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Elicio Therapeutics, Inc.

Elicio Therapeutics, Inc.ELTX财报

Nasdaq · 医疗保健 · 药物制剂

Elicio Therapeutics, Inc. is a clinical-stage biotechnology company focused on developing innovative cancer immunotherapies leveraging its proprietary amphiphile technology platform. Its pipeline includes targeted cancer vaccines and immunomodulatory candidates addressing both solid tumors and hematological malignancies, serving global oncology patient communities.

What changed in Elicio Therapeutics, Inc.'s 10-K — 2021 vs 2022

Top changes in Elicio Therapeutics, Inc.'s 2022 10-K

346 paragraphs added · 851 removed · 218 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

52 edited+27 added−305 removed32 unchanged
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.
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 provided 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.
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 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 (CSA-AKI) and a Phase 4 confirmatory study in donor kidney transplant patients who were at risk for developing delayed graft function (DGF), given we do not believe the earlier Phase 2 and Phase 3 clinical trial results in the respective indications support regulatory approval.
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.
Under this agreement we obtained 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.
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 issued claims in the United States to solid forms of ANG-3777 which expires in 2040, and pending applications in Australia, Brazil, Canada, China, Israel, Japan, Korea, Mexico, New Zealand, Singapore, and the United States. Patents issuing from these applications will expire in 2040.
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.
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.
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.
According to the National Institutes of Health (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.
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.
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.
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.
Sublicensees 10 Table of Contents 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.
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.
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 NDA or a BLA) under provisions of the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
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.
We and Vifor continue to discuss the analyses of the results of the clinical trials announced in the fourth quarter of 2021 and the future of the collaboration.
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.
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 7 Table of Contents arrangements with large, established companies.
Additionally, we cannot be certain that we will always be able to establish sufficient 19 Table of Contents ownership rights to ensure complete or necessary control over our intellectual property rights as required in order to obtain, maintain, and/or enforce them.
Additionally, we cannot be certain that we will always be able to establish sufficient ownership rights to ensure complete or necessary control over our intellectual property rights as required in order to obtain, maintain, and/or enforce them.
Multiple dual ROCK1/2 inhibitors have received regulatory approval, including ripasudil (Glanatec®), which is approved in Japan for treating glaucoma and ocular hypertension, fasudil (Eril TM ), which is approved in Japan and 16 Table of Contents China for treating cerebral vasospasm in hemorrhagic stroke, and netarsudil (Rhopressa®), which is approved in the United States for the treatment of glaucoma.
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 China for treating cerebral vasospasm in hemorrhagic stroke, and netarsudil (Rhopressa®), which is approved in the United States for the treatment of glaucoma.
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.
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. We hold global rights to our ROCK2 inhibitor program.
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.
As of March 15, 2023, 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.
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.
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 filing.
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.
Department of Defense grant to be complete. Collaboration 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.
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.
CYP11B2 Inhibitor Program As of March 17, 2023, the patent portfolio for the CYP11B2 inhibitor program includes pending applications in the United States, Europe and Israel, each of which would have presumed twenty-year terms expiring in 2038.
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.
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.
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.
CYP11B2 We created a selection of inhibitor molecules with high specificity to CYP11B2 (aldosterone synthase) relative to CYP11B1, which we were investigating for the purpose of targeting aldosterone-related diseases including resistant hypertension, congestive heart failure, renal fibrosis, and primary hyperaldosteronism.
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.
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.
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.
The presumptive twenty-year expiration of any national applications arising therefrom is 2042. 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.
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.
As of March 15, 2023, 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, India and Japan. Each of the patents expire in 2035.
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. 22 Table of Contents 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.
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. 11 Table of Contents 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.
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.
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.
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.
We also owned issued patents in Australia, Canada, China, Europe, Hong Kong, Israel, India, and Japan. 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.
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. 20 Table of Contents 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.
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. These patents 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 mid-2023.
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.
The Ohr License represents a related-party transaction, as discussed in our financial statements included in Item 8 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.
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 17 Table of Contents 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.
Currently, we 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 manufacture all clinical trial supplies of ANG-3070.
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.
The first family includes granted patents in the United States and India, and pending applications in the United States, Australia, Canada, China, Europe, Hong Kong, Israel, and Japan, each of which would have presumed twenty-year terms expiring in 2038.
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.
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.
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.
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. 8 Table of Contents Our ANG-3070 Tyrosine Kinase Inhibitor Program As of March 17, 2023, compound, pharmaceutical composition and methods of use claims to our kinase inhibitors are covered in patents issued in the United States.
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.
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. We have determined not to proceed with this program.
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.
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. Human Capital Resources As of December 31, 2022, we have three full-time employees and nine part-time consultants.
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.
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.
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.
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. 9 Table of Contents 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 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.
ANG-3777 In 2022, we completed preclinical work and the process of closing out analyses of data from the 2021 clinical trial readouts of ANG-3777, that was formerly our lead product candidate until December 2021. We have shared these data with our license partner Vifor International, Ltd, (Vifor Pharma) and conversations continue on next steps for the program, if any.
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.
The ROCK2-selective inhibitor belumosudil has been approved by the United States Food and Drug Administration (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.
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.
Furthermore, in a 6 Table of Contents 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.
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.
The disease is of unknown cause and represents an important area of unmet medical need. 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.
Our goal is to transform the treatment paradigm for patients 8 Table of Contents 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.
Our goal was 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.
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.
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. As of March 17, 2023, we had filed applications directed to the use of ANG-3070 in the treatment of irritable bowel disease (IBD) in Australia, Canada, China, Europe, Israel, Japan, and the United States.
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.
ROCK2, CYP11B2 and CYP26 During 2022, we also conducted activities in our ROCK2, CYP11B2 and CYP26 preclinical programs. ROCK2 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.
