As filed with the Securities and Exchange Commission on ~~June 30, 2014.~~

April 8, 2016.

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

VIAMET PHARMACEUTICALS HOLDINGS, LLC

(to be converted into Viamet Pharmaceuticals, ~~Inc~~Corp.)

(Exact name of registrant as specified in its charter)

Delaware		2834		45-4059526
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code No.) 4505 Emperor Blvd., Suite 300 Durham, NC 27703 (919) 467-8539		(I.R.S. Employer Identification No.)

4505 Emperor Blvd., Suite 300

Durham, NC 27703

(919) 467-8539

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

Robert J. Schotzinger, M.D., Ph.D.

President and Chief Executive Officer

Viamet Pharmaceuticals Holdings, LLC

4505 Emperor Blvd., Suite 300

Durham, NC 27703

(919) 467-8539

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

Copies to:

~~David E. Redlick, Esq.~~ Rosemary G. Reilly, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, MA 02109 (617) 526-6000 ~~David~~Patrick ~~S. Rosenthal~~O’Brien, Esq. ~~Dechert~~Ropes ~~LLP~~& ~~1095~~Gray ~~Avenue~~LLP of800 ~~Americas~~Boylston ~~New~~Street ~~York~~Boston, ~~New~~MA ~~York~~02199-3600 ~~10036~~ (~~212~~617) ~~698~~951-~~3500~~7000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

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 the Securities Act of 1933, as amended (the “Securities Act”) please 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, please check the following box 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, please check the following box 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(d) under the Securities Act, please check the following box and list the Securities 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 smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller reporting company ¨ (Do not check if a smaller reporting company) ~~Smaller reporting company ¨~~

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities To Be Registered		Proposed MaximumAggregate Offering Price(1)		Amount ofRegistration Fee(2)
Common Stock, $0.001 par value per share		$75100,000,000		$910,~~660.00~~070

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act ~~of 1933, as amended~~.

(2)	Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

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

~~The~~EXPLANATORY ~~information~~NOTE in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

~~PRELIMINARY~~Viamet ~~PROSPECTUS~~Pharmaceuticals Holdings, LLC, or the LLC entity, the registrant whose name appears on the cover of this registration statement, is a Delaware limited liability company. Prior to the effectiveness of this registration statement, the LLC entity will convert into a Delaware corporation and change its name from Viamet Pharmaceuticals Holdings, LLC to Viamet Pharmaceuticals Corp. We refer to this conversion throughout the prospectus included in this registration statement as the “Conversion.” Shares of the common stock of Viamet Pharmaceuticals Corp. are being offered by the prospectus included in this registration statement.

SubjectTable toof completion, dated June 30, 2014 Contents

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

PRELIMINARY PROSPECTUS (Subject to Completion)

Dated April 8, 2016

LOGO

~~VIAMET~~COMMON ~~PHARMACEUTICALS,~~STOCK ~~INC.~~

~~Common~~Viamet ~~Stock~~Pharmaceuticals Corp. is offering shares of its common stock. This is our initial public offering, and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $ and $ per share.

~~$ per~~We ~~share~~have applied to list our common stock on The NASDAQ Global Market under the trading symbol “VMET.”

•We ~~Viamet~~are ~~Pharmaceuticals,~~an ~~Inc.~~emerging isgrowth ~~offering~~company ~~shares.~~as •that Weterm ~~anticipate~~is ~~that~~used in the ~~initial~~Jumpstart ~~public~~Our ~~offering~~Business ~~price~~Startups ~~will~~Act beof ~~between~~2012 $ and, $as ~~per~~such, have ~~share.~~elected •to ~~This~~comply iswith ~~our~~certain ~~initial~~reduced public ~~offering~~company ~~and~~reporting norequirements ~~public~~for ~~market~~this ~~currently~~prospectus ~~exists~~and ~~for~~future ~~our shares~~filings. •See ~~Proposed~~“Prospectus ~~trading~~Summary—Implications ~~symbol:~~of ~~The~~Being ~~NASDAQ~~an ~~Global~~Emerging ~~Market~~Growth —Company.” ~~VIAM~~

~~This~~Investing ~~investment~~in our common stock involves ~~risk~~risks. See “Risk Factors” beginning on page 1512.

WePRICE ~~are~~$ A anSHARE “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary—Implications of Being an Emerging Growth Company.”

Per Share Total Public offering price $ $ Underwriting discounts $ $ Proceeds, before expenses, to Viamet Pharmaceuticals, Inc. $ $

Price to
Public

Underwriting
Discounts and
Commissions⁽¹⁾

Proceeds to
Viamet

Per Share

Total

~~The~~(1) ~~underwriters~~We have ~~a 30-day~~agreed ~~option~~ to ~~purchase~~reimburse upthe ~~to additional~~underwriters ~~shares~~for ofcertain ~~common stock from us to cover over~~FINRA-~~allotments,~~related ~~if any~~expenses. See “Underwriters.”

~~Neither~~We have granted the ~~Securities~~underwriters ~~and~~an ~~Exchange~~option ~~Commission~~to ~~nor~~purchase ~~any~~up ~~state~~to additional ~~securities~~shares of ~~commission~~common ~~has~~stock ~~approved~~at orthe ~~disapproved~~initial ofpublic ~~these~~offering ~~securities~~price orless ~~determined~~the ifunderwriting discount. The underwriters can exercise this ~~prospectus~~option isat ~~truthful~~any ~~or complete.~~time ~~Any~~within ~~representation~~30 days toafter the ~~contrary~~date isof athis ~~criminal offense~~prospectus.

~~Piper~~Neither ~~Jaffray~~the ~~Stifel~~Securities ~~Wells~~and ~~Fargo~~Exchange ~~Securities~~Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The ~~date~~underwriters ofexpect ~~this~~to ~~prospectus~~deliver isthe shares of common stock to purchasers on or about , ~~2014~~2016.


Morgan Stanley		Goldman, Sachs & Co.

Guggenheim Securities		Needham & Company

The date of this prospectus is , 2016

TABLE OF CONTENTS

	Page
Prospectus Summary		1
PROSPECTUS SUMMARY		1
Risk Factors		15
RISK FACTORS		12
Special Note Regarding Forward-Looking Statements		54
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		57
Use of Proceeds		55
USE OF PROCEEDS		58
Dividend Policy		56
DIVIDEND POLICY		60
Capitalization		57
CAPITALIZATION		61
Dilution		59
DILUTION		63
Selected Consolidated Financial Data		61
SELECTED CONSOLIDATED FINANCIAL DATA		65
Unaudited Pro Forma Condensed Consolidated Financial Statements		63
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		66
Management’s Discussion and Analysis of Financial Condition and Results of Operations		70
BUSINESS		84
Business		91
MANAGEMENT		139
Management		138
EXECUTIVE AND DIRECTOR COMPENSATION		147
Executive and Director Compensation		145
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS		159
Certain Relationships and Transactions with Related Persons		157
PRINCIPAL STOCKHOLDERS		167
Principal Stockholders		166
DESCRIPTION OF CAPITAL STOCK		170
Description of Capital Stock		169
SHARES ELIGIBLE FOR FUTURE SALE		175
Shares Eligible for Future Sale		173
MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK		178
Material U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock		175
UNDERWRITERS		182
Underwriting		179
LEGAL MATTERS		188
Legal Matters		186
EXPERTS		188
Experts		186
WHERE YOU CAN FIND MORE INFORMATION		188
Where You Can Find More Information		186
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1
Index to Consolidated Financial Statements		F-1

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations, ~~and~~ market position, market opportunity and market share, is based on information from our own management estimates and research, as well as from industry and general publications, ~~and~~ research, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”

iThis prospectus presents market and industry data from IMS Health Information Service, or IMS Health. Such information is an estimate derived from the use of information under license from IMS HEALTH—NPATM (National Prescription Audit Family of Services) for the period 2013-2015. IMS expressly reserves all rights, including rights of copying, distribution and republication. Such information is based on the research, analysis and viewpoints of the publisher thereof and speaks as of its original publication dates and not as of the date of this prospectus.

We use our registered trademarks, Viamet^® and Metallophile^®, in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this prospectus appear without the ^® and ™ symbols, but the absence of those references is not intended to indicate, in any way, that we will not assert our rights or that the applicable owner will not assert its rights, to these trademarks and tradenames to the fullest extent under applicable law.

- i -

This prospectus presents market and industry data from IMS Health Information Service, or IMS Health. Such information is an estimate derived from the use of information under license from IMS HEALTH—NPATM (National Prescription Audit Family of Services) for the period 2009-2013. IMS expressly reserves all rights, including rights of copying, distribution and republication. Such information is based on the research, analysis and viewpoints of the respective publishers thereof and speaks as of its original publication dates and not as of the date of this prospectus.

We use our registered trademarks, Viamet® and Metallophile®, in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this prospectus appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks and tradenames.

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

For investors outside the United States: Neither we nor any of the underwriters have taken any action to permit a public offering of the shares of our common stock or the possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

- ii -

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the section in this prospectus entitled “Risk Factors” beginning on page 1512 and our audited consolidated financial statements and the related notes thereto appearing at the end of this prospectus, before making an investment decision.

As used in this prospectus, unless the context otherwise requires, references to “the “company,” “Viamet,” “we,” “us” and “our” refer to (i) following the date of the ~~conversion~~Conversion discussed under the heading “Corporate ~~Reorganization~~ Conversion,” Viamet Pharmaceuticals, ~~Inc~~Corp. and its consolidated subsidiaries, or any one or more of them as the context may require, and (ii) prior to the date of the ~~conversion~~Conversion, Viamet Pharmaceuticals Holdings, LLC and its subsidiaries, or any one or more of them as the context may require. Additionally, references to our “board of directors” refer to (i) following the date of the Conversion, the board of directors of Viamet Pharmaceuticals Corp. and (ii) prior to the date of the Conversion, the board of managers of Viamet Pharmaceuticals Holdings, LLC.

~~Overview~~Our Company

We are a biopharmaceutical company focused on the discovery, development and commercialization of novel ~~antifungal~~pharmaceuticals ~~agents~~ based on our proprietary metalloenzyme ~~medicinal~~ chemistry and biology technology platform. Metalloenzymes, which wecontain ~~call~~a ~~our~~metallic ~~Metallophile®~~atom ~~Technology.~~that ~~Metalloenzymes~~is ~~are~~primarily ~~enzymes~~responsible ~~that~~for ~~contain~~enzyme ~~a metal~~activity, ~~such~~are asan ~~iron,~~important ~~zinc~~class orof ~~copper,~~drug ~~that~~targets isfor ~~linked~~the totreatment ~~the~~of ~~enzyme’s~~a ~~protein~~broad ~~component~~range of diseases. We utilize ~~are using~~ our ~~platform~~technology to design novel drugs that we expect towill have significant benefits as compared to currently marketed metalloenzyme inhibitors, including greater ~~selectivity~~efficacy, ~~fewer~~improved ~~side~~safety, ~~effects~~more favorable pharmacokinetic properties and superior ~~improved~~therapeutic ~~potency~~index. ~~compared~~We have leveraged our technology to ~~currently~~develop ~~available~~ several product candidates that we believe have the potential to become best-in-class antifungal agents. ~~Our~~VT-1161, our lead product candidate, ~~VT-1161,~~ is ancurrently ~~oral~~in ~~agent~~separate Phase 2b ~~that~~clinical wetrials ~~are developing~~ for the treatment of onychomycosis, a fungal infection of the nail, and recurrent vulvovaginal candidiasis, ora ~~RVVC,~~recurrent aform ~~highly~~of ~~prevalent~~vaginal ~~mucosal~~yeast infection. ~~for~~In ~~which~~recent ~~there~~interim ~~are~~analyses noof ~~approved~~these ~~therapies~~Phase 2b clinical trials, we observed positive results in terms of both safety and efficacy for both indications. We expect final data on the ~~United~~ ~~States,~~principal efficacy and ~~onychomycosis~~safety endpoints, or top-line final data, from our ongoing Phase 2b clinical trials to be available during the fourth quarter of 2016. Our other product candidates include VT-1129 for the treatment of cryptococcal meningitis, a ~~very~~life-threatening ~~common~~invasive fungal infection of the ~~nail~~central nervous system currently in a Phase 1 clinical trial, and VT-1598 for ~~which~~the ~~current~~treatment ~~treatments~~of ~~are~~coccidioidomycosis, ~~suboptimal~~a ~~with~~fungal ~~respect~~infection in the southwestern United States also known as Valley Fever, currently in IND-enabling studies. In addition to ~~safety~~the development of novel antifungal agents, ~~tolerability~~we are leveraging our technology to pursue drug discovery programs in oncology and ~~efficacy~~certain orphan diseases.

We ~~are~~refer ~~currently~~to ~~completing~~our ~~two~~broad ~~proof~~array of ~~concept~~metalloenzyme ~~Phase~~chemistry 2aand ~~clinical~~biology technologies ~~trials~~as ofour ~~VT-1161,~~MIDAS ~~one~~(Metalloenzyme ~~for~~Inhibitor ~~the~~Design ~~treatment~~and ofSynthesis) ~~moderate~~technology toplatform. ~~severe~~This ~~acute vulvovaginal candidiasis~~platform, orbuilt ~~AVVC,~~over ~~commonly~~the ~~known~~past ~~as vaginal yeast infection~~decade, ~~and~~encompasses a ~~second~~powerful ~~for~~set ~~the treatment~~ of ~~moderate~~chemistry toand ~~severe~~biology ~~interdigital~~tools ~~tinea~~that ~~pedis,~~address athe challenges ~~dermatologic~~and ~~infection~~complexities ~~commonly~~of ~~known~~metalloenzyme asdrug ~~athlete’s~~discovery ~~foot.~~and Inenable ~~these~~the ~~Phase~~design ~~2a clinical trials, VT-1161 has demonstrated strong evidence~~ of ~~clinical~~ ~~antifungal~~highly ~~activity~~differentiated asmetalloenzyme ~~well as a favorable safety profile~~inhibitors. ~~The~~Our ~~fungal~~technology ~~pathogens~~is ~~that~~comprised ~~cause~~of ~~AVVC~~a ~~are~~deep ~~typically~~understanding ~~the~~of ~~same~~over ~~pathogens~~120 ~~that~~potential ~~cause~~metalloenzyme ~~RVVC~~targets, ~~and~~a ~~the~~set ~~fungal~~of proprietary ~~pathogens~~computer-based ~~that~~design ~~cause~~tools, ~~tinea~~a ~~pedis~~library ~~are~~of ~~typically~~over ~~the~~200 ~~same~~unique ~~pathogens~~metal-binding ~~that~~groups, ~~cause onychomycosis.~~knowledge Weof ~~expect~~important ~~to begin Phase 2b clinical trials for VT~~counter-~~1161~~screens ~~in RVVC~~ and ~~onychomycosis~~pharmacologic inexpertise. ~~the~~We ~~second~~have ~~half~~focused ofour ~~2014.~~efforts Inon ~~Phase~~disease 1areas ~~clinical~~that ~~trials,~~are ~~VT-1161~~characterized ~~demonstrated~~by asignificant ~~favorable safety profile, good~~unmet ~~oral~~medical ~~pharmacokinetics~~need and acommercial ~~prolonged~~opportunity ~~half-life.~~and Wefor ~~believe~~which ~~that~~our ~~these~~technology ~~attributes~~provides ofan ~~VT-1161~~opportunity ~~may~~to ~~make~~develop ~~the~~highly ~~agent~~differentiated ~~particularly~~agents ~~useful~~which inmay ~~indications~~have ~~such~~compelling asadvantages ~~RVVC,~~over incurrently ~~which~~available ~~recurrence rates with existing~~ therapies ~~are problematic~~.

Our second product candidate, VT-1129, is an oral agent that we are developing for cryptococcal meningitis, a life-threatening invasive fungal infection of the lining of the brain and spinal cord. VT-1129 has demonstrated in an animal model the ability to reduce to undetectable levels the pathogenic fungal organism that causes cryptococcal meningitis. We anticipate submitting an investigational new drug application, or IND, for VT-1129 to the U.S. Food and Drug Administration, or the FDA, during the first half of 2015 and we recently applied to the FDA for orphan drug designation. Our third program, VT-1598 and related analogues, is in preclinical development with a goal of developing an oral and intravenous therapy for the treatment of invasive fungal infections.

Fungal infections represent a significant medical problem, and include highly prevalent mucosal and dermatologic infections, as well as life-threatening invasive central nervous system and systemic infections. According to a market research study conducted in May 2014 by Campbell Alliance and commissioned by

Our initial drug discovery and development efforts have been focused on a metalloenzyme target, fungal usCYP51, ~~worldwide~~which ~~sales~~has broad application in the treatment of ~~branded~~human fungal infections. CYP51 is a clinically validated target in that a number of other antifungal ~~drugs~~compounds ~~were~~targeting ~~approximately~~CYP51 ~~$3.5~~have ~~billion~~either been approved or are currently in ~~2013~~clinical-stage development. ~~While~~Ranging ~~multiple~~from ~~prescription~~extremely common dermatologic and ~~over~~mucosal infections to life-threatening infections of the~~-counter~~ central nervous system and internal organs, fungal infections represent an area of significant unmet medical need. Although several antifungal agents are currently available, ineach ~~the~~of ~~United~~these ~~States~~drugs has limitations with regard to efficacy, wesafety and pharmacokinetic properties. For example, terbinafine (Lamisil), the most widely prescribed drug for the treatment of onychomycosis, ~~believe~~has a ~~significant~~labeled ~~opportunity~~complete ~~exists~~cure torate ~~improve~~of ~~upon~~only ~~current~~38% ~~treatments.~~at ~~With~~the ~~respect~~48-week toevaluation ~~safety~~point and ~~tolerability,~~its ~~current~~use ~~agents~~is ~~are~~ limited by ~~potential~~ liver toxicity, and frequent drug-drug interactions. Similarly, ~~endocrine~~amphotericin ~~toxicity~~B, ~~and~~which ~~pregnancy~~is ~~warnings.~~used ~~With respect~~for tothe ~~efficacy,~~treatment ~~current~~of ~~agents~~cryptococcal ~~are~~meningitis, ~~limited~~is highly bytoxic ~~poor~~to ~~initial~~the ~~response~~kidneys ~~rates~~ and ~~high~~is ~~relapse~~very ~~rates~~poorly tolerated. InWe ~~addition,~~have ~~there~~applied isour ~~increasing~~technology ~~incidence~~to ofdesign ~~fungal~~antifungal ~~strains~~compounds that we believe are ~~resistant~~highly todifferentiated ~~currently~~from, ~~available~~and ~~antifungal~~will ~~drugs~~address ~~and~~the ~~for~~shortcomings ~~which~~of, ~~new antifungal~~currently ~~treatments~~available ~~are~~antifungal ~~required~~agents.

Our ~~Current~~Development Pipeline

The ~~focus~~following oftable summarizes our ~~three~~development ~~principal antifungal~~ programs ~~is a metalloenzyme known as fungal CYP51~~, ~~a clinically validated~~ target ~~that is important in the synthesis of the fungal cell membrane and therefore critical to fungal proliferation and survival. Fungal CYP51 is the target of the triazole class of antifungal drugs~~indications, ~~the~~current ~~most~~stages ~~commercially successful class~~ of ~~antifungals.~~development ~~Utilizing our know-how~~ and ~~integrated~~key ~~scientific~~upcoming ~~and~~milestones: drug development capabilities, we have established a pipeline of antifungal product candidates. Our pipeline includes one product candidate in clinical development for two highly prevalent fungal diseases as well as preclinical programs that we are developing to treat life-threatening invasive fungal diseases.

LOGO

~~VT-1161~~Our Product Candidates

VT-1161 ~~is a potent and selective, orally available inhibitor of fungal CYP51. In in vitro and in vivo studies, VT-1161 has demonstrated broad spectrum activity against~~for ~~Candida~~Onychomycosis species, a broad family of fungi that resemble yeasts and frequently cause infections in humans. In in vitro and in vivo studies, VT-1161 has also demonstrated broad spectrum activity against dermatophytes, a broad family of fungi that frequently cause skin, nail and hair infections. Based on our research to date, we believe that VT-1161 is highly active against most species of Candida, the causative agent in RVVC, including Candida glabrata and fluconazole-resistant strains of Candida. Also, based on our research to date, we believe VT-1161 is highly active against Trichophyton rubrum and Trichophyton mentagrophytes, the two most common dermatophyte species that cause onychomycosis. As VT-1161 is highly selective for fungal

VT-1161 is an orally available inhibitor of fungal CYP51 that has shown high potency and selectivity in in vitro studies. VT-1161 blocks the production of ergosterol, an essential component of the fungal cell membrane, which is critical to fungal proliferation. In preclinical studies, VT-1161 demonstrated potent activity against Trichophyton rubrum, or T. rubrum, and Trichophyton mentagrophytes, or T. mentagrophytes, the two most common fungal species that cause onychomycosis, a fungal infection of the nail that affects approximately 32 million individuals in the United States. Despite the high prevalence of onychomycosis, current therapies for this disease are suboptimal with respect to efficacy, safety and dosing convenience.

We conducted Phase 1 clinical trials of VT-1161 commencing in August 2011 and a Phase 2a ~~CYP51~~proof-of-concept clinical trial commencing in August 2013. In our clinical trials conducted to date, VT-1161 demonstrated a long half-life and excellent penetration into the nail, properties which we believe ~~that~~are itimportant ~~may~~for ~~avoid~~the successful treatment of onychomycosis. We recently conducted a planned interim analysis of 107 patients in our ongoing Phase 2b clinical trial of VT-1161 for the ~~side~~treatment ~~effects~~of ~~that~~onychomycosis, ~~limit~~which commenced in February 2015. Enrollment of the ~~use~~trial was completed during the third quarter of ~~commonly~~2015 ~~prescribed~~and ~~antifungals~~all patients have completed the active dosing phase as of February 2016. Across the four VT-1161 treatment arms, we observed a 48% average reduction in the mean percentage of nail involvement at week 24 of the 48-week trial as compared to a 6% reduction in the placebo arm. The median reduction in percentage nail involvement in the VT-1161 arms was as high as 67% at week 24. In both preclinical studies and clinical trials conducted to date, including ~~fluconazole~~the Phase 2b interim analysis, ~~itraconazole~~VT-1161 has demonstrated a favorable safety profile with no evidence of an adverse effect on liver function. We believe that the high degree of potency, ~~posaconazole~~broad therapeutic index and favorable oral pharmacokinetic properties of VT-1161, ~~terbinafine~~coupled with the positive interim results we have observed in our ongoing Phase 2b clinical trial, suggest that VT-1161 may be superior to the approved oral therapies for onychomycosis with respect to both efficacy and ~~voriconazole~~safety. We also believe that VT-1161 may significantly outperform the approved topical therapies with respect to both efficacy and dosing convenience. We expect top-line final data from our ongoing Phase 2b clinical trial to be available during the fourth quarter of 2016 and, if the trial is successful, we expect to initiate Phase 3 clinical trials of VT-1161 in onychomycosis during the first half of 2017. VT-1161 is protected by an issued United States patent for compositions of matter that extends until 2031, not including any potential benefit from patent term restoration.

~~RVVC~~VT-1161 for Recurrent Vulvovaginal Candidiasis

In preclinical studies, VT-1161 demonstrated highly potent activity against a broad range of Candida species, the causative agents of recurrent vulvovaginal candidiasis, or RVVC. RVVC, which is defined as ~~the~~three ~~occurrence~~or more episodes of ~~four~~acute vulvovaginal candidiasis, or ~~more~~AVVC ~~acute~~(commonly ~~vulvovaginal~~referred ~~infections~~to ~~within~~as a vaginal yeast infection), in a 12-month period. ~~The~~RVVC ~~infection~~is ~~involves~~estimated to occur in 5% to 8% of women in the ~~vaginal~~United ~~mucosa~~States asduring ~~well~~their aschild-bearing years. We are not aware of any approved therapies for RVVC in the ~~surrounding~~United ~~areas~~States. We recently conducted a planned interim analysis of 115 patients in our ongoing 48-week Phase 2b clinical trial of VT-1161 for the treatment of RVVC, which commenced in February 2015. Enrollment of the trial ~~Although~~was itcompleted isduring ~~estimated~~the fourth quarter of 2015 and we project that ~~RVVC~~all ~~afflicts~~patients 5will have completed the active dosing phase by May 2016. Across the four VT-1161 treatment arms, only 3% of the patients suffered a recurrence of AVVC through week 24 as compared to 848% of ~~women~~patients ofin ~~child~~the placebo arm. In addition, in the two high-~~bearing~~dose ~~age~~VT-1161 arms not a single patient suffered a recurrence through week 24. As in the ~~United~~interim ~~States~~analysis of the onychomycosis trial, ~~there~~VT-1161 ~~are~~was ~~currently~~well tolerated with no ~~approved~~evidence ~~therapies~~of toan ~~treat~~adverse effect on liver function. Because of its high degree of potency, broad therapeutic index and long half-life, we believe VT-1161 may be a highly effective treatment for RVVC inand become the ~~United~~first ~~States~~antifungal agent approved for this common condition, which causes significant quality of life issues for patients. We ~~believe~~expect ~~RVVC~~top-line ~~represents~~final adata ~~significant~~from ~~market~~our ongoing Phase 2b clinical trial to be available during the fourth quarter of 2016 and, if the trial is successful, we expect ~~opportunity~~to initiate Phase 3 clinical trials of VT-1161 in RVVC during the second half of 2017.

~~We are currently conducting a Phase 2a clinical trial of~~ VT-~~1161~~1129 in patients with moderate to severe AVVC. Our intent in conducting this clinical trial is to establish proof of concept that VT-1161 is safe and clinically active in treating vaginal Candida infections, with overall cure rates generally comparable to those of fluconazole. We designed the Phase 2a clinical trial to enroll approximately 48 patients across three VT-1161 dose groups and an active comparator group that receives fluconazole, which is a standard of care for ~~AVVC.~~Cryptococcal WeMeningitis have completed treatment of patients in the low-dose VT-1161, mid-dose VT-1161 and high-dose VT-1161 groups and have analyzed data through the test-of-cure visit on Day 28. While this trial was not prospectively powered to demonstrate efficacy with statistical significance, the low-dose VT-1161, mid-dose VT-1161, high-dose VT-1161 and fluconazole groups demonstrated generally comparable clinical antifungal activity across the four cohorts. Effective therapeutic cure requires both effective clinical cure and mycologic cure, the latter of which, when used as a clinical trial endpoint, indicates a negative culture for fungi at the day specified. Effective therapeutic cure was achieved in 32 of the 40 patients in the VT-1161 groups in the intent to treat population, meaning patients that received one or more doses. Complete therapeutic cure, which requires both complete clinical cure and mycologic cure, was achieved in 29 of these 40 patients. Importantly, 38 of the 40 patients treated with VT-1161 achieved mycologic cure, defined as a negative fungal culture at Day 28. VT-1161 was well-tolerated with no serious adverse events reported and no discontinuations related to an adverse event. Since the fungal pathogens that cause AVVC are typically the same pathogens that cause RVVC, we believe that the results in our Phase 2a AVVC clinical trial will be indicative of the anticipated results of our planned Phase 2b RVVC clinical trial.

~~In the second half of 2014, we plan to initiate a randomized, double~~VT-~~blind,~~1129 ~~placebo-controlled,~~is ~~multi-arm~~an ~~Phase~~orally 2bavailable ~~clinical~~inhibitor ~~trial~~ of ~~VT-1161~~ infungal ~~approximately~~CYP51 ~~200~~that ~~patients~~has ~~with~~shown ~~RVVC~~high ~~with~~potency ~~the~~and ~~goal~~selectivity ofin ~~preventing~~in ~~acute~~vitro ~~episodes through week 48~~studies. We ~~also~~are ~~plan~~developing VT-1129 tofor ~~perform~~the antreatment ~~interim~~of ~~analysis~~cryptococcal ~~that~~meningitis, ~~will~~a ~~assess~~life-threatening ~~the~~fungal ~~prevention~~infection of ~~acute~~the ~~episodes~~central ~~through~~nervous ~~week 24~~system. WeOccurring ~~expect~~most tofrequently ~~obtain~~in ~~interim data~~immuno-compromised ~~from~~patients, ~~this~~cryptococcal ~~Phase~~meningitis 2bresults ~~clinical~~in ~~trial~~approximately by3,400 hospitalizations ~~the~~per ~~third~~year ~~quarter of 2015 and to have complete top line data by mid-2016.~~

Onychomycosis

Onychomycosis is a fungal infection that involves the nail matrix, the nail bed, the nail plate and, in some cases, the skin surrounding the nail plate. Global Data, a market research firm, projected onychomycosis to affect approximately 32 million individuals in the United States in 2012 and as many as 38 million by 2022. According to data provided by IMS Health, approximately 2.85 million prescriptions were written in 2013 for terbinafine, the most commonly used oral drug for this indication. The number of prescriptions written for terbinafine increased at a compound annual growth rate of 5% during the period from 2009 to 2013. The primary prescribing groups included family practice, podiatry, internal medicine and dermatology. We believe onychomycosis represents a significant market opportunity.

We are currently conducting a Phase 2a clinical trial of VT-1161 in patients with moderate to severe interdigital tinea pedis. Our intent in conducting this clinical trial is to establish proof of concept that

~~VT-1161~~and iscarries ~~safe~~a ~~and~~mortality ~~clinically~~rate ~~active~~as inhigh ~~treating~~as ~~human~~21% ~~infections~~in ~~due~~the toUnited ~~dermatophytes~~States. Globally, ~~which~~it ~~typically~~is ~~cause~~estimated ~~both~~that ~~tinea~~approximately ~~pedis~~one ~~and~~million ~~onychomycosis.~~cases Weof ~~designed~~cryptococcal ~~the~~meningitis ~~tinea~~occur ~~pedis~~each ~~Phase~~year, 2awith ~~clinical~~associated ~~trial~~mortality rates estimated to ~~enroll~~be ~~approximately~~as 48high ~~patients~~as ~~across~~55% ~~three~~to 70%. VT-~~1161~~1129 ~~dose~~has ~~groups~~particular ~~and~~potency aagainst ~~placebo~~Cryptococcus ~~group.~~species Weand ~~have~~the ~~completed~~ability ~~treatment~~to ofachieve ~~patients~~high inconcentrations within the ~~low-dose~~central ~~VT-1161,~~nervous ~~mid-dose~~system. ~~VT-1161~~To ~~and~~our ~~high-dose~~knowledge, VT-~~1161~~1129 ~~groups~~is ~~and~~the ~~have~~only antifungal ~~analyzed~~agent ~~data~~that ~~through~~is ~~the test-~~capable of~~-cure~~ ~~visit~~fully oneradicating ~~Day~~the ~~42.~~fungal ~~While~~pathogen ~~this~~that ~~trial~~causes ~~was~~cryptococcal ~~not~~meningitis ~~prospectively~~from ~~powered~~the tobrain ~~demonstrate~~in ~~efficacy~~preclinical ~~with~~studies. ~~statistical~~We ~~significance,~~are ~~the~~currently ~~cure~~conducting ~~rates~~a inPhase ~~the~~1 VTsingle-~~1161~~ascending ~~groups~~dose ~~were~~clinical ~~numerically~~trial ~~superior~~of toVT-1129 ~~the~~in ~~placebo~~healthy volunteers, ~~group.~~which Incommenced ~~the~~in ~~intent~~October ~~to treat population~~2015, ~~effective~~and ~~clinical~~we ~~cure~~expect ~~was~~results ~~achieved~~during inthe 26second quarter of ~~the~~2016. 38We ~~patients~~expect into ~~the~~initiate ~~VT-1161~~a ~~groups~~Phase ~~and~~2 ~~mycologic~~clinical ~~cure~~trial ~~was achieved~~ in 20patients ofwith ~~the~~cryptococcal 38meningitis ~~patients~~during in the ~~VT-1161~~first ~~groups.~~half ~~Effective~~of ~~therapeutic~~2017 ~~cure,~~if ~~which~~our ~~requires~~ongoing single-ascending ~~both~~dose ~~effective~~Phase 1 clinical ~~cure~~ trial and ~~mycologic~~a ~~cure,~~subsequent ~~was~~multiple-ascending ~~achieved~~dose inPhase 171 ofclinical ~~the~~trial 38are ~~patients~~successful. ~~in the~~ VT-~~1161~~1129 ~~groups.~~has ~~While~~received ~~complete~~orphan ~~therapeutic~~drug ~~cure,~~designation ~~which~~for ~~requires~~the ~~complete~~treatment ~~clinical~~of ~~cure~~cryptococcal meningitis and ~~mycologic~~has ~~cure,~~been ~~was~~designated ~~achieved~~a Qualified inInfectious ~~only~~Disease ~~six~~Product, ofor ~~the~~QIDP, 38by ~~patients in~~ the ~~VT-1161~~U.S. ~~groups,~~Food itand ~~was~~Drug ~~not achieved~~Administration, inor ~~any of~~ the 12FDA. ~~patients~~In inaddition, ~~the~~we ~~placebo~~have ~~group.~~commenced ~~Through~~efforts ~~the~~to ~~test-of-cure~~have ~~visit~~cryptococcal onmeningitis ~~Day~~added ~~42,~~to ~~VT-1161~~the ~~was~~list ~~found~~of toneglected betropical ~~well~~diseases ~~tolerated~~that ~~with~~is nomaintained ~~serious~~by ~~adverse~~the FDA. ~~events~~If ~~reported.~~cryptococcal ~~One~~meningitis ~~patient~~were into ~~the~~be ~~high-dose~~added ~~VT-1161~~to ~~group~~the ~~discontinued~~current ~~treatment~~list, ~~due to~~we amay ~~rash.~~ultimately ~~Because~~qualify for the ~~dermatophyte~~award ~~pathogens~~of ~~are~~a ~~typically~~priority ~~the~~review ~~same~~voucher in ~~patients~~the ~~with~~event ~~tinea~~VT-1129 ~~pedis~~were asapproved infor ~~patients~~treatment ~~with~~of ~~onychomycosis,~~this wedisease. ~~believe~~VT-1129 ~~that~~is ~~the~~protected ~~results~~by inan ~~our~~issued ~~Phase~~United States 2apatent ~~tinea~~for ~~pedis~~compositions ~~trial~~of ~~will~~matter bethat ~~indicative~~extends ofuntil ~~likely~~2031, ~~antifungal~~not ~~activity~~including ~~in our~~any ~~planned~~potential ~~Phase~~benefit 2bfrom ~~onychomycosis~~patent ~~clinical~~term ~~trial~~restoration.

~~In the second half of 2014, we plan to initiate a randomized, double-blind, placebo-controlled, multi-arm Phase 2b clinical trial of~~ VT-~~1161~~1598 ~~in approximately 200 patients with onychomycosis with the goal of evaluating complete therapeutic cure of the target toenail at week 48. We also plan to perform an~~for ~~interim~~Coccidioidomycosis ~~analysis~~(Valley ~~that~~Fever) will assess the percentage of patients with at least 2 millimeters of clear nail growth at week 24. We expect to obtain interim data from this Phase 2b clinical trial by the third quarter of 2015, and to have complete top line data by mid-2016.

VT-1598 is an orally available inhibitor of fungal CYP51 that has shown high potency and selectivity in in vitro studies. We ~~have~~are ~~studied~~developing VT-~~1161~~1598 infor the treatment of coccidioidomycosis, also known as Valley Fever, a ~~wide~~common ~~range~~lung ofinfection in ~~vitro~~the ~~and~~southwestern United States that affects approximately 150,000 patients in ~~vivo~~the ~~pre-clinical~~United ~~models~~States annually. InAlthough ~~these studies~~the infection may resolve without treatment, ~~VT-1161~~approximately ~~has~~5% ~~consistently~~to ~~demonstrated~~10% ~~substantial~~of ~~potency~~patients ~~against~~may ~~many~~develop ~~common~~a ~~species~~more severe form of ~~Candida~~the ~~that~~disease ~~cause~~and ~~mucosal,~~a ~~dermatologic~~certain ~~and~~percentage ~~invasive~~of ~~infections~~these inpatients ~~humans.~~will ~~These~~develop ~~common~~a ~~Candida~~chronic pulmonary infection at times ~~species~~associated ~~include~~with ~~Candida~~dissemination ~~albicans~~of ~~and~~the ~~Candida~~infection ~~glabrata~~to other parts of the body. ~~VT-1161~~While ~~has~~current ~~also~~therapies ~~demonstrated~~are ~~significant~~effective ~~potency~~in ~~against~~some ~~more~~patients ~~difficult~~with tothis ~~treat~~more ~~species~~severe ~~such~~form asof ~~Candida~~the ~~krusei~~disease, ~~Candida~~they ~~parapsilosis,~~are ~~Candida~~often ~~guilliermondii~~poorly tolerated and ~~Candida~~morbidity and mortality remain ~~lusitaniae~~significant. In ~~the~~in ~~majority~~vitro ofstudies, ~~these~~VT-1598 ~~tests~~has demonstrated significantly greater potency against Coccidioides clinical isolates than fluconazole, which is commonly used as the inprimary ~~vitro~~treatment ~~potency~~for Valley Fever. In preclinical models of Valley Fever, VT-~~1161~~1598 ~~against~~was ~~Candida~~highly ~~species~~effective ~~has~~in ~~been~~treating ~~greater~~Valley ~~than~~Fever that ~~for~~was ~~fluconazole,~~localized ~~itraconazole~~to the central nervous system, ~~voriconazole~~a ~~and~~common ~~posaconazole.~~site Inof ~~addition,~~dissemination in ~~preclinical~~humans. ~~testing,~~We are currently conducting IND-enabling studies of VT-1598 and expect to file an IND in the fourth quarter of 2016. We have received orphan drug designation for VT-~~1161~~1598 ~~has~~for ~~consistently~~the ~~demonstrated~~treatment ~~substantial~~of ~~potency~~Valley ~~against~~Fever ~~many~~and ~~common~~expect ~~dermatophyte~~that ~~species,~~the ~~such~~compound aswill ~~Trichophyton~~be ~~rubrum,~~designated ~~which~~a ~~commonly~~QIDP ~~cause~~by ~~onychomycosis~~the FDA. We have applied for a composition-of-matter patent for VT-1598 that we expect will extend to at least 2032, if issued.

~~VT-1129~~Our Research Programs

~~VT-1129~~In ~~has~~addition ~~been~~to ~~shown~~our inexisting ~~preclinical studies~~product tocandidates, bewe aare ~~potent~~also ~~and~~pursuing ~~selective,~~research ~~orally~~directed ~~available~~at ~~inhibitor~~designing ofa fungal CYP51. ~~VT-1129~~inhibitor ~~blocks~~suitable for the ~~production~~ treatment of ~~ergosterol,~~invasive ~~an essential component of the~~ fungal ~~cell~~infections ~~membrane,~~in ~~which is critical to fungal proliferation and survival. Additionally, VT-1129 has demonstrated substantial potency against Cryptococcus species and high concentrations within~~ the ~~central~~hospital ~~nervous system in preclinical studies~~setting. AsThe akey ~~result~~objectives of ~~these~~this ~~advantageous~~program ~~properties,~~are weto ~~selected~~design ~~VT-1129~~a ~~for~~compound ~~further preclinical~~that ~~development~~has ~~targeting~~potent ~~the~~activity ~~treatment~~against ~~of cryptococcal meningitis,~~ a ~~life-threatening~~broad ~~fungal~~spectrum ~~infection~~ of ~~the~~fungal ~~lining~~pathogens ~~of the brain~~ and ~~the~~that ~~spinal~~could ~~cord.~~be ~~This~~formulated ~~infection~~for ~~occurs~~both ~~most~~intravenous ~~often~~and ~~in immunocompromised patients, including those with HIV,~~oral ~~transplant~~delivery ~~recipients~~to ~~and~~facilitate ~~oncology patients. A study published in February 2013 in~~ the ~~scientific~~transition ~~journal~~from ~~PLOS~~acute ~~ONE~~care ~~estimated~~to ~~that~~step-down ~~there are 3,400 hospitalizations associated with cryptococcal meningitis annually in the United States~~therapy. ~~Due~~Beyond ~~to the relatively small number of cryptococcal meningitis cases in the United States and Europe each year~~antifungals, we ~~believe~~have ~~that~~recently ~~VT-1129~~initiated ~~may~~research beprograms ~~eligible~~directed ~~for~~at ~~orphan~~clinically ~~drug~~validated ~~designation~~metalloenzymes bywith ~~the~~potential ~~FDA~~applications ~~and~~in ~~the~~oncology ~~European Medicines Agency, or the EMA,~~ and wecertain ~~recently~~orphan ~~applied~~diseases ~~to the FDA~~ for ~~orphan~~which ~~designation.~~we Inbelieve ~~2011,~~our ~~VT-1129~~technology ~~was~~will ~~selected~~enable ~~to receive funding under~~ the ~~Therapeutics~~discovery ~~for~~of ~~Rare~~highly ~~and~~differentiated ~~Neglected~~compounds ~~Diseases~~that ~~program,~~have orcompelling ~~TRND,~~advantages atover ~~the~~agents ~~National~~that ~~Institutes~~are ofeither ~~Health,~~currently available or ~~NIH~~in development.

We have studied VT-1129 in multiple in vitro and in vivo preclinical models. In in vitro studies, VT-1129 was significantly more potent against both Cryptococcus neoformans and Cryptococcus gattii isolates than fluconazole, which is commonly used for maintenance therapy in the United States and as primary therapy in the developing world for the treatment of cryptococcal meningitis. VT-1129 was also studied in a mouse model of cryptococcal meningitis, in which mice were infected intracranially with Cryptococcus neoformans and oral treatment was initiated 24 hours later with either vehicle, VT-1129 or fluconazole. In this model, 90% of mice in the low-dose VT-1129 group survived and 100% of mice in the high dose VT-1129 group survived through Day 30, as compared to 40% of the mice in the low dose fluconazole group and 60% of the mice in the high-dose fluconazole group. Importantly, at the end of the study there was no detectable fungus in the brain of VT-1129 treated animals. We are not aware of any other agent that has demonstrated in an animal model the ability to reduce to undetectable levels the pathogenic fungal organism that causes cryptococcal meningitis.

We are currently conducting IND-enabling studies of VT-1129 in collaboration with the TRND program at the NIH. The NIH is currently providing funding for these studies. Following this offering, we intend to conduct the additional studies necessary for the submission of an IND in the United States without further assistance from TRND in order to accelerate the development process. If these studies are successful, we expect to submit an IND for VT-1129 to the FDA during the first half of 2015 and to commence Phase 1 clinical trials in healthy volunteers shortly thereafter.

VT-1598 and Analogues

VT-1598 and related analogues have been shown in preclinical studies to be highly potent inhibitors of fungal CYP51 with a very broad spectrum of activity in vitro, covering Candida species, Aspergillus species and several other less common mold species. VT-1598 and its analogues are in preclinical development with a goal to identify the optimal candidate to advance in development as an oral and intravenous therapy for treatment of invasive fungal infections. Invasive fungal infections are often life-threatening infections, which can involve the bloodstream, lungs, kidneys, spleen and other internal organs as well as the central nervous system. VT-1598 is orally available, and we are also developing a pro-drug formulation for intravenous administration. We are currently comparing the pharmacology profile and development attributes of VT-1598 to a number of related analogues to identify the best compound to advance in development.

Our Technology Platform

We have conceived and integrated a set of proprietary core chemistry technologies for the discovery and optimization of product candidates that act as inhibitors of metalloenzymes. We have a Metallophile database, which consists of over 200 metal-binding groups. We refer to this database of metal-binding groups and our knowledge of their activities as our Metallophile Technology. We apply our Metallophile Technology to identify small molecule inhibitors of metalloenzymes, which are proteins that catalyze a wide range of biochemical reactions. Metalloenzymes are distinguished from other enzymes in that they contain a metallic atom, such as iron, zinc, or copper, at the core of their active site. The metal in these enzymes has frequently been a target for pharmaceutical intervention, and many marketed drugs act by inhibiting metalloenzymes. We improve on these existing therapies by designing inhibitors of metalloenzymes that contain alternative metal-binding groups that enable a high degree of selectivity for the desired metalloenzyme target, while also maintaining a high degree of potency.

We are using our Metallophile Technology to design antifungal compounds that we believe will be highly differentiated from existing agents and address their shortcomings. The focus of our three principal antifungal programs is a metalloenzyme known as fungal CYP51, a clinically validated target that is

important in the synthesis of the fungal cell membrane and therefore critical to fungal proliferation and survival. Our Metallophile Technology is also potentially applicable to other metalloenzyme targets for the treatment of fungal, bacterial and viral infections.

Our Strategy

Our ~~goal~~strategy is to ~~become~~strengthen aand ~~leader~~advance our leadership position in the discovery, ~~development~~ and ~~commercialization~~development of novel ~~antifungal~~metalloenzyme ~~agents.~~inhibitors, Wewith ~~plan~~the togoal ~~continue to~~of ~~focus~~commercializing our ~~efforts~~product ~~on infectious diseases with significant unmet medical need and commercial potential~~candidates. The ~~key~~central elements of our strategy are toas follows:

• Develop and commercialize VT-1161 for the treatment of ~~RVVC~~onychomycosis and ~~onychomycosis~~RVVC;

• ~~Advance~~Develop additional product candidates, ~~including~~for ~~VT-1129~~the ~~and~~treatment ~~VT-1598~~of ~~and~~invasive ~~its~~fungal ~~analogues, into clinical development~~infections;

• ~~Strengthen~~Leverage ~~and~~our ~~expand~~MIDAS ~~our~~technology ~~core~~platform ~~metalloenzyme~~to ~~drug~~advance discovery ~~and~~programs ~~development~~in ~~capabilities~~oncology, ~~including~~certain ~~the~~orphan ~~identification~~diseases ofand ~~new~~potentially ~~product~~additional ~~candidates~~therapeutic ~~using our Metallophile Technology~~areas; ~~and~~

•

Strengthen and expand our core metalloenzyme drug discovery and development capabilities; and

•

Establish specialized sales and marketing capabilities.

