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TABLE OF CONTENTS
ANGION BIOMEDICA CORP.

Table of Contents

As filed with the Securities and Exchange Commission on February 4, 2021.

Registration No. 333-252177


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



Amendment No. 2
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



ANGION BIOMEDICA CORP.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  11-3430072
(I.R.S. Employer
Identification No.)

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

Jay R. Venkatesan, M.D.
President and Chief Executive Officer
Angion Biomedica Corp.
51 Charles Lindbergh Boulevard
Uniondale, New York 11553
(415) 655-4899

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

Copies to:

Patrick A. Pohlen
Miles P. Jennings
Latham & Watkins LLP
140 Scott Drive
Menlo Park, California 94025
(650) 328-4600

 

Jennifer J. Rhodes
General Counsel
Angion Biomedica Corp.
51 Charles Lindbergh Boulevard
Uniondale, New York 11553
(415) 655-4899

 

Kenneth L. Guernsey
Jonie I. Kondracki
Charles S. Kim
Will H. Cai
Cooley LLP
101 California Street, 5th Floor
San Francisco, California 94111
(415) 693-2000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

         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, check the following box.    o

         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.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Non-accelerated filer ý

Emerging growth company ý

  Accelerated filer o

Smaller reporting company ý

         If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. o



         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 this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

   


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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 preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS (Subject To Completion)   February 4, 2021

5,000,000 Shares

LOGO

Common Stock

This is an initial public offering of shares of common stock by Angion Biomedica Corp. We are offering 5,000,000 shares of our common stock.

Prior to this offering, there has been no public market for our common stock. Our common stock has been approved for listing on The Nasdaq Global Select Market under the symbol "ANGN." We expect that the initial public offering price will be between $14.00 and $16.00 per share.

We are an "emerging growth company" under applicable Securities and Exchange Commission rules and have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings.

Our business and an investment in our common stock involve significant risks. These risks are described under the caption "Risk Factors" beginning on page 16 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


 
  Per share   Total  

Initial public offering price

  $                $               

Underwriting discounts and commissions(1)

  $                $               

Proceeds to Angion, before expenses

  $                $               

(1)
See "Underwriting" for a description of compensation payable to the underwriters.

One or more entities affiliated with Vifor International, Ltd. is expected to purchase $25 million of our common stock in a concurrent private placement exempt from the registration requirements of the Securities Act of 1933, as amended, at a price per share equal to the initial public offering price. Cowen & Company, LLC and Stifel, Nicolaus & Company, Incorporated will serve as placement agents for the concurrent private placement and receive a placement agent fee equal to 3% of the total purchase price of the private placement shares. The concurrent private placement is contingent on the closing of this offering and the satisfaction of certain other customary conditions. However, this offering is not contingent on the consummation of the concurrent private placement.

We have granted the underwriters an option for a period of 30 days to purchase up to 750,000 additional shares of common stock from us at the public offering price, less the underwriting discounts and commissions, within 30 days from the date of this prospectus.

The underwriters expects to deliver the shares of common stock to purchasers on                           , 2021.


Joint Book-running Managers

Cowen   Stifel



Co-lead Managers

H.C. Wainwright & Co.   Oppenheimer & Co.

   

                    , 2021


Table of Contents


TABLE OF CONTENTS

 
  Page
 

Prospectus Summary

    1  

The Offering

    10  

Summary Consolidated Financial Data

    13  

Risk Factors

    16  

Special Note Regarding Forward-Looking Statements

    80  

Industry and Market Data

    82  

Use of Proceeds

    83  

Dividend Policy

    85  

Capitalization

    86  

Dilution

    89  

Concurrent Private Placement

    92  

Selected Consolidated Financial Data

    93  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    96  

Our Business

    119  

Management

    182  

Executive Compensation

    192  

Certain Relationships and Related Party Transactions

    205  

Principal Stockholders

    210  

Description of Capital Stock

    212  

Shares Eligible For Future Sale

    218  

Material United States Federal Income Tax Considerations to Non-U.S. Holders

    221  

Underwriting

    225  

Legal Matters

    233  

Experts

    233  

Where You Can Find More Information

    233  

Index to Consolidated Financial Statements

    F-1  

        You should rely only on the information contained in this prospectus. Neither we nor the underwriters have authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or any free writing prospectus prepared by or on behalf of us or to which we may have referred you in connection with this offering. We take no responsibility for, and can provide no assurance as to the reliability of, any other information others may give you. Neither we nor the underwriters are making an offer to sell or seeking offers to buy these securities in any jurisdiction where, or to any person to whom, the offer or sale is not permitted. The information in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or of any sale of shares of our common stock, and the information in any free writing prospectus we may provide to you in connection with this offering is accurate only as of the date of that free writing prospectus. Our business, financial condition, results of operations and future growth prospects may have changed since those dates.

        For investors outside of the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside of the United States.

        This prospectus may include trademarks, trade names and service marks that are the property of their respective holders. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® and ™ symbols, but the lack of those indicia are not intended, in any way, to indicate we will not assert, to the fullest extent under applicable law, our rights, or that the applicable holder will not assert its rights, to these trademarks and trade names. Use or display by us of other parties' trademarks, trade dress or products in this prospectus is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners.


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PROSPECTUS SUMMARY

        This summary highlights selected information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information you should consider before investing in our common stock. You should read this prospectus carefully, especially the risks set forth under the heading "Risk Factors" and our consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. References in this prospectus, unless the context otherwise requires, to "Angion," "our company," "we," "us" and "our" and other similar references refer to Angion Biomedica Corp.

Overview

        We are a late-stage biopharmaceutical company focused on the discovery, development and commercialization of novel small molecule therapeutics to address acute organ injuries and fibrotic diseases. Our goal is to transform the treatment paradigm for patients suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have limitations. Our lead product candidate, ANG-3777, is a hepatocyte growth factor (HGF) mimetic that we are currently evaluating in multiple acute organ injuries and related indications, including acute kidney injury (AKI) and injuries to other major organs, such as the lungs, central nervous system (CNS) and heart. Within AKI, we are currently evaluating ANG-3777's ability to improve kidney function and reduce the severity of transplant-associated AKI, also known as delayed graft function (DGF), in patients at risk for kidney dysfunction, as well as for the treatment of AKI associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI). We are also evaluating ANG-3777 for indications within acute lung injury (ALI), with our primary focus on acute respiratory distress syndrome (ARDS), as well as acute CNS injuries. We are advancing multiple programs for the treatment of fibrotic diseases, leading with ANG-3070, a tyrosine kinase inhibitor (TKI), and our inhibitor of rho kinase 2 (ROCK2). We also continue to develop other preclinical product candidates, including our CYP11B2 (aldosterone synthase) inhibitors, which we are investigating for the purpose of targeting aldosterone-related fibrotic diseases.

        Our pipeline of product candidates has been developed internally and is the result of over 20 years of in-house research by a team that has made seminal contributions to the understanding of HGF and fibrotic pathways. Our pipeline of product candidates, programs and anticipated milestones are reflected in the chart below:

GRAPHIC

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        In November 2020, we entered into a license agreement (the Vifor License) with Vifor International, Ltd. (Vifor Pharma), granting Vifor Pharma global rights (excluding Greater China) to develop, manufacture and commercialize ANG-3777 in all therapeutic, prophylactic and diagnostic uses for renal indications, including forms of AKI, and congestive heart failure (collectively, the Renal Indications). Pursuant to the Vifor License, we are entitled to receive $80 million in upfront and near-term clinical milestone payments, including $30 million in upfront cash that we received in November 2020, and a $30 million equity investment, $5 million of which we received in January 2021 and $25 million of which we expect to receive upon the consummation of a concurrent private placement contingent on the closing of this offering. We are also eligible to receive post-approval milestones of up to approximately $260 million and sales-related milestones of up to $1.585 billion, providing a total potential deal value of up to $1.925 billion (subject to certain specified reductions and offsets), plus tiered royalties on net sales of ANG-3777 at royalty rates of up to 40%. The first United States market-related sales milestone we are eligible for is a $100 million milestone payable upon $300 million in net United States annual sales. Under the Vifor License, we are responsible for executing a pre-specified clinical development plan designed to obtain regulatory approvals of ANG-3777 for DGF and CSA-AKI.

ANG-3777, an HGF Mimetic

        Our lead product candidate, ANG-3777, has the potential to be a first-in-class small molecule designed to mimic the biological activity of HGF. HGF activates the c-Met receptor, which triggers a cascade of pathways with a central role in tissue repair and organ recovery that has been well established. We believe that when an acute organ injury occurs, effective organ self-repair is hindered by a naturally-occurring mismatch in timing of peak levels of HGF concentration relative to c-Met expression, an issue that could be addressed by augmenting the activity of HGF with our HGF mimetic during the time of maximal c-Met expression. ANG-3777 has demonstrated several similarities to HGF, including c-Met dependence and selective c-Met receptor activation, without acting on other growth factor receptors. In addition, it has a substantially longer half-life than native or recombinant HGF. As a result, we believe ANG-3777 has several advantages that could enable it to address multiple forms of organ injury and related indications, including those with significant patient populations and for which no approved therapies currently exist.

        The potential advantages of ANG-3777 include:

    §
    Enhanced key natural repair pathway—ANG-3777 is an HGF mimetic that selectively activates the HGF/c-Met pathway, an early and essential pathway in acute organ injury repair. By initiating the HGF/c-Met cascade, ANG-3777 triggers downstream activation of multiple processes that we believe both attenuate further organ injury and promote organ repair.
    §
    Expanded treatment window—Our studies have shown that treatment with ANG-3777 can be successfully administered up to 48 hours after injury, increasing the viable window for intervention and significantly expanding the addressable patient population.
    §
    Favorable adverse event profile—In our Phase 2 clinical trial for DGF, the overall incidence of adverse events and serious adverse events was similar between the treatment and placebo arms, no serious adverse event was attributed to ANG-3777 by investigators and no patient on treatment withdrew because of a serious adverse event.
    §
    Ease of administration—ANG-3777 has demonstrated a half-life of approximately three hours compared to a half-life of less than five minutes for native or recombinant HGF. Due to its longer half-life, ANG-3777 can be administered once daily intravenously (IV).
    §
    Reduced pharmacoeconomic burden—Acute organ injury results in substantial costs to the healthcare system. A therapy that effectively attenuates organ injury could significantly reduce this economic burden by decreasing short-term costs, including increased hospital

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      days and re-admissions, as well as long-term costs, including costs associated with outpatient dialysis and other outpatient services.

        ANG-3777 for DGF.    We have completed enrollment in a Phase 3 registration trial of ANG-3777 to improve kidney function and reduce the severity of DGF following deceased-donor kidney transplantation in patients showing evidence of early kidney dysfunction. DGF is a severe form of AKI resulting from ischemia-reperfusion injury (caused by oxygen deprivation and reintroduction) following kidney transplantation and defined as the need for dialysis within seven days following transplantation. In the United States and Europe, over 30,000 of the kidney transplant procedures performed annually use deceased-donor kidneys, and nearly one-third of these transplant recipients, or more than 10,000 patients per year, are diagnosed with DGF. DGF has a very high clinical and economic burden, and there are no approved therapies. In our Phase 2 clinical trial for DGF, ANG-3777 achieved a clinically meaningful improvement in its primary endpoint measuring production of 1,200 cubic centimeters (cc) of urine as compared to placebo, though such results were not statistically significant (p=0.09). In addition, ANG-3777 demonstrated clinically meaningful improvements as compared to placebo on a key secondary endpoint, mean serum creatinine, and in a post hoc analysis showed statistically significant (p=0.039) increases as compared to placebo in estimated glomerular filtration rate (eGFR) at 12 months, which is the planned primary endpoint in our Phase 3 registration trial. The overall incidence of adverse events was similar between the treatment and placebo arms of the Phase 2 clinical trial, and there were no treatment-related serious adverse events or treatment-related discontinuations. We expect to report topline data from our Phase 3 registration trial of ANG-3777 by the end of 2021. If the trial is successful, and subject to discussions with the FDA, we expect to file an NDA with the FDA for DGF in 2022. Pursuant to the Vifor License, Vifor Pharma holds global exclusive rights to commercialize ANG-3777 for this indication, except in Greater China, where we have licensed development and commercialization rights exclusively to Sinovant Sciences HK Limited (Sinovant).

        ANG-3777 for CSA-AKI.    We are currently conducting a Phase 2 clinical trial to investigate ANG-3777 in patients at risk for developing CSA-AKI. This indication is a frequent complication of cardiac surgery, with approximately 150,000 cases per year in the United States and Europe, or nearly one-third of the approximately 450,000 coronary bypass and valve replacement surgeries performed annually in the United States and Europe. There are no approved therapies to address CSA-AKI, which is associated with both high mortality and significant economic burden. The planned primary endpoint for our Phase 2 clinical trial is the increase in serum creatinine above baseline and an additional important endpoint is the occurrence of Major Adverse Kidney Events at 90 days (MAKE 90), which has previously been accepted by the FDA as an approvable endpoint in this indication. We expect to report topline data from our Phase 2 clinical trial in the second half of 2021. If our Phase 2 clinical trial demonstrates sufficient evidence of efficacy, we expect to initiate a Phase 3 registration trial in CSA-AKI in the first quarter of 2022, subject to discussions with the FDA. Pursuant to the Vifor License, Vifor Pharma holds global exclusive rights to commercialize ANG-3777 for this indication, except in Greater China, where we have licensed development and commercialization rights exclusively to Sinovant.

        ANG-3777 for ALI.    We are also investigating the use of ANG-3777 for indications within ALI, with our primary focus on ARDS, a severe form of ALI that is characterized by the sudden onset of pulmonary edema, inflammatory cell infiltration and impaired oxygenation. In order to evaluate ANG-3777's potential to treat this form of ALI, we initiated a proof-of-concept Phase 2 clinical trial in Brazil to investigate ANG-3777 for the reduction of severity and progression of ALI in patients with Coronavirus disease 2019 (COVID-19) associated pneumonia who are at high risk of progressing to ARDS. COVID-19 is a respiratory tract infection caused by a newly emergent coronavirus, SARS-CoV-2. In severe cases, COVID-19 is often complicated by pneumonia, ARDS and multi-organ failure, including AKI, neurological injuries and cardiac injuries. As a result, we believe this

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study, if successful, could demonstrate the benefits of ANG-3777 for the treatment of ARDS. Studies have shown that the incidence of ARDS is between 150,000 and 200,000 cases per year in the United States, resulting in between 40,000 and 80,000 deaths per year. We expect to report topline data from this Phase 2 trial in the first half of 2021 and initiate a Phase 2 clinical trial in an ARDS indication in 2022. We hold global rights to develop, manufacture and commercialize ANG-3777 for this indication, subject to certain limitations under the Vifor License and except in Greater China, where we have licensed development and commercialization rights exclusively to Sinovant.

        ANG-3777 for CNS.    The role of the HGF/c-Met pathway has been extensively studied in CNS injuries such as acute spinal cord injury and cerebral ischemia, or stroke. A similar HGF/c-Met timing mismatch to the one observed in acute kidney injury is also present in CNS injuries, and both we and independent researchers have demonstrated via in vivo studies that administration of ANG-3777 or exogenous HGF can reduce the severity of and enhance the recovery from acute injuries to the brain and spinal cord. Based on these preclinical findings, we believe ANG-3777 could be beneficial in treating patients with acute spinal cord injury, traumatic brain injury and stroke. We are planning to submit an investigational new drug (IND) application for an acute CNS indication in 2021 and initiate a Phase 2 clinical trial of ANG-3777 in 2022. We hold global rights to develop, manufacture and commercialize ANG-3777 for this indication, subject to certain limitations under the Vifor License and except in Greater China, where we have licensed development and commercialization rights exclusively to Sinovant.

Our Programs for the Treatment of Fibrotic Diseases

        ANG-3070 for Fibrotic Diseases.    Our second product candidate, ANG-3070, is a highly selective, orally-bioavailable small molecule TKI we are developing as a potential treatment for fibrotic diseases. ANG-3070 is the result of our extensive in-house research of key fibrotic pathways impacted by tyrosine kinases, the intersecting nodes between these pathways and the correlation of genomic and proteomic signatures for different types of fibrosis. This approach enabled us to design ANG-3070 with potentially improved specificity and receptor-binding affinity, relative to currently approved TKIs, in order to deliver promising activity in fibrotic pathways while limiting off-target inhibition. ANG-3070 has demonstrated target engagement as an anti-fibrotic agent in a variety of animal models and has shown in vitro the ability to inhibit pro-inflammatory tyrosine kinases at exposures achievable by oral administration. We are also currently evaluating ANG-3070 in a Phase 1 healthy-volunteer trial in Australia, and we expect to report topline data from this trial in the first half of 2021. We believe the preliminary safety and pharmacokinetic data from our Phase 1 trial support the initiation of a Phase 2 clinical trial. Subject to the final results from this trial and discussions with the FDA, we plan to advance ANG-3070 into Phase 2 clinical development in 2021, and we are considering indications such as primary proteinuric renal diseases and potentially non-proteinuric renal diseases at high risk of progression. We hold global rights to ANG-3070.

        ROCK2 Inhibitor for Fibrotic Diseases.    Our third product candidate is a potent selective ROCK2 inhibitor that has demonstrated much higher affinity for ROCK2 versus ROCK1. Rho kinase (ROCK) signal transduction pathways are implicated in the development of fibrosis. Inhibition of the ROCK isoforms, ROCK1 and ROCK2, has shown promise in fibrosis; however, ROCK1 inhibition has been associated with inducing hypotension (low blood pressure). Recent scientific work using specific genetic or pharmacological reduction of ROCK2 indicates ROCK2 inhibition by itself can result in anti-fibrotic activity without causing hypotension. These findings informed our strategy to develop a ROCK2-specific inhibitor, with the goal of minimizing ROCK1 inhibition, as a potential treatment for fibrosis and other diseases. We believe this approach could translate into a product candidate with enhanced tolerability that may support long-term systemic use in chronic diseases. We expect the first indication for our ROCK2 inhibitor to be a chronic fibrotic indication such as chronic kidney disease (CKD), idiopathic pulmonary fibrosis (IPF) or nonalcoholic steatohepatitis

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(NASH). We expect to select a lead compound from our ROCK2 inhibitor program and initiate IND-enabling studies in 2021. We hold global rights to our ROCK2 inhibitor program.

        CYP11B2 Inhibitors.    We are developing proprietary CYP11B2 (aldosterone synthase) inhibitors, which we are investigating for the purpose of targeting aldosterone-related diseases, including resistant hypertension, congestive heart failure and kidney fibrosis. We expect to select a lead compound from our CYP11B2 inhibitor program and initiate IND-enabling studies for the program in 2021. We hold global rights to our CYP11B2 inhibitor program.

Commercialization

        If ANG-3777 is approved for DGF and/or CSA-AKI, we expect that it will be commercialized by Vifor Pharma pursuant to the Vifor License in the United States, Europe and other markets (excluding Greater China). Within Greater China, Sinovant is responsible for the development and, if approved, commercialization of ANG-3777 for all indications. There are approximately 250 institutions performing 23,000 kidney transplants in the United States annually, with the top 150 institutions accounting for over 85% of all kidney transplants each year. Vifor Pharma has an extensive commercial infrastructure addressing the renal market within and outside the United States, including distribution, contracting, medical affairs and sales functions. As a result, we believe Vifor Pharma is well positioned to successfully address these market opportunities by leveraging its strong existing relationships within the nephrology community. The Vifor License has a total potential deal value of up to $1.925 billion (subject to certain specified reductions and offsets), plus tiered royalties on net sales of ANG-3777 at royalty rates of up to 40%.

Management

        Our pipeline and company strategy were originated and are supported by a management team with extensive experience and expertise in clinical research and development, business development and commercialization. Our founder and current Executive Chairman and Chief Scientific Officer, Itzhak Goldberg, M.D., F.A.C.R., has made seminal contributions to the understanding of HGF and fibrotic pathways. Our Chief Executive Officer, Jay Venkatesan, M.D., was the founder and CEO of Alpine BioSciences (acquired by Cascadian Therapeutics, which was subsequently acquired by Seagen), was a key investor in Mavupharma Inc. (acquired by AbbVie) and is a former portfolio manager of Ayer Capital and director of Brookside Capital Partners (the hedge fund group affiliated with Bain Capital). Our Chief Medical Officer, John F. Neylan, M.D., has held leadership roles at Keryx Biopharmaceuticals and Genzyme Corporation. These individuals and other members of our senior management team have contributed to the clinical development, registration and/or commercialization of over fifty approved drug products.

License Agreement with Vifor Pharma

        In November 2020, we entered into the Vifor License with Vifor Pharma, granting it exclusive, global rights (except in Greater China, where we have licensed rights exclusively to Sinovant) to develop, manufacture and commercialize ANG-3777 in all Renal Indications, beginning with DGF and CSA-AKI. Vifor Pharma is a global leader in nephrology, with over 2,500 employees, annual sales nearing $2 billion and a market capitalization of approximately $9 billion.

        Pursuant to the Vifor License, we are entitled to receive $80 million in upfront and near-term clinical milestone payments, including $30 million in upfront cash that we received in November 2020, and a $30 million equity investment, $5 million of which we received in January 2021 and

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$25 million of which we expect to receive upon the consummation of a concurrent private placement contingent on the closing of this offering. We are also eligible to receive post-approval milestones of up to approximately $260 million. Further, we are eligible to receive milestone payments based upon global net sales: in the United States, the milestone payments range from $100 million to $450 million, based upon annual U.S. net sales tiers between $300 million and $1 billion, and outside the United States, the milestone payments range from $75 million to $200 million, based upon annual net sales tiers between $250 million and $550 million. In aggregate, we are eligible for sales milestone payments totaling $1.585 billion and a total potential deal value of up to $1.925 billion (subject to certain reductions and offsets). We are also eligible to receive tiered royalties on global net sales of ANG-3777 at royalty rates of 10% for annual U.S. net sales below $100 million, mid-teens to low twenties for annual U.S. net sales between $100 million and $500 million and 40% for annual U.S. net sales above $500 million. Outside the United States (excluding Greater China), we are eligible to receive tiered royalties on annual ex-U.S. net sales of ANG-3777 at royalty rates of 10% for annual ex-U.S. net sales below $50 million, mid-teens to low twenties for annual ex-U.S. net sales between $50 million and $250 million and 40% for annual ex-U.S. net sales above $250 million.

        Under the Vifor License, we retain responsibility at our own cost for executing a pre-specified clinical development plan, which has been designed to obtain regulatory approvals of ANG-3777 for the DGF and CSA-AKI indications in the United States, the European Union, Switzerland and the United Kingdom. The plan includes the completion of our ongoing and currently planned clinical trials and other clinical development activities in such indications. We will be responsible for regulatory interactions and filings relating to such indications in the United States, and Vifor Pharma will be responsible for such matters outside of the United States. We will share equally with Vifor Pharma the cost of related post-approval clinical development activities for such indications. In addition, Vifor Pharma will be solely responsible at its own cost for the commercialization of DGF and CSA-AKI indications and any other Renal Indications, both within and outside the United States (excluding Greater China).

        We retain rights to develop and commercialize ANG-3777 outside the Renal Indications globally (excluding Greater China), subject to certain protections provided to Vifor Pharma. For more information, see "Our Business—Licenses and Collaborations—License Agreement with Vifor Pharma."

Our Strategy

        We are focused on discovering, developing and commercializing novel small molecule therapeutics to address acute organ injuries and fibrotic diseases. Our goal is to transform the treatment paradigm for patients suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have limitations. The key tenets of our business strategy are to:

    §
    Complete pivotal development and obtain regulatory approval of ANG-3777 for DGF.
    §
    Advance ANG-3777 through clinical proof of concept for the treatment of CSA-AKI and ALI, and advance additional indications through development.
    §
    Advance development of ANG-3070 for the treatment of fibrosis.
    §
    Advance development of our earlier-stage programs addressing fibrotic diseases.
    §
    Independently commercialize any approved products in indications and geographies where we believe we can maximize value and pursue other options to realize the full potential of our pipeline.

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Recent Developments

Preliminary Unaudited Cash and Cash Equivalents as of December 31, 2020

        On a preliminary unaudited basis, we expect our cash and cash equivalents as of December 31, 2020 to be approximately $34.2 million. This estimate of cash and cash equivalents is our preliminary estimate based on currently available information and excludes the $5 million we received in January 2021 from Vifor Pharma in exchange for the convertible promissory note we issued to it in December 2020. It does not present all necessary information for an understanding of our financial condition as of December 31, 2020 or our results of operations for the year ended December 31, 2020. As we complete our year-end financial close process and finalize our year-end 2020 financial statements, we will be required to make significant judgments in a number of areas that may result in the estimate provided herein being different than the final reported cash and cash equivalents. This preliminary estimate has been prepared by and is the responsibility of our management. Our independent registered public accounting firm has not audited, reviewed or performed any procedures with respect to this preliminary estimate or the accounting treatment thereof and does not express an opinion or any other form of assurance with respect thereto. We expect to complete our audited financial statements for the year ended December 31, 2020 subsequent to the completion of this offering. It is possible that we or our independent registered public accounting firm may identify items that require us to make adjustments to the preliminary estimated cash and cash equivalents balance set forth above and those changes could be material. Accordingly, undue reliance should not be placed on this preliminary estimate. The preliminary estimate is not necessarily indicative of any future period and should be read together with the sections titled "Risk Factors" and "Special Note Regarding Forward-Looking Statements," and under similar headings in the documents incorporated by reference into this prospectus supplement and the accompanying prospectus as well as our financial statements, related notes and other financial information incorporated by reference in this prospectus.

Risks Relating to Our Business

        We are a late-stage biopharmaceutical company, and our business and ability to execute our business strategy are subject to a number of risks of which you should be aware before you decide to invest in our common stock. In particular, you should consider the following risks, which are discussed more fully in the section entitled "Risk Factors:"

    §
    We are a late-stage biopharmaceutical company with no products approved for sale and we have not generated any product revenue to date. We have incurred significant losses since our inception, and we anticipate that we will continue to incur losses for the foreseeable future, which makes it difficult to assess our future viability.
    §
    To achieve our goals we will require substantial additional funding, for which capital may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our clinical trials or operations.
    §
    COVID-19 could adversely impact our business, including our clinical trials, and financial condition.
    §
    Product development and regulatory approval involve a lengthy and expensive process with uncertain outcomes. We cannot be certain ANG-3777, ANG-3070 or any of our other product candidates will receive or maintain regulatory approval and, without regulatory approval, we and our collaborators will not be able to market our product candidates.
    §
    Due to the significant resources required for the development and commercialization of our product candidates, we must prioritize development of certain product candidates and/or certain disease indications. We may expend our limited resources on product candidates or indications that do not yield a successful product and fail to capitalize on product

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      candidates or indications that may be more profitable or for which there is a greater likelihood of success.

    §
    Our business currently depends substantially on the commercial success of ANG-3777, if approved. Our business will be materially harmed if we or our cllaborators are unable to successfully commercialize ANG-3777.
    §
    Our existing collaborations as well as additional collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our product candidates.
    §
    If our collaborators cease development and/or commercialization efforts under our existing or future collaboration agreements, or if any of those agreements are terminated, these collaborations may fail to lead to commercial products and we may never receive milestone payments or future royalties under these agreements.
    §
    It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection. If our patent position and potential regulatory exclusivity do not adequately protect our product candidates, others could compete against us more directly, which would harm our business, possibly materially.
    §
    We identified material weaknesses in our internal control over financial reporting for the years ended December 31, 2018 and 2019 and for the nine months ended September 30, 2020, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

Corporate Information

        We were incorporated in the State of Delaware on April 6, 1998. Our corporate operations are based in San Francisco, California, our clinical development and regulatory teams are primarily located in Boston, Massachusetts, and our discovery and research programs are based in Uniondale, New York. Our principal executive offices are located at 51 Charles Lindbergh Boulevard, Uniondale, New York 11553, and our telephone number is (415) 655-4899. Our website address is www.angion.com. The information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference into this prospectus and does not constitute part of this prospectus.

Concurrent Private Placement

        One or more entities affiliated with Vifor Pharma is expected to purchase $25 million of our common stock in a concurrent private placement exempt from the registration requirements of the Securities Act at a price per share equal to the initial public offering price in this offering. Cowen & Company, LLC and Stifel, Nicolaus & Company, Incorporated will serve as placement agents for the concurrent private placement and receive a placement agent fee equal to 3% of the total purchase price of the private placement shares. The concurrent private placement is contingent on the closing of this offering and the satisfaction of certain other customary conditions. However, this offering is not contingent on the consummation of the concurrent private placement. In connection with the concurrent private placement, we will enter into a securities purchase agreement with Vifor Pharma.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

        We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year following the fifth anniversary of the completion of this offering, (ii) the last day of our first fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on

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which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (Exchange Act), which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the issuer's most recently completed second fiscal quarter and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

    §
    We will present only two years of audited consolidated financial statements, plus unaudited condensed consolidated financial statements for any interim period, and related management's discussion and analysis of financial condition and results of operations;
    §
    We will avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to Sarbanes-Oxley Act of 2002;
    §
    We will provide less extensive disclosure about our executive compensation arrangements; and
    §
    We will not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.

        In addition, the JOBS Act provides that an emerging growth company can take advantage of extended transition periods to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to take advantage of the benefits of this extended transition period and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

        We are also a "smaller reporting company" as defined in Regulation S-K under the Securities Act of 1933, as amended (Securities Act), and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies. We may be a smaller reporting company even after we are no longer an emerging growth company.

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The Offering

Common stock offered by us

  5,000,000 shares.

Option to purchase additional shares

 

We have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to an additional 750,000 shares of our common stock from us.