However, there is no guarantee ANG-3070 will be able to achieve these goals or, if it does, generate comparable revenues.
However, there is no guarantee ANG-3070 will be able to achieve these goals or, if it does, generate comparable revenues. The next steps for the ANG-3070 program would be additional preclinical and/or clinical work to confirm target engagement and dose levels in patients with IPF.
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.
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.
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.
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. On March 21, 2022, we provided written notice to UM of our intention to terminate the subcontractor agreement as we believe the work under the related U.S.
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.
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 As of March 17, 2023, the patent portfolio for the ROCK2 inhibitor program consists of three composition of matter patents.
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.
As of March 17, 2023, we have filed applications in the United States and Europe directed to the use of ANG-3777 in the treatment of delayed graft function. Patents issuing from these applications will expire in 2040. As of March 17, 2023, we have filed a PCT application directed to methods of manufacturing ANG-3777 drug product.
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.
Item 1. Business Overview We had been a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel small molecule therapeutics to address chronic and progressive fibrotic diseases, prior to our 2022 Strategic Realignment.
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.
Inhibition of ROCK isoforms ROCK1 and ROCK2 have shown promise in fibrosis and cardiovascular remodeling diseases. 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.
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 .
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 product candidates with enhanced tolerability potentially supporting long-term systemic use.
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 would also face competition for our ROCK2 program from Kadmon Holdings, Inc.'s belumosudil (KD025) and RXC007/RXC008 from Redx Pharma as well as other companies developing ROCK inhibitors. Intellectual Property The proprietary nature of, and protection for, our product candidates, processes and know-how are important to our business.
Removed
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.
Added
Our product candidates and programs included ANG-3070, a highly selective oral tyrosine kinase receptor inhibitor (TKI) in development as a treatment for fibrotic diseases, a ROCK2 preclinical program targeted towards the treatment of fibrotic diseases, a CYP11B2 preclinical program targeted towards diseases related to aldosterone synthase dysregulation, and a CYP26 (retinoic acid metabolism) inhibitor program targeted towards a number of indications, including cancer, and ANG-3777, a hepatocyte growth factor (HGF) mimetic.
Removed
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.
Added
If we do not complete the merger transaction with Elicio Therapeutices, Inc. (Elicio) , we expect to move forward with developing ANG-3070 and conducting further preclinical studies for our ROCK2 program.
Removed
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.
Added
On January 17, 2023, we entered into a definitive merger agreement with Elicio under which Elicio will merge with a wholly-owned subsidiary of Angion in an all-stock transaction (the “Merger”).
Removed
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.
Added
Upon completion of the Merger, the combined company will focus on advancing Elicio’s proprietary lymph node AMP technology to develop immunotherapies, with a focus on ELI-002, a therapeutic cancer vaccine targeting mKRAS-driven tumors.
Removed
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.
Added
Our 2022 Strategic Realignment was announced following our June 2022 termination of our Phase 2 “JUNIPER” dose-finding trial for ANG-3070 in patients with primary proteinuric kidney diseases, specifically focal segmental glomerulorsclerosis (FSGS) and immunoglobulin A nephropathy (IgAN).
Removed
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.
Added
The JUNIPER trial was terminated in the interests of patient safety based upon a reassessment of the risk/benefit profile of ANG-3070 in patients with established serious kidney disease.
Removed
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.
Added
We completed the data collection work necessary related to the JUNIPER trial to ascertain whether the drug had any effect, positive or negative, in patients with fibrotic kidney diseases and determined there was no economically-viable path forward for ANG-3070 in primary proteinuric kidney diseases.
Removed
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.
Added
ANG-3070 Prior to the termination of the Phase 2 study, we had been focused on developing ANG-3070 in for fibrotic diseases in the kidney and lung. We continue to believe that, notwithstanding the termination of the ANG-3070 program in kidney indication, ANG-3070 could be a viable development candidate in lung indications such as idiopathic pulmonary fibrosis (IPF).
Removed
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.
Added
Patient drop-out rates for both drugs are substantial, with 43.8% of patients on nintedanib and 51.5% of patients on pirfenidone 5 Table of Contents dropping out after 12 months. Neither therapy demonstrated an impact on patient survival in the clinical trials forming the basis for their approval.
Removed
The potential advantages for ANG-3070 include: • Significant Addressable Kidney Fibrosis Markets .
Added
In anticipation of the announced Merger, however, we have suspended the advancement of ANG-3070 in preclinical or clinical studies. Absent completion of the transaction with Elicio, we could move forward with this program. We hold global rights to the ANG-3070 program.
Removed
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. 6 Table of Contents • Promising Drug Exposure Profile .
Added
Over the past year, we conducted additional chemistry work resulting in additional libraries of ROCK(Rho-associated coiled-coil forming protein kinase)-targeting compounds with differing ratios of ROCK2 and ROCK1 selectivity ranging from 300-fold to 1,600-fold selectivity for ROCK2 versus ROCK1 with promising bioavailability. ROCK signal transduction pathways are implicated in the development of fibrosis.
Removed
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 .
Added
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.
Removed
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.
Added
Currently, we are completing certain discovery and preclinical activities in our ROCK2 program, and absent completion of the announced Merger, we could move forward with this program, which is also currently available for out-licensing.
Removed
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.
Added
Given the early stage of the program, prior to a lead candidate being selected, investors should not expect any significant funds would be generated from a transaction, or even such a transaction occurring.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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We are completely dependent our third-party vendors for compliance with the current Good Manufacturing Practice requirements (cGMPs). requirements of United States and non-United States regulators for the manufacture of our active ingredients, drug products, and finished products.
