10-K

annx-10k_20201231.htm

10-K

annx-10k_20201231.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2020

Commission File Number 001-39402

ANNEXON, INC.

(Exact name of Registrant as specified in its Charter)

180 Kimball Way, Suite 200

South San Francisco, California 94080

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (650) 822-5500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common stock, par value $0.001 per share ANNX The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, 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 ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

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 pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The Registrant was not a public company as of June 30, 2020, the last business day of its most recently completed second fiscal quarter, and therefore, cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.

The number of shares of Registrant’s Common Stock outstanding as of March 15, 2021 was 38,157,618.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the Registrant’s fiscal year ended December 31, 2020, are incorporated by reference into Part III of this Report.

Table of Contents

Page

PART I

Item 1. Business 5

Item 1A. Risk Factors 43

Item 1B. Unresolved Staff Comments 91

Item 2. Properties 91

Item 3. Legal Proceedings 91

Item 4. Mine Safety Disclosures 91

PART II

Item 6. Selected Financial Data 93

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 102

Item 8. Financial Statements and Supplementary Data 103

Item 9A. Controls and Procedures 126

Item 9B. Other Information 126

PART III

Item 10. Directors, Executive Officers and Corporate Governance 127

Item 11. Executive Compensation 127

Item 14. Principal Accountant Fees and Services 127

PART IV

Item 15. Exhibits, Financial Statement Schedules 128

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

• our clinical and regulatory development plans;

• the pricing and reimbursement of our product candidates, if approved;

• our future financial performance; and

We have based these forward-looking statements largely on our current expectations, estimates, forecasts and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Annual Report on Form 10-K, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. You should refer to the sections titled “Risk Factor Summary” and “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward- looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Annual Report on Form 10-K by these cautionary statements.

RISK FACTOR SUMMARY

The following summarizes the most material risks that make an investment in our securities risky or speculative. If any of the following risks occur or persist, our business, financial condition and results of operations could be materially and adversely affected and the price of our common stock could significantly decline. This summary should be read in conjunction with the section titled “Risk Factors” and should not be relied upon as an exhaustive summary of the material risks we face.

PART I

Item 1. Business.

Overview

We are a clinical-stage biopharmaceutical company developing a pipeline of novel therapies for patients with classical complement-mediated disorders of the body, brain and eye. Our pipeline is based on our platform technology addressing well-researched classical complement-mediated autoimmune and neurodegenerative disease processes, both of which are triggered by aberrant activation of C1q, the initiating molecule of the classical complement pathway. Evidence suggests that potent and selective inhibition of C1q can prevent tissue damage triggered in antibody-mediated autoimmune disease and preserve loss of functioning synapses associated with cognitive and functional decline in complement-mediated neurodegeneration. Our upstream complement approach targeting C1q acts as an “on/off switch” designed to block all downstream components of the classical complement pathway that lead to excess inflammation, tissue damage and patient disability in a host of complement-mediated disorders, while preserving the normal immune function of the lectin and alternative complement pathways involved in the clearance of pathogens and damaged cells.

Our pipeline of product candidates is designed to block the activity of C1q and the entire classical complement pathway in a broad set of complement-mediated diseases. Our first product candidate, ANX005, is a full-length monoclonal antibody formulated for intravenous administration in autoimmune and neurodegenerative disorders. Our second product candidate, ANX007, is an antigen-binding fragment, or Fab, formulated for intravitreal administration for the treatment of neurodegenerative ophthalmic disorders. We are also developing ANX009, an investigational, subcutaneous formulation of a Fab designed for the treatment of systemic autoimmune diseases. We have completed Phase 1b safety and dose-ranging clinical trials for ANX005 and ANX007 in patients with Guillain-Barré Syndrome, or GBS, and glaucoma, respectively. Both ANX005 and ANX007 were well-tolerated and showed full inhibition of C1q and the classical complement pathway in the Phase 1b trials.

We have advanced ANX005 into a Phase 2/3 trial in patients with GBS and a Phase 2 trial in patients with Huntington’s disease. We plan to advance ANX005 into Phase 2 trials in patients with warm autoimmune hemolytic anemia and amyotrophic lateral sclerosis in 2021. A Phase 2 trial of ANX007 is ongoing in patients with GA, and ANX009 is being evaluated in a first-in-human trial. Based on learnings from our initial trials, we are evaluating additional orphan and large market indications that are driven by aberrant or excess classical complement activation. Additionally, we are developing novel product candidates designed to inhibit C1q and other components of the early classical complement cascade with the goal of further broadening our portfolio. Finally, we are leveraging our disciplined development strategy in early clinical trials utilizing established biomarkers to enhance patient selection, measure target engagement and assess our product candidates’ potential to meaningfully impact the disease process and improve the probability of technical success over shorter development timelines.

Annexon was co-founded by the late Dr. Ben Barres, former member of the National Academy of Sciences, Chair of Neurobiology at Stanford University and a pioneer in complement-mediated neurodegeneration, and Dr. Arnon Rosenthal, a world-renowned scientist and industry executive. We have assembled a seasoned and accomplished management team that has been involved in the development, approval and commercialization of numerous marketed drugs, and has been studying the complement pathway and autoimmune and neurodegenerative disorders for decades. Our team is further supported by an experienced scientific advisory board and leading healthcare investors that share our commitment to advancing transformative medicines for patients suffering from debilitating autoimmune and neurodegenerative diseases.

We hold worldwide development and commercialization rights, including through exclusive licenses, to all of our product candidates, which allows us to strategically maximize value from our product portfolio over time. Our patent portfolio includes patent protection for our upstream complement platform and each of our product candidates.

Our Pipeline

Our pipeline is focused on antibody-mediated autoimmune and complement-mediated neurodegenerative disorders for which there is significant unmet medical need. Our product candidates are summarized below:

Our first clinical-stage product candidate is ANX005, an investigational monoclonal antibody designed to block C1q and activation of the classical complement cascade. For GBS, ANX005 is designed to act early in the disease course to prevent nerve damage and irreversible neurological disability in GBS patients. In the Phase 1b dose-ranging trial in GBS patients, treatment with ANX005 was well-tolerated and resulted in full and prolonged C1q engagement and classical cascade inhibition in the blood and cerebrospinal fluid, or CSF. While our Phase 1b trial was not powered to show statistical significance, we did observe a significant reduction in neurofilament light chain, or NfL, a well-accepted marker of nerve damage in neurodegenerative disease that has been shown to correlate with disease severity and clinical outcomes. Patients treated with ANX005 also showed positive numerical trends across key GBS outcome measures. GBS is a rare, acute, antibody-mediated autoimmune disease impacting the peripheral nervous system. There are currently no approved therapies for GBS in the United States, but intravenous immunoglobulin, or IVIg, and plasma exchange are the current standards of care in the Western world and parts of Asia.

In March 2021, we completed the evaluation of our drug-drug interaction, or DDI, study of ANX005 co-administered with Intravenous Immunoglobulin (IVIg) in 14 patients with GBS. The DDI study was conducted to evaluate the safety and tolerability of ANX005 and IVIg co-administration in GBS patients, and measured pharmacokinetics (PK) and pharmacodynamics (PD) of ANX005 when administered in combination with IVIg. IVIg, though not FDA-approved in the United States for GBS, is currently the standard of care for GBS. Initial results from the DDI study demonstrated that co-administration of IVIg-ANX005 was well-tolerated and achieved full C1q target engagement, and C1q suppression was maintained within the targeted range. The open-label DDI study was not placebo-controlled or powered for statistical significance on efficacy measures. A number of key GBS outcome measures were recorded from baseline, and early improvement was observed in GBS patients, including increased muscle strength, decreased neurofilament light chain (NfL) and improved GBS disability score. We expect to submit full results from the DDI study to a peer-reviewed forum in 2021.

A randomized, placebo-controlled Phase 2/3 trial of ANX005 is ongoing in GBS patients in developing countries. The Phase 2/3 trial is statistically powered to evaluate the efficacy of ANX005 in improving disability in GBS patients. ANX005 has received both Orphan Drug and Fast Track designations from the U.S. Food and Drug Administration, or FDA, for the treatment of GBS.

Beyond GBS, we intend to study ANX005 in patients with warm autoimmune hemolytic anemia, or wAIHA, an antibody-mediated autoimmune disease characterized by the premature destruction of red blood cells. The classical complement pathway plays an important role in wAIHA through the removal of red blood cells labeled by activated complement components in the spleen or liver (extra-vascular hemolysis) and less common destruction of red blood cells in the blood vessels by the classical complement generated membrane attack complex (intravascular hemolysis). We plan to initiate a Phase 2 trial in patients with the primary diagnosis of wAIHA in 2021. We are conducting a non-

interventional screening study in wAIHA patients to utilize complement activation markers to identify and select patients who may be more likely to respond to our anti-C1q therapy in the planned Phase 2 trial.

We also intend to study ANX005 in patients with Huntington’s disease, or HD, and amyotrophic lateral sclerosis, or ALS—two neurodegenerative disorders where aberrant classical complement activation has been shown to be associated with synapse loss, elevated levels of NfL and disease progression. A Phase 2 trial in patients with HD is ongoing, and we plan to initiate a Phase 2 trial in patients with ALS in 2021 to assess ANX005’s safety, tolerability, target engagement and impact on disease-related biomarkers such as NfL.

Oursecond clinical-stage product candidate is ANX007, an investigational C1q Fab designed for intravitreal administration in patients with complement-mediated neurodegenerative ophthalmic disorders. Consistent with the results we observed in preclinical studies, in the Phase 1b trial with intravitreal administration in glaucoma patients, ANX007 was well-tolerated and showed full target engagement and inhibition of C1q in the eye for at least four weeks. We believe inhibition of C1q may provide neuroprotective benefit by preventing the aberrant loss of functioning synapses in the retina in a variety of ophthalmic disorders, including glaucoma and geographic atrophy, or GA. A Phase 2 trial of ANX007 in patients with GA is ongoing, with the goal of protecting against the loss of photoreceptor neurons in a well-defined patient population.

Our pipeline includes ANX009, an investigational C1q Fab designed for subcutaneous delivery, which is currently being evaluated in a first-in-human, or FIH, clinical trial. We are developing ANX009 to enable chronic dosing for patients with antibody-mediated autoimmune disorders where anti-C1q may have a disease-modifying effect and where we can utilize our targeted biomarker-driven approach. These disorders may include autoimmune hemolytic anemias and a subset of lupus nephritis patients who are selected for pathogenic anti-C1q antibodies, or PACA, and who have a high risk of renal flare. We are developing additional next generation product candidates, including ANX105, an investigational monoclonal antibody with enhanced dosing and PK properties designed for chronic neurodegenerative diseases, and small molecules designed for chronic autoimmune and neurodegenerative diseases. We intend to advance both ANX105 and our small molecule candidates through IND enabling studies in 2021.

Our Strategy

Our goal is to develop disease-modifying medicines for patients suffering from classical complement- mediated diseases. Key elements of our strategy include:

Overview of the Complement System and C1q Biology

The Complement System—three main complement pathways

The complement system is an integral component of the immune system that consists of many circulating and locally-produced molecules. This system evolved to enhance, or complement, other components of the adaptive and innate immune systems. The complement system, also known as the complement cascade, rapidly responds to pathogens, damaged cells and unwanted tissue components to facilitate their removal by the immune system.

There are three main complement pathways (also called cascades)—the classical, lectin and alternative pathways. Each pathway is initiated by different molecules that respond to distinct triggers. When activated, the initiating molecules set in motion a cascade of enzymatic reactions that greatly amplify, or complement, an inflammatory response. The classical pathway is initiated by C1q, which recognizes antibody complexes, specific pathogens, damaged cells or unwanted cellular components. The lectin pathway is triggered by carbohydrates on the surface of pathogens or cells. The alternative pathway amplifies the action of the other two pathways and also self-activatestoeliminatepathogens orcells that arenotspecificallyshieldedbythebody’sbuilt-inself-protectivesystems.Whilethesethreepathwaysareinitiatedbydistinctmolecules,theyconvergedownstreamon commonpathway componentsknownas C3and C5.

Thethreemainpathwaysof thecomplement cascadeare activated byindependentmoleculesbut convergeatC3

Aberrantactivationofthecomplementsystemcanresultinarangeofdiseasescharacterizedbyanattackon healthytissue,suchasredblood cells, nerve cells or kidney components. A broad range of diseases are known to be associated with pathological activation of the complement cascade, including antibody-mediated autoimmune disorders such as GBS, wAIHA, CAD and lupus nephritis, and complement-mediated neurodegeneration disorders in the eye and brain such as glaucoma, GA, HD, ALS, frontotemporal dementia and Alzheimer’s disease. We believe intervening in the activation of the complement cascade offers a potent and selective mechanism for specifically slowing or reversing these disease processes.

Specific activated components of the complement cascade have important immune functions that contribute to three key outcomes:

Aberrantactivationof theinitiatingmolecule,C1q,can leadtothreemainoutcomes

InhibitingC1qupstreamblocksdownstreamcomponentsandfunctional activitiesoftheclassicalcomplementcascade

Broad potential for Classical Complement pathway targeted therapeutics in Autoimmune and Neurodegenerative Diseases

Theclassicalcomplementcascadehasawell-establishedroleinaugmentingantibodyfunctionwithinthe immunesystem.C1qrecognizesantibodiesboundtopathogensorcellsandactivatestheclassicalpathwayto triggertheirremovalandclearancebytheimmunesystem.C1qcanalsodirectlyrecognizepathogens,damaged

cellsorunwantedcellularcomponentsleadingtosimilardownstreamclearance.Amorerecentfindingmadeby thelaboratoryofDr.Ben Barres,ourscientificfounder,isthatC1qalso directlyinteractswith neuronal connections,orsynapses,duringearlydevelopment.RecognitionofweakersynapsesbyC1qtriggers the classical complement cascade and directs immune cells to “prune” the synapses away from neurons, thereby reinforcing stronger synapses to establish appropriate neuronal connections.

Because of its central role in immune function, aberrant activation of C1q can lead to damage of healthy tissue and destruction offunctioningsynapses.WearefocusedontwodistinctdiseaseprocessesinvolvingC1qasakeymediatoroftissuedamage:antibody-mediatedautoimmunediseaseandcomplement-mediatedneurodegeneration.

