10-K

avir-10k_20201231.htm

10-K

avir-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 001-39661

ATEA PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its Charter)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (857) 284-8891

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, $0.001 par value per share AVIR The Nasdaq Global Select 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 Section 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 Act). YES ☐ NO ☒

The registrant was not a public company as of 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 29, 2021 was 82,736,937.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its 2021 Annual Meeting of Stockholders, which the registrant intends to file 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 Annual Report on Form 10-K.

Table of Contents

Page

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ii

SUMMARY RISK FACTORS iii

PART I

Item 1. Business 1

Item 1A. Risk Factors 41

Item 1B. Unresolved Staff Comments 106

Item 2. Properties 106

Item 3. Legal Proceedings 106

Item 4. Mine Safety Disclosures 106

PART II

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 121

Item 8. Financial Statements and Supplementary Data 121

Item 9A. Controls and Procedures 121

Item 9B. Other Information 121

PART III

Item 10. Directors, Executive Officers and Corporate Governance 122

Item 11. Executive Compensation 122

Item 14. Principal Accountant Fees and Services 122

PART IV

Item 15. Exhibits, Financial Statement Schedules 123

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, our clinical results and other future conditions. The words “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” "on track," “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

• the safety profile and related adverse events of our product candidates;

• our commercialization, marketing and manufacturing capabilities and strategy;

• our estimates regarding future revenue, expenses and results of operations;

• our business strategy;

• our expectations regarding federal, state and foreign laws and regulations;

• our ability to attract, motivate, and retain key personnel; and

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that may cause actual results to differ materially from current expectations include the initiation, execution and completion of clinical trials, uncertainties surrounding the timing of availability of data from our clinical trials, ongoing discussions with and actions by regulatory authorities, our development activities and those other factors we discuss in Part I, Item 1A. “Risk Factors.” You should read these factors and the other cautionary statements made in this report as being applicable to all related forward-looking statements wherever they appear in this report. These risk factors are not exhaustive and other sections of this report may include additional factors which could adversely impact our business and financial performance. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

As used in this Annual Report on Form 10-K, unless otherwise specified or the context otherwise requires, the terms “we,” “our,” “us,” the “Company” refer to Atea Pharmaceuticals, Inc. and its subsidiary. All brand names or trademarks appearing in this Annual Report on Form 10-K are the property of their respective owners.

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K. The principal risks and uncertainties affecting our business include the following:

• We are highly dependent on our management, directors and other key personnel.

iii

• We could be subject to securities class action litigation.

PART I

Item 1. Business.

Overview

We are a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing antiviral therapeutics to improve the lives of patients suffering from difficult to treat, life-threatening viral infections. Our current focus is on the development of product candidates to treat COVID-19, dengue, chronic hepatitis C (“HCV”), and respiratory syncytial virus (“RSV”).

Utilizing our team’s expertise from decades of developing innovative antiviral treatments we are advancing oral product candidates that are designed to be potent and selective, which we derived from our proprietary nucleotide platform that combine unique nucleotide scaffolds with novel double prodrugs for the purpose of inhibiting the enzymes central to viral replication. We believe that utilizing this double prodrug moiety approach allows us to maximize formation of the active metabolite, potentially resulting in oral antiviral product candidates that are selective for and highly effective at preventing replication of single stranded RNA (“ssRNA”), viruses while avoiding toxicity to host cells.

Our Development Pipeline

The following table summarizes our orally administered product candidate pipeline. All of our product candidates have been discovered and developed internally and we retain full global rights to commercialize our product candidates, other than certain ex-U.S. rights for our product candidate AT-527 licensed to F. Hoffmann-LaRoche Ltd. and Genentech, Inc. (together, “Roche”), under the License Agreement we entered into with Roche in October 2020 (the “Roche License Agreement”). We retain the right to commercialize all our product candidates in the United States.

1 Ex-US development and commercialization rights (other than for certain hepatitis C virus uses) licensed to Roche.

2 Rights to develop and manufacture globally and to commercialize in the US for dengue, among other viruses, retained. Ex-US commercialization of AT-752 for dengue is subject to agreement with Roche.

3 AT-787 is our selected product candidate for the treatment of HCV.

Our Technology Platform and Nucleosides Role in Antiviral Therapy

We have produced a large library of nucleoside and nucleotide prodrugs specifically designed to target viral RNA polymerase, a key enzyme that is encoded in the viral genome. All ssRNA viruses, including SARS-CoV-2, the virus that causes COVID-19, dengue and HCV, depend on viral RNA polymerase for replication and transcription and, since viral RNA polymerase is not present in the host cell, it is an ideal target to inhibit virus replication.

Over the last 40 years, nucleoside and nucleotide (together, “nucleos(t)ide”) analogs have been developed to mimic naturally occurring nucleic acids and block viral replication by inhibiting enzymes involved in RNA and DNA viral growth cycles. Nucleos(t)ide analogs have become the backbone of therapies that treat life-threatening viral infections, including human immunodeficiency virus (“HIV”) hepatitis B virus (“HBV”) and HCV.

COVID-19

The global pandemic of COVID-19, caused by SARS-CoV-2, has created significant disruption to public health and economic activity worldwide. As of March 29, 2021 there have been over 126.9 million confirmed cases of COVID-19 and 2.8 million deaths worldwide. Given our current expectation that SARS-CoV-2 is likely to become an endemic human coronavirus that has the potential to circulate in the human population for years, we believe that multiple COVID-19 preventive and therapeutic options will be needed.

At approximately one year into the pandemic, significant progress has been made with multiple vaccine and treatment options available. The treatment options include Veklury, or remdesivir, and dexamethasone, which are administered parenterally and have demonstrated benefit in hospitalized patients, and monoclonal antibody combinations, which are administered intravenously in high-risk patients.

Despite these advances, substantial need remains for new treatment options, particularly for orally administered treatments which would be more practical, convenient and efficient for use in the early stages of disease in an outpatient setting. We believe this is particularly true for patients with mild to moderate symptoms, which is the most frequent clinical presentation of the disease. Further, we believe that this need will continue for years, given that we expect there will be subsets of the population who will either refuse or fail to respond to available vaccines, or individuals for whom a vaccine is contraindicated, and who need treatment options to be available. An oral, direct acting antiviral that could be readily and easily administered in the outpatient setting would have the potential to significantly reduce disease burden and duration, prevent progression of disease or hospitalization, and have a significant impact on health systems globally. Additionally, an oral, direct acting antiviral with a mechanism of action that targets the inhibition of viral RNA polymerase, which is a highly conserved target site, could also be of particular value since the antiviral activity is expected to remain even in the presence of newly emerging variants.

Our product candidate for the treatment of patients with COVID-19 is AT-527, an orally administered, novel, direct acting antiviral. We, together with our collaborator Roche, anticipate initiating a Phase 3 clinical trial to study AT-527 in adult patients with mild or moderate COVID-19 in the outpatient setting in thesecond quarter of 2021. Currently, we are evaluating AT-527 for the treatment of patients with mild to moderate COVID-19 in two Phase 2 clinical trials. The first trial is a randomized, double-blind, placebo-controlled Phase 2 clinical trial in approximately 190 adult patients with moderate COVID-19 and one or more risk factors for poor outcomes in a hospitalized setting. We dosed our first patient in September 2020 and expect to report interim virology data from this clinical trial in the second quarter of 2021. The second trial, which is being conducted in collaboration with Roche, is a randomized, double-blind, placebo-controlled Phase 2 clinical trial in up to 220 adult patients with mild or moderate COVID-19 in an outpatient setting. The first patient in this trial was dosed in February 2021. We expect to report interim virology data from this trial in the second quarter of 2021. In addition, several Phase 1 clinical trials in healthy volunteers are planned in addition to the one currently being conducted and the one recently completed for which positive results have been announced.

Dengue

Dengue is a mosquito-borne viral infection that infects up to 400 million people a year, causing substantial public health and economic burden worldwide.Dengue, which is life threatening in severe cases, was traditionally considered a tropical disease, endemic to countries located mostly in the tropical regions of Asia, Latin America, the Pacific, and across Africa. However, in recent decades the incidence of the disease has been spreading globally. While a vaccine to prevent dengue is approved in some countries, it is indicated only for persons with confirmed prior dengue infection and its product label use is highly restricted. Currently there are no antiviral therapies approved by either the U.S. Food and Drug Administration (“FDA”) or the European Medicines Agency (“EMA”).

To address this unmet medical need, we are developing AT-752, an oral, purine nucleotide prodrug for the treatment of dengue. AT-752 targets the inhibition of the dengue viral polymerase and, in preclinical studies, AT-752 showed potent in vitro activity against all serotypes tested, as well as potent in vivo antiviral activity in a small animal model. In March 2021, we initiated a randomized, double-blind, placebo-controlled Phase 1a clinical trial to evaluate the safety and pharmacokinetics (“PK”), of different dosages of AT-752 in healthy adults. Following the completion of this Phase 1a clinical trial, we expect to initiate a Phase 1b clinical trial in the second half of 2021 to evaluate the antiviral activity, safety and PK of AT-752 in adult patients with dengue virus infection.

Hepatitis C

Despite significant recent advances in treatment, HCV remains a global health burden due to the limitations of currently available treatment options.

For the treatment of chronic HCV infection, we have created a novel combination of AT-527 with AT-777, an investigational nonstructural protein 5A (“NS5A”), inhibitor that we will coformulate into a single, oral, pan-genotypic fixed-dose combination product candidate, AT-787. We believe that AT-787 has the potential to offer a short duration protease-sparing regimen for HCV-infected patients with or without cirrhosis. For patients with decompensated cirrhosis, a life-threatening stage of liver disease, AT-787 has the potential to treat these patients without the co-administration of ribavirin. In March 2020 we paused clinical development in our HCV program due to the outbreak of the COVID-19 pandemic. In the second half of 2021, we expect to re-initiate a Phase 1/2a clinical trial, which will be designed to evaluate the safety and PK of different dosages of AT-777 in healthy adults and to evaluate the combination of AT-527 and AT-777 in HCV infected patients.

RSV

RSV is a seasonal respiratory virus that is responsible for significant health and economic burden worldwide. RSV is a common virus that causes severe respiratory disease in infants, which often leads to hospitalization. Up to 70% of infants are infected by the age of one and virtually all infants will have been infected by their third year of life. As protective immunity wanes, RSV reinfection in children and adults, is common. While these reinfections tend to be milder, RSV is a well established cause of significant morbidity and mortality in the elderly, the immunocompromised and other high-risk patients. There is also an increased awareness of the long-term consequences of RSV primary infection that have been linked to prolonged wheezing and an increased risk of developing asthma. There are no approved vaccines. The only approved drugs are ribavirin, which has safety concerns and questionable efficacy and Synagis, a monoclonal antibody which is indicated not for treatment but only for protection against RSV in a high risk pediatric population.

We are evaluating AT-889, an investigational, second-generation nucleoside pyrimidine prodrug and other compounds for the treatment of RSV. AT-889 is designed to inhibit RNA polymerase through both initiation of viral replication and viral transcription and showed potent in vitro activity in several cell based assays against RSV. In the second half of 2021, we expect to nominate a lead product candidate and initiate investigational new drug application (“IND”) enabling studies.

Our Team

Our management team has significant experience discovering, developing and commercializing antiviral therapies for life-threatening viral infections. Our Founder, Chairman, and Chief Executive Officer, Jean-Pierre Sommadossi, Ph.D., has over 30 years of scientific, operational, strategic, and management experience in the biopharmaceutical industry. Dr. Sommadossi has authored over 180 peer-reviewed publications and holds more than 60 U.S. patents related to the treatment of antiviral therapeutics and cancer. Dr. Sommadossi was the principal founder of Idenix Pharmaceuticals, Inc. (“Idenix”), which was acquired by Merck & Co., Inc. (“Merck”), in 2014, and a co-founder of Pharmasset, Inc. (“Pharmasset”), which was acquired by Gilead Sciences, Inc. in 2012.