We are completely dependent third-party vendors for compliance with the current Good Manufacturing Practice requirements (cGMPs), and the requirements of United States and non-United States regulators for the manufacture of our active ingredients, drug products, and finished products.
If we choose to go to court to stop another party from using the inventions claimed in any patents we obtain, that individual or company has the right to ask the court to rule that such patents are invalid or should not be enforced against that third party.
If we choose to go to court to stop another party from using the inventions claimed in any patents we obtain, that individual or company has the right to ask the court to rule such patents are invalid or should not be enforced against that third party.
We are an "emerging growth company," as defined in Jumpstart Our Business Act of 2012, (JOBS Act), and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining stockholder approval of any golden parachute payments not previously approved.
We are an "emerging growth company," as defined in Jumpstart Our Business Act of 2012, (JOBS Act), and we intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining stockholder approval of any golden parachute payments not previously approved.
The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our United States patent position with respect to such inventions, and granting such position to the third party, so that we may need to seek a license from such third party to continue our use of the technologies, which license might not be available, or might impose significant costs.
The costs of these proceedings could be substantial, and it is possible such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our United States patent position with respect to such inventions, and granting such position to the third party, so we may need to seek a license from such third party to continue our use of the technologies, which license might not be available, or might impose significant costs.
In addition, we may be subject to claims that we are infringing other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that our employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
In addition, we may be subject to claims we are infringing other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent our employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
If any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our technology could be adversely affected. It is possible that others have filed, and in the future may file, patent applications covering products and technologies that are similar, identical or competitive to ours, or that are otherwise important to our business.
If any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our technology could be adversely affected. It is possible others have filed, and in the future may file, patent applications covering products and technologies similar, identical or competitive to ours, or are otherwise important to our business.
Our current dependence on a single supplier for our drug substance and the challenges we may face in obtaining adequate supply of drug substance involves several risks, including limited control over pricing, availability, quality and delivery schedules, and such risks may be heightened as a result of the COVID-19 pandemic.
Our dependence on a single supplier for our drug substance and the challenges we may face in obtaining adequate supply of drug substance involves several risks, including limited control over pricing, availability, quality and delivery schedules, and such risks may be heightened as a result of the COVID-19 pandemic.
Our amended and restated certificate of incorporation and amended and restated bylaws also provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.
Our amended and restated certificate of incorporation and amended and restated bylaws also provide the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.
While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive-forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.
While the Delaware courts have determined such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive-forum provisions, and there can be no assurance such provisions will be enforced by a court in those other jurisdictions.
Under the terms of the government grant funding we have received, the government may compel us to license to a third party, or suspend, terminate or withhold grant funding. A significant amount of our discovery and initial clinical research has been funded principally by United States government grants and contracts.
Under the terms of the government grant funding we have received, the government may compel us to license to a third party, or suspend, terminate or withhold grant funding. A significant amount of our discovery and initial clinical research we have conducted has been funded principally by United States government grants and contracts.
In addition, the United States Supreme Court has recently modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of challenge of any patents we obtain or license.
In addition, the United States Supreme Court has recently modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood we will be able to obtain patents and increase the likelihood of challenge of any patents we obtain or license.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials to those of other public companies more difficult.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards applicable to public companies, which may make comparison of our financials to those of other public companies more difficult.
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.
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 our 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 cannot be certain that any patent filings owned by a third party will not have priority over patent applications filed or in-licensed by us, or that we or our licensors will not be involved in interference, opposition or invalidity proceedings before United States or foreign patent offices.
We cannot be certain any patent filings owned by a third party will not have priority over patent applications filed or in-licensed by us, or we or our licensors will not be involved in interference, opposition or invalidity proceedings before United States or foreign patent offices.
We cannot guarantee that our products or product candidates, or their manufacture or use, will not infringe third-party patents. Furthermore, a third party may claim we or our manufacturing or commercialization collaborators are using inventions covered by the third party's patent rights.
We cannot guarantee our products or product candidates, or their manufacture or use, will not infringe third-party patents. Furthermore, a third party may claim we or our manufacturing or commercialization collaborators are using inventions covered by the third party's patent rights.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible a court could find these types of provisions to be inapplicable or unenforceable.
The development of a product candidate and issues relating to its approval and marketing are subject to extensive regulation by regulatory authorities, including the FDA in the United States and other regulatory authorities in other foreign countries, with regulations differing from country to country.
The development of a product candidate and issues relating to approval and marketing are subject to extensive regulation by regulatory authorities, including the FDA in the United States and other regulatory authorities in other foreign countries, with regulations differing from country to country.
There is also a risk that, even if the validity of such patents is upheld, the court will refuse to stop the other party on the grounds that such other party's activities do not infringe our patents.
There is also a risk, even if the validity of such patents is upheld, the court will refuse to stop the other party on the grounds such other party's activities do not infringe our patents.
In addition, there is a risk the court will decide that such patents are not valid and we do not have the right to stop the other party from using the inventions.
In addition, there is a risk the court will decide such patents are not valid and we do not have the right to stop the other party from using the inventions.
If a security breach, cyber-attack, or other disruption is the result of state-sponsored activities, it may be considered an "act-of-war", potentially making us ineligible for reimbursement under our insurance policies covering such attacks. Any one of these events could cause our business to be materially harmed and our results of operations would be adversely impacted.
If a security breach, cyber-attack, or other disruption is the result of state-sponsored activities, it may be considered an "act-of-war", potentially making us ineligible for reimbursement under our insurance policies covering such attacks. Any one of these events could cause our business to be materially harmed and our results of operations would be adversely impacted. Item 1B.
As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing, and commercializing drugs for kidney, heart, liver, lung and other diseases we are targeting before we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.