Concurrent Private Placement

 

One or more entities affiliated with Vifor International, Ltd. (Vifor Pharma) is expected to purchase $25 million of our common stock in a concurrent private placement exempt from the registration requirements of the Securities Act at a price per share equal to the initial public offering price in this offering. Based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, this would be 1,666,667 shares. Cowen & Company, LLC and Stifel, Nicolaus & Company, Incorporated will serve as placement agents for the concurrent private placement and receive a placement agent fee equal to a 3% of the total purchase price of the private placement shares. The concurrent private placement is contingent on the closing of this offering and the satisfaction of certain other customary conditions. However, this offering is not contingent on the consummation of the concurrent private placement.

Common stock to be outstanding after this offering and the concurrent private placement

 

28,780,099 shares (or 29,530,099 shares if the underwriters exercise their option to purchase additional shares in full).

Use of proceeds

 

We estimate that the net proceeds from this offering and the concurrent private placement will be approximately $90.7 million, or approximately $101.1 million if the underwriters exercise their option to purchase additional shares in full (based on an assumed initial public offering price of $15.00 per share, 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.

 

We intend to use the net proceeds from this offering and the concurrent private placement together with our existing cash and cash equivalents to fund: (i) our ongoing Phase 3 registration trial of ANG-3777 for DGF and to prepare for and complete our New Drug Application (NDA) submission for ANG-3777 for DGF; (ii) our ongoing Phase 2 clinical trial and to initiate our Phase 3 clinical trial of ANG-3777 for CSA-AKI; (iii) our ongoing Phase 2 clinical trial of ANG-3777 for ALI; (iv) our ongoing Phase 1 clinical trial of ANG-3070 and the initiation of a Phase 2 clinical trial; and (v) our earlier stage research and development efforts, including for our ROCK2 inhibitor and CYP11B2 inhibitor programs. Any remaining amounts will be used for working capital and general corporate purposes. See "Use of Proceeds."

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Risk factors

 

See "Risk Factors" beginning on page 16 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.

Nasdaq Global Select Market symbol

 

"ANGN"

        The number of shares of our common stock to be outstanding after this offering and the concurrent private placement is based on 15,209,127 shares of our common stock outstanding as of September 30, 2020, (which includes 18,232 unvested restricted shares of our common stock subject to repurchase as of September 30, 2020), and excludes the following:

    §
    3,337,481 shares of our common stock issuable upon the exercise of options to purchase common stock that were outstanding as of September 30, 2020, with a weighted-average exercise price of $6.79 per share;

    §
    644,043 shares of our common stock subject to restricted stock units outstanding as of September 30, 2020 for which the vesting condition was not satisfied;

    §
    1,225,294 shares of our common stock issuable upon the exercise of outstanding warrants, with a weighted-average exercise price of $7.70 per share;

    §
    736,802 shares of our common stock reserved for issuance pursuant to future awards under our 2015 Equity Incentive Plan, which will no longer be available for issuance effective on the day prior to the first public trading date of our common stock;

    §
    4,280,000 shares of our common stock reserved for issuance pursuant to future awards under our 2021 Incentive Award Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering, and from which we will grant option awards exercisable for 695,066 shares of our common stock to certain of our officers and employees effective as of the effective date of the registration statement of which this prospectus forms a part; and

    §
    390,000 shares of our common stock reserved for issuance pursuant to future awards under our 2021 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering.

        In addition, unless we specifically state otherwise, all information in this prospectus assumes or gives effect to:

    §
    a 1-for-1.55583 forward stock split of our common stock effected on February 1, 2021;

    §
    the issuance of 233,816 shares of our common stock upon the conversion of outstanding convertible promissory notes plus accrued interest and upon the exercise of outstanding warrants in January 2021;

    §
    the issuance of 1,666,667 shares of our common stock to one or more entities affiliated with Vifor Pharma upon the closing of the concurrent private placement, based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus;

    §
    the conversion of all outstanding shares of our convertible preferred stock plus accrued dividends into an aggregate of 2,231,895 shares of our common stock immediately prior to the completion of this offering (based on an assumed initial public offering price of $15.00

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      per share, the midpoint of the estimated price range set forth on the cover page of this prospectus and assuming the conversion occurs on February 5, 2021);

    §
    the conversion of $42.0 million in aggregate principal amount of outstanding convertible promissory notes plus accrued interest (including $5.0 million in aggregate principal amount of outstanding convertible promissory notes issued following September 30, 2020) into an aggregate of 3,632,135 shares of our common stock immediately prior to the completion of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus and assuming the conversion occurs on February 5, 2021);

    §
    the net exercise of outstanding warrants into an aggregate of 806,459 shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus);

    §
    the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the adoption of our amended and restated bylaws, each of which will occur immediately prior to the consummation of this offering;

    §
    no exercise of outstanding stock options subsequent to September 30, 2020; and

    §
    no exercise of the underwriters' option to purchase additional shares of our common stock.

        Each $1.00 increase in the assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase the number of shares of our common stock issued upon the net exercise of outstanding warrants by 37,787 shares. Each $1.00 decrease in the assumed initial public offering price of $15.00 per share would decrease the number of shares of our common stock issued upon the net exercise of outstanding warrants by 43,170 shares.

        Unless otherwise specified and unless the context otherwise requires, we refer to our Series C convertible preferred stock as "convertible preferred stock" or "preferred stock" and Convertible Promissory Notes as "convertible promissory notes" or "convertible notes" in this prospectus.

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Summary Consolidated Financial Data

        The following tables set forth a summary of our historical consolidated financial data as of and for the periods indicated. We have derived the summary consolidated statements of operations data for the years ended December 31, 2018 and 2019, and the summary consolidated balance sheet data as of December 31, 2019, from our audited consolidated financial statements included elsewhere in this prospectus. The statement of operations data for the nine months ended September 30, 2019 and 2020 and the balance sheet data as of September 30, 2020 have been derived from our unaudited interim condensed financial statements included elsewhere in this prospectus and are not necessarily indicative of results to be expected for the full year. The unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2020 and the results of operations for the nine months ended September 30, 2019 and 2020. You should read this data together with our consolidated financial statements and related notes included elsewhere in this prospectus and the information under the captions "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." The summary consolidated financial data included in this section are not intended to replace the consolidated financial statements and related notes included elsewhere in this prospectus and are qualified in their entirety by those consolidated financial statements and related notes. Our historical results are not necessarily indicative of our future results.

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  Year Ended December 31,   Nine Months Ended September 30,  
 
  2018   2019   2019   2020  
 
   
   
  (unaudited)
 
 
  (in thousands, except share and per share data)
 

Statements of Operations Data:

                         

Revenue:

                         

Contract revenue

  $ 4,000   $   $   $  

Grant revenue

    29     1,487     791     2,421  

Total revenue

    4,029     1,487     791     2,421  

Operating expenses:

                         

Cost of contract revenue

    281              

Cost of grant revenue

    97     640     341     1,064  

Research and development

    12,602     29,837     19,390     27,912  

General and administrative

    5,391     9,601     5,458     14,868  

Total operating expenses

    18,371     40,078     25,189     43,844  

Loss from operations

    (14,342 )   (38,591 )   (24,398 )   (41,423 )

Other income (expense)

    (5,683 )   (2,067 )   (245 )   (9,809 )

Net loss

  $ (20,025 ) $ (40,658 ) $ (24,643 ) $ (51,232 )

Preferred stock dividends

  $ (4,980 ) $   $   $  

Net loss attributable to common stockholders

  $ (25,005 ) $ (40,658 ) $ (24,643 ) $ (51,232 )

Net loss per common share, basic and diluted(1)

  $ (2.58 ) $ (2.82 ) $ (1.71 ) $ (3.51 )

Weighted-average number of common shares outstanding, basic and diluted(1)

    9,685,890     14,435,279     14,442,294     14,609,213  

Pro forma net loss per common share, basic and diluted (unaudited)(1)

        $ (2.65 )       $ (3.04 )

Weighted-average number of common shares used in computing pro forma net loss per share, basic and diluted (unaudited)(1)

          15,325,629           16,860,195  

(1)
See Note 2 to each of our audited consolidated financial statements and unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net loss per common share, basic and diluted pro forma net loss per common share, and the weighted-average number of common shares used in the computation of the per share amounts.

        The table below presents our balance sheet data as of September 30, 2020:

    §
    on an actual basis;
    §
    on a pro forma basis to give effect to: (i) the issuance of $5.0 million in aggregate principal amount of convertible promissory notes following September 30, 2020 (the New Notes); (ii) the issuance of 233,816 shares of our common stock upon the conversion of outstanding convertible promissory notes plus accrued interest and upon the exercise of certain outstanding warrants in January 2021; (iii) the conversion of all shares of our outstanding convertible preferred stock plus accrued dividends and convertible promissory notes plus accrued interest (including the New Notes) into an aggregate of 5,864,030

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      shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus and assuming the conversion occurs on February 5, 2021), (iv) the net exercise of certain warrants into an aggregate of 806,459 shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus), (v) the forward stock split effected on February 1, 2021, and (vi) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the consummation of this offering; and

    §
    on a pro forma as adjusted basis to give further effect to the sale of 5,000,000 shares of our common stock in this offering and the sale of 1,666,667 shares of our common stock in the concurrent private placement, in each case, at an assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range listed on the cover page of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
 
  As of September 30, 2020  
 
  Actual   Pro Forma   Pro Forma
As Adjusted(1)
 
 
  (unaudited)
 
 
  (in thousands)
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 14,111   $ 19,111   $ 109,761  

Working capital(2)

    (63,965 )   11,962     102,612  

Total assets

    22,744     27,744     118,394  

Total Liabilities

    85,936     15,009     15,009  

Accumulated deficit

    (131,687 )   (132,810 )   (132,810 )

Total stockholders' (deficit) equity

    (63,192 )   12,735     103,385  

(1)
Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus), would increase (decrease) the amount of each of our cash and cash equivalents, working capital, total assets and total stockholders' equity by $6.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus and the number of shares sold in the concurrent private placement, remains the same and after deducting the estimated underwriting discount and commissions and estimated offering expenses payable by us. We may also increase (decrease) the number of shares we are offering. Each increase (decrease) of 1,000,000 in the number of shares we are offering would increase (decrease) the amount of each of our cash and cash equivalents, working capital, total assets and stockholders' equity by approximately $14.0 million, assuming the assumed initial public offering price per share, as set forth on the cover page of this prospectus, remains the same. The pro forma as adjusted information is illustrative only and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.
(2)
Working capital is defined as total current assets less total current liabilities. See our unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, including our consolidated financial statements and related notes, before deciding whether to invest in shares of our common stock. Many of the following risks and uncertainties are, and will be, exacerbated by the coronavirus disease 2019 (COVID-19) pandemic and any worsening of the global business and economic environment as a result. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Financial Position and Need for Additional Capital

We are a late-stage biopharmaceutical company with no products approved for sale and we have not generated any product revenue to date. We have incurred significant losses since our inception, and we anticipate that we will continue to incur losses for the foreseeable future, which makes it difficult to assess our future viability.

        We are a late-stage biopharmaceutical company. Drug development is a highly speculative undertaking and involves a substantial degree of risk. We have not yet submitted any product candidates for approval or received approval of any product candidate, including for ANG-3777, by regulatory authorities in any jurisdiction, including the United States Food and Drug Administration (FDA).

        Since our inception, we have devoted substantially all of our efforts and financial resources to conducting research and development activities, including drug discovery and preclinical studies and clinical trials, establishing and maintaining our intellectual property portfolio, organizing and staffing our business, business planning, raising capital and providing general and administrative support for these operations. Prior to 2014, our efforts were primarily focused on researching a number of pathways related to serious organ diseases, applying our medicinal chemistry expertise towards creating potential therapeutics to address the unmet medical needs of patients and conducting preclinical and initial clinical development of ANG-3777. During this time period, our operations were funded primarily through the receipt of U.S. government grants and contracts. In 2014, we began raising capital through the sale of debt and equity securities as well as licenses, and since that time have significantly expanded our operations with a focus on advancing our lead product candidate, ANG-3777, into and through multiple clinical trials and accelerating our other development programs, including our second product candidate, ANG-3070. From our inception through September 30, 2020, we received approximately $68.5 million from U.S. government grants and contracts and have raised aggregate gross proceeds of $108.5 million through the issuance and sale of our debt and equity securities. We also received an upfront payment under our license agreements with Vifor (International) Ltd. (Vifor Pharma) of $30 million in November 2020. As of September 30, 2020, we had cash and cash equivalents of $14.1 million (excluding such payment).

        We do not have any products approved for sale and have not generated any revenue from product sales since our inception and do not expect to generate revenue from product sales unless we successfully develop and we or our collaborators commercialize our product candidates, which we do not expect to occur for several years, if ever. In addition, a significant portion of our future revenue and cash resources is expected to be derived from the our license agreement with Vifor Pharma (the Vifor License) and, to a lesser extent, our license agreement with Sinovant Sciences HK Limited (Sinovant and the Sinovant License). Our net losses were $20.0 million and $40.7 million for the years ended December 31, 2018 and 2019, respectively, and $24.6 million and $51.3 million

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for the nine months ended September 30, 2019 and 2020, respectively. As of September 30, 2020, we had an accumulated deficit of $131.7 million. We expect to continue to incur net losses for the foreseeable future, and we expect our expenses and operating losses to increase substantially as we advance ANG-3777, ANG-3070 and our other product candidates through clinical trials and preclinical development, and as we seek regulatory approval for ANG-3777, ANG-3070 or any of our other product candidates. In addition, if we seek approval for any of our product candidates or indications for which we retain commercialization rights, we expect to incur additional expenses as we expand our clinical, regulatory, quality, manufacturing and commercialization capabilities, incur significant commercialization expenses for marketing, sales, manufacturing and distribution if we obtain marketing approval for such product candidates. Finally, we expect to incur increased expenses to protect our intellectual property and expand our general and administrative support functions, including hiring additional personnel, as well as incur additional costs associated with operating as a public company.

        If ANG-3777, ANG-3070 or any of our other product candidates fail in ongoing clinical trials or do not gain regulatory approval, or if our product candidates, if approved, do not achieve market acceptance, we may never become profitable. These net losses and negative cash flows could have an adverse effect on our stockholders' equity and working capital.

        In addition, while we have a license agreements with Vifor Pharma and Sinovant relating to ANG-3777 that contemplate upfront, regulatory and commercial milestone payments as well as royalties on sales of ANG-3777, there can be no assurance that we or Sinovant will be able to successfully advance ANG-3777 through approval, that Vifor Pharma or Sinovant will be able to successfully commercialize ANG-3777 for any indication following any approval or that any substantial revenue stream from milestone or royalty payments will be forthcoming under either license agreement.

To achieve our goals we will require substantial additional funding, for which capital may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our clinical trials or operations.

        Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities. We are currently in the process of advancing ANG-3777 through clinical development for three indications, ANG-3070 through a Phase 1 clinical trial in 72 healthy volunteers in Australia, and other candidates through preclinical development. Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We will require substantial additional future capital in order to complete clinical development and seek regulatory approval for ANG-3777 for any indication as well as to conduct the research, clinical and regulatory activities necessary to bring our other product candidates, including ANG-3070, to market. Regulatory authorities in the United States and elsewhere could also require that we perform additional preclinical studies or clinical trials to receive or maintain regulatory approval of our product candidates, including ANG-3777, and our expenses would further increase beyond what we currently expect and the anticipated timing of any potential regulatory approval could be delayed. Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development of such product candidates as well as the costs of commercializing any of our wholly-owned product candidates and those for which we retain the right to commercialize.

        We intend to use the net proceeds from this offering together with our existing cash and cash equivalents to fund: (i) our ongoing Phase 3 registration trial of ANG-3777 for DGF and to prepare for and complete our New Drug Application (NDA) submission for ANG-3777 for DGF; (ii) our

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ongoing Phase 2 clinical trial and initiate our Phase 3 clinical trial of ANG-3777 for CSA-AKI; (iii) our ongoing Phase 2 clinical trial of ANG-3777 for ALI; (iv) our ongoing Phase 1 clinical trial of ANG-3070 and the initiation of a Phase 2 clinical trial; and (v) our earlier stage research and development efforts, including for our ROCK2 inhibitor and CYP11B2 inhibitor programs. Any remaining amounts will be used for working capital and general corporate purposes. We estimate that our current cash and cash equivalents, together with continued grant funding, will be sufficient for us to fund our operating expenses and capital expenditure requirements through at least the next 12 months. However, the expected net proceeds from this offering will not be sufficient to complete our planned Phase 3 clinical trial of ANG-3777 for CSA-AKI, our planned Phase 2 clinical trials of ANG-3777 in an ARDS indication and in an acute CNS indication, our planned Phase 2 clinical trial of ANG-3070, or IND filing for our lead development candidate in our CYP11B2 inhibitor program. Accordingly, we will continue to require substantial additional capital beyond the expected proceeds of this offering to continue our clinical development activities as well as any commercialization activities we undertake with respect to our wholly-owned product candidates and those for which we retain the right to commercialize.

        We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements. The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

    §
    the scope, progress, results and costs of researching and developing ANG-3777, ANG-3070 or any other product candidates, and conducting preclinical studies and clinical trials;
    §
    the outcome of our ongoing and future clinical trials, including our Phase 3 registration trial of ANG-3777 for DGF, our Phase 2 clinical trial of ANG-3777 for CSA-AKI, our Phase 2 clinical trial in Brazil of ANG-3777 for the reduction of severity and progression of ALI in patients with COVID-19 associated pneumonia who are at high risk of progressing to acute respiratory distress syndrome (ARDS) and our Phase 1 clinical trial of ANG-3070 in healthy volunteers;
    §
    whether we are able to take advantage of any FDA expedited development and approval programs for any of our product candidates;
    §
    the clinical development of ANG-3777 for other potential indications in addition to DGF and CSA-AKI, including ALI and central nervous system (CNS) injuries;
    §
    the extent to which COVID-19 may impact our business, including our clinical trials and financial condition;
    §
    the willingness of the FDA and foreign regulatory authorities to accept the results of our ongoing Phase 3 registration trial, as well as our other completed and planned clinical trials and preclinical studies and other work, as the basis for review and approval of ANG-3777 for DGF and any other indication;
    §
    the outcome, costs and timing of seeking and obtaining and maintaining FDA and any foreign regulatory approvals;
    §
    the number and characteristics of product candidates that we pursue, including our product candidates in preclinical development;
    §
    the ability of our product candidates to progress through clinical development successfully;
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    our need to expand our research and development activities, including to conduct additional clinical trials;
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    market acceptance of our product candidates, including physician adoption, market access, pricing and reimbursement;

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    §
    the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies;
    §
    our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
    §
    our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel;
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    the effect of competing technological, market developments and government policy;
    §
    the costs associated with being a public company, including our need to implement additional internal systems and infrastructure, including financial and reporting systems;
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    the costs associated with securing and establishing commercialization and manufacturing capabilities, as well as those associated with packaging, warehousing and distribution;
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    the costs associated with being a commercial company with approved products for sale, including our obligation to meet applicable healthcare laws and regulations and implement robust compliance programs;
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    the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future and timing and amount of payments thereunder; and
    §
    the timing, receipt and amount of sales and general commercial success of any future approved products, if any.

        Until such time as we or our collaborators can generate significant revenue from sales of ANG-3777 or we can generate sufficient revenue from sales of ANG-3070 or any other product candidate, if ever, we expect to finance our operations through public or private equity offerings or debt financings or other sources of capital, including collaborations, licenses, credit or loan facilities, receipt of research contributions or grants, tax credits or a combination of one or more of these funding sources. Adequate funding may not be available to us on acceptable terms, or at all. This may be particularly true during the COVID-19 pandemic when the global capital markets are experiencing extreme volatility. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and 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 funds through additional collaborations, or other similar 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 and/or may reduce the value of our common stock. 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 commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Our operations have historically been funded largely through government grants and contracts, and we may not seek or receive any additional funding under such mechanisms in the future.

        From our inception through September 30, 2020, we received approximately $68.5 million from U.S. government grants and contracts, principally from the U.S. National Institutes of Health (NIH), and U.S. National Science Foundation (NSF), and the U.S. Department of Defense (DOD). These

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funds enabled us to progress our most advanced candidates into clinical development and preclinical development. These grants also provide fringe benefits and indirect costs used to support our overhead expenses, as well as a negotiated fixed fee (i.e., profit) equal to a percentage of total direct and indirect costs of the grant award, excluding subcontractor costs.

        Since 2014, we have primarily funded our operations through the sale of debt and equity securities as well as licenses, and since that time have significantly expanded our operations, with a focus on advancing our lead product candidate, ANG-3777, into and through multiple clinical trials and accelerating our other development programs. However, we have several grant applications pending review by the NIH, NSF and DOD, and intend to continue to apply for grants to fund our discovery and development efforts. As of September 30, 2020, active grants and those for which we have received notification of the intent to fund are expected to provide approximately $1.1 million in anticipated research cost reimbursements, which includes monies to be paid to university collaborators and other subcontractors named in the grant applications. If in the future we do not seek or receive any additional funding under government grants and contracts, or if we fail to remain eligible to receive grant funding, we may be required to significantly curtail one or more of our discovery or development programs, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to the Development and Regulatory Approval of Our Product Candidates

COVID-19 could adversely impact our business, including our clinical trials, and financial condition.

        We are subject to risks related to public health crises such as the global pandemic associated with COVID-19. In December 2019, a novel strain of coronavirus, was reported to have surfaced in Wuhan, China. Since then, COVID-19 has spread to most countries and all 50 states within the United States, including countries and states in which we have planned or active clinical trial sites. As COVID-19 continues to spread around the globe, we have and/or will likely experience disruptions that could severely impact our business and clinical trials, including:

    §
    delays or difficulties in enrolling patients in our clinical trials;
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    delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;
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    diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
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    interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data;
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    risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;
    §
    limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;
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    delays in receiving authorizations from local regulatory authorities to initiate our planned clinical trials;
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    delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

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    §
    interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials;
    §
    changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;
    §
    interruptions or delays in preclinical studies due to restricted or limited operations at our research and development laboratory facilities;
    §
    delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and
    §
    refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.

        Patient enrollment since February 2020 in each of our clinical trials has been impacted by public safety restrictions related to the COVID-19 pandemic. We are continuing to evaluate the impact of the COVID-19 restrictions on our expected pace of enrollment, as such impacts could delay the timing of topline results in either our Phase 2 clinical trial in CSA-AKI and our other ongoing clinical trials.

        Numerous state and local jurisdictions have imposed, and others in the future may impose, "shelter-in-place" orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. Starting in mid-March 2020, the governor of California, where our corporate operations are based, issued "shelter-in-place" or "stay at home" orders restricting non-essential activities, travel and business operations for an indefinite period of time, subject to certain exceptions for necessary activities. Similar orders and restrictions have been imposed in New York and Massachusetts, and such orders or restrictions have resulted in our office closing, work stoppages, slowdowns and delays, travel restrictions and cancellation of events, among other effects, thereby negatively impacting our operations. In addition, even after the "shelter-in-place" orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19 are lifted, we may continue to experience disruptions to our business.

        The global pandemic of COVID-19 continues to rapidly evolve. The extent to which COVID-19 may impact our business, including our clinical trials, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

Product development and regulatory approval involve a lengthy and expensive process with uncertain outcomes. We cannot be certain ANG-3777, ANG-3070 or any of our other product candidates will receive or maintain regulatory approval and, without regulatory approval, we and our collaborators will not be able to market our product candidates.

        We currently have no products approved for sale, and we cannot guarantee we will ever have approved products that we or our collaborators can market and sell. The development of a product candidate and issues relating to its approval and marketing are subject to extensive regulation by regulatory authorities, including the FDA in the United States and other regulatory authorities in other foreign countries, with regulations differing from country to country. We are not permitted to market our product candidates in the United States or elsewhere until we receive regulatory approval and/or

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marketing authorization, such as approval of an NDA from the FDA. We have not submitted any marketing applications for any of our product candidates.

        New drug marketing applications must include extensive preclinical and clinical data and supporting information to establish the product candidate's safety and effectiveness for each desired indication. Such marketing applications must also include significant information regarding the chemistry, manufacturing, and controls for the product. Obtaining approval of our product candidates will be a lengthy, expensive, and uncertain process, and we may not be successful. Specifically, the review processes of the FDA and foreign regulatory authorities can take years to complete, and approval is never guaranteed. Even if a product is approved, the FDA or foreign regulatory authorities may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. The FDA or foreign regulatory authorities also may not approve our product candidates with the labeling that we believe is necessary or desirable for the successful commercialization of such product candidates. Obtaining regulatory approval for marketing of a product candidate in one country does not ensure we will be able to obtain regulatory approval in any other country.

        The FDA or any foreign regulatory authorities can delay, limit or deny approval of our product candidates for many reasons, including:

    §
    our inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory authority that any of our product candidates are safe and effective for the requested indication;
    §
    the FDA's or the applicable foreign regulatory authority's disagreement with our trial protocols or the interpretation of data from preclinical studies or clinical trials;
    §
    our inability to demonstrate that the clinical and other benefits of any of our product candidates outweigh any safety or other perceived risks;
    §
    the FDA's or the applicable foreign regulatory authority's requirement for additional preclinical studies or clinical trials;
    §
    the FDA's or the applicable foreign regulatory authority's non-approval of the formulation, labeling or specifications of any of our product candidates;
    §
    the FDA's or the applicable foreign regulatory authority's failure to approve our manufacturing processes and facilities or the facilities of third-party manufacturers upon which we rely; or
    §
    the potential for approval policies or regulations of the FDA or the applicable foreign regulatory authorities to significantly change in a manner rendering our clinical data insufficient for approval.

        Our lead product candidate ANG-3777 is in late-stage clinical development and it is uncertain whether the results from our ongoing Phase 3 registration trial for DGF will lead to regulatory approval and, even if approved, will result in successful commercialization by our collaborators. For example, we have amended the protocol for our Phase 3 registration trial of ANG-3777 for DGF to change the primary endpoint from the difference in patient duration on dialysis between the treatment and placebo arms to the difference in patient estimated glomerular filtration rate (eGFR) between the treatment and placebo arms measured during a twelve month period following transplant. While we believe eGFR is a meaningful marker of the extent of recovery from the kidney dysfunction resulting from transplantation, there can be no assurance that the FDA will view the endpoint favorably during the review of any NDA we submit for such indication even if we are able to demonstrate a statistically significant improvement of eGFR in the ANG-3777 treatment group.

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        For example, in correspondence with the FDA regarding the amended protocol, the FDA has stated that, while we may submit our Phase 3 data demonstrating eGFR at 12 months post-transplant as part of our NDA, it does not agree with this change in the primary endpoint at this time in light of unresolved questions regarding data adequacy and justification of eGFR as a reasonable predictor of clinical benefit. Our belief that our amended Phase 3 protocol is appropriately designed to meet the FDA's requirements and to address the FDA's concerns may prove to be incorrect. If the totality of results of our Phase 3 clinical trial are not persuasive enough to support approval of an NDA for ANG-3777, additional evidence of efficacy may be required to substantiate the treatment benefit in DGF.

        Prior to any submission of an NDA for ANG-3777, we will need to successfully complete our ongoing and planned clinical trials. However, we cannot be certain that ANG-3777 will be successful in clinical trials, and ANG-3777 may not receive regulatory approval even if it is successful in clinical trials or we may fail to maintain such regulatory approval if ANG-3777 is approved. For example, we have previously conducted several Phase 2 clinical trials of ANG-3777 in indications other than DGF and CSA-AKI that we subsequently terminated due to a number of reasons, including changes in treatment paradigms, lack of funds to support the trials, changes in principal investigators and changes in organ transplant allocation policies.

        Of the large number of drugs in development in the pharmaceutical industry, only a small percentage result in approval by regulatory authorities such as the FDA. Furthermore, no regulatory authority has ever granted approval for a compound that mimics the activities of HGF in a manner similar to ANG-3777. As such, ANG-3777 for any indication we pursue may be subject to increased scrutiny by regulators or additional complexities.

        Similar risks exist for the clinical development and potential regulatory approvals of ANG-3070 and could apply to any future product candidates.

        We cannot predict whether our ongoing or future clinical trials of these product candidates will be successful, or whether regulators will agree with our conclusions regarding the preclinical studies and clinical trials we have conducted to date or that we conduct in the future. Accordingly, we may never receive approval of ANG-3777, ANG-3070 or any of our other product candidates, or be authorized to market and sell our product candidates to customers. If we are unable to obtain approval from regulatory authorities for ANG-3777, ANG-3070 or any of our other product candidates, we may not be able to generate sufficient revenue to become profitable or to continue our operations.

Delays or difficulties in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for ANG-3777 and our other product candidates.

        Delays in the commencement, enrollment, and completion of clinical trials could increase our product development costs or limit the regulatory approval of our product candidates. We are currently enrolling patients in our Phase 2 clinical trial of ANG-3777 for CSA-AKI and for ALI in patients with COVID-19 associated pneumonia who are at high risk of progressing to ARDS and our Phase 1 clinical trial of ANG-3070 in healthy volunteers. Delays in any of our clinical trials may require additional funding beyond the net proceeds of this offering to complete these trials. The commencement, enrollment, and completion of clinical trials can be delayed, challenged or suspended for a variety of reasons, including but not limited to:

    §
    severity of the disease under investigation;

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    §
    inability to obtain sufficient funds required for a clinical trial;
    §
    inability to obtain Institutional Review Board (IRB) approval at participating institutions;
    §
    our ability to effectively manage the clinical research organizations (CROs) we have engaged to conduct of our clinical trials;
    §
    the extent to which COVID-19 may impact our clinical trials and our or our CROs' ability to monitor such trials;
    §
    availability and efficacy of approved medications or competing product candidates in development for the disease under investigation;
    §
    the patient eligibility criteria defined in the protocol;
    §
    the ability to retain patients and the general willingness of patients to enroll, consent and complete participation in the trial;
    §
    the size of the patient population required for analysis of the trial's primary endpoint or endpoints;
    §
    clinical holds, other regulatory objections to commencing or continuing a clinical trial, or the inability to obtain regulatory approval to commence a clinical trial in countries requiring such approvals;
    §
    discussions with the FDA or foreign regulatory authorities regarding the scope or design of our clinical trials;
    §
    severe or unexpected drug-related adverse effects experienced by patients; and
    §
    inability to timely manufacture sufficient quantities of the product candidate and other clinical supplies required for a clinical trial.