We have assembled an experienced management and scientific team with a track record of success in the field of antiviral drug development, many of whom have worked together previously. Our team has significant expertise in nucleos(t)ide chemistry, biochemistry and virology and has applied that expertise towards the discovery and development of innovative antiviral treatments, including Epivir, Sovaldi, Tyzeka, Valtrex, Wellferon, Videx, Reyataz, Sustiva, Mavyret, Xofluza, Relenza and Zerit. Members of our team have held senior positions at AstraZeneca plc, Merck, GlaxoSmithKline plc, Chiron, Novartis International AG, Biogen, F. Hoffmann La Roche, Abbvie, Bristol Myers Squibb, Shire, Biohaven Pharma, Pharmasset, Idenix, Valeant Pharmaceuticals International and Alnylam Pharmaceuticals.

Our Strategy

Our goal is to become a global leader in the discovery, development, and commercialization of novel antiviral therapies for severe or life-threatening viral infections. We intend to achieve this goal by pursuing the following strategies:

Antiviral therapy

Background on viruses

Viruses are cellular parasites that can only replicate using a host cell’s replication processes, as viruses lack the machinery required to survive and replicate on their own. Unlike living organisms that use DNA as the basis for their genetic material, viruses can use either DNA or RNA. Approximately 70% of all viruses are RNA viruses.

Viruses have two primary components: nucleic acid (single or double stranded RNA or DNA) and a protective shell (the capsid). Some viruses may also have a lipid bilayer (the envelope) surrounding the capsid, an additional membrane derived from host cell membranes that contains viral proteins.

The viral replication process begins when a virus attaches itself to a specific receptor site on the host-cell membrane through attachment proteins. The replication mechanism is dependent upon whether the virus is an RNA or DNA virus. DNA viruses use host cell proteins and enzymes to make additional DNA that is used to copy the viral genome or is transcribed to messenger RNA (“mRNA”). RNA viruses use their RNA as a template for synthesis of viral genomic RNA and mRNA. The mRNA then instructs the host cell to assemble viral structural proteins. Finally, the newly created virus particles (“virions”), are released from the host cell in order to repeat the infection and replication cycle. RNA viruses can be particularly challenging to treat, as the error rates around the viral RNA polymerase directed RNA synthesis cause high mutation rates during reproduction, creating variants and resistance challenges for antiviral therapies.

Background of ssRNA viruses

RNA viruses can be single stranded (ssRNA) viruses or double-stranded (dsRNA), viruses, depending on the type of RNA used as the genetic material. A virus encased within a lipid bilayer is known as an enveloped virus, while a virus without this bilayer is called a non-enveloped virus. Enveloped ssRNA viruses are the more prevalent cause of severe human viral diseases. Studies from the last decade have placed RNA viruses as primary etiological agents of many emerging human pathogens, representing up to 50% of all emerging infectious diseases. Types of enveloped and non-enveloped ssRNA viruses and some of the diseases they cause are shown in the table below, with the types of ssRNA viruses that we are currently targeting with our product candidates highlighted in yellow.

Over the last 40 years, a great deal of progress has been made in the treatment of some of the most severe viral infections. However, many highly pathogenic ssRNA viruses, including dengue virus and newly emerging viruses such as SARS-CoV-2 continue to cause severe viral diseases which still remain inadequately treated or not treated at all.

Viral polymerase as an antiviral target

From the discovery and approval of the first antiviral drug in 1963, there have been more than 100 antiviral drugs approved in the United States for the treatment of nine different human viral diseases. A historical challenge with the treatment of intracellular viruses has been selectivity or discovering drug targets that can completely inhibit viral replication without harming the host cells, leading to toxic side effects. Advances in technology and high throughput screening in recent years have driven the discovery of more selective antiviral product candidates. The viral polymerase, which is the single protein present in all RNA viruses, is a key enzyme in the replication of viruses, making for an ideal drug target as its core structural features are highly conserved across different viruses. There are four types of viral polymerase, depending upon the virus and its genomic makeup:

As viral RNA polymerase based synthesis does not occur in human host cells, antiviral drug development for RNA viruses focuses on identifying selective drug-like molecules that target viral RNA polymerase. Advances in technology have enabled intensive structural and functional studies of viral RNA polymerase including the identification in the case of SARS-CoV-2 of nidovirus RdRp associated nucleotidyltranferase (“NiRAN”), and have opened avenues for the development of new and more effective antiviral therapies.

Viral resistance and Variants

A major obstacle to antiviral therapy is viral resistance. Resistance is a function of a virus’ ability to genetically mutate, which, in the case of RNA viruses, is substantially higher than DNA viruses, as most RdRp lack proofreading abilities. The rate of mutation of RNA viruses can occur at six orders of magnitude greater than the rate of mutation of host cells. The ability of viruses to evolve makes the design of ssRNA-directed therapies challenging, as these viral strains continue to mutate and become more resistant to certain antiviral therapies over time. Since all the enzymes involved in the metabolic pathways of AT-527 and AT-752 to their active triphosphate are designed to be essentially ubiquitous host cell enzymes and not virally encoded proteins, we believe that the high rate of viral mutation does not affect the activation of the prodrug.

At times, combination therapy has been used to combat viral resistance for specific types of human viral infections. The guiding principles to decide when combination therapy may be needed, include: the in vitro inhibitory potency and human pharmacology of the antiviral; viral replication kinetics in patients; viral polymerase error rate; and whether the viral disease is an acute or a chronic infection. With RNA viruses, the treatment of acute infection, such as influenza, is monotherapy (e.g., Tamiflu), as compared to the treatment of chronic infection, such as HCV, which is combination therapy (e.g., Epclusa). COVID-19, dengue and RSV are each the result of acute RNA viral infections.

Another consequence of viral mutations is the emergence of new variants. For example, each year the genetic mutations accumulated in the influenza virus cause antigen drift that could significantly impact immune recognition, thus the flu vaccines have to be reviewed and updated. SARS-CoV-2, despite the fact that it does have a proof-reading function with the nsp14 exonuclease, has proven to be able to mutate quickly as well. Multiple SARS-CoV-2 variants are circulating globally. For example, variants that have emerged since fall 2020, include B.1.1.7 (also known as 501Y.V1, VOC 202012/01) in the U.K., B.1.351 (501Y.V2) in South Africa, P.1 (20J/501Y.V3) in Brazil, and B.1.526 in New York. Some of these variants not only appear to transmit faster and cause more serious illness but may also reduce the efficacy of current vaccines and antibodies, and thus present an even greater health challenge.

Nucleos(t)ide analogs and prodrugs

Nucleic acids (DNA and RNA), which comprise human and viral genetic material, are composed of natural chemical compounds termed nucleosides and nucleotides. Nucleos(t)ide analogs, which are synthetic compounds that mimic the structure of naturally occurring nucleosides and nucleotides, target the viral polymerase directly so that it mistakenly incorporates these analogs into nascent nucleic acids, causing inhibition of viral replication. Nucleos(t)ide analogs, compared to other classes of antiviral therapies, have a high barrier to viral resistance due to the conservation of the structure of the polymerase that is required to produce viable virions.

Prodrugs of nucleos(t)ide analogs have become the backbone of therapies to treat life threatening viral infections, including HIV, HBV, and HCV. Prodrugs are employed to bypass rate limiting activation steps and to improve the oral bioavailability and permeation of cell membranes by the nucleos(t)ide analog.

Our Platform

Leveraging our deep understanding of antiviral drug development, nucleos(t)ide chemistry, biochemistry and virology, we have built a proprietary purine nucleotide prodrug platform to develop novel treatments for life threatening diseases caused by ssRNA viral infections.

Our proprietary nucleotide prodrug platform, as illustrated below, is comprised of the following critical components:

• highly specific salt form to enhance solubility and drug bioavailability.

Atea’s purine nucleotide prodrug platform

We believe that product candidates derived from our platform, which combines unique purine nucleotide scaffolds with a novel double prodrug strategy, have the following potential advantageous characteristics and features:

• favorable safety profile;

• convenience of once- or twice-daily oral administration; and

Development Programs

AT-527 for the treatment of COVID-19

Although vaccines have an important role in mitigating the COVID-19 pandemic, we believe that there will be a continuing need for treatment options to stay ahead of the virus and the emergence of variants. While there are parenterally or intravenously administered therapeutics available for use in the hospital setting, oral treatments would be more practical and efficient for use in the early stages of disease in an outpatient setting, including for patients with mild to moderate symptoms. Thus we believe that a significant and urgent unmet medical need remains for orally administered, direct acting antivirals with broad utility for the treatment of COVID-19.

COVID-19 is an acute viral infection. We believe antiviral therapeutics should be most effective against COVID-19 within the first stage of the infection when the viral load is at its maximum, which is consistent with rapid viral replication initially in nasal cells, throat cells and ultimately pulmonary cells. As shown in the illustration below, we believe that the use of a potent, safe, oral antiviral therapeutic to treat SARS-CoV-2-infected individuals in the early stage of infection will mitigate the onset of severe COVID-19 and avert hospitalization.

SARS-CoV-2

Background

SARS-CoV-2 is a coronavirus, belonging to the Coronaviridae family, and is an enveloped virus with a positive sense ssRNA genome which encodes 29 viral proteins. It is one of six other human coronaviruses that exist, with four responsible for one third of common cold infections.

SARS-CoV-2 is structurally similar to two other life-threatening coronaviruses: SARS-CoV and Middle East Respiratory Syndrome coronavirus (“MERS-CoV-1”). SARS-CoV-2 impairs respiratory function and spreads primarily from person to person via respiratory droplets among close contacts. Symptoms, which may include fever, cough, shortness of breath and fatigue, generally appear two to twelve days after exposure. Severe complications include pneumonia, multi-organ failure, and death.

SARS-CoV-2 is a spherical virus that carries four different structural proteins: spike protein, envelope protein, membrane glycoprotein and nucleocapsid protein. As shown in the illustration below, the infection cycle begins when the spike proteins bind to the angiotensin-converting enzyme 2 cellular receptor (“ACE2”), on the surface of the target cells. A second cell surface protein, transmembrane serine protease 2 (“TMPRSS2”), enables the virion to enter the cell, where it releases its RNA. Some of this RNA is translated into new proteins using the host cell’s machinery—these proteins include the four structural proteins, as well as a number of non-structural proteins (“nsps”), that form the replication complex. Within this complex, RdRps catalyze the synthesis of the approximately 30,000-nucleotide RNA viral genome. The proteins and RNA are then assembled into a new virion in the Golgi and released through exocytosis.

SARS-CoV-2 replication process

COVID-19

Current vaccine and treatment landscape

Several vaccines have been recently authorized for emergency use and additional vaccines and drug candidates are being developed to prevent infection and to create herd immunity, with the aim of preventing disease and reducing the amount of virus circulating within the community. Antiviral therapies are complementary to vaccines, and we anticipate that antivirals will continue to be essential because of uncertainties around the level of immunity that the vaccines will be able to generate, the durability of such immunity and the emergence of new variants of the virus that could change and potentially lessen the effectiveness of vaccines.

As of March 29, 2021, the FDA has granted emergency-use authorizations for certain monoclonal antibody regimens for the treatment of mild to moderate COVID-19 and for convalescent plasma. Antibody therapies, including those that are currently authorized for emergency use as well as those in development, may have application in prevention as well as treatment. However, the antibodies currently in use and in development require parenteral administration and are historically more complex than small molecules to manufacture. We believe that these two factors will impact and limit the use of antibodies for the treatment of patients, particularly outpatients with COVID-19.

Remdesivir, an antiviral that is a RdRp inhibitor, is approved by the FDA for treatment of adults and pediatric patients 12 years of age and older with COVID-19 requiring hospitalization. The limited bioavailability of remdesivir requires administration via intravenous infusion, which we believe is likely to limit its use to hospitalized patients.