As a result of all of these factors, any of these competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing, and commercializing drugs for kidney, heart, liver, lung and other diseases we are targeting before we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.
Any security breach of other incident, whether real or perceived, would cause us to lose product sales, and suffer reputational damage and loss of customer confidence.
Any security breach or other incident, whether real or perceived, would cause us to lose product sales, if any, and suffer reputational damage and loss of customer confidence.
Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection of our current and future product candidates, and their methods of manufacture and use.
Our success will depend in part on obtaining and maintaining patent protection and trade secret protection of our current and future product candidates, and their methods of manufacture and use.
We may not prevail in all legal or other proceedings that we may initiate and, if we were to prevail, the damages or other remedies awarded, if any, may not be commercially meaningful.
We may not prevail in all legal or other proceedings we may initiate and, if we were to prevail, the damages or other remedies awarded, if any, may not be commercially meaningful.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, and/or could allow third parties to commercialize our technology or products and compete directly with us, without payment to us. Furthermore, third party filings may issue as patents that are infringed by our manufacture or commercialization of our products.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, and/or could allow third parties to commercialize our technology or products and compete directly with us, without payment to us. Furthermore, third-party filings may issue as patents infringed by our manufacture or commercialization of our products.
Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" 57 Table of Contents which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply for a period of time with the auditor attestation requirements of Section 404, and reduced disclosure obligations regarding executive compensation in this report and our periodic reports and proxy statements.
Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply for a period of time with the auditor attestation requirements of Section 404, and reduced disclosure obligations regarding executive compensation in this report and our periodic reports and proxy statements.
A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in Phase 3 registration trials, even after seeing promising results in earlier clinical trials.
A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in Phase 3 registration trials, even after seeing promising results in earlier pre-clinical studies.
The extent to which COVID-19 may impact our business, including our clinical trials, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the geographic spread of the disease and its variants, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
The extent to which COVID-19 may impact our business and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the geographic spread of the disease and its variants, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
If the patent applications we hold or have in-licensed with respect to present or future product candidates fail to issue, if their breadth and/or strength of protection is limited or challenged, or if they fail to provide meaningful exclusivity for present or future product candidates, it could dissuade companies from collaborating with us to 52 Table of Contents develop future candidates and threaten our ability to commercialize future commercial products.
If the patent applications we hold or have in-licensed with respect to present or future product candidates fail to issue, if their breadth and/or strength of protection is limited or challenged, or if they fail to provide meaningful exclusivity for present or future product candidates, it could dissuade companies from collaborating with us to develop future candidates and threaten our ability to commercialize future commercial products.
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 will 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.
If the breadth or strength of protection provided by our patents and patent applications is threatened, or if we are perceived or found to infringe intellectual property rights of others, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates, and could impede or preclude our ability to commercialize our products.
If the breadth or strength of protection provided by our patents and patent applications is threatened, or if we are perceived or found to infringe intellectual property 20 Table of Contents rights of others, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates, and could impede or preclude our ability to commercialize our products.
We rely on single-source third party contract manufacturing organizations to manufacture and supply our product candidates, and if the FDA or foreign regulatory authorities do not approve these manufacturing facilities or if these organizations fail to perform, our ability to conduct clinical trials and obtain regulatory approval our product candidates may be harmed.
We have relied, and may continue to rely, on single-source third party contract manufacturing organizations to manufacture and supply our product candidates, and if the FDA or foreign regulatory authorities do not approve these manufacturing facilities or if these organizations fail to perform, our ability to conduct clinical trials and obtain regulatory approval our product candidates may be harmed.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company or smaller reporting company. We have completed and may in the future complete related party transactions that were not and may not be conducted on an arm's length basis.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company or smaller reporting company. 23 Table of Contents We have completed and may in the future complete related party transactions that were not and may not be conducted on an arm's length basis.
The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States, and we may encounter significant problems in securing and defending our intellectual property rights outside the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain countries.
The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States, and we may encounter significant problems in securing and defending our intellectual property rights outside the United States. 22 Table of Contents Many companies have encountered significant problems in protecting and defending intellectual property rights in certain countries.
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.
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 16 Table of Contents regulatory approval and, without regulatory approval, we and our collaborators will not be able to market our product candidates.
Success in preclinical studies and early clinical trials does not ensure subsequent clinical trials will generate the same or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate.
Success in preclinical studies and early clinical trials does not ensure subsequent clinical trials 17 Table of Contents will generate the same or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate.
For a description of our capital stock, see "Description of Capital Stock." Our amended and restated certificate of incorporation and amended and restated bylaws provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated certificate of incorporation and amended and restated bylaws provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
If we are unable to obtain approval from regulatory authorities for ANG-3070 or any of our other product candidates, we may not be able to generate sufficient revenue to become profitable or to continue our operations.
If we are unable to obtain approval from regulatory authorities for any of our product candidates, we may not be able to generate sufficient revenue to become profitable or to continue our operations.
Delays or difficulties in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for ANG-3070 and our other 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 our product candidates.
However, despite these measures, and due to the ever changing information cyber-threat landscape, we cannot guarantee that these measures will be adequate to detect, prevent or mitigate security breaches and other incidents and we may be subject to data breaches through cyber-attacks, malicious code (such as viruses and worms), phishing attacks, social engineering schemes, and insider theft or misuse.
However, despite these measures, and due to the ever changing information cyber-threat landscape, we cannot guarantee these measures will be adequate to detect, 25 Table of Contents prevent or mitigate security breaches and other incidents and we may be subject to data breaches through cyber-attacks, malicious code (such as viruses and worms), phishing attacks, social engineering schemes, and insider theft or misuse.