        For example, while we recently completed enrollment in our Phase 3 registration trial of ANG-3777 for DGF, we began enrollment in 2016 and have experienced delays due to financial constraints. In addition, patient enrollment since February 2020 in each of our clinical trials has been impacted by public safety restrictions related to the COVID-19 pandemic. In our fibrosis program, we are investigating ANG-3070 for the treatment of progressive fibrosis, beginning with a Phase 1 clinical trial in healthy volunteers in Australia. If successful, we intend to initiate a Phase 2 clinical trial in 2021 and are considering indications, such as primary proteinuric renal disease patients and potentially non-proteinuric renal diseases at high risk of progression, and there may be a significant competition for clinical trial subjects for such indications.

        Changes in regulatory requirements and related guidance related to regulatory approval may also occur and we or any of our collaborators may need to amend clinical trial protocols to reflect these changes. Amendments may require us or any of our collaborators to resubmit clinical trial protocols to IRBs for re-examination, which may impact the costs, timing or successful completion of a clinical trial. In addition, a clinical trial may be suspended or terminated at any time by us, our current or future collaborators, the FDA or other regulatory authorities due to a number of factors, including:

    §
    our failure or the failure of our collaborators to conduct the clinical trial in accordance with regulatory requirements or adherence to our clinical protocols; and
    §
    unforeseen safety issues or any determination a clinical trial presents unacceptable health risks.

        For example, we have amended the protocol for our Phase 3 registration trial of ANG-3777 for DGF to change the primary endpoint from the difference in patient duration on dialysis between the treatment and placebo arms to the difference in patient eGFR between the treatment and placebo arms measured during a 12-month period following transplant, which we believe is a surrogate endpoint reasonably likely to predict clinical benefit in this population. The FDA has stated that, while we may submit our Phase 3 data demonstrating eGFR at 12 months post-transplant as part of our

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NDA, it does not agree with the proposed changes to the protocol at this time, including the change in the primary endpoint, because we have not yet provided information sufficient to justify eGFR as reasonably likely to predict clinical benefit. Based upon the totality of the Phase 3 results, including eGFR at 12 months and data from the key secondary endpoints (including duration on dialysis), we intend to submit the eGFR data to the FDA to support accelerated approval of ANG-3777 in DGF. However, we may have difficulty collecting sufficient data from patients to support an NDA submission on the basis of the revised primary endpoint or experience other complications, and our belief that our amended Phase 3 protocol is appropriately designed to meet the FDA's requirements and to address the FDA's concerns may prove to be incorrect.

        In addition, certain of our Phase 1 clinical trials of ANG-3777 were conducted by a CRO that generated data that may not be sufficient for an NDA. As a result, we plan to repeat certain of such clinical trials in connection with the submission of an NDA, which will increase the overall costs associated with seeking approval of ANG-3777. The results of such Phase 1 clinical trials may also not replicate our earlier studies, which could result in further delays.

        Furthermore, if we or any of our collaborators are required to conduct additional clinical trials or other preclinical studies of our product candidates beyond those contemplated, our ability to obtain or maintain regulatory approval of these product candidates and generate revenue from their sales would be similarly harmed. If we are required to conduct one or more post-approval clinical trials, we may fail to demonstrate safety and efficacy in this context and our approval could be withdrawn or product labeling could be revised in a way that would make future commercialization difficult.

Clinical failure can occur at any stage of clinical development, and we have never previously completed a Phase 3 registration trial or submitted an NDA to the FDA or a marketing application to any foreign regulatory authority. The results of earlier clinical trials are not necessarily predictive of future results, and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval.

        Clinical failure can occur at any stage of our clinical development. Clinical trials may produce negative or inconclusive results, and we or our collaborators may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. In addition, data obtained from trials and studies are susceptible to various interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval. Success in preclinical studies and early clinical trials does not ensure subsequent clinical trials will generate the same or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in Phase 3 registration trials, even after seeing promising results in earlier clinical trials.

        In addition, 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. We have limited experience in designing clinical trials as we have never previously completed a Phase 3 registration trial or submitted an NDA to the FDA or a marketing application to any foreign regulatory authority, and we may be unable to design and execute a clinical trial to support regulatory approval. Further, clinical trials of potential products often reveal it is not practical or feasible to continue development efforts.

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        Furthermore, our ability to show statistical significance in our clinical trials may be affected by factors beyond our control. For example, if the condition of the patients treated with ANG-3777 in our Phase 3 registration trial is unusually poor or the condition of the patients receiving placebo in that trial is unusually good, it could reduce the likelihood of there being a statistically significant difference in eGFR between the treatment and placebo arms of the trial. This could result in the need for additional clinical trials prior to submission of an NDA to the FDA or other marketing applications to foreign regulatory authorities.

        There can also be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in composition of the patient populations, adherence to the dosing regimen and other trial protocols, differences in drug lot manufacturing, and the rate of dropout among clinical trial participants. In addition, while in our Phase 2 clinical trial for DGF ANG-3777 demonstrated statistically significant improvement in eGFR in a post-hoc analysis, it was not the primary endpoint and the trial only involved 28 patients, which is a relatively small study population with respect to diseases associated with transplantation given that there is a significant amount of heterogeneity among patients. As a result, the effect of ANG-3777 on eGFR may be less robust when measured among a patient cohort that is significantly larger in size that the cohort used in our Phase 2 clinical trial. We do not know whether any preclinical or clinical trials we or any of our existing or future collaborators may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our product candidates.

        If ANG-3777, ANG-3070 or our other product candidates are the subject of clinical trial failures or are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for them and our business would be harmed.

Even if we successfully complete ongoing and planned clinical trials of one or more of our product candidates, the product candidates may fail for other reasons.

        Even if we successfully complete the clinical trials for one or more of our product candidates, such product candidates may fail for other reasons, including the possibility the product candidates will:

    §
    fail to receive the regulatory approvals required to market them as drugs;
    §
    be subject to proprietary rights held by others requiring the negotiation of a license agreement prior to marketing;
    §
    be difficult or expensive to manufacture on a commercial scale;
    §
    have adverse side effects that make their use less desirable;
    §
    not achieve reimbursement or sales levels sufficient for continued marketing; or
    §
    fail to compete with product candidates or other treatments commercialized by our competitors.

        For example, even if our Phase 3 registration trial of ANG-3777 for DGF is able to successfully demonstrate a statistically significant improvement in eGFR upon treatment with ANG-3777 as compared to placebo, there can be no assurance that the magnitude of benefit demonstrated will be sufficient to enable us to obtain accelerated approval of ANG-3777. If we are unable to receive and maintain the required regulatory approvals, secure our intellectual property rights, maintain an acceptable safety profile or fail to compete with our competitors' products, our business, financial condition, and results of operations could be materially and adversely affected.

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Even if we receive marketing approval of a product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products, if approved.

        Any marketing approvals that we receive for any current or future product candidate may be subject to limitations on the approved indicated uses for which the product may be marketed or the conditions of approval, or contain requirements for potentially costly post-market testing and surveillance to monitor the safety and efficacy of the product candidate. The FDA may also require a Risk Evaluation and Mitigation Strategy (REMS) as a condition of approval of any product candidate, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves a product candidate, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import and export and record keeping for the product candidate will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current Good Manufacturing Practice (cGMP) and Good Clinical Practice (GCP) for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

    §
    restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls;
    §
    fines, untitled and warning letters, or holds on clinical trials;
    §
    refusal by the FDA to approve pending applications or supplements to approved applications we filed or suspension or revocation of license approvals;
    §
    product seizure or detention, or refusal to permit the import or export of the product; and
    §
    injunctions or the imposition of civil or criminal penalties.

        The FDA's and other regulatory authorities' policies may change, and additional government regulations may be enacted that could prevent, limit or delay marketing approval of a product. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.

Although we have received Fast Track designation for ANG-3777 for the prevention of DGF, there is no guarantee that ANG-3777 will experience a faster regulatory review or obtain regulatory approval. We may also seek to take advantage of other FDA expedited development and review programs, such as Breakthrough Therapy designation, Accelerated Approval, and Priority Review, but we may fail to qualify for such programs, which could substantially delay the approval of ANG-3777 and our other product candidates. Even if we are successful in obtaining additional designations, our product candidates may still fail to obtain approval.

        If a product is intended for the treatment of a serious or life-threatening condition and preclinical or clinical data demonstrate the potential to address an unmet medical need for this condition, the product sponsor may apply for Fast Track designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this

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designation, we cannot assure you that the FDA would decide to grant it. We have received Fast Track designation for ANG-3777 for prevention of DGF, and we may receive Fast Track designation for other product candidates in the future; however, we may not experience a faster development process, review or approval compared to conventional FDA approval timelines, and the FDA may still decline to approve ANG-3777 or our other designated product candidates. The FDA may rescind the Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program or for any other reason.

        We may also seek Breakthrough Therapy designation for any product candidate that we develop. 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 currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Like Fast Track designation, Breakthrough Therapy designation is within the discretion of the FDA. Accordingly, even if we believe a product candidate we develop 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 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 a product candidate we develop qualifies as a Breakthrough Therapy, the FDA may later decide that the drug no longer meets the conditions for qualification and rescind the designation.

        Drugs designated as Fast Track products or Breakthrough Therapies by the FDA are also eligible for accelerated approval if the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. If we seek accelerated approval of ANG-3777 for DGF, we expect to be required to conduct one or more such a confirmatory trials post-approval, if obtained. In addition, the FDA requires pre-approval of promotional materials for accelerated approval products, once approved. We cannot guarantee that the FDA will agree that ANG-3777 or any other product candidate has met the criteria to receive accelerated approval, which would require us to conduct additional clinical testing prior to seeking FDA approval. Even if any of our product candidates received approval through this pathway, the product may fail required post-approval confirmatory clinical trials, and we may be required to remove the product from the market or amend the product label in a way that adversely impacts its marketing.

        Once an NDA is submitted to FDA, the application may be eligible for Priority Review if the product candidate treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. Products with Fast Track or Breakthrough Therapy designation are generally eligible to be considered for Priority Review. If an NDA receives Priority Review, the FDA will aim to take action on the application within six months of confirming receipt, compared to ten months under standard review. We cannot guarantee that any NDA we submit will qualify for Priority Review, including our planned NDA for ANG-3777, which could significantly impact our timeline and plans for commercialization, if approved.

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Although we have received Orphan Drug designation for ANG-3777 to improve renal function and prevent DGF following renal transplantation, we may be unable to maintain the benefits associated with such designation, including the potential for market exclusivity.

        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 drug 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, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the United States, Orphan Drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax credits for certain clinical trial costs and user-fee waivers.

        Similarly, in Europe, the European Commission grants Orphan Drug designation after receiving the opinion of the EMA Committee for Orphan Medicinal Products on an Orphan Drug Designation application. Orphan Drug designation is intended to promote the development of drugs that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in Europe and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant benefit to those affected). Additionally, designation is granted for drugs intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in Europe would be sufficient to justify the necessary investment in developing the drug. In Europe, Orphan Drug designation entitles a party to a number of incentives, such as protocol assistance and scientific advice specifically for designated orphan medicines, and potential fee reductions depending on the status of the sponsor.

        Generally, if a drug with an Orphan Drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the European Medicines Agency (EMA) or the FDA from approving another marketing application for the same drug and indication for that time period, except in limited circumstances. 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 such that market exclusivity is no longer justified.

        Although we have obtained Orphan Drug designation for ANG-3777 to improve renal function and prevent DGF following renal transplantation, we are pursuing development and approval for reducing the severity of DGF, and there is no guarantee that we will obtain approval or Orphan Drug exclusivity for this product. Since we expect to seek approval with a labeled indication of "reducing the severity" of DGF, and the language of this indication differs from the language of the Orphan Drug designation "to improve renal function and prevent" DGF, we may be required to seek an additional designation for "reducing the severity" of DGF in order to be eligible for Orphan Drug exclusivity for ANG-3777 for this indication. If we fail to receive approval of ANG-3777 for DGF, we may never be able to take advantage of Orphan Drug exclusivity. Without such exclusivity, we would only be able to rely on other regulatory exclusivities, such as for a new chemical entity, and our proprietary rights with respect to ANG-3777, some of which, including our issued claims to pharmaceutical compositions containing ANG-3777 and methods of use, will only remain in force in the United States until 2024 and in other jurisdictions until 2023, assuming the patents withstand any challenge and appropriate maintenance, renewal, annuity and other governmental fees are paid.

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        Even if we obtain Orphan Drug exclusivity for ANG-3777 or any other product candidate, that exclusivity may not effectively protect the product candidate from competition because different therapies can be approved for the same condition and the same therapy could be approved for different conditions. Even after an Orphan Drug is approved, the FDA can subsequently approve the same 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. In addition, a designated Orphan Drug may not receive Orphan Drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. Moreover, Orphan Drug exclusive marketing rights in the United States may be lost if the FDA later 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. Orphan Drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. While we may seek additional Orphan Drug designations for applicable indications for our current and any future product candidates, we may never receive such designations. Even if we do receive such designations, there is no guarantee that we will enjoy the benefits of those designations.

Our product candidates may have undesirable side effects which may delay or prevent marketing approval or, if approval is received, require them to be taken off the market, require them to include safety warnings, or otherwise limit their sales.

        The results of our clinical trials of our product candidates may show that such product candidates led to patient safety concerns or undesirable or unacceptable side effects, creating risk to the patient which is deemed to outweigh the potential benefits of treatment to that patient. This event could interrupt, delay or halt such clinical trials, resulting in the denial of regulatory approval by the FDA and other regulatory authorities or result in restrictive label warnings, if approved. In light of widely publicized events concerning the safety risk of certain drug products, regulatory authorities, members of Congress, the Government Accounting Office, medical professionals and the general public have raised concerns about potential drug safety issues. These events have resulted in the withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and establishment of risk management programs that may, for instance, restrict distribution of drug products. The increased attention to drug safety issues may result in a more cautious approach by the FDA to clinical trials. Data from clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate clinical trials before completion, or require longer or additional clinical trials that may result in substantial additional expense and a delay or failure in obtaining approval or approval for a more limited indication than originally sought.

        ANG-3777 was designed to mimic the naturally occurring biological activities of hepatocyte growth factor (HGF), which is responsible for activating cellular repair pathways to prevent cell death and cellular dysfunction. However, such activation could result in unforeseen events, including by harming healthy cells or tissues and there are currently no approved HGF mimetic therapeutics available in the United States. Given the well-publicized effort to target c-Met for the treatment of cancer and safety concerns regarding tumorigenesis (initiation of cancer) or the enhancement and growth of existing tumors (promotion of cancer), we have excluded certain patients with a recent history of certain malignancies. While we have completed multiple animal studies demonstrating ANG-3777 had no enhancing effect in murine tumor models and researchers at the U.S. National Cancer Institute demonstrated that c-Met is actually a tumor suppressor in a liver cancer model, our ongoing and planned clinical trials could reveal a high and unacceptable severity and prevalence of side effects, and it is possible that patients enrolled in such clinical studies could respond in unexpected ways. In particular, in our Phase 3 registration trial of ANG-3777 for DGF, we are

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administering ANG-3777 in a significantly larger patient cohort than in our prior trials and will be conducting a follow-up period that is significantly longer than in our prior trials, which could result in an increase in the number of reported adverse events. In our Phase 2 clinical trial of ANG-3777 for CSA-AKI, we are administering ANG-3777 to cardiac surgery patients, which could exacerbate the risk of or increase the likelihood of adverse events. Additionally, in our Phase 2 clinical trial of ANG-3777 for ALI in patients with COVID-19 associated pneumonia who are at high risk of progressing to ARDS, we are administering ANG-3777 to patients with severe acute lung injury, including acute respiratory distress syndrome, which could also exacerbate the risk of or increase the likelihood of adverse events. Further, if we were to elect to conduct clinical trials of ANG-3777 in other forms of acute organ injuries, such patients could respond in unexpected ways, which could have an adverse effect on our other ANG-3777 programs. As a result, we cannot guarantee that ANG-3777 will continue to be generally well-tolerated as it has been in our clinical trials to date. Furthermore, although our ANG-3777 dosing regimen is based on short-term dosing soon after organ injury occurs, the long-term effects from exposure to this drug class are unknown. Unforeseen side effects from any of our product candidates could arise either during clinical development or, if approved, after the approved product has been marketed.

        ANG-3070 is a tyrosine kinase inhibitor (TKI). TKIs are widely used across a range of indications. Depending on their specific targets, TKIs have been associated with several near and long-term side effects. They have been most extensively used in cancer where cardiopulmonary toxicity, myelosuppression, and gastrointestinal toxicity have been key side effects in addition to several others. TKIs have also been studied in fibrosis, with both nintedanib and pirfenidone being approved for IPF. Nintedanib has been associated with several side effects including severe liver injuries, arterial thromboembolic events and gastrointestinal disorders including diarrhea, nausea and vomiting, and risk of bleeding. Pirfenidone has been associated with elevated liver enzymes, diarrhea, nausea vomiting, photosensitivity and rash.

        While we believe the preliminary safety and pharmacokinetic data from our Phase 1 healthy-volunteeer trial in Australia support the initiation of a Phase 2 clinical trial, there can be no assurance that similar or unforeseen side effects will not occur during such clinical trial. The range and potential severity of possible side effects from systemic therapies is significant.

        If any of our product candidates receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by such products:

    §
    regulatory authorities may require the addition of labeling statements or specific warnings, including "Black Box" warnings if the FDA views the possible side effects as very severe;
    §
    we may be required to change instructions regarding the way the product is administered, conduct additional clinical trials, or change the labeling of the product;
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    we may be subject to limitations on how we may promote the product;
    §
    sales of the product may decrease significantly;
    §
    regulatory authorities may require us to take our approved product off the market;
    §
    we may be subject to litigation or product liability claims; and
    §
    our reputation may suffer.

        Any of these events could prevent us or any potential future collaborators from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization costs and expenses, which, in turn, could delay or prevent us from generating significant revenues from the sale of our products.

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Clinical trials of our product candidates may not uncover all possible adverse effects that patients may experience or be indicative of the effect of our product candidates in the general population.

        Clinical trials are conducted in representative samples of the potential patient population, which may have significant variability. By design, clinical trials are based on a limited number of subjects and are of limited duration of exposure to the product, to determine whether the product candidate demonstrates the substantial evidence of efficacy and safety necessary to obtain regulatory approval. As with the results of any statistical sampling, we cannot be sure that any evidence of efficacy will be repeated in the general population or all side effects of our product candidates may be uncovered. It may be the case that only with a significantly larger number of patients exposed to the product candidate for a longer duration may a more complete safety and efficacy profile be identified. For instance, in our Phase 3 registration trial of ANG-3777 the percentage of enrolled patients that have received deceased-donor kidneys with donations after cardiac death is capped at 20% to match current epidemiological data regarding the rate of kidneys donated after cardiac death. However, if the actual percentage of patients that receive deceased-donor kidneys from donors after cardiac death in the general population is different or changes over time, our trial results may not be indicative. Further, even larger clinical trials may not identify rare serious adverse events, and the duration of such studies may not be sufficient to identify when those events may occur particularly for adverse events or safety risks that could occur over time, such as the development and diagnosis of cancer. Other products have been approved by the regulatory authorities for which safety concerns have been uncovered following approval. Such safety concerns have led to labeling changes, restrictions on distribution through use of a REMS, or withdrawal of products from the market, and any of our product candidates may be subject to similar risks.

        Patients treated with our products, if approved, may experience previously unreported adverse reactions, and it is possible that the FDA or other regulatory authorities may ask for additional safety data as a condition of, or in connection with, our efforts to obtain approval of our product candidates. If safety problems occur or are identified after our products, if any, reach the market, we may make the decision or be required by regulatory authorities to amend the labeling of our products, recall our products, or even withdraw approval for our products.

Due to the significant resources required for the development and commercialization of our product candidates, we must prioritize development of certain product candidates and/or certain disease indications. We may expend our limited resources on product candidates or indications that do not yield a successful product and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

        We plan to develop a pipeline of product candidates to treat potentially life-threatening acute organ injuries and fibrotic diseases. However, due to the significant resources required for the development of our product candidates, we must focus on specific indications and decide which product candidates to pursue and the amount of resources to allocate to each. Our initial focus is on AKI, which impairs kidney function, and when severe, can result in kidney failure and death. We are developing and plan to seek regulatory approval of ANG-3777 for DGF and CSA-AKI. We are also currently focused on advancing ANG-3070 from a Phase 1 healthy-volunteer study into Phase 2 development, and are considering indications such as primary proteinuric renal disease patients and potentially non-proteinuric renal diseases at high risk of progression.

        Our decisions concerning the allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic areas may not lead to the development of any viable commercial product and may divert resources away from better

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opportunities. Similarly, our potential decisions to delay, terminate or collaborate with third parties in respect of certain programs may subsequently also prove to be suboptimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the viability or market potential of any of our programs or product candidates or misread trends in the biopharmaceutical industry, our business, financial condition and results of operations could be materially adversely affected. As a result, we may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain development and commercialization rights.

If manufacturers obtain approval for generic versions of our products or product candidates, our business will be materially harmed.

        In our industry, much of an innovative product's commercial value is realized while it has market exclusivity. When market exclusivity expires generic versions of the product can be approved and marketed, and there can be substantial decline in the innovative product's sales.

        Market exclusivity for our products is based upon patent rights and certain regulatory forms of exclusivity. If we are unable to secure or maintain our exclusivities, we may face generic competition that could materially impede our ability to effectively commercialize our products, including be reducing the price we can charge and reducing our market share.

        ANG-3777 is protected by a number of granted patents and pending patent applications as well as regulatory exclusivities. For example, the issued patent claiming pharmaceutical compositions and methods of use for ANG-3777 is eligible for patent term restoration, potentially for up to five years. In addition, ANG-3777 is protected by a United States patent claiming solid forms of ANG-3777 which will expire in 2040, and an international application filed under the Patent Cooperation Treaty is pending, and any patents issuing from this application would expire in 2040. Also, ANG-3777 may be eligible for five years of marketing exclusivity as a new chemical entity under the Hatch-Waxman Act, and its indication for DGF has been granted Orphan Drug designation, making it potentially eligible for seven years of orphan exclusivity for prevention of this indication upon approval. Should these regulatory exclusivities not be secured, and if other patent filings should not provide sufficient protection, then generic competitors may be able to enter the U.S. market upon expiration of the issued U.S. patent claiming pharmaceutical compositions and methods of treatment, which is expected to expire during 2024, assuming it withstands any challenge and all maintenance fees are paid.

        In some countries, patent protections for our products may not exist because certain countries did not historically offer the right to obtain specific types of patents or we did not file patents in those markets. Also, the patent environment is unpredictable and the validity and enforceability of patents cannot be predicted with certainty.

        Specifically, with regard to the potential for generic entry in the United States, under the U.S. Food, Drug and Cosmetic Act (FDCA) the FDA can approve an Abbreviated New Drug Application (ANDA) for a generic version of an approved branded drug without the ANDA applicant undertaking the clinical testing necessary to obtain approval to market a new drug. Generally, in place of such clinical studies, an ANDA applicant needs only to submit data demonstrating that its product has the same active ingredient(s), strength, dosage form, route of administration and that it is bioequivalent to the approved product.

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        The FDCA requires that an ANDA applicant certify either that its generic product does not infringe any of the patents listed by the owner of the branded drug in the Orange Book or that those patents are not enforceable. This process is known as a paragraph IV certification. Upon notice of a paragraph IV certification, a patent owner or NDA holder has 45 days to bring a patent infringement suit in federal district court against the company seeking ANDA approval of a product covered by one of the owner's patents. If this type of suit is commenced, the FDCA provides a 30-month stay on the FDA's approval of the competitor's application. If the litigation is resolved in favor of the ANDA applicant or the challenged patent expires during the 30-month stay period, the stay is lifted and the FDA may thereafter approve the application based on the standards for approval of ANDAs. Once an ANDA is approved by the FDA, the generic manufacturer may market and sell the generic form of the branded drug in competition with the branded medicine.

        The ANDA process can result in generic competition if the patents at issue are not upheld or if the generic competitor is found not to infringe the owner's patents. If this were to occur with respect to any of our product candidates after approval, our business could be materially harmed.

Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.

        Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our product candidates, if approved. Such laws include:

    §
    the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under U.S. federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
    §
    the U.S. federal civil and criminal false claims laws, including the civil False Claims Act, which, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government. In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti- Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
    §
    the federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies;

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    §
    the U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
    §
    the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;
    §
    the U.S. Physician Payments Sunshine Act and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children's Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers starting in 2022, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members;
    §
    federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
    §
    analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws that require the registration of pharmaceutical sales representatives; and
    §
    similar healthcare laws and regulations in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.

        Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices, including our relationships with physicians and other healthcare providers, some of whom are compensated in the form of stock options for consulting services provided, may not comply with current or future statutes, regulations, agency guidance 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 the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our

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ability to operate our business. Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business and our ability to sell our products may be materially harmed.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval for and commercialize our product candidates and affect the prices we 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 prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

        In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (Affordable Care Act or ACA), was signed into law, intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

        Among the provisions of the Affordable Care Act that are of importance to our potential product candidates are the following:

    §
    an annual, nondeductible fee payable by any entity that manufactures, or imports specified branded prescription drugs and biologic agents;
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    an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
    §
    an increase in the discount rate for the federal 340B program to eligible hospitals;
    §
    a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices;
    §
    extension of manufacturers' Medicaid rebate liability;
    §
    expansion of eligibility criteria for Medicaid programs;
    §
    expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
    §
    a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
    §
    a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research.

        Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges and amendments to the Affordable Care Act in the future. For example, legislation informally titled the Tax Cuts and Jobs Acts (TCJA) was enacted, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, ruled that the individual mandate is a critical and inseverable feature of the Affordable Care Act, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the Affordable Care Act are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court's decision that the individual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. The U.S. Supreme Court is currently reviewing the case, although it is unclear when the Supreme Court will make a decision. It is also unclear how other efforts to challenge, repeal or replace the Affordable Care Act will affect the law or our business.

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        In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. In August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021, unless additional Congressional action is taken. In addition, on January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers, including hospitals, and an increase in 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.

        We expect that 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 product candidates, if approved.

        Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products. Individual states in the United States have become increasingly aggressive in implementing regulations designed to contain pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures. Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our product candidates, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.

        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 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.

We rely on single-source third party contract manufacturing organizations to manufacture and supply our product candidates, and if the FDA or foreign regulatory authorities do not approve these manufacturing facilities or if these organizations fail to perform, our ability to obtain regulatory approval or commercialize our product candidates may be harmed.

        We do not own facilities for clinical and commercial manufacturing of our product candidates, including ANG-3777, and we rely upon third-party contract manufacturing organizations to manufacture and supply product candidates for our clinical trials and we will rely in such manufacturers to meet commercial demand. Currently, we rely on and have agreements with a single third-party contract manufacturer to supply the drug substance for ANG-3777 and to

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manufacture all clinical trial supplies of ANG-3777. Similarly, we rely on and have agreements with a single third party manufacturer to supply drug substance for ANG-3070 and a separate single source third party manufacturer to supply clinical trial supplies of ANG-3070. We do not have agreements for the manufacture and we may not be able to reach agreements with third party contract manufacturers to supply and manufacturer supplies of our other product candidates.

        Additionally, the facilities at which ANG-3777 or any of our other product candidates are manufactured must be the subject of a satisfactory inspection before the FDA or the regulators in other jurisdictions approve the product candidate manufactured at that facility. We are completely dependent our third-party vendors for compliance with the current Good Manufacturing Practice requirements (cGMPs). requirements of United States and non-United States regulators for the manufacture of our active ingredients, drug products, and finished products. If our manufacturers cannot successfully manufacture material conforming to our specifications and cGMPs of any applicable governmental agency, our product candidates will not be approved or, if already approved, may be subject to recalls or demands by regulatory agencies to stop selling the product until manufacturing issues are resolved.

        Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the product candidates, including:

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    the possibility we are unable to enter into a manufacturing agreement with a third party to manufacture our product candidates;
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    the possible breach of the manufacturing agreements by the third parties because of factors beyond our control; and
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    the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer.

        Any of these factors could delay the approval or commercialization of our product candidates, cause us to incur higher costs or prevent us from commercializing our product candidates successfully. Furthermore, if any of our product candidates are approved and contract manufacturers fail to deliver the required commercial quantities of finished product on a timely basis and at commercially reasonable prices and we are unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis, we would likely be unable to meet demand for our products and could lose potential revenue. It may take several years to establish an alternative source of supply for our product candidates and to have any such new source approved by the regulatory authorities that regulate our products. Further, such challenges could be compounded by the COVID-19 pandemic.

Even if our product candidates receive regulatory approval, we may still face future development and regulatory difficulties.

