angn-20211231

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-K

_____________________________________________

For the fiscal year ended December 31, 2021

For the transition period from to

Commission file number 001-04321

ANGION BIOMEDICA CORP

(Exact name of registrant as specified in its charter)

51 Charles Lindbergh Boulevard, Uniondale, New York 11553

(Address of Principal Executive Offices) (Zip Code)

(415) 655-4899

Registrant's telephone number, including area code

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

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

Common Stock, par value $0.01 ANGN 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-(§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 aggregate market value of the voting stock and non-voting common stock held by non-affiliates of the registrant, based on the closing price of a share of the registrant’s common stock on June 30, 2021 as reported by the Nasdaq Global Select Market on such date, was approximately $365 million. Shares of common stock held by each executive officer and director and by each entity affiliated with an executive officer or and director have been excluded from this computation. The determination of affiliate status for this purpose is not necessarily a conclusive determination for other purposes.

The number of shares of the issuer’s common stock outstanding as of March 25, 2022, was 29,958,064.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement relating to the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K.

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TABLE OF CONTENTS

PART I Page

Item 1. Business 6

Item 1A. Risk Factors 33

Item 1B. Unresolved Staff Comments 64

Item 2. Properties 64

Item 3. Legal Proceedings 64

Item 4. Mine Safety Disclosures 64

PART II

Item 6. Reserved 65

Item 7A. Quantitative and Qualitative Disclosures 78

Item 8. Financial Statements and Supplementary Data 79

Item 9. Changes in and Disagreements with Accountants 115

Item 9A. Controls and Procedures 115

Item 9B. Other Information 116

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 116

PART III

Item 10. Directors, Executive Officers and Corporate Governance 117

Item 11. Executive Compensation 121

Item 14. Principal Accountant Fees 129

PART IV

Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Annual Report on Form 10-K are statements that could be deemed forward-looking statements reflecting the current beliefs and expectations of management with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other 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 these forward-looking statements. These statements are often identified by the use of words such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “if,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” “until” and similar expressions or variations. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:

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•the potential benefits, activity, effectiveness and safety of our product candidates;

•the success and timing of our preclinical studies and clinical trials, including the timing and availability of data from such clinical trials;

•the primary endpoints to be utilized in our clinical trials;

•the scope, progress, expansion, and costs of developing and commercializing our product candidates;

•our dependence on existing and future collaborators for commercializing product candidates in the collaboration;

•our receipt and timing of any milestone payments or royalties under any existing or future research collaboration and license agreements or arrangements;

•the potential effects of the COVID-19 pandemic on our business and operations, results of operations and financial performance;

•the potential adverse effects of any regional armed conflicts on our business and operations, results of operations and financial performance;

•the size and growth of the potential markets for our product candidates and the ability to serve those markets;

•our expectations regarding our expenses and revenue, the sufficiency of our cash resources, and needs for additional financing;

•regulatory developments in the United States and other countries;

•the rate and degree of market acceptance of any future products;

•the implementation of our business model and strategic plans for our business and product candidates, including additional indications for which we may pursue;

•our expectations regarding competition;

•our anticipated growth strategies;

•the performance of third-party manufacturers;

•our ability to establish and maintain development partnerships;

•our expectations regarding federal, state, and foreign regulatory requirements;

•our ability to obtain and maintain intellectual property protection for our product candidates;

•the successful development for our sales and marketing capabilities;

•the hiring and retention of key scientific or management personnel; and

•the anticipated trends and challenges in our business and the market in which we operate.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 10-K.

Forward-looking statements involve known and unknown risks, uncertainties and other 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. We discuss many of these risks in greater detail in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report on Form 10-K. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard,

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when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires.

Trademarks

This Annual Report on Form 10-K includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this Annual Report on Form 10-K are the property of their respective owners.

Risk Factors Summary

The following is a summary of the principal factors that cause an investment in the company to be speculative or risky:

Risks Relating to Our Financial Position and Need for Additional Capital

•We are a clinical-stage biopharmaceutical company with no products approved for sale and we have not generated any product revenue to date, which makes it difficult to assess our future viability.

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

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

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

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

•Delays or difficulties in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for ANG-3070 and our other product candidates.

•Clinical failure can occur at any stage of clinical development, and the results of earlier clinical trials are not necessarily predictive of future results.

•Our clinical trials could be disrupted by the uncertainty of war due to the aggressive actions taken by Russia which, if this occurs, could delay our ability to complete our clinical trials.

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

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

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

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

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

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

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Risks Relating to Collaborations and Commercialization of Our Product Candidates

•If we are able to develop and obtain regulatory approval for any of our product candidates, our business will be materially harmed if we are unable to successfully commercialize such approved products.

•If we fail to develop market opportunities for ANG-3070 or any future products are smaller than we believe they are, our potential to generate revenue may be adversely affected, and our business may suffer.

Risks Relating to Our Business and Strategy

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

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

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

Risks Relating to Our Intellectual Property

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

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

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

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

Risks Relating to Our Common Stock

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

•We identified material weaknesses in our internal control over financial reporting and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

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Part I

Item 1. Business

Overview

We are a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel small molecule therapeutics to address chronic and progressive fibrotic diseases. Our goal is to transform the treatment paradigm for patients suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have known limitations. Our lead product candidate is ANG-3070, a highly selective oral tyrosine kinase receptor inhibitor (TKI) in development as a treatment for fibrotic diseases, particularly in the kidney and lung. ANG-3070 has demonstrated activity as an anti-fibrotic agent in a variety of animal models. A Phase 1 healthy volunteer study, which was designed to support clinical development in multiple indications, demonstrated ANG-3070 has a favorable safety and PK profile, producing plasma concentrations which exceeded the levels necessary for activity in animal models of proteinuric kidney diseases. Enrollment is ongoing in a dose-finding Phase 2 trial of ANG-3070 in primary proteinuric kidney diseases (PPKDs) and we expect to file an IND in idiopathic pulmonary fibrosis (IPF) by the end of 2022.

We continue to work with our license partner Vifor International, Ltd, (Vifor Pharma) on the process of closing out our analyses of data from the 2021 clinical trial readouts of ANG-3777, a hepatocyte growth factor (HGF) mimetic that was formerly our lead product candidate until December 2021. We do not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License, which had included a Phase 3 study for the prevention of AKI in patients undergoing cardiac surgery involving cardiopulmonary bypass who were thought to be at risk for AKI (CSA-AKI) and a Phase 4 confirmatory study in donor kidney transplant patients who were at risk for developing delayed graft function (DGF), given that we do not believe the earlier Phase 2 and Phase 3 clinical trial results in the respective indications support regulatory approval. We have no funds budgeted for additional clinical trials for ANG-3777.

We are also continuing to develop our preclinical programs. Our ROCK2 program is targeted towards the treatment of fibrotic diseases. Our CYP11B2 program is targeted towards diseases related to aldosterone synthase dysregulation.

ANG-3070 for Fibrotic Diseases.

Our lead product candidate is ANG-3070, a highly selective oral small molecule TKI we are developing as a potential treatment for fibrotic diseases. TKIs are one of the largest classes of newly approved drugs, with more than 25 approved molecules worldwide targeting pathways believed to affect relevant diseases. However, tyrosine kinases are ubiquitous proteins and there is significant overlap in their structures and binding sites. This can lead to binding against unintended tyrosine kinase targets and these off-target effects are largely responsible for the toxicity associated with TKIs. While no TKI can be entirely selective due to close structural homology of the various tyrosine kinases, ANG-3070 was designed with the intent of enhancing inhibition of kinases involved in inflammation and the progression of fibrosis while minimizing binding to kinases thought responsible for adverse or off-target effects. ANG-3070 demonstrated target engagement as an anti-fibrotic agent in a variety of animal models across different organ systems and has shown in vitro the ability to inhibit pro-fibrotic tyrosine kinases at exposures achievable by oral administration. We reported positive data from a Phase 1 healthy volunteer study in August of 2021 and are actively enrolling patients in JUNIPER, a randomized, multi-center, double-blind, and placebo-controlled global dose-finding Phase 2 trial to evaluate ANG-3070 in patients with primary proteinuric kidney diseases (PPKDs). We hold global rights to ANG-3070.

The potential advantages for ANG-3070 include:

•Significant Addressable Kidney Fibrosis Markets. The PPKDs of Focal Segmental Glomerular Sclerosis (FSGS), Immunoglobulin A Nephropathy (IgAN), Alport Syndrome, and Membranous Nephropathy (MN) together affect over 250,000 patients in the U.S. alone.

•Significant Addressable Pulmonary Fibrosis Markets. 2021 projected worldwide sales for the two approved drugs for IPF will be approximately $3.8 billion despite the fact that fewer than 30% of IPF patients in the U.S. are prescribed either drug and approximately half of IPF patients discontinue these therapies within 12 months.

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•Promising Drug Exposure Profile. In the Phase 1 healthy volunteer study, ANG-3070 demonstrated ANG-3070 can achieve drug exposures exceeding plasma concentrations in which activity was demonstrated in animal models of proteinuric kidney diseases and pulmonary fibrosis.As such, ANG-3070 is being investigated for both twice-daily (BID) and once-daily (QD) dosing.

•Encouraging Adverse Event Profile. The safety and tolerability profile in the Phase 1 study was encouraging given the recognized incidence and severity of gastrointestinal side effects in approved kinase inhibitors, particularly nausea, vomiting, and diarrhea.

ANG-3070 for Renal Fibrosis. While PPKDs like FSGS, IgAN, MN, and Alport often have different root causes, each condition often progresses to kidney fibrosis and end-stage renal disease. There is only one approved therapy for any PPKD, budesonide for IgAN. In December 2021, we enrolled the first patient into JUNIPER, our randomized, double-blind, placebo-controlled global dose-finding Phase 2 trial intended to assess ANG-3070 in adult patients with FSGS or IgAN, two types of PPKD.

ANG-3070 for Pulmonary Fibrosis. Pulmonary fibrosis is characterized by progressive scarring (fibrosis) of the lungs, which leads to their deterioration and destruction. Over time, lung scarring in patients progresses and breathing becomes difficult, often resulting in the lungs failing to take in enough oxygen to meet the body’s needs. IPF is an aggressive form of lung disease with a median survival of two to three years from diagnosis. There are two drugs approved for IPF, the kinase inhibitor nintedanib (OFEV®) and the pyridine pirfenidone (Esbriet®). We plan to file an IND for ANG-3070 in the IPF indication by the end of 2022.

ANG-3777, an HGF Mimetic for Acute Organ Injury

ANG-3777 was designed to mimic the biological activity of HGF and to treat acute organ injuries, such as delayed graft function, where there are no approved therapies. HGF activates the c-Met receptor, which triggers a cascade of pathways with a central role in tissue repair and organ recovery that has been well established.