These provisions include the following: ▪ a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; ▪ no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ▪ the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; ▪ the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; ▪ the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; ▪ the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; ▪ a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; ▪ the requirement that a special meeting of stockholders may be called only by our chief executive officer or president or chairperson of the board of directors or by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and ▪ advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of directors or otherwise attempting to obtain control of us. 58 Table of Contents We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law.
These provisions include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by our chief executive officer or president or chairperson of the board of directors or by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of directors or otherwise attempting to obtain control of us.
As COVID-19 continues to persist around the globe, we may continue to experience disruptions that could severely impact our business and clinical trials, including: ▪ delays or difficulties in enrolling patients in our clinical trials, including our ANG-3070 Phase 2 study in PPKD with clinical sites in Eastern Europe, namely Georgia, Lithuania and Bulgaria; ▪ delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ▪ diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ▪ interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; ▪ risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; ▪ limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; 35 Table of Contents ▪ delays in receiving authorizations from local regulatory authorities to initiate our planned clinical trials; ▪ delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; ▪ interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials; ▪ changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; ▪ interruptions or delays in preclinical studies due to restricted or limited operations at our research and development laboratory facilities; ▪ delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
As COVID-19 continues to persist around the globe, to the extent we resume clinical trials or commence new clinical trials, we may experience disruptions that could severely impact our business and clinical trials, including: ▪ delays or difficulties in enrolling patients in our clinical trials; ▪ delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ▪ diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ▪ interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; ▪ risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; ▪ limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; ▪ delays in receiving authorizations from local regulatory authorities to initiate our planned clinical trials; ▪ delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; ▪ interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials; ▪ changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; ▪ interruptions or delays in preclinical studies due to restricted or limited operations at our research and development laboratory facilities; ▪ delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and refusal of the FDA to accept data from clinical trials in affected geographies outside the United States. ▪ refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
For example, in the fourth quarter of 2021, we disclosed the results of the ANG-3777 Phase 3 clinical trial for delayed graft function (DGF) and AKI associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI), neither of which met their primary endpoints despite the existence of encouraging pre-clinical and clinical data for ANG-3777 established prior to initiating such studies.
For example, in the fourth quarter of 2021, we disclosed the results of the ANG-3777 Phase 3 clinical trial for DGF and AKI associated with cardiac surgery involving CSA-AKI, neither of which met their primary endpoints despite the existence of encouraging pre-clinical and clinical data for ANG-3777 established prior to initiating such studies.
The results of our clinical trials of our product candidates may show that such product candidates led to patient safety concerns or undesirable or unacceptable side effects, creating risk to the patient which is deemed to outweigh the potential benefits of treatment to that patient.
The results of any clinical trials of our product candidates we may resume or commence may show such product candidates led to patient safety concerns or undesirable or unacceptable side effects, creating risk to the patient which is deemed to outweigh the potential benefits of treatment to that patient.
We cannot predict whether our ongoing or future clinical trials of our product candidates will be successful, or whether regulators will agree with our conclusions regarding the preclinical studies and clinical trials we have conducted to date or that we conduct in the future.
If we resume clinical trials, we cannot predict whether the clinical trials of our product candidates will be successful, or whether regulators will agree with our conclusions regarding the preclinical studies and clinical trials we have conducted to date or we conduct in the future.
Although, to our knowledge, the U.S. government has never forced a grantee to license a third party or taken title and granted a license itself, 50 Table of Contents these march-in rights are available to the government, and we cannot assure you that the government will not exercise such rights in the future.
Although, to our knowledge, the U.S. government has never forced a grantee to license a third party or taken title and granted a license itself, these march-in rights are available to the government, and we cannot assure you the government will not exercise such rights in the future.
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.
Regulatory authorities in the United States and elsewhere could also require us to perform additional preclinical studies or clinical trials to receive or maintain regulatory approval of our product candidates, and our expenses would further increase beyond what we currently expect.
Other countries have similar laws that permit secrecy of patent applications and may be entitled to priority over our applications in such jurisdictions.
Other countries have similar laws permitting secrecy of patent applications and may be entitled to priority over our applications in such jurisdictions.
We cannot be certain that our drug substance supplier will continue to provide us with sufficient quantities of drug substance, or that our manufacturers will be able to produce sufficient quantities of drug product incorporating such drug substance, to satisfy our anticipated specifications and quality requirements, or that such quantities can be obtained at pricing necessary to sustain acceptable pharmaceutical margins for any of our product candidates, if approved.
To the extent we resume or commence clinical trials of our product candidates, we cannot be certain our drug substance supplier will continue to provide us with sufficient quantities of drug substance, or our manufacturers will be able to produce sufficient quantities of drug product incorporating such drug substance, to satisfy our anticipated specifications and quality requirements, or such quantities can be obtained at pricing necessary to sustain acceptable pharmaceutical margins for any of our product candidates, if approved.
Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.
Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of our capital 24 Table of Contents stock unless the holder has held the stock for three years or, among other exceptions, our Board has approved the transaction.
The trading price of our common stock could be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
The trading price of our common stock could be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include those discussed above.
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 33 Table of Contents several years, if ever.
We do not expect to generate revenue from product sales unless we, or we or our collaborators, resume clinical development of our product candidates and obtain approval and commercialize our product candidates, which we do not expect to occur for several years, if ever.
We are increasingly dependent on our information technology systems and infrastructure for our business. We, our collaborators and our service providers collect, store, and transmit sensitive information including intellectual property, proprietary business information, clinical trial data and personal information in connection with our business operations. The secure maintenance of this information is critical to our operations and business strategy.
We, our collaborators and our service providers collect, store, and transmit sensitive information including intellectual property, proprietary business information, clinical trial data and personal information in connection with our business operations. The secure maintenance of this information is critical to our operations and business strategy.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Item 1B. Unresolved Staff Comments None.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property we develop or license.
