Purpose 
The purpose of this policy is to document the requirements and responsibilities associated with identifying and managing domestic and foreign financial conflicts of interest of Investigators and Senior/Key personnel (see below for definitions) at Adecto Pharmaceuticals, Inc. (Adecto) and to comply with federal regulations. It addresses the specific federal agency requirements of the 2011 Revised Financial Conflict of Interest (FCOI) Regulation, Promoting Objectivity in Research (42 CFR part 50 subpart F) and incorporates more recent National Institutes of Health (NIH) guidance on preventing foreign interference on federally funded research. This policy seeks to: (i) establish standards that provide a reasonable expectation that the design, conduct and reporting of research funded under Public Health Service (PHS) and NIH grants or cooperative agreements will be free from bias resulting from Investigator and Senior/Key personnel FCOIs, and (ii) protect proprietary information and sensitive and confidential data as part of the proper stewardship of federally funded research.

Summary of Process 
Significant Financial Interests (SFIs) (see below for definition) will be disclosed by any Investigator and Senior/Key personnel requesting government-sponsored or company-sponsored funds for a research project or when an SFI arises during the course of research. Regardless of whether an SFI exists, all Investigators and Senior/Key personnel are required to submit SFI disclosures annually. It is the Principal Investigator (PI)'s responsibility to ensure that those with financial interests (FI) in research are identified and that they make the required disclosures. The FCOI Disclosure Form and supporting materials are forwarded to Adecto’s President or Chief Scientific Officer (CSO) for review. The President and/or CSO will be responsible for evaluating and instituting a plan for managing any disclosed FIs, for producing institutional reports and other required reports to external sponsors and governmental agencies, and for the general administration and enforcement of this policy. Advance approval by Adecto’s President or CSO is required prior to engaging in government-sponsored research. An SFI review must be completed before any expenses are incurred under an award. Annual updates are required of all Investigators and Senior/Key personnel participating in research. Any Investigators and Senior/Key personnel who have acquired a new or increased SFI during the course of a research project will report it immediately to the President or CSO. Annual updates and newly acquired interests are reported using the FCOI Disclosure Form.    

Key Definitions
Entity - means any domestic or foreign, public or private, for-profit or not for-profit, business, organization, or association; including but not limited to a sole proprietorship, partnership, corporation, limited liability company (excluding U.S. federal, state, and local government agencies).

Financial Conflict of Interest (FCOI) - a significant financial interest that could directly and significantly affect the design, conduct, or reporting of NIH-funded research or the proper stewardship of proprietary information and sensitive and confidential data developed using federal funds.   

Financial Interest (FI) - anything of monetary value, whether or not the value is readily ascertainable.

  
Foreign Talent Program - any program sponsored by, or benefit offered (whether in the form of remuneration or in-kind support) by a foreign researcher, foreign government (at any level), foreign Entity, or foreign government–controlled Entity for the purpose of facilitating the transfer or acquisition of expertise, technical know-how, research results/data/designs, or technology. Such a program may involve entering into a contract with a foreign institution and may be accompanied by an honorary, adjunct, or temporary appointment. Participation in a Foreign Talent Program could give rise to conflicts of interest or commitment, and concerns of unauthorized transfer of intellectual property, materials, data products, or other nonpublic information developed with a U.S. federal research and development award to the government of a foreign country or an Entity based in, funded by, or affiliated with a foreign country. 

Institutional Responsibilities - Investigator's or Senior/Key personnel’s professional responsibilities on behalf of and as defined by Adecto, including but not limited to, activities such as research, research consultation, teaching, professional practice, institutional committee memberships, and service on panels.  

Investigator - a project director (PD) or principal investigator (PI) or any other person, regardless of title or position, who is or will be responsible for the design, conduct, or reporting of research funded by the NIH and who has access to proprietary information and sensitive and confidential data, generated with NIH funding. This may include, for example, collaborators or consultants.   

Manage - take action to address an FCOI, which can include reducing or eliminating the SFI, to ensure, to the extent possible, that the design, conduct, and reporting of research will be free from bias and that proprietary information and sensitive and confidential data is protected.   

Senior/Key Personnel - PD/PI or any other person identified as senior/key personnel by Adecto in a grant application, progress report, or any other report submitted to the NIH.   