        Our product candidates, if approved, will also be subject to ongoing regulatory requirements for labeling, packaging, storage, advertising, promotion, record-keeping, and submission of safety and other post-marketing information. In addition, approved products, manufacturers, and manufacturers' facilities are required to comply with extensive FDA and comparable foreign regulatory requirements and requirements of other similar agencies, including ensuring quality control and manufacturing procedures conform to cGMPs. As such, we and our contract manufacturers are subject to continual review and periodic inspections to assess compliance with cGMPs. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, quality control and quality assurance. We will also be required to report certain adverse reactions and production problems, if any, to the FDA and

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comparable foreign regulatory and other similar agencies and to comply with certain requirements concerning advertising and promotion for our products. 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 label. Accordingly, we may not promote our approved products, if any, for indications or uses for which they are not approved. We must also continue to comply with GCP requirements for any post-approval trials we are required to conduct or choose to undertake for additional indications in the future.

        If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of a product, it may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If our product candidates fail to comply with applicable regulatory requirements, the FDA and other regulatory agencies may:

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    issue Untitled or Warning letters;
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    mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;
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    require us or our collaborators to enter into a corporate integrity agreement, consent decree or permanent injunction, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
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    impose other administrative or judicial civil or criminal penalties;
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    withdraw regulatory approval;
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    refuse to approve pending applications or supplements to approved applications filed by us or our potential future collaborators;
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    impose restrictions on operations, including costly new manufacturing requirements; or
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    seize or detain products.

Changes in structure of or funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.

        The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel, the maintenance of regulatory review timelines, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

        Disruptions or reorganizations at the FDA and foreign regulatory authorities may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. FDA's Office of New Drugs recently underwent a reorganization, which could continue to affect staffing and priorities and cause delays with respect to the clinical development and regulatory approval process for ANG-3777 and potentially other product candidates. In addition, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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        Separately, in response to the global COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most foreign inspections of manufacturing facilities and products through April 2020, and subsequently, on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities. Subsequently, on July 10, 2020 the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system. The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We have and may continue to conduct future clinical trials outside of the United States. The FDA and other regulatory authorities may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business.

        We have enrolled patients in Canada, Brazil and Georgia in our Phase 2 clinical trial of ANG-3777 for CSA-AKI under separate clinical trial applications in such jurisdictions and have enrolled healthy volunteers in Australia in our Phase 1 clinical trial of ANG-3070 under a separate clinical trial application. In addition, we are conducting our Phase 2 clinical trial of ANG-3777 for ALI in Brazil and we may conduct additional future clinical trials outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, the FDA requires the clinical trial to have been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical trial through an onsite inspection if it deems such inspection necessary. In addition, when clinical trials are conducted only at sites outside of the United States, such trials may not be subject to IND review, meaning the FDA may not provide advance comment on the clinical protocols for the trials, and therefore there is an additional potential risk that the FDA could determine that the study design or protocol for a non-U.S. clinical trial was inadequate, which would likely require additional clinical trials in order to seek FDA approval. If the FDA does not accept data from our clinical trials of ANG-3777 and any future product candidates conducted outside the United States, it would likely result in the need for additional clinical trials, which would be costly and time consuming and delay or permanently halt our development of ANG-3777 and any future product candidates.

        Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with:

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    additional foreign regulatory requirements;
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    foreign exchange fluctuations;
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    patient monitoring and compliance;
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    compliance with foreign manufacturing, customs, shipment and storage requirements;
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    cultural differences in medical practice and clinical research; and
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    diminished protection of intellectual property in some countries.

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Risks Relating to the Commercialization of Our Product Candidates

Our business currently depends substantially on the commercial success of ANG-3777, if approved. Our business will be materially harmed if we or our collaborators are unable to successfully commercialize ANG-3777.

        Even if we receive regulatory approval of ANG-3777 for any indication, it is uncertain whether we or our collaborators will be able to successfully commercialize the product. In November 2020, we entered into the Vifor License, granting Vifor Pharma global rights (excluding Greater China) to develop, manufacture and commercialize ANG-3777 in all therapeutic, prophylactic and diagnostic uses for renal indications, including forms of AKI, and congestive heart failure (collectively, the Renal Indications). In addition, in August 2018 we granted Sinovant an exclusive, royalty-bearing license pursuant to the Sinovant License for the development and commercialization of ANG-3777 in Greater China for all indications.

        Vifor Pharma's marketing of ANG-3777 for any Renal Indication, if approved, Sinovant's marketing of ANG-3777 for any indication, if approved, and our marketing of ANG-3777 for ALI or other non-Renal Indication outside Greater China, if approved, will be limited to ANG-3777's approved use and potentially subject to other limitations as set forth in its approved prescribing information and package insert. Accordingly, we cannot ensure that ANG-3777 will be successfully developed, approved or commercialized. If we or our collaborators are unable to successfully commercialize ANG-3777, if approved, we may not be able to generate sufficient revenue to operate our business.

        In particular, the future commercial success of ANG-3777 for DGF is subject to a number of risks, including the following:

    §
    potential side effects of ANG-3777 could emerge causing an approved drug to be taken off the market;
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    even if approved, ANG-3777 may not receive market acceptance by physicians, hospitals, payers and patients; and
    §
    we may not be able to obtain, maintain or enforce our patents and other intellectual property rights related to ANG-3777.

Our existing collaborations as well as additional collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our product candidates.

        We have licensed certain rights with respect to ANG-3777 to Vifor Pharma and Sinovant and in the future, we may seek additional collaboration arrangements for the commercialization, or potentially for the development, of certain of our product candidates depending on the merits of retaining development and/or commercialization rights for ourselves as compared to entering into collaboration arrangements.

        Under the Vifor License, we retain responsibility at our own cost for a pre-specified clinical development plan designed to obtain regulatory approvals of ANG-3777 for DGF and CSA-AKI indications in the United States, the European Union, Switzerland and the United Kingdom, which includes the completion of the ongoing and currently planned clinical development activities and clinical trials in such indications. While we retain rights to develop and commercialize ANG-3777 in non-Renal Indications (subject to certain protections for Vifor Pharma), we have granted Vifor Pharma global rights (excluding Greater China) to develop, manufacture and commercialize ANG-3777 in all therapeutic, prophylactic and diagnostic uses for all Renal Indications, including our most advanced product candidates, DGF and CSA-AKI. As a result, our ability to generate revenue

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from product sales in the near term is dependent on Vifor Pharma's ability to successfully commercialize ANG-3777 for Renal Indications, if approved.

        To the extent that we decide to enter into additional collaboration agreements in the future, we may face significant competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex and time-consuming to negotiate, document, implement and maintain. We may not be successful in our efforts to prudently manage our existing collaborations or to enter new ones should we chose to do so. The terms of new collaborations or other arrangements that we may establish may not be favorable to us.

        The success of our collaboration arrangements, including the Vifor License and the Sinovant License, will depend heavily on the efforts and activities of our collaborators and our dependence on collaborative arrangements subjects us to a number of risks, including the risk that:

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    we may not be able to control the amount and timing of resources our collaborators may devote to the product candidates;
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    collaborators may delay clinical studies, provide insufficient funding for a clinical study program, stop clinical studies, abandon product candidates, repeat or conduct new clinical studies or require a new formulation of a product candidate for clinical testing;
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    collaborators, such as Sinovant, may independently be able to conduct preclinical studies and/or clinical trials of our product candidates, including ANG-3777 that result in negative outcomes that could harm our development, approval or commercialization of our product candidates;
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    our collaborators may experience financial difficulties;
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    we may be required to relinquish important rights, such as marketing and distribution rights, as is the case in the Vifor License;
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    business combinations or significant changes in a collaborator's business strategy may also adversely affect a collaborator's willingness or ability to complete its obligations under any arrangement;
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    a collaborator could independently move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors;
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    a collaborator's sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings;
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    collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;
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    disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaborations;
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    our collaborators may experience security breaches, cyberattacks and other security incidents that result in compromises of personal information, clinical data and proprietary information, which could harm our reputation and expose us to potential liability; and
    §
    collaborative arrangements are often terminated or allowed to expire, which would delay the development and may increase the cost of developing our product candidates.

        If our collaborators are unable to successfully commercialize ANG-3777, if approved, we may not be able to generate sufficient revenue to operate our business. In addition, if any current or future collaborator were to delay or abandon development and commercialization of any product candidate we had licensed to them, we may be unable to reacquire such asset and may therefore never realize any revenue from milestone payments or royalties pursuant to our agreement with such collaborator.

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If our collaborators cease development and/or commercialization efforts under our existing or future collaboration agreements, or if any of those agreements are terminated, these collaborations may fail to lead to commercial products and we may never receive milestone payments or future royalties under these agreements.

        A significant portion of our future revenue and cash resources is expected to be derived from the Vifor License and, to a lesser extent, the Sinovant License, as well as other similar agreements we may enter into in the future. Revenue from such collaboration arrangements depend upon continuation of the collaborations, the achievement of milestones and royalties, if any. For example, pursuant to the Vifor License, we are entitled to receive $80 million in upfront and near-term clinical milestone payments, including $30 million in upfront cash that we received in November 2020, and a $30 million equity investment, and a total potential deal value of up to $1.925 billion (subject to certain specified reductions and offsets), plus tiered royalties on net sales of ANG-3777 at royalty rates up to 40%. However, if we are unable to successfully advance the development of ANG-3777 for DGF or CSA-AKI, our revenue and cash resources from sales-related milestone payments under the Vifor License will be substantially less than expected. In addition, even if we do obtain all necessary regulatory approvals for ANG-3777 for DGF or CSA-AKI, we may still never receive the revenue or cash resources from milestone payments we expect unless Vifor Pharma is able to successfully commercialize ANG-3777 for such indications. Pursuant to our Sinovant License, where Sinovant is responsible for the development and commercialization of ANG-3777 in Greater China for all indications, we are subject to further risks related to any development efforts undertaken by Sinovant.

        To the extent that any of our existing or future collaborators were to terminate a collaboration agreement, we may be forced to assume further development costs, marketing and distribution costs and the costs of defending intellectual property rights. In certain instances, we may even be forced to abandon product candidates altogether. Any of the foregoing could result in a change to our business plan and a material and adverse effect on our business, financial condition, results of operations and prospects.

Even if approved, our product candidates may not achieve broad market acceptance among physicians, patients, and healthcare payors and, as a result, our revenues generated from their sales may be limited.

        The commercial success of ANG-3777, ANG-3070 or our other product candidates, if approved, will depend upon their acceptance among the medical community including physicians, transplant centers, healthcare payors, and patients. There are currently no approved therapies for DGF or CSA-AKI and there are currently no pharmacologic therapies approved for use with ARDS. Nevertheless, in order for ANG-3777 to be commercially successful, we and our collaborators will need to demonstrate that it is safe and effective for patients with DGF, CSA-AKI or any other indications we pursue. In particular, even if our Phase 3 registration trial of ANG-3777 for DGF is able to successfully demonstrate a statistically significant improvement in eGFR upon treatment of ANG-3777 as compared to placebo and we receive approval of ANG-3777 for the reduction of severity of DGF, there can be no assurance that the magnitude of benefit demonstrated during our clinical trials will be sufficient to achieve market acceptance. The degree of market acceptance of our product candidates will depend on a number of factors, including:

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    limitations in the approved clinical indications for our product candidates;
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    demonstrated clinical safety and efficacy compared to other products;
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    lack of significant adverse side effects;
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    sales, marketing, and distribution support;

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    §
    the extent to which our product candidates are approved for inclusion on formularies of hospitals, integrated delivery networks, and managed care organizations;
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    whether our product candidates are designated under physician treatment guidelines for the treatment of the indications for which we have received regulatory approval;
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    availability of pricing and reimbursement from government entities and private and public third-party payors in and outside of the U.S.;
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    timing of market introduction and perceived effectiveness of competitive products;
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    the degree of cost-effectiveness as assessed by reimbursement-focused organizations, such as the "Institute for Clinical and Economic Review";
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    availability of alternative therapies at similar or lower cost, including generics and over-the-counter products;
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    adverse publicity about our product candidates or favorable publicity about competitive products;
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    convenience and ease of administration of our product candidates; and
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    potential product liability claims.

        If our product candidates are approved, but do not achieve an adequate level of acceptance by hospitals, physicians, patients, the medical community, and healthcare payors, sufficient revenue from product sales may not be generated from these products either by us or our collaborators and we may not become or remain profitable. In addition, efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful.

The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels and pricing policies. Our failure or the failure of our collaborators to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our or their ability to generate revenue from product sales.

        There is significant uncertainty related to the insurance coverage and reimbursement of newly-approved and launched products. In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs and biologics will be covered. The Medicare and Medicaid programs increasingly are used as models in the United States for how private payors and other governmental payors develop their coverage and reimbursement policies for drugs and biologics. Some third-party payors may require pre-approval of coverage for new or innovative drug therapies before they will reimburse healthcare providers who use such therapies. We cannot predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our product candidates including, for example, whether we will seek, and whether the Centers for Medicare and Medicaid (CMS) would approve a new technology add-on payment (NTAP) under the Medicare inpatient prospective payment system (IPPS) for our product candidates, once approved. Introduced in 2001, the NTAP program was created by Congress to support timely access to innovative therapies used to treat Medicare beneficiaries in the hospital inpatient setting. NTAP will only be available for our products if we submit a timely and complete application and CMS determines that our product candidates meet the eligibility requirements of NTAP, including, among other criteria, demonstrating a substantial clinical improvement relative to services or technologies previously available.

        Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for

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particular drugs and biologics when an equivalent generic drug, biosimilar or a less expensive therapy is available. It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Even if we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing third-party therapeutics may limit the amount we will be able to charge for our product candidates. These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates. In addition, hospital and hospital systems are extremely cost-conscious and may require significant discounts on the list price of new medications before placing them on their formulary and in their treatment guidelines. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our product candidates and may not be able to obtain a satisfactory financial return on our product candidates.

        No uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely.

        Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in the EU and other jurisdictions have and will continue to put pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our product candidates may be reduced compared with the United States and may be insufficient to generate commercially-reasonable revenue and profits.

        Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and biologics and surgical procedures and other treatments, has become intense. As a result, increasingly high barriers are being erected to the entry of new products.

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Pricing and reimbursement decisions by government entities and third-party payors may have an adverse effect on the market acceptance of our approved candidates. If there is not sufficient reimbursement for our approved products, it is less likely they will be widely used.

        Market acceptance and sales of ANG-3777, ANG-3070 or any other product candidates, if approved, will depend on applicable pricing and reimbursement policies, health outcome and economic data we and our collaborators collect during clinical development and may be affected by future healthcare reform measures in the United States and elsewhere. Government authorities, specifically CMS, and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs they will cover and establish payment levels. We cannot be certain reimbursement will be available for ANG-3777, ANG-3070 or any other product candidates we develop. Also, we cannot be certain pricing and reimbursement policies will not reduce the demand for, or the price paid for, our products. If reimbursement is not available or is available on a limited basis, we and our collaborators may not be able to successfully commercialize ANG-3777, ANG-3070 or any other product candidates.

        The United States and several other jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. We expect to experience pricing pressures in connection with the sale of products that we develop, due to the trend toward cost containment and additional legislative proposals.

If we fail to develop ANG-3777 for additional indications or if the market opportunities for ANG-3777, ANG-3070 or any future products are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.

        To date, we have focused the majority of our development efforts on the development of ANG-3777 for DGF, an orphan or rare disease with a small numbers of potential patients, and ANG-3777 for CSA-AKI. We granted Vifor Pharma, an exclusive, global (excluding Greater China), royalty-bearing license for the commercialization of ANG-3777 in all Renal Indications, beginning with DGF and CSA-AKI. While Vifor Pharma is obligated to pay us tiered royalties on global net sales of ANG-3777 at royalty rates up to 40%, our ability to grow our revenue from product sales beyond the Vifor License will be dependent on our ability to successfully develop and commercialize ANG-3777 for the treatment of non-Renal Indications. Obtaining the approval and commercialization of ANG-3777 for future indications, including ALI or CNS indications, will require substantial additional funding beyond the net proceeds of this offering and the concurrent private placement and are prone to the risks of failure inherent in drug development. We cannot provide you any assurance we will be able to successfully advance any new indications through the development process. Even if we receive FDA approval to market ANG-3777 for the treatment of additional indications, we cannot assure you any such additional indications will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize ANG-3777 for additional indications, our commercial opportunity with ANG-3777 will be limited, and our business prospects will suffer.

        In addition, the precise incidence and prevalence for all the conditions we currently or may intend to address with ANG-3777, ANG-3070 or any future product candidates are unknown. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment of ANG-3777, ANG-3070 or

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any future product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics or market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of these diseases. The total addressable market across ANG-3777, ANG-3070 and any future product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each of ANG-3777, ANG-3070 and any future product candidates approved for sale for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of ANG-3777, ANG-3070 and any future product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement. The number of patients in the United States and other major markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

We have no sales, marketing, market access or distribution experience and we will have to invest significant resources to develop those capabilities or enter into acceptable third-party sales and marketing arrangements.

        We have no sales, marketing, market access or distribution experience, nor have we commercialized a product. While we have granted commercialization rights for ANG-3777 to Vifor Pharma and Sinovant, we plan to independently commercialize ANG-3777 for any indications for which we retain commercialization rights as well as for ANG-3070 and any other product candidates for which we obtain approval in the United States. As a result, we expect that we will need to develop internal sales, distribution and marketing capabilities by investing significant amounts of financial and management resources, some of which will be committed prior to any confirmation that any such product candidates will be approved. We have no prior experience as a company in the marketing, sale and distribution of biopharmaceutical products and there are significant risks involved in building and managing a commercial organization, including our ability to hire, retain and incentivize qualified individuals, to generate sufficient sales leads, to provide adequate training to personnel and to effectively manage a geographically dispersed team. Any failure or delay in the development of our internal sales, marketing, market access, and distribution capabilities would adversely impact the commercialization of our products. We may in the future seek to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing, market access and distribution functions, but may fail to do so on acceptable financial terms, or at all. In addition, our product revenues and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to market, sell and distribute any products that we develop ourselves. For product candidates where we decide to perform sales, marketing, market access and distribution functions ourselves or through third parties, we could face a number of additional risks, including:

    §
    we, or our third-party sales collaborators, may not be able to attract and build an effective marketing and sales force;
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    the cost of securing or establishing a marketing or sales force may exceed the revenues generated by any products; and
    §
    our direct sales and marketing efforts may not be successful.

        We may have limited or no control over the sales, marketing and distribution activities of third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we are not successful in commercializing any of our current or future product candidates, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue, we would incur significant additional losses and we may be unable to continue operations.

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If serious adverse events or other undesirable side effects are identified during the development of ANG-3777 for one indication, we may need to abandon our development or, if approved, commercial sales of ANG-3777 for other indications.

        Product candidates in clinical stages of development have a high risk of failure. We cannot predict if ANG-3777 will prove effective or safe in humans or will receive regulatory approval. Safety concerns could be identified as we expand our clinical trials for ANG-3777 for DGF and CSA-AKI and to other indications, including ALI and CNS indications. If new side effects are found during the development of ANG-3777 for any indication, we may need to abandon our development or, if approved, commercial sales of ANG-3777 for DGF and other potential indications. We cannot assure you that additional or severe adverse side effects with respect to ANG-3777 will not develop in future clinical trials, which could delay or preclude regulatory approval of ANG-3777 or limit its commercial use.

        Under the Vifor License, we retain responsibility at our own cost for a pre-specified clinical development plan, which has been designed to obtain regulatory approvals of ANG-3777 of the DGF and CSA-AKI indications in the United States, the European Union, Switzerland and the United Kingdom. Such plan includes the completion of our ongoing and currently planned clinical development activities and clinical trials in such indications. However, we have granted Vifor Pharma the right to develop ANG-3777 for other Renal Indications beyond DGF and CSA-AKI, and will have very limited control with respect to any such development. Similarly, pursuant to the Sinovant License, we have very limited control over Sinovant, which has the right to develop and commercialize ANG-3777 in Greater China. If safety concerns are found during the development by Vifor Pharma or Sinovant of ANG-3777 for any indication, or if the results of future clinical trials of ANG-3777 conducted by Vifor Pharma or Sinovant generate negative results or results that conflict with the results of our clinical trials, the FDA or other regulatory authorities may delay, limit, or deny approval of ANG-3777, require us to conduct additional clinical trials as a condition to marketing approval, or withdraw their approval of ANG-3777 or otherwise restrict our ability to market and sell ANG-3777, if approved, and we may be forced to abandon our development of ANG-3777 for DGF, CSA-AKI or other potential indications in other territories around the world, including the United States and the European Union. In addition, treating physicians may be less willing to prescribe ANG-3777 due to concerns over such trial results or adverse events, which would limit our ability and the ability of our collaborators to commercialize ANG-3777.

Risks Relating to Our Business and Strategy

We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.

        The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We have competitors in the United States, Europe, and other jurisdictions, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical and generic drug companies, and universities and other research institutions. Many of our competitors have greater financial and other resources, such as larger research and development staff and more experienced marketing and manufacturing organizations. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients, and manufacturing pharmaceutical products. These companies also have significantly greater research, sales, and marketing capabilities and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds potentially making the product candidates we develop obsolete. As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing, and

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commercializing drugs for kidney, heart, liver, lung and other diseases we are targeting before we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. In addition, many universities and private and public research institutes may become active in our target disease areas.

        There is currently limited competition for ANG-3777 in the renal space. Quark Pharmaceuticals, Inc. has an anti-p53 siRNA molecule, QPI-1002. In December 2018, Quark's majority shareholder, SBI Holdings, announced QPI-1002 failed to meet its prespecified primary efficacy endpoint of a reduction in dialysis days in a Phase 3 registration trial for DGF prevention. Quark is also currently investigating QPI-1002 for CSA-AKI in a Phase 3 trial based on results observed in a pre-defined subgroup of patients in a Phase 2 trial. In addition, we are aware of Astellas Pharma Inc. and Alloksys Life Sciences B.V., which are advancing ASP1128 and bRESCAP respectively for AKI following coronary artery bypass graft and/or valve surgery. ASP1128 is currently in a Phase 2 clinical trial whilst bRESCAP is in a Phase 2/3 clinical trial.

        In ALI, for COVID-19, there are a number of preventative vaccines in development with two having received an Emergency Use Authorization approval and others potentially nearing regulatory approval. Vaccine coverage and efficacy will be less than 100%, in our view, necessitating therapeutic intervention for these patients. There are hundreds of clinical trials examining various methods of treating COVID-19 related acute lung injury. To date, only a small number of these trials have resulted in data positive enough for regulators to approve therapeutics on either an emergency use or permanent basis. Therapeutics receiving an Emergency Use Authorization for the treatment of COVID-19 patients include co-administration of casirivimab and imdevimab from Regeneron Pharmaceuticals, Inc., baricitinib (in combination with remdesivir) and bamlanivimab from Eli Lilly, and remdesivir from Gilead Sciences, Inc. In ARDS, there are no approved therapies but a number of companies have Phase 3 programs under way in the United States including brexanolone from Sage Therapeutics, ravulizumab from Alexion, siltuximab from EusaPharma (UK) Liminted, alteplase from Boehringer Ingleheim, MultiStem from Athersys, ruxolitinib from Incyte, and aviptadil from NeuroRX.

        In an effort to expand ANG-3777's therapeutic area, we are currently exploring indications associated with the central nervous system. We are aware of Athira Pharma's ATH-1017, a small molecule that enhances HGF/c-Met activity and it is currently in two Phase 2 clinical trials for Alzheimer's Disease. Other programs targeting the HGF/c-Met pathway is Kringle Pharma's KP-100, a recombinant human HGF. KP-100 is currently being investigated in a Phase 2 clinical trials for amyotrophic lateral sclerosis and a Phase 3 clinical trial for acute spinal cord injury in Japan.

        With respect to ANG-3070, in fibrosis-related primary renal diseases clinical programs in this space include bardoxolone methyl from Reata Pharmaceuticals, Lademirsen from Sanofi Genzyme, Sparsentan from Travere Therapeutics, Bleselumab from Astellas Pharma, and Tesevatinib from Kadmon Holdings. In IPF, there are two approved therapies, pirfenidone (Esbriet®, sold by Roche/Genentech) and nintedanib (OFEV®, sold by Boehringer-Ingleheim). There are several programs currently in development for IPF, including an anti-CTGF antibody from Fibrogen, Inc., a GPR84 inhibitor and an ENPP2 inhibitor from Galapagos NV, a Wnt-pathway inhibitor from United Therapeutics Corporation/Samumed, LLC.

        With respect to competition for our ROCK2 inhibitor, netarsudil ophthalmic solution from Aerie Pharmaceuticals, Inc. was first approved by the FDA in 2017 as a topical agent for reducing intraocular pressure in patients with open-angle glaucoma and ocular hypertension. Other competition in clinical development include Kadmon Holdings, Inc.'s belumosudil (KD025), a ROCK2 inhibitor with reduced selectivity against ROCK1, in the clinic for several indications, including

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chronic graft versus host disease, systemic sclerosis and IPF. We are also aware of other ROCK2 inhibitors in preclinical development.

        Regarding competition for our CYP11B2 inhibitor, PhaseBio's CYP11B2 inhibitor PB6440 is preparing for Phase 1 trials in 2021 in treatment resistant hypertension. CinCor Pharma's RAAS pathway inhibitor CIN-107 is in Phase 2 trials for resistant hypertension and primary aldosteronism.

        We believe our ability to successfully compete will depend on, among other things:

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    our ability to recruit and enroll patients for our clinical trials;
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    our ability to design and successfully execute appropriate clinical trials;
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    our ability to gain and to maintain positive relationships with regulatory authorities;
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    the efficacy, safety, and reliability of our product candidates;
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    the speed at which we develop our product candidates;
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    our ability to commercialize and market any of our product candidates receiving regulatory approval;
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    the pricing of our products;
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    adequate levels of reimbursement by government entities and by private health insurance plans;
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    our ability to protect intellectual property rights and regulatory exclusivities related to our products;
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    our ability to manufacture and sell commercial quantities of any approved products to the market; and
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    acceptance of our product candidates by downstream customers, including physicians, other healthcare providers, pharmacists, and patients.

        If our competitors market products more effective, safer, or less expensive than our products or product candidates, or if any, or these products reach the market sooner we may not achieve commercial success. In addition, the biopharmaceutical industry is characterized by rapid technological change. It may be difficult for us to stay abreast of the rapid changes in each area of research and development. If we fail to stay at the forefront of change, we may be unable to compete effectively. Products developed by our competitors may render our product candidates or products obsolete, less competitive or not economical.

We currently depend on single third-party suppliers for the manufacture and supply of drug substance and potential future commercial product supplies for our product candidates, and any performance failure on the part of our supplier could delay the development and potential commercialization of our product candidates.

        We cannot be certain that our drug substance supplier will continue to provide us with sufficient quantities of drug substance, or that our manufacturers will be able to produce sufficient quantities of drug product incorporating such drug substance, to satisfy our anticipated specifications and quality requirements, or that such quantities can be obtained at pricing necessary to sustain acceptable pharmaceutical margins for any of our product candidates, if approved. Our current dependence on a single supplier for our drug substance and the challenges we may face in obtaining adequate supply of drug substance involves several risks, including limited control over pricing, availability, quality and delivery schedules, and such risks may be heightened as a result of the COVID-19 pandemic. While under the Vifor License we will not be responsible for securing the commercial supply of ANG-3777 for DGF or CSA-AKI, if approved, any supply interruption in drug substance or drug product could materially harm our ability to complete our development program for such indications. In addition, any supply interruption in drug substance or drug product could materially

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harm our ability to complete our other development programs or satisfy commercial demand, if approved, until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the development and potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.

        Moreover, our current supplier of drug substance may not have the capacity to manufacture drug substance in the quantities that we believe will be sufficient to meet our future clinical needs or, in the case of any of our wholly-owned product candidates and those for which we retain the right to commercialize, anticipated market demand or to enable us to achieve the economies of scale necessary to reduce the manufacturing cost of applicable drug substance. While we are currently engaged in discussions with a potential second supplier for clinical and commercial drug substance, such negotiations may not lead to a definitive agreement on acceptable terms, or at all, which could have a material adverse effect on our business. With respect to any of our wholly-owned product candidates and those for which we retain the right to commercialize, we expect that we will be able to develop a supply chain with multiple suppliers and significantly decrease our cost of goods within the first several years of commercialization following the receipt of any approvals. However, if our contract manufacturer for drug substance is unable to source, or we are unable to purchase, sufficient quantities of materials necessary for the production of the drug substance for such product candidates, the ability of such product candidates to reach their market potential or to be timely launched, would be delayed or suffer from a shortage in supply, which would impair our ability to generate revenue from sales. If there is a disruption to our contract manufacturers' or suppliers' relevant operations, we could have no other means of producing drug substance until they restore the affected facilities or we or they procure alternative manufacturing facilities. Additionally, any damage to or destruction of our contract manufacturers' or suppliers' facilities or equipment may significantly impair our ability to manufacture drug substance for our product candidates on a timely basis.

We depend on third-party contractors for a substantial portion of our operations and may not be able to control their work as effectively as if we performed these functions ourselves. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for or commercialize our product candidates, if approved.

        We outsource substantial portions of our operations to third-party service providers, including the conduct of preclinical studies and clinical trials, collection and analysis of data, and manufacturing. Our agreements with third-party service providers and CROs are on a study-by-study and project-by-project basis. Typically, we may terminate the agreements with notice and are responsible for the supplier's previously incurred costs. In addition, any CRO we retain will be subject to the FDA's and EMA's regulatory requirements and similar standards outside of the United States and Europe, and we do not have direct control over compliance with these regulations by these providers. Consequently, if these providers do not adhere to applicable governing practices and standards, the development and commercialization of our product candidates could be delayed or stopped, which could severely harm our business and financial condition.