In the fourth quarter of 2021, we reported topline results from two clinical trials of ANG-3777. The first was a Phase 3 trial of ANG-3777 to treat AKI in patients who were at risk for developing DGF. The second was an exploratory Phase 2 trial for the prevention of CSA-AKI. While neither trial achieved statistical significance on its primary endpoint, we believe ANG-3777 demonstrated biologic activity in both trials. We continue to work with our license partner Vifor International, Ltd. (Vifor Pharma) on the process of closing out our analyses of data from these trials. We do not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License, which had included a Phase 3 study in CSA-AKI and a Phase 4 confirmatory study in DGF. There are no funds budgeted for additional clinical trials for ANG-3777.

In November 2020, we entered into a license agreement (the Vifor License) with Vifor Pharma, granting Vifor Pharma global rights (excluding Greater China) to develop, manufacture and commercialize ANG-3777 in all therapeutic, prophylactic and diagnostic uses for renal indications, including forms of AKI, and congestive heart failure (collectively, the Renal Indications). Pursuant to the Vifor License, we received an upfront license payment of $30 million in November 2020, and a $30 million equity investment, $5 million of which we received in January 2021 and $25 million of which we received contemporaneously with the closing of our Initial Public offering (IPO). Although the Vifor License includes additional milestone and royalty objectives, we do not expect to receive any clinical, post-approval, or sales milestones, or royalties, as we do not intend to continue to pursue the clinical development plan set forth in the Vifor License. In 2022, we and Vifor Pharma continue to complete planned analyses of the results of the clinical trials announced in the fourth quarter of 2021 and discuss the future of the collaboration on the basis of such analyses.

Our Preclinical Pipeline

We have a wholly-owned preclinical pipeline of internally-developed programs, including a ROCK2 inhibitors programs for fibrotic diseases, and CYP11B2 inhibitor program. Our goal is to select clinical lead candidates for one or more of these programs and begin IND-enabling studies by the end of 2022.

ROCK2 Inhibitors for Fibrotic Diseases. Our ROCK2 program includes a number of highly selective, oral small molecule inhibitors of ROCK2 developed internally as a potential treatment for fibrotic and other diseases. Rho-associated coiled-coil forming protein kinase (ROCK) signal transduction pathways are implicated in the development of fibrosis. Inhibition of ROCK isoforms ROCK1 and ROCK2 has shown promise in fibrosis and dual

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ROCK1/ROCK2 inhibitors have been used to treat conditions including hemorrhagic stroke and glaucoma. However, ROCK1 inhibition has been associated with hypotension (low blood pressure) and enhanced vascular permeability. Recent scientific work using specific genetic or pharmacological reduction of ROCK2 indicates ROCK2 inhibition by itself can result in anti-fibrotic activity without causing hypotension. These findings informed our strategy to develop a ROCK2-specific inhibitor, with the goal of minimizing ROCK1 inhibition, as a potential treatment for fibrosis and other diseases. We believe this approach could translate into a product candidate with enhanced tolerability potentially supporting long-term systemic use. We hold global rights to our ROCK2 inhibitor program.

CYP11B2 Inhibitors. We have created a selection of molecules with high specificity to CYP11B2 (aldosterone synthase) relative to CYP11B1, which we are investigating for the purpose of targeting aldosterone-related diseases, which include resistant hypertension, congestive heart failure, renal fibrosis and primary hyperaldosteronism. We hold global rights to our CYP11B2 inhibitor program.

Commercialization

Our lead product candidate, ANG-3070, is a highly selective, oral small molecule TKI we are developing as a potential treatment for fibrotic diseases, particularly of the kidney and lung. We reported positive data from a Phase 1 healthy volunteer study in August of 2021 and have enrolled the first patients in JUNIPER, a randomized, multi-center, double-blind, and placebo-controlled global dose-finding Phase 2 trial to evaluate ANG-3070 in patients with primary proteinuric kidney diseases (PPKDs). We hold global rights to ANG-3070, including all commercial rights. As we advance the program, we will evaluate how to successfully commercialize ANG-3070. We do not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License, which had included a Phase 3 study in CSA-AKI and a Phase 4 confirmatory study in DGF.

Management

Our pipeline and company strategy were originated and are supported by a management team with extensive experience and expertise in clinical research and development, business development, and commercialization. Our President and Chief Executive Officer, Jay Venkatesan, M.D., was the founder and CEO of Alpine BioSciences (acquired by Cascadian Therapeutics, which was subsequently acquired by Seagen), was a key investor in Mavupharma Inc. (acquired by AbbVie), and is a former portfolio manager of Ayer Capital and director of Brookside Capital Partners (the hedge fund group affiliated with Bain Capital). Our Chief Medical Officer and Head of Research, John F. Neylan, M.D., is a nephrologist who has held leadership roles at Keryx Biopharmaceuticals, Genzyme Corporation, and Wyeth Corporation. Our Chief Business Officer and General Counsel, Jennifer J. Rhodes, has held leadership roles at Pfizer Inc., Medivation Inc., and Adamas Pharmaceuticals, Inc. These individuals and other members of our senior management team have contributed to the clinical development, registration and/or commercialization of a multitude of approved drug products.

Company History

We were founded in 1998. From our incorporation through 2014, our efforts were primarily focused on researching pathways related to serious organ diseases and applying our medicinal chemistry expertise towards creating potential therapeutics to address the unmet medical needs of patients. Since 2014, we have focused on the clinical development of our ANG-3070 and ANG-3777 programs and translational work necessary to bring our pipeline programs to the clinic. ANG-3070 is now our lead clinical asset.

Our corporate operations are based in San Francisco, California, our clinical development and regulatory teams are primarily located in Boston, Massachusetts, and our discovery and research programs are based in Uniondale, New York.

Our Strategy

We are focused on discovering, developing, and commercializing novel small molecule therapeutics to address fibrotic diseases, particularly of the kidney and lung. Our goal is to transform the treatment paradigm for patients

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suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have recognized limitations. The key tenets of our business strategy are to:

▪Develop ANG-3070 in multiple renal fibrosis indications. We believe ANG-3070 can address a large unmet medical need in patients with PPKDs progressing towards renal fibrosis and end-stage renal disease. We are currently enrolling JUNIPER, a global Phase 2 trial of ANG-3070. JUNIPER is a randomized, double-blind, placebo-controlled dose-finding trial intended to assess ANG-3070 in adult patients with FSGS or IgAN, two types of PPKDs. The trial will enroll 100 patients equally among four treatment arms: 200mg ANG-3070 once daily, 400mg ANG-3070 once daily, 300mg ANG-3070 twice daily, and placebo with dosing for 12 weeks. The primary endpoint in the study is the percentage reduction in urinary protein/creatinine ratio (UPCR) at week 12. Topline data from this trial should be available in the first half of 2023.

▪Develop ANG-3070 in Idiopathic Pulmonary Fibrosis. Given multiple animal models demonstrating the activity of ANG-3070 activity in pulmonary fibrosis, we intend to complete IND-enabling work and file an IND by the end of 2022 for a Phase 2 trial of ANG-3070 in IPF, a chronic, life-threatening condition. There are two medicines currently approved for IPF by regulators, pirfenidone and nintedanib. However, we believe additional therapies are needed to treat IPF, since approximately half of IPF patients discontinue taking these approved medicines within one year. Fewer than one-third of IPF patients are currently prescribed pirfenidone or nintedanib. Despite this, the two medicines together are projected to sell $3.8 billion worldwide in 2021.

▪Advancement of our earlier-stage programs. Our ROCK2 inhibitor program is designed to advance a potent and highly selective inhibitor of ROCK2, with minimal inhibition of ROCK1, which we believe could translate into a therapeutic with enhanced tolerability in patients with fibrotic diseases. We are also developing proprietary CYP11B2 inhibitors for the purpose of targeting aldosterone-related diseases. We expect to nominate a lead compound and initiate IND-enabling studies for at least one of these earlier-stage programs by the end of 2022.

Our Pipeline

Our research and development activities are primarily focused on discovering and investigating novel small molecule therapeutics to address fibrotic diseases. All our pipeline programs were developed internally and are wholly owned by Angion. Anticipated milestones are reflected in the chart below:

ANG-3070, Our Lead Product Candidate

Our lead product candidate, ANG-3070, is a highly selective, oral small molecule TKI developed internally as a potential treatment for fibrotic diseases, particularly in the kidney and lung. ANG-3070 has demonstrated positive results in a Phase 1 healthy volunteer study, proof of concept in a variety of animal models as an anti-fibrotic agent, and the ability in vitro to inhibit pro-fibrosis tyrosine kinases at levels achievable with oral administration.

Within fibrosis, we believe there is promising therapeutic potential for ANG 3070 in PPKDs, a group of kidney diseases characterized by excess urinary protein excretion, and in types of pulmonary fibrosis, particularly IPF.In August 2021, we reported positive final data on a Phase 1 study of ANG-3070 in healthy volunteers. In December 2021 we enrolled the first patient in “JUNIPER”, a randomized, multi-center, double-blind, and placebo-controlled

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global dose-finding Phase 2 study in PPKD patients focused on FSGS and IgAN. We plan to file an IND for ANG-3070 in IPF by the end of 2022.

Fibrotic Diseases and Tyrosine Kinase Inhibitors

Fibrosis is a part of the body’s natural healing response to organ injury. When it becomes dysregulated, fibrosis can be highly detrimental to a normal organ’s architecture and function, potentially leading to death from organ failure. Two major organs commonly impacted by fibrosis are the kidney and the lung.

Renal or kidney fibrosis is the underlying pathological process leading to progression of chronic kidney disease (CKD), a disease affecting more than 10% of the world’s population, and renal fibrosis is currently also the best predictor of disease progression. No specific anti-fibrotic therapeutics currently exist to combat renal fibrosis.

Pulmonary or lung fibrosis is a disease which occurs when lung tissue becomes damaged or scarred. The resulting thickened, stiff tissue makes it more difficult for lungs to work properly. As pulmonary fibrosis worsens, patients have progressive shortness of breath and face increasing restrictions on activities of daily living. Pulmonary fibrosis is a family of over 200 different diseases, including IPF. At this time, pulmonary fibrosis is not reversible and remains a terminal disease.

TKIs are known to affect a wide array of biochemical pathways, including the mediation of tissue inflammation and fibrosis. TKIs are one of the largest classes of newly approved drugs, with more than 25 approved molecules worldwide targeting pathways believed to affect relevant diseases. However, tyrosine kinases are ubiquitous proteins and there is significant overlap in their structures and binding sites. This can lead to binding against unintended tyrosine kinase targets and these off-target effects are largely responsible for the toxicity associated with TKIs.