Significant Financial Interest (SFI) - means a foreign or domestic FI of the Investigator or Senior/Key personnel [their spouse or partner, and dependent child(ren)] that reasonably appears to be related to their Institutional Responsibilities, and consists of one or more of the following:   
•With regard to publicly-traded Entities, if the value of any remuneration received from the Entity in the twelve months preceding the disclosure combined with the value of any equity interest of the Investigator or Senior/Key personnel in the Entity, as of the date of disclosure, when aggregated, exceeds $5,000. 
•With regard to non-publicly traded Entities, if either: a. the value of any remuneration received from the Entity in the twelve months preceding the disclosure, when aggregated, exceeds $5,000, or b. the Investigator or Senior/Key personnel holds any equity interest in the Entity (i.e., there is no de minimis amount for equity interests in a non-publicly traded Entity). 
•Income from intellectual property rights and interests (e.g., patents, trademarks, copyrights) that exceeds $5,000 in the previous twelve months. 
•Reimbursed or Sponsored Travel, income from seminars, lectures, or teaching engagements, and income from service on advisory committees or review panels, exceeding $5,000 per Entity in the twelve months preceding disclosure (some U.S.-based exclusions apply, see below).
•FIs received from any foreign Entity, including foreign institutions of higher education, academic teaching hospitals, or medical centers, and foreign governments (which includes local, provincial, or equivalent governments of another country) when each such interest exceeds $5,000 in the previous twelve months.
•Any negotiations, plans to participate or participation in a Foreign Talent Program opportunity. 
 

The term SFI does not include the following types of FI:    
•Salary, royalties, travel or other remuneration paid by Adecto to the Investigator or Senior/Key personnel if they are currently employed or otherwise appointed by Adecto. 
•Intellectual property rights assigned to Adecto and agreements to share in royalties related to such rights. 
•Any ownership interest in Adecto held by the Investigator or Senior/Key personnel. 
•Income from investment vehicles, such as mutual funds and retirement accounts, as long as Investigator or Senior/Key personnel does not directly control investment decisions made in these vehicles.  
•Reimbursed or Sponsored Travel, income from seminars, lectures, or teaching engagements, and income from service on advisory committees or review panels from a U.S. federal, state, or local government agency, a U.S. institution of higher education as defined at 20 U.S.C. 1001(a), a U.S. academic teaching hospital, a U.S. medical center, or a research institute that is affiliated with a U.S. Institution of higher education. 

 

Sponsored Travel - travel that is paid for on behalf of an Investigator or Senior/Key personnel and not reimbursed to them directly.

Training
The NIH FCOI tutorial was designed by the NIH to provide training on what constitutes an FCOI. This course is required for anyone involved with an NIH funded project, which includes all Investigators and Senior/Key personnel of Adecto engaged in NIH-funded research or its compliance. The course is available at:

http://grants.nih.gov/grants/policy/coi/tutorial2011/fcoi.htm 

Upon completion, a certificate of completion must be turned to Adecto’s President or CSO. Investigators and Senior/Key personnel must retain a copy for their records. This training is required prior to engaging in research relating to any NIH-funded grant or as deemed necessary by the Company due to changes in the FCOI policy, non-compliance of an Investigator or Senior/Key personnel or new employment at Adecto. The FCOI training will be taken at least every four (4) years.

Procedures
A. Identification of Persons Required to Disclose an SFI - It will be the responsibility of the PI of a research project to identify all Investigators or Senior/Key personnel who have an SFI requiring disclosure under this policy and to ensure that an FCOI Disclosure Form is prepared and submitted. In addition, the PI will be responsible for ensuring that annual updates and disclosures of new or increased SFIs are disclosed.    

B. Submission and Review of FCOI Disclosure Form - Every individual having an SFI requiring disclosure under this policy will prepare a fully-completed FCOI Disclosure Form that will be submitted to Adecto’s President or CSO. An initial review of the FCOI Disclosure Form will be conducted by the President or CSO to determine whether a potential for conflict of interest exists. If it is determined that there is a potential conflict of interest, then steps will be taken to determine what measures are needed to address the SFI identified in the FCOI Disclosure Form. A management plan may be required to outline the terms, conditions and restrictions, if any, to ensure compliance with this policy. The management plan may require one or more of the following actions to be taken in order to Manage, reduce or eliminate any actual or potential conflict of interest:    
•Public disclosure of SFIs 
•Review of research protocols by independent reviewers
•Monitoring of research by independent reviewers
•Modification of research plan 
•Disqualification from participation in all or a portion of the funded research  
•Divesture of SFIs 
•Severance of relationships that create actual or potential conflicts

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All management plans are required to be signed by the Investigator or Senior/Key personnel and by Adecto’s President or CSO. Compliance with the management plan will be monitored by the President or CSO.  