Clinical drug candidates in development include small molecules designed to work as direct acting antivirals, which may be administered for both treatment and potentially prophylaxis. In addition to our antiviral candidate, AT-527, other antiviral drug candidates currently in development include molnupiravir, a nucleoside analog that incorporates into the viral RNA leading to lethal accumulation of mistakes or “error catastrophe” and PF-0083521, a protease inhibitor.

In addition to treatments directed at the virus, there are other immunomodulatory therapies such as interleukin-6 inhibitors, steroids, JAK inhibitors, and anti-tumor necrosis factor antibodies which are being developed to treat the host inflammatory response to the disease.

Our approach

We, together with our collaboration partner, Roche, are developing AT-527, an orally administered, novel antiviral product candidate, for the treatment of COVID-19. AT-527 uniquely inhibits viral RNA polymerase including both NiRAN and RdRp functional domains.

Targeting SARS-COV-2 NiRAN/RdRp to treat COVID-19

The RNA polymerase complex of SARS-CoV and SARS-CoV-2 supports the transcription and replication of their approximately 30,000-nucleotide viral RNA genomes. It is the largest and most complex RNA synthesis machinery among RNA viruses. As shown in the illustration below, the multi-subunit SARS-CoV polymerase complex is composed of a number of nsps including viral RNA-dependent RNA polymerase (nsp12), processivity factors (nsp7, nsp8), a proofreading exonuclease, a N7-methyl transferase (nsp14), and a helicase (nsp13). The nsp12 protein contains two domains, a RdRp core, which is the catalytic subunit incorporating ribonucleotides into RNA templates, and a N-terminal NiRAN domain, the function of which was previously unknown.

SARS-CoV RNA Polymerase

We have investigated the mechanism by which SARS-CoV initiates viral RNA synthesis and have discovered that there are two distinct pathways: one protein-primed and mediated by the NiRAN through the UMPylation of nsp8, and the other through de novo synthesis of dinucleotide primers in a NiRAN-independent manner. Importantly, both functions can be inhibited by AT-9010, the active triphosphate metabolite of the prodrug AT-527. Furthermore, we have obtained a 2.98 Å cryo-EM quaternary structure of nsp12/7/8/RNA/AT-9100, which confirms that AT-9010 not only bound to the NiRAN active site but also was incorporated by the RdRp and functions as a chain terminator. We believe this unique dual mechanism of AT-527 may create a potentially higher barrier to resistance compared to other direct acting antiviral inhibitors. We expect that AT-527 will maintain its antiviral activity even against the recently emerged variants with mutations in the spike (S) protein responsible for the receptor recognition and host cell membrane fusion process. These variants may affect the efficacy of vaccines and antibodies due to the mutations in the viral spike protein.

It is also conceivable that the proofreading exonuclease activity of nsp14 could remove the terminating analog nucleotide from the RdRp core and experiments to demonstrate this are ongoing. However, the NiRAN function has no exonuclease activity.

Preclinical Studies

AT-511, the free base of AT-527, has shown in vitro antiviral activity against multiple ssRNA viruses, including human flaviviruses and coronaviruses.

We assessed the in vitro potency of AT-511 against SARS-CoV and SARS-CoV-2. The data observed is summarized in the table below.

The activity against SARS-CoV was assessed after exposure of Huh-7 cells to virus and serial dilutions of test compound by determining the effective concentration required to reduce secretion of infectious virus into the culture medium by 90% (EC90) after a 3-day incubation using a standard endpoint dilution CCID50 assay to determine virus yield reduction (VYR). Half-maximal cytotoxicity (CC50) was measured by neutral red staining of compound-treated duplicates in the absence of virus.

Since Huh-7 cells were unable to support infection by and replication of SARS-CoV-2, normal human airway epithelial (“HAE”) cell preparations were used to assess the activity of AT-511 against this virus, using the same method as described above. Cytotoxicity was assessed by visual inspection of the cells at the end of the 5-day incubation period.

In Vitro Activity of AT-511 (free base of AT-527) Against Human Coronaviruses

aCytotoxicity assessed by visual inspection of cell monolayers

Huh‐7, human hepatocyte carcinoma cell line (established ability to form triphosphate from AT‐511)

HAE, human airway epithelial cell culture (established ability to form triphosphate from AT‐511)

The EC90 values for AT-511 against SARS-CoV and SARS-CoV-2 were 0.34 μM and an average of 0.5 μM from five independent experiments. The concentration of AT-511 required to exhibit CC50 of the host cells used in these assays to support viral infection and propagation was consistently greater than the highest concentration tested (>86 μM). The sub-micromolar EC90 values, in combination with the lack of

toxicity observed in the host cells, suggests the potential for high potency and selectivity of AT-511 in vivo against these SARS coronaviruses.

The EC90 for remdesivir, which was included in all SARS-CoV-2 assays as a positive control and was included as a blinded test article in two independent assays, ranged from 0.002-0.27 μM. The potency of remdesivir, however, is likely a combination of its antiviral activity and cytotoxicity since dying and dead cells cannot support efficient viral replication. The CC50 for remdesivir, determined by neutral red staining in the SARS-CoV assay conducted in human cells (Huh-7; less precise visual assessments without staining were used to determine cytotoxicity in the HAE assays) ranged from 5-11 μM. Similar in vitro cytotoxicity of remdesivir (1.7-36 μM CC50) has been reported in other cell lines.

We also assessed the in vitro potency of N4-hydroxycytidine, the nucleoside formed from the oral prodrug molnupiravir currently being developed by Ridgeback/Merck for the treatment of COVID-19. N4-hydroxycytidine was five to eight times less potent than AT-511 against SARS-CoV-2 in the same experiment. We also assessed the antiviral activity of sofosbuvir and found that it did not inhibit SARS-CoV replication in BHK-21 cells at concentrations as high as 100 μM and was a poor inhibitor of SARS-CoV-2 with an estimated EC90 of about 8 μM in HAE cells.

In addition to assessing the in vitro potency of AT-511 against SARS-CoV-2 and SARS-CoV, we evaluated the formation and intracellular half-life of AT-9010, the active triphosphate metabolite of AT-527, in primary human nasal and bronchial epithelial cells. Also, we evaluated the pharmacokinetics and intracellular half-life of AT-9010 in tissues of non-human primates after oral administration of AT-527.

Substantial levels of the active triphosphate of AT-527 were formed in normal human bronchial and nasal epithelial cells incubated in vitro with 10 μM AT-511. After an 8-hour incubation, intracellular concentrations of the triphosphate were 698 and 236 μM in the bronchial and nasal cells, respectively. After replacement of the culture medium at 8 hours with fresh medium without AT-511, the half-life of the active triphosphate was determined to be 39 and 38 hours in the respective cell incubations. The accumulation and half-life of remdesivir triphosphate has been reported in the same type of human bronchial epithelial cells incubated with 1 μM remdesivir. After similar eight hour incubations, the concentration of remdesivir triphosphate, normalized to a dose of 10 μM, is at least 7-fold lower than the observed concentration of AT-9010 in the same cell type. In similar incubations of 1 μM remdesivir with human bronchial epithelial cells for two hours followed by washout of drug and continued incubation for 30 hours, the initial half-life of remdesivir triphosphate was less than 8 hours which is at least 4 times shorter than the half-life of AT-9010 in the same primary human lung cells, suggesting the accumulation of higher levels of AT-9010 leading to a potentially greater antiviral effect after twice daily oral administration of 550 mg AT-527 versus daily intravenous administration of remdesivir (200 mg loading + 100 mg maintenance doses).

In non-human primates (“NHPs”) administered AT-527 orally for three days in the form of a loading dose (60 mg/kg) followed by five maintenance doses (30 mg/kg each) 12 hours apart, intracellular concentrations of the active triphosphate metabolite in lung, kidney and liver tissue 12 hours after the last dose (steady-state trough levels with respect to twice daily dosing) were 0.14, 0.13 and 0.09 μM, respectively. Since the NHP maintenance doses were allometrically scaled to be equivalent to the initially intended clinical maintenance doses for COVID-19 subjects (550 mg AT-527 given orally twice daily), predicted trough concentrations of AT-9010 in lung cells in prospective COVID-19 subjects were obtained from the plasma pharmacokinetics of AT-273 (surrogate for intracellular triphosphate concentrations) obtained from COVID-19 subjects given twice-daily oral doses of 550 mg AT-527.These values were adjusted by either the 1.6-fold greater triphosphate lung versus liver concentrations or the 1.2-fold greater lung triphosphate versus plasma AT-273 concentrations observed at 12 hours after the last dose in NHPs. These predictions of the trough human lung concentrations (0.9 and 0.7 μM, respectively) were based on the established close pharmacokinetic-pharmacodynamic relationship between plasma AT-273 concentrations and the antiviral effect in HCV-infected patients. We believe both predictions suggest that trough levels of the active triphosphate in COVID-19 patients during treatment with AT-527 should exceed the EC90 of 0.5 μM for AT-511 against SARS-CoV-2 replication. Moreover, we believe both predictions likely underestimate triphosphate trough levels in human lung since neither account for the extended intracellular half-life (39 hours) of the triphosphate observed exclusively in human lung epithelial cells in vitro.

Clinical Development History

AT-527 was initially developed for the treatment of chronic HCV, and we have completed two clinical trials of AT-527 in HCV. See –Hepatitis C virus (HCV)—Clinical development. By utilizing data that we obtained in our HCV clinical trials of AT-527, we were able to initiate our clinical development program of AT-527 for the treatment of patients with COVID-19. Ongoing clinical trials include a Phase 2 clinical trial in hospitalized patients, a Phase 2 clinical trial in the outpatient setting and a Phase 1 clinical trial in healthy volunteers.

Ongoing Phase 2 clinical trial in hospitalized patients

We are currently conducting a randomized, double-blind, placebo-controlled, multi-center, global Phase 2 clinical trial of AT-527, which is expected to enroll approximately 190 COVID-19 hospitalized patients.

Patients eligible for enrollment in this Phase 2 clinical trial are aged 18 to 80 years with moderate COVID-19 illness and at least one risk factor suggestive of poor outcome (such as obesity, hypertension, a history of diabetes, or a history of asthma). Moderate severity is defined as having at least one symptom of lower respiratory infection consistent with COVID-19, as well as oxygen saturation below 93% on room air or requiring ≤2L/min oxygen to maintain oxygen saturation in excess of 93%. The primary efficacy endpoint is the change in level of respiratory insufficiency, assessed on an ordinal 6-category scale of respiratory support levels, as compared to placebo, where a statistically significant finding would be reflected by a significantly lower probability for AT-527-treated subjects to exhibit a worsening of respiratory insufficiency (requiring ≤2 level higher respiratory support) during the study compared to placebo recipients. The six categories of the ordinal scale are: (1) no respiratory support; (2) low-level passive O2 supplementation (up to 2 L/min) by mask or nasal cannula; (3) higher O2 supplementation (>2 L/min); (4) any non-invasive form of positive-pressure oxygenation/ventilation; (5) invasive respiratory support; and (6) death. We believe the most important outcomes to be assessed in this trial are the effect of AT-527 versus placebo on the viral kinetics of the infection and the elucidation of the safety and tolerability of the drug at the dose of 550mg administered twice daily.

Trial participants are being randomized 1:1 (AT-527: placebo). The first 40 patients (20 AT-527, 20 placebo) received a dose of either 550 mg of AT-527 or placebo twice daily for five days in addition to supportive standard of care. In accordance with the protocol, an independent Data Safety Monitoring Board (“DSMB”), conducted safety reviews after the first cohort of 20 patients, and again after the second cohort of 20 patients, and approved continued enrollment of patients in the trial.

There are additional planned pauses and DSMB reviews at each of the 50% and 75% enrollment levels.

We expect to report interim virology data from this Phase 2 clinical trial in the second quarter of 2021.