ANG-3070 was designed with the intent of having enhanced inhibition of kinases involved in inflammation and the progression of fibrosis while minimizing binding to kinases thought responsible for adverse or off-target effects. Four kinase receptors targeted by ANG-3070 include platelet-derived growth factor receptor alpha and beta (PDGFRα and PDGFRβ, respectively) and Discoidin Domain Receptors 1 and 2 (DDR1 and DDR2). ANG-3070 has demonstrated potent, low nanomolar IC50s (a standard measure of drug potency) to these tyrosine kinase receptors as shown in the figure below. PDGFRα, PDGFRβ, DDR1, and DDR2 are implicated in a number of diseases and targeting them effectively could provide a therapeutic benefit to patients with renal and pulmonary fibrosis.

PDGFRα and PDGFRβ are expressed in renal mesenchymal cells (i.e., glomerular mesangial cells) or cells with stem-cell like properties capable of maturing into a variety of critical cell types and in vascular smooth-muscle cells. In addition, they are expressed in interstitial cortical fibroblasts forming the skeleton of the kidney and medullary pericytes responsible for blood flow through the kidneys. In human renal disease, PDGFRα is upregulated in glomerulus as well as arterial smooth muscle cells and endothelial cells. Activation of PDGFRβ

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specifically in renal mesenchymal cells is sufficient to induce and drive progressive glomerulosclerosis and interstitial renal fibrosis. Being able to downregulate or prevent these targets could be beneficial to patients with related renal diseases.

In patients with early, but not late stage, IPF, cells responsible for the ability of the lung to exchange oxygen, cells lining the inside of blood vessels, and fibroblasts making up the structure of the lung express increased PDGFRβ. PDGFRα is expressed in these same cells in IPF patients, plus in lung immune cells. During pulmonary fibrosis, both PDGFRα and PDGFRβ are involved in pro-fibrotic activity, suggesting a therapy specific to these targets might exert beneficial anti-fibrotic effects for patients with IPF.

DDR1 is a tyrosine kinase transmembrane receptor of collagens, expressed in several cell types and organs, including the gastrointestinal tract, brain, lung, mammary gland, and kidney. Despite collagen being the most abundant protein in the body, DDR1 is not induced or activated under normal conditions. Several studies show DDR1 is overexpressed in pathological conditions and participates in tissue adaptation to acute and chronic inflammatory lesions, including renal inflammation and fibrosis. In a mouse model of Alport’s Syndrome (AS), for example, deletion of DDR1 delays renal fibrosis. Other animal studies suggest DDR1 could play an important role in IPF, mediating the creation of permanent pulmonary surface cell lesions. Targeting DDR1 with an effective therapeutic would help reduce some of the adverse effects related to DDR1 activation, potentially helping patients with DDR1-related diseases.

In contrast to DDR1’s primary expression in epithelial cells and activation by multiple types of collagens, DDR2 is abundantly expressed in fibroblasts. In the early phase of fibrosis in IPF, TGF-β induces expression of DDR2 in lung fibroblasts and synergizes with the resulting downstream signals to accelerate formation of fibrotic tissue. In later stages of fibrosis with the fibrotic process is already established, the DDR2/ERK axis promotes the oversynthesis of extracellular matrix components, resulting in massive fibrosis. Given these roles in pro-fibrotic pathways, targeting DDR2 could help prevent or reduce fibrosis in patients with chronic fibrotic disease.

Disease Overviews and Markets

Our lead product candidate, ANG-3070, is a highly selective, oral small molecule TKI developed internally as a potential treatment for renal and pulmonary fibrosis. In December 2021, we enrolled the first patient in “JUNIPER” a randomized, multi-center, double-blind, and placebo-controlled global dose-finding Phase 2 study in PPKD patients with FSGS and IgAN. We plan to file an IND for ANG-3070 in IPF at the end of 2022.

Primary Proteinuric Kidney Disease (PPKD)

A common thread among certain kidney diseases is the presence of abnormal levels of protein in the urine, or proteinuria. This is an indication of damaged kidneys and the presence of potentially serious disease. PPKDs share proteinuria as the common primary means of diagnosis.

Despite the differences in root causes among various PPKDs, they have a common path of disease progression as seen in the figure below. PPKDs typically move from proteinuria, through the development of fibrosis, chronic kidney disease, and eventually to end-stage renal disease and kidney failure resulting in transplantation or death. Therefore, we are developing ANG-3070 to address the fibrosis experienced by PPKD patients regardless of the root etiology of their specific condition.

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Four types of PPKDs include IgA nephropathy, Alport Syndrome, Focal Segmental Glomerulosclerosis, and Membranous Nephropathy.

Focal Segmental Glomerulosclerosis (FSGS) is a rare form of nephrotic disease (disease in which kidney damage allows proteins to leak into the urine) in which scar tissue develops in the glomeruli, the structures in the kidneys responsible for filtering waste from the blood. FSGS accounts for about 40% of adults with nephrotic syndrome and about 20% of children with nephrotic syndrome. In many cases, the cause of FSGS is unknown (idiopathic). In other cases, the scarring may occur because of another condition such as HIV infection, sickle cell disease, obesity, autoimmune diseases, or genetic causes. It is estimated that FSGS affects up to 40,000 patients in the United States, with a similar prevalence in Europe. More than 5,400 patients in the United States are diagnosed with FSGS every year, a number likely underestimated because of the limited number of biopsies performed to confirm the diagnosis. The disease adversely affects those of African descent more than other demographics. Current treatments for FSGS, corticosteroids and immunosuppressive drugs, are effective only in 25% to 35% of patients. Both of these therapeutic options were developed decades ago for non-renal indications and have been repurposed for FSGS given no approved therapy currently exists for this indication.

IgA nephropathy (IgAN) is the most common glomerulonephritis (GN, the inflammation of the cells in the kidney responsible for filtering the blood) globally and is responsible for between 10% and 20% of all GN in the United States. The prevalence in estimated at up to 150,000 in the United States. IgAN is caused by deposits of immunoglobulin A in the glomeruli caused by aberrant glycosylation, thereby disrupting renal function and causing blood in the urine (hematuria) and proteinuria. IgAN progresses steadily over time, with approximately 30% to 40% of patients developing ESRD over 20 to 30 years, including 20% of children who develop ESRD within 20 years of diagnosis. In 2021, the FDA granted accelerated approval for budesonide, a type of corticosteroid addressing the inflammatory component of IgAN, for IgAN patients based upon a percentage reduction in protein to creatinine ratio at nine months.

Membranous Nephropathy (MN) occurs when the glomeruli become damaged or thickened resulting in proteinuria. MN is often caused by some type of autoimmune activity. As protein leakage increases, so does the risk of long-term kidney damage. In the U.S., it is estimated around 3,000 patients per year will be diagnosed with MN, with an estimated prevalence of under 40,000. There are currently no approved drugs for MN.

Alport Syndrome (AS) is a genetic renal disease and is the second most common inherited cause of kidney failure. AS affects approximately 30,000 to 60,000 people in the United States. AS is caused by a genetic defect in type IV collagen, a component of the glomerular basement membrane in the kidney, resulting in defects in its structure and function. In some patients with inherited AS, the disease can progress very rapidly leading to kidney failure in early adulthood. As in other forms of PPKD, progressive fibrosis plays an important role in the pathophysiology and progression of AS. With no currently approved therapies to stop progressive loss of kidney function, AS represents a rare disorder with significant unmet need.

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Pulmonary Fibrosis

Pulmonary fibrosis is characterized by progressive scarring (fibrosis) of the lungs, which leads to their deterioration and destruction. Over time, patients’ lung scarring progresses and breathing becomes difficult, often resulting in the lungs failing to take in enough oxygen to meet the body’s needs.

IPF is an aggressive form of pulmonary fibrosis with a median survival of two to three years from diagnosis. The course of the disease is highly variable. Certain patients become seriously ill within a few months, while others may survive for five years or longer. Most deaths in IPF occur from progression of pulmonary fibrosis leading to respiratory failure. According to the NIH, approximately 140,000 people in the United States have IPF, and approximately 30,000 to 40,000 new cases are diagnosed each year, usually affecting people between the ages of 50 to 70. EU incidence rates are estimated to be similar. Over half are undiagnosed in the mild category alone, while more could be underdiagnosed. The disease is of unknown cause and represents an important area of unmet medical need.

Systemic sclerosis with interstitial lung disease is a complex immune disorder characterized by progressive pulmonary fibrosis. Systemic sclerosis (SSc), also known as scleroderma, is caused by dysfunctional interplay between fibrosis, vascular, and immunological pathways. Interstitial lung disease (ILD) is a common complication of systemic sclerosis and is its leading cause of morbidity and mortality accounting for 35% of disease specific mortality. SSc-ILD usually develops within the first five years of the disease, with 30-40% of SSc patients developing

clinically significant SSc-ILD. The U.S. prevalence of SSc-ILD is estimated to be over 60,000 with about 9,000 diagnosed each year.

There are currently two approved therapies for IPF, pirfenidone (Esbriet®, sold by Roche/Genentech) and the kinase inhibitor nintedanib (OFEV®, sold by Boehringer-Ingelheim). Nintedanib is also approved for SSc-ILD patients. Both drugs have known tolerability challenges for patients. Diarrhea and nausea are very common side effects, with 62% of patients taking nintedanib reporting diarrhea and 29% reporting nausea according to its drug label. Similarly, diarrhea was reported by 26% and nausea by 36% of patients taking pirfenidone according to its label. Patient convenience is also a recognized challenge, with nintedanib required to be dosed twice per day with food and pirfenidone three times per day with food after a three-step titration over the first two weeks. Patient drop-out rates for both drugs are substantial, with 43.8% of patients on nintedanib and 51.5% of patients on pirfenidone dropping out after 12 months. Neither therapy demonstrated an impact on patient survival in the clinical trials forming the basis for their approval. Due to the recognized limitations of these approved medicines, under 30% of U.S. patients diagnosed with IPF, despite it being a life threatening disease, are prescribed nintedanib or pirfenidone.

Despite these drawbacks to tolerability, convenience, and efficacy, pirfenidone and nintedanib generated approximately $3.8 billion in combined 2021 worldwide sales. If we are able to demonstrate in clinical trials ANG-3070 provides IPF patients with an alternative treatment option with a more acceptable tolerability, convenience, and/or efficacy profile, we would expect ANG-3070, if approved, to compete successfully with these two approved medicines. However, there is no guarantee ANG-3070 will be able to achieve these goals or, if it does, generate comparable revenues.

Our Solution: ANG-3070 for the Treatment of Renal and Pulmonary Fibrosis

By targeting tyrosine kinases receptors involved in fibrogenesis such as PDGFRα, PDGFRβ, DDR1, and DDR2, ANG-3070 could be an important potential therapeutic addressing a number of fibrotic conditions in the kidney and lung.

