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September 24, 2018
Raymond W. Cohen
Chief Executive Officer
Axonics Modulation Technologies, Inc.
26 Technology Drive
Irvine, California 92618
Re: Axonics Modulation Technologies, Inc.
Draft Registration Statement on Form S-1
Submitted August 28, 2018
CIK No. 0001603756
Dear Mr. Cohen:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1 submitted August 28, 2018
Overview, page 1
1. We note the disclosure regarding your estimates of the addressable SNM
market. Please
tell us how the data you included accounts for less frequent procedures
to be performed,
given the battery life of your product compared to the battery life of
your competition.
Also tell us how such data accounts for SNM being a third-line therapy,
per your
disclosure, and 70% advancement from trial stimulation referenced on
page 121.
2. We note the disclosure regarding continued positive results from your
ARTISAN-SNM
pivotal study. Please expand to disclose that such study is not being
conducted in
Raymond W. Cohen
FirstName LastNameRaymond W. Inc.
Axonics Modulation Technologies, Cohen
Comapany 24, 2018
September NameAxonics Modulation Technologies, Inc.
September 24, 2018 Page 2
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FirstName LastName
accordance with FDA recommendations, as referenced in your disclosure
beginning on
page 15. Also, since that study has not been completed, please tell us
why it is not too
preliminary to characterize any results from that study to date as
positive.
Anti-takeover provisions in our certificate of incorporation, page 71
3. Please revise to present the last paragraph as a separate,
appropriately captioned risk
factor.
Use of Proceeds, page 76
4. Please revise to specify the technological enhancements and research
and development
activities you intend to fund with the proceeds of this offering.
Dilution, page 81
5. Please revise to clarify how the numbers and percentages in the table
on page 82 would
change assuming the exercise of all outstanding options and warrants.
Comparison of the Six Months Ended June 30, 2018 and 2017, page 91
6. Disclose why you did not generate revenue from sales of your r-SNM
System as part of
the evaluation agreement with the hospital in Canada during the six
months ended June
30, 2018.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 91
7. We note that the sale of your r-SNM System in 2018 generated $12,000
in revenue while
the sale of your system in 2017 generated $128,000 in revenue. Please
revise to explain
the difference in revenue and gross profit for the two systems sold.
In addition, revise
your disclosure to describe the evaluation agreement referenced for
the 2017 sale.
Liquidity and Capital Resources, page 94
8. Given your regulatory approvals in other markets, disclose whether you
will expend
capital resources pursuing sales in those markets.
Indebtedness, page 96
9. Please revise to clarify whether this offering will satisfy the
condition regarding gross
proceeds from the sale of your equity securities.
Contractual Obligations, page 98
10. We note the disclosure that the information in the table reflects your
obligations as of
December 31, 2017. Please revise to clarify any material changes to
such information
Raymond W. Cohen
FirstName LastNameRaymond W. Inc.
Axonics Modulation Technologies, Cohen
Comapany 24, 2018
September NameAxonics Modulation Technologies, Inc.
September 24, 2018 Page 3
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FirstName LastName
since that date. We note, for example, disclosure regarding the new
lease and loan
agreement with Silicon Valley Bank.
ARTISAN-SNM Study, page 128
11. We note your disclosure regarding the FDA reiterating its previously
expressed
recommendations that you make modifications to your ARTISAN-SNM
pivotal study.
Please clarify which FDA recommendations you have or have not
incorporated into your
study and briefly indicate why you have chosen to incorporate only
certain of those
recommendations into your study. We also note your disclosure that if
you intend to
modify the study design to address any of the FDA's considerations
that you have not
already addressed, you will be required to obtain FDA approval of an
IDE supplement
before implementing the changes, which could result in significant
delays. Please clarify
in your "Use of Proceeds" disclosure if your existing funds would be
sufficient for you to
complete any modified or delayed trials.
Intellectual Property, page 134
12. Please discuss the application of Section 6.1(b) and (c) of Exhibit
10.1 to the intellectual
property you disclose that you own.
13. Refer to the first paragraph on page 136. Please revise to clarify
AMF's rights to use the
intellectual property you own, as referenced in the carryover
paragraph here.
Investors' Rights Agreement, page 173
14. Please revise to clarify the duration of the obligations discussed in
the last paragraph of
this section.
Share Exchange Agreement, page 174
15. We note that you consolidate Axonics Europe, S.A.S. since you exercise
control over that
entity. Please explain to us your basis for consolidation since, as
indicated on page
174, the majority of Axonics Europe's shares are held by other
entities. In addition,
explain how you will account for the Share Exchange Agreement. Refer
to the
requirements of ASC 810.
16. Please revise to clarify the purpose of the arrangement described in
this section, including
why a portion of the proceeds fund a subsidiary in France.
Principal Stockholders, page 177
17. Please tell us why note 4 identifies a different manager of
BioDiscovery than Exhibit
10.29.
18. Please revise to identify the natural persons who have or share voting
and/or dispositive
powers with respect to the shares held by Noble Prestige Holdings.
Please also revise to
Raymond W. Cohen
Axonics Modulation Technologies, Inc.
September 24, 2018
Page 4
clarify whether the other managing member of Longitude Venture Partners
mentioned in
note 9 shares voting and/or dispositive power with Ms. Tammenoms Bakker.
General
19. We note your graphics indicate your product is "the future of sacral
neuromodulation."
Please revise to highlight that you do not yet have regulatory approval
in the United States
to market and sell your product.
You may contact Michael Fay, staff accountant, at (202) 551-3812 or
Brian Cascio,
Accounting Branch Chief, at (202) 551-3676 if you have questions regarding
comments on the
financial statements and related matters. Please contact Geoff Kruczek, staff
attorney, at (202)
551-3641 or Tim Buchmiller, senior attorney, at (202) 551-3635 with any other
questions.
Sincerely,
FirstName LastNameRaymond W. Cohen
Division of
Corporation Finance
Comapany NameAxonics Modulation Technologies, Inc.
Office of
Electronics and Machinery
September 24, 2018 Page 4
cc: Michael A. Hedge, Esq.
FirstName LastName