Ongoing Phase 2 clinical trial in an outpatient setting

In addition to the Phase 2 clinical trial in hospitalized patients, we, together with our collaborator, Roche, are conducting a randomized, double-blind, placebo-controlled Phase 2 clinical trial to evaluate the antiviral activity, safety, and pharmacokinetics of AT-527 in adult patients with mild or moderate COVID-19, with and without risk factors, in an outpatient setting (MOONSONG). There are multiple cohorts included in this clinical trial. The initial cohort is receiving 550 mg of AT-527 administered twice daily. With additional cohorts we may investigate dosing regimens in addition to the 550 mg twice-daily dose. The study may enroll up to 220 patients in the U.K., Ireland and other countries.

We expect to report interim virology data from this Phase 2 clinical trial in the second quarter of 2021.

Phase 1 clinical trials

In addition to the Phase 2 clinical trials, we, in collaboration with Roche, are conducting a Phase 1 clinical trial of AT-527 in healthy volunteers and we are planning several additional Phase 1 clinical trials, including clinical pharmacology studies required to support applications for regulatory approval.

On March 6, 2021 we announced favorable results from a Phase 1 clinical trial that evaluated 20 healthy volunteers who were randomized 1:1 to receive oral AT-527 550 mg twice daily (BID) or matching placebo for 5 days. The results demonstrated that AT-527 was well tolerated. In this Phase 1 clinical trial, there were no discontinuations, serious adverse events, clinically significant changes in vital signs, or electrocardiograms observed. The data also demonstrated that AT-511, the free base of AT-527, was

rapidly absorbed, followed by fast and extensive stepwise metabolic activation ultimately to the active triphosphate metabolite AT-9010, reflected by plasma AT-273. AT-527 550 mg BID led to fast attainment of steady-state levels of AT-273 within two days of dosing. Plasma levels of AT-273 were further used to predict lung concentrations of AT-9010 using a scaling factor of 1.2X which was previously determined based onin vivo tissue distribution of the triphosphate metabolite observed in cynomolgus monkeys. Beginning as early as three hours after the first dose, and maintained thereafter throughout the five days of dosing, predicted lung AT-9010 levels were consistently above the EC90 level of 0.5 μM that was required for in vitro inhibition of SARS-CoV-2 replication in cynomolgus monkeys.

Planned Phase 3 Global Clinical Development Program

Phase 3 Registrational Clinical Trial

We, together with Roche, are currently engaging with regulatory authorities in order to open a Phase 3 clinical trial of AT-527 in an outpatient setting (MORNINGSKY). This clinical trial is expected to enroll patients aged 18 years and older with mild or moderate COVID-19. The primary objective of the trial is expected to be evaluation of the efficacy of AT-527 compared to placebo by measuring the time to alleviation of symptoms (“TAS”), in patients with SARS-CoV-2 virus infection with mild or moderate disease. The primary endpoint of TAS is defined as the time when all COVID-19 symptoms are assessed and self-reported by the patient as none or mild for a duration of at least 24 hours. Patients will assess the severity of disease on a 4-point scale (with 0 indicating no symptoms, 1 mild symptoms, 2 moderate symptoms, and 3 severe symptoms). We expect to enroll approximately 1,500 patients in this clinical trial.

Post-exposure Prophylaxis Clinical Trial

We, together with Roche, are also planning to conduct a randomized, double-blind, post-exposure prophylaxis Phase 3 clinical trial evaluating the reduction of direct transmission from SARS-CoV-2 infected patients (index case) to contacts. In this outpatient clinical trial, we expect to enroll approximately 3,000 patients aged 18 years or older. Pending additional discussions with regulatory authorities, the primary endpoint is expected to be the proportion of participants who test positive by RT-PCR at predetermined timepoints.

Regulatory Strategy

To align on the most efficient regulatory pathway for AT-527 in COVID-19, we and Roche are engaging in discussions with the FDA and other regulatory authorities as we plan and implement the clinical trials described above.

Clinical Trial Material

We and Roche are currently conducting manufacturing campaigns at third-party contract manufacturers that are expected to result, when combined with our current drug tablet inventory, in an inventory of AT-527 275 mg and 550 mg tablets and matching placebo that is expected to satisfy the clinical trial material requirements for currently planned COVID-19 clinical trials. Additionally, we, together with Roche, are engaged, through our contract manufacturers, in the optimization of the synthetic process and formulation for commercial scale manufacture of AT-527 275 mg tablets. We are targeting availability of initial commercial supply of AT-527 beginning in 2022.

AT-752 for the Treatment of

Dengue

Background

Dengue, which is caused by a positive sense ssRNA virus belonging to the Flaviviridae family, is a mosquito-borne viral infection. Dengue causes flu-like symptoms in both children and adults and is spread through the bite of an infected mosquito. There are five dengue viral serotypes, and infection with one serotype does not produce immunity to another serotype. Thus, a person could be infected with dengue multiple times and reinfection typically results in a more severe disease. Symptoms include fever, eye pain, headache, swollen glands, rash, muscle pain, bone pain, nausea, vomiting, and joint pain, and last two to seven days post-infection.

Globally, three billion people, or roughly 40% percent of the world’s population, live in high-risk dengue areas, while up to 400 million are infected each year, resulting in 500,000 hospitalizations. The WHO has called dengue the most important mosquito-borne viral disease in the world. Although dengue rarely occurs in the continental United States, it is endemic in Puerto Rico, Southeast Asia, Latin America and the Pacific Islands, as shown in the map below. Seventy percent of the global disease burden for dengue is in Asia.

According to the Center for Disease Control (“CDC”), 5% of infected patients develop a life-threatening form of dengue called severe dengue. Those who develop severe dengue may have some or all of the following complications: severe abdominal pain, fatigue, severe bleeding, organ impairment, and plasma leakage. The mortality rate of severe dengue ranges between 12% and 44%, if left untreated. The global economic cost burden of dengue was estimated at $8.9 billion in 2013, with nearly 50% of the costs associated with hospitalizations.

Current treatment landscape

There are no FDA or EMA approved therapies indicated for the treatment of dengue. Current treatment protocols involve supportive care, including analgesics, judicious fluid replacement, and bed rest. In 2019, a vaccine, Dengvaxia developed by Sanofi Pasteur Inc. (“Sanofi”), was approved by the FDA for the prevention of disease caused by dengue virus serotypes 1, 2, 3 and 4 in children ages nine to 16 with laboratory-confirmed previous dengue infection and living in endemic areas.

Takeda Pharmaceuticals Co Ltd, (“Takeda”), is also advancing a dengue vaccine, TAK-003, which is in Phase 3 development. Primary endpoint analysis of its ongoing Phase 3 trial in children ages four to 16 years showed protection against virologically-confirmed dengue.

Our approach

We are developing AT-752, an oral, purine nucleoside prodrug product candidate for the treatment of dengue. AT-752 has shown potent activity against all serotypes tested in preclinical studies. AT-752 is designed to target the inhibition of the dengue viral polymerase. We also intend to explore the potential development of AT-752 as a prophylactic treatment for dengue, which we believe, if approved, could be directed at the travelers’ market. As a part of the Roche License Agreement, we agreed that we would not commercialize AT-752 outside the United States unless we enter into a separate commercialization agreement with Roche to do so. We retain global rights to develop and manufacture AT-752 for the treatment of dengue.

Preclinical development

We have conducted preclinical studies of AT-752 in which we pre-treated AG129 mice with AT-752 (1000 mg/kg, p.o.) for four hours before subcutaneous inoculation with D2Y98P dengue strain and subsequent dosing of AT-752 twice daily (500 mg/kg, p.o.) for seven days, starting one hour post inoculation. This disease model, which ultimately resulted in fatal central nervous system sequelae, showed notable differences in overall health, survival, and viremia between AT-752-treated mice and mice that were treated with vehicle. As shown in the graphs below, viral RNA in serum was statistically significantly lower than control by day 6 and below the limit of detection (“LOD”) (LOD: 50 copies per m/L) on day 8, after seven days of drug treatment.

The antiviral activity of AT-281, the free base of AT-752, was evaluated under contract with the National Institutes of Health and Infectious Disease against a variety of flaviviruses. Huh-7 cells were infected with individual viral strains and exposed to serial dilutions of AT-281. A virally induced cytopathic effect (“CPE”), assay using a neutral red dye uptake endpoint or a virus yield reduction measurement using a standard endpoint dilution CCID50 assay was used to measure the antiviral EC50 or EC90 value, respectively. Uninfected cell controls concurrently exposed to drug were used to determine cytotoxicity (CC50) using the CPE assay. AT-281 demonstrated sub-micromolar potencies against all flaviviruses tested (summarized in the table below), with an EC90 of 0.64 μM against Dengue type 2 and an EC50 of 0.77 μM against Dengue type 3. No toxicity was detected for AT-281 up to the highest concentration tested (172 μM).

a Selectivity index (CC50/EC90 or CC50/EC50)

Clinical development

Phase 1 Clinical Trial

We have initiated a randomized, double-blind, placebo-controlled Phase 1a trial to evaluate the safety and pharmacokinetics (“PK”) of several different dosages of AT-752 in 50 to 60 healthy adult subjects.

Following the completion of the Phase 1a trial, we expect to initiate in the second half of 2021 a Phase 1b trial of AT-752 in 60 to 80 adult subjects with dengue, to evaluate antiviral activity, safety and PK. Currently, we expect that the endpoints of the Phase 1b trial will include reductions in viral load, fever and time to clearance of non-structural protein 1.

We intend to pursue FDA expedited development and review programs for AT-752. Dengue is also defined as a tropical disease under the Federal Food, Drug and Cosmetic Act (the “FDCA”), and therefore FDA approval of AT-752 for the treatment of Dengue may result in a tropical disease priority review voucher.

AT-787 for the Treatment of Hepatitis C

Hepatitis C virus (HCV)

Background

HCV is a blood-borne, positive sense, ssRNA virus, primarily infecting cells of the liver. HCV is a leading cause of chronic liver disease and liver transplants and spreads via blood transfusion, hemodialysis and needle sticks. Injection drug use accounts for approximately 60% of all new cases of HCV. Diagnosis of HCV is made through blood tests, including molecular tests that allow for the detection, quantification and analysis of viral genomes and the classification of an infection into specific viral genotypes. Hepatitis C becomes chronic Hepatitis C in 75% to 85% of cases, with an incubation period lasting from two to 26 weeks.

HCV is classified into seven genotypes and 67 subtypes, with genotype 1 responsible for more than 70% of HCV cases in the United States. Patients with HCV are also classified by liver function status: compensated cirrhosis (liver scarring) denotes those patients that do not yet have impaired liver function, while decompensated cirrhosis describes patients with moderate to severe liver function impairment.

According to the WHO, an estimated 71 million people are chronically infected with HCV, a significant portion of which are likely to develop cirrhosis or liver cancer. Of those infected with HCV, only 20% are diagnosed and 2% are treated globally. The WHO estimates that 399,000 people died from HCV in 2016.

As shown in the table below, the CDC reported that new infections in the United States have increased substantially from 2011 to 2017 with the greatest increase in incidence occurring in individuals ages 20 to 39 years old.

Despite recent advances in treatment, there remains a large underserved HCV patient population which continues to grow. The CDC estimated the incidence of HCV in 2018 increased by 50,300 cases in the United States. It is estimated that a substantial global market for HCV therapeutics will exist to 2050 and beyond.