Inantibody-mediatedautoimmunedisease,self-reactiveantibodiesbindtocellsortissues,activatingC1q andleadingtodamaginginflammatoryresponses.WehaveobservedthatinhibitionofC1qwasprotectivein severalanimalmodelsofantibody-mediatedautoimmunedisease,includingneuromyelitisoptica,orNMO,and twovariantsofGBS.InNMO,auto-antibodiesrecognizecellswithinthecentralnervoussystem,orCNS,and canleadtorapidlocalizeddestructionoftheopticnerveandregionsofthespinalcord,whileinGBSpathogenic antibodiesreactwithcomponentsoftheperipheralnervesystem,orPNS,tocausewidespreadperipheralnerve damageandparalysis.Thisdiseaseprocessisalsoevidentinantibody-mediatedautoimmunediseaseinvolving bloodcomponents,suchaswAIHAandCAD,characterizedbyauto-reactiveantibodiesthattriggerdestruction ofredbloodcells,andsystemiclupuserythematosus,orSLE,whereendogenouspathogenicantibodiesagainst C1qitselfdriveaberrantC1qactivationand are highly associatedwith kidney damage, or lupus nephritis.

Incomplement-mediatedneurodegeneration,aberrantactivationofC1q atsynapsesinaginganddiseasecan leadtoexcessivesynapselossandneuronaldamage,drivingdiseaseprogressioninmultipleneurodegenerative disordersregardlessoftheinitiatingfactor.Inanimalmodels,C1qaccumulatedonsynapseswithage,building upto300-foldhigherlevelsthaninyoungeranimals.Itdidnotactivatewithnormalaging,butother inflammatorystimuli,includingmisfoldedproteins,metabolicdysfunctionorincreasesinintraocularpressure, appearedtoaberrantlyreactivateC1q’sdevelopmentalroleinsynapseelimination.Complementactivationand aberrantsynapsepruningindiseasemayleadtoneuroinflammation,lossofsynapticneuronalconnectionsand neurodegeneration.Insupportofthishypothesis,weandotherinvestigatorshaveobservedthatC1qinhibition was protective in numerous models of neurodegenerative disease, including diseases of the eye, such as glaucomaandage-relatedmaculardegeneration,chronicdiseasesoftheCNS,suchasfrontotemporaldementia, Alzheimer’s,HDandSpinalMuscularAtrophy,orSMA,andacuteinjury,suchastraumaticbraininjuryand stroke.

Synapticloss isa pathogenicdriver of disabilityinmany neurodegenerative diseases, protectedwith C1qinhibition

Our differentiated approach to treating complement-mediated autoimmune and neurodegenerative disease through inhibition of C1q

Webelievethatinordertoselectivelyinhibitaberrantactivationoftheclassicalcomplementpathway implicatedindrivingcertaincomplement-mediatedautoimmuneandneurodegenerativediseases,itisimportant totargettheearlycomponentsoftheclassicalcascade,particularlyC1q,C4andC3.ActivatedfragmentsofC4 andC3inducevascularleakinessandimmunecellrecruitmentintothetissue,whileotherfragmentsofC4and C3,aswellasC1q,worktogethertodirectimmunecellattacktothecellorsynapsesurface.Furthermore,C1q inhibitionblocksdownstreamclassicalpathwayactivationofC5anditsmembranedamagingeffects.Webelieve thatinhibitionofC1qdoesnotblocktheactivityofthesecomponentsinthelectinoralternativecomplement pathways, and both of thesepathways will continueto performtheirnormalimmunefunctions.

Our Platform

Ournovelupstreamcomplementplatformisdesignedtocompletelyinhibitclassicalcomplementactivity forthetreatmentofantibody-mediatedautoimmunediseaseandcomplement-mediatedneurodegeneration.We believe there arepotentialadvantages toourapproach ofupstreaminhibition oftheclassical complement cascade,which include:

Our Pipeline

Ourpipelineisfocusedonantibody-mediatedautoimmuneandcomplement-mediatedneurodegenerativedisordersforwhichthereissignificantunmetmedicalneed.Ourproductcandidatesaresummarizedinthetablebelow.

Our First Product Candidate, ANX005

ANX005isaninvestigationalhumanizedrecombinantmonoclonalantibodythatisdesignedtopotently bindandinhibitC1q.Ourinvestigationalnewdrug,orIND,applicationforANX005inGBSwasauthorizedto proceedinFebruary2019.WehavecompletedaPhase1bclinicaltrialforANX005inpatientswithGBSin whichANX005 was well-tolerated and achieved full target engagement and C1q suppression in the PNS and CNS. Based on the results from our Phase 1b trial, we intend to advance ANX005 through clinical development in multiple autoimmune and neurodegenerative indications of high unmet need. ANX005hasbeengrantedOrphanDrugandFast Track designationsfromthe FDAfor the treatmentof GBS.

ANX005for the Treatmentof GBS

Overview of Guillain-BarréSyndrome

GBSisasevereacute inflammatory disease typically triggered by a preceding infection, in which aberrant auto-antibodies that recognize neurons or associated cells cause neuronal injury and acute paralytic neuropathy. In 2011, the estimated annual incidence of GBS was approximately 12,000 in North America and Europe. In 2004, the annual economic cost of GBS in the United States was $1.7 billion, largely due to the permanent disability and mortality it can cause.

There are currently no FDA-approved therapies for the treatment of GBS. Treatment guidelines published by the American Academy of Neurology recommend early initiation of IVIg or plasma exchange in patients diagnosed with GBS. IVIg and plasma exchange are the established standards of care in the Western world and parts of Asia. Although IVIg and plasma exchange have been shown to provide some benefit, significant unmet need still exists, and many patients, despite receiving the standard of care, are left with residual neurological disability, accompanied by chronic pain and fatigue.

The clinical course of GBS usually involves rapidly progressive weakness in the limbs culminating in neuromuscular paralysis within two to four weeks of onset. According to 2011 estimates, 20 to 30 percent of patients require mechanical ventilation, over 20 percent have permanent motor or sensory disability and 2 to 17 percent of cases result in death globally. Many patients with GBS require extensive monitoring and supportive care and will seek treatment in a hospital within a few days of onset of the disease. Because approximately a quarter of patients need artificial ventilation due to respiratory muscle weakness, and many develop autonomic disturbances, admission in an intensive care unit is frequentlynecessary.Symptomspeakwithinfourweeksastheauto-antibodyresponsedeclines,followedbyarecoveryperiodthatcanlastmonthsoryears,asthenervoussystemrepairsitself.

C1q is a key driver of pathogenesis in GBS

GBSisanacute,autoimmunediseasedrivenbyantibodiesthatleadtoactivationoftheclassical complementcascade.Pathologicalnerve-targetingauto-antibodies,whichmaybetriggeredbyaninfection,lead totheactivation ofC1qandtheclassical complement cascade.Studieshaveshownthatpathogenicauto- antibodiesarepresentintheserumandCSFandthatactivatedcomponentsofthecomplementcascadeare depositedonperipheralnervetissuefromGBSpatients.PeripheralnerverootsareimmersedinCSFasthey emergefromthespinalcordandareprominentsitesofdamageinGBS.Thefigurebelowillustrates the activationoftheclassicalcomplementpathwaywithinperipheralnervesinaGBSpatient.Theleftimageshows alowmagnificationviewofaperipheralnervefromaGBSpatientwithnumerousindividualnervefiberscoated withmembrane-damagingcomplementactivationproducts(C5b-9;darkstaining).ThemiddleimageshowsahighmagnificationviewofanindividualnervefiberwithdepositionofC3d(darkstaining),acomplement activationproductthatdirectsimmunecellattack.Therightimageshowsahighpowerimageofanindividualnerve fiberbeing probed by an infiltratingimmunecell(macrophage).

WebelievethatbyblockingtheactivityofC1qearlyintheonsetofthedisease,wecanminimizethe neuronaldamagecausedbythesepathogenicauto-antibodies,inturnreducingthepatients’symptomsand acceleratingtheirneurologicalrecovery.

Neurofilamentlightchain (NfL), a marker of neurodegeneration,is highlyelevatedin GBS

NfL,an intracellular neuron-specificprotein,hasemergedasawell-acceptedbiomarkerofnervedamageindisorderscharacterizedbydamagedordegeneratingnerves.NfLisasubunitofneurofilaments,whicharecylindricalproteinsexclusivelylocatedinthecytoplasmofnervecellsandarereleasedintotheCSFandbloodwhennervesaredamaged(illustrationbelow).Recentultrasensitivetechniques(e.g.,single-moleculearraytechnology)havemadeitpossibletoaccuratelyandquantitativelydetectlongitudinalchangesofNfLinbothbloodandCSF,withverylowanalyticalvariation.Theseassayproperties,inadditiontoneuron-specificity,positionNfLasanimportantdecision-enablingtoolinproof-of-conceptstudiesofneuroprotectiveagentsacrossawidevarietyofdiseases.

Neurofilament LightChain(NfL)isreleased from damaged nerve cells

ElevatedNfLlevelscorrelatewithcurrentpatientdisabilityandpredictpatientoutcomesinautoimmune neurologicaldiseasessuchasGBS,multiplesclerosis,orMS,chronicinflammatorydemyelinatingpolyneuropathyandmultifocalmotorneuropathyaswellasinchronicneurodegenerativediseasessuchas Huntington’sdisease,amyotrophiclateralsclerosis,spinalmuscularatrophy,orSMA,frontotemporaldementia,andAlzheimer’sdisease.Moreover,effectivetreatmentsforMS(e.g.,ocrelizumab,natalizumabandfingolimod) andSMA(e.g.,nusinersen)thatpreventneurologicaldisabilityinpatientshavebeenshowntosignificantly reduceNfLlevelsinthesesamepatients.InpatientswithGBS,NfLisveryhighlyelevated(insomeinstances, greaterthan100foldabovenormal).RetrospectiveandprospectivestudiesinGBSpatientshaveshownthatNfL levelsin CSFand serummay correlatewith diseasecourse,severityand prognosisin GBS.

PreclinicalDevelopmentin GBS

Asillustratedbelow,inamousemodelofsevereGBS,ANX005treatmentblockedcomplementdeposition onnerveterminals(leftpanel)andprotectedrespiratoryandmotorfunction(rightpanel)whencomparedtoan irrelevantimmunoglobulinG,orIgG,isotypecontrolantibody.Ap-valueisameasureofthestatistical significanceoftheobservedresult.Byconvention,ap-valuelowerthan0.05isconsideredstatisticallysignificant.

Respiratoryandmotorfunction

Phase 1a Trial in Healthy Volunteers

ANX005wasinitiallyevaluatedinaPhase1adose-escalationsingle-dosetrialdesignedtoassesssafety, pharmacokineticsandpharmacodynamics.Thistrialwasconductedin27healthyvolunteersinAustralia.The dosinglevelsofANX005deliveredinthistrialrangedfrom1mg/kgto8.2mg/kg.Weterminatedthetrialin healthyvolunteersandtransitionedourclinicaldevelopmenttoevaluateANX005directlyinpatientswithGBS based on guidancefromthe FDAin orderto expedientlyadvance thisprogramin the United States.

Phase 1b Trial in GBS Patients

WehavecloselycoordinatedourclinicaleffortswithleadingresearchersoftheInternationalGBSOutcome Study,orIGOS,inpursuinganoveltherapyforGBS.Withthegoalofaidingthedevelopmentofeffective treatmentsforGBS,practitionersestablishedIGOSinMay2012,andhavecollectednaturalhistorydatafrom over1,750newly-diagnosedGBSpatientsworldwide.IGOSisaprospective,observational,multicentercohort studythataimstoidentifytheclinicalandbiologicaldeterminantsandpredictorsofdiseaseonsetaswellasthe subtype,courseandoutcomeofGBS.IGOSwasestablishedtohelpdevelopabetterunderstandingofthe mechanismofdiseaseprogressionandrecoveryandtoconductselectivetherapeutictrialstoimprovepatient outcomes.Thisnaturalhistorydatabaseisaninvaluableresourcetoclinicaldevelopment,facilitatingthedesign ofclinicaltrials,optimalselectionofendpoints,andpatientfollow-upforonetothreeyears.WeinitiatedourGBSclinicaldevelopmentinBangladesh,acountrywheretheincidenceofGBSisseveraltimeshigherthanin NorthAmericaandEuropeandwhere17%ofpatientsdiefromthediseaseand20%sufferpermanentdisability andareunabletowalk.Additionally,oursiteinBangladeshiswellsituatedtoconductclinicalresearchinGBS inamannercompliantwithgoodclinicalpractice,orGCP,requirements.AsofMarch2017,BangladeshhadenrolledmorepatientsinIGOSthananyothercountry,representingapproximately15%ofallenrolledpatients worldwide.

WeconductedaPhase1bplacebo-controlled,doseescalationtrial(n=31)ofANX005inGBSpatientsatatertiarycarehospitalinBangladesh,incompliancewithGCPasdescribedabove.Thetrialobjectivesincluded safetyandtolerability,dosinglevelsandtargetengagement, and included a follow up of eight weeks. The dosing levels of ANX005 delivered in this trial ranged from 3 mg/kg to 75 mg/kg. ANX005 was well tolerated, and no drug-related serious adverse events or drug-related discontinuations occurred. The most common adverse events were acute infusion-related reactions, or IRRs, which occurred in the majority of patients and presented as low grade, non-serious, transient skin rash. These acute IRRs were mitigated by standard anti-inflammatory pre-medications.

Results from the Phase 1b trial showed increasing serum levels of ANX005 and its duration in the circulation at increasing dose levels, and that the drug was present in the serum for up to three weeks at a dose of 75 mg/kg (left panel). When ANX005 was present in the circulation C1qfunctionwasfullyinhibited,andrapidlyreturnedtonormallevelsasANX005serumlevelsdeclined(rightpanelshowingdatafromapatientreceiving75mg/kg).

MuchoftheproximalweaknessinGBSpatientsisduetoinvolvementofperipheralnerverootsthatareimmersedinCSF astheyexitthespinalcord.Hence,webelieveproductcandidatelevelsandtargetinhibition in CSFmaybeanimportantcontributortoefficacy.WeobservedthatANX005enteredtheCSF of GBS patientstreatedwithdosesof18-75mg/kgofANX005,resultinginfullengagementofC1qinhibitionintheCSF(asshownbelow).