In August 2021, we reported positive final data from a Phase 1 study of ANG-3070 in healthy volunteers. Key findings from the study included:

•ANG-3070 achieved drug exposures in humans exceeding exposures in which activity was demonstrated in animal models of proteinuric kidney diseases

•Encouraging safety and tolerability profile, particularly given the well-recognized incidence and severity of gastrointestinal side effects in approved TKIs

•Pharmacokinetic data supportive of potential once-daily oral dosing for ANG-3070

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As represented in the figure below, in Part A, healthy volunteers were given ascending single doses of ANG-3070 ranging from 50 mg to 600 mg to assess the safety, tolerability, pharmacokinetics and food effect of ANG-3070 at different doses. In Part B, healthy volunteers were given either twice-daily doses ranging from 50 mg to 500 mg under fasting conditions over two weeks or once-per-day doses ranging of 400 mg and 600 mg with meals over two weeks.

ANG-3070 was generally well-tolerated at all doses and there were no Serious Adverse Events reported at any dose schedule or level. The reported (non-serious) Adverse Events (AEs) were seen mostly at higher doses, 600 mg administered once daily and 500 mg administered twice daily over two weeks. These AEs included nausea, abdominal cramps, and diarrhea. Generally, these AEs were mild to moderate.

Pharmacokinetic highlights from the Phase 1 study included:

•ANG-3070 was rapidly absorbed within 1-2 hours under fasting conditions;

•Dosing with food delayed absorption to 3-4 hours with no change in exposure but lower incidence of nausea when given with food;

•Mean half-life (T1/2) of 15-21 hours and small/no accumulation in blood after 14 days supports either once or twice per day dosing; and

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•Urinary excretion less than 3%, suggesting dose reduction in patients with kidney disease may not be required

An important finding from the Phase 1 study was human exposure levels as measured by AUC between 0-24 hours after dosing exceeded active exposure levels seen in the preclinical animal studies of ANG-3070. The figure below compares exposure levels in the passive Heymann’s nephritis rat model of MN with the exposure levels seen in the Phase 1 study. The blue box indicates the dose range where ANG-3070 was demonstrated to be active in the MN rat model. The pair of bars on the left side notes a 15 mg/kg dose in rats provided equivalent drug exposure to 3 mg/kg or about 200 mg once daily dose in humans. The next set of bars to the right show the upper end of a 50 mg/kg dose in rats was equivalent to the 6mg/kg or about 400 mg once daily in humans. A human dose of 250 mg twice a day, which was well-tolerated in the Phase 1 study, provides ANG-3070 exposures well above those seen as necessary for activity in animal models. Finally, the multi-colored bar on the right side of the graph shows the no adverse event level in non-human primates was not seen until about 250 mg/kg, or an equivalent human dose of about 5,600 mg once daily. Taken together, these exposure data demonstrate a large margin between doses seen as active in animal studies and much higher dose levels required to show toxicity in animal models.

Based upon the Phase 1 study data, in December 2021 we enrolled the first patient in JUNIPER, a randomized, multi-center, double-blind, and placebo-controlled global Phase 2 dose finding study in PPKD patients focused on FSGS and IgAN. The study plan is to enroll appropriately 100 patients at a 1:1:1:1 ratio to ANG-3070, 200 mg QD (once daily), 400 mg QD, 300 mg BID (twice daily), or placebo (QD or BID) administered daily for 12 weeks. The primary endpoint is the percentage change in urinary protein/creatinine ratio (UPCR) at week 12.

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Key enrollment criteria for the study include:

•Diagnosis of IgAN or primary FSGS confirmed by past renal biopsy or genetic forms of FSGS on standard of care (SoC) for at least 12 weeks prior to enrollment

•eGFR > 40mL/min/1.73m2, urinary protein > 1g/day, stable blood pressure, SoC background therapy of ACEi or ARB with up to 20 patients with and eGFR > 30 but < 40mL/min/1.73m2

•Any other RAAS/SGLT-2/immunomodulatory medications must be stable for prior 12 weeks.

The goals of the JUNIPER study are:

•Provide enough information of effect of ANG-3070 on proteinuria to determine a regulatory strategy in PPKD patients

•Determine the proper dose for subsequent studies

•Discover whether the proper dose may be different for IgAN patients than FSGS patients

•Gather additional safety, tolerability, biomarker, and PK/PD data on ANG-3070

We are also planning a Phase 1B study in patients with IPF, to begin in 2022. The preliminary plan is to enroll IPF patients who are either treatment naïve or have been proven intolerant of approved therapies to evaluate the pharmacokinetics and safety and tolerability of ANG-3070. Subsequently, we are planning a Phase 2 study where the primary endpoint is likely to be pulmonary function tests at 6-12 months and we expect this trial to also compare multiple doses of ANG-3070 against placebo.

In addition to the Phase 1 data in healthy volunteers, the clinical plans for ANG-3070 in kidney and pulmonary fibrosis are supported by a broad program of preclinical animal studies. ANG-3070 has demonstrated activity in preclinical models across renal and pulmonary fibrosis.

ANG-3777

ANG-3777 was designed to be a first-in-class hepatocyte growth factor (HGF) mimetic. We engineered ANG-3777 to mimic the biological activity of HGF in activating critical pathways in the body’s natural organ repair process following an acute organ injury. In 2021, we reported the results of three clinical trials of ANG-3777. None of the trials were positive on their primary endpoints, but we believe ANG-3777 demonstrated biologic activity in the Phase 3 trial of kidney transplant patients with delayed graft function (DGF) and in the Phase 2 trial in patients at risk for acute kidney injury associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI).

We continue to work with our license partner Vifor Pharma on the process of closing out our analyses of data from the 2021 clinical trial readouts. We do not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License, which had included a Phase 3 study in CSA-AKI and a Phase 4 confirmatory study in DGF, given these clinical results. There are no funds budgeted for additional clinical trials for ANG-3777.

Our Preclinical Pipeline

We plan to select clinical lead candidates for one or more of these preclinical programs and begin IND-enabling studies by the end of 2022.

ROCK2 Program for Fibrotic and Other Diseases

Our ROCK2 program includes a number of highly selective, oral, small molecule inhibitors of ROCK2 developed internally as a potential treatment for fibrotic and other diseases. Rho-associated coiled-coil forming protein kinase (ROCK) signal transduction pathways are implicated in the development of fibrosis. Inhibition of the ROCK isoforms ROCK1 and ROCK2 has shown promise in treating fibrosis in animal models. However, use of a non-isoform-specific ROCK inhibitor (i.e., dually inhibits ROCK1 and ROCK2) has been associated with inducing hypotension. Recent scientific work using specific genetic or pharmacological inhibition of ROCK2 indicates ROCK2 inhibition alone can result in anti-fibrotic activity without causing hypotension. These findings informed our strategy to develop ROCK2-specific inhibitors as a potential treatment for fibrosis.

Multiple dual ROCK1/2 inhibitors have received regulatory approval, including ripasudil (Glanatec®), which is approved in Japan for treating glaucoma and ocular hypertension, fasudil (ErilTM), which is approved in Japan and

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China for treating cerebral vasospasm in hemorrhagic stroke, and netarsudil (Rhopressa®), which is approved in the United States for the treatment of glaucoma. The ROCK2-selective inhibitor belumosudil has been approved by the FDA for the treatment of chronic graft-versus-host disease.

Elevated expression of ROCK2 has been implicated in a number of chronic fibrotic conditions and other diseases. ROCK2 is significantly upregulated in fibrotic kidneys in both pediatric and adult patients, with ROCK2 levels positively correlated with the severity of the fibrosis. Study of ROCK2 inhibition in the unilateral ureteral obstruction (UUO) model of renal fibrosis showed ROCK2 inhibition alleviates renal fibrosis. Furthermore, in a mouse model of IPF, researchers found mice with either ROCK1 or ROCK2 genetically deleted were protected from bleomycin-induced IPF, indicating specifically targeting either ROCK isoform would be an effective therapeutic strategy against IPF. ROCK2 expression in vitro has also been associated with co-expression of fibrotic liver markers. Elevated ROCK2 levels are seen in cardiac hypertrophy, cardiac fibrosis and diastolic dysfunction. ROCK2 has also been shown to play a role in neurodegenerative disorders such as amyotrophic lateral sclerosis, Parkinson's disease and Alzheimer's disease. As a result, we believe a potent ROCK2 inhibitor should prevent disease progression in chronic fibrotic diseases and potentially be useful in a variety of other cardiac and neurodegenerative disorders.

Dual ROCK1/2 inhibitors can have problematic side effects including hypotension and increased vascular permeability. In an in vitro analysis measuring binding affinity for ROCK2 and ROCK1, our ROCK2 selective inhibitors show much stronger binding affinity for ROCK2 versus ROCK1. We believe high selectivity for ROCK2 could provide enhanced tolerability, potentially supporting long-term systemic use.

CYP11B2 (Aldosterone Synthase) Inhibitor Program

Aldosterone is a hormone produced in the adrenal glands which helps control the body's blood pressure by causing the kidneys to retain salt and excrete potassium, thereby increasing water retention, blood volume and blood pressure. CYP11B2 is a member of the broad cytochrome P450 family and is responsible for the biosynthesis of aldosterone. There are a number of diseases associated with dysregulated aldosterone, including primary hyperaldosteronism (Conn's Syndrome), refractory hypertension, congestive heart failure and kidney fibrosis. As a result, we believe inhibition of CYP11B2 could potentially be used in aldosterone-related diseases.

The renin-angiotensin-aldosterone system (RAAS) is responsible for producing aldosterone to maintain blood pressure. Two major approaches to modulating the RAAS pathway are angiotensin converting enzyme inhibitors (ACE inhibitors) and angiotensin receptor blockers (ARBs). There are eighteen FDA-approved ACE inhibitors/ARBs, and while these drugs are generally quite effective in controlling hypertension, aldosterone breakthrough or escape happens in approximately 10% to 50% of patients depending on the duration of therapy studied and the definition of 'breakthrough'. Aldosterone excess is estimated to be the primary cause in approximately 20% of patients with resistant hypertension, or nearly 2 million patients in the United States alone.

Two hormonal mineralocorticoid receptor antagonists (MRAs), spironolactone and eplerenone, plus a non-steroidal MRA (finerenone), are also involved in blocking the effects of aldosterone. MRAs act by binding to the mineralocorticoid receptor to prevent aldosterone from having its biologic effect on blood pressure and renal excretion and absorption of salt and potassium. However, approved MRAs have the downside of increasing circulating levels of aldosterone, leading to increased activity of aldosterone through its non-MR mechanisms. Aldosterone acts on the vascular system by inducing oxidative stress, inflammation, fibrosis and endothelial dysfunction through both MR-dependent and MR-independent pathways. As such, increased levels of aldosterone have direct deleterious effects on the progression of congestive heart failure and renal fibrosis.

We have created a selection of molecules with high specificity to CYP11B2 relative to CYP11B1 and continue work towards selecting a clinical lead for the program.