We do not own facilities for clinical and commercial manufacturing of our product candidates, including ANG-3070, and we rely upon third-party contract manufacturing organizations to manufacture and supply product candidates for our clinical trials and we will rely in such manufacturers to meet commercial demand.
We do not own facilities for clinical and commercial manufacturing of our product candidates, and to the extent we resume or commence clinical trials of any of our product candidates, we will rely upon third-party contract manufacturing organizations to manufacture and supply product candidates for our clinical trials and we will rely in such manufacturers to meet commercial demand.
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.
We expect to continue to incur net losses for the foreseeable future to the extent we advance our product candidates through preclinical and clinical and development, and as we continue to incur expenses to protect our intellectual property, maintain our general and administrative support functions, and incur costs associated with operating as a public company.
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.
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 trials, and seek regulatory approval to bring our product candidates to market.
Furthermore, if we are required to conduct additional clinical trials or other preclinical studies of our product candidates beyond those contemplated, our ability to obtain or maintain regulatory approval of these product candidates and generate revenue from their sales would be similarly harmed . 37 Table of Contents Clinical failure can occur at any stage of clinical development, and the results of earlier clinical trials are not necessarily predictive of future results.
Furthermore, if we are required to conduct additional clinical trials or other preclinical studies of our product candidates beyond those contemplated, our ability to obtain or maintain regulatory approval of these product candidates and generate revenue from their sales would be similarly harmed .
Our ability to stop third parties from making, using, selling, offering to sell or importing our product candidates is dependent upon the extent to which we have rights under valid and enforceable patents and/or trade secrets that cover these 51 Table of Contents activities.
Our ability to stop third parties from making, using, selling, offering to sell or importing our product candidates is dependent upon the extent to which we have rights under valid and enforceable patents and/or trade secrets that cover these activities. The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions.
There is a risk a court would decide that we or our commercialization collaborators are infringing the third party's intellectual property rights and would order us or our collaborators to stop relevant activities.
There is a risk a court would decide we or our commercialization collaborators are infringing the third party's intellectual property rights and would order us or our collaborators to stop relevant activities. In that event, we or our commercialization collaborators may not have a viable way to avoid the infringement and may need to halt commercialization of the relevant product.
We may be unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the development and potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.
Any performance failure on the part of our suppliers could delay the development and potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.
If ANG-3070 or our other product candidates are the subject of clinical trial failures or are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for them and our business would be harmed.
If we resume or commence clinical trials, the product candidates in those clinical trials may be the subject of clinical trial failures or found to be unsafe or lack efficacy, and if that were to occur we would not be able to obtain regulatory approval for them and our business would be harmed.
Such monitoring can be less reliable and creates additional exposure to data privacy and cybersecurity issues. Additionally, the facilities at which any of our product candidates are manufactured must be the subject of a satisfactory inspection before the FDA or the regulators in other jurisdictions approve the product candidate manufactured at that facility.
Additionally, the facilities at which any of our product candidates are manufactured must be the subject of a satisfactory inspection before the FDA or the regulators in other jurisdictions approve the product candidate manufactured at that facility.
We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
Any such outcome could have a materially adverse effect on our business. We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
The use of our product candidates in clinical trials and the sale of any products for which we may obtain marketing approval expose us to the risk of product liability claims. Product liability claims may be brought against us or our collaborators by participants enrolled in our clinical trials, patients, healthcare providers, or others using, administering, or selling our products.
The use of our product candidates in clinical trials and the sale of any products for which we may obtain marketing approval expose us to the risk of product liability claims.
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.
Risks Relating to Our Financial Position and Need for Additional Capital We have temporarily suspended our clinical programs and we have no products approved for sale, which makes it difficult to assess our future viability.
Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds potentially making the product candidates we develop obsolete.
These companies also have significantly greater research, sales, and marketing capabilities and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds potentially making the product candidates we develop obsolete.
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent changes in control or changes in our management without the consent of our board of directors.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent changes in control or changes in our management without the consent of our board of directors.
In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
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 Merger with Elicio If the conditions to the closing of our pending Merger with Elicio are not met, the Merger may not occur.
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.
If we are unable to enroll clinical trials for any of our product candidates, or we fail in clinical trials or do not gain regulatory approval, we may never generate revenue or become profitable.
If this were to occur with respect to any of our product candidates after approval, our business could be materially harmed. 44 Table of Contents 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 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. 18 Table of Contents Even if we pursue and receive regulatory approval of any product candidate, it is uncertain whether we will be able to successfully commercialize such product.
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 have not yet submitted any product candidates for approval or received approval of any product candidate by regulatory authorities in any jurisdiction, including the FDA.
We currently have no products approved for sale, and we cannot guarantee we will ever have approved products that we or our collaborators can market and sell.
We currently have suspended our clinical programs, only have a small number of pre-clinical programs, and have no products approved for sale, and even if we resume clinical trials we cannot guarantee we will ever have approved products we or our collaborators can market and sell.
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.
To achieve our goals we will require substantial additional funding, 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 operations We have invested and, to the extent we resume clinical development and clinical trials of our product candidates following our 2022 Strategic Realignment process, will continue to invest a significant portion of our efforts and financial resources in research and development activities.
The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent or other intellectual property (e.g., trade secret, trademark, etc.) infringement, we could incur significant costs, and delays in our product development or commercialization.
If we are sued for patent or other intellectual property (e.g., trade secret, trademark, etc.) infringement, we could incur significant costs, and delays in our product development or commercialization. Our competitors may have filed, and may in the future file, patent applications covering technology like ours.
Changes in either the patent laws or interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property.