Current treatment landscape

No vaccine exists for the prevention of HCV, but several recently introduced oral antiviral therapeutics have boosted sustained virologic response rates to over 95% in a majority of patients, with treatment durations reduced to eight to 12 weeks depending upon the regimen and patient population. There are three classes of direct acting antiviral therapeutics, defined by their mechanism of action and therapeutic target: NS3/4A protease inhibitors, NS5A inhibitors, and NS5B non-nucleos(t)ide polymerase inhibitors. A patient’s genotype, cirrhotic status, and prior treatment failures determine the appropriate antiviral therapeutic used in treatment. The two leading therapeutics for treatment of chronic HCV are:

Our approach

We are developing AT-787 for the treatment of chronic HCV infection, including patients with decompensated cirrhosis. AT-787 combines AT-527 with a second-generation NS5A inhibitor, AT-777, into a single, oral, pan-genotypic fixed-dose combination therapy. Based on our preclinical and clinical data to date, we believe that AT-787, if approved, could offer the following potential benefits over currently available treatments:

Clinical development

We have completed two clinical trials of AT-527 for the treatment of chronic HCV infection.

Phase 1 clinical trial of AT-527

We conducted a Phase 1 trial to evaluate single and multiple doses of AT-527 as a single agent in healthy and HCV-infected subjects for up to seven days. All HCV-infected subjects were treatment-naïve with HCV RNA ≥ 5 log10 IU/mL. The objectives of the trial were to assess safety, tolerability, PK and antiviral activity.

The trial evaluated single oral doses of AT-527 up to 369 mg free base (400 mg salt form) in healthy subjects (Part A), single doses up to 600 mg salt form (553 mg free base) in non-cirrhotic HCV-infected subjects (Part B), and multiple doses up to 600 mg salt form (553 mg free base) once daily for seven days in non-cirrhotic genotype 1b (“GT1”), HCV-infected subjects (Part C). Additional cohorts evaluated 600 mg salt form (553 mg free base) once daily for seven days in non-cirrhotic genotype 3 (“GT3”), (Part D) and Child-Pugh A cirrhotic genotype 1b/3 (“GT1b/2”), HCV-infected subjects (Part E). The tables below show the dosage and mean maximum HCV RNA reductions for each treatment cohort.

A total of 88 subjects were dosed across all parts of the trial, with 72 subjects who received active drug and 16 subjects who received placebo. In this trial, AT-527 showed equivalent pan-genotypic antiviral activity in both cirrhotic and non-cirrhotic HCV infected patients. The mean HCV reduction within 24 hours after a single dose was up to 2.4 log10 IU/mL, and the mean maximum HCV RNA reduction after seven days of dosing with AT-527 at 553 mg free base was 4.6 log10 IU/mL. Data also showed a mean maximum HCV RNA reduction of 4.4 log10 IU/mL after seven days of dosing of AT-527 at 553 mg free base in non-cirrhotic genotype 1b (“GT1b”), HCV-infected subjects, and a mean reduction of 4.5 log10 IU/mL after seven days of dosing in non-cirrhotic GT3 HCV-infected subjects. The PK data in cirrhotic subjects was similar to non-cirrhotic subjects. Emax modeling predicted that a dose of 553 mg free base of AT-527 once daily would result in maximum viral load reduction.

Maximum HCV RNA change in Part B (single dose in non-cirrhotic, GT1 HCV-infected subjects)

Maximum HCV RNA change in Part C (multiple dose in non-cirrhotic, GT1 HCV-infected subjects)

Maximum HCV RNA change in Part D (multiple dose in non-cirrhotic, GT3 HCV-infected subjects) and Part E (multiple dose in cirrhotic HCV-infected subjects)

Maximum Reduction(log10 IU/mL) Part D – GT3 Part E – Cirrhotic

* SD = standard deviation

** QD = once daily

Phase 2 clinical trial of AT-527 in combination with an NS5A inhibitor

We conducted a Phase 2, open-label clinical trial to evaluate AT-527 in combination with daclatasvir, an approved commercially available HCV NS5A inhibitor, in HCV-infected subjects. Ten treatment-naïve, non-cirrhotic GT1 HCV-infected subjects received 553 mg free base AT-527 and 60 mg daclatasvir once daily for a period of eight or 12 weeks. The primary efficacy endpoint of the study was an SVR of 12, with secondary efficacy endpoints that included HCV RNA< Lower Limit Of Quantitation (“LLOQ”), and Target Not Detected (“TND”), by study visit, HCV RNA changes from baseline, alanine transaminase normalization in those who had elevated levels at baseline, virologic failure, and resistance-associated substitutions to either of the study drugs. All subjects completed the treatment period in the study, nine of whom received eight weeks of treatment and one of whom received 12 weeks of treatment. All subjects achieved an SVR of four, nine of whom received only eight weeks of treatment. As shown in the graph below, viral load decreased rapidly, with 70% of subjects achieving plasma HCV RNA < LLOQ by week 2 (and 50% achieving TND by week 2). We believe that the rapid early clearance of HCV RNA observed in this trial supports continued evaluation of AT-527 in shortened treatment regimens, ideally with a more potent, next-generation HCV NS5A inhibitor.

AT-527 Safety Results

There were no serious adverse events, dose-limiting toxicities or adverse events leading to trial discontinuation observed in our HCV Phase 1 or Phase 2 clinical trials of AT-527. The most common side

effects observed were headache and small increases in blood lipid levels, with no consistent patterns in other reported effects. Most side effects were not severe and were not thought to be related to AT-527.

Planned clinical development

We have temporarily paused our development program for AT-787 in HCV infected patients, given industry-wide challenges in clinical studies during the COVID-19 pandemic. We expect to restart this program once the planned clinical trial sites are able to re-open and we elect to resume patient enrollment, starting with our Phase 1/2a clinical trial, which is designed to evaluate the safety and PK of different dosages of AT-777 in healthy adults and evaluate the combination of AT-527 and AT-777. We currently anticipate that this will occur in the second half of 2021. The Phase 1/2a clinical trial is comprised of two parts. Part A is a randomized, blinded, sequential-dose trial to evaluate the safety, tolerability and PK of AT-777 alone in up to 24 healthy volunteers. Part B is an open-label trial in up to 20 patients with HCV to evaluate AT-527 in combination with AT-777. The primary objectives of Part B are safety, antiviral activity and PK. Following the completion of the Phase 1/2a clinical, we anticipate commencing a Phase 2b clinical trial to further evaluate the antiviral activity and safety of AT-787, the fixed dose combination of AT-777 and AT-527.

AT-889 and Other Candidates for the Treatment of Respiratory Syncytial Virus (RSV)

Respiratory Syncytial Virus (RSV)

Background

RSV is a seasonal respiratory virus that can be serious for infants, older adults, and the immuno-compromised population. Although the virus is seasonal, the duration, peaks and severity of the virus vary each season. RSV, a negative ssRNA virus belonging to the Pneumoviridae subfamily of the Paramyxoviridae family, is the most common cause of bronchiolitis (inflammation of the small airways in the lung) and pneumonia (infection of the lungs) in children in the United States. Almost all children contract the RSV infection by their third year of life.

The primary symptoms of RSV infections include coughing, wheezing, fever, decreased appetite, and runny nose. In the United States, RSV infections generally occur during fall, winter and spring, but the timing and severity can vary from year to year and from region to region. Two different strains of the virus co-circulate each season, and RSV epidemics last from four to six months.

Globally, RSV affects 64 million people, according to the National Institutes of Health (the “NIH”), with annual mortality estimated at 160,000 deaths. Three distinct patient populations are most significantly impacted by RSV. These patient populations are:

Current treatment landscape

Treatment for RSV typically focuses on supportive care, which can include nasal suction, fever management, hydration, and oxygen. The FDA approved aerosolized ribavirin in 1986 for the treatment of serious RSV infections in hospitalized children. However, ribavirin, a nucleoside analog, carries several safety concerns, including potential toxicity for exposed persons. Aerosolized ribavirin has not been approved for use in the elderly or immunocompromised populations.

In addition, the FDA approved Synagis (palivizumab) in 1998 for the prevention of lower respiratory tract disease caused by RSV in children at high risk of RSV disease. Synagis is administered as an injection every month during RSV season. Synagis has not been approved for treatment of RSV, nor is it indicated for use in populations other than children under 24 months of age.

Our approach

We are evaluating AT-889, an investigational second-generation nucleoside pyrimidine prodrug, and other compounds. Our development efforts in RSV have focused on two strategies: fusion inhibitors and replication inhibitors (both nucleoside and non-nucleoside). We believe AT-889 or one of our other candidates for RSV has the potential to inhibit both the initiation of viral replication, as well as viral transcription. We plan to develop our selected product candidate in both oral and parenteral dosage formulations.

Development history

We observed the antiviral potency and selectivity of AT-889 against RSV in in vitro cell-based assays. The EC50 to inhibit replication of the RSV (strain A Long) was 0.20 μM for AT-889. The concentration of AT-889 required to exhibit a CC50 of the host cells used in these assays was greater than 50 μM.

Development strategy

Currently, we are evaluating the antiviral activity of AT-889 and other compounds in in vitro studies to inform our selection of a lead candidate. Once chosen, we will assess the in vivo antiviral activity of such lead candidate in a small animal model, and conduct IND-enabling toxicology studies. Thereafter we intend to nominate a product candidate for clinical development. We anticipate nominating our product candidate and initiating the IND-enabling studies in the second half of 2021.

Roche License Agreement

In October 2020, we entered into the Roche License Agreement, with F. Hoffmann-La Roche Ltd and Genentech, Inc. in connection with AT-511, AT-527, their backup compounds (including AT-752) (the “Compounds”), products containing any Compound (the “Products”), and related companion diagnostics (the “Companion Diagnostics”).

Subject to the terms and conditions of the Roche License Agreement, we granted Roche (i) an exclusive, sublicensable, worldwide (excluding the United States) license to make, sell, import and export the Compounds, the Products and the Companion Diagnostics in all fields of use, except for certain hepatitis C virus use (the “Field”), (ii) a non-exclusive, sublicensable license to make, import and export the Compounds, the Products and the Companion Diagnostics in the Field in the United States and (iii) a non-exclusive, sublicensable license to research and develop the Compounds, the Products and the Companion Diagnostics in the United States. We also agreed that Roche would manufacture the commercial supply of AT-527. On February 22, 2021, we announced that Chugai Pharmaceutical Co., Ltd. in-licensed from Roche the exclusive right to develop and market AT-527 for the treatment of COVID-19 in Japan.

Subject to the terms and conditions of the Roche License Agreement, Roche granted us (i) an exclusive, sublicensable license to distribute, register and sell the Compounds and the Products in the United States, (ii) a non-exclusive, sublicensable license to research, develop, use, import, export and market the Compounds and the Products in the United States and (iii) a non-exclusive, sublicensable, worldwide (excluding the United States) license to research and develop the Compounds and the Products in the Field.

Subject to the terms and conditions of the Roche License Agreement, Roche and we will jointly develop certain Products including AT-527 for COVID-19 on a worldwide-basis and equally share the costs associated with such development activities. Atea remains responsible for, and alone will bear the costs associated with the development of AT-752 for dengue and other Retained Indications, as defined below.

Subject to the terms of the Roche License Agreement, we retain the sole right at our expense to develop, manufacture and commercialize the Compounds and the Products in the United States, and to develop and manufacture the Compounds and the Products outside of the United States, in each case, for the treatment of Dengue Fever, Japanese Encephalitis, West Nile Virus, Yellow Fever and/or Zika, or the (the “Retained Indications”). The parties will negotiate in good faith an amendment to the Roche License Agreement pursuant to which Roche may commercialize Products indicated for one or more Retained Indications outside of the United States, unless Roche offers such commercialization right to us. Neither Roche nor we may commercialize such Products outside of the United States until the parties agree to an amendment to the Roche License Agreement.

Subject to the terms of the Roche License Agreement, we also have a one-time option to request that Roche co-promote the Products, other than for the Retained Indications, in the United States on a Product-by-Product basis, such option to be exercised by us prior to the expected regulatory approval of each applicable Product.