Inhibitionof C1qObserved inCSF at18-75mg/kg

InthePhase1btrialinGBSpatients,ANX005treatmentatdosesthatengagedC1qinbothserumandCSF(i.e.,18-75mg/kgdose)resultedinastatisticallysignificantearlydeclineinserumNfLlevelscomparedto placebo(2-4weekposttreatmentp-value<0.05,leftpanelbelow).InthisPhase1btrial,wealsoexploredthe administrationofANX005onmultiplevalidatedclinicaldisabilitymeasuresincludingGBS-DisabilityScore,or GBS-DS,MedicalResearchCouncilMuscleStrengthScale,orMRC,andInflammatoryRasch-builtOverall DisabilityScale,orI-RODS,overaneight-weekperiod.WeobservedthatearlydeclineinNfLcorrelatedwith improvementintheGBS-DSattheendofthestudy(2-8weekposttreatmentp-value<0.05;rightpanelbelow). WebelievetheseresultssuggestthatANX005hadarapidimpactonthediseaseprocessbyameliorating antibody-inducednerve damage, likelywithin the firsttwo weeks of dosing.

Delta NfL wk 2-4

Thoughthetrialwasnotpoweredforstatisticalsignificance,treatmentwithANX005resultedinconsistent, positivenumericaltrends,includinganimprovementinMRCscoreandthenumberofdaysofventilation.We observeda dose-dependenttrendfor improvementin MRCwithin the firstweek of treatment(as shownbelow).

Mean Change in MRC Score

Week 1 from Baseline

Dose ANX005 (mg/kg)

EarlyimprovementinMRCisknowntohavestrongprognosticimplications onlong-termfunctional recovery(modifiedErasmusGBSOutcomeScore).Inlinewiththispublisheddata,wefoundthatearly improvementinMRCcorrelatedwithpatients’disabilityscoresattheendofthePhase1btrial(GBS-DS atweekeight).ThisresultisimportantbecauseGBS-DSistypicallyusedastheprimaryendpointinGBSregistrational studies.Inaddition,usingaresponderanalysis,28%ofpatientstreatedwithhighdoseANX005(18-75mg/kg)improvedbyatleastthreepointsonGBS-DSbyweek8comparedto0%ofplacebo-treatedpatients(asshown below).PatientstreatedwithANX005showedatrendofimprovementonGBS-DSwhenusingameananalysis. Both resultsare promisingbut not statisticallysignificant.

BasedontheresultsofthePhase1btrial,we selectedthe75mg/kgdoseofANX005for ongoing developmentinGBS.FollowingthecompletionofthePhase1btreatmentcohorts(through75mg/kg),two unblindedexploratorycohortswereenrolledtoestablishhigherdoseandmultipledosesafetyandPK/PDto informsubsequentchronicdosingtrials.Thesetwoexploratorycohortswereasingledoseof 100 mg/kg, and two dosesof75mg/kgseparatedbyoneweek(150mg/kgtotal).Atthesehigherdoselevels,ANX005waswell-tolerated,andnodrug-relatedseriousadverseeventsordrug-relateddiscontinuationsoccurred;moreover,wedid notreachamaximumtolerateddose.Similarly,we observedfullinhibitionof C1qin serumand CSF,a reduction inNfLandtrendsofimprovementinclinicalmeasureswhencomparedtoplacebo;however,therewasno additionalimpacton theseclinicalmeasuresbeyond thatseen at 75 mg/kg.

TheresultsofthePhase1bdoserangingtrialinGBSshowedthatANX005waswell-tolerated,fully inhibitedC1qinthebloodandCSFattargetdoses, anddemonstratedanearlyreductioninNfLlevels.DrugtreatmentwasassociatedwithatrendforearlyimprovementinMRC,andearlychangesinMRCsignificantly correlatedwithimprovedclinicalmeasuresinGBSpatients.Anadditionalkeylearningfromthestudyisthe

importanceofusingbaselineMRCforpatientstratification atthetimeofhospitalizationandstudyentry. AccountingforbaselineMRCstrengthenedtheimpactofANX005treatmentinthebiomarkerandclinical measures,demonstratingthatMRCwill be an importantstratificationtool in futureGBStrials.

Ongoing Development of ANX005 for GBS

We completed a DDI trial which demonstrated that concomitant use of ANX005 and IVIg in GBS patients was well-tolerated and achieved full target engagement. A randomized, placebo-controlled Phase 2/3 trial designed to evaluate the efficacy of ANX005 in improving disability in GBS patients is ongoing, and we anticipate reporting data from this trial in 2023.

ANX005 for the Treatment of Autoimmune Hemolytic Anemias

Overview of Autoimmune Hemolytic Anemias

Autoimmune hemolytic anemias, or AIHA, are characterized by the presence of auto-antibodies that bind red blood cells and activate the classical complement pathway. The temperature at which these auto-antibodies bind to red blood cells determines whether the hemolytic anemia is labelled “cold” or “warm.” In both cases, the antibodies trigger classical complement activation, which tags red blood cells with complement components (e.g., C3d, C4d) for removal in the spleen or liver (via extra-vascular hemolysis) or, less commonly, leads to their direct lysis within blood vessels by the C5b-9 membrane attack complex (intravascular hemolysis). The “cold” forms of AIHA are known to be complement-mediated disorders, whereas complement is hypothesized to play a dominant role in a subset of patients with the “warm” form of AIHA. It is estimated that less than 5,000 people have the cold form while approximately 30,000 people have the warm form of AIHA in the United States. There are no approved treatments for AIHA in the United States; however, blood transfusions, steroids, rituximab, chemotherapies and splenectomies are currently used to treat patients with AIHA. It is estimated that up to 30% of patients require second-line treatment when treated with the standard of care treatment and approximately 11% of cases after symptom onset result in death.

Ongoing Developmentof ANX005in Autoimmune Hemolytic Anemias

We have found that ANX005 inhibited complement deposition on human red blood cells (left panel) and prevented direct red blood cell lysis (right panel) induced by sera from CAD patients as ex vivo models of extravascular and intravascular lysis, respectively.

WehaveobservedinbothpreclinicalstudiesandinourPhase1btrialinpatientswithGBSthattreatment withANX005resultedinnearcompleteinhibitionofC1q,asmeasuredinserumbythesameexvivohemolysis assayusedforhemolyticanemiaconditions.Thus,webelievethatANX005maybeabletoachievenearcompletesuppressionof complement-mediatedhemolysisin patientswith wAIHA.

We are conducting a non-interventional screening study in wAIHA patients to utilize complement activation markers in an effort to identify and select patients who may be more likely to respond to our anti-C1q therapy in a planned Phase 2 trial. An open label Phase 2 trial in wAIHA patients will evaluate safety, tolerability, PK, pharmacodynamic impact and efficacy, as measured by biomarkers of hemolysis and changes in hemoglobin. We anticipate reporting data from this trial in 2022. We may also evaluate ANX005 in patients with CAD.

ANX005for the Treatmentof Huntington’sDisease

Overview of Huntington’sDisease

HDisanorphanhereditaryneurodegenerativediseasethatisfatalandforwhichtherearenoapproved treatmentsthatcanreverseorslowitscourseofprogression.HDsymptomstypicallybegintomanifestbetween the ages of 30 to 50 and progressas a devastatingneurodegenerativedisorder characterizedbyabnormal involuntarymovements,knownaschorea,spreadingtoallmuscles,progressivedementiaandpsychiatric manifestationssuchasdepressionandpsychosis.Ultimately,affectedindividualssuccumbtocardio-respiratory complications.Lifeexpectancyaftersymptomonsetisapproximately10to20years.Someofthesymptomsof HDsuch as choreaand depressioncan be managedwith medications.

Approximately25,000to35,000peopleintheUnitedStateshaveHD.Estimatesprojectthatapproximately 75,000peopleintheUnitedStatesandothermajormarketcountrieswillhaveHDby2025.BecauseHDisa geneticdiseaseinwhichanindividualwithasinglecopyofthedysfunctionalgenewilldevelopthedisease, everychildofaparentwithHDhasa50percentchanceofinheritingthefaultygeneanddevelopingthedisease. Thereareanestimated200,000individualsintheUnitedStateswhohavea50percentriskofdevelopingHD becauseoftheirfamilyrelationshiptoHDpatients.Itisestimatedthatonlyfivetosevenpercentoftheseat-risk individualshavevoluntarilyundergonegenetictestingduetothedevastatingnatureofthediseaseandthelackof anyeffectivetreatments.Thedevelopmentofadisease-modifyingtherapycouldencourageat-riskpatientsto seekouttestingandtherebybothprovidehopetogenecarriersandexpandthenumberofpatientswhomay benefitfromtreatment.

C1q is a key driver of pathogenesis in HD

HDiscausedbyageneticmutation,specifically,byexpansionofthenumberofcytosine-adenine-guanine,orCAG,nucleotidesequenceswithintheDNAofthehuntingtingene,whichleadstoproductionofamutant huntingtinproteinthatisthoughttobe neurotoxicand promotethe degenerationof neurons. Abovea thresholdof 35CAGrepeats,theageofdiseaseonsetisinverselycorrelatedwiththenumberofCAGrepeats.TheclassicalcomplementcascadeisactivatedinHDpatientsandisassociatedwithprogressivesynapseloss.Wehypothesize thatC1qplaysanimportantroleinthedegenerativeprocessbytaggingweakenedsynapsesandtriggeringa neuroinflammatoryresponsethatleadstoaberrantsynapselossandprogressiveneuronaldestruction.Asshown below,weobservedthatincreasedcomplementactivationinHDpatients(asmeasuredbythecomplement activationmarkerC4ain CSF)was associatedwith diseaseprogression.

NfL is elevated in HD patients

BothCSF(shownbelow)andplasmalevelswerefoundtobeelevatedinHDpatientscomparedtohealthy controls,consistentwithobservationsinotherneurodegenerativediseases.Furthermore,plasmaNfLisincreased withadvancingdiseaseseverityandincreasesatanearlieragewithagreaternumberoftheCAGrepeats.NfL levelsinbothplasmaandCSFcorrelatebetterthanlevelsofthemutanthuntingtin,ormHTT,proteinitself,with clinicalfunctional/cognitivemeasuressuchastotalUnifiedHuntington’sDiseaseRatingScaleandwithbrain volumemeasuresasdeterminedbyMRI.Inaddition,whileCSFmHTTlevelsaccuratelydifferentiatecontrols andHDmutationcarriers,onlyNfLinCSFandplasmaisabletodistinguishpresymptomaticfromsymptomatic (manifest)HDpatients,suggestingthatNfLmightbeoneoftheearliestdetectableabnormalitiesinthe progressiontomanifestHD.Ofnote,NfLlevelswereshowntoreflectfuturepatientoutcomesaswellascurrent disability.

Increased NflintheCSF withDiseaseProgression

Progressive synapse loss in HD patients

Asshownbelow,researchersobservedinpost-mortemtissuefromHDpatientsthatthenumberofsynapses onneuronsconnectingspecificregionsofthebrain(thecortexandstriatum)werereducedcomparedtohealthy controls,withpatientsmoreadvancedinthediseaseprocess(Huntington’sdiseasestage4)showinggreaterloss ofsynapsesthanearlierstagepatients(Huntington’sdiseasestage2).Theseresultsareconsistentwithour hypothesisthatcomplementactivationleadsto synapse eliminationand neuronaldamage.

ProgressiveSynapse LossinHuntington’sDisease Synapse number(%Control)

ANX005 protected against synapse loss and reduced NfL in a preclinical model of HD

IntransgenicmousemodelsofHD,weassessedthepotentialofperipherallyadministeredANX005to inhibitactivationoftheclassicalcomplementcascadeand protectagainstsynapse loss. Asshownbelow, ANX005treatmentreducedtheamountofactivatedcomplementfactorC3dthatwasdepositedonsynapsesin thestriatum

(thesameregionofthebrainasaffectedinHDpatients;leftpanel),reducedCSFlevelsofNfL (middlepanel),andreducedthelossofsynapses(rightpanel).Webelievethesethreelinesofevidencesupport thehypothesisthatANX005blockscomplement-mediatedneurodegenerationinHDandcanleadtopreservation of neuronalsynapses.

Developmentof ANX005in HD

We initiated our Phase2trialinHDpatientsin late 2020.Thisopen-labeltrialwillevaluateANX005’sabilitytoinhibitC1qinthe CSFandtoreducelevelsofserumandCSFNfL,amarkerofneurodegenerationwithprognosticsignificance. We anticipatereportingdata fromthistrialin 2021.

ANX005for the Treatmentof ALS

Overview of ALS

ALSisadevastatingneurodegenerativediseasewithnocurativetreatmentthataffectsabout30,000patients worldwide.TherearerarefamilialformsofALS(e.g.,duetoDNAmutationsintheSOD1andC9ORF72 genes),butthemajorityofALScasesareconsideredsporadic.Thediseaseisamotorneurondiseaseimpacting boththecentralandperipheralnervoussystems.ALScausesprogressiveweaknessoflimb,respiratory, swallowingandspeakingmuscles,anddeathtypicallyoccurswithintwotofiveyearsaftersymptomonset. Thereisevidencethatneurodegenerationbeginsperipherally,attheneuromuscularjunction,orNMJ,andthen proceedsproximallytoinvolvetheperipheralmotornerves,ventralnerveroots,spinalcordandbrainmotor cortex(“dyingback”neurodegeneration).TheNMJisaspecializedsynapsebetweenperipheralmotornerveand musclefiber.As

illustratedbelow,“dyingback”oftheperipheralnerveinALSisassociatedwithC1q/classical complementdepositionon the NMJ.

C1qinvolvementin ALS

C1q and classical pathway activation is elevated in ALS patients. Specifically, C1q deposition has been noted in NMJs and C4d levels are increased in the CSF of ALS patients.

As shown below in a preclinical model of ALS, muscle levels of C1q (at NMJs) increased with age (left panel) and were observed to correlate with decline in muscle strength (right panel).