Risks Associated With Our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the “Risk Factors” section of this prospectus immediately following this prospectus summary. These risks include the following:

• We ~~are~~have ~~early~~a inlimited ~~our~~operating ~~development~~history, ~~efforts and~~ have ~~only~~incurred ~~one~~significant ~~product~~operating ~~candidate~~losses insince ~~Phase~~our 2ainception, ~~clinical~~including ~~trials.~~an ~~All~~accumulated deficit of ~~our~~$86.0 ~~other~~million ~~product~~as ~~candidates~~of ~~are~~December ~~still~~31, in2015, ~~preclinical~~and ~~development.~~anticipate Ifthat we ~~are~~will ~~unable~~continue to ~~commercialize~~incur ~~our~~losses ~~product~~for ~~candidates~~the orforeseeable ~~experience significant delays in doing so, our business will be materially harmed~~future.

• IfWe ~~clinical~~will ~~trials~~need substantial additional funding to complete the development and, subject to receiving marketing approval, the commercialization of VT-1161 ~~and~~for either onychomycosis or RVVC, which may not be available on acceptable terms, or at all. Absent this offering, we do not believe that our ~~future~~currently ~~product~~available ~~candidates~~cash ~~fail~~and cash equivalents, including the proceeds from the call option to ~~demonstrate~~purchase ~~safety~~Series ~~and~~D ~~efficacy~~preferred shares, which was exercised on February 17, 2016, would provide sufficient funds to enable the ~~satisfaction~~Company ofto ~~the~~meet ~~FDA~~its orobligations ~~comparable~~for ~~non-U.S.~~greater ~~regulatory~~than ~~authorities~~one oryear ~~are~~subsequent ~~not~~to ~~otherwise~~December ~~successful~~31, we2015. ~~may~~If ~~incur~~we ~~additional~~are ~~costs~~unable orto ~~experience~~raise ~~delays~~capital inwhen ~~completing~~needed, orwe ~~ultimately~~may be ~~unable~~forced to ~~complete~~delay, ~~the~~reduce, terminate or eliminate product development ~~and~~or commercialization ofprograms, including those for VT-1161 and our ~~future~~other product candidates.

• We ~~will~~are ~~need~~early ~~substantial~~in ~~additional~~our ~~funding to complete the~~ development, efforts and, ~~subject~~have toonly ~~receiving~~one ~~marketing~~product ~~approval,~~candidate ~~the~~in ~~commercialization,~~Phase of2b ~~VT-1161~~clinical trials (for ~~RVVC~~two indications) and ~~onychomycosis,~~one ~~which~~product ~~may~~candidate ~~not~~in bea ~~available~~Phase on1 ~~acceptable~~clinical ~~terms,~~trial or(for atone ~~all~~indication). IfAll weof ~~are~~our ~~unable~~other toproduct ~~raise~~candidates ~~capital~~are ~~when~~still ~~needed,~~in wepreclinical ~~may~~development. beIf ~~forced~~we toare ~~delay,~~unable ~~reduce,~~to ~~terminate~~commercialize orour ~~eliminate~~ product ~~development~~candidates or ~~commercialization~~experience ~~programs,~~delays ~~including~~in ~~for~~doing ~~VT-1161~~so, ~~and~~ our ~~other~~business ~~product~~will ~~candidates~~be materially harmed.

• ~~Clinical~~Our ~~drug~~limited ~~development~~operating ~~involves~~history ~~uncertain~~may ~~outcomes,~~make ~~and~~it ~~results~~difficult ofto ~~earlier~~evaluate ~~studies~~the ~~and~~success ~~clinical trials may not be predictive~~ of ~~future clinical trial results. In particular,~~ our ~~Phase~~business ~~2a clinical trials of VT-1161 are not powered~~ to ~~demonstrate~~date ~~efficacy with statistical significance,~~ and ~~our~~to ~~planned~~assess ~~Phase 2b clinical trials of VT-1161 have different trial designs and are for different disease indications than~~ our ~~ongoing~~future ~~Phase 2a clinical trials of this product candidate~~viability. ~~The results of our planned Phase 2b clinical trials may vary significantly from the results of our Phase 2a clinical trials of VT-1161.~~

•

If clinical trials of VT-1161 or our other product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA or comparable non-U.S. regulatory authorities or are not otherwise successful, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of VT-1161 or our other product candidates.

•

Clinical drug development involves uncertain outcomes, and the results of earlier studies and clinical trials and our interim results from our Phase 2b clinical trials may not be predictive of final results of our Phase 2b clinical trials or any future clinical trial results.

•

The regulatory approval process is expensive, time-consuming and uncertain. If we are unable to obtain, or experience significant delays in obtaining, regulatory approval of our product candidates, our ability to generate revenue will be materially impaired.

•

Even if VT-1161 or any of our other product candidates receives regulatory approval, it or they may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success, and the market opportunity for any such product candidate may be smaller than we expect. Additionally, because many of the existing products available to treat the diseases for which we are developing our product candidates are available on a generic basis and are offered and sold at low prices, price competition from these products may limit our market opportunity and materially and adversely affect our business and results of operations.

•

If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates, we may not be successful in commercializing VT-1161 or any of our other product candidates even if they are approved.

Corporate Conversion

We are currently a Delaware limited liability company named Viamet Pharmaceuticals Holdings, LLC, or Viamet Holdings. Prior to December 2011, we operated as Viamet Pharmaceuticals, Inc., or VPI, a Delaware corporation that was incorporated in December 2004 as a research and development company that focused for most of its history on the development of compounds for the treatment of fungal diseases and, later, prostate cancer. In December 2011, Viamet Holdings was formed and became the parent of VPI through the exchange of VPI’s capital stock for membership interests in Viamet Holdings. In October 2014, we spun off the prostate cancer business, as well as a collaboration program not associated with our human antifungal business. We effected the spin-off through a series of transactions whereby Innocrin Pharmaceuticals, Inc., or Innocrin Pharmaceuticals, one of Viamet Holdings’ subsidiaries, was transferred to a newly formed subsidiary, Innocrin Pharmaceuticals Holdings, LLC, or Innocrin Holdings, and then the equity interests in Innocrin Holdings were distributed to our equityholders on a pro-rata basis. Innocrin Pharmaceuticals and Innocrin Holdings are collectively referred to as Innocrin in this prospectus.

Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will engage in the following transactions, which we refer to collectively as the Conversion:

•

we will convert from a Delaware limited liability company to a Delaware corporation by filing a certificate of conversion with the Secretary of State of the State of Delaware; and

•

we will change our name from Viamet Pharmaceuticals Holdings, LLC to Viamet Pharmaceuticals Corp.

As part of the Conversion:

•

holders of series 1 preferred shares in Viamet Holdings will receive one share of series 1 preferred stock for each series 1 preferred share held immediately prior to the Conversion;

•

holders of series 2 preferred shares in Viamet Holdings will receive one share of series 2 preferred stock for each series 2 preferred share held immediately prior to the Conversion;

•

holders of series A preferred shares in Viamet Holdings will receive one share of series A preferred stock for each series A preferred share held immediately prior to the Conversion;

•

holders of series B preferred shares in Viamet Holdings will receive one share of series B preferred stock for each series B preferred share held immediately prior to the Conversion;

•

holders of series C1 preferred shares in Viamet Holdings will receive one share of series C1 preferred stock for each series C1 preferred share held immediately prior to the Conversion;

•

holders of series C2 preferred shares in Viamet Holdings will receive one share of series C2 preferred stock for each series C2 preferred share held immediately prior to the Conversion;

•

holders of series D preferred shares in Viamet Holdings will receive one share of series D preferred stock for each series D preferred share held immediately prior to the Conversion; and

• ~~Our~~outstanding ~~limited~~common ~~operating~~shares ~~history~~in ~~may~~Viamet ~~make~~Holdings itwill ~~difficult~~be converted into shares of common stock and, if such outstanding common shares were profits interests subject to ~~evaluate~~time-based vesting at the ~~success~~time of ~~our~~the ~~business~~Conversion, the resulting shares of common stock will continue to ~~date~~be ~~and~~subject to ~~assess~~time-based ~~our~~vesting ~~future~~to ~~viability~~the same extent as such outstanding common shares were subject to time-based vesting prior to the Conversion.

•After ~~Even~~converting ifto ~~VT-1161~~a orcorporation ~~any~~and ofchanging our ~~other~~name ~~product~~to ~~candidates~~Viamet ~~receives~~Pharmaceuticals ~~regulatory approval~~Corp., itwe ~~may~~will ~~fail~~be togoverned ~~achieve~~by ~~the~~a ~~degree~~certificate of ~~market~~incorporation ~~acceptance~~to bybe filed ~~physicians,~~with ~~patients,~~the ~~third~~Delaware ~~party~~Secretary ~~payors~~of State and ~~others~~our inbylaws. Upon the ~~medical~~effectiveness ~~community~~of ~~necessary~~the ~~for commercial success~~Conversion, ~~and~~ the ~~market~~members ~~opportunity~~of ~~for~~ the ~~product~~board ~~candidate~~of ~~may~~directors beof ~~smaller~~Viamet ~~than~~Holdings we(with ~~expect.~~the ~~Additionally,~~changes ~~many~~discussed ofbelow ~~the~~under ~~existing~~“Management”) ~~products~~will ~~available~~become tothe ~~treat~~members of the ~~diseases~~board ~~for~~of ~~which~~directors weof ~~are~~Viamet ~~developing~~Pharmaceuticals ~~our~~Corp. ~~product~~and ~~candidates~~the ~~are~~officers ~~available~~of onViamet aHoldings ~~generic~~will ~~basis~~become ~~and~~the ~~are~~officers ~~offered~~of ~~and~~Viamet ~~sold~~Pharmaceuticals ~~at low prices~~Corp.

•Following Ifthe Conversion, we ~~are~~will ~~unable~~consummate tothe ~~establish~~initial ~~sales~~public ~~and~~offering ~~marketing~~of ~~capabilities~~our orcommon ~~enter~~stock. ~~into~~Upon ~~agreements~~the ~~with~~closing ~~third~~of ~~parties~~our toinitial ~~sell~~public ~~and~~offering, ~~market~~all ~~our~~of ~~product~~the shares ~~candidates,~~of wepreferred ~~may~~stock ~~not~~issued beto ~~successful~~our members in ~~commercializing~~the ~~VT-1161~~Conversion orwill ~~any~~convert into shares of our ~~future~~common ~~product candidates if they are approved~~stock.

• We have a limited operating history, have incurred significant operating losses since our inception, including an accumulated deficit of $92.1 million as of March 31, 2014, and anticipate that we will continue to incur losses for the foreseeable future.

Corporate Reorganization

We are currently a Delaware limited liability company named Viamet Pharmaceuticals Holdings, LLC, or Viamet Holdings. Prior to December 2011, we operated as Viamet Pharmaceuticals, Inc., or VPI, a Delaware corporation that was incorporated in December 2004 as a research and development company initially focused on the development of compounds for the treatment of fungal diseases and, later, prostate cancer. In December 2011, Viamet Holdings was formed and made the parent of VPI through the exchange of VPI’s capital stock for membership interests in Viamet Holdings. Since December 2011, we have operated two main businesses, the prostate business, which is operated through VPI and primarily focuses its research and development on discovery and development of a product candidate to treat patients with prostate cancer, and the human antifungal business, which is primarily operated through our remaining subsidiaries. See “Certain Relationships and Related Party Transactions—Formation of Viamet Holdings” for a description of the transactions through which Viamet Holdings became the parent of VPI.

In connection with this offering, Viamet Holdings will form a wholly owned limited liability company subsidiary and contribute the stock of VPI to it. We refer to VPI and this parent limited liability company that will be created for it collectively as Legacy VPI. Prior to conducting this offering, we will spin off the prostate business, along with two collaboration programs not associated with the human antifungal business, in the form of a distribution of Legacy VPI to our existing equity holders. Prior to the distribution of Legacy VPI, the Viamet Pharmaceuticals, Inc. name and certain assets related to the antifungal business held by Legacy VPI will be transferred to one or more of the subsidiaries of Viamet Holdings engaged in the antifungal business. Additionally, we expect that 11 of the existing 14 Legacy VPI employees will become our only full-time employees. Thereafter and immediately prior to the effectiveness of the registration statement of which this prospectus forms a part, Viamet Holdings will be converted into a Delaware corporation and renamed Viamet Pharmaceuticals, Inc. In connection with this conversion, holders of common shares of Viamet Holdings will receive shares of our common stock for the common shares of Viamet Holdings held immediately prior to the conversion, and holders of each series of preferred shares of Viamet Holdings will receive shares of a substantially equivalent series of preferred stock for the preferred shares of Viamet Holdings held immediately prior to the conversion. Additionally, as part of this corporate reorganization, warrants to purchase series C1 preferred shares will be automatically net exercised, and the series C1 preferred shares of Viamet Holdings issued upon such exercise will be converted into shares of our series C1 preferred stock.

Following the conversion, we will consummate the initial public offering of our common stock. Upon the closing of our initial public offering, all of the shares of preferred stock issued to our members in the

conversion will convert into shares of our common stock. We refer to the asset transfer, the Legacy VPI distribution, our conversion to a Delaware corporation and the associated recapitalization collectively as the Reorganization.

The following diagrams illustrate our ownership and organizational structure, before and after giving effect to the Reorganization and this offering:

Before Reorganization

After Reorganization and the Offering

In connection with the Reorganization, we and Legacy VPI expect to enter into certain agreements governing the separation of the antifungal business and the prostate business, including a separation and distribution agreement, license agreements, a transition services agreement and an employee matters agreement. See “Certain Relationships and Transactions with Related Persons” for further information on these agreements.

Unless otherwise indicated, or the context otherwise requires, all information in this prospectus is presented giving effect to the Reorganization.

Corporate Information

Our principal executive offices are located at 4505 Emperor Blvd., Suite 300, Durham, NCNorth Carolina 27703, and our telephone number is (919) 467-8539. Our website address is www.viamet.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus, and you should not consider information contained on our website to be a part of this prospectus or in deciding whether to purchase shares of our common stock. We have included our website address in this prospectus solely as an inactive textual reference.

Implications of Being an Emerging Growth Company

As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not emerging growth companies. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. We may take advantage of the exemptions provided by the JOBS Act ~~for~~ up tountil ~~five~~the ~~years~~last day of the fiscal year following the fifth anniversary of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1 billion in annual revenue, we have more than $700 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K), or we issue more than $1 billion of non-convertible debt ~~over~~securities over a three -year period.

9In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to new or revised accounting standards that are applicable to other public companies that are not emerging growth companies.

THE OFFERING

Common stock offered by us

Common stock to be outstanding after this offering

Underwriters’ ~~over-allotment~~ option to purchase additional shares The underwriters have an option for a period of 30 days to purchase up to additional shares of our common stock.

Use of proceeds We intend to use the net proceeds of this offering to fund ~~our~~the ~~ongoing clinical~~ development of VT-1161, ~~our~~VT-1129 ~~research~~ and ~~development~~VT-1598, ~~efforts~~as towell ~~advance~~as our ~~pipeline~~research and development of additional product candidates and for working capital and other general corporate purposes. Based on our planned use of the net proceeds from this offering and our existing cash and cash equivalents, we estimate that such funds will be sufficient to enable us to complete our ongoing Phase 2b clinical trials of VT-1161 in onychomycosis and RVVC and to initiate our planned Phase 3 clinical trials in both of these indications, to complete our ongoing Phase 1 clinical trial and initiate our planned Phase 2 clinical trial of VT-1129 for cryptococcal meningitis, to conduct our Phase 1 clinical trials for VT-1598 and to fund our operating expenses and capital expenditure requirements at least through . See “Use of Proceeds” on page 5558 for a more complete description of the intended use of proceeds from this offering.

Risk factors See “Risk Factors” beginning on page 1512 and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our common stock.

Proposed NASDAQ Global Market symbol ~~VIAM~~VMET

The number of shares of our common stock to be outstanding after this offering is based on 110,347,896 shares of our common stock outstanding as of March 31, ~~2014~~2016, and gives effect to the conversion of all outstanding shares of our preferred stock into 92,446,802 shares of common stock that will become effective upon the closing of this offering.

The number of shares of our common stock to be outstanding after this offering excludes shares of our common stock available for future issuance under our ~~2014~~stock-based compensation plans, including 2,163,981 shares of common stock available for future issuance under our 2011 Incentive Plan as of March 31, ~~2014~~2016 and shares of common stock reserved for issuance under our 2016 Stock Incentive Plan.

Except as otherwise noted, all information in this prospectus:

• assumes that the ~~Reorganization~~Conversion has occurred;

• assumes no exercise by the underwriters of their ~~over-allotment~~ option to purchase up to additional shares of common stock from us;

•

gives effect to the automatic conversion of all outstanding shares of our preferred stock into shares of our common stock upon the closing of this offering;

•8 ~~gives effect to the conversion of all outstanding profits interests into shares of our common stock in connection with the corporate conversion, which is a part of the Reorganization;~~

•Table gives effect to the exercise of outstanding series C1 warrants into an aggregate of series C1 preferred shares that will, in turn, convert into our common stock in connection with the corporate conversion, which is a part of the Reorganization, and the closing of this offering; andContents

•

gives effect to the conversion of all outstanding profits interests into shares of our common stock in connection with the Conversion; and

•

gives effect to the restatement of our certificate of incorporation and adoption of our amended and restated bylaws upon the closing of this offering.

109

SUMMARY CONSOLIDATED FINANCIAL DATA

The following financial data should be read in conjunction with our audited ~~and unaudited~~ consolidated financial statements and the related notes, ~~and our unaudited pro forma condensed consolidated financial statements and the related notes,~~ included elsewhere in this prospectus.

The following table summarizes our consolidated financial data. We have derived the following summary of our consolidated statements of ~~operations~~comprehensive loss data for the years ended December 31, ~~2012~~2014 and ~~2013~~2015 from our audited consolidated financial statements appearing ~~elsewhere~~ in this prospectus. The consolidated statements of operations data for the three months ended March 31, 2013 and 2014 and the balance sheet data as of March 31, 2014 have been derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on a basis consistent with our audited consolidated financial statements included in this prospectus and include, in our opinion, all adjustments, consisting only of normal recurring adjustments, necessary to fairly present our financial position as of March 31, 2014 and results of operations for the three months ended March 31, 2013 and 2014. Our historical results are not necessarily indicative of the results that may be expected in the future ~~and the results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the full fiscal year~~.

~~Our~~The ~~unaudited~~summary ~~pro~~of ~~forma~~our ~~condensed~~ consolidated financial ~~statements~~data ~~have~~set ~~been~~forth ~~prepared~~below toshould ~~reflect~~be ~~adjustments~~read totogether with our ~~historical financial~~consolidated financial statements, ~~that~~and ~~are (1) directly attributable to~~ the ~~transactions~~related ~~described~~notes ~~below; (2) factually supportable; and (3) with respect~~ to ~~the~~those ~~unaudited pro forma condensed consolidated~~ statements ~~of comprehensive loss~~, ~~expected~~as towell ~~have~~as a“Selected ~~continuing impact~~Consolidated onFinancial ~~our~~Data” ~~results.~~and ~~The~~“Management’s ~~unaudited~~Discussion ~~pro~~and ~~forma~~Analysis ~~condensed~~of ~~consolidated~~Financial ~~financial~~Condition ~~statements do not include non-recurring items, including offering related legal~~ and ~~advisory~~Results ~~fees.~~of ~~The~~Operations” ~~unaudited pro forma condensed consolidated financial information~~appearing ~~reflects~~elsewhere ~~the~~in ~~impact~~this ~~of:~~prospectus.

Reorganization and Separation of the Prostate Business


	Year Ended December 31,
	2014			2015
	(in thousands, except share and per share data)
Consolidated Statement of Comprehensive Loss Data:
Revenue	$	198		$	679
Operating expenses
Research and development		8,553			25,375
General and administrative		7,725			5,407

Total expense		16,278			30,782

Operating loss		(16,080	)		(30,103	)
Change in fair value of financial instruments		2,156			(2,568	)
Interest income		1			2

Net loss from continuing operations		(13,923	)		(32,669	)
Loss from discontinued operations		(4,491	)		—

Net loss and comprehensive loss	$	(18,414	)	$	(32,669	)
Accretion and deemed dividends:
Preferred shares		(4,471	)		(6,618	)

Net loss attributable to common shareholders:
Basic and diluted	$	(22,885	)	$	(39,287	)
Net loss per share attributable to common shareholders:
Basic and diluted	$	(20.80	)	$	(35.72	)

Weighted average common shares outstanding:
Basic and diluted		1,100,000			1,100,000

Pro forma net loss per share attributable to common shareholders (unaudited)⁽¹⁾:
Basic and diluted	$			$	(0.30	)
Pro forma weighted average shares used to compute net loss per share attributable to common shareholders (unaudited)⁽¹⁾:
Basic and diluted					98,993,933

•(1) Pro forma to reflect (i) the ~~contribution~~Conversion by(including ~~Legacy~~the ~~VPI~~conversion toof uspreferred shares into preferred stock and the conversion of ~~certain~~profits ~~assets~~interests ~~that~~into ~~are~~common ~~used~~stock), in(ii) the ~~antifungal~~conversion ~~business;~~of all outstanding shares of preferred stock into shares of common stock and (iii) the issuance and

•10 the distribution to Viamet Holdings’ shareholders of Legacy VPI, which at the time of distribution, will contain all of the assets and liabilities directly attributable to the prostate business and associated with the collaboration agreements remaining with Legacy VPI;

•Table certainof transactions contemplated by agreements between us and Legacy VPI described in “Certain Relationships and Transactions with Related Persons;” andContents

•ultimate ~~the~~conversion ~~issuance~~ of ~~series~~8,855,145 C1Series D preferred shares ~~upon~~for ~~the~~gross ~~exercise~~proceeds of ~~our~~$15.8 ~~Viamet~~million ~~Holdings~~on ~~series~~February ~~C1 warrants~~17, ~~which,~~2016 ~~pursuant~~through to the ~~terms~~exercise of the ~~LLC~~call ~~Agreement (as defined below), as amended in connection with the Reorganization, will occur automatically~~option.

Conversion of Viamet Holdings to Viamet Pharmaceuticals, Inc.


	As of December 31, 2015
	Actual			Pro Forma⁽¹⁾		Pro Forma As Adjusted⁽²⁾
				(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	29,361			45,123
Working capital		21,346			41,535
Total assets		31,976			47,738
Call option liability		4,427			—
Members’ deficit and stockholders’ deficit		(85,988	)		41,699

•(1) Pro forma to reflect (i) the ~~issuance~~Conversion (including the conversion of preferred shares into preferred stock and the conversion of ~~our~~profits interests into common stock), to(ii) ~~holders~~the conversion of ~~Viamet~~all ~~Holdings~~outstanding ~~common~~shares of preferred stock into shares inof ~~conjunction~~common ~~with~~stock ~~our~~and (iii) the issuance and ultimate conversion toof a8,855,145 ~~Delaware~~Series ~~corporation~~D ~~based~~preferred onshares anfor ~~exchange~~gross ~~ratio~~proceeds of ~~share~~$15.8 ofmillion ~~Viamet~~on ~~Pharmaceuticals~~February 17, ~~Inc.~~2016 ~~for~~through ~~each~~the ~~common~~exercise ~~share~~ of ~~Viamet~~the ~~Holdings;~~call option.

•(2) Pro forma as adjusted to further reflect the ~~issuance~~sale of shares of our ~~preferred~~common stock toin ~~holders~~this ofoffering, ~~Viamet~~assuming ~~Holdings~~an ~~preferred~~initial ~~shares~~public inoffering ~~conjunction~~price ~~with~~of ~~our~~$ ~~conversion~~per toshare, athe ~~Delaware~~midpoint ~~corporation~~of ~~based~~the onprice anrange ~~exchange~~set ~~ratio~~forth ofon ~~share~~the cover of ~~the~~this ~~corresponding~~prospectus, ~~class~~after ofdeducting ~~Viamet~~underwriting ~~Pharmaceuticals,~~discounts ~~Inc.~~and ~~preferred~~commissions ~~stock~~and ~~for~~estimated ~~each~~offering ~~Viamet~~expenses ~~Holdings~~payable ~~preferred~~by ~~share;~~us.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and members’ deficit and stockholders’ deficit by approximately $ million, assuming that the number of shares 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. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us at the assumed initial public offering price would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and members’ deficit and stockholders’ deficit by $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

• the issuance of shares of our common stock to holders of Viamet Holdings profits interest shares in conjunction with our conversion to a Delaware corporation pursuant to the terms of such profits interest shares (including the applicable threshold valuation) and our plan of conversion; and

• the automatic conversion of preferred stock to common stock upon the closing of this offering.

Collectively, the transactions underlying these adjustments are referred to as the Transactions.

The unaudited pro forma condensed consolidated statements of comprehensive loss give effect to the Transactions as though the Transactions had occurred as of January 1, 2012. The unaudited pro forma condensed consolidated balance sheet gives effect to the Transactions as though the Transactions had occurred as of March 31, 2014.

The unaudited pro forma condensed consolidated financial statements are for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had we operated as a standalone public company during the periods presented or if the Transactions had actually occurred as of the dates indicated. The unaudited pro forma condensed consolidated financial statements should not be considered indicative of our future results of operations or financial position as a standalone public company.

The summary of our consolidated financial data set forth below should be read together with our consolidated financial statements and the related notes to those statements, as well as “Selected Consolidated Financial Data,” “Unaudited Pro Forma Condensed Consolidated Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Certain Relationships and Transactions with Related Persons,” appearing elsewhere in this prospectus.

	Historical												Pro Forma
	Viamet Holdings												Viamet Pharmaceuticals, Inc.
	Year EndedDecember 31,						Three MonthsEnded March 31,						Year EndedDecember 31,						Three MonthsEndedMarch 31,
	2012			2013			2013			2014			2012			2013			2014
							(unaudited)						(unaudited)
	(in thousands, except share per share data)
Consolidated Statement of Operations Data:
Revenue	$	3,484		$	2,873		$	890		$	365		$	881		$	1,077		$	227
Operating expenses:
Research and development		8,760			10,789			2,379			3,808			3,702			5,598			2,134
General and administrative		2,650			2,872			626			1,265			2,615			2,884			1,253
Total expense		11,410			13,661			3,005			5,073			6,317			8,482			3,387
Operating loss		(7,926	)		(10,788	)		(2,115	)		(4,708	)		(5,436	)		(7,405	)		(3,160	)
Change in fair value of financial instruments		(62	)		(387	)		(31	)		(2,574	)		(73	)		(431	)		(565	)
Interest income		3			—			—			—			3			—			—
Net loss	$	(7,985	)	$	(11,175	)	$	(2,146	)	$	(7,282	)	$	(5,506	)	$	(7,836	)	$	(3,725	)
Accretion and deemed dividends:
Preferred shares		(5,328	)		(7,516	)		(631	)		(19,714	)		—			—			—
Net loss attributable to common shareholders:
Basic and diluted	$	(13,313	)	$	(18,691	)	$	(2,777	)	$	(26,996	)	$	(5,506	)	$	(7,836	)	$	(3,725	)
Net loss per share attributable to common shareholders:
Basic and diluted	$	(12.10	)	$	(16.99	)	$	(2.52	)	$	(24.54	)		—			—			—
Weighted average common shares outstanding:
Basic and diluted		1,100,000			1,100,000			1,100,000			1,100,000			—			—			—
Pro forma net loss per share attributable to common shareholders (unaudited):
Basic and diluted
Pro forma weighted average shares used to compute net loss per share attributable to common shareholders (unaudited):
Basic and diluted

	As of December 31,						As of March 31, 2014
	2012			2013			Actual			ProForma(1)	Pro Forma AsAdjusted(2)(3)
							(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	1,042		$	1,435		$	7,383
Furniture, fixtures and equipment, net		314			221			201
Working (deficit) capital		(2,366	)		92			(943	)
Total assets		2,068			2,715			9,071
Warrant liability		220			1,017			4,761
Members’ deficit and stockholders’ deficit		(46,592	)		(65,109	)		(92,061	)

(1) The pro forma balance sheet data give effect to the completion of the Reorganization, including the net exercise of warrants to purchase preferred shares, and the conversion of preferred stock and profits interest shares due to the conversion of Viamet Holdings to Viamet Pharmaceuticals, Inc.

(2) The pro forma as adjusted balance sheet data give effect to our issuance and sale of shares of common stock in this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

(3) A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working (deficit) capital, total assets and stockholders’ equity by approximately $ million, assuming that the number of shares 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. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us at the assumed initial public offering price would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working (deficit) capital, total assets and and stockholders’ equity by $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this prospectus, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below or additional risks and uncertainties not presently known to us or that we currently deem immaterial could materially and adversely harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline and you may lose all or part of your investment.

Risks Related to our Financial Position and Need for Additional Capital

We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.

We have incurred significant operating losses in every year since inception and expect to incur net operating losses for the foreseeable future. ~~Our~~For ~~net loss was $11.2 million for~~ the ~~year~~years ended December 31, ~~2013,~~2014 ~~$8.0 million~~and ~~for~~2015, ~~the~~we ~~year~~reported ~~ended~~a ~~December 31,~~net ~~2012~~loss ~~and~~of $718.3 4 million ~~for~~and ~~the~~$32.7 ~~three months ended March 31~~million, ~~2014~~respectively. As of ~~March~~ December 31, ~~2014~~ 2015, we had an accumulated deficit of $9286.1 0 million. We do not know whether or when we will become profitable. To date, we have not generated any revenues from product sales and have financed our ~~antifungal~~ operations primarily through private placements of our preferred stock and, to a lesser extent, through funding from ~~the~~government ~~National~~grants ~~Institutes of Health, or the NIH,~~ and collaboration ~~the U~~agreements.S. ~~Internal Revenue Service, or the IRS.~~ We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and, beginning in 2011, clinical trials. We are still in the early stages of development of our product candidates, and we have not completed development of any product candidate. We expect to continue to incur significant expenses and operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our members’ deficit and working capital. We anticipate that our expenses will increase substantially if and as we:

• continue our Phase 2a2b clinical trials of VT-1161, our lead product candidate, ~~for~~in ~~treatment of~~ patients with ~~acute vulvovaginal candidiasis~~onychomycosis, ora ~~AVVC,~~common ~~commonly~~fungal ~~known~~infection asof athe ~~vaginal yeast infection~~nail, and patients with ~~interdigital~~recurrent ~~tinea~~vulvovaginal ~~pedis~~candidiasis, ~~also~~or ~~known~~RVVC, asa ~~athlete’s~~recurrent ~~foot~~form of vaginal yeast infection;

• initiate our planned Phase 2b3 clinical trials of VT-1161 infor ~~patients~~the ~~with~~treatment ~~recurrent~~of ~~vulvovaginal~~onychomycosis ~~candidiasis, or RVVC,~~ and ~~patients with onychomycosis, a fungal infection of the nail~~RVVC;

• ~~initiate and~~ continue ~~the~~our ~~research~~Phase ~~and~~1 ~~development~~clinical trial of VT-1129, our ~~other~~next most advanced product ~~candidates~~candidate, and, ~~potential~~if ~~product candidates~~successful, ~~including~~initiate our planned Phase 2 clinical trial of VT-1129 ~~and~~for ~~VT-1598~~the ~~and~~treatment ~~its~~of ~~analogues~~patients with cryptococcal meningitis;

•

initiate and continue the research and development of VT-1598 and our other product candidates, as well as potential product candidates;

•

strengthen and expand our core metalloenzyme discovery activities;

•

seek to discover and develop additional product candidates;

•

seek regulatory approvals for any product candidates that successfully complete clinical trials;

•

establish a sales, marketing and distribution infrastructure in the future to commercialize any products for which we may obtain regulatory approval;

•

require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization;

•12 ~~maintain, expand and protect our intellectual property portfolio;~~

• hire additional clinical, quality control and scientific personnel; and

•

maintain, expand and protect our intellectual property portfolio;

•

hire additional clinical, quality control, commercial and scientific personnel; and

•

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.

Our ability to become and remain profitable depends on our ability to generate revenue. We do not expect to generate significant revenue unless and until we are able to obtain marketing approval for, and successfully commercialize, one or more of our product candidates. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of our product candidates, discovering additional product candidates, obtaining regulatory approval for these product candidates, manufacturing, marketing and selling any products for which we may obtain regulatory approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payors. We are only in the preliminary stages of most of these activities and have not yet commenced other of these activities. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the U.S. Food and Drug Administration, or the FDA, or comparable non-U.S. regulatory authorities to perform studies in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of any of our product candidates, our expenses could increase.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on aan ongoing quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of product candidates or even continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

In addition, the notes to our financial statements appearing at the end of this prospectus indicate that management believes that currently available cash and cash equivalents, including the proceeds from the call option to purchase Series D preferred shares, which was exercised on February 17, 2016, would not provide sufficient funds to enable us to meet our obligations for greater than one-year subsequent to December 31, 2015. The report of our independent registered public accounting firm with respect to our consolidated financial statements appearing elsewhere in this prospectus ~~contains~~includes an explanatory paragraph ~~stating~~expressing ~~that our recurring losses from operations and our net capital deficiency raise substantial~~ doubt about our ability to continue as a going concern. The inclusion of a going concern explanatory paragraph in the report of of our independent registered public accounting firm may make it more difficult for us to secure additional financing or enter into strategic relationships on terms acceptable to us, if at all, and may materially and adversely affect the terms of ~~any~~ any financing that we might obtain. If we are unable to obtain sufficient capital in this offering, our business, financial condition and results of operations will be materially and adversely affected and we will need to obtain alternative financing or significantly modify our operational plans to continue as a going concern. Further, even if we successfully complete and receive the net proceeds from this offering, given our planned expenditures for the next several years, including ~~expenditures~~ expenditures in connection with our clinical trials ~~of VT-1161~~, our independent registered public accounting firm may conclude, in connection with the preparation of our financial statements for fiscal year ~~2014~~2016 or any other subsequent period, that there is substantial doubt regarding our ability to continue as a going concern.

We13 ~~will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.~~

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the Phase 2a clinical trials of VT-1161, initiate Phase 2b clinical trials of VT-1161, advance VT-1129 and VT-1598 and its analogues into clinical development, continue research and development, initiate clinical trials and, if development succeeds, seek regulatory approval of our product candidates. Our

~~expenses~~We could further increase if we initiate new research and preclinical development efforts for other product candidates. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Furthermore, upon the closing of this offering, we expect to incur significant additional costs associated with operating as a public company. Accordingly, we will need ~~to obtain~~ substantial additional funding ~~in connection with our continuing operations~~. If we are unable to raise capital when needed ~~or on attractive terms~~, we ~~could~~may be forced to delay, reduce, terminate or eliminate our ~~research~~product ~~and~~ development programs or ~~any future~~ commercialization efforts.

We ~~believe~~expect ~~that~~our ~~the~~expenses ~~net~~to increase in ~~proceeds~~connection ~~from~~with ~~this~~our ~~offering~~ongoing activities, ~~together~~particularly ~~with~~as ~~our~~we ~~existing~~continue ~~cash~~the ~~and~~Phase ~~cash~~2b ~~equivalents~~clinical trials of ~~$7.4~~VT-1161 ~~million~~and asour Phase 1 clinical trial of ~~March 31~~VT-1129, ~~2014~~advance VT-1598 into clinical development, ~~will~~continue ~~enable~~research usand todevelopment ~~fund~~and, if development succeeds, seek regulatory approval of our ~~operating~~product candidates. Our expenses could further increase if we initiate new research and ~~capital~~preclinical ~~expenditure~~development ~~requirements~~efforts for atother ~~least~~product ~~the~~candidates. ~~next~~In addition, if we obtain regulatory approval for any of ~~months.~~our Weproduct ~~have~~candidates, ~~based~~we ~~this~~expect ~~estimate~~to onincur ~~assumptions~~significant ~~that~~commercialization ~~may~~expenses ~~prove~~related to beproduct ~~wrong~~manufacturing, marketing, sales and wedistribution. ~~could~~Furthermore, ~~use~~upon ~~our~~the ~~capital~~closing ~~resources~~of ~~sooner~~this ~~than~~offering, we ~~currently~~ expect. ~~Changing~~to ~~circumstances~~incur ~~could~~significant ~~cause~~additional uscosts associated towith ~~consume~~operating ~~capital~~as ~~significantly faster~~a ~~than~~public wecompany. ~~currently anticipate~~Accordingly, ~~and~~ we ~~may~~will need to ~~spend~~obtain ~~more~~substantial ~~money~~additional ~~than~~funding ~~currently~~in ~~expected~~connection ~~because~~with ofour ~~circumstances~~continuing ~~beyond~~operations. ~~our~~If ~~control.~~we ~~Our~~are ~~future~~unable to raise capital ~~requirements,~~when ~~both~~needed ~~short-term~~or ~~and~~on ~~long-term~~attractive terms, ~~will~~we ~~depend~~could onbe ~~many~~forced to ~~factors~~delay, ~~including:~~ reduce or eliminate our research and development programs or any future commercialization efforts.

•We believe that the ~~progress,~~net ~~timing~~proceeds from this offering, ~~costs~~together with our existing cash and ~~results~~cash equivalents of $29.4 million as of December 31, 2015 and the proceeds from the call option to purchase Series D preferred shares, which was exercised on February 17, 2016, will enable us to fund our ~~ongoing~~operating ~~Phase~~expenses 2aand ~~clinical~~capital ~~trials~~expenditure ofrequirements ~~VT-1161~~for at least the next months. We have based this estimate on assumptions that may prove to be wrong, and we could use our ~~planned~~capital resources ~~Phase~~sooner 2bthan ~~clinical~~we ~~trials~~currently expect. Changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of VTcircumstances beyond our control. Our future capital requirements, both short-~~1161;~~term and long-term, will depend on many factors, including:

• the scope, progress, timing, costs and results of ~~clinical~~our ~~trials~~ongoing ~~of,~~Phase ~~and~~2b ~~research~~clinical trials and ~~preclinical~~planned ~~development~~Phase ~~efforts~~3 ~~for,~~clinical ~~other~~trials ~~product~~of ~~candidates, including~~ VT-~~1129 and VT-1598 and its analogues, and any future product candidates~~1161;

• ~~our~~the ~~ability~~scope, toprogress, ~~enter~~timing, ~~into~~costs and ~~the~~results ~~terms~~of ~~and~~clinical ~~timing~~trials of, ~~any~~and ~~collaborations~~research and preclinical development efforts for, ~~licensing~~our orproduct ~~other~~candidates, ~~arrangements~~including ~~that~~VT-1129 weand ~~may~~VT-1598, ~~establish~~and any future product candidates;

•

our ability to enter into and the terms and timing of any collaboration, licensing or other arrangements that we may establish;

•

the number and development requirements of other product candidates that we pursue;

•

the costs, timing and outcome of regulatory review of our product candidates by the FDA and comparable non-U.S. regulatory authorities;

•

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

•

the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

•

our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure;

•

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

• the extent to which we acquire or in-license other products, technologies and ~~technologies~~businesses;

• the costs of operating as a public company; ~~and~~

• the effect of competing technological and market developments.;

~~Identifying~~14 potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing

to• ~~achieve~~ our ~~business~~ability ~~objectives. Adequate additional financing may not be available~~ to usobtain onand ~~acceptable~~maintain ~~terms,~~government orgrants atand ~~all.~~other ~~In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.~~ funding;

•

the extent to which we are entitled to reimbursement of clinical trial costs under Qualified Infectious Disease Product, or QIDP, designation by the FDA (for VT-1129 and potentially VT-1598); and

•

our ability to establish and maintain healthcare coverage and adequate reimbursement.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, even if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

Raising additional capital may cause dilution to our stockholders, including purchasers of our common stock in this offering, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate product revenues sufficient to achieve profitability, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, government or other third party funding, collaborations and licensing arrangements. We do not have any committed external source of funds other than limited government grant funding ~~from the NIH and from the Defense Medical Research and Development Program of the U~~.S. ~~Department of Defense.~~ To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, your ownership interest may be materially diluted, and the terms of these securities may include liquidation or other preferences and anti-dilution protections that could adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business. Securing additional financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We commenced active operations in 2005, and our operations to date have been limited to organizing and staffing the company, business planning, raising capital, developing our technology, identifying potential product candidates, undertaking preclinical studies and, beginning in 2011, conducting clinical trials. ~~All~~Several ~~but one~~ of our product candidates are still in preclinical development. We have not yet demonstrated our ability to successfully obtain regulatory approvals, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In15 addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from a company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We expect our financial condition and operating results to continue to fluctuate significantly from quarter-to-quarter and year-to-year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.

commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history. Our financial condition and operating results have varied in the past and will continue to fluctuate from quarter to quarter or year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly and annual periods as indications of future operating performance. Factors relating to our business that may contribute to these fluctuations include the following risk factors, as well as other factors described elsewhere in this prospectus:

•

our ability to obtain additional funding to develop our product candidates;

•

the need to obtain and maintain regulatory approval for VT-1598, VT-1129, VT-1161 or any of our other potential product candidates;

•

delays in the commencement, enrollment and the timing of clinical testing;

•

the success of our clinical trials through all phases of clinical development;

•

any delays in regulatory review and approval of product candidates in clinical development;

•

potential side effects of our product candidates that could delay or prevent commercialization or cause an approved drug to be taken off the market;

•

our ability to develop intravenous formulations of our product candidates;

•

market acceptance of our product candidates;

•

our ability to establish an effective sales and marketing infrastructure;

•

competition from existing products or new products that may emerge;

•

the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for our products;

•

our ability to receive approval and commercialize our product candidates outside of the United States;

•

our dependency on third party manufacturers to supply or manufacture our products;

•

our ability to establish and maintain collaborations, licensing or other arrangements;

•

our ability and third parties’ abilities to protect intellectual property rights;

•

costs related to and outcomes of potential intellectual property litigation;

•

our ability to adequately support future growth;

•

our ability to attract and retain key personnel to manage our business effectively;

•

our ability to build our finance infrastructure and improve our accounting systems and controls;

•

potential product liability claims;

•

potential liabilities associated with hazardous materials; and

•

our ability to maintain adequate insurance policies.

In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from a company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

Risks Related to the Discovery and Development of our Product Candidates

Our research and development of product candidates is focused on the identification of small molecule inhibitors of metalloenzymes ~~for the treatment of human fungal infections~~. Our approach is unproven and we do not know whether we will be successful in our efforts to use our product platform to build a pipeline of product candidates or if we will be able to develop any products of commercial value.

Our scientific approach focuses on using our proprietary technology to identify small molecule inhibitors of metalloenzymes for the treatment of ~~human~~a range of potential indications, including fungal infections. Any product candidates that we develop may not effectively inhibit the targeted metalloenzyme or any metalloenzyme, and we may not be successful in using our ~~product~~MIDAS ~~platform,~~technology ~~called Metallophile® Technology,~~ to build a pipeline of small molecule inhibitors of metalloenzyme targets and progress these product candidates through clinical development for the treatment of any medical conditions.

Even if we are successful in continuing to build our pipeline, we may not be able to develop product candidates that are safe and effective metalloenzyme inhibitors. Our research programs may initially show promise in creating potential product candidates, yet fail to yield viable product candidates for clinical development for a number of reasons, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance. Our research programs to identify new product candidates will require substantial technical, financial and human resources. In addition, we may focus our efforts and resources on one or more potential product candidates that ultimately prove to be unsuccessful. If we are unable to identify suitable additional compounds for preclinical and clinical development, our ability to develop product candidates and obtain product revenues in future periods could be compromised, which could result in significant harm to our financial position and adversely impact our stock price.

We are early in our development efforts and have only ~~one~~two product ~~candidate~~candidates inthat ~~Phase~~are 2ain clinical trials. All of our other product candidates are still in preclinical development. If we are unable to commercialize our product candidates, or experience ~~significant~~ delays in doing so, our business will be materially harmed.