As partial consideration of the rights we granted to Roche under the Roche License Agreement, Roche paid us an upfront payment of $350 million in November 2020. The Roche License Agreement further provides that Roche is obligated to pay us up to $330 million in the aggregate upon the achievement of certain development or regulatory milestone events; up to $320 million in the aggregate upon the achievement of certain sales-based milestone events; and tiered royalties based on annual net sales of the Products, such royalty percentages ranging between low double-digit and mid-twenties, subject to certain adjustments. Roche’s obligation to pay us royalty payments will continue, on a country-by-country and Product-by-Product basis, until the later of (1) 10 years from the first commercial sale of a Product in a country and (2) expiration of the last to expire patent rights that we own or control containing a composition of matter claim covering such Product in such country.

The Roche License Agreement will remain in effect until the expiration of all payment obligations to us. Roche has the right to terminate the Roche License Agreement for convenience in its entirety or on a Product-by-Product or country-by-country basis, (x) upon three months’ prior written notice if such notice is provided prior to the first commercial sale of the first Product and the parties are not conducting a certain prophylaxis study, in each case, pursuant to the terms of the Roche License Agreement, (y) if such notice is provided while the parties are conducting such prophylaxis study, upon the earlier of six months’ prior written notice or the completion of such prophylaxis study, but in no event earlier than three months’ prior written notice and (z) upon nine months’ prior written notice if such notice is provided on or after the first commercial sale of the first Product pursuant to the terms of the Roche License Agreement. Each party has the right to terminate the Roche License Agreement (i) in its entirety or on a country-by-country basis for the other party’s material breach of the terms of the Roche License Agreement, subject to a ninety-day cure period and (ii) for insolvency-related events involving the other party. Upon termination of the Roche License Agreement by Roche for the Company’s material breach or insolvency, the rights and licenses granted by each party to the other party will terminate. Upon termination of the Roche License Agreement by Roche for convenience or by us for Roche’s material breach, all rights and licenses granted by us to Roche will terminate, however, subject to the terms of the Roche License Agreement, we have the right to continue to develop and commercialize one or more terminated Products.

The Roche License Agreement also includes customary provisions regarding, among other things, confidentiality, intellectual property ownership, patent prosecution, enforcement and defense, representations and warranties, indemnification, insurance, and arbitration and dispute resolution.

Manufacturing

We do not currently own or operate manufacturing facilities for the production of preclinical or clinical product candidates, nor do we have plans to develop or operate our own manufacturing operations in the future. Pursuant to the Roche License Agreement, we will exclusively rely on Roche to manufacture the commercial supply of AT-527 for the treatment of COVID-19, if approved. We currently rely upon third-party contract manufacturing organizations (“CMOs”), to produce our product candidates for both preclinical and clinical use. Although we rely on CMOs, we also have personnel with extensive manufacturing experience that can oversee the relationship with our manufacturing partners. We believe that any materials required for the manufacture of our product candidates could be obtained from more than one source.

Competition

As a clinical-stage biopharmaceutical company, we face competition from a wide array of companies in the pharmaceutical and biotechnology industries. These include both small companies and large companies with much greater financial and technical resources and far longer operating histories than our own. We may also compete with the intellectual property, technology, and product development efforts of academic, governmental, and private research institutions.

Our competitors may have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement, and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific, sales, marketing, and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of any product candidates that we develop, if approved, are likely to be their efficacy, safety, convenience, price, and the availability of reimbursement from government and other third-party payors. Our commercial opportunity for any of our product candidates could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, and may commercialize products more quickly than we are able to.

We are aware of the following competitors in the areas that we are initially targeting:

SARS-CoV-2

Many therapies and vaccines are approved, authorized for use or being investigated for the treatment of COVID-19 in the United States, including:

• PF-00835321, (Pfizer Inc.), a protease inhibitor.

The potential treatments and vaccines for COVID-19 continues to evolve. The list above addresses the products or product candidates approved or authorized for emergency use in the United States as of the date of this Annual Report on Form 10-K that we believe could be the most competitive with AT-527, but is not a comprehensive list of every treatment or vaccine that is in development for COVID-19.

Dengue Virus

At this time, there are no FDA- or EMA-approved treatments for dengue, and we are not aware of any potential therapeutics in development for treatment of dengue. Dengvaxia, marketed by Sanofi, was approved in 2019 by the FDA for prevention of dengue in individuals ages nine to 16 with a laboratory-confirmed previous dengue infection and living in endemic areas. Takeda is also advancing TAK-003, which is in Phase 3 development, as a vaccine for dengue.

HCV

FDA-approved treatments for patients with chronic HCV include Epclusa marketed by Gilead Sciences, Inc. and Mavyret, marketed by AbbVie Inc. We are also aware of an investigational agent for HCV, currently in Phase 2 testing, being developed by Cocrystal Pharma Inc.

RSV

Supportive care is the most common course of care for RSV and includes oxygen, fluid management, bronchodilators, and corticosteroids. Ribavirin, approved in 1986, is used to treat severe cases of RSV infection, but carries significant side effects and risks associated with its use, especially in infants. Synagis (palivizumab), marketed by Swedish Orphan Biovitrum AB in the United States and AstraZeneca plc outside of the United States, is an FDA-approved, seasonal monoclonal antibody injection given monthly to help protect high-risk infants from severe RSV. Synagis is not approved as a treatment for RSV.

At this time, we are aware of investigational agents for the treatment of RSV being developed by Janssen Pharmaceuticals, Inc., Enanta Pharmaceuticals Inc., ReViral Ltd, and Ark Biosciences Inc.

Commercialization

Given the stage of development of our lead asset, we have not yet invested in a commercial infrastructure or distribution capabilities. We believe that the commercialization of AT-527 in the United States could be achieved by a small Atea team across sales, marketing, reimbursement and other commercial activities. While we currently plan to establish our own commercial organization in the United States and potentially in other selected markets, we continue to consider and evaluate in each market the potential advantages and enhancements of our commercial capabilities that may be realized as a result of a collaboration between us and a pharmaceutical or other company, as we have recently done through the Roche License Agreement. In connection with AT-527 for the treatment of COVID-19, we have a one-time option to request Roche co-promote AT-527 in the United States.

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our nucleotide therapeutic products for viral diseases, including our purine nucleotide compounds for SARS-CoV-2, dengue fever and HCV. We seek to protect our proprietary compounds and methods of treatment for viral diseases using our nucleotide compounds, alone and in combination with other therapeutic agents, in addition to dosage forms, dosing regimens and formulations for their administration. We also seek protection on the manufacturing process for the production of our nucleotide compounds. Our success also depends on our ability to operate without infringing, misappropriating or otherwise violating on the proprietary rights of others and to prevent others from infringing, misappropriating or otherwise violating our proprietary rights.

Our policy is to seek to protect our proprietary position by filing U.S. and foreign patent applications covering our proprietary technologies, inventions, and improvements that are important to the development and implementation of our business. In addition, we currently plan to seek patent term adjustments, restorations, and/or patent term extensions where applicable in the United States, Europe and other jurisdictions. We also rely on trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position. Additionally, we expect to benefit, where appropriate, from statutory frameworks in the United States, Europe and other countries that provide a period of regulatory data exclusivity to compensate for the time required for regulatory approval of our drug products.

As of December 31, 2020, we are the sole owner of nine patent families covering our product candidates and proprietary nucleotide compounds, which include composition of matter, pharmaceutical compositions, methods of use, and processes of manufacture as described in more detail below. Our owned patent estate as of December 31, 2020, on a worldwide basis, includes 132 granted or pending patent applications with ten issued U.S. patents, four allowed U.S. non-provisional application, five pending U.S. non-provisional applications, 14 pending U.S. provisional applications, one pending international patent applications filed under the Patent Cooperation Treaty (“PCT”), and 98 pending or granted patent applications that have entered the national phase of prosecution in countries outside the United States.

The exclusivity terms of our patents depend upon the laws of the countries in which they are obtained. In the countries in which we currently file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. The term of a U.S. patent may be extended to compensate for the time required to obtain regulatory approval to sell a drug (a patent term extension) or by delays encountered during patent prosecution that are caused by the U.S. Patent and Trademark Office (referred to as patent term adjustment). For example, the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act, permits a patent term extension for FDA-approved new chemical entity drugs of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review and diligence during the review process. Patent term extensions in the United States cannot extend the term of a patent beyond a total of 14 years from the date of product approval, only one patent covering an approved drug or its method of use may be extended, and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. A similar kind of patent extension, referred to as a Supplementary Protection Certificate, is available in Europe. Legal frameworks are also available in certain other jurisdictions to extend the term of a patent. We currently intend to seek patent term extensions on any of our issued patents in any jurisdiction where we have a qualifying patent and the extension is available; however, there is no guarantee that the applicable regulatory authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions. Further, even if our patent is extended, the patent, including the extended portion of the patent, may be held invalid or unenforceable by a court of final jurisdiction in the United States or a foreign country.

Current issued patents and patent applications covering the composition of matter for our present clinical candidates AT-511, AT-527, AT-281 (the free base of AT-752), and AT-752 will expire on dates ranging from 2036 to 2038, if the applications are issued and held valid by a court of final jurisdiction if challenged. Current patent applications covering the use of AT-511 and AT-527 for the treatment of SARS-CoV-2 will expire on dates ranging from 2037 to 2041, if the applications (including non-provisional applications filed on the basis of provisional applications) are issued and held valid by a court of final jurisdiction if challenged. Current issued patents and patent applications covering the use of AT-511 and AT-527 for the treatment of HCV will expire on dates ranging from 2036 to 2039, if the applications are issued and held valid by a court of final jurisdiction if challenged. Current patent applications covering the use of AT-281 and AT-752 for the treatment of dengue fever will expire on a date in 2037, if the applications are issued and held valid by a court of final jurisdiction if challenged.

Current patent applications covering the composition of matter for our present HCV combination drug clinical candidate AT-787 will expire on a date in 2039, if the applications are issued and held valid by a court of final jurisdiction if challenged. Current patent applications covering the use of AT-787 for the treatment of HCV will expire on dates ranging from 2036 to 2039, if the applications are issued and held valid by a court of final jurisdiction if challenged.

However, any of our patents, including patents that we may rely on to protect our market for approved products, may be held invalid or unenforceable by a court of final jurisdiction. Alternatively, we may decide that it is in our interest to settle a litigation in a manner that affects the term or enforceability of our patent. Changes in either the patent laws or in interpretations of patent laws in the United States and other jurisdictions may diminish our ability to protect our inventions and enforce our intellectual property rights. Accordingly, we cannot predict the breadth or enforceability of claims that have been or may be granted on our patents or on third-party patents. The pharmaceutical and biotechnology industries are characterized by extensive litigation regarding patents and other intellectual property rights. Our ability to obtain and maintain our proprietary position for our nucleotide compounds and the use of these compounds will depend on our success in enforcing patent claims that have been granted or may grant. We do not know whether any of the pending patent applications that we have filed or may file or license from third parties will result in the issuance of any additional patents. The issued patents that we own or may receive in the future may be challenged, invalidated, or circumvented, and the rights granted under any issued patents may not provide us with sufficient protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may be able to independently develop and commercialize drugs with similar mechanisms of action and/or duplicate our methods of treatments or strategies without infringing our patents. Because of the extensive time required for clinical development and regulatory review of a drug we may develop, it is possible that, before any of our drugs can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent. For more information regarding risks relating to intellectual property, see Part I, Item 1A. “Risk Factors—Risks Related to Intellectual Property.”

Our patent families, as of December 31, 2020, are further described below.