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        Because we have relied on third parties, our internal capacity to perform these functions is limited to contractual oversight. Outsourcing these functions involves the risk third parties may not perform to our standards, may not produce results in a timely manner or may fail to perform at all. This challenge has been made more difficult by the COVID-19 pandemic and resulting shelter-in-place and stay-at-home restrictions, which are driving greater dependency on electronic monitoring of trial sites. Such monitoring can be less reliable and creates additional exposure to data privacy and cybersecurity issues. Additionally, the facilities at which ANG-3777 or any of our other product candidates are manufactured must be the subject of a satisfactory inspection before the FDA or the regulators in other jurisdictions approve the product candidate manufactured at that facility. We are completely dependent our third-party vendors for compliance with cGMP requirements of United States and non-United States regulators for the manufacture of our finished products. If our manufacturers cannot successfully manufacture material conforming to our specifications and cGMPs of any applicable governmental agency, our product candidates will not be approved or, if already approved, may be subject to recalls or demands by regulatory agencies to stop selling the product until manufacturing issues are resolved. In addition, our third-party service providers and CROs that perform nonclinical studies and clinical trials on our behalf must comply with applicable Good Laboratory Practice (GLP) requirements for animal testing and GCP requirements for clinical trials, where any failure to comply with such requirements could result in the FDA or other regulatory authorities refusing to accept data obtained in violation of such requirements and possibly initiating other enforcement action against us and our contractors.

        We and our consultants monitor our third parties for performance and adherence to protocols. We have had to replace clinical sites because of poor enrollment. In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties (including sensitive data such as personal information or clinical data), which could increase the risk this information will be misappropriated or compromised in connection with a security breach, cyber-attack or other security incident. There are a limited number of third-party service providers specializing in or having the expertise required to achieve our business objectives. Identifying, qualifying, and managing performance of third-party service providers can be difficult, time consuming, and cause delays in our development programs. We currently have a relatively small number of employees, which limits the internal resources we have available to identify and monitor third-party service providers. To the extent we are unable to identify, retain, and successfully manage the performance of third-party service providers in the future, our business may be adversely affected, and we may be subject to the imposition of civil or criminal penalties if their conduct of clinical trials violates applicable law.

We will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth. A deterioration in our relationships with our employees could have an adverse impact on our business.

        As of January 1, 2021, we had approximately 53 full-time employees and 22 consultants who provide part-time or full time support to the company. As we increase the number of ongoing product development programs and advance our product candidates through preclinical studies and clinical trials and, if approved, commercialization, we will need to increase our product development, scientific, commercial and administrative headcount to manage these programs. In addition, we currently operate out of three locations across the United States, which increases the overall complexity of the management of our operations. Furthermore, to meet our obligations as a public company, we will need to increase our general and administrative capabilities. Our management,

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personnel, and systems currently in place may not be adequate to support this future growth. Our need to effectively manage our operations, growth, and various projects requires we:

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    successfully attract and recruit new employees or consultants with the expertise and experience we will require;
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    manage our clinical programs effectively, which we anticipate being conducted at numerous clinical sites;
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    develop corporate infrastructure to support the commercialization of our products; and
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    continue to improve our operational, financial, and management controls, reporting systems and procedures.

        Maintaining good relationships with our employees is crucial to our operations. If we are unable to successfully maintain such relationships or manage any growth and increased complexity of operations, our business may be adversely affected. See "Our Business—Human Capital Resources."

We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants.

        We may not be able to attract or retain qualified management, finance, scientific, clinical, and commercial personnel and consultants due to the intense competition for qualified personnel and consultants among biotechnology, pharmaceutical, and other businesses. If we are not able to attract and retain necessary personnel and consultants to accomplish our business objectives, we may experience constraints significantly impeding the achievement of our development objectives, our ability to raise additional capital, and our ability to implement our business strategy.

        We are highly dependent upon our senior management, particularly our Executive Chairman and Chief Scientific Officer, Dr. Itzhak Goldberg, and our Chief Executive Officer, Dr. Jay Venkatesan, as well as on the development, regulatory, commercialization, and business development expertise of the rest of our senior management and other senior personnel across preclinical, clinical, translational medicine, legal, and regulatory affairs. If we lose one or more of our executive officers or key employees or consultants, our ability to implement our business strategy successfully could be seriously harmed. Any of our executive officers, key employees, or consultants may terminate their employment and/or engagement with us at any time. Replacing executive officers, key employees, and consultants may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of, and commercialize products successfully. Competition to hire and retain employees and consultants from this limited pool is intense, and we may be unable to hire, train, retain, or motivate these additional key personnel and consultants. Our failure to retain key personnel or consultants could materially harm our business.

        We have scientific and clinical advisors and consultants who assist us in formulating and implementing our research, development, and clinical strategies. These advisors are not our employees and may have commitments to, or consulting or advisory contracts with, other entities limiting their availability to us and typically they will not enter into non-compete agreements with us. If a conflict of interest arises between their work for us and their work for another entity, we may lose their services. In addition, our advisors may have arrangements with other companies to assist those companies in developing products or technologies competitive with ours.

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We expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

        We are a late-stage biopharmaceutical company that has been operating since 1998. Our operations to date have been limited to researching and developing product candidates, including conducting preclinical studies and clinical trials. We have not yet obtained regulatory approvals for any of our product candidates. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history or approved products on the market. Our financial condition and operating results are expected to significantly fluctuate from quarter-to-quarter or year-to-year due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include, but are not limited to:

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    the timing and cost of, and level of investment in, research, development, including the needs for additional clinical trials, and, if approved, commercialization activities relating to our product candidates, which may change from time to time;
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    delay in or the success of our clinical trials through all phases of clinical development, including our ongoing clinical trials of ANG-3777 and our ongoing clinical trial of ANG-3070;
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    potential adverse events associated with our product candidates potentially delaying or preventing approval or causing an approved drug to be taken off the market;
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    any delays in regulatory review and approval by regulatory authorities of our product candidates in clinical development, including ANG-3777;
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    our ability to obtain additional funding to develop our product candidates;
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    our ability to commercialize and obtain market acceptance and reimbursement for our approved products; and
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    our dependency on third-party manufacturers to manufacture and distribute our products and key ingredients.

We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for a product candidate and may have to limit its commercialization.

        The use of our product candidates in clinical trials and the sale of any products for which we may obtain marketing approval expose us to the risk of product liability claims. Product liability claims may be brought against us or our collaborators by participants enrolled in our clinical trials, patients, healthcare providers, or others using, administering, or selling our products. If we cannot successfully defend ourselves against any such claims, we would incur substantial liabilities. Regardless of merit or eventual outcome, product liability claims may result in:

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    withdrawal of clinical trial participants;
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    termination of clinical trial sites or entire trial programs;
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    costs of related litigation;
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    substantial monetary awards to patients or other claimants;
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    decreased demand for our product candidates and loss of revenues;
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    impairment of our business reputation;
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    diversion of management and scientific resources from our business operations; and
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    the inability to commercialize our product candidates.

        We have obtained limited product liability insurance coverage for our clinical trials in the United States and in selected other jurisdictions where we are conducting clinical trials. Our product liability insurance coverage for clinical trials in the United States is currently limited to an aggregate of $5.0 million and outside of the United States we have coverage for lesser amounts varying by

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country. As such, our insurance coverage may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to product liability. We intend to expand our insurance coverage for products to include the sale of commercial products if we obtain marketing approval for our product candidates in development, but we may be unable to obtain commercially reasonable product liability insurance for any products approved for marketing. Large judgments have been awarded in class action lawsuits based on drugs with unanticipated side effects. A successful product liability claim or series of claims brought against us, particularly if judgments exceed our insurance coverage, could decrease our cash resources and adversely affect our business.

Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities.

        We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include property, general liability, employment benefits liability, business automobile, workers' compensation, products liability, malicious invasion of our electronic systems, and clinical trials (U.S. and foreign), and directors' and officers', employment practices and fiduciary liability insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.

Our independent registered public accounting firm's audit report, contained herein, includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern, indicating the possibility we may not be able to operate in the future.

        In their report dated May 13, 2020, except for the effect of the one-for-1.55583 stock split described in Note 16, as to which the date is February 1, 2021, on our consolidated financial statements as of and for the years ended December 31, 2018 and 2019, our independent registered public accounting firm, Moss Adams LLP, stated that our audited consolidated financial statements have been prepared assuming that we will continue as a going concern.

        The accompanying financial statements do not include any adjustments necessary should we be unable to continue as a going concern. Our ability to continue as a going concern is subject to our ability to obtain sufficient financing. However, we cannot assure you that such funding will be available to us, will be obtained on terms favorable to us or will provide us with sufficient funds to meet our objectives. The reaction of investors to the inclusion of a going concern statement by our auditors and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital or enter into partnerships. If we become unable to continue as a going concern, we may have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our consolidated financial statements. If we cannot continue as a viable entity, you may lose some or all of your investment in our company.

Under the terms of the government grant funding we have received, the government may compel us to license to a third party, or suspend, terminate or withhold grant funding.

        A significant amount of our discovery and initial clinical research has been funded principally by United States government grants and contracts. As with all other pharmaceutical research programs supported in part by federal research dollars, conducting research under federal grants required us to grant the U.S. government a nonexclusive, nontransferable, irrevocable, paid-up license for the

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government to practice or have the invention practiced on its behalf throughout the world. Under certain circumstances, the government can require the grantee to license a third party, or the government may take title and grant a license itself, known as march-in rights, which may occur if the invention is not brought to practical use within a reasonable time, if health or safety issues arise, if public use of the invention is in jeopardy, or if other legal requirements are not satisfied. Although, to our knowledge, the U.S. government has never forced a grantee to license a third party or taken title and granted a license itself, these march-in rights are available to the government, and we cannot assure you that the government will not exercise such rights in the future.

        Under the terms and conditions of the government grant funding, we are obligated to comply with various reporting requirements and to take certain administrative actions. Material noncompliance with the terms and conditions of the grant funding may result in one or more enforcement actions by the grant agency. These enforcement actions include denying funds for the cost of funded activities, suspending the grant in whole or in part, pending corrective action, and withholding further grant awards. The grant agency may also terminate the grant for cause, or take other legally available remedies.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

        We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset a portion of future taxable income, if any, until such unused losses expire, if ever. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an "ownership change," generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a rolling three-year period, the corporation's ability to use its pre-change net operating loss carryforwards (NOLs) and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We have not performed an analysis to assess whether an ownership change has occurred. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise become unavailable to offset future income tax liabilities. Under the TCJA, as modified by the Coronavirus Aid, Relief and Economic Security Act (the CARES Act), the amount of post-2017 NOLs that are permitted to deduct from U.S. federal income taxes for tax years beginning after December 31, 2020 is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL deduction itself. The TCJA, as modified by the CARES Act, generally eliminates the ability to carry back any NOLs to prior taxable years for tax years beginning after December 31, 2020, while allowing post-2017 unused NOLs to be carried forward indefinitely without expiration. Additionally, state NOLs generated in one state cannot be used to offset income generated in another state. For these reasons, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes.

Risks Relating to Our Intellectual Property

It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection. If our patent position and potential regulatory exclusivity do not adequately protect our product candidates, others could compete against us more directly, which would harm our business, possibly materially.

        Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection of our current and future product candidates, and their methods of manufacture and use. Our ability to stop third parties from making, using, selling, offering to sell or importing our product candidates is dependent upon the extent to which we have rights under valid

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and enforceable patents and/or trade secrets that cover these activities. The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions. No consistent policy regarding the breadth of claims allowed in pharmaceutical patents has emerged to date in the United States or in many jurisdictions outside of the United States. Changes in either the patent laws or interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be issued in relevant jurisdictions from our present or future patent filings, or those we license from third parties, and further cannot predict the extent to which we will be able to enforce such issued claims in jurisdictions important to our business. If any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our technology could be adversely affected.

        It is possible that others have filed, and in the future may file, patent applications covering products and technologies that are similar, identical or competitive to ours, or that are otherwise important to our business. We cannot be certain that any patent filings owned by a third party will not have priority over patent applications filed or in-licensed by us, or that we or our licensors will not be involved in interference, opposition or invalidity proceedings before United States or foreign patent offices. The costs of defending our patents or enforcing our proprietary rights in post-issuance administrative proceedings and litigation can be substantial and the outcome can be uncertain. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, and/or could allow third parties to commercialize our technology or products and compete directly with us, without payment to us. Furthermore, third party filings may issue as patents that are infringed by our manufacture or commercialization of our products. Licenses may not be available to such third party patents, and challenges to their validity or infringement may be expensive and may not succeed. If the breadth or strength of protection provided by our patents and patent applications is threatened, or if we are perceived or found to infringe intellectual property rights of others, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates, and could impede or preclude our ability to commercialize our products.

        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. We may 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. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, any of which could limit our ability to stop others from using or commercializing similar or identical technology and products, and/or limit the duration of the patent protection of our technology and products.

        The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

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    we might not have been the first to make the inventions covered by our pending patent applications or patents;
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    others may be able to develop a product similar to, or better than, ours in a way that is not covered by the claims of our patents;
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    we might not have been the first to file patent applications for these inventions;
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    others may independently develop similar or alternative technologies or duplicate any of our technologies;

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    §
    any patents that we have or obtain may not provide us with any competitive advantages;
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    patents have limited term and geographic scope; we may not be able to secure patents that last long enough and are in relevant jurisdictions to effectively limit competition;
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    we may not develop additional proprietary technologies that are patentable; or
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    the patents of others may have an adverse effect on our business.

        Without patent protection for our compounds, pharmaceutical compositions, or formulations of our product candidates, our ability to stop others from using or selling our product, or other competitive products including our compounds, may be limited.

        If the patent applications we hold or have in-licensed with respect to present or future product candidates fail to issue, if their breadth and/or strength of protection is limited or challenged, or if they fail to provide meaningful exclusivity for present or future product candidates, it could dissuade companies from collaborating with us to develop future candidates and threaten our ability to commercialize future commercial products. Any such outcome could have a materially adverse effect on our business.

        We may also rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or feasible. However, trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators, and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

If we do not obtain protection under the Hatch-Waxman Act and similar legislation outside of the United States by extending the patent terms and obtaining data exclusivity for our product candidates, our business may be materially harmed.

        Depending upon the timing, duration and specifics of FDA marketing approval of ANG-3777 and our other product candidates, if any, one or more of our United States patents 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 Act. The Hatch-Waxman Act permits 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 of patent term because, for example, of failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, 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 the term of any such extension is less than what we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially. If we are unable to obtain any patent term extensions, the issued pharmaceutical composition and method of treatment US patent for ANG-3777 is expected to expire during 2024, assuming it withstands any challenge. We expect that the other patents and patent applications, if issued, in our ANG-3777 portfolio, if the appropriate maintenance, renewal, annuity or other governmental fees are paid, would expire from 2023 to 2040.

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Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.

        We expect to rely on trademarks as one means to distinguish any of our product candidates that are approved for marketing from the products of our competitors. We have not yet selected trademarks for our product candidates, including ANG-3777 for DGF, and have not yet begun the process of applying to register trademarks for our current or any future product candidates. Once we select trademarks and apply to register them, our trademark applications may not be approved. Third parties may oppose our trademark applications or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks, and we may not have adequate resources to enforce our trademarks.

        In addition, any proprietary name we propose to use with our current or any other product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

Risks Relating to Our Common Stock and This Offering

Our stock price may be volatile and you may not be able to resell shares of our common stock at or above the price you paid.

        The trading price of our common stock following this offering could be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include those discussed in this "Risk Factors" section of this prospectus and others such as:

    §
    results from, and any delays in, our clinical trials for ANG-3777;
    §
    results of clinical trials of our competitors' products;
    §
    competition from existing products or new products that may emerge;
    §
    announcements by academic, guideline publishers or other third parties challenging the fundamental premises underlying our approach to treating AKI;
    §
    announcements of regulatory approval or disapproval of ANG-3777;
    §
    failure or discontinuation of any of our research and development programs;
    §
    manufacturing setbacks or delays of or issues with the supply of the materials for ANG-3777;
    §
    announcements relating to future licensing, collaboration or development agreements;
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    announcements relating to our existing collaborators;
    §
    delays in the commercialization of ANG-3777;
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    acquisitions and sales of new products, technologies or businesses;
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    quarterly variations in our results of operations or those of our future competitors;
    §
    changes in earnings estimates or recommendations by securities analysts;
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    announcements by us or our competitors of new products, significant contracts, commercial relationships, acquisitions or capital commitments;
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    developments with respect to intellectual property rights;
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    our commencement of, or involvement in, litigation;

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    §
    changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;
    §
    any major changes in our board of directors or management;
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    new legislation in the United States or relevant foreign jurisdictions relating to the sale or pricing of pharmaceuticals;
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    FDA or other U.S. or foreign regulatory actions affecting us or our industry;
    §
    product liability claims or other litigation or public concern about the safety of ANG-3777;
    §
    market conditions in the pharmaceutical and biotechnology sectors; and
    §
    general economic conditions in the United States and abroad.

        In addition, the stock markets in general, and the markets for pharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If we were to become involved in securities litigation, we could incur substantial costs and resources and the attention of our management could be diverted from the operation of our business.

There has been no public market for our common stock and an active, liquid and orderly market for our common stock may not develop, and you may not be able to resell your common stock at or above the public offering price.

        Prior to this offering, there has been no public market for shares of our common stock, and an active public market for our shares may not develop or be sustained after this offering. We and the representatives of the underwriters will determine the initial public offering price of our common stock through negotiation. 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. In addition, an active trading market may not develop following the consummation of this offering or, if it is developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other businesses, applications, or technologies using our shares as consideration.

        The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

    §
    others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of our patents;
    §
    we might not have been the first to make the inventions covered by our pending patent applications or patents;
    §
    others may be able to develop a product similar to, or better than, ours in a way that is not covered by the claims of our patents;
    §
    we might not have been the first to file patent applications for these inventions;
    §
    others may independently develop similar or alternative technologies or duplicate any of our technologies;
    §
    any patents that we have or obtain may not provide us with any competitive advantages;
    §
    patents have limited term and geographic scope; we may not be able to secure patents that last long enough and are in relevant jurisdictions to effectively limit competition;
    §
    we may not develop additional proprietary technologies that are patentable; or

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

        Without patent protection for our compounds, pharmaceutical compositions, or formulations of our product candidates, our ability to assert our patents to stop others from using or selling our product, or other competitive products including our compounds, may be limited.

        If the patent applications we hold or have in-licensed with respect to present or future product candidates fail to issue, if their breadth and/or strength of protection is limited or challenged, or if they fail to provide meaningful exclusivity for present or future product candidates, it could dissuade companies from collaborating with us to develop future candidates and threaten our ability to commercialize future commercial products. Any such outcome could have a materially adverse effect on our business.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

        If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline. Based upon the number of shares outstanding as of September 30, 2020, upon the closing of this offering, we will have outstanding a total of 28,780,099 shares of common stock, assuming no exercise of the underwriters' option to purchase additional shares of common stock and no exercise of outstanding options or warrants. Of these shares, all of the shares of our common stock sold in this offering (other than shares sold to entities affiliated with certain of our directors), plus any shares sold upon exercise of the underwriters' option to purchase additional shares, will be freely tradable, without restriction, in the public market immediately following this offering.

        The lock-up agreements pertaining to this offering will expire 180 days from the date of this prospectus. After the lock-up agreements expire, as of September 30, 2020, up to approximately 26.2 million additional shares of common stock will be eligible for sale in the public market, approximately 4.5 million of which shares are held by directors, executive officers and other affiliates and will be subject to Rule 144 under the Securities Act of 1933, as amended, or the Securities Act, and applicable vesting schedules. Cowen & Company, LLC and Stifel, Nicolaus & Company, Incorporated may, however, in their sole discretion, permit our officers, directors and other stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

        In addition, as of September 30, 2020, approximately 5.6 million shares of common stock that are either subject to outstanding options or reserved for future issuance under our existing equity incentive plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

        After this offering, the holders of approximately 20.7 million shares of our common stock, or approximately 93.6% of our total outstanding common stock as of September 30, 2020, will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to vesting schedules and to the lock-up agreements described above. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.

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Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.

        The initial public offering price of our common stock is substantially higher than the pro forma net tangible book value per share of our common stock before giving effect to this offering. Accordingly, if you purchase our common stock in this offering, you will incur immediate and substantial dilution of approximately $11.41 per share, based on the initial public offering price of $15.00 per share, and our pro forma net tangible book value as of September 30, 2020. In addition, following this offering, purchasers in this offering and the concurrent private placement will have contributed approximately 48.0% of the total gross consideration paid by stockholders to us to purchase shares of our common stock, through September 30, 2020, but will own only approximately 23.2% of the shares of common stock outstanding immediately after this offering. Furthermore, if the underwriters exercise their option to purchase additional shares, or outstanding options and warrants are exercised, you could experience further dilution. For a further description of the dilution that you will experience immediately after this offering and the concurrent private placement, see "Dilution."

If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.

        We may from time to time issue additional shares of common stock at a discount from the current trading price of our common stock, including pursuant to our 2021 Incentive Award Plan and 2021 Employee Stock Purchase Plan. As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. If we issue common stock or securities convertible into common stock, our common stockholders would experience additional dilution and, as a result, our stock price may decline.

We identified material weaknesses in our internal control over financial reporting for the years ended December 31, 2018 and 2019 and for the nine months ended September 30, 2020, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

        In connection with the audit of our consolidated financial statements for the years ended December 31, 2018 and 2019 and our preparation of our consolidated unaudited financial statements for the nine months ended September 30, 2020, we identified control deficiencies in the design and operation of our internal control over financial reporting that constituted material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

        The material weaknesses identified in our internal control over financial reporting related to (i) insufficient resources with knowledge and expertise in U.S. GAAP to properly evaluate certain transactions, including debt instruments, equity instruments and investments with related parties and (ii) insufficient financial reporting and close controls to ensure that there was the appropriate capture of expense accruals and appropriate calculations of stock compensation expense. We have taken certain actions to remediate the material weaknesses, including engaging SEC compliance and technical accounting consultants to assist in evaluating and recording transactions in accordance with U.S. GAAP and implementing financial reporting and close processes including for the

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appropriate capture of expense accruals and appropriate capture of the inputs used in the calculations of stock compensation expense. We intend to hire additional finance and accounting personnel to augment accounting staff and to provide more resources for complex accounting matters and financial reporting.

        However, we are still in the process of implementing these measures and we cannot assure you that these measures will be sufficient to remediate the material weaknesses that have been identified or prevent future material weaknesses or significant deficiencies from occurring.

        Neither we nor our independent registered public accounting firm has performed an evaluation of our internal control over financial reporting during any period in accordance with the provisions of the Sarbanes-Oxley Act of 2002, as amended, (Sarbanes-Oxley). In light of the control deficiencies and the resulting material weaknesses that were previously identified as a result of the limited procedures performed, we believe that it is possible that, had we and our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley, additional material weaknesses and significant control deficiencies may have been identified. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required by reporting requirements under Section 404 of the Sarbanes-Oxley after the completion of this offering.

        If we are unable to successfully remediate the existing material weakness in our internal control over financial reporting, or discover additional material weaknesses in the future, the accuracy and timing of our financial reporting, and our stock price, may be adversely affected and we may be unable to maintain compliance with the applicable stock exchange listing requirements.

We will incur significant costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives. We may fail to comply with the rules that apply to public companies, including Section 404, which could result in sanctions or other penalties that would harm our business.

        We will incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the Exchange Act and regulations regarding corporate governance practices. The listing requirements of The Nasdaq Global Market and the rules of the Securities and Exchange Commission (SEC) require that we satisfy certain corporate governance requirements relating to director independence, filing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, the reporting requirements, rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors' and officers' insurance, on acceptable terms and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

        After this offering, we will be subject to Section 404 and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Beginning with the second annual

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report that we will be required to file with the SEC, Section 404 requires an annual management assessment of the effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the JOBS Act or smaller reporting company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company or smaller reporting company or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal controls over financial reporting. We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year following the fifth anniversary of the completion of this offering, (ii) the last day of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (Exchange Act) which means the market value of equity securities that is held by non-affiliates exceeds $700.0 million as of the last business day of the issuer's most recently completed second fiscal quarter and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

        To date, we have never conducted a review of our internal control for the purpose of providing the reports required by these rules. During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we will be required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. In order to report our results of operations and financial statements on an accurate and timely basis, we will depend on CROs to provide timely and accurate notice of their costs to us. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from The Nasdaq Global Select Market or other adverse consequences that would materially harm to our business.

        We may also be subject to more stringent state law requirements. For example, in September 2018, California Governor Jerry Brown signed into law Senator Bill 826 (SB 826), which generally requires public companies with principal executive offices in California to have a minimum number of females on the company's board of directors. As of December 31, 2019, each public company with principal executive offices in California was required to have at least one female on its board of directors. By December 31, 2021, each public company will be required to have at least two females on its board of directors if the company has at least five directors, and at least three females on its board of directors if the company has at least six directors. The new law does not provide a transition period for newly listed companies. Similarly, in January 2020, New York enacted a new law that mandates a study on the number of female directors on the board of corporations doing business in New York.

        Additionally, on September 30, 2020, California Governor Gavin Newsom signed into law Assembly Bill 979 (AB 979), which generally requires public companies with principal executive offices in California to include specified numbers of directors from "underrepresented communities." A director from an "underrepresented community" means a director who self-identifies as Black,

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African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, gay, lesbian, bisexual or transgender. By December 31, 2021, each public company with principal executive offices in California is required to have at least one director from an underrepresented community. By December 31, 2022, a public company with more than four but fewer than nine directors will be required to have a minimum of two directors from underrepresented communities, and a public company with nine or more directors will need to have a minimum of three directors from underrepresented communities. Similar to SB 826, AB 979 does not provide a transition period for newly listed companies.

        If we fail to comply with either SB 826 or AB 979, we could be fined by the California Secretary of State, with a $100,000 fine for the first violation and a $300,000 fine for each subsequent violation of either law, and our reputation may be adversely affected.

We are an "emerging growth company" and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

        We are an "emerging growth company," as defined in Jumpstart Our Business Act of 2012, (JOBS Act), and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining stockholder approval of any golden parachute payments not previously approved. In addition, as an "emerging growth company," the JOBS Act allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We have elected to use this extended transition period under the JOBS Act. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials to those of other public companies more difficult. Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply for a period of time with the auditor attestation requirements of Section 404, and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements.

        We cannot predict if investors will find our common stock less attractive because we will 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. We may take advantage of these reporting exemptions until we are no longer an emerging growth company or smaller reporting company.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

        As of January 1, 2021, our executive officers, directors, holders of 5.0% or more of our capital stock and their respective affiliates held approximately 45.5% of our outstanding voting stock and, upon the closing of this offering, that same group will hold approximately 35.5% of our outstanding voting stock (inclusive of shares purchased in this offering and assuming no exercise of the underwriters' option to purchase additional shares and no exercise of outstanding options). Therefore, even after this offering these stockholders will have the ability to influence us through this

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ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.

        Dr. Goldberg, our Executive Chairman and Chief Scientific Officer, beneficially owns a substantial percentage of our outstanding equity securities. As of January 1, 2021, Dr. Goldberg beneficially owned 2,308,666 shares of our common stock, or approximately 10.4% of our total outstanding common stock. In addition, as of January 1, 2021, Dr. Goldberg's family members beneficially owned 3,654,637 shares of our common stock, or approximately 16.5% of our total outstanding common stock. Accordingly, Dr. Goldberg will have significant influence over all business decisions, including with respect to such matters as amendments to our charter, other fundamental corporate transactions, such as mergers, asset sales, and the sale of the Company, and otherwise will be able to influence our business and affairs.

We have completed and may in the future complete related party transactions that were not and may not be conducted on an arm's length basis.

        We have in the past and continue to be party to certain transactions with certain entities affiliated with Dr. Goldberg, our Executive Chairman and Chief Scientific Officer, as well as certain of his immediate family members. For instance, in November 2013, we granted Ohr Cosmetics, LLC (Ohr), an affiliated company, an exclusive worldwide license, with the right to sublicense, under our patent rights covering one of our CYP26 inhibitors, ANG-3522, for the use in treating conditions of the skin or hair. We own, and the family of Dr. Goldberg, owns approximately 2.4% and 81.3%, respectively, of the membership interests in Ohr. Dr. Goldberg's son is the manager of Ohr.

        In addition, we rent office and laboratory space in Uniondale, New York from NovaPark LLC (NovaPark), an affiliated company, under a lease that expires on June 20, 2026. The space that we rent is part of an approximately 110,000-square-foot general laboratory and development facility (NovaPark Facility) for biological and chemistry research owned by NovaPark. For the year ended December 31, 2018, we recorded rent expense for fixed lease payments of $1.6 million, including $0.5 million to adjust rent to the market rate for 2011 through 2017, and variable expenses related to the lease of $0.6 million. We recorded rent expense for fixed lease payments of $1.6 million and $1.0 million and variable expenses related to the lease of $0.6 million and $0.4 million for the year ended December 31, 2018 and 2019. We recorded rent expense for fixed lease payments of $0.8 million and variable expenses related to the lease of $0.4 million for the nine months ended September 30, 2020. Variable expenses include NovaPark management fees of $0.1 million for each of the years ended December 31, 2018 and 2019 and $0.1 million for the nine months ended September 30, 2020. We account for our investment in NovaPark under the equity method of accounting. We own, and Dr. Goldberg, and Rina Kurz, Dr. Goldberg's spouse, own 10%, 45% and 45%, respectively, of the membership interests in NovaPark.

        Furthermore, we are party to a consulting agreement with Dr. Goldberg's spouse and Dr. Goldberg's son is a full-time employee.