We are early in our development efforts and have ~~only~~ one product candidate currently in two Phase 2a2b clinical trials for two different indications and one product candidate currently in a Phase 1 clinical trial for one indication. All of our other product candidates are still in preclinical development. We have invested substantially all of our efforts and financial resources in the identification and preclinical development of metalloenzyme inhibitors. Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates and the viability of metalloenzyme inhibitors as a source of additional product candidates. The success of our product candidates will depend on several factors, including the following:

•

completion of successful preclinical studies and clinical trials;

• ~~submitting investigational new drug applications, or INDs, to~~ the ~~FDA~~prevalence and ~~being~~severity ~~allowed~~of toany ~~initiate~~adverse ~~clinical~~side ~~trials~~effects of ~~product~~any ~~candidates~~of inour ~~addition~~product ~~to VT-1161~~candidates;

•

submitting investigational new drug applications, or INDs, to the FDA and being allowed to initiate clinical trials of product candidates in addition to VT-1161 and VT-1129;

•

applying for and receiving marketing approvals from applicable regulatory authorities for our product candidates;

•

the extent of any required post-marketing approval commitments to applicable regulatory authorities;

•

obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

•17 ~~establishment of supply arrangements with third party raw materials suppliers and manufacturers;~~

•

establishment of supply arrangements with third party raw materials suppliers and manufacturers;

•

making arrangements with third party manufacturers for, or establishing, commercial manufacturing capabilities;

•

scaling up our manufacturing processes and capabilities to support clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain marketing approval;

•

developing, validating and maintaining a commercially viable manufacturing process that is compliant with current good manufacturing practices, or cGMP;

•

launching commercial sales of the products, if and when approved, whether alone or in collaboration with others;

•

obtaining approval of labeling without unacceptable restrictions;

• acceptance of ~~the~~our products, if and when approved, by patients, the medical community and third party payors;

•

effectively competing with other therapies;

•

obtaining and maintaining healthcare coverage and adequate reimbursement;

• protecting our rights in our intellectual property portfolio; ~~and~~

• ~~maintaining~~practicing aour ~~continued~~technology ~~acceptable~~and ~~safety~~commercializing ~~profile~~our ofproducts without infringing the ~~products~~intellectual ~~following~~property ~~approval.~~rights of third parties; and

•

maintaining a continued acceptable safety profile of our products following approval.

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business.

~~Additionally,~~Clinical ~~certain~~drug ~~invasive fungal~~development ~~infection~~is ~~treatment~~a ~~regimens~~lengthy ~~typically~~and ~~involve~~expensive ~~initial~~process ~~treatments~~with as an ~~intravenous~~uncertain ~~infusion,~~outcome. ~~with~~We amay ~~step~~incur ~~down~~additional tocosts anor ~~oral~~experience ~~formulation~~delays ofin ~~the~~completing, ~~same~~ or ultimately abe ~~similar~~unable ~~medication~~ to complete, the ~~course of treatment. For example, we currently have in preclinical~~ development ~~an oral form of VT-1598,~~ and wecommercialization ~~are also developing a pro-drug formulation for intravenous administration. If we are unable to successfully develop and achieve regulatory approval for an intravenous formulation~~ of ~~the product candidates we develop for the treatment of certain invasive fungal infections, or are delayed in developing and obtaining regulatory approval for~~ our ~~intravenous formulation of any of these~~ product candidates~~, the commercial success of these products could be adversely affected~~.

~~Clinical~~Two ~~drug~~of ~~development~~our ~~involves~~product acandidates ~~lengthy~~are in clinical development and ~~expensive~~all ~~process,~~of ~~with~~our ~~an uncertain~~other ~~outcome~~product candidates are in preclinical development. WeThe ~~may~~risk ~~incur~~of ~~additional~~failure ~~costs~~of all of our product candidates is high. It is impossible to predict when, or ~~experience~~if, ~~delays~~any of our product candidates will prove effective or safe in ~~completing,~~humans or ~~ultimately~~will bereceive ~~unable~~regulatory toapproval. ~~complete,~~Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and ~~commercialization~~conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome.

~~One~~The clinical development of our product candidates is insusceptible ~~clinical~~to ~~development~~the ~~and~~risk ~~all~~ of ~~our~~failure ~~other~~inherent ~~product~~at ~~candidates~~any ~~are~~stage inof ~~preclinical~~drug development., ~~The~~including ~~risk~~failure to ofdemonstrate ~~failure~~efficacy in a clinical trial or across a broad population of ~~all~~patients, the occurrence of ~~our~~serious ~~product~~or ~~candidates~~medically or commercially unacceptable adverse events, failure to comply with protocols or applicable regulatory requirements and determination by the FDA or any comparable non-U.S. regulatory authority that a drug product is ~~high~~not approvable. It is ~~impossible~~possible tothat ~~predict~~even ~~when,~~if one or ~~if,~~more ~~any~~ of our product candidates ~~will~~has ~~prove~~a ~~effective~~beneficial oreffect, ~~safe~~that ineffect ~~humans or~~ will ~~receive~~not ~~regulatory~~be ~~approval.~~detected ~~Before~~during clinical ~~obtaining~~evaluation ~~marketing~~as ~~approval~~a ~~from regulatory~~result ~~authorities~~of ~~for~~one ~~the~~or ~~sale~~more of ~~any~~a ~~product~~variety ~~candidate~~of factors, weincluding ~~must~~the ~~complete~~size, ~~preclinical~~duration, ~~development~~design, ~~and~~measurements, conduct ~~extensive~~or ~~clinical~~analysis ~~trials~~of toour ~~demonstrate~~clinical ~~the~~trials. ~~safety~~Conversely, ~~and~~as ~~efficacy~~a result of ~~our~~the ~~product~~same ~~candidates~~factors, inour ~~humans.~~clinical ~~Clinical~~trials ~~testing~~may isindicate ~~expensive,~~an ~~difficult~~apparent topositive ~~design~~effect ~~and~~of ~~implement,~~a ~~can~~product ~~take~~candidate ~~many~~that ~~years~~is togreater ~~complete~~than ~~and~~the isactual ~~uncertain~~positive aseffect, toif ~~outcome~~any. Similarly, in our clinical

~~The~~18 clinical development of our product candidates is susceptible to the risk of failure inherent at any stage of drug development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of serious or medically or commercially unacceptable adverse events, failure to comply with protocols or applicable regulatory requirements and determination by the FDA or any comparable non-U.S. regulatory authority that a drug product is not approvable. It is possible that even if one or more of our product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials. Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any. Similarly, in our clinical trials we may fail to detect toxicity of or intolerability caused by our product candidates, or mistakenly believe that our product candidates are toxic or not well tolerated when that is not in fact the case.

~~The outcome of preclinical testing and early clinical~~ trials we may ~~not~~fail beto ~~predictive~~detect oftoxicity ~~the success~~ of ~~later~~or ~~clinical~~intolerability ~~trials,~~caused ~~and~~by ~~interim~~our ~~results~~product ~~of a clinical trial do not necessarily predict final results. Our ongoing clinical trials~~candidates, ~~including~~or ~~both~~mistakenly ofbelieve that our ~~Phase~~product 2acandidates ~~clinical~~are ~~trials~~toxic ofor ~~VT-1161 were conducted with small patient populations and were~~ not ~~powered~~well totolerated ~~determine~~when ~~efficacy with statistical significance, making it difficult to predict whether the favorable results~~ that weis ~~observed~~not in ~~such studies will be repeated in larger and more advanced clinical trials and in our target~~ ~~indications.~~fact ~~Additionally,~~the ~~both of our ongoing Phase 2a clinical trials of VT-1161 were for a shorter period of dosing and different indications than our planned Phase 2b clinical trials of this product candidate~~case.

InThe ~~some~~outcome ~~instances,~~of ~~there~~preclinical ~~can~~testing and early clinical trials may not be ~~significant~~predictive ~~variability~~of inthe ~~safety~~success orof ~~efficacy~~later ~~results~~clinical ~~between~~trials, ~~different~~and interim results of a clinical trial do not necessarily predict final results. Both of our Phase 2a clinical trials of ~~the~~VT-1161 ~~same~~were ~~product~~conducted ~~candidate~~with ~~due~~small topatient ~~numerous~~populations ~~factors,~~and ~~including~~were ~~changes~~not inpowered ~~trial~~to ~~procedures~~determine ~~set~~efficacy ~~forth~~with instatistical ~~protocols~~significance, making ~~differences~~it indifficult ~~the~~to ~~size~~predict ~~and~~whether ~~type~~the offavorable ~~the~~results ~~patient~~that ~~populations,~~we ~~changes~~observed in ~~and~~such ~~adherence~~studies towill ~~the~~be ~~clinical~~repeated ~~trial protocols~~in larger and ~~the~~more ~~rate~~advanced ofclinical ~~dropout~~trials ~~among~~and ~~clinical~~in ~~trial~~our ~~participants~~target indications. ~~For example~~Additionally, ~~the~~both of our Phase 2b2a clinical trials of VT-1161 were ~~that~~for wea ~~expect~~shorter toperiod ~~initiate~~of ~~have~~dosing and different ~~trial~~indications ~~designs~~than our ongoing Phase 2b and ~~are~~planned ~~for~~Phase ~~different~~3 ~~disease~~clinical ~~indications~~trials ~~than~~of ~~our~~this ~~ongoing~~product candidate. Moreover, no patient included in the interim analysis in our Phase 2a 2b clinical ~~trials~~trial of VT-1161. for Asonychomycosis aachieved ~~result,~~the ifprimary final endpoints of such trial (which we ~~initiate~~believed ~~these~~were ~~planned~~unlikely ~~Phase~~to 2bbe ~~clinical~~achieved ~~trials,~~in the ~~results~~time ~~may~~period ~~vary~~covered ~~significantly~~by ~~from~~our interim analysis) and the interim results ofobserved in both our Phase 2a2b clinical trials of VT-1161. may ~~Any~~not ~~Phase~~be 2,indicative ~~Phase~~of 3the orfinal ~~other~~results ~~clinical~~of these trials ~~that~~or ~~we may conduct may not demonstrate~~ the ~~efficacy~~results ~~and~~we ~~safety~~may ~~necessary~~obtain toin ~~obtain~~our ~~regulatory~~planned ~~approval~~Phase to3 ~~market~~clinical ~~our~~trials ~~product~~of ~~candidates~~VT-1161.

~~The~~In ~~design~~some instances, ofthere acan ~~clinical~~be ~~trial~~significant ~~can~~variability ~~determine~~in ~~whether~~safety ~~its~~or efficacy results ~~will~~between ~~support~~different ~~approval~~clinical trials of athe same product, ~~and~~candidate ~~flaws~~due into ~~the~~numerous ~~design~~factors, ofincluding ~~a clinical~~changes in trial ~~may~~procedures ~~not~~set ~~become~~forth ~~apparent~~in ~~until~~protocols, ~~the~~differences ~~clinical~~in ~~trial~~the size isand ~~well~~type ~~advanced~~of orthe ~~completed.~~patient Wepopulations, ~~have~~changes ~~limited experience~~ in ~~designing~~and ~~clinical~~adherence ~~trials~~to ~~and~~the ~~may~~clinical betrial ~~unable~~protocols toand ~~design~~the ~~and~~rate ~~execute~~of adropout among clinical trial ~~to support marketing approval~~participants. ~~Our beliefs~~For ~~that~~example, ~~results~~the ofongoing ~~our~~ Phase 2a2b clinical ~~trial~~trials of VT-1161 ~~for~~have ~~AVVC~~different ~~may~~trial bedesigns and ~~indicative~~are ~~of results in our planned Phase 2b clinical trial~~ for ~~RVVC~~different ~~and~~disease ~~that~~indications ~~results~~than of our Phase 2a clinical ~~trial~~trials of VT-1161. ~~for~~As ~~interdigital~~a ~~tinea~~result, ~~pedis~~the ~~may~~results ~~be indicative~~ of ~~results~~these ~~in our planned~~ Phase 2b clinical ~~trial~~trials ~~for onychomycosis~~ may ~~not~~vary besignificantly ~~correct.~~from ~~Moreover,~~the ~~preclinical~~results ~~and~~of ~~clinical~~our ~~data~~Phase ~~are~~2a ~~often~~clinical ~~susceptible~~trials toof ~~varying~~VT-1161. ~~interpretations and analyses~~Similarly, ~~and~~we cannot ~~many~~be ~~companies~~certain that ~~have~~the ~~believed~~final ~~their product~~results ~~candidates~~of ~~performed~~our ~~satisfactorily~~ongoing inPhase ~~preclinical~~2b ~~studies and~~ clinical trials ~~have~~will ~~nonetheless~~compare ~~failed~~favorably to ~~obtain~~any ~~marketing approval~~ of ~~their products. Even if we believe that~~ the final results offrom clinical trials ~~for~~of ~~our~~other ~~product~~compounds, ~~candidates~~even ~~warrant marketing~~if ~~approval,~~ the ~~FDA~~interim orresults ~~comparable~~from ~~non-U.S.~~our ~~regulatory~~clinical ~~authorities~~trials ~~may~~compare ~~disagree~~favorably ~~and~~to the ~~may~~interim ~~not~~results ~~grant~~from ~~marketing~~the ~~approval~~trials of ~~our~~those ~~product~~other ~~candidates~~compounds. WeAny ~~expect that the primary efficacy endpoint in our onychomycosis~~ Phase ~~2b clinical trial and~~2, ~~if it~~Phase is3 ~~successful,~~or inother ~~our~~clinical ~~pivotal~~trials ~~Phase~~that 3we ~~clinical~~may ~~trials~~conduct ~~for~~may ~~this~~not ~~indication~~demonstrate ~~will~~the beefficacy ~~complete~~and ~~therapeutic~~safety ~~cure.~~necessary ~~This~~to ~~may~~obtain beregulatory anapproval ~~exacting~~to ~~clinical~~market ~~endpoint~~our toproduct ~~satisfy~~candidates.

The design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced or completed. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. In addition, there is not a well-established pathway for designing studies to obtain regulatory approval for a product candidate treating RVVC (such as validated endpoints or inclusion/exclusion criteria). While the design of our planned Phase 3 clinical trials in RVVC will be determined largely based on discussions we have with the FDA following completion of our Phase 2b clinical trial, based on feedback we have received from the FDA to date, we believe the inclusion/exclusion criteria of our planned Phase 3 clinical trials for RVVC may differ from the criteria of our Phase 2b clinical trial. As a result, the interim and final results of our Phase 2b clinical trial in RVVC may not be predictive of the results of our planned Phase 3 clinical trials in RVVC. Our belief that results of our Phase 2a clinical trial of VT-1161 for acute vulvovaginal candidiasis, or AVVC, commonly known as vaginal yeast infection, may be indicative of results in our Phase 2b clinical trial for RVVC and that results of our Phase 2a clinical trial of VT-1161 for interdigital tinea pedis, also known as athlete’s foot, may be indicative of results in our Phase 2b clinical trial for onychomycosis may not be correct. Similarly, our belief that favorable interim results in our Phase 2b clinical trials of VT-1161 may be indicative of the final results of such trials or the results of our planned Phase 3 clinical trials may also not be correct. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. Even if we believe that the results of clinical trials for our product candidates warrant marketing approval, the FDA or comparable non-U.S. regulatory authorities may disagree and may not grant marketing approval of our product candidates. The primary efficacy endpoint in our onychomycosis clinical trial and, if it is successful, in our planned Phase 3 clinical trials for this indication will be complete cure. This may be an exacting clinical endpoint to satisfy.

Further, our product candidates may not be approved even if they achieve their primary endpoints in our planned Phase 3 clinical trials or registration trials. The FDA and comparable non-U.S. regulatory authorities may disagree with our trial design and our interpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory authorities may change the requirements for the approval of a product candidate even after reviewing and providing comments or advice on a protocol for our planned Phase 3 clinical trial that has the potential to result in FDA or other agencies’ approval. Even if we obtain regulatory approval, our product candidates may be approved for fewer or more limited indications than we request, such approval may be contingent on the performance of costly post-marketing clinical trials, or we may not be allowed to include the labeling claims necessary or desirable for the successful commercialization of such product candidate.

Additionally, certain invasive fungal infection treatment regimens typically involve initial treatments as an intravenous infusion, with a step down to an oral formulation of the same or a similar medication to complete the course of treatment. Even if we obtain regulatory approval for the oral form of a product candidate for the treatment of such invasive fungal infections, we may be unable to successfully develop and achieve regulatory approval for an intravenous formulation, or may be delayed in obtaining regulatory approval, and the commercial success of such product candidate could be adversely affected.

If we experience any of a number of possible unforeseen events in connection with clinical trials of our product candidates, potential marketing approval or commercialization of our product candidates could be delayed or prevented.

We may experience numerous unforeseen events during, or as a ~~result~~ result of, our clinical trials that could delay or prevent our ability to receive marketing approval of or commercialize our product candidates, including:

•

regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

•

we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial agreements or clinical trial protocols with prospective investigators or trial sites;

•

patients that enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial’s duration;

•

the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;

•

clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

• our third party contractors, including those manufacturing our product candidates or components, or ingredients thereof, or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

• weinvestigators may ~~have~~deviate tofrom ~~suspend~~the ortrial ~~terminate~~protocol, ~~clinical~~fail ~~trials~~to ofconduct ~~our~~the ~~product~~trial ~~candidates~~in ~~for~~accordance ~~various~~with ~~reasons,~~regulatory ~~including~~requirements aor ~~finding~~misreport ~~that~~ the ~~participants are being exposed to unacceptable health risks~~data;

• regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;,

unexpected or serious adverse events or other unexpected characteristics of the product candidate or other therapeutic agents used in our clinical trials or findings of undesirable effects caused by a chemically or mechanistically similar drug or drug candidate;

•

the cost of clinical trials of our product candidates may be greater than we anticipate;

•

the FDA or comparable non-U.S. regulatory authorities may disagree with our clinical trial design or our interpretation of data from preclinical studies and clinical trials;

•

the FDA or comparable non-U.S. regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third party manufacturers with which we enter into agreements for clinical and commercial supplies;

•

the approval policies or regulations of the FDA or comparable non-U.S. regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain regulatory approval;

•

the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and

•

our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials.

If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA ~~and~~or comparable non-U.S. regulators, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of these product candidates.

We are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining marketing approval from the FDA. Comparable non-U.S. regulatory authorities, such as the European Medicines Agency, or EMA, impose similar restrictions. We may never receive such approvals. We must complete extensive preclinical development and clinical trials to demonstrate the safety and efficacy of our product candidates in humans before we will be able to obtain these approvals.

Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. We have not previously completed late stage clinical trials or submitted a new drug application, or an NDA, to the FDA or similar drug approval filings to comparable non-U.S. regulatory authorities for any of our product candidates.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us and impair our ability to generate revenues from product sales, ~~and~~or, if we enter into any collaboration arrangements, regulatory and commercialization milestones and royalties. In addition, if we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to initiate or successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may:

collaboration arrangements, regulatory and commercialization milestones and royalties. In addition, if we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to initiate or successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may:

•

be delayed in obtaining or unable to obtain marketing approval for our product candidates;

•

obtain approval for indications or patient populations that are not as broad as intended or desired;

•

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

•

be subject to additional post-marketing testing requirements; or

•

be required to remove the product from the market after obtaining marketing approval.

~~Our~~21 product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. In addition, many of the factors that cause, or lead to, clinical trial delays may ultimately lead to the denial of regulatory approval of any of our product candidates.

Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. For example, in October 2015, the FDA placed a partial clinical hold on our Phase 1 clinical trial of VT-1129, which required us to submit safety and pharmacokinetic data after each dosing cohort and receive approval from the FDA prior to proceeding to the next dosing cohort until the partial clinical hold was lifted in March 2016. Although the FDA has lifted a partial clinical hold, we are required to submit additional non-clinical studies in a relevant species before we can proceed to the MAD clinical trial, which may delay or forestall our VT-1129 MAD clinical trial if the results are not successful. Additionally, the FDA has indicated that women of child bearing age should be excluded from studies of VT-1129 until we complete additional reproductive toxicity testing. If the FDA imposes a new clinical hold on our VT-1129 program or if another development program were placed on partial or full clinical hold, it could delay or have an adverse effect upon our development plans. Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. In addition, many of the factors that cause, or lead to, clinical trial delays may ultimately lead to the denial of regulatory approval of any of our product candidates.

If we experience delays or difficulties in the enrollment of patients in clinical trials, we may not achieve our clinical development on our anticipated timeline, or at all, and our receipt of necessary regulatory approvals could be delayed or prevented.

We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or comparable non-U.S. regulatory authorities. In addition, some of our competitors currently have ongoing clinical trials, and in the future may have clinical trials, for product candidates that treat the same indications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates. Patient enrollment is affected by other factors including:

•

the size and nature of the patient population;

•

the severity of the disease under investigation;

•

the eligibility criteria for the study in question;

•

the perceived risks and benefits of the product candidate under study in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating;

•

the efforts to facilitate timely enrollment in clinical trials;

•

the patient referral practices of physicians;

•

the proximity of patients to clinical sites;

•

the ability to monitor patients adequately during and after treatment;

•

the proximity and availability of clinical trial sites for prospective patients; and

•

the conduct of clinical trials by competitors for product candidates that treat the same indications as our product candidates.

23We expect our planned Phase 3 clinical trials of VT-1161 for both onychomycosis and RVVC to require a large number of patients. For example, we expect our planned Phase 3 clinical trials of VT-1161 for onychomycosis alone to require a total of approximately 2,000 patients. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether and could delay or prevent our receipt of necessary regulatory approvals. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, delay or halt the development of and approval processes for our product candidates and jeopardize our ability to achieve our clinical development timeline and goals, including

~~Our inability to enroll a sufficient number of patients for our clinical trials would result~~ in significant delays and could require us to abandon one or more clinical trials altogether and could delay or prevent our receipt of necessary regulatory approvals. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, delay or halt the ~~development of and approval processes for our product candidates and jeopardize our ability to achieve our clinical development timeline and goals, including the~~ dates by which we will commence, complete and receive results from clinical trials, commence sales of and generate revenues from our product candidates. Any of the foregoing could cause the value of our company to decline and limit our ability to obtain additional financing.

If serious adverse events or undesirable side effects are identified during the development of our product candidates, we may need to abandon or limit our development of some of our product candidates.

Serious adverse events or undesirable side effects caused by, or other unexpected properties of, our product candidates could cause an institutional review board or regulatory authorities to interrupt, delay or halt clinical trials of one or more of our product candidates and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable non-U.S. regulatory authorities. If our product candidates are associated with serious adverse effects or undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow uses or subpopulations in which the serious adverse effects or undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. For example, it is possible that the long half-life of our product ~~candidate~~candidates VT-1161 and VT-1129 could be a concern in treating women of child-bearing age, as fungal CYP51 inhibitors have the potential to impair prenatal development. Many compounds that initially showed promise in clinical or preclinical testing for treating disease have later been found to cause side effects that prevented or limited further development of the compound.

Our clinical drug development program may not uncover all possible adverse events that patients who use our products may experience. The number of subjects exposed to treatment and the average exposure time in the clinical development program may be inadequate to detect rare adverse events, or chance findings, that may only be detected once our products are administered to more patients and for greater periods of time.

Clinical trials by their nature utilize a sample of the potential patient population. However, with a limited number of subjects and limited duration of exposure, rare and severe side effects of our product candidates may only be uncovered when a significantly larger number of patients are exposed to the product.

Although we have monitored the subjects in our studies for certain safety concerns and we have not seen evidence of significant safety concerns in our clinical trials, patients treated with our product candidates, if approved, may experience adverse reactions. If safety problems occur or are identified after one of our products reaches the market, the FDA or comparable non-U.S. regulatory authorities may require that we amend the labeling of our product, recall our product, or even withdraw approval for our product.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

Risks Related to our Dependence on Third Parties

We rely, and expect to continue to rely, on third parties to conduct our preclinical studies and our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

We do not have an infrastructure for the conduct of preclinical studies and human clinical trials. We currently rely, and expect to continue to rely, on third parties to conduct our preclinical studies. Additionally, we currently rely on a third party clinical research ~~organization~~organizations, or ~~CRO~~CROs, to to conduct our ongoing Phase 2a2b clinical trials of VT-1161 and Phase 1 clinical trial of VT-1129 and expect to rely on CROs to conduct future clinical trials of our product candidates. We have entered into and expect to continue to enter into agreements with various third parties, ~~including~~such as CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct our ~~planned~~preclinical studies and our clinical trials, including our Phase 2b and planned Phase 3 clinical trials of VT-1161. WeAny ~~have~~of ~~entered~~these ~~into~~agreements ~~and~~might ~~expect~~terminate tofor ~~continue to~~a ~~enter~~variety ~~into~~of ~~agreements~~reasons, ~~with~~including ~~various~~a failure to perform by the third parties,. ~~such~~If aswe ~~CROs~~need to enter into alternative arrangements, ~~clinical~~that would delay our product development activities.

data management organizations, medical institutions and clinical investigators, to conduct our preclinical studies and our clinical trials, including our planned Phase 2b clinical trials of VT-1161. Any of these agreements might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into alternative arrangements, that would delay our product development activities.

Our reliance on these third parties for research and development activities will reduce our day-to-day control over these activities, but we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. The FDA enforces these GCPs through periodic inspections of trial sponsors, principal investigators, clinical trial sites and institutional review boards. If we or our third party contractors fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our product candidates, which would delay the marketing approval process. We cannot be certain that, upon inspection, the FDA will determine that any of our clinical trials comply with GCPs.

Furthermore, the third parties conducting preclinical studies and clinical trials on our behalf are not our employees, and except for remedies available to us under our agreements with such contractors, we cannot control whether or not they devote sufficient time, skill and resources to our ongoing development programs. These contractors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting preclinical studies, clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our preclinical and clinical programs. If these third parties do not successfully carry out their contractual duties, meet expected deadlines, conduct preclinical studies as expected or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates. If that occurs, we will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates. In such an event, our financial results and the commercial prospects for any product candidates that we seek to develop could be harmed, our costs could increase and our ability to generate revenues could be delayed, impaired or foreclosed.

We also rely, and expect to continue to rely, on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additional losses and depriving us of potential product revenue.

We contract with third parties for the manufacture of our product candidates for preclinical and clinical testing and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, or that we will fail to meet applicable regulatory requirements, any of which could delay, prevent or impair our development or commercialization efforts.

We do not have any manufacturing facilities or personnel. We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing. We also expect to rely on third party manufacturers or third party collaborators for the manufacture of commercial supply of any product candidates for which we or our collaborators obtain marketing approval. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

We may be unable to establish any agreements with third party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third party manufacturers, reliance on third party manufacturers entails additional risks, including:

•

manufacturing delays if our third party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;

•

the possible mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied;

•

reliance on the third party for regulatory compliance and quality assurance;

•

the possible breach of the manufacturing agreement by the third party;

•

the possible misappropriation of our proprietary information, including our trade secrets and know-how; and

•

the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

Third party manufacturers may not be able to comply with ~~current good manufacturing practices, or~~ cGMP, regulations or similar regulatory requirements outside the United States. Although we do not have control over the day-to-day operations of our third party manufacturers, we are ultimately responsible for ensuring that our product candidates are manufactured in accordance with cGMP. Our failure, or the failure of our third party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

We currently rely on a small number of third party contract manufacturers for all of our required raw materials, drug substance and finished product for our preclinical studies and clinical trials. For example, we contract with one third party manufacturer to supply us with VT-1161 drug substance, a second manufacturer to provide VT-1161 drug product, currently tablets, and a third manufacturer to provide packaging and labeling. We obtain our supplies of VT-1161 from these manufacturers on a purchase order basis and do not have any long-term agreements with these third parties. If any of these manufacturers should become unavailable to us for any reason, we may incur some delay in our clinical trials as we identify or qualify replacements.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. If our current contract manufacturers cannot perform as agreed, we may be required to replace such manufacturers. Although we believe that there are several potential alternative manufacturers who could manufacture our product candidates, we may incur added costs and delays in identifying and qualifying any such replacement.

Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

We may seek to enter into collaborations with third parties for the development and commercialization of our product candidates. If we fail to enter into such collaborations, or such collaborations are not successful, we may not be able to capitalize on the market potential of our product candidates.

We may seek third party collaborators for development and commercialization of our product candidates. Our likely collaborators for any marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies and regional and national biotechnology companies. We are not currently party to any such arrangement. However, if we do enter into any such arrangements with any third parties in the future, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

national biotechnology companies. We are not currently party to any such arrangement that relates to the human antifungal business. However, if we do enter into any such arrangements with any third parties in the future, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

Collaborations involving our product candidates would pose the following risks to us:

•

collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

•

collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities;

•

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

•

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

•

collaborators with marketing and distribution rights to one or more of our products may not commit sufficient resources to the marketing and distribution of such product or products;

•

collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

•

collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;

•

disputes may arise between the collaborators and us regarding ownership of or other rights in the intellectual property generated in the course of the collaborations;

•

disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and

•

collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

~~Collaboration~~26 agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all. If a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated. Our collaboration programs, which are not associated with our human antifungal business, will be retained by Legacy VPI following the Reorganization.

Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all. If a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.

If we are not able to establish collaborations, we may have to alter our development and commercialization plans.

Our drug development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. For some of our product candidates, we may decide to collaborate with biotechnology and pharmaceutical companies for the development and potential commercialization of those product candidates.

We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement ~~for~~to acollaborate ~~collaboration~~ will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors., ~~Those~~including ~~factors may include~~ the design of or results of our clinical trials, and the likelihood of regulatory approval. byWe ~~the~~may ~~FDA~~not orbe ~~comparable~~able ~~non-U.S.~~to ~~regulatory~~negotiate ~~authorities,~~collaborations ~~the~~on ~~potential~~a ~~market~~timely ~~for~~basis, ~~the~~on ~~subject~~acceptable ~~product candidate~~terms, ~~the~~or ~~costs~~at ~~and~~all. ~~complexities of~~If ~~manufacturing~~we ~~and~~are ~~delivering~~unable ~~such product candidate~~ to ~~patients~~do so, ~~the~~we ~~potential~~may ofhave ~~competing~~to ~~products,~~curtail the ~~existence~~development of ~~uncertainty~~a ~~with~~product ~~respect~~candidate, reduce toor ~~our~~delay ~~ownership~~its ofdevelopment ~~technology,~~program ~~which~~or ~~can~~one ~~exist~~or ifmore ~~there~~of isour aother ~~challenge~~development toprograms, ~~such~~delay ~~ownership~~its ~~without regard~~potential tocommercialization, reduce the ~~merits~~scope of ~~the~~any ~~challenge~~sales ~~and~~or ~~industry~~marketing ~~and~~activities, ~~market~~or ~~conditions~~increase ~~generally.~~our ~~The~~expenditures ~~collaborator~~and ~~may~~undertake ~~also~~development ~~consider alternative product candidates~~ or commercialization ~~technologies~~activities ~~for~~at ~~similar~~our ~~indications~~own ~~that~~expense. ~~may~~If bewe ~~available~~elect to ~~collaborate~~increase onour ~~and~~expenditures ~~whether~~to ~~such~~fund ~~a collaboration~~development ~~could~~or becommercialization ~~more~~activities ~~attractive~~on ~~than one with us for~~ our ~~product~~own, ~~candidates.~~we We may ~~also~~need beto ~~restricted~~obtain ~~under~~additional ~~future~~capital, ~~license~~which ~~agreements~~may ~~from~~not ~~entering~~be ~~into~~available ~~agreements~~to us on ~~certain~~acceptable terms or ~~with~~at ~~potential collaborators~~all. ~~Collaborations~~If ~~are~~we ~~complex~~do ~~and time-consuming~~not tohave ~~negotiate~~sufficient ~~and document. In addition~~funds, ~~there~~we ~~have~~may ~~been~~not abe ~~significant~~able ~~number~~to offurther ~~recent~~develop ~~business~~our ~~combinations~~product ~~among~~candidates ~~large~~or ~~pharmaceutical~~bring ~~companies~~them ~~that~~to ~~have~~market ~~resulted~~and ingenerate aproduct ~~reduced number of potential future collaborators~~revenue.

We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization, reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.

Risks Related to our Intellectual Property

We may be unable to obtain and maintain patent protection for our technology and products or the scope of the patent protection obtained may not be sufficiently broad, such that our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary technology and products. If we do not adequately protect our intellectual property, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. We seek to protect our proprietary position by filing patent applications in the United States and ~~abroad~~in other selected jurisdictions related to our novel technologies and product candidates.

The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Many of our patent applications are in the early stages, including provisional patent applications and Patent Corporation Treaty, or PCT, applications. Neither of these types of applications result in issued patents. We will need to decide whether and where to pursue protection for inventions disclosed in these applications by the applicable deadlines and we will not have the opportunity to obtain patent protection for these inventions in jurisdictions where we do not seek protection. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Moreover, in some circumstances, we might not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering any technology that we may license from third parties in the future. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain. No consistent policy regarding the breadth of claims allowed in biotechnology and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions. In addition, the determination of patent rights with respect to pharmaceutical compounds commonly involves complex legal and factual questions, which have in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patent portfolio (including applications) or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our patents may not protect our technology or products, in whole or in part, or effectively prevent others from commercializing competitive technologies and products. Our pending and future patent applications may not result in patents being issued that protect our technology or products, in whole or in part, or that effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

Moreover, we may be subject to a third party preissuance submission of prior art to the U.S. Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us and without payment to us, or result in our inability to manufacture or commercialize products without infringing third party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Even if the patent applications in our patent portfolio issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may also seek approval to market their own products similar to or otherwise competitive with our products. Alternatively, our competitors may seek to market generic versions of any approved products by submitting abbreviated new drug applications, or ANDAs, to the FDA in which they claim that patents owned or licensed by us are invalid, unenforceable or not infringed. In these circumstances, we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find that our patents are invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

Certain of our issued patents and pending patent applications related to VT-1161 also relate to VT-1129. As a result, litigation or other adversarial proceedings based on one of these product candidates may also put at risk our protection for our other product candidate, such as because of a finding of invalidity or unenforceability or due to a narrow interpretation of our claims.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and ~~covering~~our ~~any~~owned ~~technology~~and ~~that~~licensed wepatents may ~~license~~be ~~from~~challenged ~~third~~in ~~parties~~the courts or patent offices in the ~~future~~United States and abroad. ~~Therefore~~Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, ~~these~~invalidated ~~patents~~or ~~and~~held unenforceable, ~~applications~~in ~~may~~whole ~~not~~or bein ~~prosecuted~~part, which could limit our ability to stop others from using or commercializing similar or identical technology and ~~enforced~~products, inor alimit ~~manner~~the ~~consistent~~duration ~~with~~of the ~~best~~patent protection of our technology and products. Given the ~~interests~~amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our ~~business~~owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

~~The~~We ~~patent~~may ~~position of biotechnology and pharmaceutical companies generally is highly uncertain.~~become Noinvolved ~~consistent policy regarding the breadth of claims allowed~~ in ~~biotechnology~~lawsuits ~~and pharmaceutical patents has emerged~~ to date in the United States or in many foreign jurisdictions. In addition, the determination of patent rights with respect to pharmaceutical compounds commonly involves complex legal and factual questions, which have in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or inenforce ~~some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in~~ our ~~patent~~patents ~~portfolio (including applications)~~ or ~~that~~other weintellectual ~~were the first to file for patent protection of such inventions. As a result~~property, ~~the~~which ~~issuance,~~could ~~scope,~~be ~~validity~~expensive, ~~enforceability~~time ~~and~~consuming ~~commercial value of our patent rights are highly uncertain. Our pending~~ and future patent applications may not result in patents being issued that protect our technology or products, in whole or in part, or that effectively prevent others from commercializing competitive technologies and productsunsuccessful. ~~Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.~~

~~Moreover~~Competitors may infringe our patents, trademarks or other intellectual property. To counter infringement or unauthorized use, we may be ~~subject~~required to afile infringement ~~third~~claims, ~~party preissuance~~which ~~submission~~can ofbe ~~prior~~expensive ~~art~~and totime consuming and divert the ~~U.S.~~time ~~Patent~~and attention of our management and ~~Trademark~~scientific ~~Office~~personnel. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or ~~become~~unenforceable, ~~involved~~or inboth. ~~opposition~~In any patent infringement proceeding, ~~derivation~~there is a risk that a court will decide that a patent of ours is invalid or unenforceable, ~~reexamination~~in whole or in part, ~~inter~~and ~~partes~~that ~~review~~we do not have the right to stop the other party from using the invention at issue. There is also a risk that, ~~post-grant~~even ~~review~~if orthe ~~interference~~validity ~~proceedings~~of ~~challenging~~such ~~our~~patents is upheld, the court will construe the patent’s ~~rights~~claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent ~~rights~~claims ofdo ~~others~~not cover the invention. An adverse ~~determination~~outcome in ~~any~~a ~~such~~litigation ~~submission,~~or proceeding involving orour ~~litigation~~patents could ~~reduce~~limit ~~the~~our ~~scope~~ability ~~of,~~to assert our patents against those parties or ~~invalidate~~other competitors, and may curtail or preclude our ~~patent~~ability ~~rights,~~to ~~allow~~exclude third parties tofrom ~~commercialize~~making ~~our~~and ~~technology~~selling similar or competitive products. ~~and~~Any ~~compete~~of ~~directly with~~these usoccurrences could adversely affect our competitive business position, business prospects and ~~without~~financial ~~payment~~condition. toSimilarly, usif we assert trademark infringement claims, ora ~~result~~court inmay ~~our~~determine ~~inability~~that tothe ~~manufacture~~marks orwe ~~commercialize~~have ~~products~~asserted ~~without~~are ~~infringing~~invalid ~~third~~or unenforceable, or that the party ~~patent~~against whom we have asserted trademark infringement has superior rights to the marks in question. In ~~addition~~this case, ifwe ~~the~~could ~~breadth~~ultimately orbe ~~strength~~forced to cease use of ~~protection~~such ~~provided~~trademarks. byIn addition, under our ~~patents~~agreements with Innocrin and ~~patent~~Dow ~~applications~~AgroSciences ~~is threatened~~LLC, itor ~~could~~DAS, ~~dissuade~~DAS ~~companies~~has ~~from~~rights ~~collaborating~~in their field (agricultural uses) with usrespect to ~~license~~certain of our patent rights for CYP51. These rights include certain enforcement rights, ~~develop~~and orthe ~~commercialize~~exercise ~~current~~of orthese ~~future~~enforcement ~~product~~rights ~~candidates~~could place the applicable patents at risk.

Even if ~~the~~we ~~patent~~establish ~~applications in our patent portfolio issue as patents~~infringement, ~~they~~the court may decide not ~~issue~~to ingrant aan ~~form~~injunction ~~that~~against ~~will~~further ~~provide~~infringing activity usand ~~with~~instead ~~any~~award ~~meaningful~~only ~~protection~~monetary damages, ~~prevent~~which ~~competitors~~may ~~from competing with us~~ or ~~otherwise~~may ~~provide~~not usbe ~~with~~an ~~any~~adequate ~~competitive advantage~~remedy. ~~Our~~Furthermore, ~~competitors~~because ~~may~~of bethe ~~able~~substantial toamount ~~circumvent~~of ~~our~~discovery ~~owned~~required orin ~~licensed~~connection ~~patents~~with byintellectual ~~developing~~property ~~similar~~litigation, orthere ~~alternative~~is ~~technologies~~a orrisk ~~products~~that insome aof ~~non-infringing manner. Our~~our ~~competitors~~confidential ~~may~~information ~~also~~could ~~seek~~be ~~approval~~compromised toby ~~market~~disclosure ~~their~~during ~~own~~litigation. ~~products~~Moreover, ~~similar~~there tocan orbe ~~otherwise~~no ~~competitive~~assurance ~~with~~that ~~our~~we ~~products.~~will ~~Alternatively,~~have ~~our~~sufficient ~~competitors~~financial ~~may~~or ~~seek~~other resources to ~~market~~file ~~generic~~and ~~versions~~pursue ofsuch ~~any~~infringement ~~approved~~claims, ~~products~~which bytypically ~~submitting~~last ~~abbreviated~~for ~~new drug~~years ~~applications,~~before orthey ~~ANDAs~~are toconcluded. ~~the~~Even ~~FDA~~if inwe ~~which~~ultimately ~~they~~prevail ~~claim~~in ~~that~~such ~~patents~~claims, ~~owned~~the ormonetary ~~licensed~~cost byof ussuch ~~are~~litigation ~~invalid,~~and ~~unenforceable~~the ordiversion ~~not~~of ~~infringed.~~the Inattention ~~these~~of ~~circumstances,~~our wemanagement ~~may~~and ~~need~~scientific topersonnel ~~defend~~could oroutweigh ~~assert~~any ~~our~~benefit ~~patents,~~we orreceive ~~both,~~as ~~including~~a byresult ~~filing~~of ~~lawsuits~~the ~~alleging patent infringement~~proceedings. InPublic ~~any~~announcements of ~~these~~the ~~types~~results of ~~proceedings~~hearings, amotions ~~court~~ or other ~~agency~~interim ~~with~~proceedings ~~jurisdiction~~or developments may ~~find~~also ~~that~~occur. ~~our~~If ~~patents~~securities ~~are~~analysts ~~invalid~~ or ~~unenforceable,~~investors orperceive ~~that~~these ~~our~~results ~~competitors~~to ~~are~~be ~~competing in a non-infringing manner. Thus~~negative, ~~even~~it ifcould we have ~~valid~~a ~~and~~material ~~enforceable~~adverse ~~patents,~~effect ~~these~~on the ~~patents~~price ~~still~~of ~~may not provide protection against competing products or processes sufficient to achieve~~ our ~~business~~common ~~objectives~~stock.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and

abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our patents, trademarks, copyrights or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both. In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention. An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy. 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 litigation. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability, and the ability of our collaborators, to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. We cannot assure you that our business, the making, using or selling of our product candidates, if approved, or the practice of our technology does not or will not infringe the patents or other intellectual property rights of third parties. There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our ~~products~~ product candidates, including interference proceedings before the UUSPTO.S. Patent and Trademark Office. Third parties may assert infringement claims against us based on existing or future intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that

Third parties may assert infringement claims against us based on existing or future intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. The pharmaceutical and biotechnology industries have produced a significant number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products, including methods of use. It is also possible that we have failed to identify relevant third-party patents or applications. For example, applications filed before November 29, 2000 and certain applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Moreover, it is difficult for industry participants, including us, to identify all third-party patent rights that may be relevant to our product candidates and technologies because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. We may fail to identify relevant patents or patent applications or may identify pending patent applications of potential interest but incorrectly predict the likelihood that such patent applications may issue with claims of relevance to our technology. In addition, we may be unaware of one or more issued patents that would be infringed by the manufacture, sale, importation or use of a current or future product candidate, or we may incorrectly conclude that a third-party patent is invalid, unenforceable or not infringed by our activities.

The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. We may also assert that a patent claim for a corresponding compound or other invention does not cover a given product. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on us. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.

If we are found, or believe there is a risk we may be found, to infringe a third party’s intellectual property rights, we could be required or may choose to obtain a license from such third party to continue developing and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. If the owner of the intellectual property at issue is unwilling or unable to offer a license on commercially reasonable terms or otherwise, or if we contest an allegation of infringement and receive an adverse judgment, we could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to

~~cannot~~cease besome ~~adequately quantified in advance. The pharmaceutical and biotechnology industries have produced a significant number~~ of ~~patents,~~our ~~and~~business ~~it may not always be clear to industry participants~~operations, ~~including~~ ~~us,~~ which ~~patents~~could ~~cover~~materially ~~various~~harm ~~types~~our ~~of products or methods of use~~business. ~~The~~Claims ~~coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate~~ that ~~our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and~~ we ~~may~~have ~~not~~misappropriated ~~be able to do this. Proving invalidity is difficult. For example, in~~ the ~~United~~confidential ~~States~~information, ~~proving~~trade ~~invalidity~~secrets ~~requires~~or aother ~~showing~~intellectual ofproperty ~~clear and convincing evidence to overcome the presumption~~ of ~~validity enjoyed by issued patents. We may also assert that a patent claim for a corresponding compound does not~~ ~~cover~~third ~~our~~parties ~~product. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel~~ could ~~be diverted in pursuing these proceedings, which could~~ have a ~~material adverse~~similar ~~effect~~negative impact on ~~us.~~our ~~In addition, we may not have sufficient resources to bring these actions to a successful conclusion~~business.

~~If we~~We ~~are~~may ~~found~~not seek to ~~infringe~~protect aour ~~third party’s~~ intellectual property rights, wein ~~could~~all bejurisdictions throughout ~~required~~the toworld ~~obtain a license from such third party to continue developing~~ and ~~marketing our products and technology. However,~~ we may not be able to ~~obtain~~adequately ~~any required~~enforce ~~license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving~~ our ~~competitors access to the same technologies licensed to us. If the owner of the~~ intellectual property atrights ~~issue~~even isin unwilling or unable to offer a license on commercially reasonable terms or otherwise, or if we contest an allegation of infringement and receive an adverse judgment, we could be forced, including by court order, to cease commercializing the ~~infringing~~jurisdictions ~~technology~~where ~~or product. In addition,~~ we ~~could~~seek ~~be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent~~protection. ~~A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business.~~

IfFiling, weprosecuting ~~are~~and ~~unable~~defending patents on product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to ~~obtain~~the ~~licenses~~same ~~from~~extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties onfrom ~~commercially~~practicing ~~reasonable~~our ~~terms~~inventions in all countries outside the United States, or ~~fail~~from toselling ~~comply~~or ~~with~~importing products made using our ~~obligations~~inventions ~~under~~in and into the United States or other jurisdictions. The statutory deadlines for pursuing patent protection in individual foreign jurisdictions are based on the priority date of each of our patent application families. For some of our patent application families, the relevant statutory deadlines have not yet expired. For each of such ~~agreements~~patent families, ~~our~~we ~~business~~will ~~could~~need beto ~~harmed~~decide whether and where to pursue protection outside the United States.