OurgoalwithourC1qinhibitoristopreventlossofNMJsandhenceprevent“dyingback” neurodegenerationofmotornervesinpatientswithALS.Ofnote,thereissignificantoverlapintheperipheral nervestructuresthatareinvolvedinbothGBSandALS;therefore,webelieveourANX005pharmacokinetics and pharmacodynamicsdata in GBSpatientscan be extrapolatedto ALSpatients.

Likewise,inanexperimentalmodelofSMA,anotherperipheralnervedegenerativediseasethatis pathologicallysimilartoALS,wefoundthattreatmentwithanti-C1qantibody(mouseprecursorofANX005) protectedagainstsynapselossandimprovedmotorfunction.Thesameperipheralnervepathwayisinvolvedin GBSand ALS,as illustratedbelow.

Thesameperipheralnerve pathwayisinvolved inGBSandALS

NfL is elevated in ALS patients

ALSpatientshavesubstantialelevationsofNfLinbothCSFandserumcomparedwithcontrolsandpre- symptomaticmutationcarriers.InALSpatients,serumlevelsofNfL increaseintheyearpriortoonsetofdisease symptoms(seebelow).Inaddition,ithasbeenobservedthatNfLlevelsinALSpatientscorrelatebothwith currentdisabilityand futurepatientoutcomes.

Serum NfL Elevated inALS Patientsa Year PriortoSymptom Onset

Developmentof ANX005in ALS

OurINDapplication for ANX005 in ALS was activated in May 2020. We intend to initiate a three-month, open-label Phase 2 trial in ALS patients in 2021 to evaluate ANX005’s ability to inhibit C1q in the CSF and to reduce NfL levels in serum and CSF in ALS patients. We anticipate reporting data from this trial in 2021. Based on the results of this trial, we will evaluate whether to initiate a potential registrational program for ALS.

If either of the HD or ALS Phase 2 trials are successful, we will consider proof-of-concept studies in other CNS neurodegenerative indications,suchasAlzheimer’sdisease,frontotemporaldementiaandprogressivemultiplesclerosis.

Our Second Product Candidate, ANX007

ANX007isaninvestigationalmonoclonalantibodyantigen-bindingfragment,orFab,thatisdesignedtopotentlybindtoC1qandinhibitactivationoftheclassicalcomplementcascade.WeactivatedanINDforANX007in2018andaredevelopingANX007asanintravitrealinjectionforophthalmicindicationssuchasglaucomaandgeographicatrophy.WehaveconductedaPhase1btrialofANX007inpatientswithglaucoma,andbasedontheseandpreclinicalstudyresults,webelieveANX007mayhavepotentialtotreatpatientswithGA.

ANX007 for the Treatment of Ophthalmic Diseases, including Glaucoma and Geographic Atrophy

Overview of Glaucoma

Glaucoma is a major cause of blindness and results from progressive loss of neurons in the retina called Retinal Ganglion Cells, and optic nerve degeneration. A frequent risk factor for glaucoma is elevated intraocular pressure, or IOP, but there are patients with “normotensive” glaucoma who have normal IOP. Patients with glaucoma have progressive loss of peripheral vision, which can eventually result in functional blindness.

It is estimated that over three million people in the United States have glaucoma but only half of these people have been diagnosed. More than 120,000 people in the United States are blind due to glaucoma, accounting for 9 to 12% of all cases of blindness.Theworldwideprevalenceofglaucomahasbeenestimatedto beover60millionpeople.Glaucomaisadiseasethatismorefrequentlyfoundinolderadultswithrates increasingseveralfoldbetweenages50and70.Similartootherneurodegenerativediseases,theoverall prevalenceof glaucomais projectedto increaseas populationsage worldwide.

Glaucomaisoneofthelargestsegmentsoftheglobalophthalmicmarketandhasasignificantimpactonthe qualityoflife.Patients’abilitytoperformdailyactivitiesbecomesincreasinglylimitedasthediseaseprogresses. Individualswithglaucomaaremorelikelytoexperiencefalls,tobeinvolvedinmotorvehiclecollisions,to sufferdepressionand to requireadmissionto a nursinghome.

ThegoalofexistingtherapiesforglaucomaisreductionofIOP.IOP-loweringtreatmentsaretypically administeredintheformofeyedrops,andpatientsmayrequiresurgerytofacilitatedrainageoffluidintheeye. However,approximatelytenpercentofpeoplewho receiveappropriatetreatmentneverthelesscontinueto experienceprogressivevisionloss.Theopticnervedamageobservedinglaucomaisbelievedtobeirreversible, highlightingthe need for neuroprotectivetherapiesthatcan slow or stop the damageto opticnerves.

Role of C1q in Glaucoma

C1q,theinitiatingmoleculeoftheclassicalcomplementcascade,hasbeenimplicatedintheprogressionof neurodegenerativedisease,includingglaucoma.Thelabofourscientificfounder,Dr.BenBarres,reportedthat C1qaccumulatedonretinalneuronsandtheirsynapsesearlyinthediseaseprocessinachronicmousemodelof glaucoma,beforetheonsetofotherobservablechanges.C1qaccumulationcontinuedassynapseswerelost, followedbylossoftheopticnerve.SubsequentstudiesshowedthatgeneticdeletionofC1qprotectedagainst opticnerve damagein a chronicmouse modelof glaucomaat 12 monthsof age (leftpanel, figurebelow).

UsingpharmacologicalinhibitionofC1qwithANX007,weobservedthesefindingsinadifferentmouse modelofglaucomainvolvingacuteelevationofIOP.Inthismodel,animalsreceivedanintravitrealinjectionof theM1-FabmurineprecursorofANX007atthetimeofIOPelevation,followedbyaseconddoseoneweek later,andtheirretinaswereexaminedatweek2.Asshownintherightpanelofthefigurebelow,intravitreal administrationof ANX007protectedagainstopticnerve damage.

IndependentinvestigatorsobservedelevatedlevelsofC1qandothercomponentsoftheclassical complementcascadeintheinnerretinalsynapselayerof34outof34humandonoreyesfrompatientswith glaucoma,as illustratedbelow. C1qwas not found in donor eyes fromindividualswhodid not have glaucoma.

Overview of Geographic Atrophy

GAisan advanced, vision-threatening form of age-related macular degeneration, or AMD, and is a chronic, progressive disease of the macula that results in loss of central vision. The disease typically affects one eye first, with a high likelihood of it occurring in the second eye over time.

There are two forms of AMD, “dry” AMD and “wet” AMD. Dry AMD is the most common form, representing approximately 85% to 90% of all AMD cases. Geographic atrophy represents the advanced form of dry AMD and is characterized by progressive atrophy of retinal pigment epithelial cells, overlying photoreceptors and underlying choriocapillaries. An early feature of the disease is the presence of drusen, which is comprised of extracellular yellow deposits at the back of the retina.

GA accountsforabouttenpercentoflegalblindnessrelatedtoAMD.Approximatelyonemillion individualsintheUnitedStatesandfivemillionindividualsworldwidesufferfromgeographicatrophy.Aswith AMD, theprevalenceofgeographicatrophyincreaseswithage. There are no approved therapiesto preventeither the onset or progressionof geographicatrophy.

Role of C1qand Complement in Geographic Atrophy

Genome-wideassociationstudieshavestronglyimplicatedmultiplecomponentsofthecomplementcascadein AMDandgeographicatrophy.Forexample,specificallelesofthegeneforC3canincreasethelikelihoodof developingAMDby50percent.Histopathologicalinvestigationshavealsoobservedthepresenceofcomplement componentsingeographicatrophy.ThesestudieslargelypointtoaroleofexcessiveC3activityindisease,butdonot indicatehowC3isbeingactivated(classical,lectinoralternativepathways).Wehaveidentifiedapotentialdualroleof C1qandtheclassicalcascadeasanimportantcomplement-activatingsystemingeographicatrophy.First,wefound thatC1qstronglyaccumulated on photoreceptorcell synapses with normal ageor disease, as shown below (leftpanels), implicatingC1q’sroleinexcessivesynapsepruningandcomplement-mediatedneurodegeneration.Second,C1qand C1qligands,suchasC-reactiveprotein,alsoaccumulatedintheretinabelowphotoreceptorcellsinassociationwith drusen(extracellularmembraneandproteindebrisassociatedwithgeographicatrophy;rightpanel).Theseresults suggestthatthephotoreceptorneuronsandpigmentedretinalepithelialcells–celltypesthatarebothlostinGA–are sandwichedbetweendepositsofC1qandthattheclassicalcomplementcascademayhaveanongoingandpathogenic role in GA by activating C3.

Insupportofthishypothesis,wefoundthateitherdeletionorpharmacologicinhibitionofC1qwasprotectiveinananimalmodelofphotoreceptorneuronlossinducedbyphoto-oxidation,asshownbelow.Further,componentsoftheclassicalcomplementcascadehavebeenassociatedwithphotoreceptorcellsinhumanGAtissue(C4andC3)andimplicatedinphotoreceptorcelltargetingwithaninvitroassay.Finally,C1q is locally produced within the retina duringdiseasebyinfiltratingimmunecells,indicatingthatitspathogenicrolemaybeamenabletolocalinhibitionofC1q.Asdescribedabove,webelieveinhibitionofC1qwouldblockallkeycomponentsoftheclassicalcascade,includingC1q,C4, and C3 involved in immune cell attack and synapse pruning, as well asC5 involved in direct membrane damage.

As shown below, C1q inhibition was protective of photoreceptor cells and retinal function ina model of GA.

Developmentof ANX007for OphthalmicDiseases

WehavecompletedaPhase1btrialofANX007inpatientswithglaucoma.BasedonourPhase1bclinical resultsinglaucoma,ourpreclinicaldatashowingprotectioninthreeretinalneurodegenerationanimalmodels (glaucoma,opticneuritisandGA),andourknowledgeofC1qbiologyinthissetting,weinitiated a Phase 2 trial of ANX007in GA. Our rationaleto pursue ANX007for GAincludes:

• There is a well-established clinical and regulatory path for development.

Phase 1b Trial in Glaucoma

Wecompletedsingleascendingdose(n=9)andsham-controlledmultipledose(n=17)studiesofintravitreal ANX007inpatientswithglaucomatoevaluatesafety,tolerability,pharmacokineticsandtargetengagement. ThesepatientshadaqueoushumortapssothatocularfluidcouldbeanalyzedforlevelsofANX007 andfreeC1q immediatelypriortofirstdose(day1)andpriortoseconddose(day29).ThestudiesshowedthatANX007was well-toleratedatalldoses(1mg,2.5mg,5mg)andachievedcompletesuppressionofC1qat2.5mgand5mg, asillustratedbelow.WebelievetheseresultssuggestthatANX007canbedosedmonthlyorpotentiallyless

frequentlyinfuturePhase2efficacytrials.WeareexploringfurtherdevelopmentofANX007thatcouldenablepatientsto be dosed as infrequentlyas every six months.

Ongoing Phase 2 Trialin Geographic Atrophy

Arandomized, controlledPhase2trial inGApatients whoareatahighriskof progression is ongoing, and weanticipatereportingdatafromthistrialin2023.Priornaturalhistorydatasimilartothat foundinotherrecentlargePhase 3 trials may provide a wealth of natural history data from nearly 2,000 patients on how to successfully enrich fast progressors of GA to enable an efficacy read-out within a one-year time period. The Phase 2 trial is designed to evaluate clinical effect on slowing of GA lesion growth, leveraging the natural history data and patient selection criteria of prior GA trials.

Our Third Product Candidate, ANX009

ANX009is designed to potently bind to C1q and inhibit activation of the classical complement cascade. ANX009isaFabdesignedforsubcutaneousdelivery,andwaswelltoleratedinpreclinicaltoxicologystudies. APhase 1 FIH clinical trial is ongoing, and we anticipate reporting data from this trial in 2021.

ANX009 for Future Autoimmune Indications

WearedevelopingANX009to potentiallyenablechronicdosing in antibody-mediated autoimmunediseases such ashemolyticanemias, wAIHAandCAD.Inaddition,weareevaluatingANX009asatreatmentoptionforasubsetoflupusnephritis patientswhoareatahighriskofrenalflareduetopathogenicanti-C1qantibodiesinthecirculation,andwho we believe mayrespondtotreatmentwithouranti-C1qapproach.Forthispurpose,we

haveidentifiedaplasma biomarkerthatidentifieslupus nephritispatientswith ongoing earlyclassicalcomplementcascadeactivation.

WehaveobservedthatdailysubcutaneousadministrationofANX009fullyinhibitedC1q functionalactivity intheserumofnon-humanprimates.Itsactivityoccurredrapidlyafterthefirstdoseandthisactivityrapidly reversedafterdosing was stopped.

Webelieve that ANX009’s inhibitory activity and its on/off function may benefit patients with hematological autoimmune disorders. Importantly,the use of plasma biomarkers that define an active complementsignaturewillallowustotakeaprecisionmedicineapproachtoidentifypatientsappropriatefor anti-C1qtherapy.

Our Next Generation Product Candidates

Wearedevelopingadditionalnextgenerationproductcandidates,includingANX105,aninvestigationalmonoclonalantibody,andsmallmoleculemodulatorsoftheclassicalpathway.ANX105hasbeendesigned to have enhanceddosingandPKpropertiesfacilitatinguseinchronicneurodegenerativediseases.Oursmallmolecule program is targeting compounds suitable for oral dosing for the treatment of chronic autoimmune and neurodegenerative diseases. We intend to advance both ANX105and our smallmoleculecandidatesthrough INDenablingstudies in 2021.

Intellectual Property

Our intellectual property is critical to our business and we strive to protect it, including by obtaining and maintaining patent protection in the United States and internationally for our product candidates, new therapeutic approaches and potential indications, and other inventions that are important to our business. Our policy is to seek to

protect our proprietary and intellectual property position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions and improvements that are important for the development and implementation of our business. We also rely on the skills, knowledge and experience of our scientific and technical personnel, as well as that of our advisors, consultants and other contractors. To help protect our proprietary know-how that is not patentable, we rely on confidentiality agreements to protect our interests. We generally require our employees, consultants, scientific advisors and contractors to enter into confidentiality agreements prohibiting thedisclosure of confidential information and requiring disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business.