 
C. Annual Reporting and Newly Acquired SFIs - All Investigators and Senior/Key personnel will provide annual FCOI disclosure reports or more frequently if required by the management plan. Any Investigators and Senior/Key personnel who acquire a new or increased SFI will promptly submit a new FCOI Disclosure Form within 30 days of discovering or acquiring the new SFI. It is the PI’s responsibility to ensure that any new Investigator or Senior/Key personnel on a research project submits the required FCOI Disclosure Form to the President or CSO.   

D. Violations of Conflict of Interest Policy - Disclosure of SFIs is essential for Adecto to implement its FCOI policy. Thus, Investigators and Senior/Key personnel are expected to comply fully and promptly with this policy. Whenever a person has violated this policy, including failure to make a required disclosure of SFIs or failure to comply with a requirement of the management plan, the President or CSO will determine the sanctions or disciplinary proceedings needed to be taken against the violating individual, implement a mitigation plan and further require that the Investigator or Senior/Key personnel disclose the FCOI in each public presentation of the results of the research, and to remedy previously published presentations with an FCOI disclosure addendum. The employee may be subject to employment discipline including, without limitation, suspension or termination of employment. In addition, Adecto will follow federal regulations regarding the notification of the sponsoring agency in the event an Investigator or Senior/Key personnel has failed to comply with this policy. The federal agency may take its own action as it deems appropriate, including the suspension of the funding for the Investigator or Senior/Key personnel until the matter is resolved.    

E. Record Keeping - Records of Investigator and Senior/Key personnel FCOI Disclosure Forms, and of actions taken to Manage actual or potential conflicts of interest, will be retained by the President and/or CSO for three (3) years from the date the final expenditure report is submitted to the NIH, or as required by 45 CFR 74.53(b) and 92.42(b) for different situations.    

F. Sub-recipient Requirements - Sub-award recipients must comply with this policy or provide certification that their organization is in compliance with federal policy, the 2011 Revised Financial Conflict of Interest Regulation, Promoting Objectivity in Research (42 CFR part 50 subpart F), and that their portion of the research project, as detailed in their sub-award agreement, is in compliance with their institutional policies. If an SFI is identified by the sub-award recipient, they are required to notify Adecto’s President or CSO of the existence of the conflicting interest within 30 days of the identification of the interest. In addition, the sub-award recipient must certify and assure that any reported conflicting interest has been Managed, reduced or eliminated in accordance with federal regulations.    

G. Federal Reporting - Adecto’s President or CSO is responsible for the reporting disposition of matters involving disclosures of SFI in accordance with applicable federal requirements. The following reports are required by the NIH:   
•Initial report – prior to the Adecto’s expenditure of any funds under an NIH-funded research project, Adecto must provide to the NIH an FCOI report regarding any Investigators and Senior/Key personnel SFI found by Adecto to have an FCOI in accordance with the regulation.   
•During on-going NIH-funded research projects – Adecto will submit an FCOI report within 60 days after its determination that a new FCOI exists. If an FCOI was not disclosed timely, Adecto will submit an FCOI report to the NIH within 60 days of the discovery, as well as complete a retrospective review within 120 days of discovery of noncompliance.

•Annual FCOI report – For any FCOI previously reported to the NIH, Adecto will provide an annual FCOI report addressing the status of the FCOI and any changes to its related management plan.  

  
H. Public Accessibility - As required by PHS regulation, this FCOI policy is being made accessible on Adecto’s web site (www.adectopharma.com). If a PHS-funded Investigator or Senior/Key personnel holds a FI that is determined to constitute an FCOI, as required by PHS regulation, this will also be posted on the web site, and:
•include at least the minimum elements required by the regulation
•be updated within sixty (60) days of a newly identified FCOI            
•be updated annually and remain available for three (3) years