<SEC-DOCUMENT>0000950123-19-006016.txt : 20191017
<SEC-HEADER>0000950123-19-006016.hdr.sgml : 20191017
<ACCEPTANCE-DATETIME>20190614171717
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-19-006016
CONFORMED SUBMISSION TYPE:	DRSLTR
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20190614

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EXAGEN INC.
		CENTRAL INDEX KEY:			0001274737
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MEDICAL LABORATORIES [8071]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DRSLTR

	BUSINESS ADDRESS:	
		STREET 1:		1261 LIBERTY WAY
		CITY:			VISTA
		STATE:			CA
		ZIP:			92081
		BUSINESS PHONE:		(760) 560-1501

	MAIL ADDRESS:	
		STREET 1:		1261 LIBERTY WAY
		CITY:			VISTA
		STATE:			CA
		ZIP:			92081

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EXAGEN DIAGNOSTICS INC
		DATE OF NAME CHANGE:	20031230
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Matthew T. Bush</B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Direct Dial:
+1.858.523.3962</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Matt.Bush@lw.com</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">12670 High Bluff Drive</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">San Diego,
California 92130</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Tel:&nbsp;+1.858.523.5400&nbsp;Fax:&nbsp;+1.858.523.5450</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">www.lw.com</P> <P STYLE="font-size:6pt; margin-top:0pt; margin-bottom:1pt">&nbsp;</P></TD></TR>
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<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3">FIRM / AFFILIATE OFFICES</TD></TR>
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<TD VALIGN="middle">June&nbsp;14, 2019</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Beijing</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Boston</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Brussels</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Century City</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Chicago</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dubai</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">D&uuml;sseldorf</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Frankfurt</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Hamburg</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Hong Kong</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Houston</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">London</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Los Angeles</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Madrid</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Milan</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Moscow</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Munich</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">New York</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Orange County</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Paris</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Riyadh</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">San Diego</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">San Francisco</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Seoul</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Shanghai</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Silicon Valley</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Singapore</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Tokyo</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Washington, D.C.</P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>VIA EDGAR AND HAND DELIVERY </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">James Lopez </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Branch Chief </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Beverages, Apparel and Mining </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation
Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S. Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F
Street N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Exagen Inc. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B>Draft Registration Statement on Form <FONT STYLE="white-space:nowrap">S-1</FONT> </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B>Submitted February&nbsp;1, 2019 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B>CIK No.&nbsp;0001274737 </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear
Mr.&nbsp;Lopez: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We are in receipt of the Staff&#146;s letter dated February&nbsp;26, 2019 with respect to the above-referenced
confidential draft Registration Statement (the &#147;<B><I>Registration Statement</I></B>&#148;). We are responding to the Staff&#146;s comments on behalf of Exagen Inc. (&#147;<B><I>Exagen</I></B>&#148; or the &#147;<B><I>Company</I></B>&#148;) as
set forth below. Simultaneously with the submission of this letter, the Company is confidentially submitting via EDGAR Amendment No.&nbsp;1 to the draft Registration Statement (the &#147;<B><I>Amended Registration Statement</I></B>&#148;) responding
to the Staff&#146;s comments and updating the Registration Statement. Courtesy copies of this letter and the Amended Registration Statement (marked to show changes to the Registration Statement) are being submitted to the Staff by hand delivery.
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s responses set forth in this letter are numbered to correspond to the numbered comments in the Staff&#146;s letter. All
terms used but not defined herein have the meanings assigned to such terms in the Amended Registration Statement. For ease of reference, we have set forth the Staff&#146;s comments and the Company&#146;s response for each item below. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Draft Registration Statement on Form <FONT STYLE="white-space:nowrap">S-1</FONT> </U></I></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>General </U></I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>1.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the
Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section&nbsp;5(d) of the Securities Act, whether or not they retain copies of the communications.</I> </P></TD></TR></TABLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>June&nbsp;14, 2019 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B> Page
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 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Exagen&#146;s Response: The Company acknowledges the Staff&#146;s comment and will provide
to the Staff on a supplemental basis under separate cover copies of all written materials that the Company, or anyone authorized to do so on the Company&#146;s behalf, has presented to potential investors in reliance on Section&nbsp;5(d) of the
Securities Act of 1933, as amended. In the event the Company determines to present additional communications to potential investors in reliance on Section&nbsp;5(d) of the Securities Act, it will provide the Staff with copies of such additional
written materials on a supplemental basis. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Prospectus Summary, page 1 </U></I></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>2.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>We note your risk factor on page 12 regarding your promotion strategy and your disclosure on page 1 that:
&#147;Combined U.S. sales of SIMPONI&reg; and SIMPONI ARIA&reg;, an intravenous formulation, were approximately $1&nbsp;billion in 2018.&#148; In connection with your disclosure regarding SIMPONI sales, please describe in greater detail your