ItCompetitors may ~~be necessary for us to~~ use ~~the patented or proprietary technology of third parties to commercialize~~ our ~~products,~~ technologies in ~~which~~jurisdictions ~~case~~where we ~~would~~do benot ~~required~~pursue toand obtain apatent ~~license~~protection ~~from~~to ~~these~~develop ~~third~~their ~~parties.~~own Ifproducts weand ~~are~~further, ~~unable~~may export tootherwise ~~license~~infringing ~~such~~products ~~technology,~~to orterritories ifwhere we ~~are~~have ~~forced~~patent toprotection, ~~license~~but ~~such~~enforcement ~~technology,~~is onnot ~~unfavorable~~as ~~terms,~~strong ~~our~~as ~~business~~that ~~could~~in bethe ~~materially~~United ~~harmed~~States. ~~If we~~These ~~fail~~products tomay ~~comply~~compete with our ~~obligations~~products ~~under~~and ~~license agreements,~~ our ~~counterparties~~patents ~~may~~or ~~have~~other ~~the~~intellectual ~~right~~property torights may ~~terminate these agreements, in which event we might~~ not be ~~able~~effective ~~to develop, manufacture~~ or ~~market,~~sufficient ~~or may be forced~~ to ~~cease~~prevent ~~developing, manufacturing~~them orfrom ~~marketing, any product that is covered by these agreements or may face other penalties under such agreements~~competing. ~~Such~~Even anif ~~occurrence~~we ~~could~~pursue ~~materially~~and ~~adversely~~obtain ~~affect~~issued ~~the~~patents ~~value~~in ofparticular ~~the~~jurisdictions, ~~product~~our ~~candidate~~patent ~~being~~claims ~~developed under any such agreement. Termination of these agreements~~ or ~~reduction~~other orintellectual ~~elimination~~property ~~of our~~ rights ~~under these agreements~~ may ~~result~~not inbe ~~our~~effective ~~having to negotiate new~~ or ~~reinstated~~sufficient ~~agreements with less favorable terms, cause us~~ to ~~lose~~prevent ~~our rights under these~~third ~~agreements,~~parties ~~including~~from ~~our~~so ~~rights to important intellectual property or technology or impede, delay or prohibit the further development of commercialization of one or more product candidates that rely on such agreements~~competing.

WeThe ~~may~~laws beof ~~subject~~some foreign countries do not protect intellectual property rights to ~~claims~~the bysame ~~third~~extent ~~parties~~as ~~asserting~~the ~~that~~laws ~~our~~of ~~employees~~the United orStates. weMany companies have ~~misappropriated~~encountered ~~their~~significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the orenforcement ~~claiming~~of ~~ownership~~patents and other intellectual property protection, especially those relating to biotechnology. For example, an April 2014 report from the Office of ~~what~~the weUnited ~~regard~~States asTrade Representative identified a number of countries, including India and China, where challenges to the procurement and enforcement of patent rights have been reported. Several countries, including India and China, have been listed in the report every year since 1989. This could make it difficult for us to stop the infringement of our ~~own~~patents, if obtained, or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

~~Although~~Furthermore, weproceedings ~~try~~ to ~~ensure~~enforce ~~that~~our patent rights in foreign jurisdictions could result in substantial costs and divert our ~~employees~~efforts doand ~~not~~attention ~~use~~from ~~the~~other ~~proprietary~~aspects ~~information~~of orour ~~know-how~~business, ofcould ~~others~~put inour ~~their~~patents ~~work~~at ~~for~~risk usof being invalidated or interpreted narrowly, wecould ~~may~~put beour ~~subject~~patent applications at risk of not issuing and could provoke third parties to assert claims ~~that~~against ~~our~~us. ~~employees~~We may ornot weprevail ~~have~~in ~~used~~any orlawsuits ~~disclosed~~that ~~intellectual~~we ~~property,~~initiate ~~including~~and ~~trade~~the ~~secrets,~~damages ~~know-how~~ or other ~~proprietary~~remedies ~~information~~awarded, of if any, ~~employee’s~~may ~~former~~not ~~employer,~~be ~~which~~commercially meaningful. We may ~~include~~choose ~~biotechnology~~not orto ~~pharmaceutical~~initiate ~~companies~~a ~~that~~lawsuit ~~are~~because ~~our~~of ~~competitors~~these risks. ~~Litigation~~Accordingly, our efforts to enforce our intellectual property rights around the world may be ~~necessary~~inadequate to ~~defend~~obtain ~~against~~a ~~these~~significant ~~claims~~commercial advantage from the intellectual property that we develop or license.

~~may~~Obtaining beand ~~unsuccessful~~maintaining inour ~~executing~~patent ~~such~~protection andepends ~~agreement~~on compliance with ~~each~~various ~~party~~procedural, ~~who~~document insubmission, fee ~~fact~~payment ~~develops intellectual property that we regard as our own. Our~~ and ~~their~~other ~~assignment~~requirements ~~agreements~~imposed ~~may~~by ~~not~~governmental ~~be self-executing~~patent ~~or may be breached~~agencies, and weour ~~may~~patent beprotection ~~forced~~could tobe ~~bring~~reduced ~~claims against third parties,~~ or ~~defend~~eliminated ~~claims~~for ~~they~~non-compliance ~~may~~with ~~bring~~these ~~against us, to determine the ownership of what we regard as our intellectual property~~requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent and, in some jurisdictions, during the pendency of a patent application. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

Changes to the patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our 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 involve both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act, or Leahy-Smith Act, signed into law on September 16, 2011, could increase those uncertainties and costs. The Leahy-Smith Act included a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents. In addition, the Leahy-Smith Act has transformed the U.S. patent system into a “first to file” system. The first-to-file provisions, however, only became effective on March 16, 2013. Accordingly, it is not yet clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our business, results of operations and financial condition. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

If we are unable to obtain licenses from third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmed.

It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain a license from these third parties. If we are unable to license such technology, or if we are forced to license such technology, on unfavorable terms, our business could be materially harmed. If we are unable to obtain a necessary license, we may be unable to develop or commercialize the affected product candidates, which could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

If we fail to comply with our obligations under license agreements, our counterparties may have the right to terminate these agreements, in which event we might not be able to develop, manufacture or market, or may be forced to cease developing, manufacturing or marketing, any product that is covered by these agreements or may face other penalties under such agreements. Such an occurrence could materially adversely affect the value of the product candidate being developed under any such agreement. Termination of these agreements or reduction or elimination of our rights under these agreements may result in our having to negotiate new or reinstated agreements with less favorable terms, cause us to lose our rights under these agreements, including our rights to important intellectual property or technology or impede, delay or prohibit the further development or commercialization of one or more product candidates that rely on such agreements.

We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Most of our employees have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. We also engage advisors and consultants who are concurrently employed at or who perform services for other entities. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that our employees or we have used or disclosed intellectual property, including trade secrets, know-how or other proprietary information, of any employee’s former employer, which may include biotechnology or pharmaceutical companies that are our competitors. Litigation may be necessary to defend against these claims.

In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, or may conflict with a pre-existing obligation of assignments to another entity, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to management. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of intellectual property litigation or other proceedings could compromise our ability to compete in the marketplace and obtain future financing and adversely impact the performance of our common stock.

If33 ~~we are unable to protect the confidentiality of our trade secrets, including our Metallophile Technology, our business and competitive position could be harmed.~~

In addition to seeking patents for some of our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. In particular, we have maintained our Metallophile Technology as a trade secret. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, or if we are unable to establish the enforceability of any of our trade secrets, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position could be harmed.

If we are unable to protect the confidentiality of our trade secrets, including our MIDAS technology, our business and competitive position could be harmed.

In addition to seeking patents for some of our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. In particular, we have maintained our MIDAS technology as a trade secret. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality agreements and invention or patent assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, or if we are unable to establish the enforceability of any of our trade secrets, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position could be harmed.

Some of our intellectual property may have been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for U.S. industry. Compliance with such regulations may limit our exclusive rights, subject us to expenditure of resources with respect to reporting requirements and limit our ability to contract with non-U.S. manufacturers.

Some of our intellectual property relating to chemical manufacturing may have been or may in the future be generated through the use of U.S. government funding or under a cooperative agreement with the U.S. government and may therefore be subject to certain federal regulations. For example, we co-own six patent applications with the United States as Represented by the Department of Health and Human Services that include subject inventions generated pursuant to a Cooperative Research and Development Agreement, or CRADA, that is now terminated. As a result, the U.S. government may have certain rights to intellectual property relating to, for example, chemical manufacturing of our current or future product candidates pursuant to the Bayh-Dole Act of 1980, or Bayh-Dole Act. These U.S. government rights in certain inventions developed under a government-funded program or under a cooperative agreement with the U.S. government include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S. government has the right to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that:

•

adequate steps have not been taken to commercialize the invention;

•

government action is necessary to meet public health or safety needs; or

•

government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).

The U.S. government also has the right to take title to inventions developed under a government-funded program if we fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.

In addition, the U.S. government may acquire title to inventions developed under a government-funded program in any country in which a patent application is not filed within specified time limits. Intellectual property generated under a government funded program is also subject to certain

reporting requirements, compliance with which may require us, or the applicable licensor, to expend substantial resources. In addition, the U.S. government requires that any products embodying the subject invention or produced through the use of the subject invention be manufactured substantially in the United States. This preference for U.S. manufacturers may limit our ability to contract with non-U.S. product manufacturers for products, if any, covered by such intellectual property.

We previously received, currently receive and may in the future apply for additional U.S. government funding. Rights in certain intellectual property made using government funding may be subject to the applicable provisions of the Bayh-Dole Act.

If we do not obtain additional protection under the Hatch-Waxman Amendments and similar foreign legislation by extending the patent terms for our product candidates, our business may be materially harmed.

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of the U.S. patents we own or license may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, we may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Assuming other requirements are met, only a single patent directed to an approved product or its method of use can be extended and a patent can only be extended once and based on one approved product. Thus, for example, in the case of our patents covering both VT-1161 and VT-1129, we will only be able to extend a particular patent once based on either VT-1161 or VT-1129, if approved.

Moreover, even if eligible for extension, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent term extension or restoration for a product candidate, if approved, or the term of any such extension is less than we request, our competitors may obtain approval of competing products sooner, and our ability to generate revenues could be materially adversely affected.

Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights. The following examples are illustrative:

•

others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology but that is not covered by the claims of our patents;

•

we might not have been the first to make the inventions covered by a patent or pending patent application that we own;

•

we might not have been the first to file patent applications covering an invention;

•

others may independently develop similar or alternative technologies without infringing our intellectual property rights;

•

pending patent applications that we own or license may not lead to issued patents;

•

patents that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;

•

third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection;

•

third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; and

•

the patents of others may have an adverse effect on our business.

Should any of these events occur, they could significantly harm our business and results of operations.

Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters

Even if we initiate and successfully complete the necessary clinical trials, the marketing approval process is expensive, time consuming and uncertain. If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.

Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA, other regulatory agencies in the United States and by comparable non-U.S. regulatory authorities. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. Our product candidates are in the early stages of development and are subject to the risks of failure inherent in drug development. We have not received approval to market any of our product candidates from regulatory authorities in any jurisdiction. We have only limited experience in conducting and managing the clinical trials, and in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third party CROs to assist us in this process. Securing marketing approval requires the submission of extensive nonclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional nonclinical, clinical or other studies. In addition, varying interpretations of the data obtained from nonclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable. If we experience delays in obtaining ~~approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired.~~

approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired.

Failure to obtain marketing approval in foreign jurisdictions would prevent any product candidates we may develop from being marketed in such jurisdictions, and any approval we are granted for our product candidates in the United States would not assure approval of product candidates in foreign jurisdictions.

In order to market and sell any product candidates we develop in other jurisdictions, we must obtain separate marketing approvals for those jurisdictions and comply with their numerous and varying regulatory requirements. We may not obtain foreign regulatory approvals on a timely basis, or at all. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our product candidates in certain countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one non-U.S. regulatory authority does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others countries. Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. For example, our planned Phase 3 clinical trials of VT-1161 may be insufficient to receive regulatory approval in Europe for VT-1161 to treat onychomycosis or RVVC or both as European regulators may require use of an active comparator instead of placebo. Our failure to obtain approval of our product candidates by foreign regulatory authorities may negatively impact the commercial prospects of our product candidates and our business prospects could decline. Also, if regulatory approval for any of our product candidates is granted, it may be later withdrawn. If we fail to comply with the regulatory requirements in international jurisdictions or to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential for our product candidates will be harmed and our business may be adversely affected. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.

We may not be able to obtain or maintain orphan drug designation or exclusivity for our product candidates.

We ~~are~~have ~~seeking~~obtained orphan drug ~~designation~~status ~~for VT-1129~~ in the United States for VT-1129 for the treatment of cryptococcal meningitis and for VT-1598 for the treatment of coccidioidomycosis, also known as Valley Fever. We may seek orphan drug designation for other product candidates in the future. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States.

33Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for the same drug for the same indication during that time period. The applicable period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be

~~Generally, if a product with an orphan drug designation subsequently receives the first~~ marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for the same indication for that drug during that time period. The applicable period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

We cannot assure you that ~~the~~any future application for orphan drug designation ~~of VT-1129, or any future application~~ with respect to any other product candidate, will be granted. If we are unable to obtain orphan drug designation with respect to other product candidates in the United States, we will not be eligible to obtain the period of market exclusivity that could result from orphan drug designation or be afforded the financial incentives associated with orphan drug designation. Even ifwhen we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve ~~the~~a ~~same~~later drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

Any fast track designation or grant of priority review status by the FDA may not actually lead to a faster development or regulatory review or approval process, nor will it assure FDA approval of our product candidates. Additionally, our product candidates may treat indications that do not qualify for priority review vouchers.

We may seek fast track designation for some of our product candidates or priority review of applications for approval of our product candidates. If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for FDA fast track designation. If a product candidate offers major advances in treatment, the FDA may designate it eligible for priority review. The FDA has broad discretion whether or not to grant these designations, so even if we believe a particular product candidate is eligible for these designations, we cannot assure you that the FDA would decide to grant them. Even if we do receive fast track designation or priority review, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program.

Additionally, the FDA is authorized to grant a priority review voucher to sponsors of certain approved tropical disease applications, which ~~priority~~ priority review vouchers may be used to obtain priority review for subsequent applications. Although Cryptococcal infections share many of the characteristics of tropical diseases that may qualify for a priority review voucher, cryptococcal ~~meningitis~~ meningitis is not currently formally designated as a neglected tropical disease. If the FDA does not include cryptococcal meningitis in a future revision of the list of qualifying tropical diseases, our development of VT-1129 for the treatment of ~~cryptococcal~~ cryptococcal meningitis would not be eligible to qualify for an award of a priority review voucher.

Any breakthrough therapy designation granted by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.

We may seek a breakthrough therapy designation for some of our product candidates. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs and biologics that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the FDA may also be eligible for accelerated approval if the relevant criteria are met.

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drugs and biologics that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the FDA may also be eligible for accelerated approval if the relevant criteria are met.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that the products no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Designation of our product candidates as qualified infectious disease products is not assured and, in any event, even if granted, may not actually lead to a faster development or regulatory review, and would not assure FDA approval of our product candidates.

WeVT-1129 has been designated a qualified infectious disease products, or QIDP, and we may be eligible for designation of ~~certain~~additional ~~of our~~ product candidates as ~~qualified infectious disease products, or~~ QIDPs. A QIDP is “an antibacterial or antifungal drug intended to treat serious or life- threatening infections, including those caused by an antibacterial or antifungal resistant pathogen, including novel or emerging infectious pathogens or certain “qualifying pathogens.” A product designated as a QIDP for a particular indication will also be granted priority review by the FDA and can qualify for “fast track” status. Upon the approval of an NDA for a drug product designated by the FDA as a QIDP, the product is granted a period of five years of regulatory exclusivity that is in addition to any other period of regulatory exclusivity for which the product is eligible. The FDA has broad discretion whether or not to grant these designations, so even if we believe a particular product candidate is eligible for such designation or status, the FDA could decide not to grant it. Moreover, even if we do receive such a designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures and there is no assurance that our product candidate, even if determined to be a QIDP, will be approved by the FDA.

Our failure to obtain marketing approval in foreign jurisdictions would prevent our product candidates from being marketed abroad, and any approval we are granted for our product candidates in the United States would not assure approval of product candidates in foreign jurisdictions.

In order to market and sell our products in the European Union and many other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from non-U.S. regulatory authorities on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one non-U.S. regulatory authority does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others countries. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.

Even if we obtain marketing approval for our product candidates, the terms of approvals and ongoing regulation of and post-marketing restrictions for our products may limit how we manufacture and market our products and compliance with such requirements may involve substantial resources, which could materially impair our ability to generate revenue.

Even if marketing approval of a product candidate is granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation, including the possible requirement to implement a risk evaluation and mitigation strategy or to conduct costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product. We must also comply with requirements concerning advertising and promotion for any of our product candidates for which we obtain marketing approval. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, we will not be able to promote any products we develop for indications or uses for which they are not approved. In addition, manufacturers of approved products and those manufacturers’ facilities are required to ensure that quality control and manufacturing procedures conform to cGMPs, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We and our contract manufacturers could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMPs.

Accordingly, assuming we receive marketing approval for one or more of our product candidates, we and our contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control. If we are not able to comply with post-approval regulatory requirements, we could have the marketing approvals for our products withdrawn by regulatory authorities and our ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Thus, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

~~Any~~39 product candidate for which we obtain marketing approval will be subject to strict enforcement of post-marketing requirements and we could be subject to substantial penalties, including withdrawal of our product from the market, if we fail to comply with applicable regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other regulatory authorities. These requirements include restrictions governing promotion of an approved product, submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, and requirements regarding the distribution of samples to physicians and recordkeeping.

The FDA and other federal and state agencies, including the Department of Justice, closely regulate compliance with all requirements governing prescription drug products, including requirements pertaining to marketing and promotion of drugs in accordance with the provisions of the approved labeling and manufacturing of products in accordance with cGMP requirements. Violations of such requirements may lead to investigations alleging violations of the FDCA and other statutes, including the False Claims Act and other federal and state health care fraud and abuse laws as well as state consumer protection laws. Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, may yield various results, including:

• litigation involving patients taking our products;

future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Thus, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

The FDA and other federal and state agencies, including the Department of Justice, closely regulate compliance with all requirements governing prescription drug products, including requirements pertaining to marketing and promotion of drugs in accordance with the provisions of the approved labeling and manufacturing of products in accordance with cGMP requirements. Violations of such requirements may lead to investigations alleging violations of the Federal Food, Drug and Cosmetic Act, or FDCA and other statutes, including the False Claims Act and other federal and state health care fraud and abuse laws as well as state consumer protection laws. Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, may yield various results, including:

•

litigation involving patients taking our products;

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restrictions on such products, manufacturers or manufacturing processes;

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restrictions on the labeling or marketing of a product;

•

restrictions on product distribution or use;

•

requirements to conduct post-marketing studies or clinical trials;

•

warning or untitled letters;

•

withdrawal of the products from the market;

•

refusal to approve pending applications or supplements to approved applications that we submit;

•

recall of products;

•

fines, restitution or disgorgement of profits or revenues;

•

suspension or withdrawal of marketing approvals;

•

damage to relationships with any potential collaborators;

•

unfavorable press coverage and damage to our reputation;

•

refusal to permit the import or export of our products;

•

product seizure; or

•

injunctions or the imposition of civil or criminal penalties.

Non-compliance by us or any future collaborator with regulatory requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with regulatory requirements regarding the protection of personal information can also lead to significant penalties and sanctions.

Our relationships with customers and third party payors will be subject to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

Healthcare providers, physicians and third party payors will play a primary role in the recommendation and prescription of any product candidates for ~~which we obtain marketing approval. Our future arrangements with third party payors and customers may expose us to broadly applicable fraud~~ ~~and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through~~ which we ~~market, sell and distribute any products for which we~~ obtain marketing approval. ~~Restrictions under applicable federal and state healthcare laws and regulations, include the following:~~

Our future arrangements with third party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any products for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

•

the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

•

the federal False Claims Act, which imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

•

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

•

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and its implementing regulations, which imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

• the federal ~~law~~false ~~requires~~statements ~~applicable~~statute ~~manufacturers~~prohibits ofknowingly ~~covered~~and ~~drugs~~willfully tofalsifying, ~~report~~concealing ~~payments~~or ~~and~~covering ~~other~~up ~~transfers~~a ofmaterial ~~value~~fact toor ~~physicians~~making ~~and~~any ~~teaching~~materially ~~hospitals,~~false statement in connection with the ~~first~~delivery ~~reports~~of ~~due~~or inpayment ~~2014;~~for ~~and~~healthcare benefits, items or services;

•

federal law requires applicable manufacturers of covered drugs to report payments and other transfers of value to physicians and teaching hospitals, with the first reports due in 2016;

•

the federal transparency requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the PPACA, requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments; and

•

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers.

Some state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties including, without limitation, damages, fines, imprisonment, exclusion of products from participation in government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government funded healthcare programs.

~~Laws~~41 and regulations governing any international operations we may have in the future may preclude us from developing, manufacturing and selling certain product candidates and products outside of the United States and require us to develop and implement costly compliance programs.

regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties including, without limitation, damages, fines, imprisonment, exclusion of products from participation in government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government funded healthcare programs.

Laws and regulations governing any international operations we may have in the future may preclude us from developing, manufacturing and selling certain product candidates and products outside of the United States and require us to develop and implement costly compliance programs.

If we expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate, as well as with the Foreign Corrupt Practices Act, or FCPA. Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the medical device industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions. If we expand our presence outside of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing or selling certain product candidates and products outside of the United States, which could limit our growth potential and increase our development costs. We are currently designing an international Phase 2 clinical trial of VT-1129 in patients with cryptococcal meningitis. Although this trial will include sites in the United States, we expect the majority of the patients who are enrolled in the trial will likely be from international sites, including sites in Southeast Asia and Africa, given the prevalence of cryptococcal meningitis in these regions. The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting. The Securities and Exchange Commission, or the SEC, also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions.

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

Currently, we do not operate any pharmaceutical research and development or production facilities, such as laboratory, development or manufacturing facilities. However, if we decided to operate our own pharmaceutical research and development and production facilities, we would be subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Such operations may involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and wastes, we would not be able to eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use or disposal of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

Although we would increase our level of workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials if we operated any research and development or production facilities, this insurance may not ~~provide adequate coverage against potential liabilities. We do not expect to maintain insurance for environmental liability or toxic~~ ~~tort claims that may be asserted against us in connection with our possible future storage or disposal of biological, hazardous or radioactive materials.~~

provide adequate coverage against potential liabilities. We do not expect to maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our possible future storage or disposal of biological, hazardous or radioactive materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Risks Related to the Commercialization of our Product Candidates

Even if one of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success and the market opportunity for the product candidate may be smaller than we estimate.

We have never commercialized a product. If any of our product candidates receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third party payors and others in the medical community. Physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the market. Further, patients often acclimate to the therapy that they are currently taking and do not want to switch unless their physicians recommend switching products or they are required to switch therapies due to lack of reimbursement for existing therapies. Efforts to educate the medical community and third party payors on the benefits of our product candidates may require significant resources and may not be successful. Additionally, many of the existing products available to treat the conditions for which we are developing our product candidates are available on a generic basis and are offered and sold at low prices. Many of these generic products have been marketed by third parties for many years and are well accepted by physicians, patients and payors.

If our product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

•

the efficacy, safety and potential advantages compared to alternative treatments;

•

the clinical indications for which the product is approved;

•

limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling;

•

our ability to offer our products for sale at competitive prices;

•

the convenience and ease of administration compared to alternative treatments;

•

the willingness of the target patient population to try new therapies;

•

the willingness of physicians to prescribe these therapies;

•

the strength of marketing and distribution support;

•

the approval of other new products for the same indications;

•

changes in the standard of care for the targeted indications for the product;

•

the timing of market introduction of our approved products as well as competitive products;

•

the availability of third party coverage and adequate reimbursement;

•

adverse publicity about the product or favorable publicity about competitive products;

•

potential product liability claims;

•

the prevalence and severity of any side effects; and

•

any restrictions on the use of our products together with other medications.

The potential market opportunities for our product candidates are difficult to estimate precisely. Our estimates of the potential market opportunities are predicated on many assumptions including industry knowledge and publications, third party research reports and other surveys. While we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain and the reasonableness of these assumptions has not been assessed by an independent source. If ~~any of~~ the ~~assumptions proves to be inaccurate, the~~ actual ~~markets~~market for ~~our~~ ~~product candidates could be smaller than~~ our ~~estimates of the potential market opportunities. If the actual market for our~~ products is smaller than we expect, our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.

If any of our product candidates receives marketing approval and we, or others, later discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified or if strains of fungi become resistant to our products, our ability to market the drug could be compromised.

Clinical trials of our product candidates are conducted in carefully defined subsets of patients who have agreed to enter into clinical trials. Consequently, it is possible that our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects. If, following approval of a product candidate, we, or others, discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur:

•

regulatory authorities may withdraw their approval of the drug or seize the drug;

•

we, or our collaborators, if any, may be required to recall the drug or change the way the drug is administered;

•

additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular drug;

•

we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

•

regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

•

we, or our collaborators, if any, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients or institute a risk evaluation and mitigation strategy, or REMS;

•

we, or our collaborators, could be sued and held liable for harm caused to patients;

•

the drug may become less competitive; and

•

our reputation may suffer.

Any of these events could have a material and adverse effect on our operations and business and could adversely impact our stock price.

One or more strains of fungi may develop resistance to our product candidates. Since we expect lack of resistance to be an important factor in the commercialization of our product candidates, the development of such resistance could have a material adverse impact on the acceptability and sales of any affected product that we commercialize.

If we are unable to establish and maintain adequate sales, marketing and distribution capabilities, or enter into sales, marketing and distribution arrangements with third parties, we may not be successful in commercializing our product candidates if and when they are approved.

We do not have a sales, marketing or distribution infrastructure and have nolimited experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any product for which we obtain marketing approval, we will need to either establish a sales, marketing and distribution organization or contract with third parties for the performance of these functions.

In the future, we plan to build a focused sales and marketing infrastructure to market or co-promote some of our product candidates in the United States, if and when they are approved. There are risks involved with establishing our own sales and marketing capabilities. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. We expect we will commence the development of these capabilities prior to receiving approval of any of our product candidates. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

Factors that may inhibit our efforts to commercialize our products on our own include:

•

our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

•

the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future products;

•

the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

•

unforeseen costs and expenses associated with creating an independent sales and marketing organization.

Because we do not currently plan to seek regulatory approval for any of our product candidates outside of the United States until after we apply for marketing approval for the applicable product candidate in the United States, we cannot be certain when, if ever, we will recognize revenue from commercialization of our product candidates in any international markets. If we decide to commercialize any approved products outside of the United States, we expect to utilize a variety of types of collaboration, distribution and other marketing arrangements with one or more third parties to commercialize any product of ours that receives marketing approval. These may include independent distributors or pharmaceuticals companies.

If we are unable, or determine not, to establish our own sales, marketing and distribution capabilities and enter into arrangements with third parties to perform these services, our product revenues and our profitability, if any, are likely to be lower than if we were to market, sell and distribute any products that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.

We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully, than we do.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies and private and public research institutions. We face competition with respect to our current product candidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future. Our potential competitors include major pharmaceutical companies, including ~~Merck & Co.~~Pfizer, ~~Inc.~~Gilead, ~~Astellas Pharma~~Johnson & ~~US,~~Johnson ~~Pfizer, Inc.~~ and Novartis AG and specialty pharmaceutical and biotechnology companies, such as Valeant Pharmaceuticals International, ~~and~~ Anacor Pharmaceuticals, ~~Inc~~and Akorn. These competitors market existing ~~approved drugs for the diseases and conditions that we are seeking to address with our product candidates and are developing new therapies for those diseases and conditions.~~

~~Our~~45 commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other non-U.S. regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

In addition, our ability to compete may be affected in many cases by insurers or other third party payors seeking to encourage the use of generic products. One way in which insurers and other payors may encourage the use of generic drugs is by refusing to include more expensive branded drugs on their formularies or the lists of approved drugs for which they will provide reimbursement. Generic products are currently on the market for many of the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming years. If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic products. Many generic products against which we may compete have been marketed by third parties for many years and are well accepted by physicians, patients and payors. For example, the principal products currently used for the treatment of RVVC and onychomycosis are generics. Price competition from generic products may limit our market opportunity and materially adversely affect our business and results of operations. Other currently branded products are likely to become generic by the time any of our product candidates reach the market.

~~companies.~~approved Indrugs ~~addition~~for tothe ~~potential~~diseases ~~commercial~~and ~~competition,~~conditions ~~all~~that ofwe ~~these~~are ~~third~~seeking ~~parties~~to ~~compete~~address with usour inproduct ~~recruiting~~candidates and ~~retaining~~are ~~qualified~~developing ~~scientific~~new ~~and~~therapies ~~management personnel, establishing clinical trial sites and patient registration~~ for ~~clinical~~those ~~trials,~~diseases ~~as well as in acquiring technologies~~ and ~~technology licenses complementary to our programs or advantageous to our business~~conditions.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other non-U.S. regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

In addition, our ability to compete may be affected in many cases by insurers or other third party payors seeking to encourage the use of generic products. One way in which insurers and other payors may encourage the use of generic drugs is by refusing to include more expensive branded drugs on their formularies or the lists of approved drugs for which they will provide reimbursement. Generic products are currently on the market for many of the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming years. If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic products. Many generic products against which we may compete have been marketed by third parties for many years and are well accepted by physicians, patients and payors. For example, the principal products currently used for the treatment of onychomycosis and RVVC are generics. Price competition from generic products may limit our market opportunity and materially adversely affect our business and results of operations. Other currently branded products are likely to become generic by the time any of our product candidates reach the market.

Many of our competitors and potential competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. In addition to potential commercial competition, all of these third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies and technology licenses complementary to our programs or advantageous to our business.

If the FDA or comparable non-U.S. regulatory authorities approve generic versions of any of our products that receive marketing approval, or such authorities do not grant our products appropriate periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected.

Once an NDA is approved, the product covered thereby becomes a “reference listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the Orange Book. Manufacturers may seek approval of generic versions of reference listed drugs through submission of ANDAs, in the United States. In support of an ANDA, a generic manufacturer need not conduct clinical trials. Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference listed drug and that the generic version is bioequivalent to the reference listed drug, meaning it is absorbed in the body at the same rate and to the same extent. Generic products may be significantly less costly to bring to market than the reference listed drug and companies that produce generic products are generally able to offer them at lower prices. Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference listed drug is typically lost to the generic product.

~~The~~46 FDA may not approve an ANDA for a generic product until any applicable period of non-patent exclusivity for the reference listed drug has expired. The Federal Food, Drug, and Cosmetic Act, or FDCA, provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity. Specifically, in cases where such exclusivity has been granted, an ANDA may not be submitted to the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification that a patent covering the reference listed drug is either invalid or will not be infringed by the generic product, in which case the applicant may submit its application four years following approval of the reference listed drug. While we believe that our product candidates contain active ingredients that would be treated as new chemical entities by the FDA and, therefore, if approved, should be afforded five years of data exclusivity, the FDA may disagree with that conclusion and may approve generic products after a period that is less than five years. Manufacturers may seek to launch these generic products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for our product.

The FDA may not approve an ANDA for a generic product until any applicable period of non-patent exclusivity for the reference listed drug has expired. The FDCA provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity. Specifically, in cases where such exclusivity has been granted, an ANDA may not be submitted to the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification that a patent covering the reference listed drug is either invalid or will not be infringed by the generic product, in which case the applicant may submit its application four years following approval of the reference listed drug. While we believe that our product candidates contain active ingredients that would be treated as new chemical entities by the FDA and, therefore, if approved, should be afforded five years of data exclusivity, the FDA may disagree with that conclusion and may approve generic products after a period that is less than five years. Manufacturers may seek to launch these generic products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for our product.

Competition that our products may face from generic versions of our products could materially and adversely impact our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on the investments we have made in those product candidates.

Even if we are able to commercialize any product candidates, the products may become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, which could harm our business.

The commercial success of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investments. There is significant uncertainty related to third party payor coverage and reimbursement of newly approved drugs. The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.

43Our ability to commercialize any product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government healthcare programs, private health insurers, managed care plans and other organizations. Government authorities and third party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third party payors are requiring that drug companies provide them with predetermined discounts from list

~~There~~ prices isand ~~significant~~are ~~uncertainty~~challenging ~~related~~the toprices ~~third~~charged ~~party~~for ~~payor~~medical ~~coverage~~products. Coverage and reimbursement ~~of newly~~may ~~approved~~not ~~drugs.~~be ~~The~~available ~~regulations~~for ~~that~~any ~~govern~~product ~~marketing~~that ~~approvals,~~we ~~pricing,~~commercialize ~~coverage~~ and, ~~reimbursement~~even ~~for~~if ~~new~~these ~~drug~~are ~~products~~available, ~~vary~~the level ~~widely~~of ~~from~~reimbursement ~~country~~may tonot ~~country~~be satisfactory. ~~Current~~Inadequate ~~and~~reimbursement ~~future legislation~~ may ~~significantly~~adversely ~~change~~affect the ~~approval~~demand ~~requirements in~~for, ~~ways~~or ~~that~~the ~~could~~price ~~involve~~of, ~~additional~~any ~~costs~~product ~~and~~candidate ~~cause~~for ~~delays~~which inwe ~~obtaining~~obtain ~~approvals.~~marketing ~~Some countries require~~ approval. ofObtaining ~~the~~and ~~sale~~maintaining ~~price~~adequate ofreimbursement afor ~~drug~~our products ~~before~~may ~~it can~~ be ~~marketed~~difficult. InWe ~~many~~may ~~countries,~~be ~~the~~required ~~pricing~~to ~~review~~conduct ~~period~~expensive ~~begins~~pharmacoeconomic ~~after~~studies ~~marketing~~to ~~or product~~justify ~~licensing~~coverage ~~approval~~and isreimbursement ~~granted.~~or Inthe ~~some~~level ~~foreign~~of ~~markets,~~reimbursement ~~prescription~~relative ~~pharmaceutical~~to ~~pricing~~other ~~remains~~therapies. ~~subject~~If tocoverage ~~continuing~~and ~~governmental~~adequate ~~control~~reimbursement ~~even~~are ~~after~~not ~~initial~~available ~~approval~~or reimbursement is ~~granted.~~available Asonly ato ~~result~~limited levels, we ~~might~~may ~~obtain~~not ~~marketing~~be ~~approval~~able ~~for~~to ~~a product~~successfully incommercialize aany ~~particular~~product ~~country,~~candidate ~~but~~for ~~then~~which bewe ~~subject~~obtain tomarketing ~~price~~approval. ~~regulations~~Cost-control ~~that~~initiatives ~~delay~~could ~~our~~cause ~~commercial~~us ~~launch~~to ofdecrease the ~~product,~~price ~~possibly~~we ~~for~~might ~~lengthy~~establish ~~time periods~~for products, ~~and~~which ~~negatively~~could ~~impact~~result ~~the~~in ~~revenues~~lower wethan ~~are~~anticipated ~~able~~product torevenues. ~~generate~~If ~~from~~ the ~~sale~~prices offor ~~the~~our ~~product~~products, ~~in that~~if ~~country.~~any, ~~Adverse~~decrease ~~pricing~~or ~~limitations~~if ~~may~~governmental ~~hinder~~and ~~our~~other ~~ability~~third toparty ~~recoup~~payors ~~our~~do ~~investment~~not inprovide ~~one~~adequate coverage or ~~more product candidates~~reimbursement, ~~even if~~ our ~~product~~prospects ~~candidates~~for ~~obtain~~revenue and ~~marketing~~profitability ~~approval~~will suffer.

~~Our~~There ~~ability~~may tobe ~~commercialize~~significant ~~any~~delays ~~product candidates successfully also will depend~~ in ~~part~~obtaining ~~on the extent to which~~ coverage and ~~adequate~~ reimbursement for ~~these~~newly ~~products~~approved ~~and related treatments will be available from government healthcare programs~~drugs, ~~private health insurers, managed care plans~~ and ~~other~~coverage ~~organizations.~~may ~~Government authorities and third party payors, such as private health insurers and health maintenance~~be ~~organizations,~~more ~~decide~~limited ~~which~~than ~~medications~~the ~~they~~indications ~~will pay~~ for ~~and~~which ~~establish~~the ~~reimbursement~~drug ~~levels.~~is Aapproved ~~primary~~by ~~trend~~the inFDA ~~the~~or comparable non-U.S. ~~healthcare~~regulatory ~~industry and elsewhere is cost containment~~authorities. ~~Government~~Moreover, ~~authorities~~eligibility ~~and~~for ~~third party payors have attempted to control costs by limiting~~ coverage and ~~the amount of~~ reimbursement ~~for~~does ~~particular~~not ~~medications.~~imply ~~Increasingly, third party payors are requiring~~ that a drug ~~companies~~will ~~provide~~be ~~them~~paid ~~with predetermined discounts from list prices and are challenging the prices charged~~ for ~~medical~~in ~~products.~~all ~~Coverage~~cases ~~and~~or ~~reimbursement~~at ~~may~~a ~~not be available for any product~~ rate that wecovers ~~commercialize~~our ~~and~~costs, ~~even~~including ~~if these are available~~research, ~~the level of reimbursement may not be satisfactory. Inadequate reimbursement may adversely affect the demand for~~development, ~~or the price of~~manufacture, ~~any~~sale ~~product candidate for which we obtain marketing approval. Obtaining~~ and ~~maintaining~~distribution ~~adequate reimbursement for our products may be difficult~~expenses. WeInterim ~~may be required to conduct expensive pharmacoeconomic studies to justify coverage and~~ reimbursement orlevels ~~the~~for ~~level~~new ofdrugs, ~~reimbursement~~if ~~relative to other therapies. If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels~~applicable, we may also not be ~~able~~sufficient to ~~successfully commercialize~~cover any product candidate for which we obtain marketing approval. Cost-control initiatives could cause us to decrease the price we might establish for products, which could result in lower than anticipated product revenues. If the prices for our ~~products,~~costs ~~if any, decrease or if governmental~~ and ~~other~~may ~~third party payors do~~ not ~~provide~~be ~~adequate~~made ~~coverage or reimbursement, our prospects for revenue and profitability will suffer~~permanent.

There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the indications for which the drug is approved by the FDA or comparable non-U.S. regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution expenses. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Third party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

44Current and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of our product candidates and affect the prices we, or they, may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability, or the ability of any future collaborators, to profitably sell any products for which we, or they, obtain marketing approval. We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any future collaborators, may receive for any approved products.

For example, in March 2010, President Obama signed into law the PPACA. Among the provisions of the PPACA of potential importance to our business and our product candidates are the following:

•

an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents;

•

an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

~~Recently~~• ~~enacted~~a ~~and~~new ~~future~~methodology ~~legislation~~by ~~may~~which ~~increase~~rebates ~~the~~owed ~~difficulty~~by ~~and~~manufacturers ~~cost~~under ~~for~~the usMedicaid ~~to obtain~~Drug ~~marketing~~Rebate ~~approval~~Program ofare ~~and~~calculated ~~commercialize~~for ~~our~~drugs ~~product~~that ~~candidates~~are ~~and~~inhaled, ~~affect~~infused, ~~the~~instilled, ~~prices~~implanted weor ~~may obtain.~~ injected;

In• ~~the United~~expansion ~~States and some foreign jurisdictions, there have been a number~~ of ~~legislative~~healthcare ~~and~~fraud ~~regulatory changes~~ and ~~proposed~~abuse ~~changes~~laws, ~~regarding~~including the ~~healthcare~~civil ~~system~~False ~~that~~Claims ~~could~~Act ~~prevent~~and orthe ~~delay~~federal ~~marketing~~Anti-Kickback ~~approval of our product candidates~~Statute, ~~restrict~~new ~~or regulate~~government ~~post-approval~~investigative ~~activities~~powers and ~~affect~~enhanced ~~our~~penalties ~~ability to profitably sell any product candidates~~ for ~~which we obtain marketing approval.~~ noncompliance;

In• ~~the~~a ~~United~~new ~~States, the~~ Medicare ~~Prescription~~Part ~~Drug,~~D ~~Improvement, and Modernization Act of 2003, or Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare~~ coverage ~~for~~gap ~~drug~~discount ~~purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for physician administered drugs. In addition~~program, ~~this legislation provided authority for limiting the number of drugs that will be covered~~ in ~~any~~which ~~therapeutic~~manufacturers ~~class~~must inagree ~~certain~~to ~~cases.~~offer ~~Cost~~50% ~~reduction~~point-of-sale ~~initiatives~~discounts ~~and~~off ~~other~~negotiated ~~provisions~~prices of ~~this~~applicable ~~and~~brand ~~other~~drugs ~~more recent legislation could decrease the coverage and reimbursement that is provided for any approved products. While the Medicare Modernization Act applies only~~ to ~~drug~~eligible ~~benefits for Medicare~~ beneficiaries, ~~private~~during ~~payors~~their ~~often follow Medicare~~ coverage ~~policy~~gap ~~and payment limitations in setting their own reimbursement rates. Therefore~~period, ~~any~~as ~~reduction~~a incondition ~~reimbursement~~for ~~that results from~~ the ~~Medicare~~manufacturer’s ~~Modernization~~outpatient ~~Act~~drugs orto ~~other~~be ~~more~~covered ~~recent~~under ~~legislation~~Medicare ~~may~~Part ~~result in a similar reduction in payments from private payors.~~ D;

In• ~~March~~extension 2010, President Obama signed into law the Patient Protection and Affordable Care Act, commonly referred to as the Affordable Care Act, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of ~~healthcare~~manufacturers’ spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. Effective October 1, 2010, the Affordable Care Act revised the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid ~~drug~~rebate ~~rebates~~liability to ~~states.~~ ~~Further,~~individuals ~~the~~enrolled ~~law~~in ~~imposes~~Medicaid amanaged significant annual fee on companies that manufacture or import branded prescription drug products. Substantial provisions affecting compliance have also been enacted, which may affect our business practices with health care practitioners. We will not know the full effects of the Affordable Care Act until applicable federal and state agencies issue regulations or guidance under the new law. Although it is too early to determine the effect of the Affordable Care Act, the law appears likely to continue the pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs. organizations;

~~Legislative~~• ~~and~~expansion ~~regulatory~~of ~~proposals~~eligibility ~~have~~criteria ~~been made to expand post-approval requirements and restrict sales and promotional activities~~ for ~~pharmaceutical~~Medicaid products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our products candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements. programs;

•

expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

•

new requirements to report certain financial arrangements with physicians and teaching hospitals;

•

a new requirement to annually report drug samples that manufacturers and distributors provide to physicians;

•

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

•

a new Independent Payment Advisory Board, which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs; and

•

established the Center for Medicare and Medicaid Innovation within Center for Medicare and Medicaid Services, or CMS, to test innovative payment and service delivery models.

Other legislative changes have been proposed and adopted since the PPACA was enacted. These changes include the Budget Control Act of 2011, which, among other things, led to aggregate reductions to Medicare payments to providers of up to 2% per fiscal year that started in 2013 and, due to subsequent legislation, will continue until 2025. In addition, the American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which regulatory approval is obtained.

We expect that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Moreover, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any,

may be. In addition, increased scrutiny by the United States Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us and any future collaborators to more stringent product labeling and post-marketing testing and other requirements.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.

In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We face an inherent risk of product liability claims as a result of the clinical testing of our product candidates despite obtaining appropriate informed consents from our clinical trial participants. We will face an even greater risk if we commercially sell any product that we may develop. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Regardless of the merits or eventual outcome, liability claims may result in:

•

decreased demand for any product candidates or products that we may develop;

•

injury to our reputation and significant negative media attention;

•

withdrawal of clinical trial participants;

•

significant costs to defend the related litigation;

•

substantial monetary awards to trial participants or patients;

•

loss of revenue;

•

reduced resources of our management to pursue our business strategy; and

•

the inability to commercialize any products that we may develop.

We currently hold $10.0 million in product liability insurance coverage in the aggregate, with a per incident limit of $10.0 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we initiate or expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. If we are unable to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of our product candidates or result in future uninsured losses, which could adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Employee Matters and Managing Growth

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the research and development, clinical and business development expertise of Robert J. Schotzinger, M.D., Ph.D., our President and Chief Executive Officer, ~~and Richard D. Katz, M.D., our Chief Business and Financial Officer,~~ as well as the other principal members of our management, scientific and clinical team. Although we have entered into employment agreements with our executive officers, each of them may terminate their employment with us at any time. We only maintain “key person” insurance for our President and Chief Executive Officer.

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our success. The loss of the services of any of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. We may be unable to hire, train, retain or motivate these key personnel on acceptable terms or at all given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating and executing our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating and executing our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs and, if any of our product candidates receives marketing approval, sales and marketing. Our management may need to divert a significant amount of its attention away from our day-to-day activities to manage these growth activities. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth in its operations, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. Our inability to effectively manage the expansion of our operations may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If our management is unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.

Risks Related to our Common Stock and this Offering

After this offering, our executive officers, directors and principal stockholders, if they choose to act together, will continue to have the ability to control all matters submitted to stockholders for approval.