No consistent policy regarding the breadth of claims allowed in pharmaceutical patents has emerged to date in the United States or in many jurisdictions outside of the United States. Changes in either the patent laws or interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property.
Even if we receive regulatory approval of any product candidate, including ANG-3070, it is uncertain whether we will be able to successfully commercialize such product. Our marketing of any approved product will be limited to the product’s approved use and potentially subject to other limitations as set forth in its approved prescribing information and package insert.
Our marketing of any approved product will be limited to the product’s approved use and potentially subject to other limitations as set forth in its approved prescribing information and package insert. Accordingly, we cannot ensure any of our future approved products will be successfully developed, approved or commercialized.
In that event, we or our commercialization collaborators may not have a viable way to avoid the infringement and may need to halt commercialization of the relevant product. In addition, there is a risk a court will order us or our collaborators to pay the other party damages for having infringed the other party's intellectual property rights.
In addition, there is a risk a court will order us or our collaborators to pay the other party damages for having infringed the other party's intellectual property rights. In the future, we may agree to indemnify our commercial collaborators against certain intellectual property infringement claims brought by third parties.
In the future, we may agree to indemnify our commercial collaborators against certain intellectual property infringement claims brought by third parties. The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use.
The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not 21 Table of Contents always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
In addition, any supply interruption in drug substance or drug product could materially harm our ability to complete our other development programs or satisfy commercial demand, if approved, until a new source of supply, if any, could be identified and qualified.
Any supply interruption in drug substance or drug product could materially harm our ability to complete our development program for such indications, until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Our corporate operations are based in San Francisco, California, our clinical and regulatory operations are based in Newton, Massachusetts, and our discovery and research programs are based in Uniondale, New York. We currently occupy 100 square feet of temporary corporate office space in San Francisco under a bi-monthly lease.
Item 2. Properties Prior to March 2023, our corporate headquarters were located in Uniondale, New York. In March 2023, we surrendered our lease of that property and moved our headquarters to Newton, Massachusetts, where we currently lease 6,157 square feet of clinical development and operations space under a lease that expires June 2024.
Removed
We also currently lease 6,157 square feet of clinical and regulatory space in Newton, Massachusetts under a lease that expires in June 2024 and 43,000 square feet of research and discovery space in Uniondale, New York under a lease that expires in June 2026 from NovaPark LLC, a related party. See "Certain Relationships and Related Party Transactions".
Added
See Note 15 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Removed
In addition to these facilities, we rent approximately 2,105 square feet of office space in Fort Lee, New Jersey under a lease expiring in March 2022 and will not be renewed. We believe our facilities are suitable and adequate for our current needs, and that we will be able to obtain additional space, as needed, on commercially reasonable terms.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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The Initial Public Offering and Concurrent Private Placement, which both closed on February 9, 2021, generated aggregate net proceeds of approximately $107.0 million, after deducting the underwriting discounts and commissions, private placement fee and estimated offering expenses of $10.0 million. As of December 31, 2021, we have used approximately 50% of the aggregate net proceeds from our IPO.
The Initial Public Offering and Concurrent Private Placement, which both closed on February 9, 2021, generated aggregate net proceeds of approximately $107.0 million, after deducting the underwriting discounts and commissions, private placement fee and estimated offering expenses of $10.0 million. As of December 31, 2022, we have used approximately 79% of the aggregate net proceeds from our IPO.
Dividend Policy We have never declared or paid cash dividends on our common stock. We intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future.
We intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future.
There has been no material changes in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on February 5, 2021 pursuant to Rule 424(b)(4), except that given the clinical trial data on ANG-3777 reported in the fourth quarter of 2021, we no longer intend to use the Use of Proceeds for the clinical development of ANG-3777.
There has been no material changes in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on February 5, 2021 pursuant to Rule 424(b)(4), except that given the clinical trial data on ANG-3777 reported in the fourth quarter of 2021, the termination of the JUNIPER trial and the suspension of certain of our clinical development activities as a result of our 2022 Strategic Realignment, we no longer intend to use the Use of Proceeds for the clinical development of ANG-3777 or ANG-3070, or any of our other product candidates if the Merger occurs.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades under the symbol “ANGN” on the Nasdaq Global Select Market and has been publicly traded since February 5, 2021. Prior to this time, there was no public market for our common stock.
Mine Safety Disclosures None. 26 Table of Contents Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades under the symbol “ANGN” on the Nasdaq Global Select Market and has been publicly traded since February 5, 2021.
There are no funds budgeted for additional clinical trials of ANG-3777. Holders of Record As of March 30, 2022, there were approximately 150 holders of record of shares of our common stock. This number does not reflect the beneficial holders of our common stock who hold shares in street name through brokerage accounts or other nominees.
Holders of Record As of March 15, 2023, there were approximately 136 holders of record of shares of our common stock. This number does not reflect the beneficial holders of our common stock who hold shares in street name through brokerage accounts or other nominees. Dividend Policy We have never declared or paid cash dividends on our common stock.
Item 3. Legal Proceedings We are not currently a party to any material legal proceedings. From time to time, we may be involved in legal proceedings or subject to claims incident to the ordinary course of business.
Item 3. Legal Proceedings From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of our business.
Removed
Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safety Disclosures None. 64 Table of Contents Part II Item 5.
Added
In addition, following announcement of the merger agreement with Elicio on January 17, 2023, and the filing of a Registration Statement on Form S-4 on February 13, 2023, a lawsuit was filed in the United States District Court for the Eastern District of New York on February 17, 2023 by a purported stockholder of Angion in connection with the proposed merger between Angion and Elicio.
Added
The lawsuit was captioned Klein v. Angion Biomedica Corp., et al., No. 1:23-cv-01313 (E.D.N.Y.). The Klein complaint named as defendants Angion, and the members of the Angion Board.