        We have adopted a written related-person transactions policy that sets forth our policies and procedures regarding the identification, review, consideration and oversight of related-person transactions. However, as of January 1, 2021, Dr. Goldberg beneficially owned 2,308,666 shares of our common stock, or approximately 10.4% of our total outstanding common stock. Accordingly, he will have significant influence over all business decisions, including with respect to such matters

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as amendments to our charter, other fundamental corporate transactions, such as mergers, asset sales, and the sale of the Company, and otherwise will be able to influence our business and affairs.

We have broad discretion to determine how to use the funds raised in this offering and the concurrent private placement, and may use them in ways that may not enhance our operating results or the price of our common stock.

        Our management will have broad discretion over the use of proceeds from this offering and the concurrent private placement, and we could spend the proceeds from this offering and the concurrent private placement in ways our stockholders may not agree with or that do not yield a favorable return, if at all. We intend to use the net proceeds from this offering and the concurrent private placement together with our existing cash and cash equivalents to fund: (i) our ongoing Phase 3 registration trial of ANG-3777 for DGF and prepare for and complete our New Drug Application (NDA) submission for ANG-3777 for DGF; (ii) our ongoing Phase 2 clinical trial and Phase 3 clinical trial of ANG-3777 for CSA-AKI; (iii) our ongoing Phase 2 clinical trial of ANG-3777 for ALI; (iv) our ongoing Phase 1 clinical trial of ANG-3070 and the initiation of a Phase 2 clinical trial; and (v) our earlier stage research and development efforts, including for our ROCK2 inhibitor and CYP11B2 inhibitor programs. Any remaining amounts will be used for working capital and general corporate purposes. If we do not successfully invest or apply the proceeds of this offering and the concurrent private placement, we may fail to achieve expected financial results, which could cause our stock price to decline.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.

        Our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect immediately prior to the consummation of this offering will contain provisions that could delay or prevent changes in control or changes in our management without the consent of our board of directors. These provisions will include the following:

    §
    a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;
    §
    no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
    §
    the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
    §
    the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
    §
    the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval;
    §
    the required approval of at least 662/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors;
    §
    a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
    §
    the requirement that a special meeting of stockholders may be called only by our chief executive officer or president or chairperson of the board of directors or by the board of

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      directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

    §
    advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of directors or otherwise attempting to obtain control of us.

        We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law. Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction. For a description of our capital stock, see "Description of Capital Stock."

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

        Our amended and restated certificate of incorporation and amended and restated bylaws will provide that we will indemnify our directors and officers, in each case, to the fullest extent permitted by Delaware law.

        In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws to be effective immediately prior to the completion of this offering and our indemnification agreements that we have entered into with our directors and officers will provide that:

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    We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person's conduct was unlawful.
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    We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.
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    We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
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    We will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification.
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    The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.
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    We may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

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Our amended and restated certificate of incorporation and amended and restated bylaws will provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

        Our amended and restated certificate of incorporation and amended and restated bylaws will provide that the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. Our amended and restated certificate of incorporation and amended and restated bylaws will also provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act. Nothing in our amended and restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in state or federal court, subject to applicable law.

        We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive-forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the choice of forum provision that will be contained in our amended and restated certificate of incorporation and amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

        We do not currently intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future. Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.

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General Risk Factors

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.

        The global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including most recently as a result of the COVID-19 pandemic. Such volatility and disruptions have caused and may continue to cause severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.

Any claims relating to improper handling, storage, or disposal of hazardous materials used in our business could be costly and delay our research and development efforts.

        Our research and development activities involve the controlled use of potentially harmful hazardous materials, including volatile solvents and chemicals causing cancer. Our operations also produce hazardous waste products. We face the risk of contamination or injury from the use, storage, handling, or disposal of these materials. We are subject to federal, state, and local laws and regulations governing the use, storage, handling, and disposal of these materials and specified waste products. The cost of compliance with these laws and regulations could be significant, and current or future environmental regulations may impair our research, development, or production efforts. If one of our employees were accidentally injured from the use, storage, handling, or disposal of these materials, the medical costs related to their treatment would be covered by our workers' compensation insurance policy. However, we do not carry specific hazardous waste insurance coverage and our general liability insurance policy specifically excludes coverage for damages and fines arising from hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be subject to criminal sanctions or fines or be held liable for damages, our operating licenses could be revoked, or we could be required to suspend or modify our operations and our research and development efforts.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

        Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board (FASB) or the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, may retroactively affect previously reported results, could cause unexpected financial reporting fluctuations and may require us to make costly changes to our operational processes and accounting systems.

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Our business could be affected by litigation, government investigations and enforcement actions.

        We currently operate in a number of jurisdictions in a highly regulated industry and we could be subject to litigation, government investigation and enforcement actions on a variety of matters in the United States. or foreign jurisdictions, including, without limitation, intellectual property, regulatory, product liability, environmental, whistleblower, false claims, privacy, anti-kickback, anti-bribery, securities, commercial, employment, and other claims and legal proceedings which may arise from conducting our business. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, civil and criminal penalties, equitable remedies, including disgorgement, injunctive relief, and/or other sanctions against us, and remediation of any such findings could have an adverse effect on our business operations.

        Legal proceedings, government investigations and enforcement actions can be expensive and time consuming. An adverse outcome resulting from any such proceeding, investigations or enforcement actions could result in significant damages awards, fines, penalties, exclusion from the federal healthcare programs, healthcare debarment, injunctive relief, product recalls, reputational damage and modifications of our business practices, which could have a material adverse effect on our business and results of operations.

Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.

        We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures, reckless and/or negligent conduct or unauthorized activities that violates (i) the laws and regulations of the FDA and other regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities, (ii) manufacturing standards, (iii) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad and (iv) laws that require the true, complete and accurate reporting of financial information or data. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct also could involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, creating fraudulent data in our preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government-funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our

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operations, any of which could have a negative impact on our business, financial condition, results of operations and prospects.

If we engage in an acquisition, reorganization or business combination, we will incur a variety of risks potentially adversely affecting our business operations or our stockholders.

        From time to time we have considered, and we will continue to consider in the future, strategic business initiatives intended to further the expansion and development of our business. These initiatives may include acquiring businesses, technologies, or products or entering into a business combination with another company. If we pursue such a strategy, we could, among other things:

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    issue equity securities dilutive to our current stockholders' percentage ownership;
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    incur substantial debt straining our operations;
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    spend substantial operational, financial, and management resources to integrate new businesses, technologies, and products;
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    assume substantial actual or contingent liabilities;
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    reprioritize our development programs and even cease development and commercialization of our product candidates; or
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    merge with, or otherwise enter into a business combination with, another company in which our stockholders would receive cash and/or shares of the other company on terms certain of our stockholders may not deem desirable.

        Although we intend to evaluate and consider acquisitions, reorganizations, and business combinations in the future, we have no agreements or understandings with respect to any acquisition, reorganization, or business combination at this time.

Security breaches, cyber-attacks, or other disruptions or incidents could expose us to liability and affect our business and reputation.

        We are increasingly dependent on our information technology systems and infrastructure for our business. We, our collaborators and our service providers collect, store, and transmit sensitive information including intellectual property, proprietary business information, clinical trial data and personal information in connection with our business operations. The secure maintenance of this information is critical to our operations and business strategy. Some of this information could be an attractive target of criminal attack by third parties with a wide range of motives and expertise, including organized criminal groups, "hacktivists," patient groups, disgruntled current or former employees, nation-state and nation-state supported actors, and others. Cyber-attacks are of ever-increasing levels of sophistication, and despite our security measures, our information technology and infrastructure may be vulnerable to such attacks or may be breached, including due to employee error or malfeasance. We have implemented information security measures to protect our systems, proprietary information and sensitive data, including the personal information of clinical trial participants against the risk of inappropriate and unauthorized external use and disclosure and other types of compromise. However, despite these measures, and due to the ever changing information cyber-threat landscape, we cannot guarantee that these measures will be adequate to detect, prevent or mitigate security breaches and other incidents and we may be subject to data breaches through cyber-attacks, malicious code (such as viruses and worms), phishing attacks, social engineering schemes, and insider theft or misuse. Any such breach could compromise our networks and the information stored there could be accessed, modified, destroyed, publicly disclosed, lost or stolen. If our systems become compromised, we may not promptly discover the intrusion. Like other companies in our industry, we have experienced attacks to our data and systems, including malware and computer viruses. Any security breach of other incident, whether real or perceived, would cause us to lose product sales, and suffer reputational damage and loss of

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customer confidence. Such incidents could result in costs to respond to, investigate and remedy such incidents, notification obligations to affected individuals, government agencies, credit reporting agencies and other third parties, legal claims or proceedings, and liability under our contracts with other parties and federal and state laws that protect the privacy and security of personal information. If a security breach, cyber-attack, or other disruption is the result of state-sponsored activities, it may be considered an "act-of-war", potentially making us ineligible for reimbursement under our insurance policies covering such attacks. Any one of these events could cause our business to be materially harmed and our results of operations would be adversely impacted.

The occurrence of natural disasters, including a tornado, an earthquake, or fire, or any material failure, weakness, interruption, cyber-attack, security incident, or any other catastrophic event, could disrupt our operations or the operations of third parties who provide vital support functions to us, which could have a material adverse effect on our business, results of operations, and financial condition.

        We and the third-party service providers on which we depend for various support functions, such as data storage, are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism, physical theft, power loss, war, state-sponsored attacks, telecommunications failure and similar unforeseen events beyond our control, as well as from internal and external security breaches, malware and viruses, denial or degradation of service attacks, ransomware, cyber events and other disruptive problems. Such events could severely disrupt our operations and have a material adverse effect on our business, results of operations, financial condition, and prospects.

        If a natural disaster, power outage, security incident or other event occurred that prevented us from using all or a significant portion of our offices or other facilities, damaged critical infrastructure such as our data storage facilities, financial systems, or manufacturing resource planning and quality systems, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business. In addition, the failure of our systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms, or a breach in security could result in delays and reduce efficiency in our operations. Remediation of such problems could result in significant, unplanned capital investments.

        Furthermore, parties in our supply chain may be operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen, and severe adverse events. If such an event were to affect our supply chain, it could have a material adverse effect on our business.

We are subject to numerous and varying data privacy and security laws, regulations and standards, and our failure to comply could result in penalties and reputational damage.

        We are subject to domestic and foreign laws and regulations concerning data privacy, information security and the protection of personal information including health information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business and is expected to increase our compliance costs and exposure to liability. In the United States, numerous federal and state laws and regulations, including state security breach notification laws, federal and state health information privacy laws (including HIPAA), and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of personal information. Each

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of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues for us. For example, the California Consumer Privacy Act (CCPA) went into effect January 1, 2020. The CCPA, among other things, imposes new data privacy obligations on covered companies and provides expanded privacy rights to California residents, including the right to access, delete and opt out of certain disclosures of their information. The CCPA provides for civil penalties for violations, as well as a private right of action with statutory damages for certain data breaches, which may increase the frequency and likelihood of data breach litigation. Although the law includes limited exceptions, including for "protected health information" maintained by a covered entity or business associate, such exceptions may not apply to all of our operations and processing activities. Further, the California Privacy Rights Act (CPRA), recently passed in California. The CPRA imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It also creates a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. In addition, the CCPA has prompted a number of proposals for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs and adversely affect our business. If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information in a manner that is not authorized or permitted by HIPAA or applicable state laws.

        We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions, including Canada, Australia, Brazil, Georgia and Europe. For example, the European Union General Data Protection Regulation (GDPR) governs certain collection and other processing activities involving personal data about individuals in the European Economic Area and the United Kingdom. Among other things, the GDPR imposes requirements regarding the security of personal data, the rights of data subjects to access and delete personal data, requires having lawful bases on which personal data can be processed and transferred outside of the European Economic Area, requires changes to informed consent practices, and requires more detailed notices for clinical trial participants and investigators. In addition, the GDPR imposes substantial fines for breaches and violations (up to the greater of €20 million or 4% of our annual global revenue). The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR. Relatedly, following the United Kingdom's withdrawal from the European Economic Area and the European Union, and the expiry of the transition period, companies will have to comply with the GDPR and the GDPR as incorporated into United Kingdom national law, the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover. The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, for example around how data can lawfully be transferred between each jurisdiction, which exposes us to further compliance risk.

        Compliance with U.S. and foreign privacy and security laws, rules and regulations could require us to take on more onerous obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our or our partners' or suppliers' ability to operate in certain jurisdictions. Each of these constantly evolving laws can be subject to varying interpretations. If we fail to comply with any such laws, rules or regulations, we may face government investigations and/or enforcement actions, fines, civil or

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criminal penalties, private litigation or adverse publicity that could adversely affect our business, financial condition and results of operations.

U.S. tax legislation and future changes to applicable U.S. tax laws and regulations may have a material adverse effect on our business, financial condition and results of operations.

        Changes in laws and policy relating to taxes may have an adverse effect on our business, financial condition and results of operations. For example, the U.S. government enacted significant tax reform legislation in 2017, which, as modified by the CARES Act, contains, certain provisions which may adversely affect us. Changes include, but are not limited to, a federal corporate income tax rate decrease to 21% for tax years beginning after December 31, 2017, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017, eliminating carrybacks of net operating losses for tax years beginning after December 31, 2020, providing for indefinite carryforwards for losses generated in tax years after December 31, 2017, imposing significant additional limitations on the deductibility of interest, allowing for the accelerated expensing of capital expenditures, and putting into effect the migration from a "worldwide" system of taxation to a largely territorial system. The legislation is unclear in many respects and may continue to be subject to potential amendments, technical corrections, interpretations and implementing regulations by the Treasury and Internal Revenue Service, any of which may mitigate or increase certain adverse effects of the legislation. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation. Generally, future changes in applicable U.S. tax laws and regulations, or their interpretation and application could have an adverse effect on our business, financial condition and results of operations.

Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

        The United States has enacted and implemented wide-ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by the U.S. Congress, the Federal Courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have obtained or licensed, or that we might obtain or license in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have obtained or licensed or that we may obtain or license in the future.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.

        If we choose to go to court to stop another party from using the inventions claimed in any patents we obtain, that individual or company has the right to ask the court to rule that such patents are invalid or should not be enforced against that third party. These lawsuits are expensive, would consume time and resources and would divert the attention of managerial and scientific personnel even if we were successful in stopping the infringement of such patents. In addition, there is a risk that the court will decide that such patents are not valid and that we do not have the right to stop the other party from using the inventions. There is also a risk that, even if the validity of such patents is upheld, the court will refuse to stop the other party on the ground that such other party's activities do not infringe our patents. In addition, the United States Supreme Court has recently

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modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of challenge of any patents we obtain or license.

We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates.

        Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We cannot guarantee that our products or product candidates, or their manufacture or use, will not infringe third-party patents. Furthermore, a third party may claim that we or our manufacturing or commercialization collaborators are using inventions covered by the third party's patent rights. It is also possible that a third party might allege that our products or product candidates, or their manufacture or use, incorporate or rely on trade secrets improperly received from the third party. A third party alleging violations of their intellectual property rights may go to court to stop us from engaging in our normal operations and activities, including making or selling our product candidates. Defense of such claims, regardless of their merit, are costly and could affect our results of operations and divert the attention of managerial and scientific personnel.

        There is a risk that a court would decide that we or our commercialization collaborators are infringing the third party's intellectual property rights and would order us or our collaborators to stop relevant activities. In that event, we or our commercialization collaborators may not have a viable way to avoid the infringement and may need to halt commercialization of the relevant product. In addition, there is a risk that a court will order us or our collaborators to pay the other party damages for having infringed the other party's intellectual property rights. In the future, we may agree to indemnify our commercial collaborators against certain intellectual property infringement claims brought by third parties. The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

        If we are sued for patent or other intellectual property (e.g., trade secret, trademark, etc.) infringement, we could incur significant costs, and delays in our product development or commercialization.

        For example, in order to prevail in a suit alleging patent infringement, we would need to demonstrate that our products or methods either do not infringe the claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving invalidity of a patent 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. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming.

        We cannot be certain that others have not filed patent applications or obtained issued patents for technology that we need to use to commercialize our products, at least because:

    §
    some patent applications in the United States may be maintained in secrecy until the patents are issued;
    §
    patent applications in the United States are typically not published until 18 months after the priority date;

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    §
    even published patent applications and patents may be difficult or impossible to identify if their records in available databases are incomplete or inaccurate, or are in a language that is not readily amendable to searching in English; and
    §
    publications in the scientific literature often lag behind actual discoveries.

        Our most advanced programs are currently in clinical trials. Patent laws of various jurisdictions, including the United States, exempt clinical trial activities, and most or all preclinical work, from patent infringement. These exemptions expire when clinical work is completed and application for a commercialization license (e.g., a New Drug Application) is submitted to a relevant regulatory authority (e.g., the FDA). Accordingly, we cannot be confident that third parties will not allege patent infringement with respect to our existing products or programs merely because they have not yet done so.

        Our competitors may have filed, and may in the future file, patent applications covering technology like ours. Any such patent application may have priority over our patent applications, which could further require us to obtain rights to issued patents covering such technologies. If another party has filed a United States patent application on inventions similar to ours, we may have to participate in an interference or derivation proceeding declared by the USPTO to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our United States patent position with respect to such inventions, and granting such position to the third party, so that we may need to seek a license from such third party to continue our use of the technologies, which license might not be available, or might impose significant costs.

        Other countries have similar laws that permit secrecy of patent applications and may be entitled to priority over our applications in such jurisdictions.

        In addition, we may be subject to claims that we are infringing other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that our employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

        We may not have sufficient resources to bring actions alleging intellectual property infringement to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates. Furthermore, even if we are successful in proceedings relating to alleged intellectual property infringement or misappropriation, we may incur substantial costs and divert management's time and attention in pursuing these proceedings, which could have a material adverse effect on us.

        Some of our competitors may be able to sustain the costs of complex litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

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Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

        Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to the USPTO and non-United States patent agencies. 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. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, 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. In such an event, our competitors might be able to enter the market and this circumstance could have a material adverse effect on our business.

We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished.

        As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we seek to protect our ownership of intellectual property rights by ensuring that our agreements with our employees, collaborators and other third parties with whom we do business include provisions requiring such parties to assign rights in inventions to us, we may be subject to claims that these employees, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. We may also be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims. There is no guarantee of success in defending these claims, and if we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, validity or enforceability of, or right to use, valuable intellectual property. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

        We rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA's disclosure policies may change in the future, if at all. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our

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proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States, and we may encounter significant problems in securing and defending our intellectual property rights outside the United States.

        Many companies have encountered significant problems in protecting and defending intellectual property rights in certain countries. The legal systems of certain countries, particularly certain developing countries, do not always favor the enforcement of patents, trade secrets, and other intellectual property rights, particularly those relating to pharmaceutical products, which could make it difficult for us to stop infringement of our patents, misappropriation of our trade secrets, or marketing of competing products in violation of our proprietary rights. Proceedings to enforce our intellectual property rights in foreign countries could result in substantial costs, divert our efforts and attention from other aspects of our business, and put our patents in these territories at risk of being invalidated or interpreted narrowly, or our patent applications at risk of not being granted, and could provoke third parties to assert claims against us. We may not prevail in all legal or other proceedings that we may initiate and, if we were to prevail, the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

If securities or industry analysts do not publish research or reports about our business, or if an adverse or misleading opinion regarding our stock or business is published by anyone, our stock price and trading volume could decline.

        The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. It may also be influenced by research, reports, and other opinions and statements published by others, including on social media. We do not currently have and may never obtain research coverage by securities and industry analysts. If no or few securities or industry analysts commence coverage of us, the trading price for our stock would be negatively impacted. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us, or others, issues an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our clinical trials and operating results fail to meet the expectations of analysts or others, demand for our common stock could decrease and our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements. 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, objectives of management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would," 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, but are not limited to, statements about:

    §
    the potential benefits, activity, effectiveness and safety of our product candidates;
    §
    the success and timing of our preclinical studies and clinical trials, including the timing and availability of data from such clinical trials;
    §
    the primary endpoints to be utilized in our clinical trials;
    §
    our and our collaborators' ability to obtain and maintain regulatory approval of ANG-3777 and any other product candidates we may develop, and the labeling under any approval we may obtain;
    §
    the scope, progress, expansion, and costs of developing and commercializing our product candidates;
    §
    our dependence on existing and future collaborators for commercializing product candidates in the collaboration;
    §
    our receipt and timing of any milestone payments or royalties under any existing or future research collaboration and license agreements or arrangements;
    §
    the potential effects of the COVID-19 pandemic on our business and operations, results of operations and financial performance;
    §
    the size and growth of the potential markets for our product candidates and the ability to serve those markets;
    §
    our expectations regarding our expenses and revenue, the sufficiency of our cash resources, and needs for additional financing;
    §
    regulatory developments in the United States and other countries;
    §
    the rate and degree of market acceptance of any future products;
    §
    the implementation of our business model and strategic plans for our business and product candidates, including additional indications for which we may pursue;
    §
    our expectations regarding competition;
    §
    our anticipated growth strategies;
    §
    the performance of third-party manufacturers;
    §
    our ability to establish and maintain development partnerships;
    §
    our expectations regarding federal, state, and foreign regulatory requirements;
    §
    our ability to obtain and maintain intellectual property protection for our product candidates;
    §
    the successful development for our sales and marketing capabilities;
    §
    the hiring and retention of key scientific or management personnel;
    §
    the anticipated trends and challenges in our business and the market in which we operate;
    §
    our estimated cash and cash equivalents balance as of December 31, 2020; and
    §
    the use of our net proceeds from this offering and the concurrent private placement.

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        These forward-looking statements are only predictions and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, so 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 based these forward-looking statements largely on our current expectations and projections about future events and trends we believe may affect our business, financial condition, and operating results. We have included important factors in the cautionary statements included in this prospectus, particularly in the "Risk Factors" section, potentially causing actual future results or events to differ materially from the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

        The forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.

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INDUSTRY AND MARKET DATA

        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 size, is based on information from our management's estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. In some cases, we do not expressly refer to the sources from which this information is derived.

        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."

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USE OF PROCEEDS

        We estimate that the net proceeds from the sale of 5,000,000 shares of our common stock in this offering and 1,666,667 shares of our common stock in the concurrent private placement will be approximately $90.7 million at an assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares in full, we estimate that the net proceeds will be approximately $101.1 million at an assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus) after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) the net proceeds to us from this offering and the concurrent private placement, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by approximately $6.2 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus and in the concurrent private placement, remains the same. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 in the number of shares we are offering would increase (decrease) the net proceeds to us from this offering and the concurrent private placement, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by approximately $14.0 million, assuming the assumed initial public offering price of $15.00 (the midpoint of the estimated price range set forth on the cover of this prospectus) stays the same. The estimated net proceeds from this offering is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

        We intend to use the net proceeds from this offering and the concurrent private placement as follows:

    §
    approximately $15.0 million to $25.0 million to fund our ongoing Phase 3 registration trial of ANG-3777 for DGF and to prepare for and complete our New Drug Application (NDA) for DGF;
    §
    approximately $11.5 million to $21.5 million to fund our ongoing Phase 2 clinical trial and to initiate our Phase 3 trial of ANG-3777 for CSA-AKI;
    §
    approximately $6.0 million to $11.0 million to fund our ongoing Phase 2 clinical trial of ANG-3777 for ALI;
    §
    approximately $17.0 million to $27.0 million to fund our ongoing Phase 1 clinical trial of ANG-3070 and the initiation of a Phase 2 clinical trial;
    §
    approximately $12.0 million to $22.0 million to fund our earlier stage research and development efforts, including for our ROCK2 inhibitor and CYP11B2 inhibitor programs; and
    §
    any remaining proceeds for working capital and general corporate purposes.

        We estimate that our current cash and cash equivalents together with the net proceeds from this offering and the concurrent private placement, will be sufficient to fund our planned operations for at least into the fourth quarter of 2022, including through at least the completion of our Phase 3 clinical trial and NDA submission for ANG-3777 for DGF, the completion of our Phase 2 clinical trials of

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ANG-3777 for CSA-AKI and ALI, the completion of our Phase 1 clinical trial of ANG-3070 and the IND filing for our lead development candidate under our ROCK2 inhibitor program.

        This expected use of the net proceeds from this offering and the concurrent private placement represents our intentions based upon our current plans and business conditions. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering and the concurrent private placement or the amounts that we will actually spend on the uses set forth above.

        The amounts and timing of our actual expenditures and the extent of our development activities may vary significantly depending on numerous factors, including our ability to obtain additional financing, the relative success and cost of our research, the continued enrollment, status and eventual results of ongoing clinical trials, preclinical and clinical development programs, the amount and timing of additional revenue or grants, if any, received from our relationships with third parties and whether we are able to enter into future collaborations, partnerships, or licensing relationships. As a result, management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering. In addition, we might decide to postpone or not pursue other clinical trials or preclinical activities if the net proceeds from this offering and the other sources of cash are less than expected. As in the past, we will continue to apply for competitive grants from the United States government. To the extent the planned studies described here can be paid for under government grants, management expects to reallocate funds budgeted for these studies to support other programs, with the primary goal of advancing compounds into the clinic.

        Pending our use of the net proceeds from this offering and the concurrent private placement, we intend to invest the net proceeds in interest-bearing, investment-grade instruments and government securities.

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DIVIDEND POLICY

        We have never declared or paid cash dividends on our common stock. We intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2020:

    §
    on an actual basis;

    §
    on a pro forma basis to give effect to: (i) the issuance of $5.0 million in aggregate principal amount of convertible promissory notes following September 30, 2020 (the New Notes); (ii) the issuance of 233,816 shares of our common stock upon the conversion of outstanding convertible promissory notes plus accrued interest and upon the exercise of outstanding warrants in January 2021; (iii) the conversion of all shares of our outstanding convertible preferred stock plus accrued dividends and convertible promissory notes plus accrued interest (including the New Notes) into an aggregate of 5,864,030 shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus and assuming the conversion occurs on February 5, 2021), (iv) the net exercise of warrants into an aggregate of 806,459 shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus), (v) the forward stock split effected on February 1, 2021; and (vi) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the consummation of this offering; and

    §
    on a pro forma as adjusted basis to give further effect to the sale of 5,000,000 shares of our common stock in this offering and the sale of 1,666,667 shares of our common stock in the concurrent private placement, in each case, at an assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range listed on the cover page of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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        You should read this information together with our consolidated financial statements and related notes included elsewhere in this prospectus and the information set forth in the sections of this prospectus titled "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  As of September 30, 2020  
 
  Actual   Pro Forma   Pro Forma
As Adjusted(1)
 
 
  (unaudited)
(In thousands, except share and per share data)

 

Cash and cash equivalents

  $ 14,111   $ 19,111   $ 109,761  

Convertible promissory notes payable at fair value

  $ 40,528   $   $  

Series C convertible preferred stock at amortized cost

    21,248          

Series C convertible preferred stock at fair value

    2,244          

Warrant liability

    7,055     148     148  

Shareholders' equity:

                   

Common stock, $0.01 par value; 46,674,809 shares authorized; 15,209,127 shares issued and outstanding, actual; $0.01 par value—300,000,000 shares authorized, pro forma and pro forma as adjusted; 22,113,432 shares issued and outstanding, pro forma; 28,780,099 shares issued and outstanding, pro forma as adjusted

    155     223     290  

Preferred stock, $0.01 par value; no shares authorized, issued and outstanding, actual; 10,000,000 shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted

             

Treasury stock, 312,164 shares outstanding

    (1,810 )   (1,810 )   (1,810 )

Additional paid-in capital

    70,215     147,197     237,780  

Accumulated other comprehensive loss

    (65 )   (65 )   (65 )

Accumulated deficit

    (131,687 )   (132,810 )   (132,810 )

Total stockholders' (deficit) equity

    (63,192 )   12,735     103,385  

Total capitalization

  $ 7,883   $ 12,883   $ 103,533  

(1)
Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) the amount of each of our cash and cash equivalents, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by approximately $6.2 million, assuming the number of shares offered by us, as set forth on the cover of this prospectus and in the concurrent private placement, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1,000,000 in the number of shares offered by us would increase (decrease) each of our cash and cash equivalents, additional paid-in capital, total stockholders' (deficit) equity and total capitalization by approximately $14.0 million, assuming the assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus) remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

        The number of shares of our common stock issued and outstanding actual, pro forma and pro forma as adjusted in the table above excludes the following:

    §
    3,337,481 shares of our common stock issuable upon the exercise of options to purchase common stock that were outstanding as of September 30, 2020, with a weighted-average exercise price of $6.79 per share;

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    §
    644,043 shares of our common stock subject to restricted stock units outstanding as of September 30, 2020 for which the vesting condition was not satisfied;

    §
    1,225,294 shares of our common stock issuable upon the exercise of outstanding warrants, with a weighted-average exercise price of $7.70 per share;

    §
    736,802 shares of our common stock reserved for issuance pursuant to future awards under our 2015 Equity Incentive Plan, which will no longer be available for issuance effective on the day prior to the first public trading date of our common stock;

    §
    4,280,000 shares of our common stock reserved for issuance pursuant to future awards under our 2021 Incentive Award Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering, and from which we will grant option awards exercisable for 695,066 shares of our common stock to certain of our officers and employees effective as of the effective date of the registration statement of which this prospectus forms a part; and

    §
    390,000 shares of our common stock reserved for issuance pursuant to future awards under our 2021 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering.