Upon the closing of this offering, our executive officers and directors, combined with our stockholders who owned more than 5% of our outstanding common stock before this offering will, in the aggregate, beneficially own shares representing approximately % of our common stock ( % if the underwriters exercise in full their option to purchase additional shares). As a result, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

the aggregate, beneficially own shares representing approximately % of our common stock ( % if the underwriters exercise in full their option to purchase additional shares). As a result, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

•

delay, defer or prevent a change in control;

•

entrench our management and the board of directors; or

•

impede a merger, consolidation, takeover or other business combination involving us that other stockholders may desire.

Provisions in our corporate charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our certificate of incorporation and our bylaws that will become effective upon the closing of this offering may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions:

•

establish a classified board of directors such that only one of three classes of directors is elected each year;

•

allow the authorized number of our directors to be changed only by resolution of our board of directors;

•

limit the manner in which stockholders can remove directors from our board of directors;

•

establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

•

require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

•

limit who may call stockholder meetings;

•

authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

•

require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal specified provisions of our certificate of incorporation or bylaws that will become effective upon the closing of this offering.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years ~~after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or~~ combination is approved in a prescribed manner. This could discourage, delay or prevent someone from acquiring us or merging with us, whether or not it is desired by, or beneficial to, our stockholders.

If52 ~~you purchase shares of common stock in this offering, you will suffer immediate dilution in the book value of your investment.~~

~~aggregate~~after ~~price~~the ~~paid~~date byof ~~all~~the ~~purchasers~~transaction ofin ~~our~~which ~~stock~~the ~~but~~person ~~will~~acquired ~~own~~in ~~only~~excess ~~approximately~~ of 15% of our ~~common stock~~ outstanding ~~after~~voting ~~this offering~~stock, ~~excluding~~unless ~~any~~the ~~shares~~merger ofor ~~our common~~combination ~~stock~~is ~~that~~approved ~~they~~in ~~may~~a ~~have~~prescribed ~~acquired prior to this offering~~manner. InThis ~~addition~~could discourage, ~~future~~delay ~~sales~~or ~~and~~prevent ~~issuances~~someone offrom ~~our~~acquiring ~~common~~us ~~stock~~ or ~~rights~~merging towith ~~purchase common stock~~us, ~~including~~whether ~~pursuant~~or tonot ~~our~~it ~~equity~~is ~~incentive~~desired ~~plans~~by, ~~could~~or ~~result~~beneficial into, ~~additional dilution of the percentage ownership of~~ our stockholders ~~and could cause our stock price to fall~~. ~~For a further description of the dilution that you will experience immediately after this offering, see “Dilution.”~~

If you purchase shares of common stock in this offering, you will suffer immediate dilution in the book value of your investment.

The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. Based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, you will experience immediate dilution of $ per share, representing the difference between our pro forma net tangible book value per share, after giving effect to this offering, and the assumed initial public offering price. In addition, purchasers of common stock in this offering will have contributed approximately % of the aggregate price paid by all purchasers of our stock but will own only approximately % of our common stock outstanding after this offering, excluding any shares of our common stock that they may have acquired prior to this offering. In addition, future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. For a further description of the dilution that you will experience immediately after this offering, see “Dilution.”

An active trading market for our common stock may not develop.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations with the underwriters. This price will not necessarily reflect the price at which investors in the market will be willing to buy and sell our shares following this offering. Although we have applied to have our common stock approved for listing on The NASDAQ Global Market, an active trading market for our shares may never develop or be sustained following this offering. If an active market for our common stock does not develop or is not sustained, it may be difficult for you to sell shares you purchase in this offering without depressing the market price for the shares or at all. An inactive trading market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock in this offering.

Our stock price is likely to be volatile. The stock market in general and the market for smaller biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including:

•

the success of existing or new competitive products or technologies;

•

failure or discontinuation of any of our development programs;

•

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

•

regulatory or legal developments in the United States and other countries;

•

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

•

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, acquire or in-license additional product candidates or products;

•

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

•

announcement or expectation of additional financing efforts;

•

sales of our common stock by us, our insiders or other stockholders;

•

variations in our financial results or those of companies that are perceived to be similar to us;

•

changes in estimates or recommendations by securities analysts, if any, that cover our stock;

•

changes in the structure of healthcare payment systems;

•

market conditions in the pharmaceutical and biotechnology sectors;

•

general economic, industry and market conditions; and

•

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

We may be subject to securities litigation, which is expensive and could divert management attention.

Our share price may be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. After this offering, we will have outstanding shares of common stock based on the number of shares outstanding as of March 31, ~~2014~~2016. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates or existing stockholders. The remaining 110,347,896 shares are currently restricted as a result of securities laws or lock-up agreements but will become eligible to be sold at various times after the offering as described in the “Shares Eligible for Future Sale” section of this prospectus. Moreover, after this offering, holders of an aggregate of shares of our common stock will have rights, subject to specified conditions, to require us to file registration statements covering their shares or, along with holders of an additional shares of our common stock, to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the “Underwriting” section of this prospectus.

In54 connection with the Reorganization, we expect to enter into several agreements with Legacy VPI governing the separation of our businesses, the provision of services during a transition period, responsibility for employee matters related to the separation and the licensing of certain intellectual property assets, including a license of our Metallophile Technology to Legacy VPI. If Legacy VPI is unable to satisfy its obligations under these agreements, engages in the same type of business we conduct, takes advantage of business opportunities that might be attractive to us or conflicts arise between us and Legacy VPI, our ability to operate successfully and expand our business may be hampered.

Prior to the Reorganization, which will occur prior to this offering, VPI handled all financial and administrative aspects of our business. In connection with the Reorganization, Legacy VPI will transfer to us a portion of its assets, including assets associated with financial, administrative and other support services, as well as 11 of the 14 employees currently employed by Legacy VPI. In connection with the Reorganization, we and Legacy VPI expect to enter into various agreements governing the separation of the prostate business and our collaboration programs from the antifungal business, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a

~~Metallophile~~Future ~~Technology~~Sale” ~~license~~section ~~agreement~~of this prospectus. Moreover, ~~which~~after this offering, holders of an aggregate of shares of our common stock will ~~include~~have rights, asubject ~~limited~~to ~~license~~specified ~~from~~conditions, to require us to ~~Legacy~~file ~~VPI~~registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register all shares of common stock that we may issue under our ~~Metallophile~~equity ~~Technology~~compensation plans. Once we register these shares, ~~and~~they acan ~~license~~be ~~agreement~~freely ~~enabling~~sold ~~Legacy~~in ~~VPI’s~~the ~~continued~~public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up ~~performance~~agreements ~~under~~described ~~its~~in ~~collaboration~~the ~~with~~“Underwriters” ~~Dow~~section ~~AgroSciences~~of ~~LLC~~this prospectus.

If Legacy VPI is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses. For example, Legacy VPI will retain all liabilities that did not historically arise from the antifungal business and will have limited assets, and third parties may seek to hold us responsible for Legacy VPI’s retained liabilities if Legacy VPI cannot satisfy its liabilities. If those liabilities are significant and we are ultimately determined to be liable for them, we might not be able to recover our resulting losses from Legacy VPI.

Legacy VPI will have a license to our Metallophile Technology, which potentially could result in Legacy VPI engaging in the same type of business we conduct or taking advantage of business opportunities that might be attractive to us, particularly if Legacy VPI does not adhere to the field limitation in the license. If either of those events were to occur, our business could be harmed.

If the assets transferred by Legacy VPI are not sufficient to conduct our business, our business may be harmed. Additionally, under the transition services agreement, we must provide certain services to Legacy VPI for an initial term of one year, with an option to extend for up to two additional six month terms upon mutual consent. During the transition services period, our employees may divert their attention from our business in order to provide services under the transition services agreement, which could adversely affect our business.

All of our directors, including Dr. Schotzinger, our President and Chief Executive Officer, will initially serve on the board of directors of Legacy VPI. Additionally, all of our executive officers and all of our directors, or stockholders affiliated with them, will own equity interests in Legacy VPI. The overlap in the boards of directors and ownership between our company and Legacy VPI may create, or may create the appearance of, conflicts of interest. For example, in a situation in which Legacy VPI is adverse to us, such as if it engages in the same types of business as us or if it breaches one of the agreements with us, a conflict may arise. Additionally, disputes may arise between Legacy VPI and us in a number of areas relating to our past and ongoing relationships, including:

• intellectual property, technology and business matters, including failure to make required technology transfers and failure to comply with confidentiality and non-compete provisions applicable to Legacy VPI and us;

• labor, tax, employee benefit, indemnification and other matters arising from our separation from Legacy VPI; and

• the nature, quality and pricing of transitional services we have agreed to provide to Legacy VPI.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to some investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

•

being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

•

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or Section 404, in the assessment of our internal control over financial reporting;

•

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

•

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statement and registration statements; and

•

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We have taken advantage of reduced reporting burdens in this prospectus. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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

As a public company, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The NASDAQ Global Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. We expect that we will need to hire additional accounting, finance and other personnel in connection with our becoming, and our efforts to comply with the requirements of being, a public company and our management and other personnel will need to devote a substantial amount of time to these compliance requirements. Moreover, the rules and regulations applicable to us as a public company will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified members of our board of directors.

We55 are evaluating these rules and regulations, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the Securities and Exchange Commission, or the SEC, after we become a public company. However, while we remain an emerging growth company, we will not be required to include an attestation report

onThe ~~internal~~Sarbanes-Oxley ~~control~~Act ~~over~~of ~~financial~~2002, ~~reporting~~the ~~issued~~Dodd-Frank byWall ~~our~~Street ~~independent~~Reform ~~registered~~and ~~public~~Consumer ~~accounting~~Protection ~~firm.~~Act, Tothe ~~achieve~~listing ~~compliance~~requirements ~~with~~of ~~Section 404~~The ~~within~~NASDAQ ~~the~~Global ~~prescribed~~Market ~~period,~~and weother ~~will~~applicable ~~be engaged~~securities inrules aand regulations ~~process~~impose tovarious ~~document~~requirements ~~and~~on ~~evaluate~~public ~~our~~companies, ~~internal~~including ~~control~~establishment ~~over~~and ~~financial~~maintenance ~~reporting,~~of ~~which~~effective isdisclosure ~~both~~and ~~costly~~financial controls and ~~challenging~~corporate governance practices. InWe ~~this~~expect ~~regard,~~that we will need to ~~continue~~hire toadditional ~~dedicate~~accounting, finance ~~internal~~and ~~resources,~~other ~~potentially~~personnel ~~engage~~in ~~outside~~connection ~~consultants~~with ~~and adopt~~our abecoming, ~~detailed~~and ~~work~~our ~~plan~~efforts to ~~assess~~comply ~~and~~with ~~document~~ the ~~adequacy~~requirements of ~~internal~~being, ~~control~~a ~~over~~public ~~financial~~company ~~reporting,~~and ~~continue~~our ~~steps~~management toand ~~improve~~other ~~control~~personnel ~~processes~~will asneed ~~appropriate,~~to ~~validate~~devote ~~through~~a ~~testing~~substantial ~~that~~amount ~~controls~~of ~~are~~time ~~functioning~~to asthese ~~documented and~~compliance ~~implement~~requirements. aMoreover, ~~continuous~~the ~~reporting~~rules and ~~improvement~~regulations ~~process~~applicable ~~for~~to ~~internal~~us ~~control~~as ~~over~~a ~~financial~~public ~~reporting.~~company ~~Despite~~will increase our ~~efforts,~~legal ~~there~~and isfinancial acompliance ~~risk~~costs ~~that~~and we will ~~not~~make besome ~~able~~activities tomore ~~conclude,~~time-consuming ~~within~~and ~~the~~costly. ~~prescribed~~For ~~timeframe~~example, orwe atexpect ~~all,~~ that ~~our~~these ~~internal~~rules ~~control~~and ~~over~~regulations ~~financial~~may ~~reporting~~make isit ~~effective~~more asdifficult ~~required~~and bymore ~~Section 404.~~expensive Iffor weus ~~identify~~to ~~one~~obtain ordirector ~~more~~and ~~material~~officer ~~weaknesses~~liability insurance, itwhich ~~could result~~ in anturn ~~adverse~~could ~~reaction~~make init ~~the~~more ~~financial~~difficult ~~markets~~for ~~due~~us to aattract ~~loss~~and ofretain ~~confidence~~qualified inmembers ~~the reliability~~ of our ~~financial statements~~board of directors.

We are evaluating these rules and regulations, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the SEC after we become a public company. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of return on your investment.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

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

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. There can be no assurance that analysts will cover us, or provide favorable coverage. If one or more analysts ~~downgrade~~ downgrade our stock or change their opinion of our stock, our share price would likely decline. In addition, if one or more analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

5356

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” or in each case their negative and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, all matters that are not historical facts and specifically, among other things, statements about:

• our plans to identify, develop and commercialize VT-1161, VT-1129, VT-1598 and ~~its~~our ~~analogues and~~ other product candidates;

•

ongoing and planned clinical trials and preclinical studies for our product candidates, including the timing of initiation of these trials and studies and the anticipated results;

•

our plans to possibly enter into collaborations for the development and commercialization of product candidates and the potential benefits of any future collaboration;

•

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

•

the rate and degree of market acceptance and clinical utility of our products;

•

our commercialization, marketing and manufacturing capabilities and strategy;

•

our intellectual property position and strategy;

•

our ability to identify additional products or product candidates with significant commercial potential;

•

our expectations related to the use of proceeds from this offering;

•

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

developments relating to our competitors and our industry; and

•

the impact of government laws and regulations.

We may not actually achieve the plans, intentions or expectations disclosed in any of our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this prospectus, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or enter into. Our forward-looking statements assume the completion of the ~~Reorganization~~Conversion unless otherwise indicated or the context otherwise requires.

You should read this prospectus, the documents that we reference in this prospectus and the documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

5457

USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of shares of our common stock in this offering will be approximately $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their ~~over-allotment~~ option to purchase additional shares in full, we estimate that the net proceeds from this offering will be approximately $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the net proceeds from this offering by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us at the assumed initial public offering price would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and members’ deficit and stockholders’ deficit by $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

As of ~~March~~ December 31, ~~2014~~2015, we had cash and cash equivalents of $729.4 million. We currently estimate that we will use the net proceeds from this offering, together with our existing cash and cash equivalents and the proceeds from the call option to purchase additional Series D preferred shares, which was exercised on February 17, 2016, as follows:

• approximately $ to fund ~~direct~~the ~~program~~development ~~costs~~ of ~~clinical~~our ~~development~~lead ofproduct candidate, VT-1161, ~~our~~for ~~lead~~both ~~product~~onychomychosis ~~candidate~~and RVVC, through Phase 2b clinical trials and the initiation of our planned Phase 3 clinical trials;

• approximately $ to fund ~~direct~~the ~~program~~development ~~costs~~ of ~~research~~VT-1129 ~~and~~for ~~development~~the treatment of ~~VT-1129~~cryptococcal meningitis through Phase 1 clinical trials and the initiation of Phase 2 clinical trials;

• approximately $ to fund ~~direct~~the ~~program costs of research and~~ development of VT-1598 ~~and~~for ~~its~~the ~~analogues~~treatment ~~through submission~~ of anValley ~~IND~~Fever ~~and~~through ~~the initiation of~~ Phase 1 clinical trials; and

•

the remainder for research and development of additional product candidates and working capital and other general corporate purposes.

The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development of product candidates, the status of and results from clinical trials, as well as any collaborations that we may enter into with third parties for our product candidates and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.

Based on our planned use of the net proceeds from this offering and our existing cash and cash equivalents described above, we estimate that such funds will be sufficient to enable us to complete our ongoing Phase 2a2b clinical ~~trial~~trials of VT-1161 ~~for~~in ~~AVVC~~onychomycosis and RVVC and to initiate our ~~ongoing~~planned Phase 3 2a clinical ~~trial~~trials ofin ~~VT-1161~~one ~~for~~or ~~tinea~~both ~~pedis~~of these indications, to complete ~~conduct~~ our ~~planned~~ongoing Phase 1 2b clinical ~~trials~~trial ~~of VT-1161 in RVVC~~ and ~~onychomycosis,~~initiate ~~to conduct~~ our planned Phase 2 1 clinical trial of VT-1129 for cryptococcal meningitis, to ~~submit~~conduct our ~~IND~~Phase 1 clinical trials for VT-1598 and to fund our operating expenses and capital expenditure requirements ~~through .~~at Weleast ~~do not expect that the net proceeds from this offering and our existing cash and cash equivalents will be sufficient to enable us to fund the completion of development of any of our product candidates~~through .

The net proceeds from this offering and our existing cash and cash equivalents will not be sufficient to enable us to fund the completion of development of any of our product candidates.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

5559

DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay any cash dividends to the holders of our common stock in the foreseeable future.

5660

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of ~~March~~December 31, ~~2014~~2015 on:

•

an actual basis;

• a pro forma basis giving effect to (1) the ~~Reorganization~~issuance ~~and,~~of ~~in connection therewith~~8,855,145 ~~the~~Series ~~contribution~~D bypreferred ~~Legacy~~shares ~~VPI~~for togross usproceeds of ~~certain~~$15.8 ~~assets~~million ~~that~~on ~~are~~February ~~used~~17, in2016 ~~the~~through ~~antifungal business;~~ the ~~spin-off~~exercise of the ~~prostate~~call ~~business~~option, ~~along~~and ~~with~~(2) ~~two collaboration programs not associated with~~ the ~~human~~Conversion ~~antifungal business~~and, in ~~the~~connection ~~form~~therewith, ~~of a distribution of Legacy VPI to our existing shareholders;~~ the issuance of shares of our common stock to holders of Viamet Holdings common shares ~~in conjunction with our conversion to a Delaware corporation~~ based on an exchange ratio of share of Viamet Pharmaceuticals, ~~Inc~~Corp. for each common share of Viamet Holdings (excluding profits interest shares); the issuance of shares of our preferred stock to holders of Viamet Holdings preferred shares ~~in conjunction with our conversion to a Delaware corporation~~ based on an exchange ratio of one share of the corresponding preferred class of Viamet Pharmaceuticals, ~~Inc~~Corp. for each preferred share of Viamet Holdings; the issuance of shares of our preferred stock to holders of Viamet Holdings series C1 warrants in exchange for shares of series C1 preferred shares issued upon the exercise of such warrants as part of the Reorganization; the issuance of shares of our common stock to holders of Viamet Holdings profits interest shares ~~in conjunction with our conversion to a Delaware corporation~~ pursuant to the terms of such profits interest shares (including the applicable threshold valuation) and our plan of conversion, and (23) the automatic conversion of all outstanding shares of our preferred stock, including the Series D preferred shares issued on February 17, 2016, into shares of common stock and the filing and effectiveness of our restated certificate of incorporation upon the closing of this offering; and

• a pro forma as adjusted basis giving additional effect to the sale of shares of our common stock offered in this offering, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us ~~and the filing and effectiveness of a restated certificate of incorporation upon the closing of this offering~~.

You should read the following table in conjunction with our consolidated financial statements and related notes, “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this prospectus.

	As of March 31, 2014
	Actual			Pro Forma	Pro FormaAsAdjusted
	(unaudited)
	(in thousands except share data)
Cash and cash equivalents	$	7,383
Series 1 redeemable convertible preferred shares; 299,984 shares authorized issued and outstanding		200
Series 2 redeemable convertible preferred shares; 550,000 shares authorized issued and outstanding		550
Series A redeemable convertible preferred shares; 6,250,000 shares authorized issued and outstanding		6,250
Series B redeemable convertible preferred shares; 21,739,128 shares authorized issued and outstanding		25,000
Series C1 redeemable convertible preferred shares; 30,000,000 shares authorized, 21,739,130 shares issued and outstanding		25,000
Total redeemable preferred shares		57,000
Members’ deficit and stockholders’ equity
Class A common shares, no par value: 59,939,112 shares authorized, 1,100,000 shares issued and outstanding		1
Class B common shares, no par value: 3,599,026 shares authorized, 3,230,177 shares issued and outstanding		—
Class C common shares, no par value: 2,788,975 shares authorized, 506,816 shares issued and outstanding		—
Common Stock, 0.001 par value: 125,000,000 shares authorized pro forma, no shares issued and outstanding, shares issued and outstanding, pro forma and shares issued and outstanding, pro forma as adjusted		—
Preferred Stock, 0.001 par value: 5,000,000 shares authorized pro forma		—
Additional paid-in capital		—
Accumulated deficit		(92,062	)
Total members’ deficit and stockholders’ deficit		(92,061	)
Total capitalization	$	(35,061	)

The table above does not include shares of our common stock available for future issuance under our 2014 Incentive Plan.

DILUTION

If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share and the pro forma tangible book value per share of our common stock after this offering.

Our historical net tangible book value (deficit) as of March 31, 2014 was $(5.5) million, or $(5.03) per common share. Historical net tangible book value deficit per share represents the amount of our total tangible assets less total liabilities, divided by 1,100,000 common shares outstanding as of March 31, 2014.

Our pro forma net tangible book value as of March 31, 2014 was $ million, or $ per share of common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the pro forma number of shares of our common stock outstanding on March 31, 2014, after giving effect to the Reorganization, including the net exercise of warrants to purchase preferred shares and the automatic conversion of all of our outstanding shares of preferred stock into shares of our common stock upon the closing of this offering.

After giving effect to our issuance and sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, the pro forma net tangible book value as of March 31, 2014 would have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $ per share. The initial public offering price per share will significantly exceed the pro forma net tangible book value per share. Accordingly, new investors who purchase shares of common stock in this offering will suffer an immediate dilution of their investment of $ per share. The following table illustrates this per share dilution to the new investors purchasing shares of common stock in this offering without giving effect to the over-allotment option granted to the underwriters:

Assumed initial public offering price per share				$
Historical net tangible book value (deficit) per share as of March 31, 2014	$	(5.03	)
Decrease attributable to the Reorganization, the exercise of warrants to purchase preferred shares and the conversion of outstanding preferred stock
Pro forma net tangible book value per share as of March 31, 2014
Increase per share attributable to sale of shares of common stock in this offering
Pro forma net tangible book value per share after this offering				$
Dilution per share to new investors				$

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the pro forma net tangible book value by $ million, the pro forma net tangible book value per share after this offering by $ per share and the dilution to investors in this offering by $ per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discount and offering expenses payable by us.

If the underwriters exercise their over-allotment option in full, the pro forma net tangible book value will increase to $ per share, representing an immediate increase to existing stockholders of $ per share and an immediate dilution of $ per share to new investors. If any shares are issued upon exercise of outstanding options, you will experience further dilution.

The following table summarizes, on a pro forma basis as of March 31, 2014, after giving effect to the Reorganization, including the net exercise of warrants to purchase preferred shares, and the conversion of all of our outstanding preferred stock into common stock, the differences between the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and by new investors purchasing shares of common stock in this offering. The calculation below is based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, before the deduction of the estimated underwriting discounts and commissions and estimated offering expenses payable by us:

	Shares Purchased				Total Consideration				Average PricePer Share
	Number	Percent			Amount	Percent
Existing stockholders				%				%	$
New investors									$
Total			100	%			100	%	$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $ million and increase (decrease) the percentage of total consideration paid by new investors by approximately %, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

The number of shares purchased from us by existing stockholders is based on shares of our common stock outstanding as of March 31, 2014, after giving effect to the Reorganization, including the net exercise of warrants to purchase preferred shares, and the automatic conversion of all of our outstanding shares of preferred stock into shares of common stock upon the closing of this offering, and excludes shares of our common stock available for future issuance under our 2014 Incentive Plan as of March 31, 2014.

If the underwriters exercise their option to purchase additional shares from us in full, the number of shares held by new investors will increase to , or % of the total number of shares of common stock outstanding after this offering and the percentage of shares held by existing stockholders will decrease to % of the total shares outstanding.

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected consolidated financial data together with our consolidated financial statements and accompanying notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus. The selected consolidated financial data in this section are not intended to replace our consolidated financial statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future and do not reflect the effects of the Reorganization.

The selected consolidated statement of operations data for the years ended December 31, 2012 and 2013 and the selected consolidated balance sheet data as of December 31, 2012 and 2013 are derived from our audited consolidated financial statements appearing elsewhere in this prospectus. The selected consolidated statement of operations data for the three months ended March 31, 2013 and 2014, and the selected consolidated balance sheet data as of March 31, 2014 are derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on a basis consistent with our audited consolidated financial statements included in this prospectus and include, in our opinion, all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial information in those statements.

	Year EndedDecember 31,			Year EndedDecember 31,			Three Months EndedMarch 31,
	2012			2013			2013			2014
							(unaudited)
	(in thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue	$	3,484		$	2,873		$	890		$	365
Operating expenses:
Research and development		8,760			10,789			2,379			3,808
General and administrative		2,650			2,872			626			1,265
Total expenses		11,410			13,661			3,005			5,073
Operating loss		(7,926	)		(10,788	)		(2,115	)		(4,708	)
Change in fair value of financial instruments		(62	)		(387	)		(31	)		(2,574	)
Interest income		3			—			—			—
Net loss	$	(7,985	)	$	(11,175	)	$	(2,146	)	$	(7,282	)
Accretion and deemed dividends:
Preferred shares		(5,328	)		(7,516	)		(631	)		(19,714	)
Net loss attributable to common shareholders:
Basic and diluted	$	(13,313	)	$	(18,691	)	$	(2,777	)	$	(26,996	)
Net loss per share attributable to common shareholders:
Basic and diluted	$	(12.10	)	$	(16.99	)	$	(2.52	)	$	(24.54	)
Weighted average shares used to compute net loss per share attributable to common shareholders:
Basic and diluted		1,100,000			1,100,000			1,100,000			1,100,000
Pro forma net loss per common share—basic and diluted (unaudited)
Weighted average pro forma common shares outstanding—basic and diluted (unaudited)

							As ofMarch 31, 2014
	As of December 31,						Actual			ProForma(1)	Pro FormaAsAdjusted(2)(3)
	2012			2013
							(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	1,042		$	1,435		$	7,383
Furniture, fixtures and equipment, net		314			221			201
Working (deficit) capital		(2,366	)		92			(943	)
Total assets		2,068			2,715			9,071
Warrant liability		220			1,017			4,761
Members’ deficit and stockholders’ deficit		(46,592	)		(65,109	)		(92,061	)

You should read the following table in conjunction with our consolidated financial statements and related notes appearing at the end of this prospectus and the “Selected Consolidated Financial Data” section and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, each appearing elsewhere in this prospectus.

(1) The pro forma balance sheet data give effect to the completion of our corporate reorganization, including the net exercise of warrants to purchase preferred shares, and the conversion of preferred stock and profits interest shares due to the conversion of Viamet Holdings to Viamet Pharmaceuticals, Inc.


	As of December 31, 2015
	Actual			Pro Forma		Pro Forma As Adjusted
				(unaudited)
	(in thousands except share and per share data)
Cash and cash equivalents	$	29,361		$	45,123

Series 1 redeemable convertible preferred shares; 299,984 shares authorized issued and outstanding		174			—
Series 2 redeemable convertible preferred shares; 550,000 shares authorized issued and outstanding		468			—
Series A redeemable convertible preferred shares; 6,250,000 shares authorized issued and outstanding		4,911			—
Series B redeemable convertible preferred shares; 21,739,128 shares authorized issued and outstanding		17,351			—
Series C1 and C2 redeemable convertible preferred shares; 23,549,999 shares authorized issued and outstanding		16,824			—
Series D redeemable convertible preferred shares; 44,275,737 shares authorized, 35,420,590 shares issued and outstanding		67,770			—

Total redeemable preferred shares		107,498			—
Members’ deficit and stockholders’ equity
Class A common shares, no par value: 97,764,848 shares authorized, 1,100,000 shares issued and outstanding		1			—
Class B common shares, no par value: 3,599,026 shares authorized issued and outstanding		—			—
Class C common shares, no par value: 15,366,049 shares authorized, 3,448,059 shares issued and outstanding		—			—
Common Stock, 0.001 par value: 125,000,000 shares authorized pro forma, no shares issued and outstanding, shares issued and outstanding, pro forma and shares issued and outstanding, pro forma as adjusted		—			11
Preferred Stock, 0.001 par value; 5,000,000 shares authorized pro forma		—			—
Additional paid-in capital		—			—
Accumulated deficit		(85,989	)		41,688

Total members’ (deficit) equity and stockholders’ (deficit) equity		(85,988	)		41,699

Total capitalization	$	21,510		$	41,699

A $1.00 increase (2decrease) ~~The~~in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted ~~balance~~amount ~~sheet~~of ~~data~~each ~~give~~of ~~effect~~cash toand ~~our~~cash equivalents, ~~issuance~~additional paid-in-capital, total members’ (deficit) equity and ~~sale~~total capitalization by approximately $ million, assuming that the number of shares 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. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us at the assumed initial public offering price would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, additional paid-in-capital, ~~this~~total members’ (deficit) equity and total capitalization by $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting ~~the~~estimated underwriting discounts and commissions and estimated offering expenses payable by us.

~~(3)~~The Atable ~~$1.00~~above ~~increase~~does ~~(decrease)~~not ininclude ~~the assumed initial public offering price of $ per share~~2, ~~which is the midpoint of the estimated price range set forth on the cover page of this prospectus~~314,489 would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working (deficit) capital, total assets and stockholders’ equity by approximately $ million, assuming that the number of shares ~~offered by us, as set forth on the cover page~~ of ~~this~~our prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million shares in the number of shares of common stock ~~offered~~available byfor usfuture atissuance ~~the~~under ~~assumed~~our ~~initial~~2011 ~~public~~Incentive ~~offering~~Plan ~~price would increase (decrease) the pro forma~~ as ~~adjusted amount~~ of ~~each of cash and cash equivalents~~December 31, working (deficit) capital, total assets and stockholders’ equity by $ million, assuming an initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us 2015.

~~UNAUDITED~~DILUTION ~~PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~The~~If ~~following~~you ~~unaudited~~invest ~~pro~~in ~~forma~~our ~~condensed~~common ~~consolidated~~stock ~~financial statements should be read~~ in ~~conjunction with~~this ~~the~~offering, ~~sections~~your ~~entitled~~ownership ~~“Risk~~interest ~~Factors,”~~will ~~“Selected~~be ~~Consolidated~~immediately ~~Financial~~diluted ~~Data”~~to ~~and~~the ~~“Management’s~~extent ~~Discussion~~of ~~and~~the ~~Analysis~~difference ofbetween ~~Financial~~the initial ~~Condition~~public ~~and~~offering ~~Results~~price ofper ~~Operations”~~share and ~~our~~the ~~audited~~pro ~~consolidated~~forma ~~annual~~tangible ~~and unaudited~~book ~~consolidated~~value ~~interim~~per ~~financial~~share ~~statements~~of ~~and~~our ~~accompanying~~common ~~notes~~stock ~~included~~after ~~elsewhere in~~ this ~~prospectus~~offering.

Our ~~unaudited~~ ~~pro~~historical ~~forma~~net tangible ~~condensed~~book ~~consolidated~~value ~~financial~~as ~~statements consist~~ of ~~unaudited~~December ~~pro~~31, ~~forma~~2015 ~~condensed~~was ~~consolidated~~$21.5 ~~statements~~million, ofor ~~comprehensive~~$19.55 ~~loss~~per ~~for~~common ~~the~~share. ~~three~~Historical ~~months~~net ~~ended~~tangible ~~March 31,~~book ~~2014~~value ~~and~~per ~~for~~share represents the ~~years~~amount ~~ended~~of ~~December 31,~~our ~~2013~~total ~~and 2012,~~tangible ~~and~~assets anless ~~unaudited~~total ~~pro~~liabilities, ~~forma~~divided ~~condensed~~by ~~consolidated~~1,100,000 ~~balance~~common ~~sheet~~shares outstanding as of ~~March~~December 31, ~~2014~~2015. The unaudited pro forma condensed consolidated financial statements are based on and have been derived by application of pro forma adjustments to our historical consolidated annual and consolidated interim financial statements included elsewhere in this prospectus.

~~The~~Our pro forma net tangible book value as of December 31, 2015 was $41.7 million, or $0.42 per share of ~~unaudited~~common stock. Pro forma net tangible book value per share represents the amount of our total pro forma ~~condensed~~tangible ~~consolidated~~assets ~~financial~~less ~~statements~~our ~~give~~total pro forma liabilities, divided by the pro forma number of shares of our common stock outstanding on December 31, 2015, after giving effect to the ~~following~~Conversion ~~Transactions~~(including asthe ifconversion ~~they~~of ~~each~~preferred ~~had~~shares ~~occurred~~into onpreferred ~~January 1~~stock and the conversion of profits interests into common stock), ~~2012~~the automatic conversion of all of our outstanding shares of preferred stock into shares of our common stock, and the issuance and ultimate conversion of 8,855,145 Series D preferred shares for gross proceeds of $15.8 million on February 17, 2016 through the ~~unaudited~~exercise of the call option. Our pro forma ~~condensed~~as ~~consolidated~~adjusted ~~statements~~net tangible book value per share represents the amount of ~~comprehensive~~our ~~loss~~total ~~and~~pro ~~on March~~forma tangible assets less our total pro forma liabilities, divided by the pro forma as adjusted number of shares of our common stock outstanding on December 31, ~~2014~~2015, ~~for~~after further reflecting the ~~unaudited~~sale ~~pro~~of ~~forma~~shares ~~condensed~~of ~~consolidated~~our ~~balance~~common ~~sheet:~~stock in this offering at an assumed initial public offering price of $ , which is the midpoint of the estimated price range set forth on the cover page of this prospectus.

~~Reorganization~~After giving effect to our issuance and ~~Separation~~sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the ~~Prostate~~estimated ~~Business~~price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, the pro forma net tangible book value as of December 31, 2015 would have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $ per share. The initial public offering price per share will significantly exceed the pro forma net tangible book value per share. Accordingly, new investors who purchase shares of common stock in this offering will suffer an immediate dilution of their investment of $ per share. The following table illustrates this per share dilution to the new investors purchasing shares of common stock in this offering without giving effect to the option to purchase additional shares granted to the underwriters:

• the contribution by Legacy VPI to us of certain assets that are used in the antifungal business;


Assumed initial public offering price per share				$
Historical net tangible book value per share as of December 31, 2015	$	19.55
Decrease attributable to the conversion of outstanding preferred stock		(19.13	)
Pro forma net tangible book value per share as of December 31, 2015		0.42
Increase per share attributable to sale of shares of common stock in this offering

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

Dilution per share to new investors.				$

•Each $1.00 increase (decrease) in the ~~distribution~~assumed toinitial ~~Viamet~~public ~~Holdings’~~offering ~~shareholders~~price of $ per ~~Legacy~~share ~~VPI~~would increase (decrease) the pro forma net tangible book value by $ million, ~~which~~the atpro forma as adjusted net tangible book value per share after this offering by $ per share and the ~~time~~dilution ofto ~~distribution~~investors in this offering by $ per share, ~~will~~assuming ~~contain~~that ~~all~~the number of ~~the~~shares ~~assets~~offered ~~and~~by ~~liabilities~~us, ~~directly~~as set ~~attributable~~forth toon the ~~prostate~~cover ~~business~~page of this prospectus, remains the same and ~~associated~~after ~~with~~deducting the ~~collaboration~~estimated ~~agreements~~underwriting ~~remaining~~discount ~~with~~and ~~Legacy~~offering ~~VPI;~~expenses payable by us.

• certain transactions contemplated by agreements between us and Legacy VPI described in “Certain Relationships and Transactions with Related Persons;” and

• the issuance of series C1 preferred shares upon the exercise of our Viamet Holdings series C1 warrants, which, pursuant to the terms of the LLC Agreement (as defined below), as amended in connection with the Reorganization, will occur automatically.

Conversion of Viamet Holdings to Viamet Pharmaceuticals, Inc.

• the issuance of shares of our common stock to holders of Viamet Holdings common shares in conjunction with our conversion to a Delaware corporation based on an exchange ratio of share of Viamet Pharmaceuticals, Inc. for each common share of Viamet Holdings;

• the issuance of shares of our preferred stock to holders of Viamet Holdings preferred shares in conjunction with our conversion to a Delaware corporation based on an exchange ratio of share of the corresponding class of Viamet Pharmaceuticals, Inc. preferred stock for each Viamet Holdings preferred share;

• the automatic conversion of preferred stock to common stock upon the closing of this offering.

InIf ~~management’s opinion,~~ the ~~unaudited~~underwriters ~~pro~~exercise ~~forma~~their ~~condensed~~option ~~consolidated financial statements reflect certain adjustments that are necessary~~ to ~~present~~purchase ~~fairly~~additional ~~our~~shares ~~unaudited~~in ~~pro~~full, ~~forma~~the ~~condensed consolidated results of operations and our unaudited~~ pro forma ~~condensed consolidated balance sheet~~ as ~~of and for the periods indicated.~~adjusted ~~The~~net ~~pro~~tangible ~~forma~~book ~~adjustments~~value ~~give~~will ~~effect~~increase to ~~events~~$ per ~~that are (1) directly attributable to the Transactions~~share, ~~(2) factually~~representing ~~supportable,~~an ~~and~~immediate ~~(3) with~~increase ~~respect~~ to ~~the~~existing ~~statement~~stockholders of ~~comprehensive~~$ per ~~loss,~~share ~~expected~~and toan ~~have a continuing impact on~~immediate ~~us.~~dilution ~~The~~of ~~unaudited~~$ per ~~pro~~share ~~forma~~to ~~condensed~~new ~~consolidated financial statements do not include non-recurring items, including offering related legal and advisory fees~~investors. ~~The~~If ~~pro~~any ~~forma~~shares ~~adjustments~~ are ~~based~~issued onupon ~~assumptions~~exercise ~~that~~of ~~management~~outstanding ~~believes~~options, ~~are reasonable~~you ~~given~~will ~~the~~experience ~~information~~further ~~currently available~~dilution.

The ~~unaudited~~following table summarizes, on a pro forma ~~condensed~~basis ~~consolidated~~as ~~financial~~of ~~statements~~December ~~are for~~31, ~~illustrative~~2015, ~~and~~after ~~informational~~giving ~~purposes~~effect ~~only~~to ~~and~~the ~~are~~Conversion ~~not~~and ~~intended~~the toautomatic ~~represent~~conversion ~~what~~of all of our ~~results~~outstanding shares of ~~operations~~preferred orstock ~~financial~~into ~~position~~shares ~~would~~of ~~have~~our ~~been~~common ~~had~~stock weupon ~~operated~~the asclosing aof ~~standalone~~this ~~public~~offering, ~~company~~the ~~during~~differences between the ~~periods~~number ~~presented~~of orshares ifof common stock purchased from us, the total consideration paid to us and the average price ~~Transactions~~per ~~had~~share ~~actually~~paid ~~occurred~~by asexisting stockholders and by new investors purchasing shares of ~~the~~common ~~dates~~stock ~~indicated~~in this offering. The ~~unaudited~~calculation ~~pro~~below ~~forma~~is ~~condensed~~based ~~consolidated~~on ~~financial~~an ~~statements~~assumed ~~should~~initial ~~not~~public beoffering ~~considered~~price ~~indicative~~of $ per share, which is the midpoint of ~~our~~the ~~future~~estimated ~~results~~price range set forth on the cover page of ~~operations~~this orprospectus, ~~financial~~before ~~position~~the asdeduction aof ~~standalone~~the ~~public company.~~estimated underwriting discounts and commissions and estimated offering expenses payable by us:

Our historical condensed consolidated financial statements include expenses for certain support functions that are provided on a centralized basis within Viamet Holdings, such as expenses for business technology, facilities, legal, finance, human resources, and business development, among others. These expenses have been allocated based on the most relevant allocation method to the service provided. In addition, there are no income tax expense effects related to the pro forma adjustments as the subsidiaries of Viamet Holdings have a zero effective tax rate and any impact would be offset by a corresponding change in the deferred tax asset valuation allowance.


	Shares Purchased					Total Consideration					Average Price Per Share
	Number		Percent			Amount		Percent			Average Price Per Share
Existing stockholders		101,342,243			%	$	76,215,000			%	$	0.75
New Investors											$

Total				100	%				100	%

WeA ~~will~~$1.00 ~~also~~increase ~~incur~~(decrease) ~~additional~~in ~~costs~~the ~~related~~assumed toinitial ~~being~~public aoffering price of ~~standalone~~$ per ~~public~~share, ~~company.~~which Asis athe ~~standalone~~midpoint ~~public~~of ~~company~~the estimated price range set forth on the cover page of this prospectus, ~~our~~would increase (decrease) the total ~~costs~~consideration ~~related~~paid toby ~~such~~new ~~support~~investors ~~functions~~by $ million ~~may~~and ~~differ~~increase ~~from~~(decrease) the ~~costs~~percentage ~~that~~of ~~were~~total ~~historically~~consideration ~~incurred~~paid by ~~Viamet~~new ~~Holdings.~~investors Weby ~~estimate~~approximately %, assuming that ~~these~~the ~~costs~~number ~~may~~of ~~exceed~~shares ~~the~~offered ~~amounts~~by ~~for~~us, ~~full~~as set ~~year~~forth ~~2013~~on bythe acover ~~range~~page of ~~approximately~~this ~~$ to~~prospectus, ~~$ in~~remains ~~2014~~the same. WeEach ~~have~~increase ~~not~~(decrease) ~~adjusted~~of 1.0 million shares in the ~~accompanying~~number ~~unaudited~~of ~~pro~~shares of common stock offered by us at the assumed initial public offering price would increase (decrease) the total ~~forma~~consideration ~~condensed~~paid ~~consolidated~~by ~~statements~~new investors by $ million and increase (decrease) the percentage of ~~comprehensive~~total ~~loss~~consideration ~~for~~paid ~~any~~by new investors by approximately %, assuming an initial public offering price of ~~these~~$ per ~~estimated~~share, ~~costs~~which asis ~~they~~the ~~are~~midpoint ~~projected~~of ~~amounts~~the ~~based~~estimated price range set forth on ~~estimates~~the ~~and,~~cover ~~therefore~~page of this prospectus, ~~are~~after ~~not~~deducting ~~factually~~estimated ~~supportable~~underwriting discounts and commissions and estimated offering expenses payable by us.

The number of shares purchased from us by existing stockholders is based on 101,342,243 shares of our common stock outstanding as of December 31, 2015 after giving effect to the Conversion and the automatic conversion of all of our outstanding shares of preferred stock into 83,591,657 shares of common stock upon the closing of this offering, and excludes 8,855,145 shares of common stock issuable upon conversion of Series D preferred shares issued on February 17, 2016 through the exercise of the call option and 2,314,489 shares of our common stock available for future issuance under our 2011 Incentive Plan as of December 31, 2015.

~~Pro~~SELECTED ~~Forma~~CONSOLIDATED ~~Condensed~~FINANCIAL ~~Consolidated~~DATA ~~Statement of Comprehensive Loss for the Three Months Ended March 31, 2014~~

	HistoricalViametHoldings			Reorganizationand SeparationAdjustments			Notes	ConversionAdjustments		Notes			ViametPharmaceuticals,Inc.Pro Forma
	(unaudited)
	(in thousands)
Revenue	$	365		$	(334	)	(c)	$	—				$	31
Related party revenue		—			196		(b)		—					196
Total revenue		365			(138	)			—					227
Research and development		3,808			(1,674	)	(a),(b),(c)		—					2,134
General and administrative		1,265			(12	)	(a)		—					1,253
Total expense		5,073			(1,686	)			—					3,387
Operating loss		(4,708	)		1,548				—					(3,160	)
Change in fair value of financial instruments		(2,574	)		—				2,009		(g)			(565	)
Net loss		(7,282	)		1,548				2,009					(3,725	)
Comprehensive loss	$	(7,282	)	$	1,548			$	2,009				$	(3,725	)
Net loss	$	(7,282	)										$	(3,725	)
Accretion and deemed dividends—preferred shares		(19,714	)						19,714		(e	)
Net loss attributable to common shareholders	$	(26,996	)										$	(3,725	)
Net loss per share attributed to common shareholders—basic and diluted loss per share	$	(24.54	)
Weighted-average number of common shares outstanding—basic and diluted		1,100,000									(f	)

You should read the following selected consolidated financial data together with our audited consolidated financial statements and accompanying notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus. The selected consolidated financial data in this section are not intended to replace our consolidated financial statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future.

The selected consolidated statement of comprehensive loss data for the years ended December 31, 2014 and 2015 and the selected consolidated balance sheet data as of December 31, 2014 and 2015 are derived from our audited consolidated financial statements appearing elsewhere in this prospectus.


	Year Ended December 31,
	2014			2015
	(in thousands, except share and per share data)
Consolidated Statement of Comprehensive Loss Data:
Revenue	$	198		$	679
Operating expenses:
Research and development		8,553			25,375
General and administrative		7,725			5,407

Total expenses		16,278			30,782

Operating loss		(16,080	)		(30,103	)
Change in fair value of financial instruments		2,156			(2,568	)
Interest income		1			2

Net loss from continuing operations		(13,923	)		(32,669	)
Loss from discontinued operations		(4,491	)		—

Net loss and comprehensive loss	$	(18,414	)	$	(32,669	)
Accretion and deemed dividends:
Preferred shares		(4,471	)		(6,618	)

Net loss attributable to common shareholders:
Basic and diluted	$	(22,885	)	$	(39,287	)

Net loss per share attributable to common shareholders:
Basic and diluted	$	(20.80	)	$	(35.72	)

Weighted average shares used to compute net loss per share attributable to common shareholders:
Basic and diluted		1,100,000			1,100,000

Pro forma net loss per common share—basis and diluted (unaudited)⁽¹⁾	$			$	(0.30	)

Weighted average pro forma common shares outstanding—basic and diluted (unaudited)⁽¹⁾					98,993,933

(1)

Pro forma to reflect (i) the Conversion (including the conversion of preferred shares into preferred stock and the conversion of profits interests into common stock), (ii) the conversion of all outstanding shares of preferred stock into shares of common stock and (iii) the issuance and ultimate conversion of 8,855,145 Series D preferred shares for gross proceeds of $15.8 million on February 17, 2016 through the exercise of the call option.