Our patent portfolio includes patents and patent applications that are licensed to us in whole or in part from a number of partners, including Stanford University and the University of California, and patents and patent applications that are owned by us. Our proprietary technology has been primarily developed by in-house research and development programs, and to a lesser extent through acquisitions, relationships with academic research centers and contract research organizations.

For our product candidates, we will, in general, initially pursue patent protection covering compositions of matter and methods of use. Throughout the development of our product candidates, we seek to identify additional means of obtaining patent protection that would potentially enhance commercial success, including by protecting inventions related to additional methods of use, processes of making, formulation and dosing regimens.

As of February 15, 2021, our patent portfolio, including patents licensed from our partners, comprised 12 different patent families filed in various jurisdictions worldwide. Our patent portfolio includes issued patents and patent applications in the United States and in other jurisdictions.

One patent family, which we exclusively license from Stanford University, includes nine granted U.S. patents covering various methods of treating neurodegeneration and related medical conditions by inhibiting the C1 complex or its components, such as by using an anti-C1q antibody. The U.S. patents in this family include claims covering uses of ANX005, ANX007, ANX009 and ANX105. These U.S. patents will expire between 2026 and 2030, absent any disclaimers, extensions or adjustments of patent term. There are no pending applications or foreign patents in this family.

Two other patent families, which we own, are directed to anti-C1q antibodies and methods of using them. These families include four granted U.S. patents, three pending U.S. patent applications, eight granted foreign patents and 30 pending foreign patent applications. The U.S. patents in these families cover ANX005, ANX007, ANX009 and ANX105. These patents will expire between 2034 and 2037, absent any disclaimers, extensions or adjustments of patent term.

Another patent family that we own includes one granted U.S. patent, one pending U.S. patent application and 13 pending foreign patent applications. The granted U.S. patent in this family includes claims directed to antibody fragments of anti-C1q antibodies, including ANX007 and ANX009. This patent will expire in 2037, absent any disclaimers, extensions or adjustments of patent term.

Another patent family that we own includes one U.S. patent application with claims covering certain small molecule modulators of the classical pathway. Patents that may be issued from this family would expire in 2041, absent any disclaimers, extensions or adjustments of patent term.

Our patent portfolio also includes six patent families, owned by us solely or jointly with the University of California or The J. David Gladstone Institutes, directed to the treatment of certain medical conditions using anti-C1q antibodies, including ANX005, ANX007, ANX009 and ANX105. These families include five pending U.S. patent applications, one granted foreign patent, and two pending PCT applications. Patents that may be issued from these applications would expire between 2034 and 2040, absent any disclaimers, extensions or adjustments of patent term.

Exclusive (Equity) Agreement with The Board of Trustees of the Leland Stanford Junior University

In November 2011, we and The Board of Trustees of the Leland Stanford Junior University, or Stanford, entered into an exclusive licensing agreement, or the Stanford Agreement. Under the Stanford Agreement, Stanford granted

to us an exclusive, worldwide, royalty-bearing, sublicensable license, under certain patent rights, or the Licensed Patents, to make, use, offer for sale, sell, import and otherwise commercialize products covered by the Licensed Patents for human or animal diseases, disorders or conditions. We are required to meet certain development and funding diligence milestones for the licensed products.

Under the Stanford Agreement, we are obligated to pay Stanford an upfront payment, license maintenance fees ranging from the single digit to tens of thousands of dollars per year, and milestone payments totaling up to $675,000. We also agreed to make royalty payments at a rate equal to a low single-digit percentage of worldwide net sales of licensed products and a portion of certain sublicensing income we receive from sublicensees at a rate in the low double digit percentages, subject to a specified maximum total payment.

Additionally, in accordance with the terms of the Stanford Agreement, upon closing our first financing event that raised at least $2.0 million, we granted Stanford $150,000 in shares of our redeemable convertible preferred stock. We may also have to pay a fee to Stanford if we assign our rights under the Stanford Agreement to a third party.

We may terminate the Stanford Agreement in its entirety, or as to a particular Licensed Patent or licensed product, for convenience on thirty days’ prior written notice. Stanford may terminate the Stanford Agreement for our breach that remains uncured for forty-five days or if we provide any false report, are delinquent on any report or payment, fail to achieve a milestone or fail to diligently develop and commercialize a licensed product.

Patent Term and Term Extensions

The terms of individual patents are determined based primarily on the filing date of the earliest non-provisional patent application to which a claim of priority is made or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, utility patents issued for applications filed in the United States are granted a term of 20 years from the filing date of the earliest non-provisional patent application to which a claim of priority is made. In addition, in certain instances, the term of a U.S. patent can be extended to recapture a portion of the United States Patent and Trademark Office, or USPTO, delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years and the restoration period cannot extend the patent term beyond 14 years from FDA approval for the product covered by that patent. In addition, only one patent applicable to an approved drug may receive the extension, and the extension applies only to coverage for the approved drug, methods for using it and methods of manufacturing it, even if the claims cover other products or product candidates. Where one patent covers multiple products or product candidates, it may only receive an extension for one of the covered products; any extension related to a second product or product candidate must be applied to a different patent. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from filing date of the earliest non-provisional patent application to which a claim of priority is made, such as a Patent Cooperation Treaty, or PCT, application. All taxes, annuities or maintenance fees for a patent, as required by the USPTO and various foreign jurisdictions, must be timely paid in order for the patent to remain in force during this period of time.

The actual protection afforded by a patent may vary on a product by product basis, from country to country, and can depend upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions and the availability of legal remedies in a particular country and the validity and enforceability of the patent.

Our patents and patent applications may be subject to procedural or legal challenges by others. We may be unable to obtain, maintain and protect the intellectual property rights necessary to conduct our business, and we may be subject to claims that we infringe or otherwise violate the intellectual property rights of others, which could materially harm our business. For more information, see the section titled “Risk Factors—Risks Related to Our Intellectual Property.”

Trademarks and Know-How

In connection with the ongoing development and advancement of our products and services in the United States and various international jurisdictions, we seek to create protection for our marks and enhance their value by pursuing

trademarks and service marks where available and when appropriate. In addition to patent and trademark protection, we rely upon know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, by using confidentiality agreements with our commercial partners, collaborators, employees and consultants, and invention assignment agreements with our employees and consultants. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed by our employees and through relationships with third parties. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our contractors, commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. For more information, see the section titled “Risk Factors—Risks Related to Our Intellectual Property.”

Sales andMarketing

We hold worldwide commercialization rights, including through exclusive licenses, to our product candidates. Given our stage of development, we have not yet established a commercial organization or distribution capabilities. Should any of our product candidates be approved for commercialization, we intend to develop a plan to commercialize them in the United States and other key markets, through internal infrastructure and/or external partnerships in a manner that will enable us to realize the full commercial value of our programs.

Manufacturing

Oursuccessasacompanywilldependonourabilitytodeliverreliable,high-qualitypreclinicalandclinical drugsupply.Wedonotcurrentlyownoroperatefacilitiesforproductmanufacturing,storageanddistribution,or testing.Wecontractwiththirdpartiesforthemanufactureofour productcandidates.Because werelyon contract manufacturers,weemploypersonnelwithextensivetechnical,manufacturing,analyticalandqualityexperience. Ourstaffhasstrongprojectmanagementdisciplinetooverseecontractmanufacturingandtestingactivities,and to compilemanufacturingand qualityinformationfor our regulatorysubmissions.

Manufacturingissubjecttoextensiveregulationthatimposesvariousproceduralanddocumentation requirementsandthatgovernsrecordkeeping,manufacturingprocessesandcontrols,personnel,qualitycontrol andqualityassurance,andmore.Oursystemsandourcontractorsarerequiredtobeincompliancewiththese regulations,andcomplianceisassessedregularlythroughmonitoringofperformanceandaformalaudit program.

Ourcurrentsupplychainsforourleaddrugcandidatesinvolveseveralmanufacturersthatspecializein specificoperationsofthemanufacturingprocess,specifically,rawmaterialsmanufacturing,drugsubstance manufacturinganddrugproductmanufacturing.Wecurrentlyoperateunderworkorderprogramsforourdrug candidateswithmasterservicesagreementsinplacethatincludespecificsupplytimelines,volumeandquality specifications.Weintendtoestablishlong-termsupplyagreementsinthefuture.Webelieveourcurrent manufacturershave the scale,the system, and the experienceto supply our currentlyplanned clinicaltrials.

Wedonotcurrentlyrequirecommercialmanufacturingcapabilities.Shouldourneedschange,wewillneed toscaleupourmanufacturingprocessestoenablecommerciallaunch.Toensurecontinuityinoursupplychain, weplantoestablishsupplyarrangementswithalternativelargerscalesuppliersforcertainportionsofoursupply chain, as appropriate.

Competition

Thepharmaceutical,biopharmaceuticalandbiotechnologyindustriesarecharacterizedbyrapidlyadvancingtechnologies,intensecompetitionandastrongemphasisonproprietaryproducts.Whilewebelievethatour technology,theexpertiseofourexecutiveandscientificteam,research,clinicalcapabilities,development experienceandscientificknowledgeprovideuswithcompetitiveadvantages,wefacepotentialcompetitionfrom manydifferentsources,includingpharmaceutical,biopharmaceuticalandbiotechnologycompanies,academicinstitutions,governmentalagenciesandpublicandprivateresearchinstitutions.Productcandidatesthatwe successfullydevelopandcommercializemaycompetewithexistingtherapiesand newtherapiesthatmay becomeavailablein the future.

Ourcompetitorsmayhavesignificantlygreaterfinancialresources,establishedpresenceinthemarket, expertiseinresearch anddevelopment, manufacturing,preclinicalandclinical testing,obtainingregulatory approvalsand reimbursementand marketingapproved productsthan wedo. These competitorsalso competewith usinrecruitingandretainingqualifiedscientific,sales,marketingandmanagementpersonnel,establishing clinicaltrialsitesandpatientregistrationforclinicaltrials,aswellasinacquiringtechnologiescomplementary to,ornecessaryfor,ourprograms.Smallerorearly-stagecompaniesmayalsoprovetobesignificant competitors,particularlythrough collaborativearrangementswith largeand establishedcompanies.

Guillain-BarréSyndrome

TherearecurrentlynoapprovedtherapiesforGBSintheUnitedStates.IVIgandplasmaexchangearethe currentstandardsofcareintheWesternworldandpartsofAsia.HansaBiopharmaAB is conductinganopenlabel Phase 2 trialin GBSpatients. Alexion plans to initiate a Phase 3 study of SOLIRIS in GBS in Japan in the first half of 2021.

Autoimmune HemolyticAnemias

TherearecurrentlynoapprovedtherapiesforwAIHAintheUnitedStates.RigelisrunningaPhase3clinicaltrialofTavalisseinwAIHA.Apellis is conducting aPhase2trial ofAPL-2incoldagglutinin disease, or CAD. Sanofi’s sutimlimab is under regulatory review by the FDA for CAD. Other companieswhohave trialsongoing or planned in theserareanemiasincludeAlexion in Phase 2 with SYNT001, Momentain Phase 2/3 with Nipocalimaband Immunovant in Phase 2 with IMVT-1401.

Huntington’sDisease

Therearenoknowncuresfor HD.Companiessuch as Ionis,Takeda, Wave Life Sciences,Voyager Therapeutics,uniQureandHoffmanLaRocheareconductingclinicaltrialswithproductsthataregenesilencing inordertoattempttolowerthelevelofthemutanthuntingtinproteininpatientstoinvestigatewhetherthiswill translateto benefitsfor people with HD.

AmyotrophicLateralSclerosis

TherearenoknowncuresforALS.Thedrugriluzoleiscurrentlyapprovedfortreatmentandhasshown modestaffectinslowingtheprogressionofthedisease.AlexionhasinitiatedaPhase3trialofUltomiris,along actingC5inhibitorforALS.WeareawarethatZilucoplan,aC5ainhibitorfromRaPharma,asubsidiaryof UCB,willbeincludedintheHEALYALSplatformtrial.Thereare a significant number of companiesconductingclinicaltrialsin ALSpatientsincludingMediciNova,Astellas,Biogen, MitsubishiTanabe, OnoPharmaceuticalsand others.

Geographic Atrophy

No FDA-approved treatment is currently available for GA. We are aware of a number of companies developing products for the treatment of GA. Those products in clinical development targeting the complement cascade include: APL-2, a C3 inhibitor in Phase 3 trials being developed by Apellis; Zimura, a C5 inhibitor in Phase 3 clinical trials, is developed by IVERIC bio, previously Ophthotech Corporation, and NGM621, a C3 inhibitor in Phase 2 trials being developed by NGM Pharma. Complement directed therapies in clinical development for genetically selected patient populations include GT005, a Factor I replacement therapy in Phase 2 development by Gyroscope and GEM103, a Factor H replacement therapy in Phase 2 being developed by Gemini Therapeutics Other products that do not target the complement cascade that are in Phase 2 or 3 clinical trials are being developed by Hoffman La Roche, Stealth BioTherapeutics, Allegro, Allergan PLC and Regenerative Patch Technologies.

GovernmentRegulation

TheFDAandotherregulatoryauthoritiesatfederal,stateandlocallevels,aswellasinforeigncountries, extensivelyregulate,amongotherthings,theresearch,development,testing,manufacture,qualitycontrol, import,

export,safety,effectiveness,labeling,packaging,storage,distribution,recordkeeping,approval, advertising,promotion,marketing,post-approvalmonitoringandpost-approvalreportingofbiologicalproduct candidatessuchasthosewearedeveloping.We,alongwiththird-partycontractors,willberequiredtonavigate thevariouspreclinical,clinicalandcommercialapprovalrequirementsofthegoverningregulatoryagenciesof thecountriesinwhichwewishtoconductstudiesorseekapprovalorlicensureofourproductcandidates.The processofobtainingregulatoryapprovalsandthesubsequentcompliancewithapplicablefederal,state,localand foreignstatutesand regulationsrequirethe expenditureof substantialtimeand financialresources.

