the foregoing or anything elseherein to the contrary, other than as expressly provided in Section 1(c) hereof, if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of this Warrant asrequired pursuant to the terms hereof, the Company shall have no obligation to pay to the Holder any cash or other consideration or otherwise “net cash settle” this Warrant.

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14. LIMITATION ON LIABILITY. No provisions hereof, in the absence of affirmative action by the Holder to purchase Warrant Shares hereunder, shall give rise to

any liability of the Holder to pay the Exercise Price or as a shareholder of the Company (whether such liability is asserted by the Company or creditors of the Company).

15. SUCCESSORS AND ASSIGNS. This Warrant shall bind and inure to the benefit of and be enforceable by the Company and the Holder and their respectivepermitted successors and assigns.

16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

(a) “Bloomberg” means Bloomberg LP.

(b) “Common Stock” means (i) the Company’s shares of Common Stock, $0.01 par value per share, and (ii) any share capital into which such Common Stock

shall have been changed or any share capital resulting from a reclassification of such Common Stock. (c) “Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for

shares of Common Stock.

(d) “Eligible Market” means The New York Stock Exchange, Inc., the NYSE MKT or The Nasdaq Stock Market.

(e) “Expiration Date” means November [—], 2019 or, if such date falls on a day other than a Trading Day or on which trading does not take place on thePrincipal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the CommonStock is then traded (a “Holiday”), the next date that is not a Holiday.

(f) “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or

into another Person, (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, (iii) allow another Person tomake a purchase, tender or exchange offer that is accepted by the holders of more than 50% of either the outstanding shares of Common Stock (not including any shares of Common Stock heldby the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), (iv) consummate a stock purchaseagreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Personacquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated oraffiliated with the other Persons making or party to, such stock purchase agreement or other business combination), (v) reorganize, recapitalize or reclassify its Common Stock or (vi) any“person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under theExchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

(g) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

(h) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity

security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of thedate of consummation of the Fundamental Transaction.

(i) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other

entity and a government or any department or agency thereof.

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(j) “Principal Market” means The NASDAQ Stock Market. (k) “Required Holders” means the holders of the Warrants representing at least a majority of shares of Common Stock underlying the Warrants then

outstanding.

(l) “Successor Entity” means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by, resulting from or surviving anyFundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

(m) “Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading

market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any dayon which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour oftrading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at4:00:00 p.m., New York Time).

(n) “Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market, or,

if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange on which the Common Stock is then traded, during the periodbeginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does notapply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m.,New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg forsuch hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Inc.. Ifthe Weighted Average Price cannot be calculated for such security on such date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair marketvalue as mutually determined by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair market value of such security, then suchdispute shall be resolved pursuant to Section 12 with the term “Weighted Average Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriatelyadjusted for any share dividend, share split or other similar transaction during such period.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

ONCOBIOLOGICS, INC.

By: Name: Title:

EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

ONCOBIOLOGICS, INC.

The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of Oncobiologics, Inc., a Delaware corporation (the“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings setforth in the Warrant.

1. Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one): ☐ Cash Exercise under Section 1(a). ☐ Cashless Exercise under Section 1(d). 2. Cash Exercise. If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $ to the Company in accordance with the terms of the Warrant. 3. Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. If the shares are to be

delivered electronically, please complete the Depository Trust Company (“DTC”) DWAC information below. 4. Representations and Warranties. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise

evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of1934, as amended) permitted to be owned under Section 1(f) of this Warrant to which this notice relates.

Date: _______________ __, ______ Name of Registered Holder Name of Signatory By:

Name: Title :

If shares are to be delivered electronically: Broker Name: ________________________________ Broker DTC DWAC #: ________________________________ Account at Broker shares are to be delivered to: ________________________________

ACKNOWLEDGMENT

The Company hereby acknowledges this Exercise Notice.

ONCOBIOLOGICS, INC.

By: Name: Title:

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm The Board of DirectorsOncobiologics, Inc.: We consent to the use of our report included herein and to the reference to our firm under the heading “Experts” in the prospectus. Our report dated November 16, 2015, except as to therecapitalization described in Note 3, which is as of April 26, 2016, contains an explanatory paragraph that states that Oncobiologics, Inc. has incurred recurring losses and negative cash flowsfrom operations since inception and has an accumulated deficit at September 30, 2015 of $94.1 million and $14.2 million of indebtedness that is due on demand, which raises substantial doubtabout its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ KPMG LLP Philadelphia, PennsylvaniaMay 11, 2016