Corporate Policy re: Sponsored Preclinical Research Budgeting
This is a Policy Statement to provide guidance related to cost and budgeting activities regarding sponsored preclinical research for any of Solid Ventures’ investigational compounds or drug candidates.
The purpose of this policy is to set forth Solid Biosciences LLC.’s (hereinafter “Solid”) policy regarding institution overhead or indirect expenses related to sponsored preclinical research. Solid is a clinical stage biotech company founded and funded specifically for the purpose of discovering and developing novel, first-in-class drugs for the treatment of patients with Duchenne Muscular Dystrophy. The company currently has no commercial products and therefore no revenue from sales of any products. Pursuant to the direction of the Board of Directors, Solid is determined to utilize, to the maximum extent possible, all available funds to positively impact patients in as direct a manner as possible. As a result, Solid must engage in strict policy guidelines regarding reimbursement metrics, including with respect to indirect costs related to sponsored research arrangements.
This policy applies to all preclinical research budgeting, specifically institutional overhead expense.
3. Policy principles
The principles of fiduciary responsibility required toward Solid’s investors and, more importantly, our commitment to utilizing funds to directly impact patients, require that Solid engage in cost effective and consistent costing activities, while simultaneously allowing institutions and researchers to receive a reasonable and competitive reimbursement for their services. To that end, it was determined by Solid’s Board of Directors that, in order to maximize the funds that are devoted directly to patient care expenses, institutional overhead expenses should be capped at twenty percent (20%).
4. Policy statement
Institutional overhead reimbursement for sponsored preclinical research may not exceed twenty percent (20%) of actual direct costs.
If an institution requests reimbursement for overhead or indirect costs, no budget or fee provision shall exceed an overhead rate of 20%. Solid’s representatives should explain this rate was arrived at taking into consideration Solid’s fiduciary obligations and commitment to patients while also recognizing the need to compensate institutions for the efforts involved in supporting sponsored research. The rate of 20% was thought to fairly reflect the needs and circumstances of both parties. 2
5. Institutions requesting higher than 20% institutional overhead.
5.1 In the event an institution is unable to accept the 20% institutional overhead amount, Solid’s representative(s) shall have the option of decreasing Solid’s accepted cost rates for sponsored research in an effort to offset any increase in institutional overhead. If the parties can negotiate a decrease in the direct costs to offset the increase in institutional overhead, then the institutional overhead may be increased, provided the direct costs are also decreased accordingly.
5.2 In the event the process outlined in paragraph 5.1 is unachievable, the parties may submit the budget or fee proposal to the institution’s corporate body to determine if any subsidies are available to offset the requested overhead reimbursement in excess of 20%. Solid’s senior management should be informed if this situation occurs in order to help or advise on possible options.
5.3 In the event the processes outlined in paragraphs 5.1 and 5.2 are both unachievable, Solid’s representative(s) may submit a request to Solid’s senior management. Such request shall set forth the following: a) institution’s name; b) requested institutional overhead rate; c) actions that were taken by Solid’s representative(s) to resolve the issue with the institution and d) the institution’s rationale for requiring the excess overhead percentage.