AT-511 and AT-527

We own a first patent family that describes AT-511 or a pharmaceutically acceptable salt thereof (for example, AT-527), pharmaceutical compositions of AT-511 or the pharmaceutical salts thereof, and methods to treat HCV using AT-511 or a salt thereof. This family consists of eight issued U.S. patents (U.S. Pat. Nos. 9,828,410; 10,000,523; 10,005,811; 10,239,911; 10,815,266; 10,870,672; 10,870,673; 10,875,885; ) and one pending U.S. application covering AT-511 or a pharmaceutically acceptable salt thereof and its pharmaceutical compositions. This patent family is now also in the national stage of prosecution in the African Regional Intellectual Property Organization (“ARIPO”), Australia, Brazil, Canada, China, Colombia, the Eurasian Patent Office (“EAPO”), Egypt, the European Patent Office (“EPO”), Georgia, Hong Kong, Indonesia, Israel, India, Japan, Korea, Mexico, Macao, Malaysia, Nigeria, New Zealand, the Philippines, Russia, Saudi Arabia, Singapore, Thailand, Vietnam, Ukraine, South Africa, and the United Arab Emirates. The expected year of expiration for this patent family, where issued, valid and enforceable, is 2036, without regard to any extensions, adjustments, or restorations of term that may be available under national law.

We also own a second patent family that specifically covers AT-527, pharmaceutical compositions, and methods to treat HCV using AT-527. This family includes issued U.S. patent (U.S. Pat. No. 10,519,186), two allowed applications (US 2020-0087339 and US 2020-0331954), and one pending U.S. application covering AT-527, pharmaceutical compositions, and methods to treat HCV using AT-527. This family is currently in the national phase of prosecution in Argentina, ARIPO, Australia, Brazil, Canada, China, Colombia, the EAPO, the EPO, Georgia, Hong Kong, Indonesia, Israel, India, Japan, Korea, Mexico, Malaysia, Nigeria, New Zealand, the Philippines, Russia, Singapore, Taiwan, Thailand, Vietnam, Ukraine, Uzbekistan, and South Africa. The expected year of expiration for this patent family, if issued, valid and enforceable, is 2038, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws.

We own a third patent family that discloses methods for the treatment of SARS-CoV-2 using AT-511 or AT-527. This family includes seven provisional U.S. applications. The expected year of expiration for patents issued from non-provisional patent applications filed on the basis of these provisional patent applications, if valid and enforceable, is 2041, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws. We also filed a U.S. normal application with the U.S. PTO under its COVID-19 Prioritized Examination Pilot Program to advance out of turn patent applications covering methods to treat COVID-19 that are currently under review by the FDA. This patent granted as U.S. Patent No. 10,874,687 on December 29, 2020. A continuation application claiming priority to the ‘687 patent is pending. The expected year of expiration for patents issued from non-provisional patent applications filed on the basis of U.S. Patent No. 10,874,687, if valid

and enforceable, is 2040, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws.

We own a fourth patent family that discloses the use of AT-511 or a pharmaceutically acceptable salt thereof for the treatment or prevention of a positive-stranded RNA virus infection, including a Coronaviridae viral infection. This family consists of two allowed applications (US 2019-0201433 and US 2020-0222442) and is currently in the national phase of prosecution in Australia, Brazil, Canada, China, the EAPO, the EPO, Hong Kong, Indonesia, Japan, Korea, Malaysia, Nigeria, Russia, Singapore, Thailand, Vietnam, and South Africa. The expected year of expiration for this patent family, if issued, valid and enforceable, is 2037, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws.

We own a fifth patent family that discloses the use of AT-511 and AT-527 for the treatment of HCV in patients with cirrhosis of the liver. This family includes one pending U.S. application. This family is currently in the national phase of prosecution in China, the EPO, Japan, Korea, Russia, and Taiwan. The expected year of expiration for this patent family, if issued, valid and enforceable, is 2039, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws.

We own a sixth patent family that describes methods to treat SARS-CoV-2 virus. This family consists of one U.S. application. The expected year of expiration for patents issued from non-provisional patent applications filed on the basis of this patent application, if valid and enforceable, is 2041, without regard to adjustments of term that may be available under U.S. or other national laws. We also own a seventh patent family that discloses methods for manufacturing AT-511 and AT-527. This family consists of two provisional U.S. applications. The expected year of expiration for patents issued from non-provisional patent applications filed on the basis of these provisional patent applications, if valid and enforceable, is 2041, without regard to adjustments of term that may be available under U.S. or other national laws.

We also own an eighth patent family that discloses new commercial scale processes for the manufacture of AT-511 and AT-527. This family consists of four U.S. provisional applications. The expected year of expiration for patents issuing from these non-provisional patent applications, if valid and enforceable, is 2041, without regard to any adjustments of term that may be available under U.S. or other national law.

AT-787

We own a ninth patent family that discloses the combination of AT-511 or AT-527 and AT-777 (i.e., AT-787) for the treatment of HCV. This family includes one pending U.S. application, one international application filed under the PCT (PCT/US19/64522), one patent application in Taiwan, and one patent application in Argentina. The expected year of expiration for this patent family, if issued, valid and enforceable, is 2039, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws.

AT-281 and AT-752

The first patent family described above also describes AT-281, a pharmaceutically acceptable salt thereof (for example, AT-752) and pharmaceutical compositions of AT-281 or a pharmaceutical salt thereof and their use to treat HCV infection.

The second patent family described above also describes AT-752 and pharmaceutical compositions of AT-752. One of these pending U.S. application in this patent family covers AT-752 and pharmaceutical compositions of AT-752.

The fourth patent family described above also includes a disclosure of the use of AT-281 or a pharmaceutically acceptable salt thereof for the treatment or prevention of an RNA viral infection, including dengue fever, yellow fever, and Zika virus in addition to the treatment and prevention of a Coronaviridae viral infection. Therefore, we have three patent families that describe AT-281 or AT-752 and methods of treatment for viral infections using AT-281 or AT-752.

Government Regulation and Product Approval

Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution,

marketing and export and import of products such as those we are developing. A new drug must be approved by the FDA through the new drug application (“NDA”), process before it may be legally marketed in the United States.

U.S. Drug Development Process

In the United States, the FDA regulates drugs under the FDCA and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

• submission to the FDA of an NDA after completion of all pivotal trials;

• satisfactory completion of an FDA advisory committee review, if applicable;

Prior to beginning the first clinical trial with a product candidate in the United States, a sponsor must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an IND product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. Once submitted, the IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30- day time period, raises safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study. 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 effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments. Furthermore, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completed. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a

study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. Depending on its charter, this group may determine whether a trial may move forward at designated check points based on access to certain data from the trial. The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

Post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.

The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior to submission of an IND, at the end of Phase 2, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the next phase of development. Sponsors typically use the meetings at the end of the Phase 2 trial to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug. In addition, 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.

While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to

humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.

U.S. Review and Approval Process

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of substantial user fees; a waiver of such fees may be obtained under certain limited circumstances. Additionally, no user fees are assessed on NDAs for products designated as orphan drugs, unless the product also includes a non-orphan indication.

The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. Under the Prescription Drug User Fee Act (“PDUFA”), guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission. This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision after it the application is submitted. The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing.

The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP and adequate to assure consistent production of the product within required specifications. Additionally, before approving a NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete, and the application will not be approved in its present form. A Complete Response Letter usually describes the specific deficiencies in the NDA identified by the FDA and may require additional clinical data, such as an additional clinical trials or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the sponsor must resubmit the NDA or, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.

If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations or restrictions on the indicated uses for which such product may be marketed. For example, the FDA may approve the NDA with a Risk Evaluation and Mitigation Strategy (“REMS”), to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy 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-market 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. In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could impact the timeline for regulatory approval or otherwise impact ongoing development programs.

In addition, the Pediatric Research Equity Act (“PREA”), requires a sponsor to conduct pediatric clinical trials for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original NDAs and supplements must contain a pediatric assessment unless the sponsor has received a deferral or waiver. The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin. The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation.

Emergency Use Authorization

An Emergency Use Authorization (“EUA”), is a mechanism to facilitate the availability and use of medical countermeasures, during public health emergencies, such as the current COVID-19 pandemic. Under an EUA, FDA may allow the use of unapproved medical products, or unapproved uses of approved medical products in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when certain statutory criteria have been met, including that there are no adequate, approved, and available alternatives. Once submitted, FDA will evaluate an EUA request and determine whether the relevant statutory criteria are met, taking into account the totality of the scientific evidence about the drug that is available to FDA. EUAs can be terminated, revoked or reissued, depending on the state of the public health emergency and new data about the drug.

Expedited Development and Review Programs

The FDA offers a number of expedited development and review programs for qualifying product candidates. For example, the FDA Fast Track program is intended to expedite or facilitate the process for reviewing product candidates that meet certain criteria. Specifically, new drugs are eligible for Fast Track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. With regard to a fast track product, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

Any marketing application for a drug submitted to the FDA for approval, including a product with a Fast Track designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval. A drug is eligible for priority review if it is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or effectiveness compared to marketed products. The FDA will attempt to direct additional resources to the evaluation of an application for a new drug designated for priority review in an effort to facilitate the review. The FDA endeavors to review applications with priority review designations within six months of the filing date as compared to ten months for review of new molecular entity NDAs under its current PDUFA review goals.

In addition, a product candidate may be eligible for accelerated approval. Product candidates intended to treat serious or life-threatening diseases or conditions may be eligible for accelerated approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to verify the predicted clinical benefit. Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required clinical trials, or if such trials fail to verify the predicted clinical benefit. In addition, the FDA currently requires pre-approval of promotional materials as a condition for accelerated approval, which could adversely impact the timing of the commercial launch of the product.

The Food and Drug Administration Safety and Innovation Act established a category of drugs referred to as “Breakthrough Therapies” that may be eligible to receive Breakthrough Therapy designation. A sponsor may seek FDA designation of a product candidate as a “Breakthrough Therapy” if the product is intended, alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance. The Breakthrough Therapy designation is a distinct status from both accelerated approval and priority review, which can also be granted to the same drug if relevant criteria are met. If a product is designated as Breakthrough Therapy, the FDA will work to expedite the development and review of such drug.

Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval 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, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Tropical Disease Priority Review Voucher Program

In 2007, Congress authorized the FDA to award priority review vouchers (“PRVs”), to sponsors of certain tropical disease product applications. The FDA’s Tropical Disease Priority Review Voucher Program is designed to encourage development of new drug and biological products for the prevention and treatment of certain tropical diseases affecting millions of people throughout the world. Under this program, a sponsor who receives an approval for a drug or biologic for the prevention or treatment a tropical disease that meets certain criteria may qualify for a PRV that can be redeemed to receive priority review of a subsequent NDA or Biologics License Application (“BLA”), for a different product. The sponsor of a topical disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor of an NDA or BLA. The FDCA does not limit the number of times a priority review voucher may be transferred before the voucher is used.

For a product to qualify for a PRV, (i) the sponsor must request approval of the product for the prevention or treatment of a “tropical disease” listed in Section 524 of the FDCA, (ii) the product must otherwise qualify for priority review, and (iii) the product must contain no active ingredient (including any salt or ester of an active ingredient) that has been approved by the FDA in any other NDA or BLA. The Food and Drug Administration Reauthorization Act of 2017 made further changes to the eligibility criteria for receipt of a tropical disease PRV under this program. Specifically, applications submitted after September 30, 2017 must also contain reports of one or more new clinical investigations (other than bioavailability studies) that were essential to the approval of the application and conducted or sponsored by the sponsor. We are currently developing AT-752 for the treatment of Dengue, which is listed in Section 524 of the FDCA as a disease qualifying for a tropical disease PRV. Accordingly, if AT-752 is approved by the FDA for the prevention or treatment of Dengue, we may receive a tropical disease PRV, provided that AT-752 otherwise meets the statutory criteria for receipt.

Post-approval Requirements

Any products manufactured or 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, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual program fees for any marketed products.

Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon drug manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical studies to assess new safety risks, or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

• fines, warning letters, or untitled 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 drug products. 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 regulations prohibiting the promotion of off label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested and approved by the FDA. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict marketers’ communications on the subject of off-label use of their products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory agencies have

also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labelling.