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DILUTION

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

        As of September 30, 2020, we had a historical net tangible book value (deficit) of $(64.7) million, or $(4.25) per share of common stock. Our net tangible book value represents total tangible assets less total liabilities all divided by the number of shares of our common stock outstanding on September 30, 2020. Our pro forma net tangible book value as of September 30, 2020, before giving effect to this offering and the concurrent private placement, was $12.7 million, or $0.57 per share of our common stock. Pro forma net tangible book value, before the issuance and sale of shares in this offering and the concurrent private placement, gives effect to: (i) the issuance of $5.0 million in aggregate principal amount of convertible promissory notes following September 30, 2020 (the New Notes); (ii) the issuance of 233,816 shares of our common stock upon the conversion of outstanding convertible promissory notes plus accrued interest and upon the exercise of outstanding warrants in January 2021; (iii) the conversion of all shares of our outstanding convertible preferred stock plus accrued dividends and convertible promissory notes plus accrued interest (including the New Notes) into an aggregate of 5,864,030 shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus and assuming the conversion occurs on February 5, 2021), (iv) the net exercise of warrants into an aggregate of 806,459 shares of common stock immediately prior to the consummation of this offering (based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus), (v) the forward stock split effected on February 1, 2021; and (vi) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the consummation of this offering.

        Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma as adjusted net tangible book value per share of common stock immediately after completion of this offering and the concurrent private placement. After giving effect to the sale of shares of our common stock in this offering and the concurrent private placement at an assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus) and after deducting the estimated underwriting discounts and commissions and estimated offering expenses, our pro forma as adjusted net tangible book value as of September 30, 2020 would have been approximately $103.4 million, or $3.59 per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $3.02 per share to existing

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stockholders and an immediate dilution of $11.41 per share to new investors. The following table illustrates this per share dilution:

Assumed initial public offering price per share

        $ 15.00  

Historical net tangible book value per share as of September 30, 2020

  $ (4.25 )      

Pro forma increase in net tangible book value per share

    4.83        

Pro forma net tangible book value per share as of September 30, 2020

    0.58        

Increase in pro forma net tangible book value per share attributable to new investors

    3.01        

Pro forma as adjusted net tangible book value per share after this offering and the concurrent private placement

          3.59  

Dilution per share to new investors participating in this offering

        $ 11.41  

        Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) our pro forma as adjusted net tangible book value as of September 30, 2020 after this offering and the concurrent private placement by approximately $6.2 million, or approximately $0.22 per share, and would increase (decrease) dilution to investors in this offering by approximately $0.78 per share, assuming that the number of shares offered by us, as set forth on the cover of this prospectus and in the concurrent private placement, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase of 1,000,000 in the number of shares we are offering would increase our pro forma as adjusted net tangible book value as of September 30, 2020 after this offering and the concurrent private placement by approximately $14.0 million, or approximately $0.47 per share, and would decrease dilution to investors in this offering by approximately $0.35 per share, assuming the assumed initial public offering price per share remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. A decrease of 1,000,000 in the number of shares we are offering would decrease our pro forma as adjusted net tangible book value as of September 30, 2020 after this offering and the concurrent private placement by approximately $14.0 million, or approximately $0.50 per share, and would increase dilution to investors in this offering by approximately $0.37 per share, assuming the assumed initial public offering price per share remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

        If the underwriters fully exercise their option to purchase additional shares, our pro forma as adjusted net tangible book value after this offering and the concurrent private placement would increase to approximately $3.74 per share, the increase in pro forma as adjusted net tangible book value per share to existing stockholders would be $3.16 per share and the dilution to new investors purchasing shares in this offering would be $11.26 per share.

        To the extent that outstanding options or warrants with an exercise price per share that is less than the pro forma as adjusted net tangible book value per share are exercised, new investors will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or

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convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

        The following table shows, as of September 30, 2020, on a pro forma as adjusted basis, the number of shares of our common stock purchased from us, the total consideration paid to us and the average price paid per share by existing stockholders and by new investors purchasing common stock in this offering and the concurrent private placement at an assumed initial public offering price of $15.00 per share (the midpoint of the estimated price range set forth on the cover of this prospectus), before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us (in thousands, except share and per share data and percentages):

 
   
   
  Total
Consideration
   
 
 
  Shares Purchased   Weighted-
Average
Price Per
Share
 
 
  Number   Percent   Amount   Percent  

    22,113,432     76.8 % $ 108,462,717     52.0 % $ 7.03  

Existing stockholders

                               

Investors participating in this offering and the concurrent private placement

    6,666,667     23.2 %   100,000,000     48.0 %   15.00  

Total

    28,780,099     100 % $ 208,462,717     100 % $ 8.88  

        The number of shares of our common stock to be outstanding after this offering is based on 15,209,127 shares of our common stock outstanding as of September 30, 2020, including 18,232 unvested restricted shares of our common stock subject to repurchase as of September 30, 2020, and excludes the following:

    §
    3,337,481 shares of our common stock issuable upon the exercise of options to purchase common stock that were outstanding as of September 30, 2020, with a weighted-average exercise price of $6.79 per share;

    §
    644,043 shares of our common stock subject to restricted stock units outstanding as of September 30, 2020 for which the vesting condition was not satisfied;

    §
    1,225,294 shares of our common stock issuable upon the exercise of outstanding warrants, with a weighted-average exercise price of $7.70 per share;

    §
    736,802 shares of our common stock reserved for issuance pursuant to future awards under our 2015 Equity Incentive Plan, which will no longer be available for issuance effective on the day prior to the first public trading date of our common stock;

    §
    4,280,000 shares of our common stock reserved for issuance pursuant to future awards under our 2021 Incentive Award Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering, and from which we will grant option awards exercisable for 695,066 shares of our common stock to certain of our officers and employees effective as of the effective date of the registration statement of which this prospectus forms a part; and

    §
    390,000 shares of our common stock reserved for issuance pursuant to future awards under our 2021 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the consummation of this offering.

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CONCURRENT PRIVATE PLACEMENT

        One or more entities affiliated with Vifor International, Ltd. (Vifor Pharma) is expected to purchase $25 million of our common stock in a concurrent private placement exempt from the registration requirements of the Securities Act at a price per share equal to the initial public offering price in this offering. Based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, this would be 1,666,667 shares. Cowen & Company, LLC and Stifel, Nicolaus & Company, Incorporated will serve as placement agents for the concurrent private placement and receive a placement agent fee equal to 3% of the total purchase price of the private placement shares. The concurrent private placement is contingent on the closing of this offering and the satisfaction of certain other customary conditions. However, this offering is not contingent on the consummation of the concurrent private placement. In connection with the concurrent private placement, we will enter into a securities purchase agreement with Vifor Pharma.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following tables set forth our selected historical consolidated financial data as of and for the periods indicated. We have derived the selected consolidated statements of operations data for the years ended December 31, 2018 and 2019, and the selected consolidated balance sheet data as of December 31, 2018 and 2019, from our audited consolidated financial statements included elsewhere in this prospectus. The statement of operations data for the nine months ended September 30, 2019 and 2020 and the balance sheet data as of September 30, 2020 have been derived from our unaudited interim condensed financial statements included elsewhere in this prospectus and are not necessarily indicative of results to be expected for the full year. The unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2020 and the results of operations for the nine months ended September 30, 2019 and 2020. You should read these data together with our consolidated financial statements and related notes included elsewhere in this prospectus and the information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." The selected consolidated financial data included in this section are not intended to replace the consolidated financial statements and related notes included elsewhere in this prospectus and are

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qualified in their entirety by those consolidated financial statements and related notes. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

 
  Year Ended December 31,   Nine Months Ended September 30,  
 
  2018   2019   2019   2020  
 
   
   
  (unaudited)
 
 
  (in thousands, except share and per share data)
 

Statements of Operations Data:

                         

Revenue:

                         

Contract revenue

  $ 4,000   $   $   $  

Grant revenue

    29     1,487     791     2,421  

Total revenue

    4,029     1,487     791     2,421  

Operating expenses:

                         

Cost of contract revenue

    281              

Cost of grant revenue

    97     640     341     1,064  

Research and development

    12,602     29,837     19,390     27,912  

General and administrative

    5,391     9,601     5,458     14,868  

Total operating expenses

    18,371     40,078     25,189     43,844  

Loss from operations

    (14,342 )   (38,591 )   (24,398 )   (41,423 )

Other income (expense)

    (5,683 )   (2,067 )   (245 )   (9,809 )

Net loss

  $ (20,025 ) $ (40,658 ) $ (24,643 ) $ (51,232 )

Preferred stock dividends

    (4,980 )            

Net loss attributable to common stockholders

  $ (25,005 ) $ (40,658 ) $ (24,643 ) $ (51,232 )

Net loss per common share, basic and diluted(1)

  $ (2.58 ) $ (2.82 ) $ (1.71 ) $ (3.51 )

Weighted-average number of common shares outstanding, basic and diluted(1)

    9,685,890     14,435,279     14,442,294     14,609,213  

Pro forma net loss per common share, basic and diluted (unaudited)(1)

        $ (2.65 )       $ (3.04 )

Weighted-average number of common shares used in computing pro forma net loss per share, basic and diluted (unaudited)(1)

          15,325,629           16,860,195  

(1)
See Note 2 to each of our audited and unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net loss per common share, basic and diluted pro forma net loss per common share, and the weighted-average number of common shares used in the computation of the per share amounts.

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  As of December 31,    
 
 
  As of
September 30,
2020
 
 
  2018   2019  
 
  (in thousands)
  (unaudited)
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 25,512   $ 5,571   $ 14,111  

Working capital(1)

    18,324     (20,469 )   (63,965 )

Total assets

    26,628     11,886     22,744  

Total liabilities

    7,717     30,472     85,936  

Accumulated deficit

    (39,797 )   (80,455 )   (131,687 )

Total stockholders' equity (deficit)

    18,911     (18,586 )   (63,192 )

(1)
Working capital is defined as total current assets less total current liabilities. See our consolidated financial statements and related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

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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 "Selected Financial Data" and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. In addition to the historical financial information, this discussion contains forward-looking statements that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under the section of this prospectus titled "Risk Factors" and elsewhere in this prospectus. You should carefully read the section of this prospectus titled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section of this prospectus titled "Special Note Regarding Forward-Looking Statements."

Overview

        We are a late-stage biopharmaceutical company focused on the discovery, development and commercialization of novel small molecule therapeutics to address acute organ injuries and fibrotic diseases. Our goal is to transform the treatment paradigm for patients suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have limitations. Our lead product candidate, ANG-3777, is a hepatocyte growth factor (HGF) mimetic that we are currently evaluating in multiple acute organ injuries and related indications, including acute kidney injury (AKI) and injuries to other major organs, such as the lungs, central nervous system (CNS) and heart. Within AKI, we are currently evaluating ANG-3777's ability to improve kidney function and reduce the severity of transplant-associated AKI, also known as delayed graft function (DGF), in patients at risk for kidney dysfunction, as well as for the treatment of AKI associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI). We are also evaluating ANG-3777 for indications within acute lung injury (ALI), with our primary focus on acute respiratory distress syndrome (ARDS), as well as acute CNS injuries. We are advancing multiple programs for the treatment of fibrotic diseases, leading with ANG-3070, a tyrosine kinase inhibitor (TKI), and our inhibitor of rho kinase 2 (ROCK2). We also continue to develop other preclinical product candidates, including our CYP11B2 (aldosterone synthase) inhibitors, which we are investigating for the purpose of targeting aldosterone-related fibrotic diseases.

        Since our inception, we have devoted substantially all of our efforts and financial resources to conducting research and development activities, including drug discovery and pre-clinical studies and clinical trials, establishing and maintaining our intellectual property portfolio, organizing and staffing our business, business planning, raising capital and providing general and administrative support for these operations. Prior to 2014, our efforts were primarily focused on researching a number of pathways related to serious organ diseases and applying our medicinal chemistry expertise towards creating potential therapeutics to address the unmet medical needs of patients. During this time period, our operations were funded primarily through the receipt of U.S. government grants and contracts. In 2014, we began raising capital through the sale of debt and equity securities as well as licenses, and since that time have significantly expanded our operations, with a focus on advancing our lead product candidate, ANG-3777, into and through multiple clinical programs and accelerating our other development programs, including our second product candidate, ANG-3070. From our inception through September 30, 2020, we have received an aggregate of $177.0 million in funding, which includes approximately $68.5 million from U.S. government grants and contracts and aggregate gross proceeds of $108.5 million through the issuance and sale of our debt and equity

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securities. In addition, in the year ended December 31, 2018, we received an upfront payment of $4.0 million from Sinovant pursuant to the Sinovant License discussed below. We also received an upfront payment under our license agreements with Vifor (International) Ltd. (Vifor Pharma) of $30 million in November 2020. As of September 30, 2020, we had cash and cash equivalents of $14.1 million (excluding such payment).

        We do not have any products approved for sale and have not generated any revenue from product sales since our inception and do not expect to generate revenue from product sales unless we successfully develop and we or our collaborators commercialize our product candidates, which we do not expect to occur for several years, if ever. In addition, a significant portion of our future revenue and cash resources is expected to be derived from our license agreement with Vifor Pharma (the Vifor License) and, to a lesser extent, our license agreement with Sinovant Sciences HK Limited (Sinovant and the Sinovant License). Our net losses were $20.0 million and $40.7 million for the years ended December 31, 2018 and 2019, respectively, and $24.6 million and $51.3 million for the nine months ended September 30, 2019 and 2020, respectively. As of September 30 2020, we had an accumulated deficit of $131.7 million. We expect to continue to incur net losses for the foreseeable future, and we expect our expenses and operating losses to increase substantially as we advance ANG-3777. ANG-3070 and our other product candidates through clinical trials and preclinical development, and as we seek regulatory approval for ANG-3777, ANG-3070 or any of our other product candidates. In addition, if we seek approval for any of our wholly-owned product candidates or those for which we retain the right to commercialize, we expect to incur additional expenses as we expand our clinical, regulatory, quality, manufacturing and commercialization capabilities, incur significant commercialization expenses for marketing, sales, manufacturing and distribution if we obtain marketing approval for such product candidates. Finally, we expect to incur increased expenses to protect our intellectual property and expand our general and administrative support functions, including hiring additional personnel, as well as incur additional costs associated with operating as a public company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical development activities, other research and development activities and pre-commercialization activities.

        We rely on third parties in the conduct of our preclinical studies and clinical trials and for manufacturing and supply of our product candidates. We have no internal manufacturing capabilities, and we expect to continue to rely on third parties, many of whom are single-source suppliers, for our preclinical study and clinical trial materials. In addition, we do not yet have a marketing or sales organization or commercial infrastructure. Accordingly, we will incur significant expenses to develop a marketing and sales organization and commercial infrastructure in advance of generating any product sales of wholly-owned product candidates or those for which we retain the right to commercialize. Furthermore, we will need to make continued investment in development studies, registration activities and the development of commercial support functions including quality assurance and safety pharmacovigilance before we will be in a position to sell any of our product candidates, if approved.

COVID-19 Update

        A novel strain of coronavirus SARS-CoV-2 and the resulting disease, coronavirus disease 2019 (COVID-19), were first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. COVID-19 has placed strains on the providers of healthcare services, including the healthcare institutions where we conduct our clinical trials. These strains have resulted in institutions prohibiting the initiation of new clinical trials, enrollment in existing trials and restricting the on-site monitoring of clinical trials. For example, our Phase 3 registration trial of ANG-3777 to improve kidney function and reduce the severity of DGF, patient enrollment between February 2020 and when we completed enrollment was impacted by public

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safety restrictions related to the COVID-19 pandemic. Our Phase 2 clinical trial of ANG-3777 in patients at risk for developing AKI following cardiac surgery involving cardiopulmonary bypass has been similarly impacted. We are continuing to evaluate the impact of the COVID-19 restrictions on our expected pace of enrollment, as such impacts could delay the timing of topline results in either our Phase 3 study in DGF or our Phase 2 clinical trial in CSA-AKI. We also follow FDA guidance on clinical trial conduct during the COVID-19 pandemic, including the remote monitoring of clinical data.

        At this time, we do not expect any disruption in our supply chain of drugs necessary to conduct our clinical trials and given our drug inventories, and we believe we will be able to supply the drug needs of our clinical trials in 2020 and 2021. However, we are continuing to evaluate our clinical supply chain in light of the COVID-19 pandemic.

        Numerous state and local jurisdictions have imposed, and others in the future may impose, "shelter-in-place" orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. Starting in mid-March 2020, the governor of California, where our corporate operations are based, issued "shelter-in-place" or "stay at home" orders restricting non-essential activities, travel and business operations for an indefinite period of time, subject to certain exceptions for necessary activities. Similar orders and restrictions have been imposed in New York and Massachusetts, and such orders or restrictions have resulted in our office closing, work stoppages, slowdowns and delays, travel restrictions and cancellation of events, among other effects, thereby negatively impacting our operations. We are supporting our employees by utilizing remote work, leveraging virtual meeting technology and encouraging employees to follow local guidance.

        The global pandemic of COVID-19 continues to rapidly evolve. The extent to which COVID-19 may impact our business, including our clinical trials, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

License, Collaboration and Grant Agreements

License Agreement with Vifor Pharma

        In November 2020, we granted Vifor Pharma, an exclusive, global (excluding Greater China), royalty-bearing license, with the right to sublicense through multiple tiers subject to our consent for certain specified conditions, for the commercialization of ANG-3777 in all therapeutic, prophylactic and diagnostic uses for renal indications, including forms of AKI, and congestive heart failure (collectively, the Renal Indications), beginning with DGF and CSA-AKI. The Vifor License also grants Vifor Pharma exclusive rights, with a right to sublicense subject to our consent for certain specified conditions, to develop and manufacture ANG-3777 for commercialization in Renal Indications worldwide (excluding Greater China) in cooperation with us or independently. We retain the right to develop and commercialize combination therapy products combining ANG-3777 with our other proprietary molecules, subject to Vifor Pharma's right of first negotiation with respect to global (excluding Greater China) rights to such combination therapy products in the Renal Indications.

        Pursuant to the Vifor License, we are entitled to receive $80 million in upfront and near-term clinical milestone payments, including $30 million in upfront cash that we received in November 2020, a $30 million equity investment and $20 million due upon enrolling the first patient in a Phase 3 trial of ANG-3777 for CSA-AKI. In December 2020, we issued Vifor Pharma a convertible

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promissory note in aggregate principal amount of $5 million as part of the equity investment, which will automatically convert into shares of our common stock upon the consummation of this offering, and one or more entities affiliated with Vifor Pharma is expected to purchase $25 million of our common stock in a concurrent private placement at a price per share equal to the initial public offering price in this offering. We are also eligible to receive post-approval milestones of up to approximately $260 million. Further, we are eligible to receive milestone payments based upon global net sales: in the United States, the milestone payments range from $100 million to $450 million, based upon annual U.S. net sales tiers between $300 million and $1 billion, and outside the United States, the milestone payments range from $75 million to $200 million, based upon annual net sales tiers between $250 million and $550 million. In aggregate, we are eligible for sales milestone payments totaling $1.585 billion and a total potential deal value of up to $1.925 billion (subject to certain reductions and offsets). We are also eligible to receive tiered royalties on global net sales of ANG-3777 at royalty rates of 10% for annual U.S. net sales below $100 million, mid-teens to low twenties for annual U.S. net sales between $100 million and $500 million and 40% for annual U.S. net sales above $500 million. Outside the United States, we are eligible to receive tiered royalties on annual ex-U.S. net sales of ANG-3777 at royalty rates of 10% for annual ex-U.S. net sales below $50 million, mid-teens to low twenties for annual ex-U.S. net sales between $50 million and $250 million and 40% for annual ex-U.S. net sales above $250 million. Such milestones and royalties are subject to certain specified reductions and offsets.

        Under the Vifor License, we retain responsibility at our own cost for executing a pre-specified clinical development plan, which has been designed to obtain regulatory approvals of ANG-3777 for the DGF and CSA-AKI indications in the United States, the European Union, Switzerland and the United Kingdom. The plan includes the completion of our ongoing and currently planned clinical trials and other clinical development activities in such indications. We will be responsible for regulatory interactions and filings relating to such indications in the United States, and Vifor Pharma will be responsible for such matters outside the United States. We will share equally with Vifor Pharma the cost of related post-approval clinical development activities for such indications. We will conduct drug substance and drug product development for ANG-3777 for DGF and CSA-AKI until production scale at our cost. Prior to the first regulatory approval of ANG-3777 for DGF or CSA-AKI in the United States or the European Union, Vifor Pharma will assume responsibility of the commercial manufacture of ANG-3777 for such indications in accordance with a supply agreement to be negotiated in good faith between Vifor Pharma and us. In addition, Vifor Pharma will be solely responsible at its own cost for the commercialization of DGF and CSA-AKI indications and any other Renal Indications, both within and outside of the United States (excluding Greater China). Pursuant to the Vifor License, we expect to collaborate with Vifor Pharma through the operation of joint governance committees, with each party having final determination authority in their respective areas of responsibility and other specific matters, subject to certain exceptions.

        The Vifor License will continue until the expiration of the last royalty term for a licensed product in the licensed territory, unless earlier terminated. The royalty term for a licensed product is, on a country-by-country basis, shall start with the first commercial sale of such licensed product in such country and expire at the latest of (i) expiration of all licensed patents covering the composition of matter of such licensed product or method of use for such licensed product that has obtained regulatory approval in such country, (ii) expiration of all regulatory and data exclusivity applicable to such licensed product in such country, or (iii) the tenth (10th) anniversary of the date of the first commercial sale of such licensed product in such country.

        Vifor Pharma may terminate the Vifor License at its sole discretion upon the earlier of (i) the acceptance for filing of an NDA covering products incorporating ANG-3777 filed with the FDA (after completion of the relevant Phase 3 clinical trial for such products), or (ii) the third anniversary of the

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effective date of the Vifor License. Both we and Vifor Pharma may terminate the Vifor License in its entirety if the other is in material breach of the Vifor License and has not cured the breach (if curable) within 60 days, or 90 days for incurable breach. In certain circumstances, in the event of our material breach of the Vifor License, Vifor Pharma may terminate the Vifor License with respect to certain major markets. In addition, both parties have the right to terminate the Vifor License upon insolvency of the other party.

License Agreement with Sinovant

        In August 2018, we granted Sinovant an exclusive, royalty-bearing license (the Sinovant License), with the right to sublicense through multiple tiers subject to our consent for certain specified conditions, for the development and commercialization of ANG-3777 for all therapeutic uses in humans and animals in Greater China (China, Hong Kong, Taiwan and Macau). We also granted Sinovant a non-exclusive license, with the right to sublicense through multiple tiers subject to our consent for certain specified conditions, to manufacture ANG-3777 inside and/or outside Greater China for the development and commercialization of ANG-3777 for all therapeutic uses in humans and animals in Greater China.

        In 2018, we received an upfront payment of $4.0 million from Sinovant. In addition, pursuant to the Sinovant License, if we achieve the agreed upon development and commercial milestones, Sinovant is obligated to make payments totaling up to $171 million, and tiered royalties on net sales of ANG-3777 at rates ranging from low-double digit percentages to percentages in the low-twenties. Such royalties are further subject to certain specified reductions and offsets.

        The Sinovant License will continue on a product-by-product basis from the effective date of the license until the expiration of the last royalty term for such licensed product in Greater China. The royalty term for a licensed product is, on a country-by-country basis, the latest of the expiration of the last-to-expire valid claim of a licensed patent that covers the licensed product in such country, or the expiration of regulatory exclusivity for such licensed product in the country, or ten years after the first commercial sale of such licensed product in such country.

        Sinovant may terminate the Sinovant License at its sole discretion on 90 days' written notice if notice is given before the regulatory approval of any licensed product incorporating ANG-3777, or 180 days' written notice if given after regulatory approval of any licensed product incorporating ANG-3777. Both we and Sinovant may terminate the Sinovant License in its entirety if the other is in material breach of the Sinovant License and has not cured the breach within 90 days (or 60 days if the breach is payment-related).

        In addition, both parties have the right to terminate the Sinovant License upon insolvency of the other or upon a force majeure event that prohibits either party from performing its obligations for a period of six months.

Collaboration with the University of Michigan

        In 2019, we entered into a subcontractor agreement with The Regents of the University of Michigan (UM), under which we provide funding for a study of ANG-3070 in nephrotic kidney disease. Under this agreement we obtain access to the Nephrotic Syndrome Study Network (NEPTUNE), an integrated group of academic centers, patient support organizations and clinical resources dedicated to advancing the treatment of kidney disorders. The goal of work under this agreement, which we support through a grant from the DOD, is to identify human disease and drug response profiles based upon the genes, networks and pathways that correlate with the therapeutic activity of ANG-3070 in primary focal segmental glomerulosclerosis (FSGS) and other fibrotic

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diseases. We are obligated to provide to UM up to a total of $520,000 over the course of the project. We have an option to license and commercialize intellectual property generated during the term of the agreement that is solely owned by UM under commercially reasonable terms.

        The agreement has a three-year term and may be terminated by UM for convenience upon 90 days' written notice. We may terminate the agreement for convenience with 30 days' written notice to UM or immediately upon termination of cancellation of our grant from the DOD.

Grants

        Since our inception, we have had the benefit of receiving peer-reviewed, competitive grants and contracts from the NIH and the NSF under the SBIR program and from the DOD. From our inception through September 30, 2020, such grants resulted in total proceeds of $68.5 million and as of September 30, 2020, active grants and those for which we have received notification of the intent to fund will provide approximately $1.1 million in anticipated research costs, which includes monies to be paid to university collaborators and other subcontractors named in the grant applications.

        We have several grant applications pending review by the NIH, NSF and DOD, and we intend to continue to apply for grants to fund our discovery efforts.

Certain Significant Relationships

NovaPark

        Our research and discovery operations are located in Uniondale, New York, where we occupy approximately 43,000 square feet of a 110,000-square-foot general laboratory and development facility for biological and chemistry research owned by NovaPark, LLC (NovaPark). We own, and Dr. Itzhak Goldberg, our Executive Chairman and Chief Scientific Officer, and Rina Kurz, Dr. Goldberg's spouse, own 10%, 45% and 45%, respectively, of the membership interests in NovaPark. In 2016, we agreed to indemnify Dr. Goldberg in connection with his personal guarantee of NovaPark's obligations outstanding under the mortgage for the Uniondale building; however, in February 2020, we and Dr. Goldberg terminated the indemnification agreement. See "Certain Relationships and Related Party Transactions."

        In June 2011, and as subsequently amended, we entered into a lease that expires June 20, 2026 with NovaPark for approximately 40% of the building, at a fixed annual base rent of $450,000, increasing at the rate of 1% annually, plus our proportionate share of real estate taxes and operating costs.

        For the year ended December 31, 2018, we recorded rent expense for fixed lease payments of $1.6 million, including $0.5 million to adjust rent to the market rate for 2011 through 2017, and variable expenses related to the lease of $0.6 million. We recorded rent expense for fixed lease payments of $1.0 million, $0.8 million and $0.9 million and variable expenses related to the lease of $0.4 million, $0.3 million and $0.4 million for the year ended December 31, 2019 and for the nine months ended September 30, 2019 and 2020, respectively. Variable expenses include NovaPark management fees of approximately $0.1 million for each of the years ended December 31, 2018 and 2019 and for the nine months ended September 30, 2019 and 2020.

Ohr Cosmetics

        We also have a license agreement with Ohr Cosmetics, LLC, an affiliated company. See "Certain Relationships and Related Party Transactions."

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Components of Results of Operations

        The following discussion summarizes the key factors our management believes are necessary for an understanding of our financial statements.

Revenue

        We do not have any products approved for sale and have not generated any revenue from product sales. Our revenue to date primarily has been derived from government funding consisting of U.S. government grants and contracts, and revenue under our license agreements.

Grant Revenue

        Our grants and contracts reimburse us for direct and indirect costs relating to the grant projects and also provide us with a pre-negotiated profit margin on total direct and indirect costs of the grant award, excluding subcontractor costs, after giving effect to directly attributable costs and allowable overhead costs. Funds received from grants and contracts are generally deemed to be earned and recognized as revenue as allowable costs are incurred during the grant or contract period and the right to payment is realized.

Contract Revenue

        Our license agreements comprise elements of upfront license fees, milestone payments based on development and royalties based on product sales. The timing of our operating cash flows may vary significantly from the recognition of the related revenue. Income from upfront payments is recognized when we satisfy the performance obligations in the contract, which can result in recognition at either a point in time or over the period of continued involvement. Other revenue, such as milestone payments, are recognized when achieved.

Operating Expenses

Cost of Grant Revenue

        Our cost of grant revenue primarily relates to personnel-related costs and expenses for grant projects.

Cost of Contract Revenue

        Our cost of contract revenue relates to certain direct costs paid in connection with our entry into our licensing agreements.

Research and Development Expenses

        To date, our research and development expenses have primarily related to discovery efforts and preclinical and clinical development of our product candidates. We recognize research and development expenses as they are incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Our research and development expenses consist primarily of:

    §
    personnel costs, including salaries, payroll taxes, employee benefits and stock-based compensation, for personnel in research and development functions;
    §
    costs associated with medical affairs activities;
    §
    fees paid to consultants, clinical testing sites and contract research organizations (CROs), including in connection with our preclinical studies and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical

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      trial database management, clinical trial material management and statistical compilation, analysis and reporting;

    §
    contracted research and license agreement fees with no alternative future use;
    §
    costs related to acquiring, manufacturing and maintaining clinical trial materials and laboratory supplies;
    §
    depreciation of equipment and facilities;
    §
    legal expenses related to clinical trial agreements and material transfer agreements; and
    §
    costs related to preparation of regulatory submissions and compliance with regulatory requirements.