U.S. Biologics Regulation

IntheUnitedStates,our currentproductcandidatesareregulated as biological products, orbiologics.The processrequiredbytheFDAbeforebiologicproductcandidatesmaybemarketedintheUnitedStatesgenerally involvesthe following:

• satisfactory completion of an FDA Advisory Committee review, if applicable;

PriortobeginningthefirstclinicaltrialwithaproductcandidateintheUnitedStates,wemustsubmitan INDtotheFDA.AnINDisarequestforauthorizationfromtheFDAtoadministeraninvestigationalnewdrug producttohumans.ThecentralfocusofanINDsubmissionisonthegeneralinvestigationalplanandthe protocol(s)forclinicaltrials.TheINDalsoincludesresultsofanimalandinvitrostudiesassessingthetoxicology,pharmacokinetics,pharmacologyandpharmacodynamiccharacteristicsoftheproduct;chemistry, manufacturingandcontrolsinformation;andanyavailablehumandataorliteraturetosupporttheuseofthe investigationalproduct.An IND mustbecome effectivebeforehuman clinicaltrialsmay begin. The IND automatically goes into effect 30daysafterreceiptbytheFDA,unlesstheFDA,withinthe30-daytime period,raisessafetyconcernsorquestionsabouttheproposedclinicaltrial.Insuchacase,theINDmaybe placedonclinicalholdandtheINDsponsorandtheFDAmustresolveanyoutstandingconcernsorquestions beforetheclinicaltrialcanbegin.SubmissionofanIND thereforemayormaynotresultinFDA authorizationto begin a clinicaltrial.

Clinicaltrialsinvolvetheadministrationoftheinvestigationalproducttohumansubjectsunderthe supervisionofqualifiedinvestigatorsinaccordance with GCP, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the

effectivenesscriteriatobeevaluated.AseparatesubmissiontotheexistingINDmust bemadeforeachsuccessiveclinicaltrialconductedduringproductdevelopmentandforanysubsequentprotocol amendments.Furthermore,anindependentIRB or ECforeachsiteproposingtoconducttheclinicaltrialmustreview andapprovetheplanforanyclinicaltrialanditsinformedconsentformbeforetheclinicaltrialbeginsatthat site,andmustmonitorthetrialuntilcompleted.Somestudiesalsoincludeoversightbyanindependentgroupofqualifiedexpertsorganizedbytheclinicaltrialsponsor,knownasaData SafetyMonitoringBoard,whichprovidesauthorizationforwhetherornotatrialmaymoveforwardat designatedcheckpointsbasedonaccesstocertaindatafromthestudyandmayhalttheclinicaltrialifit determinesthatthereisanunacceptablesafetyriskforsubjectsorothergrounds,suchasnodemonstrationof efficacy.Regulatory authorities, the IRB/ethics committeeor the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objective(s). Therearealsorequirementsgoverningthereportingofongoingclinicaltrialsandclinicaltrialresultsto publicregistries.

ForpurposesofBLAapproval,humanclinicaltrialsaretypicallyconductedinthreesequentialphasesthat may overlapor be combined:

In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product. These so-called Phase 4 trials may also be made a condition to approval of the BLA.

Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMPs. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

BLASubmissionandReview by the FDA

Assumingsuccessfulcompletionofallrequiredtestinginaccordancewithallapplicableregulatory requirements,theresultsofproductdevelopment,nonclinicalstudiesandclinicaltrialsaresubmittedtotheFDA aspartofaBLArequestingapprovaltomarkettheproductforoneormoreindications.TheBLAmustinclude allrelevantdataavailablefrompreclinicalstudiesandclinicaltrials,includingnegativeorambiguousresultsaswellaspositivefindings,togetherwithdetailedinformationrelatingtotheproduct’schemistry,manufacturing, controlsandproposedlabeling,amongotherthings.Datacancomefromcompany-sponsoredclinicaltrials intendedtotestthesafetyandeffectivenessofauseoftheproduct candidateorfromanumberofalternativesources, includingstudiesandtrialsinitiatedbyinvestigators.ThesubmissionofaBLArequirespaymentofasubstantial userfeetotheFDA,andthesponsorofanapprovedBLAisalsosubjecttoanannualprogramfee.Awaiverof userfeesmaybeobtainedundercertainlimitedcircumstances.Additionally,nouserfeesareassessedonBLAs for productsdesignatedas Orphan Drugs, unlessthe productalso includesa non-orphanindication.

Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the FDA accepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. OnceaBLAhasbeenaccepted for filing,theFDA’sgoalistoreviewstandardapplicationswithintenmonthsafter itacceptstheapplicationforfiling,or,iftheapplicationqualifiesforpriorityreview,sixmonthsafterthefiling date.Priorityreviewdesignationwilldirectoverallattentionandresourcestothe evaluationofapplicationsforproductsthat,ifapproved,wouldrepresentsignificantimprovementsinthesafetyor effectivenessofthetreatment,diagnosisorpreventionofseriousconditions.Inbothstandardandpriority reviews, thereviewprocess isoften significantlyextendedbyFDArequestsforadditional information or clarification.TheFDAreviewsaBLAtodetermine,amongotherthings,whetheraproductissafe,pureand potentandthefacilitiesinwhichitismanufactured,processed,packedorheldmeetstandardsdesignedtoassure theproduct’scontinuedsafety,purityandpotency.TheFDAmayalsoconvenea public AdvisoryCommitteeto provide additional expertinsightonapplicationreviewquestions.TheFDAisnotboundbyrecommendationsofan Advisory Committee, but it considerssuch recommendationswhenmakingdecisionsregardingapproval.

BeforeapprovingaBLA,theFDAwilltypicallyinspectthefacilityorfacilitieswheretheproductis manufactured.TheFDAwillnotapproveanapplicationunlessitdeterminesthatthemanufacturingprocesses andfacilitiesareincompliancewithandadequatetoassureconsistentproductionoftheproductwithinrequired specifications.Additionally,beforeapprovingaBLA,theFDAwilltypicallyinspectoneormoreclinicalsites and/orthesponsor’sheadquarterstoassurecompliancewithGCP.IftheFDAdeterminesthattheapplication, manufacturingprocessormanufacturingfacilitiesarenotacceptable,itwilloutlinethedeficienciesinthe submissionandoftenwillrequestadditionaltestingorinformation.Notwithstandingthesubmissionofany requestedadditionalinformation,the FDAultimatelymay decidethatthe applicationdoes notsatisfy the regulatorycriteriafor approval.

AftertheFDAevaluatesaBLAandconductsinspectionsofclinicaltrialsitesandmanufacturingfacilities wheretheinvestigationalproductand/oritsdrugsubstancewillbeproduced,theFDAmayissueanApproval LetteroraCompleteResponseLetter.An ApprovalLetterauthorizescommercialmarketingoftheproductwith specificprescribinginformationforspecificindications.ACompleteResponseLetterindicatesthattheBLAis notreadyforapprovalinitspresentformandendsthecurrentreviewcycle,andwilldescribeallofthe deficienciesthattheFDAhasidentifiedintheBLA. TheFDAmayissuetheCompleteResponseLetterwithout firstconductingrequiredinspections,testingsubmittedproductlots,and/orreviewingproposedlabeling.In issuingtheCompleteResponseLetter,theFDAmayrecommendactionsthattheapplicantmighttaketoplace theBLAinconditionforapproval,includingrequestsforadditionalinformationorclarification.TheFDAmay delayorrefuseapprovalofaBLAifapplicableregulatorycriteriaarenotsatisfied,requireadditionaltestingor informationand/orrequirepost-marketingtestingand surveillanceto monitorsafetyor efficacyof a product.

Ifregulatoryapprovalofaproductisgranted,suchapprovalwillbegrantedforparticularindicationsand mayentaillimitationsontheindicatedusesforwhichsuchproductmay be marketed.Additionally,the FDAmay approvetheBLAwithaRiskEvaluationandMitigationStrategy,orREMS,toensurethebenefitsoftheproduct outweighitsrisks.AREMSisasafetystrategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post- marketing requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may also require one or more Phase 4 post-marketing studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

Expedited DevelopmentandReview Programs

A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of new biological products that meet certain criteria. Specifically, new biological products are eligible for

FastTrackdesignationiftheyareintendedtotreataseriousorlife- threateningdiseaseorconditionanddemonstratethepotentialtoaddressunmetmedicalneedsforthediseaseor condition.Fora Fast Trackproduct candidate,theFDAmayconsidersectionsoftheBLAforreviewonarollingbasisbeforethecompleteapplicationis submitted,if the sponsor providesa schedulefor the submissionof the sections oftheapplication,theFDAagreestoacceptsectionsoftheapplicationanddeterminesthatthescheduleis acceptableandthesponsorpaysanyrequireduserfeesuponsubmissionofthefirstsectionoftheapplication.A FastTrackdesignatedproductcandidatemayalsoqualifyforpriorityreview,underwhichtheFDAsetsthe targetdateforFDAactionontheBLAatsixmonthsaftertheFDAacceptstheapplicationforfiling.Priority reviewisgrantedwhenthereisevidencethattheproduct candidate, if approved,wouldprovideasignificantimprovementinthe safetyoreffectivenessofthetreatment,diagnosis,orpreventionofaseriousdiseaseorcondition.Ifcriteriaare notmetforpriorityreview,theapplicationissubjecttothestandardFDAreviewperiodof10monthsafterFDA acceptstheapplicationforfiling.

Under the accelerated approval program, the FDA may approve a BLA on the basis of either a demonstrated effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or 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. Post-marketing studies or completion of ongoing studies after marketing approval are generally required to verify the biologic’s clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. The FDA may withdraw approval of a product or indication approved under accelerated approval if, for example, the sponsor fails to conduct any required post-marketing studies in a timely manner, or if such studies fail to verify the predicted clinical benefit of the product.

In addition, a sponsor may seek FDA designation of its product candidate as a Breakthrough Therapy if the product candidate is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product candidate may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. If the FDA designates a product candidate as a Breakthrough Therapy, it may take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the therapy; providing timely advice to, and interactive communication with, the sponsor regarding the development of the biologic to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable; involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review; assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor; and considering alternative clinical trial designs when scientifically appropriate, which may result in smaller trials or more efficient trials that require less time to complete and may minimize the number of patients exposed to a potentially less efficacious treatment. Breakthrough Therapy designation also comes with all of the benefits of Fast Track designation.

Fast Track designation, priority review, accelerated approval and Breakthrough Therapy designation do not change the standards for approval but may expedite the development or approval process. Even if a product qualifies for one or more of these programs,theFDAmaylaterdecidethattheproductnolongermeetsthe conditionsfor qualificationor decidethatthe timeperiodfor FDAreview or approvalwill not be shortened.

OrphanDrugDesignation andExclusivity

Under the Orphan Drug Act, the FDA may grant Orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 individuals in the United States and when there is no reasonable expectation that the cost of developing and making available the biologic in the United States will be recovered from sales in the United States for that drug or biologic. Orphan Drug designation must be requested before submitting a BLA. After the FDA grants Orphan Drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

IfaproductthathasOrphanDrugdesignationsubsequentlyreceivesthefirstFDAapprovalforaparticular activeingredientforthediseaseforwhichithassuchdesignation,theproductisentitledtoorphanproduct exclusivity,whichmeansthattheFDAmaynotapproveanyotherapplications,includingafullBLA,tomarket thesamebiologicforthesameindicationforsevenyears,exceptinlimitedcircumstances,suchasashowingof clinicalsuperioritytotheproductwithOrphanDrugexclusivityoriftheFDAfindsthattheholderoftheOrphan DrugexclusivityhasnotshownthatitcanassuretheavailabilityofsufficientquantitiesoftheOrphanDrugto meettheneedsofpatientswiththediseaseorconditionforwhichthedrugwasdesignated.OrphanDrug exclusivitydoesnotpreventtheFDAfromapprovingadifferentdrugorbiologicforthesamediseaseor condition,orthesamedrugorbiologicforadifferentdiseaseorcondition.AmongtheotherbenefitsofOrphan DrugdesignationaretaxcreditsforcertainresearchanddevelopmentactivitiesandawaiveroftheBLA applicationuser fee.

A designated Orphan DrugmaynotreceiveOrphanDrugexclusivityifitisapprovedforausethatis broader thantheindication forwhichitreceivedOrphandesignation.Inaddition,OrphanDrugexclusive marketingrightsintheUnitedStatesmaybelostiftheFDAlaterdeterminesthattherequestfordesignationwas materiallydefectiveor,asnotedabove,ifthesecondapplicantdemonstratesthatitsproductisclinicallysuperior totheapprovedproductwithOrphanexclusivityorthemanufactureroftheapprovedproductisunabletoassure sufficientquantitiesof the productto meetthe needs of patientswith the rarediseaseor condition.

Post-Approval Requirements

Anyproductsmanufacturedor distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, productsamplinganddistribution,andadvertisingand promotionoftheproduct.Afterapproval,mostchangestotheapprovedproduct,suchasaddingnewindications orotherlabelingclaims,aresubjecttopriorFDAreviewandapproval.Therealsoarecontinuing,annual programfeesforanymarketedproducts.Biologicmanufacturersandtheirsubcontractorsarerequiredtoregister theirestablishmentswiththeFDAandcertainstateagencies,andaresubjecttoperiodicunannounced inspectionsbytheFDAandcertainstateagenciesforcompliancewithcGMPs,whichimposecertainprocedural anddocumentationrequirementsuponusandourthird-partymanufacturers.Changestothemanufacturing processarestrictlyregulated,and,dependingonthesignificanceofthechange,mayrequirepriorFDAapproval beforebeingimplemented.FDAregulationsalsorequireinvestigationandcorrectionofanydeviationsfrom cGMPsandimposereportingrequirementsuponusandanythird-partymanufacturersthatwemaydecidetouse. Accordingly,manufacturersmustcontinuetoexpend time,money and effortin the areaof productionand quality controlto maintaincompliancewith cGMPs and otheraspectsof regulatorycompliance.

TheFDAmaywithdrawapprovalifcompliancewithregulatoryrequirementsandstandardsisnot maintainedorifproblemsoccuraftertheproductreachesthemarket.Laterdiscoveryofpreviouslyunknown problemswithaproduct,includingadverseeventsofunanticipatedseverityorfrequency,orwithmanufacturing processes,orfailuretocomplywithregulatoryrequirements,mayresultinrevisionstotheapprovedlabelingto addnewsafetyinformation;impositionofpost-marketstudiesorclinicalstudiestoassessnewsafetyrisks;or impositionofdistributionrestrictionsorotherrestrictionsunderaREMSprogram.Otherpotentialconsequences include,among otherthings:

• fines, Warning Letters, or untitled enforcement letters;

• clinical holds on clinical studies;

• injunctions or the imposition of civil or criminal penalties.