Marketing exclusivity

Marketing exclusivity provisions authorized under the FDCA can delay the submission or the approval of certain marketing applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not approve or even accept for review an abbreviated new drug application (“ANDA”), or an NDA submitted under Section 505(b)(2) (“505(b)(2) NDA”), submitted by another company for another drug based on the same active moiety, regardless of whether the drug is intended for the same indication as the original innovative drug or for another indication, where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder.

The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for drugs containing the active agent for the original indication or condition of use. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to any preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Pediatric exclusivity is another type of marketing exclusivity available in the United States. Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to another period of exclusivity if a sponsor conducts clinical trials in children in response to a written request from the FDA. The issuance of a written request does not require the sponsor to undertake the described clinical trials. In addition, orphan drug exclusivity, as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances.

Other Healthcare Laws

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 anti-kickback, fraud and abuse, false claims, pricing reporting, and physician payment transparency laws and regulations 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 significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement fines, additional reporting requirements and oversight obligations, contractual damages, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and/ or imprisonment.

Coverage and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval. Sales in the United States will depend, in part, on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programs such as Medicare, Medicaid, TRICARE and the Veterans Administration, as well as managed care organizations and private health insurers. Prices at which we or our customers seek reimbursement for our product candidates can be subject to challenge, reduction or denial by third-party payors.

The process for determining whether a third-party payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product. In the United States, there is no uniform policy among payors for coverage or reimbursement. Decisions

regarding whether to cover any of a product, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that can require manufacturers to provide scientific and clinical support for the use of a product to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval. Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Additionally, decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product.

U.S. Healthcare Reform

In the United States, there has been, and continues to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the profitable sale of product candidates.

Among policy makers and payors in the United States, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”) was passed, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry. The ACA increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1%; required collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs, implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; expanded eligibility criteria for Medicaid programs; created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare Innovation at the Centers for Medicare & Medicaid Services (“CMS”) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

There remain judicial and political challenges to certain aspects of the ACA. For example, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas (the “Texas District Court Judge”), ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit affirmed the District Court’s decision that the individual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, although

it remains unclear how and when the Court will make a decision. In addition, it is unclear how any other efforts to repeal, replace or challenge the ACA will impact the law.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the Bipartisan Budget Act of 2018, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021, unless additional Congressional action is taken. In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products. The likelihood of success of these and other measures initiated by the former Trump administration is uncertain.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which drugs and suppliers will be included in their healthcare programs Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

Government Regulation Outside of the United States

In addition to regulations in the United States, we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials of drug products as well as the approval, manufacture and distribution of our product candidates. Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. The requirements and process governing the conduct of clinical studies, approval process, product licensing, pricing and reimbursement vary from country to country. Failure to comply with applicable foreign regulatory requirements, may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Human Capital Resources

As of March 29, 2021, we had 39 full-time employees, including 13 employees with M.D. or Ph.D. degrees. Of these full-time employees, 25 employees are engaged in research and development activities. None of our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.

Our human capital resource priorities include attracting, recruiting, retaining, incentivizing and integrating our existing and new employees. The principal purpose of our competitive equity and cash compensation and benefits programs is to promote and support these priorities. We consider our human capital resources strategy to be comprehensive and built to foster our core way of working which is grounded on the principles of scientific rigor in a collaborative, entrepreneurial, and results-oriented manner. We plan to continue to evaluate our suite of human capital resources as we grow.

Organization

Atea Pharmaceuticals, Inc. was incorporated in July 2012 and began principal operations in March 2014. The Company is located in Boston, Massachusetts. Atea Pharmaceuticals Securities Corporation, a

Massachusetts corporation incorporated in 2016, is a wholly owned subsidiary of Atea Pharmaceuticals, Inc

Available Information

We file electronically with the Securities and Exchange Commission (the “SEC”) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information. Our SEC filings are available to the public over the Internet at the SEC's website at http://www.sec.gov. We make available on our website at https://ateapharma.com, under “Investors,” free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC.

Executive Officers and Directors

The following table sets forth the name, age and position of each of our executive officers and directors as of the date of this Annual Report on Form 10-K.

Name Age Position

Executive Officers

Janet Hammond, M.D., Ph.D. 61 Chief Development Officer

Maria Arantxa Horga, M.D. 52 Chief Medical Officer

John Vavricka 57 Chief Commercial Officer

Wayne Foster 52 Senior Vice President, Finance and Administration

Directors

Franklin Berger (1)(2) 71 Director (Lead Director)

Isaac Cheng, M.D. 45 Director

Barbara Duncan (1)(3) 56 Director

Andrew Hack, M.D., Ph.D. (1) 47 Director

Bruno Lucidi (2) 61 Director

Polly A. Murphy, D.V.M., Ph.D. (3) 56 Director

Bruce Polsky, M.D. (2)(3) 66 Director

(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the nominating and corporate governance committee.

Executive Officers

Jean-Pierre Sommadossi, Ph.D., is the founder of our company and has served as our President and Chief Executive Officer and as Chairman of our Board since July 2012. Prior to that, he co-founded and held several roles at Idenix Pharmaceuticals, Inc., a biopharmaceutical company, from 1998 to 2010, including Principal Founder and Chief Executive Officer and Chairman. Dr. Sommadossi also co-founded Pharmasset, Inc., a biopharmaceutical company, in 1998. Dr. Sommadossi also serves on the board of directors of ABG Acquisition Corporation since February 2021 and as the Chairman of the

board of directors of Kezar Life Sciences, Inc., a biopharmaceutical company, since June 2015, Chairman of the board of directors of Panchrest, Inc., a marketing authorized representative in healthcare, since 2013, Chairman of the board of directors of Biothea Pharma, Inc., a biotechnology company since 2015. Dr. Sommadossi also serves as a member of the board of directors of The BioExecInstitute since 2004and as member of the Harvard Medical School Discovery Council since 2010. Previously, Dr. Sommadossi served as Vice Chair of the board of directors of Rafael Pharmaceuticals, Inc., a biopharmaceutical company, from October 2016 to November 2020 and as Chair of the board of directors of PegaOne, Inc., a biopharmaceutical company from September 2020 to January 2021. Dr. Sommadossi received his Ph.D. and Pharm.D. degrees from the University of Marseilles in France. We believethat Dr. Sommadossi’s extensive scientific, operational, strategic and management experience in the biotech industry qualifies him to serve on our Board.

Andrea Corcoran has served as our Chief Financial Officer since October 2020, our corporate Secretary since September 2014 and our Executive Vice President, Legal and Administration since December 2013. Prior to joining us, Ms. Corcoran served as Senior Vice President, Strategy and Finance at iBio, Inc., a biotechnology company, from 2011 to 2012, as General Counsel and Secretary at Tolerx, Inc., a biopharmaceutical company, from 2007 to 2011, and as Executive Vice President of Idenix Pharmaceuticals, Inc. from 1998 to 2007. Ms. Corcoran received her J.D. from Boston College Law School and her B.S. from Providence College.

Janet Hammond, M.D., Ph.D., has served as our Chief Development Officer since August 2020. Prior to joining us, Dr. Hammond served at AbbVie, Inc., a biopharmaceutical company, from November 2016 to August 2020 as Vice President and Therapeutic Area Head for General Medicine and Infectious Disease Development and at F. Hoffmann-La Roche from March 2011 to November 2016 as Senior Vice President, Global Head of Infectious Diseases and Head of Pharmaceutical Research and Early Development China. Dr. Hammond received her M.D. and Ph.D. from the University of Cape Town, South Africa, and her Sc.M. in Clinical Investigation from Johns Hopkins University School of Hygiene and Public Health.

Maria Arantxa Horga, M.D., has served as our Chief Medical Officer since January 2021 and previously served as our Acting Chief Medical Officer since October 2020 and as Executive Vice President, Clinical Sciences since August 2020. Prior to joining us, Dr. Horga served as Vice President, Pharmacovigilance and Medical Affairs at Biohaven Pharmaceuticals from October 2019 to August 2020. Prior to that, Dr. Horga served as Vice President, Global Head of Clinical Program Execution, Site Head of the Roche NY Innovation Center from July 2017 to August 2019, and as Global Head of Translational Medicine, Infectious DiseasesatF.Hoffmann-LaRochefrom2012to2016.Dr.HorgareceivedherM.D.fromtheSantanderSchoolof Medicine, and completed her residency in Pediatrics and a fellowship in Pediatric Infectious Diseases at the Mount Sinai School ofMedicine.

John Vavricka has served as our Chief Commercial Officer since October 2018. Prior to joining us, Mr. Vavricka cofounded Biothea Pharma, Inc., a biotechnology company, in 2015, and was the Founder, Chief Executive Officer and President of Iroko Pharmaceuticals, Inc., a global pharmaceuticals company, from 2007 to 2015. Mr. Vavricka received his B.S. from Northwestern University.

Wayne Foster has served as our Senior Vice President, Finance and Administration since December 2019. Prior to joining us, Mr. Foster served as Vice President of Finance at Mersana Therapeutics, Inc., a biopharmaceutical company, from January 2012 to September 2019. Mr. Foster received his B.B.A. from the University of MassachusettsAmherst.

Directors

Franklin Berger has served as a member of our Board since September 2019. Mr. Berger is a consultant to biotechnology industry participants, including major biopharmaceutical firms, mid-capitalization biotechnology companies, specialist asset managers and venture capital companies, providing business development, strategic, financing, partnering, and royalty acquisition advice. Mr. Berger is also a biotechnology industry analyst with experience in capital markets and financial analysis

and a Founder and Managing Director at FMB Research. Mr. Berger also serves on the board of directors of BELLUS Health, Inc. since May 2010, ESSA Pharma Inc. since March 2015, Proteostasis Therapeutics, Inc. since February 2016, Kezar Life Sciences, Inc. since January 2016, and Five Prime Therapeutics, Inc. since October 2014. Mr. Berger previously served on the board of directors of Tocagen, Inc. from October 2014 to December 2020. Mr. Berger received his B.A. and M.A. from Johns Hopkins University and his M.B.A. from Harvard Business School. We believe that Mr. Berger’s financial background and experience as an equity analyst in the biotechnology industry combined with his experience serving on the boards of directors of multiple public companies qualifies him to serve on our Board.

Isaac Cheng, M.D., has served as a member of our Board since March 2019. Dr. Cheng is an investment professional at the Morningside Technology Advisory, LLC, which advises as to venture capital and private equity opportunities. Dr. Cheng served on the board of directors of NuCana PLC from May 2017 to March 2020 and Liquidia Technologies, Inc., from January 2010 to January 2018. Dr. Cheng received his M.D. and B.S. from the Tufts University School of Medicine. We believe Dr. Cheng is qualified to serve on our Board due to his financial expertise, experience as a venture capitalist, industry experience and his experience in serving on the board of directors of public and private life sciences companies.

Barbara Duncan has served as a member of our Board since October 2020. Ms. Duncan served at Intercept Pharmaceuticals, Inc. as Chief Financial Officer and Treasurer from May 2009 to June 2016. Ms. Duncan serves as Chair of the board of directors of Fusion Pharmaceuticals Inc. since November 2021 and on the board of directors of Jounce Therapeutics, Inc. since June 2016, Adaptimmune Therapeutics plc since June 2016, ObsEva S.A. since November 2016, and Ovid Therapeutics, Inc. since June 2017. Previously, Ms. Duncan served on the boards of directors of Immunomedics, Inc. from March 2019 to October 2020, Innoviva, Inc., from November 2016 through April 2018, and Aevi Genomic Medicine, Inc., from June 2015 through January 2020. Ms. Duncan received her B.A. from Louisiana State University and her M.B.A. from the Wharton School, University of Pennsylvania. We believe Ms. Duncan is qualified to serve on our Board due to her experience in the biotechnology industry and with public companies.

AVIR US Equity

AVIR · 10-K · period ended 2020-12-31

Item 1. Business.

AVIR US Equity☆

AVIR · 10-K · period ended 2020-12-31

Item 1. Business.

AVIR US Equity