	As of December 31,
	2014			2015
	(in thousands)
Consolidated Balance Sheet Data:
Cash and equivalents	$	21,301		$	29,361
Working capital		19,969			21,346
Total assets		23,859			31,976
Call option liability		1,859			4,427
Members’ deficit and stockholders’ deficit		(47,406	)		(85,988	)

Pro Forma Condensed Consolidated Statement of Comprehensive Loss for the Year Ended December 31, 2013

	HistoricalViametHoldings			Reorganizationand SeparationAdjustments			Notes	ConversionAdjustments			Notes	ViametPharmaceuticals,Inc. Pro Forma
	(unaudited)
	(in thousands)
Revenue	$	2,873		$	(2,696	)	(c)	$	—			$	177
Related party revenue		—			900		(b)		—				900
Total revenue		2,873			(1,796	)			—				1,077
Research and development		10,789			(5,191	)	(a),(b),(c)		—				5,598
General and administrative		2,872			12		(a),(c)		—				2,884
Total expense		13,661			(5,179	)			—				8,482
Operating loss		(10,788	)		3,383				—				(7,405	)
Change in fair value of financial instruments		(387	)		—				(44	)	(g)		(431	)
Net loss		(11,175	)		3,383				(44	)			(7,836	)
Comprehensive loss	$	(11,175	)	$	3,383			$	(44	)		$	(7,836	)
Net loss	$	(11,175	)									$	(7,836	)
Accretion and deemed dividends—preferred shares		(7,516	)						7,516		(e)		—
Net loss attributable to common shareholders	$	(18,691	)									$	(7,836	)
Net loss per share attributed to common shareholders—basic and diluted loss per share	$	(16.99	)
Weighted-average number of common shares outstanding—basic and diluted		1,100,000									(f)

Pro Forma Condensed Consolidated Statement of Comprehensive Loss for the Year Ended December 31, 2012

	HistoricalViametHoldings			Reorganizationand SeparationAdjustments			Notes	ConversionAdjustments			Notes			ViametPharmaceuticals,Inc. Pro Forma
	(unaudited)
	(in thousands)
Revenue	$	3,484		$	(3,434	)	(c)	$	—					$	50
Related party revenue		—			831		(b)		—						831
Total revenue		3,484			(2,603	)			—						881
Research and development		8,760			(5,058	)	(a),(b),(c)		—						3,702
General and administrative		2,650			(35	)	(a),(c)		—						2,615
Total expense		11,410			(5,093	)			—						6,317
Operating loss		(7,926	)		2,490				—						(5,436	)
Change in fair value of financial instruments		(62	)		—				(11	)		(g)			(73	)
Interest income		3			—				—						3
Net loss		(7,985	)		2,490				(11	)					(5,506	)
Comprehensive loss	$	(7,985	)	$	2,490			$	(11	)				$	(5,506	)
Net loss	$	(7,985	)											$	(5,506	)
Accretion and deemed dividends—preferred shares		(5,328	)						5,328			(e)			—
Net loss attributable to common shareholders	$	(13,313	)											$	(5,506	)
Net loss per share attributed to common shareholders—basic and diluted loss per share	$	(12.10	)
Weighted-average number of common shares outstanding—basic and diluted		1,100,000										(f	)

Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2014

	HistoricalViametHoldings			Reorganizationand SeparationAdjustments	Notes			ConversionAdjustments			Notes			Total ViametPharmaceuticals,Inc. Pro Forma
	(unaudited)
	(in thousands)
Current assets
Cash and cash equivalents	$	7,383				(d	)	$	—
Accounts receivable		347				(d	)		—
Prepaid and other		1,029				(d	)		—
Total current assets		8,759							—
Furniture, fixtures and equipment, net		201				(d	)		—
Other assets		111							—
Total assets	$	9,071						$	—
Current liabilities
Accounts payable	$	1,564				(d	)	$	—
Accrued expenses		1,554				(d	)		—
Accrued rent—current		14							—
Deferred revenue		222				(d	)		—
Call option liability		6,348							—
Total current liabilities		9,702							—
Long term liabilities
Accrued rent—long term		139							—
Warrant liability		4,761							(4,761	)		(e	)
Total long term liabilities		4,900							(4,761	)
Total liabilities		14,602							(4,761	)
Redeemable convertible preferred shares		86,530							(86,530	)		(e	)
Members’ deficit and stockholders’ deficit
Capital accounts—common (66,237,113 and shares authorized and 4,836,993 and shares issued and outstanding as of March 31, 2014 on an actual and pro forma basis, respectively)		1							—
Accumulated deficit		(92,062	)			(d	)		91,291
Total members’ deficit and stockholders’ deficit		(92,061	)						91,291
Total liabilities, redeemable convertible preferred shares, members’ deficit and stockholders’ deficit	$	9,071						$	—

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(a) Reflects the elimination of expenses directly related to the prostate business, including employee related expenses, as a result of the distribution of Legacy VPI to our shareholders. The adjustments specific to the distribution of Legacy VPI are as follows:

For the three months ended March 31, 2014:
Research and development	($	1,566,000	)
General and administrative	($	12,000	)
For the year ended December 31, 2013:
Research and development	($	4,147,000	)
General and administrative	($	11,000	)
For the year ended December 31, 2012:
Research and development	($	3,692,000	)
General and administrative	($	6,000	)

(b) Reflects the impact of the transition services agreement executed between us and Legacy VPI. The adjustments were calculated using actual records of personnel time spent on specific prostate business related research and development projects by us and personnel time spent on specific antifungal business related research and development projects by Legacy VPI as well as time spent directly related to the Dow AgroSciences LLC, or DAS, and Novartis Bioventures Ltd., or Novartis, collaboration agreements, applying a full time equivalent billing rate in accordance with the terms of the transition services agreement. The adjustments are as follows:

For the three months ended March 31, 2014:
Related party revenue	$	196,000
Research and development	$	34,000
For the year ended December 31, 2013:
Related party revenue	$	900,000
Research and development	$	108,000
For the year ended December 31, 2012:
Related party revenue	$	831,000
Research and development	$	78,000

(c) Reflects the elimination of revenue and expenses (including expense reimbursements) related to the DAS and Novartis collaboration agreements. The adjustments are as follows:

For the three months ended March 31, 2014:
Revenue	($	334,000	)
Research and development	($	142,000	)
For the year ended December 31, 2013:
Revenue	($	2,696,000	)
Research and development	($	1,152,000	)
General and administrative	$	23,000
For the year ended December 31, 2012:
Revenue	($	3,434,000	)
Research and development	($	1,444,000	)
General and administrative	($	29,000	)

(d) Reflects the adjustments specific to the distribution of Legacy VPI, including net assets associated with the DAS and Novartis collaboration agreements, to Viamet Holdings’ shareholders. It is expected that cash and cash equivalents of $ net of working capital adjustments will be retained by Legacy VPI in accordance with the separation and distribution agreement. This will result in a dividend to Viamet Holdings shareholders of the member units of Legacy VPI with a book value of $ . This excludes stock compensation adjustments, if any, that arise based on the terms of the separation arrangement. The adjustments are as follows:

Debit / (Credit) Cash and cash equivalents Accounts receivable Prepaid and other assets Furniture, fixtures and equipment, net Accounts payable Accrued expenses Deferred revenue Accumulated deficit (dividend)

(e) Reflects adjustments to reclassify the warrant liability ($4,761,000) and the redeemable convertible preferred shares ($86,530,000) to retained earnings (accumulated deficit) to effect the impact of the Reorganization and corporate conversion in which the redeemable convertible preferred shares will be converted into common stock of Viamet. In addition, the unaudited

statements of comprehensive loss for the three months ended March 31, 2014 and twelve months ended December 31, 2013 and 2012 reflect the reduction of the accretion and deemed dividends ($19,714,000, $7,516,000 and $5,328,000, respectively) associated with the preferred shares of Viamet Holdings which are assumed to have converted to common stock of Viamet as of January 1, 2012.

(f) Reflects the adjustments to the common shares outstanding to effect the corporate conversion described in the above headnote.

(g) Reflects the adjustments related to the fair value of the warrant liability of $2,009,000, ($44,000) and ($11,000) for the three months ended March 31, 2014 and the twelve months ended December 31, 2013 and 2012, respectively, which reflect the instruments having been exercised for preferred shares of Viamet Holdings effective as of January 1, 2012.

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 our audited financial statements and related notes, ~~and our unaudited pro forma condensed consolidated financial statements and the related notes,~~ appearing elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, future financial performance, expense levels and liquidity sources, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biopharmaceutical company focused on the discovery, development and commercialization of novel ~~antifungal agents~~pharmaceuticals based on our proprietary metalloenzyme ~~medicinal~~ chemistry and biology technology platform. Metalloenzymes, which wecontain ~~call~~a ~~our~~metallic atom that is primarily responsible for enzyme activity, ~~Metallophile®~~are ~~Technology~~an important class of drug targets for the treatment of a broad range of diseases. We ~~are~~utilize ~~using~~ our ~~platform~~technology to design novel drugs that we expect towill have significant benefits as compared to currently marketed metalloenzyme inhibitors, including greater ~~selectivity~~efficacy, ~~fewer~~improved ~~side~~safety, ~~effects~~more favorable pharmacokinetic properties and ~~improved~~superior ~~potency~~therapeutic ~~compared~~index. We have leveraged our technology to ~~currently~~develop ~~available~~several product candidates that we believe have the potential to become best-in-class antifungal agents. ~~Fungal~~VT-1161, ~~infections~~our ~~represent~~lead product candidate, is currently in separate Phase 2b clinical trials for the treatment of onychomycosis, a ~~significant~~fungal ~~medical~~infection ~~problem~~of the nail, and ~~include~~recurrent ~~highly~~vulvovaginal ~~prevalent~~candidiasis, ~~mucosal~~or ~~and~~RVVC, ~~dermatologic~~a ~~infections~~recurrent form of vaginal yeast infection. In recent interim analyses of these Phase 2b clinical trials, aswe ~~well~~observed aspositive results in terms of both safety and efficacy for both indications. We expect final data on the principal efficacy and safety endpoints, or ~~life~~top-~~threatening~~line ~~invasive~~final ~~central~~data, ~~nervous~~from ~~system~~our ongoing Phase 2b clinical trials to be available during the fourth quarter of 2016. Our other product candidates include VT-1129 for the treatment of cryptococcal meningitis, currently in a Phase 1 clinical trial, and VT-1598 ~~systemic~~for ~~infections~~the treatment of Valley Fever, currently in IND-enabling studies. WeIn ~~are~~addition ~~developing~~to ~~distinct~~the development of novel antifungal agents, ~~for~~we ~~each~~are ofleveraging ~~these~~our ~~major~~technology ~~categories~~to pursue drug discovery programs in oncology and certain orphan diseases.

~~Our~~We ~~lead~~refer ~~product~~to ~~candidate~~our broad array of metalloenzyme chemistry and biology technologies as our MIDAS (Metalloenzyme Inhibitor Design and Synthesis) technology platform. This platform, ~~VT-1161~~built over the past decade, isencompasses ana ~~oral~~powerful ~~agent~~set ~~that~~of wechemistry ~~are~~and ~~developing~~biology ~~for~~tools that address the ~~treatment~~challenges and complexities of ~~recurrent~~metalloenzyme ~~vulvovaginal~~drug ~~candidiasis,~~discovery orand ~~RVVC,~~enable athe design of highly ~~prevalent~~differentiated ~~mucosal~~metalloenzyme ~~infection~~inhibitors. ~~for which~~Our ~~there~~technology ~~are~~is nocomprised ~~approved~~of ~~therapies~~a indeep ~~the~~understanding ~~United~~of ~~States~~over 120 potential metalloenzyme targets, ~~and~~a ~~onychomycosis~~set of proprietary computer-based design tools, a ~~very~~library ~~common~~of ~~fungal~~over ~~infection~~200 unique metal-binding groups, knowledge of ~~the~~important ~~nail~~counter-screens ~~for~~and ~~which~~pharmacologic ~~current~~expertise. ~~treatments~~We have focused our efforts on disease areas that are ~~suboptimal~~characterized ~~with~~by ~~respect~~significant tounmet ~~safety,~~medical ~~tolerability~~need and ~~efficacy~~commercial opportunity and for which our technology provides an opportunity to develop highly differentiated agents which may have compelling advantages over currently available therapies.

WeVT-1161 ~~are~~is ~~currently~~a ~~completing~~highly ~~two~~potent ~~proof~~and selective, oforally ~~concept~~available ~~Phase~~inhibitor 2athat ~~clinical~~we ~~trials~~are ofdeveloping ~~VT-1161, one~~ for the treatment of ~~moderate~~onychomycosis, tofor ~~severe~~which ~~acute vulvovaginal~~current ~~candidiasis,~~treatments orare ~~AVVC,~~suboptimal ~~commonly~~with ~~known~~respect asto ~~vaginal~~safety, ~~yeast~~tolerability ~~infection~~and efficacy, and afor ~~second~~RVVC, for ~~the~~which ~~treatment~~we ofare ~~moderate~~not toaware ~~severe~~of ~~interdigital~~any ~~tinea~~approved therapies ~~pedis,~~in athe ~~dermatologic~~United ~~infection commonly known as athlete’s foot~~States. We expect tothe ~~begin~~results of our ongoing Phase 2b clinical trials ~~for VT-1161~~ in ~~RVVC and onychomycosis in~~ the ~~second~~fourth ~~half~~quarter of ~~2014~~2016. We are also developing VT-1129 as an oral agent for cryptococcal meningitis, a life-threatening invasive fungal infection of the ~~lining~~central ofnervous ~~the brain and spinal cord~~system. We ~~anticipate~~initiated ~~submitting~~a anPhase 1 ~~investigational~~single-ascending ~~new~~dose ~~drug~~study ~~application,~~of ~~or IND, for~~ VT-1129 toin ~~the~~healthy ~~U.S.~~volunteers ~~Food and Drug Administration, or the FDA,~~ during the ~~first~~fourth ~~half~~quarter of 2015, ~~and~~with weresults ~~recently~~expected ~~applied~~during to the ~~FDA~~second ~~for orphan~~quarter ~~drug~~of ~~designation~~2016. Our third program, VT-1598 ~~and~~for ~~related~~the treatment ~~analogues~~of coccidioidomycosis, isa fungal infection in ~~preclinical~~the ~~development~~southwestern ~~with~~United aStates ~~goal~~also ofknown ~~developing~~as anValley ~~oral~~Fever, ~~and~~is ~~intravenous~~in ~~therapy~~IND-enabling ~~for~~studies ~~the~~targeting ~~treatment~~an ofIND ~~invasive~~filing ~~fungal~~in ~~infections~~the fourth quarter of 2016.

We66 are currently a Delaware limited liability company named Viamet Pharmaceuticals Holdings, LLC, or Viamet Holdings. Prior to December 2011, we operated as Viamet Pharmaceuticals, Inc., or VPI, a Delaware corporation that was incorporated in December 2004 as a research and development company initially focused on the development of compounds for the treatment of fungal diseases and, later, prostate cancer. In December 2011, Viamet Holdings was formed and made the parent of VPI through the exchange of VPI’s capital stock for membership interests in Viamet Holdings. Since December 2011, we have operated two main businesses, the prostate business, which is operated through VPI and primarily focuses its research and development on discovery and development of product candidates to treat patients with prostate cancer, and the human antifungal business, which is primarily operated through our remaining subsidiaries. The prostate business has developed a product candidate, VT-464, or the prostate candidate, which is in the early stages of clinical development.

InWe ~~connection~~are ~~with~~currently ~~this~~a ~~offering,~~Delaware ~~Viamet~~limited ~~Holdings~~liability ~~will~~company ~~form~~named aViamet ~~wholly~~Pharmaceuticals ~~owned~~Holdings, ~~limited~~LLC, ~~liability~~or Viamet ~~company~~Holdings. ~~subsidiary~~Prior ~~and~~to ~~contribute~~December ~~the~~2011, ~~stock~~we ofoperated ~~VPI~~as toViamet itPharmaceuticals, Inc., Weor ~~refer to~~ VPI, ~~and~~a ~~this~~Delaware ~~parent~~corporation ~~limited~~that ~~liability~~was ~~company~~incorporated ~~that~~in ~~will~~December be2004 ~~created~~as ~~for~~a itresearch ~~collectively~~and asdevelopment ~~Legacy VPI~~company. ~~Prior~~For tomost ~~conducting~~of ~~this~~our ~~offering~~history, we ~~will~~have ~~spin~~primarily ~~off~~focused ~~the~~on ~~prostate business,~~the ~~along~~development ~~with~~of ~~our~~compounds ~~collaboration~~for ~~programs, in~~ the ~~form~~treatment of afungal ~~distribution~~diseases ofand, ~~Legacy~~later, ~~VPI~~prostate ~~to our existing equity holders~~cancer. ~~Prior~~In toDecember ~~the distribution of Legacy VPI~~2011, ~~the~~ Viamet ~~Pharmaceuticals,~~Holdings ~~Inc.~~was ~~name~~formed and ~~certain~~made ~~assets related to~~ the ~~antifungal~~parent ~~business held~~of ~~by Legacy~~ VPI ~~will~~through bethe ~~transferred~~exchange ~~to one or more~~ of ~~the~~VPI’s ~~subsidiaries~~capital ofstock ~~Viamet~~for ~~Holdings~~membership ~~engaged~~interests in ~~the antifungal business~~Viamet Holdings. In ~~connection~~October ~~with this corporate reorganization~~2014, ~~warrants~~we tospun ~~purchase~~off ~~series~~the C1prostate ~~preferred~~cancer ~~shares~~business, ~~will~~as bewell ~~automatically net~~as ~~exercised.~~a ~~Additionally,~~collaboration weprogram ~~expect~~not ~~that~~associated 11with ofour ~~the~~human ~~existing~~antifungal 14business, ~~Legacy~~in ~~VPI~~a ~~employees~~transaction ~~will~~we ~~become~~refer ~~our~~to ~~only~~as ~~full-time~~the ~~employees~~Spin-off. ~~Thereafter~~We ~~and~~effected ~~immediately prior to~~ the ~~effectiveness~~Spin-off ofthrough ~~the~~a ~~registration~~series ~~statement~~ of ~~which this prospectus forms a~~ ~~part,~~transactions ~~Viamet~~whereby ~~Holdings~~Innocrin ~~will be converted into a Delaware corporation and renamed Viamet~~ Pharmaceuticals, Inc., ~~Upon~~or ~~the~~Innocrin ~~closing of our initial public offering~~Pharmaceuticals, ~~all~~one of ~~the~~Viamet ~~shares~~Holdings’ ofsubsidiaries, ~~preferred~~was ~~stock~~transferred ~~issued~~ to ~~our members in the conversion to~~ a ~~corporation~~ ~~will~~newly ~~convert~~formed ~~into~~subsidiary, ~~shares~~Innocrin ofPharmaceuticals ~~our~~Holdings, ~~common~~LLC, ~~stock.~~or WeInnocrin ~~refer~~Holdings, toand then the equity ~~asset~~interests ~~transfer,~~in ~~the~~Innocrin ~~Legacy~~Holdings ~~VPI~~were ~~distribution,~~distributed to our ~~conversion~~equityholders toon a ~~Delaware~~pro-rata ~~corporation and the associated recapitalization collectively as the Reorganization~~basis.

~~The~~To ~~following~~date, ~~diagrams~~we ~~illustrate~~have devoted substantially all of our resources ~~ownership~~to advance our research and ~~organizational~~development ~~structure~~efforts relating to our product candidates, ~~before~~including activities to develop our MIDAS technology and ~~after~~our ~~giving~~core ~~effect~~capabilities in the study of metalloenzyme inhibitors, identify potential product candidates, undertake preclinical studies and clinical trials, manufacture our product candidates to support our preclinical studies and clinical trials, acquire and protect rights to our intellectual property, raise capital to support our research and development efforts and provide general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have financed our operations primarily through private placements of equity securities. To a lesser extent, we financed our operations through our collaboration with Novartis Bioventures Ltd., or Novartis, which ended in 2015, a grant from the ~~Reorganization~~National Institutes of Health, or the NIH, for research on inhibitors for the oral treatment of central nervous system (CNS) Coccidioides, the causative organism of Valley Fever, or the NIH grant, and a grant from the Department of Defense, or the DOD, for research on VT-1598, under a ~~this~~program ~~offering~~called Development and Preclinical Evaluation of VT-1598, A Broad-Spectrum and Safe Anitfungal to Prevent Fungal (Mold) Infections of Battlefield Wounds. Excluding amounts attributed to the Spin-off, since inception, we have raised an aggregate of $111.9 million to fund our operations, of which:

~~Before~~• ~~Reorganization~~$92.0 million was in the form of gross proceeds from the sale of Viamet Holdings’ preferred shares;

71• $15.4 million was in the form of gross proceeds from the sale of VPI preferred stock; and

•

$4.5 million was through a collaboration with Novartis and government grants.

In addition, we raised $9.4 million from a collaboration with Dow AgroSciences LLC, or DAS, in a program that was divested through the Spin-off.

Other than revenue from our grants, substantially all of our revenue to date has been collaboration revenue, which we first began to generate in November 2010. We did not recognize any collaboration revenue for the years ended December 31, 2014 or 2015.

Since inception, we have incurred significant operating losses. As of December 31, 2015, we had an accumulated deficit of $86.0 million. Our net loss was $18.4 million for the year ended December 31, 2014 and $32.7 million for the year ended December 31, 2015. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Our research and development expenses have increased substantially in recent years as we have progressed our lead product candidate, VT-1161, from Phase 1 clinical trials to two ongoing Phase 2b clinical trials and initiated clinical development of VT-1129. Research and development expense increased from $8.6 million in 2014 to $25.4 million in 2015. We expect to incur increasing

~~After~~ operating ~~Reorganization~~losses for at least the next several years. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue our Phase 2b clinical trials for VT-1161 in onychomycosis and RVVC. If either or both of these trials are successful, we expect that our expenses will increase further as we conduct our planned Phase 3 clinical trials. We also expect our expenses to increase as we conduct clinical trials of VT-1129 for the ~~Offering~~treatment of cryptococcal meningitis and advance VT-1598 for the treatment of Valley Fever through preclinical development and into clinical development.

To date, we have devoted substantially all of our resources to our research and development efforts relating to our product candidates, including activities to develop our Metallophile Technology and our core capabilities in the study of metalloenzyme inhibitors, identify potential product candidates, undertake preclinical studies and clinical trials, manufacture our product candidates to support our preclinical studies and clinical trials, acquire and protect rights to our intellectual property, raise capital to support our research and development efforts and provide general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have financed our operations primarily through private placements of equity securities. To a lesser extent, we have financed our operations through our collaborations with Dow AgroSciences LLC, or DAS, and Novartis Bioventures Ltd., or Novartis, a grant from the National Institutes of Health, or the NIH, for research on inhibitors for the oral treatment of CNS Coccidioides, the causative organism of valley fever, or the NIH grant, and a Therapeutic Discovery Tax Credit grant from the Internal Revenue Service, or IRS. Since inception, we have raised an aggregate of $70.4 million to fund our operations, of which:

• $32.0 million was in the form of gross proceeds from the sale of VPI preferred stock;

• $25.0 million was in the form of gross proceeds from the sale of our series C1 preferred shares;

• $12.6 million was through payments under our collaborations with DAS and Novartis, both of which will be retained by Legacy VPI after the Reorganization; and

• $0.7 million was through grants from the NIH and the IRS.

Other than our grants, substantially all of our revenue to date has been collaboration revenue, which we first began to generate in November 2010. We recognized collaboration revenue of approximately $0.3 million for the three months ended March 31, 2014.

Since inception, we have incurred significant operating losses. As of March 31, 2014, we had an accumulated deficit of $92.1 million. Our net loss was $8.0 million for the year ended December 31, 2012, $11.2 million for the year ended December 31, 2013 and $7.3 million for the three months ended

March 31, 2014. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

We expect to incur increasing operating losses for at least the next several years. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we initiate and conduct our planned Phase 2b clinical trials for VT-1161 in RVVC and onychomycosis. If either or both of these trials are successful, we expect that our expenses will increase further as we conduct Phase 3 clinical trials. We also expect our expenses to increase as we initiate and conduct clinical trials of VT-1129 for the treatment of cryptococcal meningitis and advance VT-1598 and its analogues for the treatment of invasive fungal infections through preclinical development and into clinical development.

We do not expect to generate revenue from product sales unless and until we, or our collaborators, if any, successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. We do not currently have an internal capability to manufacture our product candidates, and, to date, all of our manufacturing activities have been performed by third parties. Additionally, we currently utilize third party clinical research organizations, or CROs, to carry out our preclinical studies and clinical trials and we do not yet have a sales organization. If we obtain, or believe that we are likely to obtain, marketing approval for any of our product candidates for which we retain commercialization rights, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Furthermore, upon the closing of this offering, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

We expect to fund our operations through a combination of equity offerings, debt financing, government or other third party funding, collaborations and licensing arrangements for at least the next several years. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements may force us to delay, limit, reduce or terminate our research and development programs and could have a material adverse effect on our financial condition and our product development. We will need to generate significant revenues to achieve sustained profitability and we may never do so.

~~Our~~We do not believe that our ~~recurring~~currently ~~operating~~available ~~losses~~cash and ~~our~~cash ~~net~~equivalents, ~~capital~~including ~~deficiency~~the ~~raise~~proceeds ~~substantial~~from ~~doubt~~the ~~about~~call ~~our~~option ~~ability~~to purchase Series D preferred shares, which was exercised on February 17, 2016, would provide sufficient funds to ~~continue~~enable asViamet ato ~~going~~meet ~~concern~~its obligations for greater than one-year subsequent to December 31, 2015. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, ~~2013~~2015 with respect to this uncertainty. We have no current source of revenue sufficient to sustain our present activities, and we do not expect to generate product revenue until, and unless, the FDA or other regulatory authorities approve VT-1161 or another one of our product candidates and we successfully commercialize such product candidate. Accordingly, our ability to continue as a going concern will require us to obtain additional financing to fund our operations. We believe that the proceeds of this offering, together with our existing cash and cash equivalents, will be sufficient to fund our operations through and, as a result, we believe that the uncertainty regarding our ability to continue as a going concern will be mitigated if we complete this offering.

Financial Operations Overview

Revenue

ToExcluding ~~date,~~amounts attributed weto ~~have not generated any revenues from~~ the ~~sale~~Spin-off, ofall ~~products. All~~ of our revenue to date has been derived from payments under our ~~collaborations~~collaboration with ~~DAS and~~ Novartis and ~~grants from~~government ~~the NIH and the IRS~~grants. ToWe ~~date, we~~ have not generated any revenues in connection with our antifungal programs other than through government ~~the~~ grants ~~from the NIH and the IRS~~. We may generate revenue in the future from government contracts and grants and payments under future collaborations, however we do not expect to generate revenue from product sales unless and until we obtain marketing approval for, and commercialize, VT-1161 or one of our other product candidates.

7368

Collaborations

Novartis. In June 2009, we entered into an option agreement with Novartis to discover and develop metalloenzyme inhibitors of interest to Novartis. OnPrior ~~February 1,~~to ~~2010,~~its ~~we reached~~expiration ~~agreement~~in ~~with~~January ~~Novartis on the selection of a therapeutic target~~2015, ~~which~~we ~~triggered~~received ~~an upfront payment of~~ $13.5 0 million to fund the research and development process. We recorded a non-refundable, non-creditable $1.5 million payment as deferred revenue and recognized the revenue on a straight-line basis over a period of 17 months, representing the original estimated performance period associated with the payment. Upon successful completion of certain items specified in the option agreement, we would ~~receive~~have received royalty payments, asand ~~well as~~ sales and development milestone payments~~. As of March 31~~, ~~2014,~~but no such ~~items have been completed and therefore no royalty or milestone~~ payments ~~have~~were ~~been~~ received.

~~Under the Novartis agreement, the identification of a metalloenzyme inhibitor that meets certain in vitro criteria triggers a~~Dow ~~second payment of $1~~AgroSciences.~~5 million to fund additional research and development.~~ In ~~May~~November ~~2012~~2010, ~~Novartis~~we ~~made~~entered into an ~~additional~~Option, ~~non-refundable~~Research, ~~non-creditable~~Collaboration ~~$1.5~~and ~~million~~License ~~payment~~Agreement, toor ~~continue to fund~~ the ~~research~~DAS ~~and~~Agreement, ~~development~~with ~~process~~DAS ~~related~~ to ~~an identified~~discover ~~metalloenzyme. We deferred the entire payment~~ and ~~recognized~~develop ~~the~~metalloenzyme ~~revenue~~inhibitors ~~on a straight-line basis over a period~~ of 20interest ~~months,~~to ~~representing~~DAS. ~~the~~The ~~estimated performance period associated~~ agreement with ~~the~~DAS ~~payment.~~was Wedivested ~~recognized~~along ~~$0.6~~with ~~million~~Innocrin ofPharmaceuticals ~~the payment~~ as ~~licensing~~part ~~revenue for the year ended December 31, 2012 and $0.9 million~~ of the ~~payment as licensing revenue for the year ended December 31, 2013~~Spin-off. ~~The~~All ~~deferred~~revenues ~~revenue~~and ~~balance~~expenses related to the ~~upfront~~DAS ~~license~~agreement ~~for~~included ~~the~~in ~~Novartis collaboration~~our ~~was~~financial ~~$0.9~~statements ~~million~~are atincluded December 31, 2012 and zero at December 31, 2013. We recognized $0.2 million of the payment as licensing revenue for the three months ended March 31, 2013 and zero as licensing revenue for the three months ended March 31, 2014. The Novartis agreement is scheduled to expire in ~~January~~discontinued ~~2015~~operations.

Dow AgroSciences. In November 2010, we entered into an Option, Research, Collaboration and License Agreement with DAS to discover and develop metalloenzyme inhibitors of interest to DAS. The initial term of this agreement was two years, with the option, exercisable by DAS, to extend the agreement in one year increments for up to four years. DAS previously exercised its right to extend the agreement for an additional year on April 27, 2012 and again on June 27, 2013. As such, the current termination date of the agreement is October 31, 2014.

The agreement requires DAS to pay a non-refundable, non-creditable license fee of $4.5 million, payable in three equal payments. The first payment was due upon execution, and the remaining payments were due within 45 days of January 1, 2011 and 2012. We recorded the entire $4.5 million receivable as deferred revenue and recognized the revenue on a straight-line basis over the term of the agreement, initially 24 months. As a result of the April 2012 extension, we revised the estimated performance period to run through October 2013. As a result of the June 2013 extension, we revised the estimated performance period to run through October 2014.

Under the DAS Agreement, we recognized $1.3 million of the upfront fee as licensing revenue for the year ended December 31, 2012 and $0.4 million of the upfront fee as licensing revenue for the year ended December 31, 2013. At December 31, 2012, the deferred revenue was $0.6 million and at December 31, 2013, the deferred revenue was $0.2 million. We recognized $0.2 million of the upfront fee as licensing revenue for the three months ended March 31, 2013 and $0.1 million of the upfront fee as licensing revenue for the three months ended March 31, 2014. At March 31, 2014, the deferred revenue related to the upfront license with the DAS collaboration was $0.2 million. Upon successful completion of certain items specified in the agreement with DAS, we would be eligible to receive royalty payments and development milestone payments of up to $13.3 million in the aggregate for each indication. As of March 31, 2014, no such items have been completed and therefore no royalty or milestone payments have been received.

The agreement also requires DAS to fund collaboration research efforts through the end of the contract term, which has been extended to October 31, 2014. Payments for research and development services under the agreement include our personnel expenses, on a contractual rate, as well as direct research expenses. We recognize research collaboration payments as revenue in the period the research effort occurs.

We recognized a total of $1.6 million as collaboration revenue for the year ended December 31, 2012 and a total of $1.4 million as collaboration revenue for the year ended December 31, 2013. Our total direct program expense was $1.2 million for 2012 and $1.0 million for 2013. We recognized a total of $0.4 million as collaboration revenue for the three months ended March 31, 2013 and $0.3 million as collaboration revenue for the three months ended March 31, 2014. Our total direct program expense was $0.3 million for the three months ended March 31, 2013 and $0.2 million for the three months ended March 31, 2014.

Grants and Other Funding

Therapeutics for Rare and Neglected Disease Program. In September 2011, we entered into a Cooperative Research and Development Agreement, or CRADA, with the NIH’s Therapeutics for Rare and Neglected Disease Program, or TRND, to develop VT-1129 as an antifungal therapy for cryptococcal meningitis. Through October 2014, TRND ~~provides~~provided financial support for development under the CRADA through direct payment of vendors supporting the development. Under the terms of the agreement, we ~~provide~~ provided technical support for the project. We do not recognize any revenue in connection with the CRADA. We terminated the agreement effective October 2014.

NIH Grant. In June 2012, we were awarded the NIH grant for the oral treatment of CNS Coccidioides infections. The total award of the initial grant iswas $0.3 million and ~~covers~~covered the period June 2012 through May 2014. WeIn ~~recognized~~June ~~$50~~2014,~~000~~ aswe ~~other~~received ~~revenue~~an ~~for~~additional award to continue the ~~year~~research. ~~ended~~The ~~December 31,~~total ~~2012~~award ~~and~~of the additional grant is $0.27 million ~~for~~and covers the periods ~~year~~June ~~ended~~2014 ~~December 31,~~through ~~2013~~May 2017. We recognized $~~57,000~~0.2 asmillion ~~other~~and ~~revenue~~$0.3 ~~for~~million ~~the~~as ~~three~~grant ~~months ended March 31, 2013~~ and ~~$31,000 as~~ other revenue for the ~~three~~years ~~months~~ ended ~~March~~December 31, 2014 and 2015, respectively.

Defense Medical Research and Development Program. In April ~~2014~~2015, we received notice from the Defense Medical Research and Development Program that our proposed program, Development and Preclinical Evaluation of VT-1598, a Broad-Spectrum and Safe Antifungal to Prevent Fungal (Mold) Infections of Battlefield Wounds, ~~will~~was ~~receive~~approved for a Military Infectious Diseases Applied Research Award, or the DMRDP grant. We expect the program to have a duration of 31 months and to provide approximately $2.0 million in funding. We recognized $0.3 million related to the DMRDP grant as grant and other revenue for the year ended December 31, 2015.

We will spin off the Novartis and DAS agreements, in addition to the prostate business, with Legacy VPI in the Reorganization. We intend to terminate the CRADA upon completion of this offering. Other than the NIH grant and the DMRDP grant, the assets that we will retain after the Reorganization have not generated any revenue.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for the development of our product candidates, which include:

• employee-related expenses, including salaries, benefits and travel expense;

•

expenses incurred under agreements with CROs, and investigative sites that conduct our preclinical studies and clinical trials;

•

the cost of acquiring, developing and manufacturing clinical trial materials;

• expenses ~~related~~associated towith ~~consultants~~preclinical and ~~advisors;~~regulatory ~~and~~activities;

• employee-related expenses, ~~associated~~including ~~with~~salaries, ~~preclinical~~share-based compensation, benefits and ~~regulatory~~travel ~~activities.~~expense; and

75• expenses related to consultants and advisors.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress toward completion of specific tasks using information and data provided to us by our vendors and our clinical sites.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.

We record direct research and development expenses, consisting principally of external costs, such as fees paid to investigators, consultants and CROs in connection with our clinical trials, and costs related to manufacturing or purchasing clinical trial materials, to specific product programs. Additionally, we record employee related direct research and development expenses to specific product programs. We do not allocate costs associated with our platform and other indirect costs to specific product programs because these costs are deployed across multiple product programs under research and development and, as such, are separately classified. The table below provides research and development expenses incurred for each of our principal programs and other expenses by category.

	Year ended December 31,				Three months ended March 31,
	Year endedDecember 31,
	2012		2013		2013		2014
	2014		2015
					(unaudited)
	(in thousands)
	(in thousands)
Direct program expenses:
Direct program expenses:
VT-1161	$	6,551	$	14,459
VT-1161	$	2,215	$	4,246	$	377	$	1,795
VT-1129(1)		177		4,136
VT-1129(1)		161		92		24		29
VT-1598		573		1,508
VT-1598 and analogues		125		105		34		23
Other programs		387		3,294
Prostate candidate		3,986		4,096		1,331		1,522
Indirect expenses:
Other programs		1,894		1,749		487		272
Employees		593		1,239
Indirect expenses:
Other expenses		272		739
Employees		332		359		90		134
Total research and development expenses	$	8,553	$	25,375
Other expenses		47		142		36		33
Total research and development expenses	$	8,760	$	10,789	$	2,379	$	3,808

(1) ~~External~~Through October 2014, external research and development activities related to VT-1129 ~~have~~were ~~been~~ paid for by TRND under our CRADA with ~~TRND~~them. The amounts shown in the table for VT-1129 prior to October 2014 represent employee -related direct research and development expenses. The company terminated the CRADA agreement in October 2014, and since then, the company has borne the cost of research and development of VT-1129.

We expect our research and development expenses to continue to increase substantially as compared to prior periods in connection with ~~conducting~~completing our ongoing ~~planned~~ Phase 2b clinical trials for VT-1161 in ~~RVVC~~onychomycosis and ~~onychomycosis~~RVVC, and, if either or both of these trials are successful, advancing VT-1161 into our planned Phase 3 clinical trials. We also expect our expenses to increase as we ~~initiate and~~ conduct clinical trials of VT-1129 for cryptococcal meningitis and advance VT-1598 ~~and its analogues~~ for the treatment of ~~invasive~~Valley ~~fungal~~Fever ~~infections~~ through preclinical development. If any of our product candidates successfully complete our planned Phase 3 clinical trials, we intend to seek marketing approval for such product candidate in the United States and, whether alone or in collaboration with third parties, in the European Union and other jurisdictions.

The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:

•

the scope, progress, outcome and costs of our clinical trials and other research and development activities;

•

the efficacy and potential advantages of our product candidates compared to alternative treatments, including any standard of care;

•

our ability to manufacture, market, commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future;

•

our ability to obtain, maintain, defend and enforce patent claims and other intellectual property rights;

7670

•

the performance of our collaborators, if any;

•

significant and changing government regulation; and

•

the timing, receipt and terms of any marketing approvals.

A change in the outcome of any of these variables with respect to the development of VT-1161 or any other product candidate that we may develop could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority requires us to conduct clinical trials or other testing beyond those that we currently contemplate or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs for personnel, including equity-based compensation, in executive, operational, finance and accounting resource functions. Other general and administrative expenses include professional fees for legal, patent, consulting and accounting services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development of our product candidates. We also anticipate increased accounting, audit, legal, regulatory, compliance, insurance and investor and public relations expenses associated with being a public company. Additionally, if and when we believe a regulatory approval of the first product candidate that we intend to commercialize on our own appears likely, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.

Other Income (Expense), Net

Other income (expense), net consists primarily of the gain or loss associated with the change in the fair value of our call option and ~~warrant~~ ~~liability~~warrant liabilities.

77Discontinued Operations

Discontinued operations consists of the results of operations for Innocrin Pharmaceuticals. On October 13, 2014, we spun off Innocrin Pharmaceuticals through a series of transactions whereby Innocrin Pharmaceuticals, including its prostate cancer business, the DAS collaboration program (collectively, the “prostate business”) and Innocrin personnel, were transferred to a newly formed subsidiary, Innocrin Holdings, and then Innocrin Holdings was distributed to the existing shareholders on a non-recourse pro-rata basis.

Results of Operations

Comparison of the ~~Three~~Years ~~Months~~ Ended ~~March~~December 31, ~~2013~~2014 and ~~2014~~2015

The following ~~unaudited~~ table summarizes the results of our operations for each of the ~~three~~years ~~months~~ ended ~~March~~December 31, ~~2013~~2014 and ~~2014~~2015, together with the changes in those items in dollars and as a percentage:

	Three months endedMarch 31,						$ Change			% Change
	Year endedDecember 31,						$Change			%Change
	2013			2014
	2014			2015
	(unaudited) (in thousands)
	(in thousands)
Total revenue	$	~~890~~198		$	~~365~~679		$	~~(525~~481	)		~~(59~~242.09	%)
Operating expenses:
Research and development		28,~~379~~553			325,~~808~~375			116,~~429~~822			60196.17	%
General and administrative		~~626~~7,725			15,~~265~~407			~~639~~(2,318	)		~~102~~(30.10	)%
Total operating expenses		316,~~005~~278			530,~~073~~782			214,~~068~~504			6889.81	%
Operating loss		(216,~~115~~080	)		(430,~~708~~103	)		(214,~~593~~023	)		~~122~~87.62	%
Other income (expense), net		~~(31~~2,157	)		(2,~~574~~566	)		(24,~~543~~723	)		NA*
Net loss	$	(2,146	)	$	(7,282	)	$	(5,136	)		239.3	%
Net loss from continuing operations		(13,923	)		(32,669	)		(18,746	)		134.6	%
Loss from discontinued operations		(4,491	)		—			4,491			*
Comprehensive loss	$	(18,414	)	$	(32,669	)	$	(14,255	)		77.4	%

~~Revenue. Revenue~~* ~~was~~Not $0calculable.4 million for the three months ended March 31, 2014 compared to $0.9 million for the three months ended March 31, 2013. The decrease of $0.5 million was due primarily to decreases in recognition under our collaborations with DAS and Novartis related to license fee and collaboration research revenue. Other than $57,000 for the three months ended March 31, 2013 and $31,000 for the three months ended March 31, 2014 attributable to the NIH grant, the revenue reported in each period was attributable exclusively to collaborations that are not associated with the antifungal business.

~~Research and development expenses~~Revenue. ~~Research~~Revenue ~~and~~was ~~development expenses were~~ $30.87 million for the ~~three~~year ~~months~~ ended ~~March~~ December 31, ~~2014~~2015 compared to $20.42 million for the ~~three~~year ~~months~~ ended ~~March~~December 31, ~~2013~~2014. The increase of $10.45 million was ~~primarily~~ due primarily to ~~increased~~the ~~expenses~~DMRDP ~~associated~~grant ~~with~~which ~~our~~was ~~clinical~~approved ~~development~~in ~~programs,~~April ~~partially~~2015. ~~offset by decreased expenses associated with our preclinical programs, as follows:~~

•Research ~~expenses~~and ~~associated~~development ~~with~~expenses. Research ~~VT-1161~~and ~~increased~~development byexpenses were $125.4 million ~~due~~for the year ended December 31, 2015 compared to ~~drug~~$8.6 ~~substance~~million ~~and~~for ~~product~~the ~~costs~~year ended December 31, ~~costs~~2014. The increase of $16.8 million was primarily due to increased expenses associated with ~~safety~~our ~~and~~clinical, ~~toxicology~~preclinical ~~studies~~ and ~~clinical~~research ~~trial~~programs ~~expenses;~~as follows:

• expenses associated with ~~the~~VT-1161 ~~prostate candidate~~ increased by $07.29 million due to the initiation of the Phase 2b clinical ~~trial~~trials ~~expenses;~~in February 2015 as well as costs associated with drug supply and non-clinical studies;

• expenses associated with VT-~~1598~~1129 ~~and~~increased ~~other~~by ~~programs decreased~~ $04.20 million ~~due to decreased activity under our Novartis and DAS collaborations.~~;

~~General~~• ~~and administrative~~ expenses~~. General~~ ~~and administrative~~associated ~~expenses~~with ~~were~~VT-1598 ~~approximately~~increased ~~$1.3~~by ~~million for the three months ended March 31, 2014 compared to~~ $0.~~6 million~~9 ~~for the three months ended March 31, 2013. The increase of $0.6~~ million ~~was primarily due to increased legal and accounting expenses.~~ ;

~~Other~~• ~~income~~expenses ~~(expense),~~associated ~~net. Other~~with ~~income~~research ~~(expense),~~programs ~~net~~increased ~~was $(2.6)~~by ~~million for the three months ended March 31, 2014 compared to~~ $~~(31,000) for the three months ended March 31, 2013. The increase of $(~~2.5)9 million; ~~in other income (expense) net resulted from a change in the fair value of warrants~~ and ~~call options issued in connection with our series C1 preferred share financing.~~

78• indirect expenses increased by $1.1 million.

General and administrative expenses. General and administrative expenses were $5.4 million for the year ended December 31, 2015 compared to $7.7 million for the year ended December 31, 2014. The decrease of $2.3 million was primarily due to decreased legal and accounting expenses associated with the 2014 Spin-off and our financing activities.

Other income (expense), net. Other income (expense), net was $2.6 million in expense for the year ended December 31, 2015 compared to $2.2 million in income for the year ended December 31, 2014. The decrease of $4.8 million in other income (expense), net resulted from a change in the fair value of the call option issued in connection with our Series D redeemable convertible preferred share financing.