The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulationsprohibitingthepromotionofso-called “off-label” uses. Failure to comply with these requirements can result in, among other things, adverse publicity, Warning Letters,correctiveadvertisingandpotentialcivilandcriminal penalties.Physiciansmayprescribelegallyavailableproductsforusesthatarenotdescribedintheproduct’s labelingandthatdifferfromthosetestedbyusandapprovedbytheFDA. Suchoff-labelusesarecommonacross medicalspecialties.Physiciansmaybelievethatsuch off-label usesarethebesttreatmentformanypatientsin variedcircumstances.TheFDAdoesnotregulatethebehaviorofphysiciansintheirchoiceoftreatments.The FDAdoes, however, restrictmanufacturer’scommunicationson the subjectof off-labeluse of theirproducts.

BiosimilarsandExclusivity

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the Affordable Care Act, signed into law in 2010, includes a subtitle called the BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to, or interchangeable with, an FDA-licensed reference biological product. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. However, complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being developed by the FDA.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

Other Healthcare Laws and Compliance Requirements

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation, U.S. federal and state fraud and abuse laws, including false claims, civil monetarypenalties, consumerprotection and health care provider payment transparency laws as well as similar foreign laws in the jurisdictions outside the United States. Violation of any of such laws or any other governmental regulations that apply may result in penalties, including, without limitation, significant administrative, civil and criminal penalties,

damages,fines, disgorgement,additionalreportingobligations,contractualdamages,thecurtailmentorrestructuringofoperations,exclusionfromparticipationin governmentalhealthcareprogramsandimprisonment.

Data Privacy and Security Laws

Pharmaceutical, biopharmaceutical and biotechnology companies may be subject to U.S. federal and state health information privacy, security and data breach notification laws, which may govern the collection, use, disclosure and protection of health-related and other personal information. State laws may be more stringent, broader in scope or offer greater individual rights with respect to protected health information, or PHI, than HIPAA, and state laws may differ from each other, which may complicate compliance efforts. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured PHI, a complaint about privacy practices or an audit by the Department of Health and Human Services, or HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enterintoaresolutionagreementandcorrectiveactionplanwithHHStosettleallegationsofHIPAA non-compliance.Inaddition,CaliforniaenactedtheCaliforniaConsumerPrivacyAct,orCCPA,whichcreates individualprivacyrightsforCaliforniaconsumersandincreasestheprivacyandsecurityobligationsofentities handlingcertainpersonaldata.TheCCPAwentintoeffectonJanuary1,2020,andtheCaliforniaAttorney GeneralmaybringenforcementactionsforviolationsbeginningJuly1,2020.TheCCPAhasbeenamended fromtimetotime,anditremainsunclearwhat,ifany,furthermodificationswillbemadetothislegislationor howit will be interpreted.

EuropeanUnionmemberstates,theUnitedKingdom,Switzerlandandotherjurisdictionshavealsoadopted dataprotectionlawsandregulations,whichimposesignificantcomplianceobligations.In the European Economic Area, or EEA and the United Kingdom, the collection and use of personal data, including clinical trial data, is governed by the provisions of the General Data ProtectionRegulation,orGDPR.TheGDPRbecameeffectiveonMay25,2018, repealingitspredecessordirectiveandincreasingresponsibilityandliabilityofpharmaceuticalcompaniesin relationtotheprocessingofpersonaldataofEUdatasubjects.TheGDPR,togetherwithnationallegislation, regulationsandguidelinesoftheEUmemberstatesandtheUnitedKingdomgoverningtheprocessingof personaldata,imposestrictobligationsandrestrictionsontheabilitytocollect,analyzeandtransferpersonal data,includinghealthdatafromclinicaltrialsandadverseeventreporting.Inparticular,theseobligationsand restrictionsconcerntheconsentoftheindividualstowhomthepersonaldatarelates,theinformationprovidedto theindividuals,thetransferofpersonaldataoutoftheEuropeanEconomicArea,orEEA,ortheUnited Kingdom,securitybreachnotifications, securityandconfidentiality ofthepersonaldataandimpositionof substantialpotentialfinesforbreachesofthedataprotectionobligations.Europeandataprotectionauthorities mayinterprettheGDPRandnationallawsdifferentlyandimposeadditionalrequirements,whichaddtothe complexityofprocessingpersonaldata in or fromthe EEAor United Kingdom. Guidance on implementationand compliancepracticesare oftenupdated or otherwiserevised.

Coverage and Reimbursement

Salesofanypharmaceuticalproductdepend,inpart,ontheextenttowhichsuchproductwillbecoveredby third-partypayors,suchasfederal,stateandforeigngovernmenthealthcareprograms,commercialinsuranceand managedhealthcareorganizations,andthelevelofreimbursementforsuchproductbythird-partypayors.No uniformpolicyexistsforcoverageandreimbursementforproductsexistsamongU.S.third-partypayors. Therefore,decisionsregardingtheextentofcoverageand amountof reimbursementto be providedare made on a plan-by-planbasis.Theprocessfordeterminingwhetherathird-partypayorwillprovidecoverageforaproduct typicallyisseparatefromtheprocessforsettingthepriceofsuchproductorforestablishingthereimbursement ratethatthepayorwillpayfortheproductoncecoverageisapproved.Third-partypayorsmaylimitcoverageto specificproductsonanapprovedlist,alsoknownasaformulary,whichmightnotincludeallofthe FDA-approvedproductsforaparticularindication,orplaceproductsatcertainformularylevelsthatresultin lowerreimbursementlevelsandhighercost-sharingobligationimposedonpatients.Onethird-partypayor’s decisiontocoveraparticularmedicalproductorservicedoesnotensurethatotherpayorswillalsoprovide coverageforthemedicalproductorservice.Asaresult,thecoveragedeterminationprocesswilloftenrequireus toprovidescientificandclinicalsupportfortheuseofourproductcandidatestoeachpayorseparatelyandcan beatime-consumingprocess,withnoassurancethatcoverageandadequatereimbursementwillbeapplied consistently or obtained in the first instance. 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. Additionally, separate

reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.

Ininternationalmarkets,reimbursementandhealthcarepaymentsystemsvarysignificantlybycountry,and manycountrieshaveinstitutedpriceceilingsonspecificproductsandtherapies.Forexample,theEuropean Unionprovidesoptionsforitsmemberstatestorestricttherangeofmedicinalproductsforwhichtheirnational healthinsurancesystemsprovidereimbursementandtocontrolthepricesofmedicinalproductsforhumanuse. Amemberstatemayapproveaspecificpriceforthemedicinalproductoritmayinsteadadoptasystemofdirect orindirectcontrolsontheprofitabilityofthecompanyplacingthemedicinalproductonthemarket. Pharmaceuticalproductsmayfacecompetitionfromlower-pricedproductsinforeigncountriesthathaveplaced price controls on pharmaceutical products. Furthermore, there can be no assurance that a product will be consideredmedicallyreasonableandnecessaryforaspecificindication,thataproductwillbeconsideredcost- effectivebythird-partypayors,thatanadequatelevelofreimbursementwillbeestablishedevenifcoverageis availableorthatthethird-partypayors’reimbursementpolicieswillnotadverselyaffecttheabilitytosella productprofitably.

Healthcare Reform

IntheUnitedStatesandcertainforeignjurisdictions,therehavebeen,andweexpecttherewillcontinueto be,anumberoflegislativeandregulatorychangestothehealthcaresystem.InMarch2010,theAffordableCare Actwassignedintolaw,whichsubstantiallychangedthewayhealthcareisfinancedbybothgovernmentaland privateinsurersintheUnitedStatesandsignificantlyaffectedthepharmaceuticalindustry.TheAffordableCare Actcontainsanumberofprovisions,includingthosegoverningenrollmentinfederalhealthcareprograms, reimbursementadjustmentsandfraudandabusechanges.Additionally,theAffordableCareActincreasedthe minimumlevelofMedicaidrebatespayablebymanufacturersofbrandnamedrugsfrom15.1%to23.1%; requiredcollectionofrebatesfordrugspaidbyMedicaidmanagedcareorganizations;requiredmanufacturersto participateinacoveragegapdiscountprogram,underwhichtheymustagreetooffer70percentpoint-of-sale discountsoffnegotiatedpricesofapplicablebranddrugstoeligiblebeneficiariesduringtheircoveragegap period,asaconditionforthemanufacturer’soutpatientdrugstobecoveredunderMedicarePartD;imposeda non-deductibleannualfeeonpharmaceuticalmanufacturersorimporterswhosellcertain“brandedprescription drugs”tospecifiedfederalgovernmentprograms;implementedanewmethodologybywhichrebatesowedbymanufacturersundertheMedicaidDrugRebateProgramarecalculatedfordrugsthatareinhaled,infused, instilled,implantedorinjected;expandedeligibilitycriteriaforMedicaidprograms;createdanewPatient-CenteredOutcomesResearchInstitutetooversee,identifyprioritiesin,andconductcomparativeclinical effectivenessresearch,alongwithfundingforsuchresearch;andestablishedaCenterforMedicareandMedicaid InnovationatCMStotestinnovativepaymentandservicedeliverymodelstolowerMedicareandMedicaid spending, potentiallyincludingprescriptiondrug spending.

Sinceitsenactment,therehavebeenexecutive,judicialandCongressionalchallengestocertainaspectsof theAffordableCareAct,andweexpecttherewillbeadditionalchallengesandamendmentstotheAffordable CareActinthefuture.Forexample,in2017,CongressenactedtheTaxCutsandJobsAct,whicheliminatedthe tax-basedsharedresponsibilitypaymentimposedbytheAffordableCareActoncertainindividualswhofailto maintainqualifyinghealthcoverageforallorpartofayearthatiscommonlyreferredtoasthe“individual mandate.”OnDecember14,2018,aU.S.DistrictCourtJudgeintheNorthernDistrictofTexas,ortheTexas DistrictCourtJudge,ruledthattheindividualmandateisacriticalandinseverablefeatureoftheAffordableCare Act,andtherefore,becauseitwasrepealedaspartoftheTaxCutsandJobsAct,theremainingprovisionsofthe AffordableCareActareinvalidaswell.OnDecember18,2019,theU.S.CourtofAppealsforthe5thCircuit upheldtheDistrictCourt’sdecisionthattheindividual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well. The U.S Supreme Court is currently reviewing this case, although it is unclear when a decision will be made or how the Supreme Court will rule. It is also unclear how other efforts to challenge, repeal or replace the Affordable Care Act will impact the law.

OtherlegislativechangeshavebeenproposedandadoptedsincetheAffordableCareActwasenacted, includingaggregatereductionsofMedicarepaymentstoprovidersof2%perfiscalyearandreducedpaymentsto severaltypesofMedicareproviders,whichwillremainineffectthrough2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021,absentadditionalcongressional action.

Moreover,therehasrecentlybeenheightenedgovernmentalscrutinyoverthemannerinwhich manufacturerssetpricesfortheirmarketedproducts,whichhasresultedinseveralCongressionalinquiriesandproposedandenactedlegislationdesigned,amongotherthings,tobringmoretransparencytoproductpricing, reviewtherelationshipbetweenpricingandmanufacturerpatientprogramsandreformgovernmentprogram reimbursementmethodologiesforpharmaceuticalproducts.IndividualstatesintheUnitedStateshavealsobecomeincreasinglyactivein implementingregulationsdesignedtocontrolpharmaceuticalproductpricing,includingpriceorpatient reimbursementconstraints,discounts,restrictionsoncertainproductaccessandmarketingcostdisclosureand transparencymeasuresand,insomecases,mechanismstoencourageimportationfromothercountriesandbulk purchasing.Furthermore,therehasbeenincreasedinterestbythird-partypayorsandgovernmentalauthoritiesinreferencepricingsystemsand publicationof discountsand listprices.

Human Capital Resources

Asof December 31,2020,wehad 48 full-timeemployees, 37 ofwhomwereprimarilyengagedinresearchand developmentactivities.Atotalof 17 employeeshaveanM.D.,Ph.D.orPharm.D.degree.Substantiallyallofour employeesarelocatedinSouthSanFrancisco,California.

We believe that our future success will depend, in part, on our ability to continue to attract, hire, and retain qualified personnel. We continue to seek additions to our science and technical staff. Through our experience with technological innovation, we appreciate the importance of retention, growth and development of our employees. We believe we offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages. Noneofouremployeesisrepresentedbyalabor union, and weconsiderour employeerelationsto be good.

Corporate Information

We were incorporated under the laws of the State of Delaware on March 3, 2011. Our principal executive offices are located at 180 Kimball Way, Suite 200, South San Francisco, California 94080, and our telephone number is (650) 822-5500. Our corporate website address is www.annexonbio.com. Information contained on, or accessible through, our website shall not be deemed incorporated into and is not a part of this Annual Report on Form 10-K.

Available Information

We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and related amendments, exhibits and other information with the Securities and Exchange Commission, or the SEC. You may access and read our filings without charge through the SEC’s website at www.sec.gov or through our website at https://ir.annexonbio.com/financial-information/sec-filings, as soon as reasonably practicable after such materials are electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Information contained on, or accessible through, our website shall not be deemed incorporated into and is not a part of this Annual Report on Form 10-K

Item 1A. Risk Factors.

Our business involves significant risks, some of which are described below. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the related notes. If any of the following risks actually occur, it could harm our business, prospects, operating results and financial condition and future prospects. In such event, the market price of our common stock could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Annual Report.

Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements

We are a clinical-stage biopharmaceutical company with a limited operating history and no products approved for commercial sale. We have incurred significant losses since our inception, and we anticipate that we will continue to incur significant losses for the foreseeable future, which, together with our limited operating history, makes it difficult to assess our future viability.