Manufacturing

We rely upon third-party contract manufacturing organizations to manufacture and supply product candidates for our clinical trials, and we will rely on such manufacturers to meet commercial demand. We expect this strategy will enable us to maintain a more efficient infrastructure, avoiding dependence on our own manufacturing facility and equipment, while simultaneously enabling us to focus our expertise on the clinical development and future commercialization of our products. Currently, we rely on and have agreements with a single third-party contract manufacturer to supply the drug substance for ANG-3070 and with a single third-party contract manufacturer to

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manufacture all clinical trial supplies of ANG-3070. We currently have sufficient inventory of ANG 3070 to meet all requirements for our planned clinical trials. We expect to qualify additional suppliers for ANG 3070 drug substance and ANG 3070 clinical trials supplies to support future clinical trials, and we expect to enter into commercial supply agreements with such manufacturers prior to any potential approval of ANG 3070. ANG-3070 drug substance is manufactured via conventional organic synthetic procedures, starting from raw materials and reagents commercially available in large quantities. ANG-3070 drug product is manufactured via conventional pharmaceutical processing procedures, employing commercially available excipients and packaging materials. The procedure and equipment employed for manufacture and analysis are consistent with standard organic synthesis or pharmaceutical production, and are transferable to a range of manufacturing facilities, if needed.

We are in discussions with third party manufacturers to identify additional suppliers to produce our other product candidates.

Competition

The biotechnology and pharmaceutical industries are characterized by intense competition and rapid innovation. Although we believe our product candidates offer innovative therapeutic approaches and may provide significant advantages relative to current therapies in the treatment of acute organ damage and our other therapeutic areas, our competitors may be able to develop other compounds, drugs, or therapies capable of achieving similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies and universities and other research institutions. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. We believe the key competitive factors affecting the development and commercial success of our product candidates will be whether or not such product candidates are deemed to be safe and effective by relevant regulatory authorities, as well as their tolerability profile, reliability, convenience of dosing, price, and reimbursement.

With respect to ANG-3070, clinical programs potentially competitive in PPKDs generally focus on immune system modification, repurposed or novel hemodynamic (blood pressure) modifiers, and other approaches. In contrast, we believe ANG-3070 is the only clinical-stage anti-fibrotic in development for PPKDs. Given the disease progression path for PPKDs, programs not specifically addressing renal fibrosis have the potential to be more complimentary than competitive. In 2021, Tarpeyo® (budesonide) from Calliditas was granted accelerated approved by the FDA for IgAN, one form of PPKD. Phase 3 programs in PPKD include:

•Atrasentan from Chinook Pharmaceuticals (IgAN, FSGS, Alport)

•Bardoxolone methyl from Reata Pharmaceuticals (Alport)

•Iptacopan from Novartis (IgAN)

•Narsoplimab form Omeros (IgAN)

•Sibeprenlimab from Visterra/Otsuka Pharmaceuticals (IgAN)

•Sparsenten from Travere Therapeutics (IgAN, FSGS)

•DMX-200 from Dimerix (FSGS)

Phase 3 clinical programs potentially competitive with ANG-3070 in pulmonary fibrosis (IPF and SSc-ILD) include:

•There are two approved therapies, pirfenidone (Esbriet®, sold by Roche/Genentech) for IPF and nintedanib (OFEV®, sold by Boehringer-Ingleheim) for IPF and SSc-ILD.

•ORG-447 from Agomab Therapeutics for IPF

•PLN-74809 from Pliant Therapeutics for IPF

•PRM-151 from Roche/Genentech for IPF

•Taladegib from Endeavor Biosciences for IPF

With respect to competition for our ROCK2 inhibitor program:

•Netarsudil ophthalmic solution from Aerie Pharmaceuticals, Inc. was first approved by the FDA in 2017 as a topical agent for reducing intraocular pressure in patients with open-angle glaucoma and ocular hypertension

•Kadmon Holdings, Inc.'s belumosudil (KD025), a ROCK2 inhibitor with reduced selectivity against ROCK1, in the clinic for several indications, and approved for chronic graft versus host disease

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•Fasudil developed by Asahi Kasei approved in Asia is being investigated by Woolsey Pharmaceuticals in ALS, retinopathy of prematurity, and dementia

•CXC007 from Redx Pharma Plc

•Other ROCK2 inhibitors in preclinical development.

Regarding competition for our CYP11B2 inhibitor program:

•CIN-107 from CinCor Pharma is a CYP11B2 inhibitor in multiple Phase 2 trials for resistant hypertension, uncontrolled hypertension, and primary aldosteronism.

•PB6440 from PhaseBio is a CYP11B2 inhibitor preparing for Phase 1 trials in 2022 in treatment resistant hypertension

Across each of our development areas, other, potentially competitive, clinical-stage technologies are being developed. Also, companies developing preclinical molecules could decide to pursue development in our chosen indications and potentially compete with us. This could lead to commercial challenges as well as difficulties enrolling clinical trials if they were to target the same indications we are pursuing.

Intellectual Property

The proprietary nature of, and protection for, our product candidates, processes and know-how are important to our business. We pursue various avenues of intellectual property protection, including consideration of patent, trademark, and trade secret strategies. We have sought patent protection in the United States and internationally for our programs relating to small molecule compounds with our tyrosine kinase inhibitors (including ANG-3070), HGF-like activity (including ANG-3777), our ROCK2 inhibitors and our CYP inhibitors. Our patent strategy seeks to protect our product candidates by filing patent applications, in the United States and in relevant foreign jurisdictions, and we pursue multi-faceted protection, as available, for example to relevant small molecule compounds and analogs, pharmaceutical compositions and related methods of manufacture and use. Our policy is to pursue, maintain and defend patent rights in order to protect the technology, inventions and improvements that are commercially important to our business. We also rely on trade secret protection for certain intellectual property that may be important to the development of our business and expect to pursue trademark registrations for brand names or other text or images that may provide commercial value.

In the United States and worldwide, issued patents have a presumptive term, assuming all maintenance fees are paid, of twenty years from their earliest non-provisional filing date. Certain jurisdictions offer opportunities to extend this term. For example, the U.S. Patent and Trademark Office (USPTO) may add term to a patent (referred to as Patent Term Adjustment) if delays by the USPTO of certain activities exceed prespecified durations, from which delays by the Applicant are subtracted. Additionally, many jurisdictions, including the United States and Europe, provide opportunities for extending the term of patents relating to approved pharmaceutical products or their approved uses. In the United States, a single patent can be extended per approved product, for a period (referred to as Patent Term Extension) of up to five years, depending on the dates of patent issuance relative to submission of an application for premarketing approval (i.e., of a New Drug Application or a Biologics License Application) under provisions of the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act. Similar restoration of term is available in Europe under so-called Supplementary Protection Certificate rights, and extensions under similar policies may be available in other countries.

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, if any, one or more of our patents may be eligible for limited Patent Term Extension under the Hatch-Waxman Act in the United States, Supplementary Protection Certificate in Europe.

Our commercial success will depend in part on obtaining and maintaining patent protection and/or other intellectual property protection for our current and future product candidates, including for their use, production, formulation, etc., with commercially relevant terms; our commercial success may also depend in part on our ability to successfully defend our patent and/or other intellectual property rights against third-party challenges. Our ability to stop third parties from making, using, selling, offering to sell and/or importing our products may depend on the extent to which we have rights under valid and enforceable intellectual property rights that cover these activities. We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our product candidates, discovery programs and processes. Additionally, we cannot be certain that we will always be able to establish sufficient

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ownership rights to ensure complete or necessary control over our intellectual property rights as required in order to obtain, maintain, and/or enforce them. For these and more comprehensive risks related to our intellectual property, please see "Risk Factors—Risks Relating to Our Intellectual Property." The expiration dates of the patents discussed below assume in all cases that the appropriate maintenance, renewal, annuity, or other governmental fees are paid to maintain the patent(s) in force for the full extent of their term and any extension(s) thereof.

ANG-3070 Tyrosine Kinase Inhibitor Program

As of January 1, 2022, compound, pharmaceutical composition and methods of use claims to our kinase inhibitors are covered in patents issued in the United States. We also owned issued patents in Australia, Canada, China, Europe, Hong Kong, Israel, India, Japan; and a pending application in Canada. The European patent was validated in Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, Monaco, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland/Liechtenstein, Turkey, and the United Kingdom. A continuation application is pending in the United States. These patents, and patents that may issue from the pending applications, provide patent protection until 2033, assuming payment of all appropriate annuities and/or maintenance fees.

We have filed a PCT application directed to the use of ANG-3070 in the treatment of irritable bowel syndrome (IBS). Patents issuing from corresponding national applications will expire in 2040.

As of January 1, 2022, we had filed three PCT applications relating to solid forms of ANG-3070, methods of treating fibrotic diseases, and biomarkers relating to ANG-3070, whose twenty-year presumed terms expire in 2041.

As of January 1, 2022, we had filed a provisional patent application relating to gene expression levels associated with treatment comprising ANG-3070.

Under the Hatch-Waxman Act, a single patent term restoration of up to five years in the United States may be available. We also may be eligible for similar restoration of term in Europe under supplementary protection certificate rights, and similar extensions in certain other countries.

ROCK2 Inhibitor Program

The patent portfolio for the ROCK2 inhibitor program includes pending applications in the United States, Australia, Canada, China, Europe, Israel, India, and Japan, each of which would have presumed twenty-year terms expiring in 2038. We have also filed a Patent Cooperation Treaty (PCT) application and a provisional application, each of which recite claims to compounds, pharmaceutical compositions, and methods of use thereof. Any patents that may issue from national applications of the PCT application or the provisional application would have twenty-year presumed terms expiring between 2040 and 2041.

CYP11B2 Inhibitor Program

The patent portfolio for the CYP11B2 inhibitor program includes pending applications in the United States, Australia, Canada, Europe, Israel, and Japan, each of which would have presumed twenty-year terms expiring in 2038. As of January 1, 2022, we owned issued patents in the United States that claim, among other things, ANG-3598 composition of matter, pharmaceutical compositions comprising ANG-3598, and methods of treating renal fibrosis. We also owned issued patents in Australia, China, Israel, and India. Each of the patents expire in 2035 and any patents that may issue from the pending applications have twenty-year presumed terms expiring in 2035.

ANG-3777

The patent portfolio for ANG-3777 includes patents and patent applications that describe and/or specifically claim pharmaceutical compositions whose active agent is ANG-3777 and uses thereof, as well as compounds structurally related to ANG-3777, pharmaceutical compositions and uses thereof. As of January 1, 2022, we owned issued patents in the United States that claim, among other things, pharmaceutical compositions comprising ANG-3777. We also owned issued patents in Australia, Canada, China, Europe, Hong Kong, Israel, and Japan. Granted European patents have been validated in the following European countries: Denmark, France, Germany, Hungary, Ireland, Italy, Luxembourg, Monaco, Netherlands, Sweden, Switzerland/Liechtenstein, and the United Kingdom.