        Other than with respect to reimbursable expenses required to be recorded under our government grants and contracts, we do not allocate our expenses by product candidates. A significant amount of our direct research and development expenses include payroll and other personnel expenses for our departments that support multiple product candidate research and development programs and, other than as specified above, we do not record research and development expenses by product. However, research and development expenses were primarily driven by expenses relating to the development of ANG-3777 in 2018 and 2019. Of our total research and development expenses for the years ended December 31, 2019 and 2018, 69% and 63%, respectively, of such expenses were from external third-party sources and the remaining 31% and 37%, respectively, were from internal sources. Of our total research and development expenses for the nine months ended September 30, 2020 and 2019, 66% and 70%, respectively, of such expenses were from external third-party sources and the remaining 34% and 30%, respectively, were from internal sources.

        We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of our product candidates and continue to invest in research and development activities. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming, and successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of any of our clinical or preclinical product candidates or the period, if any, in which material net cash inflows from these product candidates may commence. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

    §
    the scope, rate of progress and expense of our ongoing, as well as any additional, clinical trials and other research and development activities;
    §
    future preclinical and clinical trial results;
    §
    obtaining market access and reimbursement approvals; and
    §
    the timing and receipt of any regulatory approvals.

        A change in the outcome of any of these variables with respect to the development of a product candidate 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 were to require us to conduct preclinical or clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in enrollment in any of our preclinical or clinical trials, we could be required to expend significant additional financial resources and time on the completion of our clinical development programs.

General and Administrative Expenses

        General and administrative expenses consist primarily of personnel-related expenses, such as salaries, payroll taxes, employee benefits and stock-based compensation, for personnel in executive, operational, finance and human resources functions. Other significant general and administrative expenses include allocation of facilities costs, accounting and legal services and expenses associated with obtaining and maintaining patents. A portion of the general and administrative expenses are reimbursed through the overhead rates contained in our grants with the U.S. Government.

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        We expect that our general and administrative expenses will increase in the future to support our continued research and development activities, pre-commercial preparation activities for ANG-3777 and, if any future product candidate receives marketing approval, commercialization activities. We also anticipate incurring additional expenses associated with operating as a public company, including increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to companies listed on a national securities exchange, additional insurance expenses, investor relations activities and other administrative and professional services.

Other Income (Expense)

Convertible Notes Recorded at Fair Value

        We have elected the fair value option for recognition of our convertible notes. Our convertible notes are subject to re-measurement each reporting period with gains and losses reported through our statements of operations.

Liability Classified Series C Convertible Preferred Stock Recorded at Fair Value

        Series C Convertible Preferred Stock includes settlement features that result in liability classification. The initial carrying value of the Series C Convertible Preferred Stock is accreted to the settlement value, the fair value of the securities to be issued upon the conversion of the Series C Preferred Stock. The discount to the settlement value is accreted to interest expense using the effective interest method. During 2020, certain of the convertible notes were exchanged for Series C Convertible Preferred Stock. As the exchange was accounted for as a modification, the Series C Convertible Preferred Stock that was exchanged for the convertible notes (the Exchanged Series C Shares) will continue to be recorded at fair value. The Exchanged Series C Shares are subject to re-measurement each reporting with gains and losses reported through our statements of operations.

Warrant Liability

        We have accounted for certain of our freestanding warrants to purchase shares of our common stock as liabilities measured at fair value, in accordance with ASC 815, Derivative and Hedging. The warrants are subject to re-measurement at each reporting period with gains and losses reported through our statements of operations.

Foreign exchange transaction gain

        Foreign currency transaction gains, primarily related to intercompany loans, are recorded as a component of other income (expense) in our statements of operations.

Earnings in Equity Method Investment

        Earnings in equity method investment represents our 10% interest in NovaPark that is accounted for under the equity method.

Interest Income

        Interest income consists of interest earned on our cash and cash equivalents.

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Results of Operations

Comparison for the Nine Months Ended September 30, 2019 and 2020

        The following table summarizes our results of operations for the periods indicated:

 
  Nine Months Ended
September 30,
   
   
 
 
  2019   2020   $ Change   % Change  
 
  (unaudited)
 
 
  (In thousands, except percentages)
 

Revenue:

                         

Grant revenue

  $ 791   $ 2,421   $ 1,630     206.1 %

Total revenue

    791     2,421     1,630     206.1 %

Operating expenses:

                         

Cost of grant revenue

    341     1,064     723     212.0 %

Research and development

    19,390     27,912     8,522     44.0 %

General and administrative

    5,458     14,868     9,410     172.4 %

Total operating expenses

    25,189     43,844     18,655     74.1 %

Loss from operations

    (24,398 )   (41,423 )   (17,025 )   (69.8 )%

Other income (expense)

    (245 )   (9,809 )   (9,564 )     *

Net loss

  $ (24,643 ) $ (51,232 ) $ (26,589 )   (107.9 )%

Foreign currency translation adjustment

        (65 )   (65 )   100 %

Comprehensive loss

  $ (24,643 ) $ (51,297 ) $ (26,654 )   (108.2 )%

*
Not meaningful

Grant Revenue

        For the nine months ended September 30, 2020, grant revenue was $2.4 million compared to $0.8 million for the nine months ended September 30, 2019. The increase of $1.6 million is primarily attributable to an increase in reimbursable costs relating to the DOD for the nine months ended September 30, 2020.

Cost of Grant Revenue

        For the nine months ended September 30, 2020, cost of grant revenue was $1.1 million compared to $0.3 million for the nine months ended September 30, 2019. The increase is primarily attributable to personnel-related costs and expenses for new grant projects with the NIH and DOD for the nine months ended September 30, 2020.

Research and Development Expenses

        For the nine months ended September 30, 2020, research and development expenses was $27.9 million compared to $19.4 million for the nine months ended September 30, 2019. Such expenses were primarily driven by expenses relating to the development of ANG-3777 in both years, and the increase is primarily related to personnel-related costs and expenses for our discovery efforts and preclinical and clinical development of ANG-3777. Of the total research and development expenses for the nine months ended September 30, 2020 and 2019, 66% and 70%, respectively, of such expenses were from external third-party sources and the remaining 34% and 30%, respectively, were from internal sources.

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General and Administrative Expenses

        For the nine months ended September 30, 2020, general and administrative expenses was $14.9 million compared to $5.5 million for the nine months ended September 30, 2019. This increase of $9.4 million is primarily attributable to the increased personnel-related expenses of $2.6 million, increased facility and operating costs of $0.8 million and $2.3 million of legal services and fees associated with obtaining and maintaining patents, as well as $3.3 million in broker fees relating to 2020 financing activities.

Other Income (Expense)

        For the nine months ended September 30, 2020, other expense was $9.8 million compared to $0.2 million for the nine months ended September 30, 2019. This increase of $9.6 million is primarily attributable to (a) an increase of $5.7 million related to the change in fair value of our convertible notes for which we have elected the fair value option, (b) an increase of $0.6 million of the change in fair value of our freestanding warrants to purchase shares of our common stock that have been recorded as liabilities at fair value, and (c) an increase in interest expense, net primarily related to $2.7 million of amortization of debt issuance costs from the issuance of Series C convertible preferred stock issued during the nine months ended September 30, 2020. The convertible notes and warrants both require re-measurement at each balance sheet date with gains and losses reported through our statement of operations.

Comparison For the Years Ended December 31, 2018 and 2019

        The following table summarizes our results of operations for the years ended December 31, 2018 and 2019:

 
  Year Ended
December 31,
   
   
 
 
  2018   2019   $ Change   % Change  
 
  (In thousands, except percentages)
 

Revenue:

                         

Contract revenue

  $ 4,000   $   $ (4,000 )     *

Grant revenue

    29     1,487     1,458       *

Total revenue

    4,029     1,487     (2,542 )   (63.1 )%

Operating expenses:

                         

Cost of contract revenue

    281         (281 )   (100.0 )%

Cost of grant revenue

    97     640     543     559.8 %

Research and development

    12,602     29,837     17,235     136.8 %

General and administrative

    5,391     9,601     4,210     78.1 %

Total operating expenses

    18,371     40,078     21,707     118.2 %

Loss from operations

    (14,342 )   (38,591 )   (24,249 )   (169.1 )%

Other income (expense)

    (5,683 )   (2,067 )   3,616     63.6 %

Net loss

  $ (20,025 ) $ (40,658 ) $ (20,633 )   (103.0 )%

*
Not meaningful

Contract Revenue

        For the year ended December 31, 2019, we did not have any contract revenue, as compared to $4.0 million for the year ended December 31, 2018, which reflects the upfront payment from Sinovant pursuant to the Sinovant License in 2018.

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Grant Revenue

        For the year ended December 31, 2019, grant revenue was $1.5 million compared to $29,000 for the year ended December 31, 2018. The increase is primarily attributable to reimbursable costs relating to two new grant projects with the NIH and the DOD for the year ended December 31, 2019.

Cost of Contract Revenue

        For the year ended December 31, 2019, we did not have any cost of contract revenue, as compared to $0.3 million for the year ended December 31, 2018, which related to certain direct costs pursuant to the Sinovant License.

Cost of Grant Revenue

        For the year ended December 31, 2019, cost of grant revenue was $0.6 million compared to $0.1 million for the year ended December 31, 2018. The increase is primarily attributable to personnel-related costs and expenses for two new grant projects with the NIH and DOD for the year ended December 31, 2019.

Research and Development Expenses

        For the year ended December 31, 2019, research and development expenses was $29.8 million compared to $12.6 million for the year ended December 31, 2018. Such expenses were primarily driven by expenses relating to the development of ANG-3777 in both years, and the increase is primarily related to personnel-related costs and expenses for our discovery efforts and preclinical and clinical development of ANG-3777. Of the total research and development expenses for the year ended December 31, 2019, 69% of such expenses were from external third-party sources and the remaining 31% were from internal sources.

General and Administrative Expenses

        For the year ended December 31, 2019, general and administrative expenses was $9.6 million compared to $5.4 million for the year ended December 31, 2018. This increase of $4.2 million is primarily attributable to the 129% increase in headcount, personnel-related expenses of approximately $1.5 million, increased professional fees of $1.5 million and $0.7 million of legal services and fees associated with obtaining and maintaining patents.

Other Income (Expense)

        For the year ended December 31, 2019, other expense was $2.1 million compared to $5.7 million for the year ended December 31, 2018. This decrease of $3.6 million is primarily attributable to a decrease of $3.4 million related to our convertible notes for which we have elected the fair value option, partially offset by an increase of $0.2 million of the change in fair value of our freestanding warrants to purchase shares of our common stock that have been recorded as liabilities at fair value. The convertible notes and warrants both require re-measurement at each balance sheet date with gains and losses reported through our statement of operations.

Liquidity and Capital Resources

Sources and Uses of Liquidity

        We have incurred losses since inception and have incurred negative cash flows from operations from inception through September 30, 2020, and we anticipate that we will incur losses for at least the next several years. To date, we have not generated any revenue from product sales. We have funded our operations primarily through the receipt of grants and the sale of debt and equity securities. From our inception, we have received an aggregate of $177.0 million in total funding,

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which consists of over $68.5 million from U.S. government grants and contracts and have raised aggregate gross proceeds of $108.5 million through the issuance and sale of our debt and equity securities. In addition, in the year ended December 31, 2018, we received an upfront payment of $4.0 million from Sinovant pursuant to the Sinovant License. As of December 31, 2019 and September 30, 2020, we had $5.6 million and $14.1 million, respectively, of cash and cash equivalents.

        During the nine months ended September 30, 2020, we issued 34,928 shares Series C convertible preferred stock at $642.75 per share for gross proceeds of approximately $22.3 million in cash. The Series C preferred stock has an accruing dividend of 12% per annum and is convertible into shares of our common stock at a 20% discount to the share price with a cap price of $11.57 per share on the conversion price of the Series C Convertible Preferred Stock into equity shares in a qualified financing.

        During the nine months ended September 30, 2020, we issued $31.2 million in aggregate principal amount of convertible promissory notes that bear interest at a rate of 12% per annum, have a one-year term from each date of issuance or exchange and are convertible into shares of our common stock at a 20% discount to the share price with a cap price of $11.57 per share on the conversion price of the convertible notes into equity shares in a qualified financing. In addition, in December 2020, we issued Vifor Pharma a convertible promissory note in aggregate principal amount of $5.0 million on substantially similar terms, but with a maturity date of three years, 2% interest and a conversion price of $11.57 per share.

        In April 2020, we were approved for and received a loan of approximately $0.9 million from Hanmi Bank under the Coronavirus Aid, Relief and Economic Security Act (the CARES Act) and the Paycheck Protection Program (PPP) offered by the U.S. Small Business Administration (SBA). The loan is evidenced by a promissory note and agreement, dated April 21, 2020 (the PPP Note). The PPP Note proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt, if any. The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Note or a portion of them, are not forgiven, we will be required to make principal and interest payments in monthly installments beginning in August 2021. The SBA and U.S. Department of Treasury may continue to update guidance on the calculation of loan forgiveness, which updated guidance could affect the amount of the loan proceeds that could be forgiven. The PPP Note matures on the two year anniversary of the loan disbursement.

Future Funding Requirements

        Based on our current operating plan, we believe that our cash and cash equivalents, together with the estimated net proceeds from this offering and the concurrent private placement, will be sufficient to fund our planned operations for at least 12 months following the date of this offering. However, we have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements. The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

    §
    the scope, progress, results and costs of researching and developing ANG-3777, ANG-3070 or any other product candidates, and conducting preclinical studies and clinical trials;

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    §
    the outcome of our ongoing and future clinical trials, including our Phase 3 registration trial of ANG-3777 for DGF, our Phase 2 clinical trial of ANG-3777 for CSA-AKI, our Phase 2 clinical trial in Brazil of ANG-3777 for the reduction of severity and progression of ALI in patients with COVID-19 associated pneumonia who are at high risk of progressing to acute respiratory distress syndrome (ARDS) and our Phase 1 clinical trial of ANG-3070 in healthy volunteers;
    §
    whether we are able to take advantage of any FDA expedited development and approval programs for any of our product candidates;
    §
    the clinical development of ANG-3777 for other potential indications in addition to DGF and CSA-AKI, including ALI and central nervous system (CNS) injuries;
    §
    the extent to which COVID-19 may impact our business, including our clinical trials and financial condition;
    §
    the willingness of the FDA and foreign regulatory authorities to accept the results of our ongoing Phase 3 registration trial, as well as our other completed and planned clinical trials and preclinical studies and other work, as the basis for review and approval of ANG-3777 for DGF and any other indication;
    §
    the outcome, costs and timing of seeking and obtaining and maintaining FDA and any foreign regulatory approvals;
    §
    the number and characteristics of product candidates that we pursue, including our product candidates in preclinical development;
    §
    the ability of our product candidates to progress through clinical development successfully;
    §
    our need to expand our research and development activities, including to conduct additional clinical trials;
    §
    market acceptance of our product candidates, including physician adoption, market access, pricing and reimbursement;
    §
    the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies;
    §
    our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
    §
    our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel;
    §
    the effect of competing technological, market developments and government policy;
    §
    the costs associated with being a public company, including our need to implement additional internal systems and infrastructure, including financial and reporting systems;
    §
    the costs associated with securing and establishing commercialization and manufacturing capabilities, as well as those associated with packaging, warehousing and distribution;
    §
    the costs associated with being a commercial company with approved products for sale, including our obligation to meet applicable healthcare laws and regulations and implement robust compliance programs;
    §
    the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future and timing and amount of payments thereunder; and
    §
    the timing, receipt and amount of sales and general commercial success of any future approved products, if any.

        Until such time as we or our collaborators can generate significant revenue from sales of ANG-3777 or we can generate sufficient revenue from sales of ANG-3070 or any other product candidate, if ever, we expect to finance our operations through public or private equity offerings or debt financings or other sources of capital, including collaborations, licenses, credit or loan facilities,

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receipt of research contributions or grants, tax credit revenue or a combination of one or more of these funding sources. Adequate funding may not be available to us on acceptable terms, or at all. This may be particularly true during the COVID-19 pandemic when the global capital markets are experiencing extreme volatility. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and 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 funds through additional collaborations, or other similar 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 and/or may reduce the value of our common stock. 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 commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Going Concern

        In their report dated May 13, 2020, except for the effect of the one-for-1.55583 stock split described in Note 16, as to which the date is February 1, 2021, on our consolidated financial statements as of and for the years ended December 31, 2018 and 2019, our independent registered public accounting firm, Moss Adams LLP, expressed substantial doubt regarding our ability to continue as a going concern. The accompanying financial statements do not include any adjustments necessary should we be unable to continue as a going concern. Our ability to continue as a going concern is subject to our ability to obtain sufficient financing. However, we cannot assure you that such funding will be available to us, will be obtained on terms favorable to us or will provide us with sufficient funds to meet our objectives. This may be particularly true due to the COVID-19 pandemic, which has introduced volatility and uncertainty into global capital markets.

Cash Flows

        The following table sets forth a summary of our net cash flow activity for the years ended December 31, 2018 and 2019 and the nine months ended September 30, 2019 and 2020 (in thousands):

 
  Year Ended
December 31,
  Nine Months Ended
September 30,
 
 
  2018   2019   2019   2020  
 
   
   
  (unaudited)
 

Net cash provided by (used in)

                         

Operating activities

  $ (8,020 ) $ (24,589 ) $ (20,154 ) $ (43,479 )

Investing activities

        (242 )   (206 )   (31 )

Financing activities

    31,741     4,890         52,207  

Effect of foreign currency on cash

                (157 )

Net increase (decrease) in cash

  $ 23,721   $ (19,941 ) $ (20,360 ) $ 8,540  

Operating activities

        For the nine months ended September 30, 2020, net cash used in operating activities was $43.5 million as compared to $20.2 million for the nine months ended September 30, 2019. This increase in net cash used in operating activities of $23.3 million is primarily related to an increase in

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net loss of $26.6 million and an increase in cash used in operating assets and liabilities of $9.4 million primarily driven by a net decrease in accounts payable and accrued expenses resulting from payments for clinical and research and development activities, and an increase in prepaid and other assets primarily driven by increased deferred offering costs related to the planned initial public offering and prepaid CRO fees. This increase is partially offset by an increase in non-cash items of $12.7 million primarily related to $6.3 million of charges related to recording our convertible notes and warrants at fair value, $2.7 million of amortization of debt issuance costs, $1.7 million of non-cash placement agent fees related to the fair value of broker warrants issued with our convertible notes and an increase of $1.6 million of stock-based compensation.

        For the year ended December 31, 2019, net cash used in operating activities was $24.6 million as compared to $8.0 million for the year ended December 31, 2018. This increase in net cash used in operating activities of $16.6 million is primarily related to an increase in net loss of $20.6 million and a decrease in non-cash items of $2.7 million, primarily driven by a $3.5 million decrease in non-cash expenses related to our convertible notes and warrants, partially offset by an increase in each of the amortization of right to use assets and stock-based compensation of $0.4 million, respectively. This increase is partially offset by an increase in cash provided by operating assets and liabilities of $6.8 million primarily driven by a net increase in accounts payable and accrued expenses resulting from increased clinical research and development activities. Net cash used in operating activities was $8.0 million for the year ended December 31, 2018, which primarily consisted of a net loss of $20.0 million, partially offset by non-cash items of $9.1 million and a $3.0 million change in operating assets and liabilities. Non-cash items primarily related to $6.1 million of charges related to recording our convertible notes and warrants at fair value and $3.0 million of stock-based compensation.

Investing activities

        For the nine months ended September 30, 2020, net cash used in investing activities remained relatively consistent from the nine months ended September 30, 2019.

        For the year ended December 31, 2019, net cash used in investing activities of $0.2 million was primary used to purchase fixed assets for research activities. We had no investing activity for the year ended December 31, 2018.

Financing activities

        For the nine months ended September 30, 2020, net cash provided by financing activities was $52.2 million primarily attributable to net proceeds of $31.2 million from the issuance of convertible notes and warrants and $20.0 million from the issuance of liability classified Series C Convertible Preferred Stock net of issuance costs. We had no financing activity for the nine months ended September 30, 2019.

        For the year ended December 31, 2019, net cash provided by financing activities was $4.9 million as compared to $31.7 million for the year ended December 31, 2018. This decrease was primarily attributable to net proceeds of $28.6 million raised in our common stock and warrant or "unit" financing in July 2018. This decrease was partially offset by an increase of $2.1 million of proceeds received from convertible notes and warrants issued during 2019 as compared to 2018. The 2018 convertible notes were subsequently converted to common stock and warrants in July 2018 in connection with the common stock and warrant issuance.

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Contractual Obligations and Commitments

        The following table summarizes our contractual obligations and commitments at December 31, 2019:

 
  Payments Due by Period  
 
  Total   Less Than
1 Year
  1 to 3
Years
  3 to 5
Years
  More than
5 Years
 
 
  (in thousands)
 

Operating lease commitments

  $ 6,937   $ 1,044   $ 2,119   $ 2,161   $ 1,613  

Convertible promissory notes, including interest

    5,918     5,918              

Total

  $ 12,855   $ 6,962   $ 2,119   $ 2,161   $ 1,613  

        We rent office and laboratory space from NovaPark. The lease commitments are included in the table above. The balance on the mortgage debt as of December 31, 2018 and 2019 was $5.3 million and $5.1 million, respectively. See "Certain Relationships and Related Party Transactions."

        We are party to collaborative agreements with universities and other third parties. Certain university laboratories serve as subcontractors on our currently funded grants, and conduct research specified in the grant award that contributes to the objectives of our grant. These entities invoice us for the agreed-upon amounts in the grant application as approved in the respective grant's Notice of Award. Included among these future obligations are clinical trial agreements in place or to be established with certain clinical testing sites, such as hospitals and clinics, to conduct human studies on ANG-3777 and ANG-3070. These entities invoice us for the agreed-upon amounts as approved in the respective grant's Notice of Award, and are typically cancellable within thirty days of notice and are not included in the table above.

        During 2019, we entered into convertible promissory note agreements with various investors pursuant to which we issued $5.3 million of convertible promissory notes due approximately one year from the date of issuance (the 2019 Notes). The 2019 Notes accrue interest at a rate of 12% per annum and have the right to convert at a 20% discount of the share price from certain qualified financings.

        During the nine months ended September 30, 2020, we issued additional convertible promissory notes (the Additional Convertible Notes) to certain investors in aggregate principal amount of $31.2 million. The Additional Convertible Notes accrue interest at a rate of 12% per annum, and will convert into shares of our common stock upon the consummation of this offering at the lesser of a 20% discount to the share price and a cap price of $11.57 per share, and mature one year from the date of issuance or exchange. In addition, in December 2020 we issued Vifor Pharma a convertible promissory note in aggregate principal amount of $5.0 million, with interest accruing at 2%, on substantially similar terms, but with a maturity date of three years and a conversion price of $11.57 per share (the Vifor Convertible Note). The Additional Convertible Notes and the Vifor Convertible Note are not reflected in the table above.

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 under SEC rules.

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Critical Accounting Policies and Significant Judgements and Estimates

        Our 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 GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue and expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience 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 value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

        While our significant accounting policies are more fully described in Note 2 to each of our audited consolidated financial statements and unaudited condensed consolidated financial statements appearing elsewhere in this prospectus, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.

Contract Revenue

        Revenues generated to date are primarily through the Sinovant License. The terms of the arrangement include a payment to us of a non-refundable upfront license fee, payments based upon the achievement of future regulatory and development milestones; and royalties on net sales of future products.

        We apply the provisions of Topic 606, Revenue from Contracts with Customers (Topic 606) (ASC 606). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

        To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy the performance obligations. We only apply the five-step model to contracts when it is probable that we will collect substantially all of the consideration we are entitled to in exchange for the goods or services transferred to the customer. Accounting for these arrangements requires that we make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation.

        Licenses of Intellectual Property:    If a license to our intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, we recognize revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

        Milestone Payments:    We evaluate whether the regulatory and development milestones are considered probable of being reached and estimate the amounts to be included in the transaction price using the most likely amount method. We evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each reporting period,

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we re-evaluate the probability of achievement of milestones and any related constraint, and if necessary, adjust the estimate of the overall transaction price.

        Royalties:    For sales-based royalties, including milestone payments based on the level of sales, we determine whether the sole or predominant item to which the royalties relate is a license. When the license is the sole or predominant item to which the sales-based royalty relates, we recognize revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, we have not recognized any sales-based royalty revenue resulting from any license agreement.

Grant Revenue

        Funds received from grants are generally deemed to be earned and recognized as revenue as allowable costs are incurred during the grant period and the right to payment is realized. We are subject to periodic audits of revenue and associated expenses by the U.S. Federal Government and are also subject to various reporting requirements.

Accrued Research and Development Expenses

        We have entered into agreements with various CROs and third-party vendors. Our research and development accruals of amounts due to the CRO are estimated based on our contractual agreement, the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. Payments made to CROs under this arrangement in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered.

Stock-Based Compensation

        We use a fair value-based method to account for all stock-based compensation arrangements with employees including stock options, restricted stock units and stock awards. Our determination of the fair value of stock options on the date of grant utilizes the Black-Scholes option pricing model.

        The fair value of the option granted is recognized on a straight-line basis over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period, which usually is the vesting period. We account for forfeitures as they occur.

        We account for stock options issued to non-employees based on the fair value of the stock options, using the Black-Scholes option pricing model, at the measurement date. The fair value of the option granted is recognized over the requisite service period.

        Estimates of the fair value of equity awards as of the grant date using valuation models such as the Black-Scholes option pricing model are affected by assumptions with a number of complex variables. Changes in the assumptions can materially affect the fair value and ultimately the amount of stock-based compensation expense recognized. These inputs are subjective and generally require significant analysis and judgment to develop. Changes in the following assumptions can materially affect the estimate of the fair value of stock-based compensation:

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    Expected Term—We use the simplified method, under which the expected term is presumed to be the midpoint between the vesting date and the end of the contractual term. We utilize this method due to the lack of historical exercise data and the plain nature of its

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      share-based awards. We use the contractual term for the expected life of non-employee awards.

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    Expected Volatility—For all stock options granted to date, the volatility data was estimated based on a study of publicly traded industry peer companies as we did not have any trading history for our common stock. For purposes of identifying these peer companies, we considered the industry, stage of development, size and financial leverage of potential comparable companies. For each grant, we measured historical volatility over a period equivalent to the expected term.
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    Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input. We currently have no history or expectation of paying cash dividends on our common stock. Accordingly, we have estimated the dividend yield to be zero.
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    Risk-Free Interest Rate—The risk-free interest rate is based on the yield available on U.S. Treasury instruments whose term is similar in duration to the expected term of the respective stock option.

        We will continue to use judgment in evaluating the expected volatility and expected term utilized for our share-based compensation calculations on a prospective basis. Historically, for all periods prior to this initial public offering, the fair values of the shares of common stock underlying our share-based awards were estimated on each grant date by our board of directors. Given the absence of a public trading market for our common stock, our board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of our common stock, including our stage of development; our actual operating results and financial performance; progress of our research and development efforts; conditions in the industry and economy in general; the rights, preferences and privileges of our convertible preferred stock and convertible notes relative to those of our common stock; the likelihood of achieving a liquidity event for the holders of our common stock, such as an initial public offering or a sale of our company, given prevailing market conditions; equity market conditions affecting comparable public companies; the lack of marketability of our common stock and the results of independent third-party valuations.

        Valuations of our common stock were prepared in accordance with the guidance provided by the American Institute of Certified Public Accountants 2013 Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

        For our valuations performed prior to this offering, the fair value assumption used in the Black-Scholes option pricing model for purposes of estimating the fair value of common stock was based on the valuations prepared at various dates, which utilized the Subject Company Transaction Method which includes the back-solve and scenario based methods (Probability Weighted Expected Return Method) to arrive at estimated fair values.

        After the completion of this offering, our board of directors will determine the fair value of each share of underlying common stock based on the closing price as reported on the date of grant on the primary stock exchange on which our common stock is traded.

Convertible Notes Payable at Fair Value

        We have elected the fair value option for recognition of our convertible notes payable. Convertible notes that were exchanged for Series C convertible preferred stock have been recognized at fair value pursuant to the prior fair value option election. The fair value option may be applied instrument by instrument, but it is irrevocable. The estimated fair value of the convertible notes is determined using an income approach and the values of the equity underlying the conversion options were estimated using equity values implied from the Subject Company

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Transaction Method which includes the back solve and scenario based methods (Probability Weighted Expected Return Method). Under the fair value option, direct costs and fees related to the convertible notes are expensed as incurred. Accrued interest for the notes is included in the change in fair value of convertible notes in the statement of operations.

Liability Classified Series C Convertible Stock

        Our Series C Convertible Preferred stock include settlement features that result in liability classification. The initial carrying value of the Series C Preferred Stock is accreted to the settlement value of the securities to be issued upon the conversion of the Series C Preferred Stock. The settlement value upon the conversion of the Series C Preferred Stock is calculated using the effective interest method to calculate the implied interest through the expected date of conversion. The discount to the settlement value is accreted to interest expense using the effective interest method.

Warrant Liability

        Certain of our common stock warrants are recorded as liabilities measured at fair value. The liabilities are subject to re-measurement at each balance sheet date until exercised. We have estimated the fair value of the warrants at each measurement date using a variant of the Black Scholes option pricing model. The underlying equity included in the Black Scholes option pricing model was valued based on the equity value implied from sales of preferred and common stock. Changes in the fair value of common stock warrant liabilities are recorded in the statement of operations.

Income Taxes

        We provide for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities arise due to differences between when assets or liabilities are recognized for tax purposes and when they are recognized for financial reporting purposes. Net operating losses and credit carryforwards are also deferred tax assets. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all of the tax benefits will not be realized.

        We assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination that the position meets the more-likely-than-not threshold and is measured at the largest amount of benefit that is likely of being realized upon ultimate settlement.

        As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether (i) the factors underlying the more-likely-than-not threshold assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. Our policy is to recognize interest and pe