~~Comparison~~Loss from discontinued operations. Discontinued operations consists of the results ~~Years~~of ~~Ended~~operations ~~December~~for Innocrin Pharmaceuticals. On October 3113, ~~2012~~2014, ~~and~~Innocrin ~~2013~~Pharmaceuticals was spun-off from Viamet Holdings. The components of discontinued operations that related to Innocrin Pharmaceuticals are as follows:

The following table summarizes the results of our operations for each of the years ended December 31, 2012 and 2013, together with the changes in those items in dollars and as a percentage:


	Year Ended December 31,
	2014
Revenue	$	703
Expenses		5,194

Net loss from discontinued operations	$	(4,491	)

	Year endedDecember 31,						$ Change			% Change
	2012			2013
	(in thousands)
Total revenue	$	3,484		$	2,873		$	(611	)		(17.5	%)
Operating expenses:
Research and development		8,760			10,789			2,029			23.2	%
General and administrative		2,650			2,872			222			8.4	%
Total operating expenses		11,410			13,661			2,251			19.7	%
Operating loss		(7,926	)		(10,788	)		(2,862	)		36.1	%
Other income (expense), net		(59	)		(387	)		(328	)		555.9	%
Net loss	$	(7,985	)	$	(11,175	)	$	(3,190	)		39.9	%

Revenue. Revenue was $2.9 million for the year ended December 31, 2013 compared to $3.5 million for the year ended December 31, 2012. The decrease of $0.6 million was due primarily to decreases in recognition under our collaborations with DAS and Novartis related to license fee and collaboration research revenue. Other than $50,000 for the year ended December 31, 2012 and $0.2 million for the year ended December 31, 2013 attributable to the NIH grant, the revenue reported in each period was attributable exclusively to our collaborations, which are not associated with the antifungal business.

Research and development expenses. Research and development expenses were $10.8 million for the year ended December 31, 2013 compared to $8.8 million for the year ended December 31, 2012. The increase of $2.0 million was primarily due to increased expenses associated with our clinical development programs, partially offset by decreased expenses associated with our preclinical programs, as follows:

• expenses associated with VT-1161 increased $2.0 million due to drug substance and product costs and costs associated with safety and toxicology studies;

• expenses associated with the prostate candidate increased $0.2 million due to clinical trial expenses; and

• expenses associated with VT-1598 and other programs decreased by $0.2 million due to decreased activity under our Novartis and DAS collaborations.

General and administrative expenses. General and administrative expenses were $2.9 million for the year ended December 31, 2013 compared to $2.7 million for the year ended December 31, 2012. The increase of $0.2 million was primarily due to increased legal expenses.

Other income (expense), net. Other income (expense), net was $(0.4) million for the year ended December 31, 2013 compared to $(59,000) for the year ended December 31, 2012. The increase of $(0.3) million in other income (expense) net resulted primarily from a change in the fair value of warrants and call options issued in connection with our series C1 preferred stock financing.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception through December ~~March~~ 31, ~~2014~~2015, excluding amounts attributed to the Spin-off, we have funded our operations principally through the private placement of approximately $5791.0 6 million of equity securities, $3.0 million from payments under the collaboration agreement with Novartis and $121.65 million from ~~payments~~grants and other sources. As of December 31, 2015, we had cash and cash equivalents of $29.4 million. We invest cash in excess of immediate requirements in accordance with our investment policy, with a priority on liquidity and capital preservation.

79Our future capital requirements will depend on many factors, including our results of operations and the expansion of our research and development, sales and marketing and general and administrative functions. If we require additional capital resources to grow our business internally or to acquire complementary technologies and businesses at any time in the future, we may seek to sell additional equity, or raise funds through debt financing or other sources. The sale of additional equity could result in additional dilution to our stockholders. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operating flexibility, and would also require us to incur additional interest expense. We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain financing on terms favorable to us. We do not believe that our currently available cash and cash equivalents, including the proceeds from the call option to purchase Series D preferred shares, which was exercised on February 17, 2016, would provide sufficient funds to enable Viamet to meet its obligations for greater than one-year subsequent to December 31, 2015. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2015 with respect to this uncertainty.

under collaboration agreements with DAS and Novartis and $0.8 million from grants and other sources. As of March 31, 2014, we had cash and cash equivalents of approximately $7.4 million. We invest cash in excess of immediate requirements in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

Our future capital requirements will depend on many factors, including our results of operations and the expansion of our research and development, sales and marketing and general and administrative functions. If we require additional capital resources to grow our business internally or to acquire complementary technologies and businesses at any time in the future, we may seek to sell additional equity, or raise funds through debt financing or other sources. The sale of additional equity could result in additional dilution to our stockholders. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operating flexibility, and would also require us to incur additional interest expense. We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain financing on terms favorable to us. As a result of our continued losses, our independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements expressing substantial doubt as to our ability to continue as a going concern.

Cash Flows

As of ~~March~~ December 31, ~~2014~~2015, we had cash and cash equivalents of $729.4 million. The following table sets forth the primary sources and uses of cash for each of the periods set forth below:

	Year endedDecember 31,						Three months endedMarch 31,
	Year EndedDecember 31,
	2012			2013			2013			2014
	2014			2015
							(unaudited)
	(in thousands)
	(in thousands)
Net cash (used in) provided by:
Net cash (used in) provided by:
Operating activities	$	(18,296	)	$	(26,651	)
Operating activities	$	(6,851	)	$	(11,491	)	$	(1,858	)	$	(4,009	)
Investing activities		(39	)		(289	)
Investing activities		(82	)		(9	)		(2	)		(3	)
Financing activities		39,025			35,000
Financing activities		2,928			11,893			1,975			9,960
Net increase in cash and cash equivalents	$	20,690		$	8,060
Net (decrease) increase in cash and cash equivalents	$	(4,005	)	$	393		$	115		$	5,948

~~Operating~~73 ~~Activities~~

Net cash used in operating activities of $6.9 million during the year ended December 31, 2012, was primarily a result of our $8.0 million net loss, increased by $1.9 million of deferred revenue recognition related to the DAS and Novartis license fees, partially offset by $3.0 million of cash receipts related to these agreements. In February 2012, we received the third and final $1.5 million cash payment for upfront license fees from DAS and, in May 2012, we received a $1.5 million cash payment from Novartis. The payment received from DAS is reflected as a decrease of accounts receivable due to the timing of cash receipt. The Novartis payment is reflected as an increase of deferred revenue. Net cash used in operating activities related to DAS collaboration efforts in 2012 is reflected as an increase of deferred revenue of $0.2 million. Additionally, we incurred approximately $0.3 million of non-cash expenses during 2012.

Net cash used in operating activities of $11.5 million during the year ended December 31, 2013, was primarily a result of our $11.2 million net loss, increased by $1.3 million of deferred revenue recognition related to the DAS and Novartis license fees, and $0.5 million of prepaid and other assets, partially offset

byOperating ~~$0.7~~Activities million of non-cash expenses and a $0.5 million increase of accrued expenses. License fee deferred revenue recognition decreased due to an extension option exercised by DAS in June 2013, extending the period of time over which the remaining deferred revenue balance relating to the DAS agreement will be recognized. Increases in prepaid and other assets and accrued expenses are primarily driven by research and development efforts associated with our ongoing clinical trials. The increase in non-cash expenses was primarily driven by $0.4 million of change in fair value recognized on the warrants and call options during 2013.

Net cash used in operating activities of $118.9 3 million during the ~~three~~year ~~months~~ ended ~~March~~December 31, ~~2013,~~2014 was primarily a result of our $218.1 4 million net loss, ~~increased~~a by $02.4 2 million ofnon-cash ~~deferred~~gain ~~revenue~~in ~~recognition~~the ~~related~~fair tovalue of the ~~DAS~~warrants ~~license~~and ~~fee~~call option liabilities, ~~partially~~a ~~offset~~$1.3 million byincrease ~~increases~~in ofprepaid expenses and other current assets, a $0.4 3 million ofincrease ~~accrued~~in ~~expenses~~accounts receivable and a $0.13 million ofincrease ~~non-cash~~in ~~expenses.~~other ~~Accrued~~assets, ~~expenses~~partially ~~increased as~~offset by a ~~result~~$2.5 million ofincrease ~~research~~in accounts payable and ~~development~~accrued ~~efforts~~expenses ~~associated~~and ~~with~~$1.0 million ~~clinical~~of ~~trials~~non-cash expense related to equity-based compensation.

Net cash used in operating activities of $426.0 7 million during the ~~three~~year ~~months~~ ended ~~March~~December 31, ~~2014,~~2015 was primarily a result of our $732.3 7 million net loss, ~~an increase of $0.3 million of prepaid and other assets,~~ partially offset by a $2.7 6 million ofincrease ~~non-cash~~in ~~expenses and an increases of $0.7 million of~~ accounts payable and ~~$0.6 million of~~ accrued expenses~~. Non-cash expenses for the three months ended March 31~~, ~~2014~~a ~~was primarily attributable to~~ $2.6 million ~~recognized~~non-cash asloss ain ~~result of~~ the ~~change in~~ fair value of the ~~warrants and~~ call ~~options~~option ~~outstanding~~liability, as$0.7 million of ~~period~~non-cash ~~end.~~expense ~~Increases~~related into ~~accounts~~equity-based compensation, ~~payable~~ and ~~accrued~~a ~~expenses~~$0.2 million ~~were~~decrease ~~primarily~~in ~~driven~~prepaid ~~by intellectual property related legal fees~~ and ~~additional~~other ~~research~~current ~~and development efforts related to our clinical trials~~assets.

Investing Activities

Net cash used in investing activities during all periods presented primarily reflects purchases of furniture, fixtures and equipment.

Financing Activities

Net cash provided by financing activities in the year ended December 31, ~~2012~~2014 primarily consisted of approximately $224.91 million of net proceeds from the sale of the initial tranche of our series C1 D redeemable convertible preferred shares, which we received in October ~~2012~~2014. Additionally we received $9.9 million of net proceeds from the sale of our series C2 redeemable convertible preferred shares in February 2014 and $5.0 million from the sale of our series C3 redeemable convertible preferred shares, which we received in July 2014. The series C3 was subsequently converted to redeemable convertible preferred series D shares at the time of the series D closing.

Net cash provided by financing activities for the year ended December 31, ~~2013~~2015, ~~primarily~~ consisted of approximately $1135.90 million of net proceeds from the sale of the second, ~~third~~tranche ~~and fourth tranches~~ of our series C1D redeemable convertible preferred shares, of which we received ~~$2.0 million, $4.9 million and $5.0 million~~ in ~~February,~~April ~~June and October 2013, respectively~~2015.

Net cash provided by financing activities for the three months ended March 31, 2013, primarily consisted of approximately $2.0 million of net proceeds from the sale of the second tranche of our series C1 redeemable convertible preferred shares, which we received in February 2013.

Net cash provided by financing activities for the three months ended March 31, 2014, primarily consisted of approximately $10.0 million of net proceeds from the sale of the fifth tranche of our series C1 redeemable convertible preferred shares, which we received in February 2014.

Funding Requirements

To date, we have not generated any revenues from product sales and have financed our operations primarily through private placements of our preferred stock and, to a lesser extent, through our collaborations, ~~the NIH grant~~ and ~~the~~our ~~IRS~~government ~~grant~~grants. We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and, beginning in 2011, clinical trials. We are still in the early stages of development of our product candidates, and we have not completed development of any product candidate. We expect to continue to incur significant expenses and operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our members’ deficit and working capital. We anticipate that our expenses will increase substantially if and as we:

81• continue our Phase 2b clinical trials of VT-1161 in patients with onychomycosis and patients with RVVC;

•

initiate our planned Phase 3 clinical trials of VT-1161 for the treatment of onychomycosis and RVVC;

•

continue our Phase 1 clinical trials of VT-1129 and, if successful, initiate our planned Phase 2 clinical trial of VT-1129 for the treatment of patients with cryptococcal meningitis;

•

initiate and continue the research and development of VT-1598 and our other product candidates, as well as potential product candidates;

~~resources~~• ~~and~~strengthen ~~efforts to research~~ and ~~development,~~expand ~~including preclinical studies and, beginning in 2011, clinical trials. We are still in the early stages of development of~~ our ~~product candidates,~~core ~~and~~metalloenzyme wediscovery have not completed development of any product candidate. We expect to continue to incur significant expenses and operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our members’ deficit and working capital. We anticipate that our expenses will increase substantially if and as we: activities;

• continue our Phase 2a clinical trials of VT-1161 for AVVC and interdigital tinea pedis;

• initiate our Phase 2b clinical trials of VT-1161 in patients with RVVC and patients with onychomycosis;

• initiate and continue the research and development of our other product candidates and potential product candidates, including VT-1129 and VT-1598 and its analogues;

•

seek to discover and develop additional product candidates;

•

seek regulatory approvals for any product candidates that successfully complete clinical trials;

•

establish a sales, marketing and distribution infrastructure in the future to commercialize any products for which we may obtain regulatory approval;

•

require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization;

•

maintain, expand and protect our intellectual property portfolio;

• hire additional clinical, quality control, commercial and scientific personnel; and

•

As of ~~March~~December 31, ~~2014~~2015, we had cash and cash equivalents of $729.4 million. We believe that such funds, the $15.8 million in proceeds from the call option to purchase Series D preferred shares, which was exercised on February 17, 2016, and the net proceeds from this offering will enable us to fund our operating expenses and capital expenditure requirements ~~for~~ at least ~~the next months~~through .

We intend to devote the net proceeds from this offering and our cash and cash equivalents ~~and short term investments~~ to fund ~~clinical~~the development of VT-1161, ~~our~~VT-1129 ~~lead~~and ~~product candidate~~VT-1598, toas well ~~fund~~as for research and development ~~to advance our pipeline~~ of additional product candidates, ~~including VT-1129~~ and ~~VT-1598 and its analogues and~~ for working capital and other general corporate purposes. We will need to obtain significant financing, in addition to the net proceeds of this offering, prior to the commercialization of any of our product candidates.

We estimate that we will incur ~~external~~ research and development expenses of approximately: $ million to complete our planned Phase 2b clinical trials for VT-1161 in RVVC and onychomycosis by mid-2016, approximately $ million to complete our preclinical studies and planned Phase 1 clinical trials for VT-1129 in cryptococcal meningitis, and approximately $ million to complete our preclinical studies, submit our IND for, and initiate Phase 1 clinical trials of, VT-1598 or one of its analogues for the treatment of invasive fungal infections. We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. At this time, we cannot reasonably estimate the remaining costs necessary to conduct Phase 3 clinical trials and commercialize VT-1161 for the treatment of RVVC or onychomycosis, including commercial manufacturing of VT-1161, or the nature, timing or costs of the efforts necessary to complete the development of any other product candidate.

82• $ for the development of VT-1161, for the treatment of both onychomychosis and RVVC, through Phase 2b clinical trials and the initiation of our planned Phase 3 clinical trials;

~~Table~~• $ for the development of ~~Contents~~VT-1129, for the treatment of cryptococcal meningitis, through Phase 1 clinical trials and the initiation of Phase 2 clinical trials; and

•

$ for the development of VT-1598, for the treatment of Valley Fever, through Phase 1 clinical trials.

We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. At this time, we cannot reasonably estimate the remaining costs necessary to complete our planned Phase 3 clinical trials and commercialize VT-1161 for the treatment of onychomycosis or RVVC, including commercial manufacturing of VT-1161, or the nature, timing or costs of the efforts necessary to complete the development of any other product candidate.

Our future capital requirements, both short-term and long-term, will depend on many factors, including:

• the scope, progress, timing, costs and results of our ongoing ~~Phase 2a~~ clinical trials ~~of VT-1161~~ and ~~our~~ planned Phase 2b3 clinical trials of VT-1161;

• the scope, progress, timing, costs and results of clinical trials of, and research and preclinical development efforts for, our other product candidates, including VT-1129 and VT-1598 ~~and its analogues~~, and any future product candidates;

• our ability to enter into and the terms and timing of any ~~collaborations~~collaboration, licensing or other arrangements that we may establish;

•

the number and development requirements of other product candidates that we pursue;

•

the costs, timing and outcome of regulatory review of our product candidates by the FDA and comparable non-U.S. regulatory authorities;

•

the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

•

our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure;

•

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

• the extent to which we acquire or in-license other products, technologies, and ~~technologies~~businesses;

• the costs of operating as a public company; ~~and~~

•

the effect of competing technological and market developments.

~~Until~~• ~~such time, if ever, as we can generate substantial product revenues, we expect to finance~~ our cash needs through a combination of equity offerings, debt financings, government or other third party funding, collaborations and licensing arrangements. Other than our existing collaborations, which will be spun off with Legacy VPI, and the NIH grant and the DRMDP grant, which will provide limited funding, we do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to ~~take~~obtain ~~specific~~and ~~actions,~~maintain ~~such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through~~ government orgrants other third party funding, collaborations or licensing arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and ~~market~~other ~~products or product candidates that we would otherwise prefer to develop and market ourselves.~~ funding;

~~Our~~• ~~recurring~~the ~~operating~~extent ~~losses~~to ~~and~~which ~~our~~we ~~net~~are ~~capital~~entitled ~~deficiency~~to ~~raise~~reimbursement ~~substantial~~of ~~doubt~~clinical ~~about~~trial ~~our ability~~costs tounder ~~continue~~Qualified asInfectious aDisease ~~going~~Product, ~~concern.~~or ~~As a result~~QIDP, ~~our~~designation ~~independent~~by ~~registered~~the ~~public~~FDA ~~accounting~~(for ~~firm~~VT-1129 ~~included an explanatory paragraph in its report on our financial statements as of~~ and ~~for~~potentially ~~the~~VT-1598); ~~year ended December 31, 2013 with respect to this uncertainty. We have no current source of revenue sufficient to~~ and

83• our ability to establish and maintain healthcare coverage and adequate reimbursement.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, government or other third party funding, collaborations and licensing arrangements. Other than our government grant, which will provide limited funding, we do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through government or other third party funding, collaborations or licensing arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

We do not believe that our currently available cash and cash equivalents, including the proceeds from the call option to purchase Series D preferred shares, which was exercised on February 17, 2016, would provide sufficient funds to enable us to meet our obligations for greater than one-year subsequent to December 31, 2015. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2015 with respect to this uncertainty. We have no current source of revenue sufficient to sustain our present activities, and we do not expect to generate product revenue until, and unless, the FDA or other regulatory authorities approve VT-1161 or another one of our product candidates and we successfully commercialize such product candidate. Accordingly, our ability to continue as a going concern will require us to obtain additional financing to fund our operations.

sustain our present activities, and we do not expect to generate product revenue until, and unless, the FDA or other regulatory authorities approve VT-1161 or another one of our product candidates and we successfully commercialize such product candidate. Accordingly, our ability to continue as a going concern will require us to obtain additional financing to fund our operations.

Critical Accounting Policies and Significant Judgments and Estimates

This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, accrued research and development expenses, warrant and call option liabilities, equity-based compensation and tax credit carry forwards. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our financial statements appearing at the end of this prospectus, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Revenue Recognition

We use the revenue recognition guidance established by the Financial Accounting Standards Board, or FASB, in Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition, or ASC 605. Our revenues generally consist of licensing revenue and fees for research services from license or collaboration agreements and grant revenue. We recognize revenues when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. For arrangements that include multiple deliverables, we identify separate units of accounting if certain separation criteria are met in accordance with ASC Topic 605-25, Multiple Element Arrangements, or ASC 605-25. This evaluation requires subjective determinations and requires management to make judgments about the fair value of the individual elements and whether such elements are separable from the other aspects of the contractual relationship. If we determine they are separable according to the separation criteria of ASC 605-25, we will recognize revenue separately for each unit.

For arrangements that include multiple deliverables, we identify separate units of accounting if certain separation criteria are met in accordance with ASC Topic 605-25, Multiple Element Arrangements, or ASC 605-25. This evaluation requires subjective determinations and requires management to make judgments about the fair value of the individual elements and whether such elements are separable from the other aspects of the contractual relationship. If we determine they are separable according to the separation criteria of ASC 605-25, we will recognize revenue separately for each unit. The consideration for the arrangement is allocated to the separate units of accounting based on their relative fair values. Applicable revenue recognition criteria are considered separately for each unit of accounting. If management determines the arrangement constitutes a single unit of accounting, the revenue recognition policy must be determined for the entire arrangement and the consideration received is recognized over athe period offrom inception through the date on which the last deliverable is expected to be delivered as a combined unit. We typically receive upfront, nonrefundable payments when licensing our intellectual property in conjunction with a research and development agreement. We believe that these payments generally are not separable from the activity of providing research and development services because the license does not have stand-alone value separate from the research and development services that we provide under applicable agreements. Accordingly, we account for these elements as one unit of accounting and recognize upfront, nonrefundable payments as licensing revenue on a straight-line basis over ~~its~~the contractual or estimated performance period, which is typically the term of our research and development performance obligations. As a result, we are required to make estimates regarding development timelines for compounds being developed pursuant to a strategic collaboration agreement. Amounts received in advance of services performed are recorded as deferred revenue until earned. Revisions to the estimated period of recognition are reflected in revenue prospectively.

8477

Any collaboration agreements we enter into in the future may also contain contingent non-refundable ~~development~~payments ~~performance~~based ~~obligations~~on the achievement of milestone events. AsRevenue arelated ~~result~~to these non-refundable payments is recognized in accordance with ASC Topic 605-28, weMilestone Method, or ASC 605-28. At the inception of each agreement that includes contingent milestone payments, management must evaluate whether the contingencies underlying each milestone are ~~required~~substantive and at risk to ~~make~~both ~~estimates~~parties, ~~regarding~~specifically ~~development~~reviewing ~~timelines~~factors ~~for~~such ~~compounds~~as ~~being~~the ~~developed~~scientific ~~pursuant~~and other risks that must be overcome to achieve athe ~~strategic~~milestone, ~~collaboration~~as ~~agreement~~well as the level of effort and investment required. Revenues from milestones, if they are nonrefundable, are recognized in licensing revenue upon successful accomplishment of the milestones if all of the following ~~Amounts~~conditions ~~received~~are met:(i) achievement of the milestone event was not reasonably assured at the inception of the arrangement; (ii) substantive effort is involved to achieve the milestone event; and (iii) the amount of the milestone payment appears reasonable in ~~advance~~relation to the effort expended, the other milestone payments in the arrangement and the related risk associated with the achievement of ~~services~~the ~~performed~~milestone event. A milestone is considered substantive if it meets all of the following criteria:(A) the payment is commensurate with either our performance to achieve the milestone or with the enhancement of the value of the delivered item; (B) the payment relates solely to past performance; and (C) the payment is reasonable relative to all of the deliverables and payment terms within the arrangement. If any of these conditions are ~~recorded~~not asmet, the milestone payment is deferred ~~revenue~~and ~~until~~is ~~earned~~recognized on a straight-line basis over the remaining performance obligation. We ~~Revisions~~evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the ~~estimated~~particular milestone and the level of effort and investment required to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive. Milestones that are not considered substantive are recognized as earned if there are no remaining performance obligations or over the remaining period of performance, assuming all other revenue recognition criteria are ~~reflected~~met. inPayments ~~revenue~~received ~~prospectively~~or for which collection is reasonably assured after meeting performance obligations are recognized as earned.

Our collaboration agreements may also contain contingent non-refundable payments based on the achievement of milestone events. Revenue related to these non-refundable payments is recognized in accordance with ASC Topic 605-28, Milestone Method, or ASC 605-28. At the inception of each agreement that includes contingent milestone payments, management must evaluate whether the contingencies underlying each milestone are substantive and at risk to both parties, specifically reviewing factors such as the scientific and other risks that must be overcome to achieve the milestone, as well as the level of effort and investment required. Revenues from milestones, if they are nonrefundable, are recognized in licensing revenue upon successful accomplishment of the milestones if all of the following conditions are met: (i) achievement of the milestone event was not reasonably assured at the inception of the arrangement; (ii) substantive effort is involved to achieve the milestone event; and (iii) the amount of the milestone payment appears reasonable in relation to the effort expended, the other milestone payments in the arrangement and the related risk associated with the achievement of the milestone event. A milestone is considered substantive if it meets all of the following criteria: (A) the payment is commensurate with either our performance to achieve the milestone or with the enhancement of the value of the delivered item; (B) the payment relates solely to past performance; and (C) the payment is reasonable relative to all of the deliverables and payment terms within the arrangement. If any of these conditions are not met, the milestone payment is deferred and is recognized on a straight-line basis over the remaining performance obligation. We evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone and the level of effort and investment required to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive. We have concluded that certain of the preclinical and clinical development milestone payments pursuant to our collaboration and license arrangements with DAS and Novartis are substantive. Accordingly, in accordance with ASC 605-28, we will recognize revenue in its entirety upon successful accomplishment of these milestones, assuming all other revenue recognition criteria are met. The DAS and Novartis agreements will be spun off with Legacy VPI and such revenue recognition will not affect our financial performance after the Reorganization. Milestones that are not considered substantive are recognized as earned if there are no remaining performance obligations or over the remaining period of performance, assuming all other revenue recognition criteria are met. Payments received or for which collection is reasonably assured after meeting performance obligations are recognized as earned.

Our collaboration agreements may also include payment for research and development services provided by us on a contractual rate and direct expense basis. We record such payments as revenue in accordance with the agreements as activities are incurred when we act as principal in the transaction.

Grant payments received prior to our performance of work required by the terms of the award are recorded as deferred revenue and recognized as grant revenue as we perform the work and incur qualifying costs.

Accrued/Prepaid Development Expenses

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses are related to ~~fees~~expenses ~~paid~~incurred to clinical sites, CROs and other vendors in connection with research and development activities for which we ~~have~~ have not yet been invoiced.

85We account for clinical trial expenses according to the progress of the trial as measured by patient enrollment, patient progression and the timing of various aspects of the trial. We determine accrual estimates through discussion with applicable personnel and the utilization of data from outside service providers as to the progress of trials, or as services are performed. During the course of a clinical trial, we adjust our rate of clinical trial expense recognition if actual results differ from our estimates. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known at that time. Our objective is to reflect the

~~We account for clinical trial expenses according to the progress of the trial as measured by~~ patient enrollment, patient progression and the timing of various aspects of the trial. We determine accrual estimates through discussion with applicable personnel and outside service providers as to the progress of trials, or services completed. During the course of a clinical trial, we adjust our rate of clinical trial expense recognition if actual results differ from our estimates. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known at that time. Our objective is to reflect the appropriate clinical trial expenses in our financial statements by matching those expenses with the period in which services and efforts are expended. Our clinical trial accrual is dependent upon the timely and accurate reporting of ~~contract~~clinical ~~research~~sites, ~~organizations~~CROs and other third party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. Depending on the timing of payments made to vendors based on the estimate of clinical trial activities, the resulting balance will be reflected as either a prepaid asset (advance payments) or an accrual on the balance sheet.

Valuation of Financial Instruments and Equity Based Compensation

Financial Instruments—Warrant and Call Option Liabilities

We account for our warrants issued to purchase series C1 redeemable convertible preferred shares and call options to purchase additional series C1 and series D redeemable convertible preferred shares in accordance with ASC Topic 480, Distinguishing Liabilities from Equity, which requires that each financial instrument, other than an outstanding share, that, at inception, includes an obligation to repurchase the issuer’s equity shares regardless of the timing or likelihood of redemption, shall be classified as a liability. We measure the fair value of the warrant and call option liabilities based on the fair value to purchase series C1 and series D redeemable convertible preferred shares, which we determine based on the two-step valuation approach as described below under “—Valuation Approach.”

Equity-Based Compensation

Prior to this offering ~~and prior to the Reorganization~~, we issued equity-based compensation awards to employees, directors and consultants through the granting of profits interests. We measure and recognize compensation expense for all equity-based awards made to employees and directors, under the fair value recognition provisions of ASC Topic 718, Compensation—Stock Compensation, or ASC 718, based on estimated fair values. We estimate the fair value of equity-based awards on the grant date using a two-step valuation approach as noted below. We record the value of the portion of the award expected to vest as expense on a straight-line basis over the requisite service period net of estimated forfeitures. We estimate forfeiture rates by taking into consideration historical experience during the preceding fiscal years. Profits ~~interests~~interest ~~awarded~~awards ~~to employees~~ typically vest at a rate of 25% after one year and the remaining portion vesting in equal increments over the subsequent 12 to 36 months following the one-year vesting milestone.

We ~~granted~~recognized ~~our~~equity-based ~~class~~compensation Cexpense ~~profits~~of ~~interests~~$1.2 million onduring ~~each~~the ~~of February 14,~~year ~~2013,~~ended December ~~April 16~~31, ~~2013~~2014 and $0.7 million during the year ended December 1931, ~~2013~~2015. ~~with~~The ~~threshold~~unrecognized ~~valuations~~compensation onexpense ~~those~~was ~~dates~~$0.9 million as of ~~$53.2~~December ~~million~~31, 2014 and $533.2 5 million ~~and~~as ~~$80~~of December 31, 2015.1 We expect unrecognized compensation expense as of both December ~~million~~31, ~~respectively~~2014 and 2015 to be recognized over a weighted-average period of 3.0 years.

We79 recognized equity-based compensation expense of $0.2 million during the year ended December 31, 2012 and $0.2 million during the year ended December 31, 2013. The unrecognized compensation expense was $0.2 million as of December 31, 2012 and $0.4 million as of December 31, 2013. We expect unrecognized compensation expense for December 31, 2012 to be recognized over a weighted-average period of 2.1 years and unrecognized compensation expense for December 31, 2013 to be recognized over a weighted-average period of 2.9 years.

WeIn ~~recognized~~connection ~~equity-based~~with ~~compensation~~the ~~expense~~Conversion, ofprofits ~~$38,000~~interests ~~during~~in ~~the~~Viamet ~~three~~Holdings ~~months~~will ~~ended March 31,~~be ~~2013~~exchanged for common stock and ~~$44,000~~restricted ~~during~~common ~~the~~stock ~~three~~of ~~months~~Viamet ~~ended~~Pharmaceuticals ~~March 31~~Corp., ~~2014.~~depending ~~The~~upon ~~unrecognized~~the ~~compensation~~portion ~~expense~~of ~~was~~the ~~$0.3 million~~profits asinterests ofaward ~~March 31,~~that ~~2013~~are ~~and~~vested ~~$0.4 million~~at asthe time of ~~March 31,~~the ~~2014~~Conversion. WeThe ~~expect~~following ~~unrecognized compensation~~table ~~expense~~summarizes ~~for~~by ~~March 31,~~grant ~~2013~~date tothe bepro ~~recognized~~forma ~~over~~number aof ~~weighted-average~~shares ~~period~~ of common ~~2.6 years~~stock ~~and~~underlying ~~unrecognized~~profits ~~compensation~~interests ~~expense~~units ~~for~~granted ~~March~~from January 311, 2014 through March 31, 2016 after giving effect to bethe ~~recognized~~Conversion, ~~over~~as awell as the associated weighted- average ~~period~~grant ofdate ~~2.8 years.~~ fair value per profits interests unit:

In connection with the Reorganization, profits interests in Viamet Holdings will be exchanged for common stock and restricted common stock of Viamet Pharmaceuticals, Inc., depending upon the portion of the profits interests award that was vested. The following table summarizes by grant date the pro forma number of shares of common stock underlying profits interest units granted from January 1, 2012 through April 30, 2014 after giving effect to the Reorganization, as well as the associated weighted average grant date fair value per profits interests unit:


	Class C Profits Interests		Weighted Average Fair Value Per Profits Interests Unit		Pro Forma Common Stock Issued in Respect of Profits Interests Units⁽¹⁾
Grant Date
October 13, 2014		1,243,207	$	0.36
February 24, 2015		2,381,226	$	0.22
October 13, 2015		5,727,264	$	0.41
November 11, 2015		1,003,388	$	0.41
February 4, 2016		150,508	$	0.68

Date	Class B ProfitsInterests			Class CProfitsInterests		WeightedAverage FairValue PerProfits InterestsUnit		Pro FormaCommonStock Issuedin Respect ofProfitsInterests Units(1)
Outstanding—January 1, 2012		3,881,096			—	$	0.17
Granted—February 17, 2012		—			387,200		0.16
Forfeitures—2012		(282,070	)		—		0.17
Outstanding—December 31, 2012		3,599,026			387,200		0.17
Granted—February 14, 2013		—			805,050		0.16
Granted—April 16, 2013		—			15,000		0.16
Granted—December 19, 2013		—			1,489,225		0.18
Outstanding—December 31, 2013		3,599,026			2,696,475		0.17
Converted to Common Stock— , 2014
Outstanding— , 2014						$

⁽¹⁾

Certain of the shares of common stock issued in respect of profits interests units will be subject to vesting in accordance with the vesting schedule applicable to such profits interests units. Common stock issued in respect of profits interests is based on $ , the midpoint of the price range set forth on the cover of this prospectus.

(1) Certain of the shares of common stock issued in respect of profits interests units will be subject to vesting in accordance with the vesting schedule applicable to such profits interests units.

Valuation Approach

Viamet Holdings is privately held with no active public market for its equity instruments. Therefore, for financial reporting purposes, management has periodically determined the estimated per share fair value of Viamet Holdings’ equity, including profits interests, and related financial instruments, or the call options and warrant liabilities, using contemporaneous valuations. These contemporaneous valuations are done using methodologies consistent with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, also known as the Practice Aid. These valuations were performed with the assistance of a third party valuation specialist. Management performed these contemporaneous valuations most recently as of ~~February~~September 1330, ~~2013~~2014, ~~June~~December 531, ~~2013~~2014, ~~October~~March 931, ~~2013~~2015, ~~November~~ June 130, ~~2013~~2015, ~~December~~September 3130, ~~2013~~2015, ~~February 26~~December 31, ~~2014~~2015 and ~~March~~February 3117, ~~2014~~2016.

The ~~contemporaneous~~ valuation ~~models~~ approach utilized ~~reflect~~ a two-stage process, whereby the value of each instrument was estimated as the probability-weighted value across multiple scenarios, and using an option pricing method to estimate the allocation of values within one or more of those scenarios. ~~Using~~This valuation approach is a hybrid between the probability weighted expected return method (PWERM) ~~which incorporates both IPO scenarios~~ and ~~discounted~~the ~~cash~~Option Pricing ~~flow~~Method ~~valuations~~(OPM), where the fair value of the total equity of the company within each scenario is ~~determined~~first asestimated using assessments of market participant expected returns and a ~~starting point~~discounted ~~for~~cash-flow ~~allocating~~analysis, and then the total equity value is allocated to the ~~individual~~various components of the capital structure including the warrants and call options using an OPM or a waterfall approach based on the specific rights of each of the equity classes. ~~Using~~The ~~these~~OPM ~~values~~uses the fair value of the total equity of the company within a scenario as a starting point, and ~~incorporating~~incorporates assumptions made regarding the expected returns and volatilities that are consistent with the expectations of market participants, a distribution of equity values is produced which cover the range of events that an informed market participant might expect. This process creates a range of equity values both between and within scenarios. The fair value measurement is sensitive to changes in the unobservable inputs. Changes in those inputs might result in a higher or lower fair value measurement.

8780

~~market~~The ~~participant~~OPM ~~might~~requires ~~expect.~~the ~~This~~input ~~process~~of ~~creates~~our atotal ~~range of~~ equity ~~values. Using a contingent claims (Option Pricing Method) and waterfall (Current Value Method) framework~~value, ~~total~~expected equity ~~value~~ isvolatility, ~~allocated to~~ the ~~various~~risk-free ~~components~~interest rate, ~~of the capital structure including the warrants~~ and ~~call~~expected ~~options~~time ~~using the Options Pricing Model. The fair value measurement is sensitive~~ to ~~changes~~liquidity inas the ~~unobservable~~key inputs. ~~Changes in those inputs might result in a higher or lower fair value measurement.~~

InTotal ~~conducting~~Equity ~~these~~Value - ~~contemporaneous~~The ~~valuations,~~total ~~management considered~~equity ~~all~~value ~~objective~~was ~~and~~estimated ~~subjective~~based ~~factors~~on ~~that~~assuming ita private ~~believed~~company toscenario be(where ~~relevant~~the incompany ~~each~~remains ~~valuation~~private) ~~conducted,~~and ~~including~~a ~~management’s~~public ~~best~~company ~~estimate~~scenario of(where ~~Viamet~~an ~~Holdings’~~IPO ~~business~~occurs). ~~condition~~In the private company scenario, ~~prospects~~the ~~and~~adjusted ~~operating~~book ~~performance~~value atand ~~each~~discounted ~~valuation date.~~cash ~~Within~~flow ~~the~~(DCF) ~~contemporaneous~~analyses ~~valuations~~were ~~performed~~utilized, ataking ~~range~~into ofaccount ~~factors,~~any relevant ~~assumptions~~equity ~~and~~securities ~~methodologies~~issued ~~were~~by ~~used.~~the ~~The~~Company ~~significant~~in ~~factors~~a ~~included~~third ~~external~~party ~~market~~transaction ~~conditions~~on ~~affecting~~or near the ~~pharmaceutical~~measurement ~~industry,~~dates. ~~trends~~In ~~within~~ the ~~pharmaceutical industry~~adjusted book value method, the ~~prices~~value atof ~~which~~each ~~Viamet~~specific ~~Holdings~~compound ~~sold~~was ~~preferred~~determined ~~and~~utilizing ~~common~~a ~~shares~~DCF analysis, ~~the~~while ~~superior~~it ~~rights~~was ~~and~~assumed ~~preferences~~that book ofvalue ~~the~~was ~~preferred~~a ~~shares~~reasonable ~~relative~~proxy tofor ~~common~~fair ~~shares~~value atfor ~~the~~other ~~time~~assets, ofincluding ~~each~~working ~~grant,~~capital ~~the~~and ~~results~~fixed ofassets. ~~operations,~~The ~~financial~~cash ~~position,~~flow ~~status~~projections ~~of research~~used ~~and~~in ~~development~~the ~~efforts,~~compounds’ ~~stage~~DCF ofanalyses ~~development~~are ~~and~~based ~~business~~on ~~strategy,~~probability-weighted ~~the~~scenarios ~~lack~~which considered estimates of antime ~~active~~to ~~public~~market, market ~~for~~share ~~the common~~ and ~~preferred~~pricing. ~~shares~~The ~~and~~cash ~~the~~flow ~~likelihood~~projections ofwere ~~achieving~~estimated over a ~~liquidity~~period ~~event~~equal ~~such~~to asthe anexpected ~~IPO~~patent orlife, ~~sale~~and ofa ~~Viamet~~terminal ~~Holdings~~value ~~in light~~was ofnot ~~prevailing market conditions~~applied.

For the public company scenario, various IPO scenarios were considered, including a range of potential IPO dates with corresponding values for each scenario. The ~~key~~IPO ~~assumptions~~scenarios were discounted and ~~resulting~~then ~~output~~probability-weighted ~~values~~to ~~are~~determine asan ~~follows~~overall asvalue ofbased on the ~~most~~public ~~recent valuation~~company ~~dates:~~scenario.

	December 31,2013			February 26,2014			March 31,2014
Key Inputs
Total equity value (in millions)	$	80.1		$	167.5		$	167.5
Volatility		20.00	%		30.00	%		30.00	%
Risk free rate		1.15	%		0.48	%		0.60	%
Time to liquidity (years)		3.8			2.4			2.3
Key Output Values
Series C1 Preferred - per share value	$	1.67		$	2.48		$	2.61
Warrant to purchase series C1 Preferred - per share value	$	0.52		$	1.33		$	1.46
Call option to purchase series C1 Preferred - per share value		n/a		$	1.33		$	1.46

The public company and private company scenarios were then probability-weighted to estimate the total equity value as of the measurement dates.

~~Income~~Expected ~~Tax~~volatility ~~Credit~~of ~~Carryforwards~~total equity - As our common stock has never been publicly traded, we estimated the expected volatility of our total equity from historical volatilities of publicly traded comparable companies within our industry. We adjusted the volatility estimate for differences in size and leverage between the comparable companies and Viamet, and the volatility was estimated over a historical period commensurate with the expected time to liquidity at each measurement date.

~~Our~~Risk-free ~~ownership~~interest rate - We ~~structure~~used ~~includes~~the aUS ~~holding~~treasury ~~company~~yields ~~organized~~ as aof ~~limited~~each ~~liability~~measurement ~~company~~date ~~that~~with ~~has~~term ~~elected~~matching ~~pass~~the ~~through~~expected ~~tax~~time ~~treatment.~~to Asliquidity ~~such,~~as ~~we do not recognize any income tax expense or benefit for the income or loss~~ of ~~the~~each ~~entity~~measurement ~~and~~date ~~have~~to ~~not~~estimate ~~established any deferred tax assets or liabilities within~~ the ~~holding~~risk-free ~~company~~rate. ~~The net operating losses and research and development credits carryforwards discussed below relate to our wholly owned subsidiaries.~~

WeTime ~~had~~to ~~operating loss tax carryforwards (both federal and state) of approximately $24.0~~liquidity ~~million at December~~- ~~31,~~The ~~2012~~expected ~~and~~time ~~$33.4 million at December 31, 2013 and federal research and development credit carryforwards of approximately $1.5 million as of both dates. Federal and state losses begin~~ to ~~expire~~liquidity ~~in 2025~~was ~~and~~determined 2020, respectively, and the research and development credit carryforwards begin to expire in 2026. For financial reporting purposes, a valuation allowance has been recognized to fully offset the deferred tax assets related to the carryforwards, based on our assessment of ~~the~~our ~~likelihood~~stage of ~~using~~development, ~~these~~our ~~net deferred tax assets in future periods. The total increase in valuation allowance of $3.4 million was allocable to current operating activities. The utilization of the~~specific ~~loss~~business ~~carryforwards~~strategy toand ~~reduce~~overall ~~future~~market ~~income~~conditions ~~taxes~~that ~~will~~would ~~depend~~impact ~~on our ability to generate sufficient taxable income prior to~~ the ~~expiration~~liquidity ~~of the loss carryforwards. In addition~~scenarios, ~~the~~which ~~maximum~~include ~~annual~~sale ~~use~~ of ~~net~~the ~~operating~~company ~~loss~~as ~~and~~well ~~research~~as ~~credit carryforwards~~potential isIPO ~~limited in certain situations in which changes occur in stock ownership~~scenarios.

88In performing these valuations, management considered all objective and subjective factors that they believed to be relevant, including management’s best estimate of our business condition, prospects and operating performance at each valuation date. Within the valuations performed, a range of factors, assumptions and methodologies were used. The significant factors included external market conditions affecting the pharmaceutical industry, trends within the pharmaceutical industry, the prices at which we sold preferred and common shares, the rights and preferences of the preferred shares relative to common shares at the time of each measurement date, the results of operations, financial position, status of research and development efforts, stage of development and business strategy, the lack of an active public market for the common and preferred shares and the likelihood of our achieving a liquidity event such as an IPO or sale in light of prevailing market conditions.

InThe ~~general,~~key ifassumptions we experience a greater than 50% aggregate change in ownership of certain significant shareholders over a three-year period (a Section 382 ownership change), utilization of our pre-change net operating loss carryforwards is subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, or the Code, and ~~similar~~resulting ~~state~~output ~~laws.~~values ~~The annual limitation generally is determined by multiplying the value~~ of ~~our~~Call ~~shares~~Option atLiability the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the net operating loss carryforwards before utilization and ~~may~~profits beinterests ~~substantial.~~units Weare ~~have not completed a study to determine the impact of ownership changes on our net operating loss carryforwards~~as ~~under~~follows ~~Section 382 of the Code. Our ability to use our net operating loss carryforwards may be limited or lost if we experience a Section 382 ownership change in connection with this offering or~~ as ~~a result~~ of ~~future changes in our share ownership. Losses from a specific period may be subject to multiple limitations, and would generally be limited by~~ the ~~lowest~~most ofrecent ~~those~~key ~~limitations.~~valuation ~~There~~dates: ~~was no recognized tax benefit related to net operating loss carryforwards in any prior period.~~

The research and development credit, which had previously expired on December 31, 2011, was reinstated as part of the American Taxpayer Relief Act of 2012 enacted on January 2, 2013. This legislation retroactively reinstated and extended the credit from the previous expiration date through December 31, 2013. As a result, we adjusted our deferred tax assets in 2013 for the 2012 and 2013 research and development credits, which resulted in an increase to the deferred tax assets and a corresponding increase to the valuation allowance (or uncertain tax positions) of $0.3 million and $0.3 million, respectively.


	December 31, 2014			March 31, 2015			June 30, 2015			September 30, 2015			December 31, 2015			February 17, 2016
	(audited)			(unaudited)									(audited)			(unaudited)
Key Inputs
Total equity value (in millions)	$	112.10		$	132.60		$	132.60		$	175.40		$	220.10		$	239.40
Volatility		45.00	%		60.00	%		60.00	%		60.00	%		60.00	%		60.00	%
Risk free rate		1.59	%		1.26	%		1.41	%		1.15	%		1.49	%		1.04	%
Time to liquidity (years)		4.80			4.50			4.30			4.00			3.79			3.70

Key Output Values
Call option to purchase series D redeemable convertible preferred—per share value	$	0.21		$	0.28		$	0.25		$	0.28		$	0.50		$	0.65
Profits interests units	$	0.22		$	0.38		$	0.38		$	0.41		$	0.69		$	0.68

There is a high degree of subjectivity involved when using option-pricing models to estimate the fair values for equity based instruments. There is currently no market-based mechanism or other practical application to verify the reliability and accuracy of the estimates stemming from these valuation models, nor is there a means to compare and adjust the estimates to actual values. Although the fair value of the Call Option Liability and profits interests are determined using an option-pricing model, the value from such a model may not be indicative of the fair value that would be observed in a market transaction between a willing buyer and willing seller. If factors change and we employ different assumptions when valuing the Call Option Liability and profits interests, the fair value adjustments that we record in the future may differ significantly from what we have historically reported.