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We have issued claims to pharmaceutical compositions containing ANG-3777 and methods of use that should remain in force, if the appropriate maintenance, renewal, annuity or other governmental fees are paid, in the United States until 2024, and in other jurisdictions until 2023.

An aqueous formulation of ANG-3777 and analogues of sufficient solubility for intravenous administration is the subject of claims in a patent issued in the United States that will expire in 2030 assuming continued payment of all maintenance fees.

We have issued United States patents on the use of ANG-3777 and related compounds for the treatment of chronic obstructive pulmonary disease, (COPD), and scleroderma, which expire in 2028 and 2029, respectively.

We have issued claims in the United States to solid forms of ANG-3777 which expires in 2040, and pending applications in Australia, Brazil, Canada, China, Eurasia, Europe, Israel, Japan, Korea, Mexico, New Zealand, Singapore, and the United States Patents issuing from these applications will expire in 2040.

We have filed a PCT application directed to the use of ANG-3777 in the treatment of delayed graft function. Patents issuing from corresponding national applications will expire in 2040.

As of January 1, 2022, we had filed two provisional patent applications relating to ANG-3777 whose twenty-year presumed terms expire in 2041.

Under the Hatch-Waxman Act, a single patent term restoration of up to five years in the United States may be available. We also may be eligible for similar restoration of term in Europe under supplementary protection, certificate rights, and similar extensions in certain other countries.

Licenses and Collaborations

License Agreement with Vifor Pharma

In November 2020, we granted Vifor Pharma, an exclusive, global (excluding Greater China), royalty-bearing license (the Vifor License), for the commercialization of ANG-3777 in all Renal Indications, beginning with DGF and CSA-AKI. The Vifor License also grants Vifor Pharma exclusive rights, with a right to sublicense subject to our consent for certain specified conditions, to develop and manufacture ANG-3777 for commercialization in Renal Indications worldwide (excluding Greater China) in cooperation with us or independently. We retain the right to develop and commercialize combination therapy products combining ANG-3777 with our other proprietary molecules, subject to Vifor Pharma's right of first negotiation with respect to global (excluding Greater China) rights to such combination therapy products in the Renal Indications. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Although the Vifor License includes additional milestone and royalty objectives, we do not expect to receive any clinical, post-approval, or sales milestones, or royalties, as we do not intend to continue to pursue the clinical development plan for ANG-3777 , which had included a Phase 3 study for CSA-AKI and a phase 4 confirmatory study in DGF.. We and Vifor continue to complete the planned analyses of the results of the clinical trials announced in the fourth quarter of 2021 and discuss the future of the collaboration.

Collaboration with the University of Michigan

In 2019, we entered into a subcontractor agreement with The Regents of the University of Michigan (UM),

under which we provide funding for identification of ANG-3070-responsive disease marker profiles in rodent models, and their intersection with existing data on patients with various forms of nephrotic kidney disease, to identify potential ANG-3070-responsive patient subsets. Under this agreement we obtain access to the Nephrotic Syndrome Study Network (NEPTUNE), an integrated group of academic centers, patient support organizations and clinical resources dedicated to advancing the treatment of kidney disorders. The goal of work under this agreement, which we support through a grant from the U.S. Department of Defense, is to identify human disease and drug response profiles based upon the genes, networks and pathways that correlate with the therapeutic activity of ANG-3070 in primary FSGS and other fibrotic renal diseases. We are obligated to provide to UM up to a total of $520,000 over the course of the project. We have an option to license and commercialize intellectual property generated during the term of the agreement that is solely owned by UM under commercially reasonable terms. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. On March 21, 2022, Angion provided written notice to UM of its intention to terminate the subcontractor agreement as Angion believes the work under the related U.S. Department of Defense grant to be complete.

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License Agreement with Ohr Cosmetics LLC.

In November 2013, we granted Ohr an exclusive worldwide license, with the right to sublicense, under our patent rights covering one of our CYP26 inhibitors, for the use in treating conditions of the skin or hair. Sublicensees may not grant further sublicenses under our patent rights other than to affiliates of such sublicensees and entities with which sublicensees are collaborating for the research, development, manufacture and commercialization of the products. Ohr will pay us a royalty at a rate in the low single digits on gross revenue of products incorporating ANG‐3522, and milestone payments potentially totaling up to $9.0 million based on achievement of sales milestones. Royalties and milestone payments will be paid until the later of 15 years from the first commercial sale of a licensed product or the last to expire licensed patent rights. The royalty rate is subject to adjustments under certain circumstances. The Ohr License represents a related-party transaction, as discussed in Note 15 in this Annual Report on Form 10-K below, and we believe the Ohr License was made on terms no less favorable to us than those we could obtain from unaffiliated third parties. No revenue from this license agreement was recognized during the year ended December 31, 2021.

Government Regulation and Product Approval

The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, marketing and promotion, distribution, post-approval monitoring and reporting, sampling, and import and export of drugs, such as those we are developing. 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.

U.S. Drug Regulation

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act and its implementing regulations. FDA approval is required before any new drug can be marketed in the United States. Drugs are also subject to other federal, state and local statutes and regulations. Failure to comply with applicable FDA or other requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA clinical holds, refusal to approve pending applications, withdrawal of an approval, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

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

▪completion of preclinical laboratory tests and animal studies, all performed in accordance with the FDA's Good Laboratory Practice (GLP) regulations;

▪submission to the FDA of an investigational new drug application (IND) which must become effective before human clinical studies may begin and must be updated annually or when significant changes are made;

▪approval by an independent institutional review board (IRB) representing each clinical site before a clinical study may be initiated;

▪performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (GCP) regulations to establish the safety and efficacy of the product candidate for each proposed indication;

▪preparation of and submission to the FDA of a new drug application (NDA);

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

▪a determination by the FDA within 60 days of its receipt of an NDA to file the application for review;

▪satisfactory completion of an FDA pre-approval inspection of the manufacturing facility(ies) where the product is manufactured to assess compliance with current good manufacturing practice (cGMP) regulations, and of selected clinical investigation sites to assess compliance with GCP; and

▪FDA review and approval of an NDA to permit commercial marketing of the product for its particular labeled uses in the United States.

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Preclinical and Clinical Studies

The preclinical and clinical testing and approval process can take many years and the actual time required to obtain approval, if any, may vary substantially based upon the type, complexity and novelty of the product or condition being treated.

Preclinical tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product. The conduct of preclinical tests must comply with federal regulations and requirements, including GLP. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls and any available human data or literature to support use of the product in humans. Long-term preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted.

The central focus of an IND submission is on the general investigational plan and the protocol(s) for human studies. An IND must become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to the proposed clinical studies. 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 clinical studies can begin. A separate submission to an existing IND must also be made for each successive clinical trial conducted during product development along with any subsequent changes to the investigational plan.

Clinical studies involve the administration of the investigational new drug 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 participation in each clinical study. Clinical studies are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the efficacy criteria to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND. Additionally, approval must also be obtained from each clinical study site's IRB before a study may be initiated at the site, and the IRB must monitor the study until completed. Each year, sponsors must submit an annual progress report to FDA detailing the status of the clinical trial(s) under an IND, and sponsors must timely report to FDA any serious and unexpected adverse reactions, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol, or any findings from other preclinical or clinical studies that suggest a significant risk in humans exposed to the drug. Sponsors generally must also register and report ongoing clinical studies and clinical study results to public registries, including the website maintained by the U.S. NIH, ClinicalTrials.gov.

For purposes of NDA approval, human clinical trials are typically divided into three or four phases. Although the phases are usually conducted sequentially, they may overlap or be combined.

•Phase 1. The drug is initially introduced into healthy human subjects or into patients with the target disease or condition. These studies are designed to evaluate the safety, dosage tolerance, metabolism and pharmacologic actions of the drug in humans, the side effects associated with increasing doses, and if possible, to gain early evidence on effectiveness.

•Phase 2. The drug is administered to a limited patient population to evaluate dosage tolerance and optimal dosage, identify possible adverse side effects and safety risks and preliminarily evaluate efficacy.

•Phase 3. The drug is administered to an expanded patient population, generally at geographically dispersed clinical study sites to generate enough data to statistically evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the investigational product and to provide an adequate basis for product approval.

•Phase 4. In some cases, the FDA may condition approval of an NDA for a product candidate on the sponsor's agreement to conduct additional clinical studies after approval. In other cases, a sponsor may voluntarily conduct additional clinical studies after approval to gain more information about the drug. Such post-approval studies are typically referred to as Phase 4 clinical studies.

The FDA, the IRB or the clinical study sponsor may suspend or terminate a clinical study at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. We may also suspend or terminate a clinical study based on evolving business objectives and/or competitive climate.

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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 the 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 and for the FDA to provide advice on the next phase of development. Sponsors typically use the meeting at the end of Phase 2 to discuss their Phase 2 clinical results and present their plans for the pivotal Phase 3 clinical trial that they believe will support the approval of the new drug.

Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the characteristics of the product candidate, and must 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 and, among other things, must include methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf life.

Submission of an NDA to the FDA

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development and testing are submitted to the FDA in the form of an NDA requesting approval to market the product for one or more indications. The submission of an NDA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies.

An NDA must include all relevant data available from pertinent preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product's chemistry, manufacturing, controls and proposed labeling, among other things. Data can come from company-sponsored clinical studies intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and effectiveness of the investigational product to the satisfaction of the FDA.

The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency's threshold determination that it is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an application for filing. In this event, the application must be resubmitted with the additional information and is subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. Under the Prescription Drug User Fee Act (PDUFA) the FDA has agreed to certain performance goals in the review of NDAs through a two-tiered classification system, standard review and Priority Review. Priority Review designation is given to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists. According to PDUFA performance goals, the FDA endeavors to review applications subject to standard review within ten to twelve months, whereas the FDA's goal is to review Priority Review applications within six to eight months, depending on whether the drug is a new molecular entity.

The FDA may refer applications for novel drug products or drug products which present difficult questions of safety or efficacy to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions.

Before approving an NDA, the FDA typically will 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 requirements and adequate to assure consistent production of the product within required specifications. Additionally, the FDA will typically inspect one or more clinical sites to assure that relevant study data was obtained in compliance with GCP requirements.