integrated testing and therapeutics strategy and clarify how you expect sales of Janssen&#146;s products to impact the company&#146;s net revenues.</I> </P></TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Exagen&#146;s Response: The Company has revised the disclosure on pages 1, 12, 71, 74, 86, 92 and 104 of the Amended Registration Statement in
response to the Staff&#146;s comment. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Use of Proceeds, page 60 </U></I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>3.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>Please disclose the approximate amount of proceeds that will be used for each of the indicated purposes.
Also revise to clarify the related contingencies and alternatives. See Instruction 7 to Item 504 of Regulation <FONT STYLE="white-space:nowrap">S-K.</FONT></I> </P></TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Exagen&#146;s Response: The Company has revised the disclosure on page 60 of the Amended Registration Statement in response to the
Staff&#146;s comment. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Undertakings, page <FONT STYLE="white-space:nowrap">II-4</FONT> </U></I></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>4.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>Please provide the undertakings required by Item 512(a)(5)(ii) and Item 512(a)(6) of Regulation <FONT
STYLE="white-space:nowrap">S-K.</FONT> Item 512(a)(5)(ii) is required for any prospectus filed in reliance on Rule 430C and Item 512(a)(6) is required for any offering that involves an initial distribution of securities pursuant to Rule 159A. For
guidance, refer to Securities Act Rules Compliance and Disclosure Interpretation, Question 229.01.</I> </P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Exagen&#146;s
Response: The Company has revised the disclosure on page <FONT STYLE="white-space:nowrap">II-5</FONT> of the Amended Registration Statement in response to the Staff&#146;s comment. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Exhibit Index, page <FONT STYLE="white-space:nowrap">II-5</FONT> </U></I></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><I>5.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>Please file as exhibits your Collaboration Agreement with GSK and Master Services Agreement with Horizon
Pharma or advise. See Item 601(b)(10) of Regulation <FONT STYLE="white-space:nowrap">S-K..</FONT></I> </P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Exagen&#146;s
Response: The Company respectfully acknowledges the Staff&#146;s comment and advises the Staff that the Company does not believe that the Collaboration Agreement with GSK (&#147;<U>GSK Agreement</U>&#148;) and Master Services Agreement with Horizon
Pharma (&#147;<U>Horizon Pharma Agreement</U>&#148;) are material contracts required to be filed pursuant to Item 601(b)(10) of Regulation <FONT STYLE="white-space:nowrap">S-K.</FONT> The GSK Agreement and the Horizon Pharma Agreement were entered
into in the ordinary course of business, and the Company&#146;s business is not substantially dependent on either agreement in any material or substantial respect. Accordingly, for the reasons set forth below, the Company believes that it is not
required to file such agreements under either Item 601(b)(10)(i) or 601(b)(10)(ii)(B). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Pursuant to Regulation <FONT
STYLE="white-space:nowrap">S-K</FONT> Item 601(b)(10)(i), &#147;[e]very contract not made in the ordinary course of business which is material to the registrant and is to be performed in whole or in part at or after the filing of the registration
statement or report or was entered into not more than two years before such filing&#148; must be filed as a material contract. In addition, pursuant to Regulation <FONT STYLE="white-space:nowrap">S-K</FONT> Item 601(b)(10)(ii)(B), if a contract is
of a sort that ordinarily accompanies the kind of business conducted by the Company, it is deemed to be an ordinary course agreement and need not be filed unless it is a &#147;contract upon which the registrant&#146;s business is substantially
dependent.&#148; Examples of substantial dependence include any contract &#147;to purchase the major part of registrant&#146;s requirements of goods, services or raw materials or any&#133; license or other agreement to use a patent, formula, trade
secret, process or trade name upon which registrant&#146;s business depends to a material extent.&#148; As disclosed in the Registration Statement, part of the Company&#146;s business operations and strategy is to leverage its testing products and
the data generated from such tests in collaboration with pharmaceutical companies. The Company disclosed the material terms of the GSK Agreement and the Horizon Pharma Agreement in order to provide investors with a further understanding of the scope
and objective of its strategy to leverage its testing products and the data generated from such tests to advance its integrated testing and therapeutics business. However, the GSK Agreement and the Horizon Pharma Agreement were made in the ordinary
course as part of this objective and therefore are of the type ordinarily accompanying the kind of business conducted by the Company (i.e., using its testing products to generate test data for pharmaceutical companies). Further, the Company&#146;s
business is not &#147;substantially dependent&#148; upon the such agreements because the Company is not materially dependent on any revenue generated from such agreements. As an example, revenue generated under the GSK Agreement and Horizon Pharma
Agreement for the year ending December&nbsp;31, 2018 were $323,583.01 and $5,000, respectively. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Accordingly, the Company is not currently
dependent on the GSK Agreement or the Horizon Pharma Agreement in any material or substantial respect and respectfully submits that such agreements are not required to be filed under Item 601(b)(10). </P>
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<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Any comments or questions regarding the foregoing should be directed to the undersigned at <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">858-523-3962.</FONT></FONT> Thank you in advance for your cooperation in connection with this matter. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top">Very truly yours,</TD></TR>
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<TD VALIGN="top">/s/ Matthew T. Bush</TD></TR>
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<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom">Matthew T. Bush<BR>of LATHAM&nbsp;&amp; WATKINS LLP</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Joanna Lam, <I>Securities and Exchange Commission</I> </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Raj Rajan<I>, Securities and Exchange Commission</I> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Brigitte Lippman, <I>Securities and Exchange Commission</I> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Pam Howell, <I>Securities and Exchange Commission</I> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Fortunato Ron Rocca, <I>Exagen Inc.</I> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Kamal Adawi, <I>Exagen Inc.</I> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Charles S. Kim, <I>Cooley LLP</I> </P>
</DIV></Center>

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