Income Tax Loss and Tax Credit Carryforwards

Our ownership structure includes a holding company organized as a limited liability company that has elected pass through tax treatment. As such, we do not recognize any income tax expense or benefit for the income or loss of the entity and have not established any deferred tax assets or liabilities within the holding company. The net operating losses and research and development credit carryforwards discussed below relate to our wholly owned subsidiaries.

We had operating loss tax carryforwards (both federal and state) of approximately $17.0 million at December 31, 2014 and $45.5 million at December 31, 2015 and federal research and development credit carryforwards of approximately $0.3 million and $1.0 million at December 31, 2014 and 2015, respectively. Federal and state losses begin to expire in 2032 and 2027, respectively, and the research and development credit carryforwards begin to expire in 2032. For financial reporting purposes, a valuation allowance has been recognized to fully offset the deferred tax assets related to the carryforwards, based on our assessment of the likelihood of using these net deferred tax assets in future periods. The total increase in valuation allowance of $10.9 million from 2014 to 2015 was allocable to current operating activities. The utilization of the loss carryforwards to reduce future income taxes will depend on our ability to generate sufficient taxable income prior to the expiration of the loss carryforwards. In addition, the maximum annual use of net operating loss and research and

development credit carryforwards is limited in certain situations in which changes occur in stock ownership.

In general, if we experience a greater than 50% aggregate change in ownership of certain significant shareholders over a three-year period (a Section 382 ownership change), utilization of our pre-change net operating loss carryforwards is subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, or the Code, and similar state laws. The annual limitation generally is determined by multiplying the value of our shares at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the net operating loss carryforwards before utilization and may be substantial. Although we have not completed a study of all entities to determine the impact of ownership changes on our net operating loss carryforwards under Section 382 of the Code, we believe that our ability to use our net operating loss carryforwards may be limited. Net operating loss carryforwards may be limited or lost if we experience a Section 382 ownership change in connection with this offering or as a result of future changes in our share ownership. Losses from a specific period may be subject to multiple limitations, and would generally be limited by the lowest of those limitations. There was no recognized tax benefit related to net operating loss carryforwards in any prior period.

Contractual Obligations and Commitments

Our principal contractual obligation relates to the leasing of our office space in Durham, North Carolina, under a non-cancelable operating lease that was is scheduled to expire in ~~March~~February 2020. In October 2015, we amended the lease to incorporate additional office space and extend the expiration date from February 2020 to June 2021, which resulted in additional lease obligations of approximately $1.3 million. The table below summarizes our financial obligations under this lease from December 31, 2015. We do not have any outstanding indebtedness.

Total

Less ~~than1~~than 1 year

1 to ~~3years~~3 years

3 to ~~5years~~5 years

More ~~than5~~than 5 years

(in thousands)

Operating lease obligations

12,~~086~~169

~~164~~308

~~341~~815

~~361~~860

~~220~~186

We enter into contracts in the normal course of business with CROs to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.

Off Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the ~~Securities and Exchange Commission~~SEC.

Quantitative and Qualitative Disclosures about Market Risks

We are not exposed to market risk related to changes in interest rates. As of ~~March~~ December 31, ~~2014~~2015, we had cash and cash equivalents of $729.4 million~~, with $7~~.3 ~~million held in checking and $0.1 million held in basic interest bearing accounts.~~

Emerging Growth Company Status

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period, and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

BUSINESS

We are a biopharmaceutical company focused on the discovery, development and commercialization of novel pharmaceuticals based on our proprietary metalloenzyme chemistry and biology technology platform. Metalloenzymes, which contain a metallic atom that is primarily responsible for enzyme activity, are an important class of drug targets for the treatment of a broad range of diseases. We utilize our technology to design novel drugs that we expect will have significant benefits as compared to currently marketed metalloenzyme inhibitors, including greater efficacy, improved safety, more favorable pharmacokinetic properties and superior therapeutic index. We have leveraged our technology to develop several product candidates that we believe have the potential to become best-in-class antifungal agents. VT-1161, our lead product candidate, is currently in separate Phase 2b clinical trials for the treatment of onychomycosis and recurrent vulvovaginal candidiasis. In recent interim analyses of these Phase 2b clinical trials, we observed positive results in terms of both safety and efficacy for both indications. We expect final data on the principal efficacy and safety end points, or top-line final data, from our ongoing Phase 2b clinical trials to be available during the fourth quarter of 2016. Our other product candidates include VT-1129 for the treatment of cryptococcal meningitis, currently in a Phase 1 clinical trial, and VT-1598 for the treatment of Valley Fever, currently in IND-enabling studies. In addition to the development of novel antifungal agents, we are leveraging our technology to pursue drug discovery programs in oncology and certain orphan diseases.

We refer to our broad array of metalloenzyme chemistry and biology technologies as our MIDAS (Metalloenzyme Inhibitor Design and Synthesis) technology platform. This platform, built over the past decade, encompasses a powerful set of chemistry and biology tools that address the challenges and complexities of metalloenzyme drug discovery and enable the design of highly differentiated metalloenzyme inhibitors. Our technology is comprised of a deep understanding of over 120 potential metalloenzyme targets, a set of proprietary computer-based design tools, a library of over 200 unique metal-binding groups, knowledge of important counter-screens and pharmacologic expertise. We have focused our efforts on disease areas that are characterized by significant unmet medical need and commercial opportunity and for which our technology provides an opportunity to develop highly differentiated agents which may have compelling advantages over currently available therapies.

Our initial drug discovery and development efforts have been focused on a metalloenzyme target, fungal CYP51, which has broad application in the treatment of human fungal infections. CYP51 is a clinically validated target in that a number of other antifungal compounds targeting CYP51 have either been approved or are currently in clinical-stage development. Ranging from extremely common dermatologic and mucosal infections to life-threatening infections of the central nervous system and internal organs, fungal infections represent an area of significant unmet medical need. Although several antifungal agents are currently available, each of these drugs has limitations with regard to efficacy, safety and pharmacokinetic properties. For example, terbinafine (Lamisil), the most widely prescribed drug for the treatment of onychomycosis, has a labeled complete cure rate of only 38% at the 48-week evaluation point and its use is limited by liver toxicity and frequent drug-drug interactions. Similarly, amphotericin B, which is used for the treatment of cryptococcal meningitis, is highly toxic to the kidneys and is very poorly tolerated. We have applied our technology to design antifungal compounds that we believe are highly differentiated from, and will address the shortcomings of, currently available antifungal agents. In addition to our antifungal programs, we have recently initiated drug discovery efforts focused on additional metalloenzyme targets relevant to oncology and certain orphan diseases for which we believe our MIDAS technology affords us the opportunity to improve upon currently available therapies and generate first-in-class agents.

A summary of our clinical, preclinical and research-stage programs is provided below.

VT-1161 for Onychomycosis

VT-1161 is an orally available inhibitor of fungal CYP51 that has shown high potency and selectivity in in vitro studies. VT-1161 blocks the production of ergosterol, an essential component of

the fungal cell membrane, which is critical to fungal proliferation. In preclinical studies, VT-1161 demonstrated potent activity against Trichophyton rubrum, or T. rubrum, and Trichophyton mentagrophytes, or T. mentagrophytes, the two most common fungal species that cause onychomycosis, a fungal infection of the nail that affects approximately 32 million individuals in the United States. Despite the high prevalence of onychomycosis, current therapies for this disease are suboptimal with respect to efficacy, safety and dosing convenience.

We conducted Phase 1 clinical trials of VT-1161 commencing in August 2011 and a Phase 2a proof-of-concept clinical trial commencing in August 2013. In our clinical trials conducted to date, VT-1161 demonstrated a long half-life and excellent penetration into the nail, properties which we believe are important for the successful treatment of onychomycosis. We recently conducted a planned interim analysis of 107 patients in our ongoing Phase 2b clinical trial of VT-1161 for the treatment of onychomycosis, which commenced in February 2015. Across the four VT-1161 treatment arms, we observed a 48% average reduction in the mean percentage of nail involvement at week 24 of the 48-week trial as compared to a 6% reduction in the placebo arm. The median reduction in percentage nail involvement in the VT-1161 arms was as high as 67% at week 24. In both preclinical studies and clinical trials conducted to date, including the Phase 2b interim analysis, VT-1161 has demonstrated a favorable safety profile with no evidence of an adverse effect on liver function. We believe that the high degree of potency, broad therapeutic index and favorable oral pharmacokinetic properties of VT-1161, coupled with the positive interim results we have observed in our ongoing Phase 2b clinical trial, suggest that VT-1161 may be superior to the approved oral therapies for onychomycosis with respect to both efficacy and safety. We also believe that VT-1161 may significantly outperform the approved topical therapies with respect to both efficacy and dosing convenience. We expect top-line final data from our ongoing Phase 2b clinical trial to be available during the fourth quarter of 2016 and, if the trial is successful, we expect to initiate Phase 3 clinical trials of VT-1161 in onychomycosis during the first half of 2017.

VT-1161 for Recurrent Vulvovaginal Candidiasis

In preclinical studies, VT-1161 demonstrated highly potent activity against a broad range of Candida species, the causative agents of recurrent vulvovaginal candidiasis, or RVVC. RVVC, which is defined as three or more episodes of acute vulvovaginal candidiasis, or AVVC (commonly referred to as a vaginal yeast infection), in a 12-month period. RVVC is estimated to occur in 5% to 8% of women in the United States during their child-bearing years. We are not aware of any approved therapies for RVVC in the United States. We recently conducted a planned interim analysis of 115 patients in our ongoing 48-week Phase 2b clinical trial of VT-1161 for the treatment of RVVC, which commenced in February 2015. Across the four VT-1161 treatment arms, only 3% of the patients suffered a recurrence of AVVC through week 24 as compared to 48% of patients in the placebo arm. In addition, in the two high-dose VT-1161 arms not a single patient suffered a recurrence through week 24. As in the interim analysis of the onychomycosis trial, VT-1161 was well tolerated with no evidence of an adverse effect on liver function. Because of its high degree of potency, broad therapeutic index and long half-life, we believe VT-1161 may be a highly effective treatment for RVVC and become the first antifungal agent approved for this common condition, which causes significant quality of life issues for patients. We expect top-line final data from our ongoing Phase 2b clinical trial to be available during the fourth quarter of 2016, and, if the trial is successful, we expect to initiate Phase 3 clinical trials of VT-1161 in RVVC during the second half of 2017.

VT-1129 for Cryptococcal Meningitis

VT-1129 is an orally available inhibitor of fungal CYP51 that has shown high potency and selectivity in in vitro studies. We are developing VT-1129 for the treatment of cryptococcal meningitis, a life-threatening fungal infection of the central nervous system. Occurring most frequently in immuno-compromised patients, cryptococcal meningitis results in approximately 3,400 hospitalizations per year and carries a mortality rate as high as 21% in the United States. Globally, it is estimated that approximately one million cases of cryptococcal meningitis occur each year, with associated mortality

rates estimated to be as high as 55% to 70%. VT-1129 has particular potency against Cryptococcus species and the ability to achieve high concentrations within the central nervous system. To our knowledge, VT-1129 is the only antifungal agent that is capable of fully eradicating the fungal pathogen that causes cryptococcal meningitis from the brain in preclinical studies. We are currently conducting a Phase 1 single-ascending dose clinical trial of VT-1129 in healthy volunteers, which commenced in October 2015, and we expect results during the second quarter of 2016. We expect to initiate a Phase 2 clinical trial in patients with cryptococcal meningitis during the first half of 2017 if our ongoing single-ascending dose Phase 1 clinical trial and the subsequent multiple-ascending dose Phase 1 clinical trial that we expect to complete in the fourth quarter of 2016 are successful. VT-1129 has received orphan drug designation for the treatment of cryptococcal meningitis and has been designated a Qualified Infectious Disease Product, or QIDP, by the U.S. Food and Drug Administration, or the FDA. In addition, we have commenced efforts to have cryptococcal meningitis added to the list of neglected tropical diseases that is maintained by the FDA. If cryptococcal meningitis were to be added to the current list, we may ultimately qualify for the award of a priority review voucher in the event VT-1129 were approved for treatment of this disease.

VT-1598 for Coccidioidomycosis (Valley Fever)

VT-1598 is an orally available inhibitor of fungal CYP51 that has shown high potency and selectivity in in vitro studies. We are developing VT-1598 for the treatment of coccidioidomycosis, also known as Valley Fever, a common lung infection in the southwestern United States that affects approximately 150,000 patients in the United States annually. Although the infection may resolve without treatment, approximately 5% to 10% of patients may develop a more severe form of the disease and a certain percentage of these patients will develop a chronic pulmonary infection at times associated with dissemination of the infection to other parts of the body. While current therapies are effective in some patients with this more severe form of the disease, they are often poorly tolerated and morbidity and mortality remain significant. In in vitro studies, VT-1598 has demonstrated significantly greater potency against Coccidioides clinical isolates than fluconazole, which is commonly used as the primary treatment for Valley Fever. In preclinical models of Valley Fever, VT-1598 was highly effective in treating Valley Fever that was localized to the central nervous system, a common site of dissemination in humans. We are currently conducting IND-enabling studies of VT-1598 and expect to file an IND in the fourth quarter of 2016. If our IND submission is successful, we expect to complete a single-ascending-dose Phase 1 clinical trial in the first half of 2017 and a multiple-ascending-dose Phase 1 clinical trial in the second half of 2017. We have received orphan drug designation in the United States for VT-1598 for the treatment of Valley Fever and expect that the compound will be designated a QIDP by the FDA.

Our Research Programs

In addition to our existing product candidates, we are also pursuing research directed at designing a fungal CYP51 inhibitor suitable for the treatment of invasive fungal infections in the hospital setting. The key objectives of this program are to design a compound that has potent activity against a broad spectrum of fungal pathogens and that could be formulated for both intravenous and oral delivery to facilitate the transition from acute care to step-down therapy. Beyond antifungals, we have recently initiated research programs directed at clinically validated metalloenzymes with potential applications in oncology and certain orphan diseases for which we believe our technology will enable the discovery of highly differentiated compounds that have compelling advantages over agents that are either currently available or in development.

Our Strategy

Our strategy is to strengthen and advance our leadership position in the discovery and development of novel metalloenzyme inhibitors, with the goal of commercializing our product

candidates. We believe that our product candidates have the potential to be superior to existing therapies with respect to efficacy, safety and dosing convenience due to our deep understanding of metalloenzyme chemistry and biology and the results of our preclinical studies and clinical trials conducted to date.

The central elements of our strategy are as follows:

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Develop and commercialize VT-1161 for the treatment of onychomycosis and RVVC. We are focused on rapidly advancing the clinical development of VT-1161, our lead product candidate, for the treatment of onychomycosis and RVVC. We are currently conducting two Phase 2b clinical trials of VT-1161, one in each of these indications, with top-line final data expected for both studies during the fourth quarter of 2016. Based upon our preclinical and clinical results to date, we believe that VT-1161 could potentially become a best-in-class therapy for both of these indications. We further believe that there is a significant unmet medical need and commercial opportunity for a novel, oral antifungal agent that improves upon the efficacy, safety and dosing convenience of current agents used for the treatment of onychomycosis. If we are successful in developing and receiving marketing approval for VT-1161 for the treatment of RVVC, to our knowledge, it would become the first approved therapy for this condition.

•

Develop additional product candidates for the treatment of invasive fungal infections. We are also focused on rapidly advancing the clinical development of VT-1129 for the treatment of cryptococcal meningitis and VT-1598 for the treatment of Valley Fever. We are currently conducting a Phase 1 single-ascending dose clinical trial of VT-1129 in healthy volunteers, with results from this clinical trial expected during the second quarter of 2016. We have obtained orphan drug status and QIDP designation for VT-1129 for the treatment of cryptococcal meningitis. For VT-1598, we are currently conducting IND-enabling studies, with an expected IND filing during the fourth quarter of 2016. We have also received orphan drug status for VT-1598 for the treatment of Valley Fever. In addition to our existing product candidates, we are conducting research on a novel series of fungal CYP51 inhibitors that can be administered either intravenously or orally for the treatment of invasive fungal infections in the hospital setting.

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Leverage our MIDAS technology platform to advance discovery programs in oncology, certain orphan diseases and potentially additional therapeutic areas. We believe that our MIDAS technology can be applied to improve upon many of the metalloenzyme inhibitors that are either currently marketed or in development. Over the past year, we have significantly expanded our research efforts with a focus on metalloenzyme targets with applicability in therapeutic areas such as oncology and certain orphan diseases. We view these programs as important opportunities to capitalize on our expertise in the discovery of novel metalloenzyme inhibitors and to enrich and expand our pipeline over the next several years.

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Strengthen and expand our core metalloenzyme drug discovery and development capabilities. All of our product candidates and research programs have resulted from our core metalloenzyme drug discovery expertise. We intend to continue to invest in our MIDAS technology platform as the cornerstone of our competitive advantage in discovering novel metalloenzyme inhibitors with improved properties compared to currently available agents. As we advance our product candidates into later-stage clinical development, we also plan to expand our existing development team by adding additional personnel with experience in clinical operations, drug safety, statistics, project management and medical affairs.

•

Establish specialized sales and marketing capabilities. We currently hold worldwide rights to commercialize all of our product candidates. We plan to retain marketing and sales rights for our products in the United States, particularly in situations where it is possible to address the market through a focused, specialized sales force. For example, we believe dermatologists and podiatrists, the primary specialists who treat onychomycosis, and a subset of

gynecologists, the primary specialists who treat RVVC, are sufficiently concentrated to enable us to effectively promote VT-1161 to these physicians with a focused, specialized internal sales force. For situations in which a large sales force is required to access the market, and with respect to markets outside the United States, we generally plan to assess potential collaborative arrangements with leading pharmaceutical and biotechnology companies to commercialize our products.

Our Product Pipeline

We are utilizing our MIDAS technology to discover and develop novel therapeutic agents across a broad range of diseases. We have focused our initial drug discovery and development efforts primarily on fungal CYP51, a well-validated metalloenzyme target. Fungal CYP51 is the target of the triazole class of antifungals, the most widely prescribed and commercially successful class of antifungals. In selecting fungal CYP51 as the target of our initial discovery efforts, we leveraged the fact that the triazole antifungals suffer to varying degrees from a low therapeutic index, which we believe results from poor selectivity of the metal-binding group that can be mitigated by our MIDAS technology. Similarly, we believe that there are multiple other high value metalloenzyme targets that we can address through the application of our technology. To begin to capitalize on these opportunities, during the past year we have initiated new research programs focused on validated metalloenzyme targets with application in oncology and certain orphan diseases. Similar to our performance with fungal CYP51, we have been able to rapidly generate attractive lead molecules in these programs that demonstrate significant improvements in selectivity compared to currently available inhibitors.

An overview of our product pipeline is provided in the figure below:

LOGO

Treating fungal infections involves several challenges that we believe we have been able to successfully address. First, fungal cells share a similar complex structure with human cells, both of which are termed eukaryotic. This is in contrast to bacterial cells, which are much simpler in structure and are termed prokaryotic. Given the similarity of fungal cells to human cells, there are fewer selective targets available for antifungal therapy than for antibacterial therapy. Thus, in contrast to the large number of antibacterial agents that are available, progress in the development of novel antifungals agents has been more difficult, with fewer agents in recent development. Second, fungal infections typically require much longer courses of therapy than bacterial infections. While many

bacterial infections will respond to antibacterial therapy within days, fungal infections often require several weeks or even months of therapy to eradicate the infection. Finally, similar to the phenomenon of antibiotic resistance, the emergence of resistant pathogens is an increasingly challenging problem in the treatment of certain fungal infections that may be mitigated by the introduction of new therapies.

VT-1161 for Onychomycosis

VT-1161, our lead product candidate, is an orally available inhibitor of fungal CYP51 that has shown high potency and selectivity in in vitro studies and that has several properties that have been optimized for the treatment of onychomycosis, including a high degree of potency against dermatophytes and other pathogens that cause onychomycosis, a long half-life, excellent penetration into the nail, and a broad therapeutic index. Interim results from our Phase 2b clinical trial in patients with onychomycosis, presented below, suggest that VT-1161 may achieve greater efficacy compared to current standard of care therapies for onychomycosis, including terbinafine, the most widely prescribed oral treatment. In addition, because of its selectivity, we believe that VT-1161 may avoid the side effects that limit the use of currently marketed oral antifungals.

Disease Overview

Onychomycosis, a fungal infection that primarily involves the nail bed and nail matrix, is an extremely common infection, affecting approximately 32 million individuals in the United States. The prevalence of onychomycosis increases with age, with approximately 18% of individuals over the age of 60 affected. Approximately 95% of cases involve the toenails, where often multiple nails are involved, while the remaining 5% of cases involve the fingernails. The most common variant of the condition is distal lateral subungual onychomycosis, or DLSO, which by definition involves the distal and lateral portion of the nail. The most common causative organisms are Trichophyton species and other fungal species, such as Candida and some molds can also infect the nail.

Onychomycosis is a chronic condition. The infection is characterized by deformation, discoloration, thickening and splitting of the nail, as well as separation of the nail plate from the nail bed. Damage to the nail can also result in pain when walking, limiting ambulation. The unsightly appearance of the infected nail and the perception that there is an active and contagious infection is a significant concern for many patients. Onychomycosis can also be a significant medical issue for diabetics or other patients with compromised immune systems or poor circulation of the lower extremities. In these patients, the infected nail can serve as an entry point for bacterial infection, which can in turn lead to serious complications such as tissue necrosis and amputation.

Onychomycosis generally will not improve without treatment, and will typically worsen over time. Due to concerns about possible side effects, limited efficacy and frequent relapse experienced with current therapies, physicians may discourage some patients from undergoing currently available treatments.

Current Therapies and Limitations

Prescribed primarily by dermatologists, podiatrists and general practitioners, medical treatment options for onychomycosis include both topical and oral drugs. In clinical trials for onychomycosis, the success of therapy is typically based upon a composite endpoint comprised of the level of nail involvement, as well as mycologic cure, which refers to a negative fungal culture and a negative fungal stain. The determination of complete cure, which is the FDA-defined primary endpoint for onychomycosis trials, requires both complete clinical cure (i.e., 0% nail involvement) as well as mycologic cure.

There are two oral agents for onychomycosis approved in the United States:

•

Terbinafine (Lamisil) is by far the most widely prescribed agent for the treatment of onychomycosis, with approximately 3.0 million prescriptions written in 2014 accounting for

~~accounting~~approximately ~~standards~~80% of prescriptions for onychomycosis therapies in the United States. ~~Thus~~Prior to the expiration of its U.S. patent in 2006, anpeak ~~emerging~~annual ~~growth~~sales ~~company~~of ~~can~~Lamisil ~~delay~~were approximately $1.2 billion worldwide. According to the ~~adoption~~approved U.S. labeling, 38% of ~~certain~~patients ~~accounting~~treated ~~standards~~with ~~until~~terbinafine ~~those~~once ~~standards~~daily ~~would~~for ~~otherwise~~12 ~~apply~~weeks toachieved ~~private~~complete ~~companies~~cure at 48 weeks. WeDespite ~~have~~its ~~irrevocably elected~~higher ~~not~~efficacy torate ~~avail~~compared ~~ourselves~~with topical agents, we believe that the use of ~~this~~terbinafine ~~extended~~has ~~transition~~been ~~period~~limited by safety concerns, primarily liver toxicity and, asdrug-drug ainteractions. ~~result~~Although rare, wecases ~~will~~of ~~adopt~~liver ~~new~~failure resulting in transplant or ~~revised~~death ~~accounting~~have ~~standards~~been onreported. ~~the~~Liver ~~relevant~~function ~~dates~~tests onare ~~which~~recommended ~~adoption~~prior ofto ~~such~~treatment ~~standards~~with terbinafine, and the drug is ~~required~~contraindicated ~~for~~in ~~other~~patients ~~public~~with ~~companies~~pre-existing liver disease. Terbinafine is available as a generic in the United States.

•

Itraconazole (Sporanox) is not widely used in the treatment of onychomycosis despite its approval for this indication, due largely to the greater risk of liver toxicity compared with terbinafine. Other concerns with the use of itraconazole include the potential for arrhythmias and significant drug-drug interactions. Itraconazole is available as a generic in the United States.

Two topical treatments for onychomycosis, efinaconazole and tavaborole, have recently been approved for the treatment of onychomycosis in the United States and, despite their limited efficacy, have collectively achieved $516 million in aggregate U.S. sales since their commercial launches in June and September 2014, respectively:

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Efinaconazole (Jublia) achieved complete cure rates of 17.8% in one clinical trial and 15.2% in a second clinical trial cited in the approved labeling. Patients included in these clinical trials were limited to those with no more than 50% involvement of the great toenail. In the time period between its launch in June 2014 and October 2015, Jublia has accounted for a total of approximately 600,000 prescriptions and accumulated sales of $343 million in the U.S. market according to IMS Health data.

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Tavaborole (Kerydin) achieved complete cure rates of 6.5% in one clinical trial and 9.1% in a second clinical trial cited in the approved labeling. Patients included in these clinical trials were limited to those with no more than 60% involvement of the great toenail. In the time period between its launch in September 2014 and October 2015, Kerydin has accounted for a total of approximately 145,000 prescriptions and accumulated sales of $172 million in the U.S. market according to IMS Health data.

A third topical treatment, ciclopirox (Penlac), was approved in the United States in December 1999 for the treatment of onychomycosis in conjunction with frequent debridement, or removal of parts of the infected nail, but is less commonly prescribed than the other topical therapies. Ciclopirox is available as a generic in the United States.

We believe that the low complete cure rates for the topical agents are due to suboptimal concentration at the primary site of infection, namely the nail bed and nail matrix. In addition, given that each of the topical agents must be applied daily to each affected nail for 48 weeks, poor compliance with the treatment regimen may also play a role.

Our Solution

VT-1161 is a highly potent and selective, orally available inhibitor of fungal CYP51. VT-1161 blocks the production of ergosterol, an essential component of the fungal cell membrane, which is critical to fungal proliferation. In preclinical studies, VT-1161 demonstrated potent activity against T. rubrum and T. mentagrophytes, the two most common dermatophyte species that cause onychomycosis. In clinical trials, VT-1161 has demonstrated a very long half-life (estimated at over 1,000 hours) and excellent penetration into the nail, properties which we believe are important in the treatment of onychomycosis. Moreover, in both preclinical studies and clinical trials conducted to date, VT-1161 has demonstrated a favorable safety profile. We believe that the high potency, broad therapeutic index and favorable oral pharmacokinetic properties of VT-1161, coupled with the positive

~~BUSINESS~~ interim results we have observed in our ongoing Phase 2b clinical trial, suggest that VT-1161 may be superior to the approved oral therapies with regard to efficacy, safety and dosing convenience and may significantly outperform the approved topical therapies with regard to efficacy and dosing convenience.

~~Overview~~Clinical Data

WeRENOVATE: ~~are~~A aPhase ~~biopharmaceutical~~2b ~~company~~Clinical ~~focused~~Trial ~~on the discovery, development and commercialization~~ of novel antifungal agents based on our proprietary metalloenzyme medicinal chemistry platform, which we call our Metallophile® Technology. Metalloenzymes are enzymes that contain a metal, such as iron, zinc or copper, that is linked to the enzyme’s protein component. We are using our platform to design drugs that we expect to have greater selectivity, fewer side effects and improved potency compared to currently available antifungal agents. Fungal infections represent a significant medical problem, and include highly prevalent mucosal and dermatologic infections, as well as life-threatening invasive central nervous system and systemic infections. We are developing distinct antifungal agents for each of these major categories. Our lead product candidate, VT-1161, ~~is an oral agent that we are developing for the treatment of recurrent vulvovaginal candidiasis, or RVVC, a highly prevalent mucosal infection for which there are no approved therapies~~ in ~~the~~Onychomycosis ~~United States, and onychomycosis, a very common fungal infection of the nail for which current treatments are suboptimal with respect to safety, tolerability and efficacy.~~

WeTrial ~~are~~Overview currently completing two proof of concept Phase 2a clinical trials of VT-1161, one for the treatment of moderate to severe acute vulvovaginal candidiasis, or AVVC, commonly known as vaginal yeast infection, and a second for the treatment of moderate to severe interdigital tinea pedis, a dermatologic infection commonly known as athlete’s foot. In these Phase 2a clinical trials, VT-1161 has demonstrated strong evidence of clinical antifungal activity as well as a favorable safety profile. The fungal pathogens that cause AVVC are typically the same pathogens that cause RVVC, and the fungal pathogens that cause tinea pedis are typically the same pathogens that cause onychomycosis. We expect to begin Phase 2b clinical trials for VT-1161 in RVVC and onychomycosis in the second half of 2014. In Phase 1 clinical trials, VT-1161 demonstrated a favorable safety profile, good oral pharmacokinetics and a prolonged half-life. We believe that these attributes of VT-1161 may make the agent particularly useful in indications such as RVVC, in which recurrence rates with existing therapies are problematic.

InWe ~~June~~are ~~2011~~currently conducting a randomized, double-blind, weplacebo-controlled, ~~submitted~~48-week toclinical ~~the~~trial ~~U.S.~~of ~~Food~~VT-1161 ~~and~~in ~~Drug~~patients ~~Administration~~with DLSO of the large, or ~~FDA~~great toenail. This clinical trial, anwhich ~~investigational~~we ~~new~~call ~~drug~~RENOVATE ~~application,~~(“Restoring orNail: ~~IND, for~~an Oral VT-1161 Tablet ~~for~~Evaluation”), ~~the~~has ~~treatment~~enrolled of259 patients ~~with~~at ~~invasive,~~32 ~~mucosal~~sites orthroughout ~~superficial~~the ~~fungal~~United ~~infections~~States. Enrollment was completed during the third quarter of 2015, and inall ~~July~~patients ~~2013,~~have wecompleted ~~submitted~~the anactive ~~IND~~dosing ~~for~~phase VTas of February 2016. We expect top-~~1161~~line ~~for~~final ~~dermatology~~data ~~indications,~~during ~~initially~~the ~~for~~fourth quarter of 2016 and 60-week follow-up data during the ~~treatment~~first quarter of ~~patients~~2017. ~~with~~A ~~moderate~~planned tointerim ~~severe~~analysis, the results of which are presented below, was performed when 107 patients had completed ~~interdigital~~the ~~tinea~~week ~~pedis~~24 visit.

WeA ~~are~~schematic ~~also developing VT-1129 as an oral agent for cryptococcal meningitis, a life-threatening invasive fungal infection~~ of the ~~lining~~RENOVATE ofclinical ~~the~~trial ~~brain~~design ~~and~~is ~~spinal~~provided ~~cord. VT-1129 has demonstrated~~ in ~~an animal model~~ the ~~ability~~figure tobelow: reduce to undetectable levels the pathogenic fungal organism that causes cryptococcal meningitis. We anticipate submitting an IND for VT-1129 to the FDA during the first half of 2015, and we recently applied to the FDA for orphan drug designation. Our third program, VT-1598 and related analogues, is in preclinical development with a goal of developing an oral and intravenous therapy for the treatment of invasive fungal infections.

~~According~~RENOVATE toTrial aDesign market research study conducted in May 2014 by Campbell Alliance and commissioned by us, or the May 2014 Campbell Alliance Study, worldwide sales of branded antifungal drugs were approximately $3.5 billion in 2013. While there are several classes of antifungal agents currently approved in the United States, we believe there is a significant opportunity for the development of new antifungal agents for three primary reasons:

LOGO

•Patients ~~Current~~have ~~antifungal~~been ~~agents~~randomized ~~often~~to ~~have~~one ~~significant~~of ~~safety~~four ~~and~~active ~~tolerability~~arms ~~shortcomings,~~or ~~such~~placebo asin ~~liver~~a ~~toxicity,~~1:1:1:1:1 ~~drug-drug interactions~~fashion, ~~endocrine~~as ~~toxicity~~follows: ~~and pregnancy warnings;~~

• ~~Current~~Low-dose, ~~antifungal~~12-week ~~agents~~VT-1161 ~~suffer~~arm ~~from~~- ~~limited~~300 ~~efficacy~~mg inonce-daily ~~treating~~for ~~many~~14 ~~fungal infections~~days, ~~including~~then ~~poor~~300 ~~initial~~mg ~~response~~once-weekly ~~rates~~for ~~and~~10 ~~high~~weeks, ~~relapse~~then ~~rates;~~matching ~~and~~placebo for 12 weeks

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High-dose, 12-week VT-1161 arm - 600 mg once-daily for 14 days, then 600 mg once-weekly for 10 weeks, then matching placebo for 12 weeks

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Low-dose, 24-week VT-1161 arm - 300 mg once-daily for 14 days, then 300 mg once-weekly for 22 weeks

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High-dose, 24-week VT-1161 arm - 600 mg once-daily for 14 days, then 600 mg once-weekly for 22 weeks

•

Placebo arm - matching placebo regimen for 24 weeks

•Key ~~Resistance~~enrollment tocriteria ~~currently~~included ~~available~~patients (i) who were between 18 and 70 years of age, (ii) who had between 25% and 75% involvement of the great toenail, and (iii) who had not received oral antifungal ~~agents~~therapy within three months or topical antifungal therapy applied to the foot for at least 30 days prior to screening. Nail involvement of 25–50% is ~~increasingly~~generally ~~problematic~~considered mild to moderate, while greater nail involvement is considered more severe. Additional inclusion and exclusion criteria were consistent with those of recent clinical trials conducted in patients with onychomycosis.

WePatients ~~have~~are ~~conceived~~being ~~and~~followed ~~integrated~~for a ~~set~~period of ~~proprietary~~48 ~~core~~weeks, ~~chemistry~~at ~~technologies~~which ~~for~~time the ~~discovery~~primary ~~and~~trial ~~optimization~~endpoints ofwill ~~product candidates~~be ~~that~~evaluated. ~~act~~These assame endpoints ~~inhibitors~~will ofalso ~~metalloenzymes.~~be Weevaluated ~~have~~after apatients ~~Metallophile~~have ~~database,~~completed ~~which~~60 ~~consists~~weeks ofin ~~over~~the ~~200~~clinical ~~metal-binding groups~~trial. WeConsistent ~~refer~~with torecent ~~this~~pivotal ~~database~~trials ofin ~~metal-binding~~onychomycosis, ~~groups~~the ~~and~~primary ~~our~~efficacy ~~knowledge~~endpoint ofat ~~their~~week ~~activities~~48 asis ~~our~~complete ~~Metallophile Technology.~~cure Weof ~~apply~~the ~~our~~target ~~Metallophile Technology to identify small molecule inhibitors of metalloenzymes~~toenail, ~~which~~a ~~are~~composite endpoint ~~proteins~~ that ~~catalyze~~includes acomplete ~~wide~~clinical ~~range~~cure of(0% ~~biochemical~~nail ~~reactions.~~involvement) ~~Metalloenzymes~~and ~~are~~negative ~~distinguished~~mycology ~~from~~(negative ~~other~~fungal ~~enzymes~~culture inand ~~that~~negative ~~they contain~~fungal astain). ~~metallic~~This ~~atom,~~endpoint ~~such~~is aswell ~~iron,~~validated ~~zinc,~~as ~~or copper, at~~ the ~~core~~key ofregulatory ~~their~~endpoint ~~active~~utilized ~~site.~~by ~~The~~the ~~metal~~FDA ~~in these enzymes has frequently been a target~~ for ~~pharmaceutical~~approval ~~intervention,~~of ~~and many marketed drugs act by inhibiting metalloenzymes. We improve~~agents onfor ~~these~~the ~~existing~~treatment ~~therapies by designing inhibitors~~ of ~~metalloenzymes~~onychomycosis ~~that~~and ~~contain~~is ~~alternative~~the ~~metal-binding~~same ~~groups~~endpoint that ~~enable~~we aintend ~~high~~to ~~degree~~use ofin ~~selectivity~~our ~~for~~planned ~~the~~Phase ~~desired~~3 ~~metalloenzyme~~clinical ~~target,~~trials ~~while~~if ~~also~~our ~~maintaining~~Phase a2b ~~high~~clinical ~~degree~~trial ofis ~~potency~~successful.

WeIn ~~are~~addition, ~~using our Metallophile Technology to design antifungal compounds that~~ we ~~believe~~ will bealso ~~highly~~evaluate ~~differentiated~~a ~~from existing~~number ~~agents~~of ~~and~~secondary ~~address~~endpoints, ~~their~~including ~~shortcomings.~~clinical ~~The~~endpoints, ~~focus~~mycology ofendpoints ~~our~~and ~~three principal antifungal programs is~~ a ~~metalloenzyme~~composite ~~known as fungal CYP51~~endpoint, abased ~~clinically validated target that is important in~~ upon the ~~synthesis~~percentage of ~~the~~patients ~~fungal~~achieving ~~cell~~each ~~membrane~~of ~~and therefore critical to fungal proliferation and survival. Our Metallophile Technology is also potentially applicable to other metalloenzyme targets for~~ the ~~treatment~~following: ~~of fungal, bacterial and viral infections.~~

~~Utilizing~~• ~~our~~Complete ~~know-how~~clinical and integrated scientific and drug development capabilities, we have identified multiple product candidates that inhibit fungal CYP51. We have also prioritized other metalloenzyme targets for the initiation of new infectious disease research programs. Our three most advanced programs are as follows: cure;

• ~~VT-1161~~Less ~~for~~than Mucosal and Dermatologic Fungal Infections. During the second half of 2014, we plan to initiate two randomized, double-blind, placebo-controlled, multi-arm Phase 2b clinical trials of VT-1161 at multiple clinical sites within the United States, one in patients with RVVC and one in patients with onychomycosis. We are currently conducting two proof of concept Phase 2a clinical trials of VT-1161. Our first ongoing Phase 2a clinical trial is in patients with moderate to severe AVVC. Our intent in conducting this clinical trial was to establish proof of concept that VT-1161 is safe and clinically active in treating vaginal Candida infections, with overall cure rates generally comparable to those of fluconazole. Candida is a broad family of fungi that resemble yeasts and frequently cause infections in humans. In the low-, mid- and high-dose arms of this trial, VT-1161 demonstrated clinical and mycologic cure rates generally comparable to fluconazole, the current standard of care, with a favorable safety and tolerability profile. When used as a clinical trial endpoint, mycologic cure indicates a negative culture for fungi at the day specified. We believe that demonstrating clinical antifungal activity in this AVVC clinical trial is likely to be indicative of clinical antifungal activity in a subsequent RVVC clinical trial because the fungal pathogens involved in both conditions are typically the same. A study published in December 2012 in the medical journal Obstetrics and Gynecology, estimates that RVVC afflicts 510% to 8% of women of child-bearing age in the United States. There are currently no approved agents in the United States for RVVC. Our second ongoing Phase 2a clinical trial of VT-1161 is in patients with moderate to severe interdigital tinea pedis. Our intent in conducting this Phase 2a tinea pedis clinical trial was to establish proof of concept that VT-1161 is clinically active in treating dermatologic infections caused by dermatophytes, a broad family of fungi that frequently cause skin, nail and hair infections and which commonly cause both tinea pedis and onychomycosis. In the low-, mid- and high-dose arms of this trial, VT-1161 demonstrated strong clinical antifungal activity and a favorable safety and tolerability profile. In Phase 1 clinical trials, VT-1161 demonstrated ainvolvement;

•

Negative fungal culture;

•

Negative fungal stain;

•

Negative mycology, defined as both negative fungal culture and negative fungal stain; and

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Less than 10% nail involvement and negative mycology, commonly referred to as “therapeutic success.”

While all of these endpoints are appropriate for the conclusion of the clinical trial, by which time new healthy nail has had sufficient time to grow, we did not include complete cure or complete clinical cure as endpoints in the interim analysis because these endpoints are generally not believed to be achievable within a 24-week timeframe.

Interim Analysis – Overview and Baseline Demographics

We conducted a planned interim analysis when 107 patients had completed the first 24 weeks of the clinical trial. The data were unblinded by treatment arm and included data through each patient’s 24-week visit only. All clinical trial personnel remain blinded with regard to individual patient treatment assignments. For patients who had missing data, a last-observation-carried-forward analysis was utilized. No statistical comparisons were planned or conducted.

All efficacy analyses were conducted on both an intent-to-treat and a per-protocol basis. The intent-to-treat analysis includes all randomized subjects. The per protocol analysis includes all patients who followed the trial protocol in all material respects. Because the results of the per protocol analysis were substantially similar to those of the intent-to-treat analysis, we present the results of the intent-to-treat analysis, which is the more conservative view of the data and is generally the primary basis on which data is evaluated by the FDA.

~~favorable~~Key ~~safety~~baseline ~~profile,~~demographics ~~good~~for ~~oral pharmacokinetics and a prolonged half-life. We believe that these attributes of VT-1161 may make~~ the ~~agent~~patients ~~particularly~~included ~~useful~~ in ~~indications~~the ~~such~~interim asanalysis ~~RVVC,~~are presented in ~~which~~the ~~recurrence~~table below: ~~rates with existing therapies are problematic.~~

• VT-1129 for Cryptococcal Meningitis. We are conducting preclinical studies of VT-1129, which we are developing for cryptococcal meningitis. We anticipate submitting an IND for VT-1129 to the FDA during the first half of 2015. Cryptococcal meningitis is an acute, life-threatening fungal infection of the lining of the brain and spinal cord. A study published in February 2013 in the scientific journal PLOS ONE estimated that there are 3,400 hospitalizations associated with cryptococcal meningitis annually in the United States. The three-month mortality rate during management of acute cryptococcal meningitis is approximately 20% in medically developed countries. Cryptococcal meningitis is particularly common in immunocompromised patients, such as transplant patients or patients with HIV infection. We believe VT-1129 may be eligible for orphan designation in this indication in both the United States and Europe, and we recently applied to the FDA for orphan designation. VT-1129 has been shown in an animal model to reduce to undetectable levels the pathogenic fungal organism that causes cryptococcal meningitis. We are not aware of any other agent that has demonstrated in an animal model the ability to reduce to undetectable levels the pathogenic fungal organism that causes cryptococcal meningitis.


	300 mg/ 12-week			300 mg/ 24-week			600 mg/ 12-week			600 mg/ 24-week			Placebo
Number of Patients		23			23			22			22			17
Mean Age (Years)		48.2			47.8			47.1			48.8			50.8
Gender (% Male)		78	%		83	%		82	%		91	%		88	%
Race (% Caucasian)		83	%		96	%		82	%		59	%		94	%
Mean Nail Involvement at Screening		47.4	%		47.7	%		46.7	%		41.8	%		43.8	%
Mean Number of Affected Toenails at Screening		4.8			4.2			5.0			4.5			4.9

•In ~~VT-1598~~the ~~and~~pivotal ~~Analogues~~trials for ~~Invasive~~efinaconazole, ~~Fungal~~one ~~Infections. We are conducting preclinical research focused on the identification~~ of ~~a compound for~~ the ~~treatment~~two ofrecently ~~invasive~~approved ~~fungal~~topical ~~infections~~agents, ~~including~~the ~~those~~patient ~~caused~~population byhad ~~Aspergillus~~less severe ~~and Candida species, two very common fungal pathogens~~disease. WeThe ~~have~~mean ~~identified~~involvement aof ~~lead~~the ~~series,~~target ~~which~~toenail ~~includes~~was ~~VT-1598~~36.7% and ~~several~~36.3% ~~analogues, which we believe would provide both improved efficacy~~ and ~~safety~~the ~~when~~mean ~~compared~~number ~~with~~of ~~the~~affected ~~currently~~toenails ~~available~~was ~~agents~~2.8 Weand ~~are currently in the lead optimization phase of this program~~2.8 Aat ~~review~~baseline ~~article published~~ in the ~~journal~~two ~~Trends~~efinaconazole inPhase ~~Microbiology~~3 ~~indicates~~clinical ~~that~~trials, ~~the~~respectively. ~~overall~~Moreover, ~~mortality~~while ~~for~~our ~~invasive~~clinical ~~diseases~~trial enrolled ~~caused~~patients bywith ~~Candida~~up ~~and Aspergillus is 30%~~ to 5075%, ~~despite~~involvement ~~the advent~~ of ~~new~~the ~~diagnostic~~target ~~and~~toenail, ~~therapeutic~~the ~~strategies.~~efinaconazole ~~These~~Phase ~~high~~3 ~~mortality~~clinical ~~rates~~trials ~~are~~limited ~~partially~~involvement ~~a result~~ of ~~growing~~the ~~resistance~~target totoenail ~~drugs currently available~~ to ~~treat~~50% ~~these~~or ~~types of infections~~less. ~~This~~While ~~concern~~the ismean ~~highlighted~~involvement

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•Table gives effect to the exercise of outstanding series C1 warrants into an aggregate of series C1 preferred shares that will, in turn, convert into our common stock in connection with the corporate conversion, which is a part of the Reorganization, and the closing of this offering; andContents

•Table certainof transactions contemplated by agreements between us and Legacy VPI described in “Certain Relationships and Transactions with Related Persons;” andContents

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