After the FDA evaluates the NDA and conducts inspections of manufacturing facilities, it may issue an approval letter or a complete response letter. A complete response letter indicates that the review cycle of the application is complete and the application is not ready for approval. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA may ultimately decide that an application does not satisfy the regulatory criteria for approval. If, or when, the deficiencies have been addressed to the FDA's satisfaction in a resubmission of the application, the FDA will issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

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As a condition of NDA approval, the FDA may require a Risk Evaluation and Mitigation Strategy (REMS) program to help ensure that the benefits of the drug outweigh its risks. If the FDA determines a REMS program is necessary during review of the application, the drug sponsor must agree to the REMS plan at the time of approval. A REMS program may be required to include various elements, such as a medication guide or patient package insert, a communication plan to educate healthcare providers of the drug's risks, or other elements to assure safe use, such as limitations on who may prescribe or dispense the drug, dispensing only under certain circumstances, special monitoring and the use of patient registries. In addition, all REMS programs must include a timetable to periodically assess the strategy following implementation.

Further, product approval may require substantial post-approval testing and surveillance to monitor the drug's safety and efficacy, and the FDA has the authority to prevent or limit further marketing of a product based on the results of these post-marketing programs. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. Moreover, changes to the conditions established in an approved application, including changes in indications, labeling or manufacturing processes or facilities may require submission and FDA approval of a new NDA or NDA supplement before the changes can be implemented. An NDA supplement for a new indication typically requires clinical data similar to that supporting the original approval, and the FDA uses similar procedures in reviewing supplements as it does in reviewing original applications.

Expedited Development and Review Programs

The FDA offers a number of expedited development and review programs for qualifying product candidates, one or more of which may be available for our current or future products.

New drug products 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. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a Fast Track product has opportunities for frequent interactions with the review team during product development and, once an NDA is submitted, the product may be eligible for Priority Review. A Fast Track product may also be eligible for rolling review, where 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.

A product intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review. A product can receive Breakthrough Therapy designation if 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 beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product, including involvement of senior managers.

After an NDA is submitted for a product, including a product with a Fast Track designation and/or Breakthrough Therapy designation, the NDA may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as Priority Review and accelerated approval. A product is eligible for Priority Review if it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition compared to marketed products. Depending on whether a drug contains a new molecular entity, Priority Review designation means the FDA's goal is to take action on the marketing application within six to eight months of the 60-day filing date, compared with ten to twelve months under standard review.

Additionally, products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA currently requires

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as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant Orphan Drug designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan Drug designation must be requested before submitting an NDA. After the FDA grants Orphan Drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The Orphan Drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process.

If a product with Orphan Drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to Orphan Drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with Orphan Drug exclusivity. Orphan Drug exclusivity does not prevent FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of Orphan Drug designation are tax credits for certain research and a waiver of the application user fee.

A designated Orphan Drug may not receive Orphan Drug exclusivity if it is approved for a use that is broader than the indication for which it received Orphan designation. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Pediatric Use and Exclusivity

Even when not pursuing a pediatric indication, under the Pediatric Research Equity Act an NDA or supplement thereto must contain data that is adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. With the enactment of the Food and Drug Administration Safety and Innovation Act in 2012, sponsors must also submit pediatric trial plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric trials the sponsor plans to conduct, including trial objectives and design, any deferral or waiver requests, and other information required by regulation. The FDA must then review the information submitted, consult with the sponsor, and agree upon a final plan. The FDA or the sponsor may request an amendment to the plan at any time. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Separately, in the event the FDA issues a Written Request for pediatric data relating to a drug product, an NDA sponsor who submits such data may be entitled to pediatric exclusivity. Pediatric exclusivity is another type of non-patent marketing exclusivity which, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing exclusivity.

Post-Approval Requirements

Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to drug listing and registration, recordkeeping, periodic reporting, product sampling and distribution, adverse event reporting and advertising, marketing and promotion. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling. While physicians may prescribe for off-label uses, manufacturers may only promote for the approved indications and in accordance with the provisions of the approved label. However, companies may share truthful and not misleading information that is otherwise consistent with a product's FDA approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

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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 user fee requirements, under which FDA assesses an annual program fee for each product identified in an approved NDA. In addition, quality-control, drug manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced and announced inspections by the FDA and these state agencies, during which the agency inspects manufacturing facilities to assess compliance with cGMPs. 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 of a product if compliance with regulatory requirements 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:

▪restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls;

▪fines, warning or untitled letters or holds on post-approval clinical studies;

▪refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals;

▪product seizure or detention, or refusal of the FDA to permit the import or export of products; or

▪injunctions or the imposition of civil or criminal penalties.

The FDA may also require post-approval studies and clinical trials if the FDA finds that scientific data, including information regarding related drugs, deem it appropriate. The purpose of such studies would be to assess a known serious risk or signals of serious risk related to the drug or to identify an unexpected serious risk when available data indicate the potential for a serious risk. The FDA may also require a labeling change if it becomes aware of new safety information that it believes should be included in the labeling of a drug.

The Hatch-Waxman Amendments

ANDA Approval Process

The Drug Price Competition and Patent Term Restoration Act of 1984, known as the Hatch-Waxman Amendments, established abbreviated FDA approval procedures for drugs that are shown to be equivalent to proprietary drugs previously approved by the FDA through the NDA process. Approval to market and distribute these generic equivalent drugs is obtained by filing an abbreviated new drug application (ANDA) with the FDA. An ANDA is a comprehensive submission that contains (among other things), data and information pertaining to the active pharmaceutical ingredient, drug product formulation, specifications and stability of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures. However, premarket applications for generic drugs are termed "abbreviated" because they generally do not include preclinical and clinical data to demonstrate safety and effectiveness. Instead, a generic applicant must demonstrate that its product is bioequivalent to a referenced proprietary drug. In certain situations, an applicant may obtain ANDA approval of a generic drug with a strength or dosage form that differs from the referenced proprietary drug pursuant to the filing and approval of an ANDA suitability petition. The FDA will approve the generic product as suitable for an ANDA application if it finds that the generic product does not raise new questions of safety and effectiveness as compared to the innovator product. A product is not eligible for ANDA approval if the FDA determines that it is not equivalent to the referenced proprietary drug or is intended for a different use and it is not otherwise subject to an approved suitability petition. However, such a product might be approved under an NDA, with supportive data from clinical trials.

505(b)(2) NDAs

Section 505(b)(2) of the FDCA, enacted as part of the Hatch-Waxman Amendments, permits the filing of an NDA where at least some of the information required for approval comes from clinical trials not conducted by or for

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the applicant and which the applicant has not obtained a right of reference. Section 505(b)(2) can serve as a path to approval for modifications to previously approved drugs, such as new indications, formulations, dosage forms, or other conditions of use. If the 505(b)(2) applicant can establish that reliance on the FDA's previous findings of safety and effectiveness for the approved reference drug is scientifically appropriate, it may eliminate the need to conduct certain preclinical or clinical studies for the new product. The FDA may approve the new product for all, or some, of the label indications for which the reference drug has been approved, as well as for any new indication sought by the 505(b)(2) applicant.

Orange Book Listing

In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to submit certain information to the FDA regarding any patents with claims covering the applicant's product or a method of using the product. Upon approval of the NDA, each of the patents is listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, known as the Orange Book. Any applicant that subsequently files an ANDA or 505(b)(2) application referencing the approved drug must certify to FDA, with respect to each patent listed for the approved drug in the Orange Book: (1) that no patent information was submitted to the FDA; (2) that such patent has expired; (3) the date on which such patent expires; or (4) that such patent is invalid or will not be infringed by the manufacture, use or sale of the drug product for which the application is submitted. This last certification is known as a "paragraph IV certification." For method of use patents, in lieu of submitting a certification, the applicant may elect to submit a "section viii statement" certifying that its proposed label does not contain (or carves out) any language regarding a patented method of use.

If an ANDA or 505(b)(2) applicant does not challenge one or more listed patents through a paragraph IV certification, the FDA will not approve the ANDA or 505(b)(2) application until all the listed patents claiming the reference product have expired.

If an ANDA or 505(b)(2) applicant provides a paragraph IV certification with its application, the applicant must send notice of the paragraph IV certification to the holder of the NDA for the reference product and all patent holders for the patent at issue within 20 days after the ANDA or Section 505(b)(2) application has been accepted for filing by the FDA. The NDA holder and patent owners may then initiate a patent infringement suit against the ANDA or 505(b)(2) applicant. Under the FDCA, the filing of a patent infringement suit within 45 days of the NDA holder's or patent owners' receipt of the notification regarding the paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) application until the earliest to occur of 30 months from the date the paragraph IV notice is received, the expiration of the patent, the settlement of the lawsuit or a court decision that the patent is invalid, unenforceable or not infringed. If the NDA holder or patent owners do not bring a patent infringement suit within the 45-day period, they may later bring a patent infringement suit under traditional patent law, but it will not invoke the 30-month stay of approval.

Separate from applicable patent terms and the 30-month stay of approval for paragraph IV applications, the FDA will also refrain from approving an ANDA or 505(b)(2) application until all applicable non-patent exclusivity for the reference drug has expired.

Non-Patent Exclusivity

NDA holders may be entitled to different periods of non-patent exclusivity, during which the FDA cannot approve an ANDA or 505(b)(2) application that relies on the approved drug. For example, an applicant may obtain five years of non-patent exclusivity upon NDA approval of a new chemical entity (NCE) which is a drug that contains an active moiety that has not been previously approved by the FDA in any other NDA. During the five-year period of NCE exclusivity, the FDA cannot accept any application for a product that contains the same active moiety as the approved NCE; however, the FDA can accept an ANDA or 505(b)(2) application for the same active moiety after a four-year period if such application includes a paragraph IV certification.

In addition, a non-NCE drug may qualify for a three-year period of exclusivity for a change to a previously approved product, such as a new indication or condition of use, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted or sponsored by the applicant. In such case, the FDA is precluded from approving any ANDA or 505(b)(2) application for the protected modification until after the three-year exclusivity period has concluded. However, unlike NCE exclusivity, the FDA can accept an application and being the review process during the exclusivity period.

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Other types of non-patent exclusivity include seven-year Orphan Drug exclusivity and six-month pediatric exclusivity (each discussed above).

International Regulation

In addition to regulations in the United States, we could become subject to a variety of foreign regulations regarding development, approval, commercial sales and distribution of our products if we seek to market our product candidates in other jurisdictions. Whether or not we obtain FDA approval for a product, we must obtain the necessary approvals by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country and can involve additional product testing and additional review periods, and the time may be longer or shorter than that required to obtain FDA approval. The requirements governing, among other things, the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others. If we fail to comply with applicable foreign regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Other Healthcare Laws

In addition to FDA restrictions on the marketing of pharmaceutical products, other foreign, federal and state healthcare regulatory laws restrict business practices in the pharmaceutical industry. These laws include, but are not limited to, federal and state anti-kickback, false claims, data privacy and security, and physician payment and drug pricing transparency laws.

