Deerfield Management Company, L.P.

Allegations: IN SEPTEMBER 2013, DEERFIELD MANAGEMENT COMPANY, L.P. VOLUNTARILY AGREED TO SETTLE AN SEC INQUIRY RELATING TO SIX ALLEGED VIOLATIONS OF RULE 105 OF REGULATION M UNDER THE SECURITIES EXCHANGE ACT OF 1934 WITHOUT ADMITTING OR DENYING THE SEC'S ALLEGATIONS. THE VIOLATIONS ALLEGEDLY OCCURRED BETWEEN DECEMBER 2010 AND JANUARY 2013. RULE 105 GENERALLY PROHIBITS PURCHASING AN EQUITY SECURITY IN A REGISTERED SECONDARY OFFERING IF THE PURCHASER SOLD SHORT THE SAME SECURITY DURING A RESTRICTED PERIOD (GENERALLY DEFINED AS FIVE BUSINESS DAYS BEFORE THE PRICING OF THE OFFERING). RULE 105'S PROHIBITION APPLIES IRRESPECTIVE OF ANY INTENT TO VIOLATE THE RULE. Status: Final Sanction Detail: THE CIVIL PENALTY OF $609,482, DISGORGEMENT OF $1,273,707, PREJUDGMENT INTEREST OF $19,035 WAS PAID TO AN ESCROW ACCOUNT FOR THE BENEFIT OF THE UNITED STATES TREASURY BEFORE SEPTEMBER 16, 2013, THE DATE OF THE CEASE AND DESIST ORDER. Summary: IN SEPTEMBER 2013, DEERFIELD MANAGEMENT COMPANY, L.P. VOLUNTARILY AGREED TO SETTLE AN SEC INQUIRY RELATING TO RULE 105 OF REGULATION M UNDER THE SECURITIES EXCHANGE ACT OF 1934 WITHOUT ADMITTING OR DENYING THE SEC'S ALLEGATIONS. RULE 105 GENERALLY PROHIBITS PURCHASING AN EQUITY SECURITY IN A REGISTERED SECONDARY OFFERING IF THE PURCHASER SOLD SHORT THE SAME SECURITY DURING A RESTRICTED PERIOD (GENERALLY DEFINED AS FIVE BUSINESS DAYS BEFORE THE PRICING OF THE OFFERING). RULE 105'S PROHIBITION APPLIES IRRESPECTIVE OF ANY INTENT TO VIOLATE THE RULE. UNDER THE TERMS OF THE SETTLEMENT, DEERFIELD MANAGEMENT COMPANY, L.P. WAS CENSURED AND AGREED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY FUTURE VIOLATIONS OF RULE 105 OF REGULATION M. IT ALSO AGREED TO PAY DISGORGEMENT OF $1,273,707, PREJUDGEMENT INTERST OF $19,035, AND A CIVIL MONETARY PENALTY IN THE AMOUNT OF $609,482 (FOR A TOTAL OF $1,902,224) TO THE UNITED STATES TREASURY.

Allegations: DEERFIELD MANAGEMENT COMPANY L.P. ("DEERFIELD") WAS ALLEGED TO HAVE VIOLATED SECTION 204A OF THE INVESTMENT ADVISERS ACT OF 1940 (THE "ADVISERS ACT") FROM 2012 THROUGH 2014. IT WAS ALLEGED THAT DEERFIELD FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT THE MISUSE OF MATERIAL, NONPUBLIC INFORMATION, PARTICULARLY TAKING INTO CONSIDERATION THE NATURE OF DEERFIELD'S BUSINESS. IT WAS ALLEGED THAT, AS PART OF THE FIRM'S RESEARCH IN THE HEALTHCARE SECTOR, DEERFIELD ENGAGED THIRD PARTY CONSULTANTS AND RESEARCH FIRMS, INCLUDING FIRMS THAT SPECIALIZED IN PROVIDING "POLITICAL INTELLIGENCE" REGARDING UPCOMING REGULATORY AND LEGISLATIVE DECISIONS, THAT DEERFIELD EMPLOYEES BASED TRADING RECOMMENDATIONS ON SUCH INFORMATION, AND THAT HEDGE FUNDS ADVISED BY DEERFIELD THEN MADE THOSE TRADES. Status: Final Sanction Detail: THE CIVIL PENALTY OF $3,946,267, DISGORGEMENT OF $714,110, PREJUDGMENT INTEREST OF $97,585 WAS PAID TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE BENEFIT OF THE UNITED STATES TREASURY ON AUGUST 22, 2017. Summary: ON AUGUST 21, 2017, THE SEC ISSUED AN ORDER, INSTITUTING AN ADMINISTRATIVE PROCEEDING AND ACCEPTING AN OFFER OF SETTLEMENT FROM DEERFIELD, PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE ADVISERS ACT. THE ORDER REQUIRED DEERFIELD TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 204A OF THE ADVISERS ACT, CENSURED THE FIRM AND PROVIDED THAT THE FIRM PAY DISGORGEMENT OF $714,110, PREJUDGMENT INTEREST OF $97,585 AND A CIVIL MONEY PENALTY OF $3,946,267. PURSUANT TO THE ORDER AND SETTLEMENT, DEERFIELD NEITHER ADMITTED NOR DENIED THE FINDINGS OF THE SEC (OTHER THAN THOSE RELATING TO THE JURISDICTION OF THE SEC OVER IT AND THE SUBJECT MATTER OF THE ACTION).