We are a clinical-stage biopharmaceutical company, and we have only a limited operating history upon which you can evaluate our business and prospects. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We have no products approved for commercial sale and have not generated any revenue from sales of our product candidates and have incurred losses in each year since our inception in March 2011. We have only a limited operating history upon which you can evaluate our business and prospects. In addition, we have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical, biopharmaceutical and biotechnology industry.

We have had significant operating losses since our inception. Our net loss for the years ended December 31, 2020 and 2019 was approximately $63.4 million and $37.2 million, respectively. As of December 31, 2020, we had an accumulated deficit of $166.0 million. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue to develop our product candidates, conduct clinical trials and pursue research and development activities. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.

Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities. Our product candidates will require additional clinical development, and we intend to conduct additional research and development activities to discover and develop new product candidates, including conducting preclinical studies and clinical trials, all of which will require substantial additional funds. We will continue to expend significant resources for the foreseeable future in connection with these activities. These expenditures will include costs associated with conducting preclinical studies and clinical trials, obtaining regulatory approvals and manufacturing and supply, as well as marketing and selling any products approved for sale. In addition, other unanticipated costs may arise. Because the outcome of any preclinical study or clinical trial is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or any future product candidates.

As of December 31, 2020, we had capital resources consisting of cash and cash equivalents and short-term investments of approximately $351.2 million. We expect our existing capital resources will fund our planned operating expenses through 2023. However, our operating plans may change as a result of many factors currently unknown to

us, and we may need to seek additional funds sooner than planned through public or private equity offerings or debt financings or other sources, such as strategic collaborations. Such financing may result in dilution to our stockholders, imposition of burdensome debt covenants and repayment obligations, or other restrictions that may affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Our future capital requirements depend on many factors, including:

• any product liability or other lawsuits related to our products;

• the expenses needed to attract, hire and retain skilled personnel;

• the costs associated with being a public company;

• the timing, receipt and amount of sales of any future approved products; and

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If adequate funds are not available to us on a timely basis, we may be required to:

• delay, limit, reduce or terminate our research and development activities; or

We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies or product candidates that we would otherwise pursue on our own.

We do not expect to realize revenue from sales of products or royalties from licensed products in the foreseeable future, if at all, and unless and until our product candidates are clinically tested, approved for commercialization and successfully marketed. To date, we have primarily financed our operations through the sale of equity securities. We will be required to seek additional funding in the future and currently intend to do so through public or private equity offerings or debt financings, credit or loan facilities, collaborations or a combination of one or more of these funding sources. Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. Additional funds may not be available to us on acceptable terms or at all. If we raise additional funds by issuing equity securities, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets.

Due to the significant resources required for the development of our product candidates, we must prioritize development of certain product candidates and/or certain disease indications. We may expend our limited resources on 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 are currently focused on developing product candidates to address classical complement-mediated autoimmune and neurodegenerative diseases. We seek to maintain a process of prioritization and resource allocation among our programs to maintain a balance between aggressively advancing our product candidates in identified indications and exploring additional indications or mechanisms as well as developing future product candidates. However, due to the significant resources required for the development of our product candidates, we must focus on specific diseases and disease pathways and decide which product candidates to pursue and the amount of resources to allocate to each such product candidate.

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 opportunities. Similarly, any decision 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 autoimmune or neurodegenerative or pharmaceutical, biopharmaceutical or biotechnology 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 and disease pathways 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.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations.

Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including:

• the timing and status of enrollment for our clinical trials;

• future accounting pronouncements or changes in our accounting policies;

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance.

This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if any forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated revenue or earnings guidance we may provide.

Risks Related to Our Business

Our business is heavily dependent on the successful development, regulatory approval and commercialization of our product candidates which are in early stages of clinical development.

We have no products approved for sale, and our product candidates are in early stages of clinical development. The success of our business, including our ability to finance our company and generate revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of our product candidates and, in particular, the advancement of our current clinical-stage product candidates. However, given our stage of development, it may be many years, if we succeed at all, before we have demonstrated the safety and efficacy of a product candidate sufficient to warrant approval for commercialization. We cannot be certain that our product candidates will receive regulatory approval or be successfully commercialized even if we receive regulatory approval.

While inhibition of the complement pathway has been validated as a therapeutic approach, C1q inhibition is a novel therapeutic approach, which exposes us to certain risks. For example, we may discover unforeseen safety events or that our product candidates do not possess certain properties required for therapeutic effectiveness, or that even if found to be effective in one type of disease, a product candidate, or the therapeutic approach, is not effective in other diseases. In addition, given the novel nature of this therapeutic approach, designing preclinical studies and clinical trials to demonstrate the effect of the product candidates is complex and exposes us to risks, including that our biomarker-driven approach may not translate into therapeutic effectiveness.

In the future, we may also become dependent on other product candidates that we may develop or acquire. The clinical and commercial success of our product candidates and future product candidates will depend on a number of factors, including the following:

• the convenience of our treatment or dosing regimen;

These factors, many of which are beyond our control, could cause us to experience significant delays or an inability to obtain regulatory approvals or commercialize our product candidates. Even if regulatory approvals are obtained, we may never be able to successfully commercialize any of our product candidates. Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of our product candidates or any future product candidates to continue our business or achieve profitability.

Public health crises such as pandemics or similar outbreaks could materially and adversely affect our preclinical and clinical trials, business, financial condition and results of operations.

In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a national emergency with respect to the COVID-19 pandemic. In response to the COVID-19 pandemic, “shelter in place” orders and other public health guidance measures have been implemented across much of the United States and Europe, including in the locations of our offices, clinical trial sites, key vendors and partners. We expect that our clinical development program timelines will continue to be negatively affected by the COVID-19 pandemic, which could materially and adversely affect our business, financial condition and results of operations. Further, due to “shelter in place” orders and other public health guidance measures, we have implemented a work-from-home policy for all staff members excluding those necessary to maintain minimum basic operations. Our increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay or otherwise adversely impact our business. For example, with our personnel working from home, some of our research activities that require our personnel to be in our laboratories will be delayed.

As a result of the COVID-19 pandemic, or similar pandemics, and related “shelter in place” orders and other public health guidance measures, we have and may in the future experience disruptions that could materially and adversely impact our clinical trials, business, financial condition and results of operations. These disruptions include but are not limited to:

• delays or difficulties in enrolling patients in our clinical trials;

These and other factors arising from the COVID-19 pandemic could worsen or could return to countries where the pandemic has been partially contained, each of which could further adversely impact our ability to conduct clinical trials and our business generally, and could materially and adversely affect our business, financial condition and results of operations.

In particular, the COVID-19 pandemic has adversely impacted hospitals and medical facilities where we are currently conducting our clinical trials, and has resulted in increased competition among companies conducting clinical trials for more limited hospital space.

The COVID-19 pandemic continues to rapidly evolve. The extent to which the outbreak may continue to affect our clinical trials, business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, such as the duration of the outbreak, travel restrictions and actions to contain the outbreak or treat its impact, such as social distancing and quarantines or lock-downs 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. Future developments in these and other areas present material uncertainty and risk with respect to our clinical trials, business, financial condition and results of operations.

Research and development of biopharmaceutical products is inherently risky. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.

We are at an early stage of clinical development of our product candidates. Our future success is dependent on our ability to successfully develop, obtain regulatory approval for and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following:

If any of these events occur, we may be forced to abandon our development efforts for a product candidate or candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations. Failure of a product candidate may occur at any stage of preclinical or clinical development, and we may never succeed in developing marketable products or generating product revenue.

We may not be successful in our efforts to further develop our current and future product candidates. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates. Each of our product candidates will require significant additional clinical development, management of preclinical, clinical and manufacturing activities, regulatory approval, adequate manufacturing supply, a commercial organization and significant marketing efforts before we generate any revenue from product sales, if at all. Any clinical studies that we may conduct may not demonstrate the efficacy and safety necessary to obtain regulatory approval to market our product candidates. If the results of our ongoing or future clinical studies are inconclusive with respect to the efficacy of our product candidates, if we do not meet the clinical endpoints with statistical significance or if there are safety concerns or adverse events associated with our product candidates, we may be prevented or delayed in obtaining marketing approval for our product candidates.

The FDA or other regulatory agencies may not agree with our clinical development plan and require that we conduct additional clinical trials to support our regulatory submissions. We have not yet conducted an end of Phase 2 meeting with the FDA to discuss the registration pathway for ANX005, and our current clinical development plans for ANX005 in Guillain-Barre Syndrome, or GBS, may change as a result of future interactions with the FDA. For example, the FDA may require that we conduct more than one pivotal trial in order to gain approval in GBS. Furthermore, any approval of ANX005 for GBS may be limited to ANX005 in combination with the existing standard of care. While not approved for use in GBS in the United States due to differing levels of efficacy in GBS patients, IVIg has developed as the standard of care in the Western world and parts of Asia for patients with GBS and has been shown to be a reasonably effective treatment in some GBS patients.

If any of our product candidates successfully completes clinical trials, we plan to seek regulatory approval to market our product candidates in the United States, the European Union and in additional foreign countries where we believe there is a viable commercial opportunity. We have never commenced, compiled or submitted an application seeking regulatory approval to market any product candidate. We may never receive regulatory approval to market any product candidates even if such product candidates successfully complete clinical trials, which would adversely affect our viability. To obtain regulatory approval in countries outside the United States, we must comply with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates. We may also rely on collaborators or partners to conduct the required activities to support an application for regulatory approval and to seek approval for one or more of our product candidates. We cannot be sure that any such collaborators or partners will conduct these activities successfully or do so within the timeframe we desire. Even if we or any future collaborators or partners are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions. If we are unable to obtain approval for our product candidates in multiple jurisdictions, our revenue and results of operations could be negatively affected.

Even if we receive regulatory approval to market any of our product candidates, we cannot assure you that any such product candidate will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives. Any approval we may obtain could be for indications or patient populations that are not as broad as intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. We may also be required to perform additional or unanticipated clinical trials to obtain approval or be subject to additional post-marketing testing requirements to maintain approval. In addition, regulatory authorities may withdraw their approval of a product or impose restrictions on its distribution, such as in the form of a Risk Evaluation and Mitigation Strategy, or REMS. The failure to obtain timely regulatory approval of product candidates, any product marketing limitations or a product withdrawal would negatively impact our business, results of operations and financial condition.

We may encounter substantial delays in our clinical trials or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. We cannot be sure that submission of an IND or a clinical trial application, or CTA, will result in the FDA or other regulatory authority, as applicable, allowing clinical trials to begin in a timely manner, if at all. For example, prior to the authorization of our IND for HD, the FDA placed the Phase 2 trial on clinical hold in order to obtain additional

information on our preclinical data package; we provided the required information and the clinical hold was lifted in March 2020. Moreover, even if these trials begin, issues may arise that could suspend or terminate such clinical trials. A failure of one or more clinical trials can occur at any stage of testing, and our future clinical trials may not be successful. Clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to:

• delays in obtaining regulatory authorization to commence a trial;

• identifying, recruiting and training suitable clinical investigators;

• obtaining institutional review board, or IRB, approval at each trial site;

• recruiting an adequate number of suitable patients to participate in a trial;

• having subjects complete a trial or return for post-treatment follow-up;

• clinical sites deviating from trial protocol or dropping out of a trial;

• addressing subject safety concerns that arise during the course of a trial;

• adding a sufficient number of clinical trial sites; or

We may experience numerous adverse or unforeseen events during, or as a result of, preclinical studies and clinical trials which could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:

If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only moderately positive or if there are safety concerns, we may:

• incur unplanned costs;

• obtain marketing approval in some countries and not in others;

• be subject to additional post-marketing testing requirements; or

• have the product removed from the market after obtaining marketing approval.

In addition, disruptions caused by the COVID-19 pandemic may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials. We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Further, conducting clinical trials in foreign countries, as we plan to do for certain of our product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs and managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks.

Principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or a regulatory authority concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of the marketing application we submit. Any such delay or rejection could prevent or delay us from commercializing our current or future product candidates.

If we experience delays in the completion, or termination, of any preclinical study or clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate revenues from any of these product candidates will be delayed or not realized at all. In addition, any delays in completing our clinical trials may increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may materially and adversely affect our business, financial condition, results of operations and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. If one or more of our product candidates proves to be ineffective, unsafe or commercially unviable, our business, financial condition, results of operations and prospects may be materially and adversely affected.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may not be able to initiate or continue clinical trials on a timely basis or at all for any product candidates we identify or develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in the trials as required by applicable regulations or as needed to provide appropriate statistical power for a given trial. The timely completion of clinical trials in accordance with their protocols depends on, among other things, our ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The enrollment of patients depends on many factors, including:

• the severity and difficulty of diagnosing the disease under investigation;

• the patient eligibility and exclusion criteria defined in the protocol;

• the proximity of patients to trial sites;

• the design of the trial;

• patient referral practices of physicians;

• ability to monitor patients adequately during and after treatment;

• our ability to obtain and maintain patient consents.

In addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Because the number of qualified clinical investigators is limited, we may conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site. Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

Our product candidates may cause undesirable and unforeseen side effects or have other properties that could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.

Adverse events or other undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. If unacceptable side effects arise in the development of our product candidates, we, the FDA, the IRBs at the institutions in which our studies are conducted or the DSMB could suspend or terminate our clinical trials or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete any of our clinical trials or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death. Any of these occurrences may materially and adversely affect our business, financial condition, results of operations and prospects.

In addition, early clinical trials may only include a limited number of subjects and limited duration of exposure to our product candidates. In particular, we are pursuing a novel approach to inhibiting upstream molecules of the classical complement pathway, primarily C1q, and as a result, our product candidates may cause unforeseen safety events when evaluated in larger patient populations. Further, clinical trials may not be sufficient to determine the effect and safety consequences of taking our product candidates over a multi-year period.

If any of our product candidates receives marketing approval, and we or others later identify undesirable and unforeseen side effects caused by such product, a number of potentially significant negative consequences could result, including but not limited to:

• we could be sued and held liable for harm caused to patients;

ANNX US Equity

ANNX · 10-K · period ended 2020-12-31

Item 1. Business.

Item 1A. Risk Factors.

ANNX US Equity☆

ANNX · 10-K · period ended 2020-12-31

Item 1. Business.

Item 1A. Risk Factors.

ANNX US Equity