The federal Anti-Kickback Statute prohibits, among other things, any person or entity from knowingly and willfully offering, paying, soliciting, receiving or providing any remuneration, directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any good, facility, item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term "remuneration" has been broadly interpreted to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, formulary managers and beneficiaries on the other hand. Several courts have interpreted the statute's intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. The majority of states also have anti-kickback laws, which establish similar prohibitions, and in some cases may apply to items or services reimbursed by any third-party payor, including commercial insurers.

The federal False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false, fictitious or fraudulent claim for payment to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government. A claim includes "any request or demand" for money or property presented to the U.S. government. Actions under the civil False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. Moreover, a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

The civil monetary penalties statute imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare

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benefits, items or services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, impose privacy, security and breach reporting obligations with respect to individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates and their covered subcontractors that perform services for them that involve individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.

In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians and certain other healthcare providers. The Affordable Care Act, as amended by the Health Care Education and Reconciliation Act (Affordable Care Act), imposed, among other things, new annual reporting requirements through the Physician Payments Sunshine Act for covered manufacturers for certain payments and "transfers of value" provided to physicians (as defined by statute), certain other health care professionals, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. In addition, certain states require implementation of compliance programs and compliance with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, impose restrictions on marketing practices and/or require the tracking and reporting of marketing expenditures and pricing information as well as gifts, compensation and other remuneration or items of value provided to physicians and other healthcare professionals and entities.

Violations of fraud and abuse laws, including state anti-kickback and false claims laws, some of which apply to items or services reimbursed by any third-party payor, including commercial insurers, may be punishable by criminal and civil sanctions, including fines and civil monetary penalties, the possibility of exclusion from federal healthcare programs, including Medicare and Medicaid, disgorgement and corporate integrity agreements, which impose, among other things, rigorous operational and monitoring requirements on companies. Similar sanctions and penalties, as well as imprisonment, also can be imposed upon executive officers and employees of such companies.

Coverage and Reimbursement

Sales of any pharmaceutical product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors. Significant uncertainty exists as to the coverage and reimbursement status of any newly approved product. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a payor-by-payor basis. One third-party payor's decision to cover a particular product does not ensure that other payors will also provide coverage for the product. As a result, the coverage determination process can require manufactures to provide scientific, clinical support, and commercial support for the use of a product to each payor separately. This can be a time-consuming process, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.

In addition, third-party payors are increasingly reducing reimbursements for pharmaceutical products and services. The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Third-party payors are more and more challenging the prices charged, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical products, in addition to questioning 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. 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.

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In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Pharmaceutical products may face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products and may also compete with imported foreign products. Furthermore, there can be no assurance that a product will be considered medically reasonable and necessary for a specific indication or considered cost-effective by third-party payors in foreign or national-level systems. In the event that an adequate level of reimbursement is not established, then even if a product is approved by global regulatory authorities, it may adversely affect the ability of manufacturers to sell such product profitably.

Healthcare Reform

In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system. In March 2010, the Affordable Care Act was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers in the United States. By way of example, the Affordable Care Act 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; 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; creates 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 CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Since its enactment, there have been judicial, executive branch and congressional challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges and amendments to the Affordable Care Act in the future. By way of example, in 2017, Congress enacted the Tax Act, which eliminated the tax-based shared responsibility payment imposed by the Affordable Care Act 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 June 17, 2021. the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Thus, the Affordable Care Act will remain in effect in its current form. Further, prior to the U.S. Supreme Court ruling, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the Affordable Care Act marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the Affordable Care Act. It is possible that the Affordable Care Act will be subject to judicial or congressional challenges in the future. It is also unclear how other efforts to challenge, repeal or replace the Affordable Care Act will impact the Affordable Care Act.

Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers, which will remain in effect through 2031 absent additional congressional action, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022. Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 3% in the final fiscal year of this sequester.

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 legislation designed, among other things, to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products. In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In

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response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue to advance these principles. No legislation or administrative actions have been finalized to implement these principles. In addition, Congress is considering drug pricing as part of other reform initiatives.In addition, 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, mechanisms to encourage importation from other countries and bulk purchasing. Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

Data Privacy and Security

Pharmaceutical manufacturers may be subject to U.S. federal and state and foreign health information privacy, security and data breach notification laws, which may govern the collection, use, disclosure and protection of health-related and other personal information. In the United States, HIPAA imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon "covered entities" (health plans, health care clearinghouses and certain health care providers), and their respective business associates, and their covered subcontractors that create, received, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HIPAA mandates the reporting of certain breaches of health information to HHS, affected individuals and if the breach is large enough, the media. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Even when HIPAA does not apply, according to the Federal Trade Commission or the FTC, failing to take appropriate steps to keep consumers' personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act 15 U.S.C § 45(a). The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards.

In addition, certain state laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. For example, the CCPA became effective on January 1, 2020, which, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Although the law includes limited exceptions, including for "protected health information" maintained by a covered entity or business associate, it may regulate or impact our processing of personal information depending on the context. Further, the CPRA was recently voted into law by California residents. The CPRA significantly amends the CCPA, and imposes additional data protection obligations on covered companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA will go into effect on January 1, 2023, and become enforceable on July 1, 2023.

In Europe, the GDPR went into effect in May 2018, and imposes strict requirements for processing the personal data of data subjects within the European Economic Area and the United Kingdom. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. Relatedly, following the United Kingdom's withdrawal from the European Economic Area and the European Union, and the expiry of the transition period, companies will have to comply with the GDPR and the GDPR as incorporated into United Kingdom national law, the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover. The relationship between the United Kingdom and the European Union in relation to certain aspects of data

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protection law remains unclear, for example around how data can lawfully be transferred between each jurisdiction, which may expose us to further compliance risk.

Human Capital Resources

As of December 31, 2021, we had 71 full-time employees, who provide full time support to us, and 23 consultants who provide part time support to us.As of March 1, 2022, we had 39 full time employees and 14 part time consultants. None of our employees are represented by a labor union or covered by collective bargaining agreements and we consider our employee relations to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.

Segment Information

We have one primary business activity and operate as one reportable segment.

Corporate Information

We were incorporated in the State of Delaware on April 6, 1998. Our corporate operations are based in San Francisco, California, our clinical development and regulatory teams are primarily located in Boston, Massachusetts, and our discovery and research programs are based in Uniondale, New York. Our principal executive offices are located at 51 Charles Lindbergh Boulevard, Uniondale, New York 11553, and our telephone number is (415) 655-4899. Our website address is www.angion.com. The information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference into and does not constitute part of this Annual Report on Form 10-K.

Available Information

We are subject to the information requirements of the Securities Exchange Act of 1934, as amended, and we therefore file periodic reports, proxy statements and other information with the SEC relating to our business, financial statements and other matters. The SEC maintains an Internet site, www.sec.gov, that contains reports, proxy statements and other information regarding issuers such as Angion Biomedica Corp.

For more information about us, including free access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, visit our website, www.angion.com. The information found on or accessible through our website is not incorporated into, and does not form a part of, this Annual Report on Form 10-K.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes, before deciding whether to invest in shares of our common stock. Many of the following risks and uncertainties are, and will be, exacerbated by the coronavirus disease 2019 (COVID-19) pandemic and any worsening of the global business and economic environment as a result. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Financial Position and Need for Additional Capital

We are a clinical-stage biopharmaceutical company with no products approved for sale and we have not generated any product revenue to date, which makes it difficult to assess our future viability.

We are a clinical-stage biopharmaceutical company. Drug development is a highly speculative undertaking and involves a substantial degree of risk. We have not yet submitted any product candidates for approval or received approval of any product candidate by regulatory authorities in any jurisdiction, including the United States Food and Drug Administration (FDA). We do not expect to generate revenue from product sales unless we, or we or our collaborators, obtain approval and commercialize our product candidates, which we do not expect to occur for

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several years, if ever. We expect to continue to incur net losses for the foreseeable future, and we expect our expenses and operating losses to increase substantially as we advance ANG-3070 and our other product candidates through clinical and preclinical development, seek regulatory approval for ANG-3070 or any of our other product candidates, and continue to incur expenses to protect our intellectual property, maintain our general and administrative support functions, including hiring additional personnel, and incur costs associated with operating as a public company.

In addition, while we have a license agreement with Vifor Pharma relating to ANG-3777 that contemplates upfront, regulatory and commercial milestone payments as well as royalties on sales of ANG-3777, we do not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License , which had included a Phase 3 study for CSA-AKI and a Phase 4 confirmatory study in DGF. Thus, it is unlikely we will receive any substantial revenue stream from milestone or royalty payments under the license agreement.

If we are unable to enroll our clinical trials for ANG-3070 or if ANG-3070 or any of our other product candidates fail in ongoing clinical trials or do not gain regulatory approval, we may never generate revenue or become profitable.

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

We have invested and will continue to invest a significant portion of our efforts and financial resources in research and development activities. We are currently in the process of advancing ANG-3070 through a Phase 2 dose-finding clinical trial in 100 patients with Primary Proteinuria Kidney Diseases (PPKDs), specifically FSGS and IgAN patients, in the United States, Georgia, Bulgaria, Lithuania, Spain and Australia, and other product candidates through preclinical and potential clinical development. Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We will require substantial additional future capital to complete clinical development, including additional clinical studies, and seek regulatory approval for ANG-3070 for any indication as well as to conduct the research, clinical and regulatory activities necessary to bring our other product candidates to market. Regulatory authorities in the United States and elsewhere could also require that we perform additional preclinical studies or clinical trials to receive or maintain regulatory approval of our product candidates, including ANG-3070, and our expenses would further increase beyond what we currently expect. Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development of such product candidates as well as the costs of commercializing any of our wholly-owned product candidates and those for which we retain the right to commercialize.

We estimate our current cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements well into 2023. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements. The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

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

▪the outcome of our ongoing and future clinical trials, including our ANG-3070 Phase 2 clinical trial in PPKD;

▪whether we are able to take advantage of any FDA expedited development and approval programs for any of our product candidates;

▪the extent to which COVID-19 may impact our business, including our clinical trials and financial condition;

▪the willingness of the FDA and foreign regulatory authorities to accept the results of our ongoing ANG-3070 Phase 2 clinical trial, as well as our other completed and planned clinical trials and preclinical studies and other work;

▪the number and characteristics of product candidates that we pursue, including our product candidates in preclinical development;

▪the ability of our product candidates to progress through clinical development successfully;

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▪our need to expand our research and development activities, including to conduct additional clinical trials;

▪the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies;

▪our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

▪our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel;

▪the costs associated with being a public company, including our need to implement additional internal systems and infrastructure, including financial and reporting systems;

▪the costs associated with securing and establishing manufacturing capabilities, as well as those associated with packaging, warehousing and distribution; and

▪the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future and the timing and amount of payments thereunder.

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ELTX · 10-K · period ended 2021-12-31

Item 1. Business

Item 1A. Risk Factors

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ELTX · 10-K · period ended 2021-12-31

Item 1. Business

Item 1A. Risk Factors

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