Added
The Klein complaint alleged claims for breaches of fiduciary duty against the members of the Angion Board, aiding and abetting breaches of fiduciary duty against Angion, violations of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against all defendants, and violations of Section 20(a) of the Exchange Act against the members of the Angion Board.
Added
The plaintiff contended that the proposed merger between Angion and Elicio is unfair and undervalues Angion, and that the registration statement on Form S-4 filed on February 13, 2023 omitted or misrepresented material information regarding the proposed merger between Angion and Elicio, rendering the registration statement false and misleading.
Added
The Klein complaint sought injunctive and declaratory relief, as well as damages. On February 21, 2023, the plaintiff filed a notice of voluntary dismissal of the Klein lawsuit. Although the plaintiffs voluntarily dismissed this case, litigation of this type is prevalent in mergers involving public companies, and o ther potential plaintiffs may file lawsuits challenging the Merger. Item 4.
Added
Prior to this time, there was no public market for our common stock.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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President and Chief Executive Officer and Chairman Power of Attorney KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Jay R. Venkatesan, M.D. and Jennifer J.
Venkatesan, M.D. President and Chief Executive Officer and Chairman Power of Attorney KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Jay R. Venkatesan, M.D. and Jennifer J.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ JAY R. VENKATESAN, M.D. President and Chief Executive Officer and Chairman of the Board (Principal Executive Officer) March 30, 2022 Jay R.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ JAY R. VENKATESAN, M.D. President and Chief Executive Officer and Chairman of the Board (Principal Executive Officer) March 17, 2023 Jay R.
Form 10-K Summary Not applicable. 131 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGION BIOMEDICA CORP. By: /s/ JAY R. VENKATESAN, M.D. Jay R. Venkatesan, M.D.
Form 10-K Summary Not applicable. 96 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 17, 2023 ANGION BIOMEDICA CORP. By: /s/ JAY R. VENKATESAN, M.D. Jay R.
Venkatesan, M.D. /s/ GREGORY S. CURHAN Chief Financial Officer (Principal Financial and Accounting Officer) March 30, 2022 Gregory S. Curhan /s/ ITZHAK D. GOLDBERG, M.D. Director and Chairman Emeritus March 30, 2022 Itzhak D. Goldberg, M.D. /s/ VICTOR F. GANZI Lead Independent Director March 30, 2022 Victor F. Ganzi /s/ ALLEN R. NISSENSON, M.D. Director March 30, 2022 Allen R.
Venkatesan, M.D. /s/ GREGORY S. CURHAN Chief Financial Officer (Principal Financial and Accounting Officer) March 17, 2023 Gregory S. Curhan /s/ ITZHAK D. GOLDBERG, M.D. Director and Chairman Emeritus March 17, 2023 Itzhak D. Goldberg, M.D. /s/ VICTOR F. GANZI Lead Independent Director March 17, 2023 Victor F. Ganzi /s/ ALLEN R. NISSENSON, M.D. Director March 17, 2023 Allen R.
Nissenson, M.D. /s/ GILBERT S. OMENN, M.D., PH.D. Director March 30, 2022 Gilbert S. Omenn, M.D., Ph.D. /s/ KAREN J. WILSON Director March 30, 2022 Karen J. Wilson 132
Nissenson, M.D. /s/ GILBERT S. OMENN, M.D., PH.D. Director March 17, 2023 Gilbert S. Omenn, M.D., Ph.D. /s/ KAREN J. WILSON Director March 17, 2023 Karen J. Wilson 97
X __________________________________ † Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K. # Indicates management contract or compensatory plan. ^ The certification that accompanies this Annual Report on Form 10-K pursuant to 18 U.S.C.
X 101.INS Inline XBRL Instance Document X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 95 Table of Contents Exhibit Number Exhibit Description Incorporated by Reference Filed Herewith Form Date Number 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File X __________________________________ † Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K. # Indicates management contract or compensatory plan. ^ The certification that accompanies this Annual Report on Form 10-K pursuant to 18 U.S.C.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+45 added−34 removed57 unchanged
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
To the extent we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
The change in net operating assets and liabilities was due to a decrease of $27.5 million in deferred revenue due to substantial satisfaction of our performance obligation under the Vifor License Agreement, a decrease of $0.9 million in accounts payable and accrued expenses due to timing of invoices and an increase of $0.8 million in grants receivable due to the recognition of the qualified Australian tax credit, partially offset by a decrease of $4.0 million in prepaid expenses and other current assets, primarily due to the subsequent receipt of $5.0 million convertible note receivable under Vifor License Agreement in 2021.
The change in net operating assets and liabilities was due to a decrease of $27.5 million in deferred revenue due to substantial satisfaction of our performance obligation under the Vifor License Agreement, a decrease of $0.9 million in accounts payable and accrued expenses due to timing of invoices and an increase of $0.8 million in grants receivable due to the recognition of the qualified Australian tax credit, partially offset by a decrease of $4.0 million in prepaid expenses and other current assets, primarily due to the subsequent receipt of a $5.0 million convertible note receivable under Vifor License Agreement in 2021.
Financing activities For the year ended December 31, 2021, net cash provided by financing activities was $107.2 million, primarily due to net proceeds of $107.5 million from the IPO and Concurrent Private Placement, $1.8 million from the exercise of warrants and stock options, and $0.3 million from a sale and leaseback arrangement, partially offset by taxes paid related to net share settlement upon vesting of restricted stock awards of $2.5 million.
For the year ended December 31, 2021, net cash provided by financing activities was $107.2 million, primarily due to net proceeds of $107.5 million from the IPO and Concurrent Private Placement, $1.8 million from the exercise of warrants and stock options, and $0.3 million from a sale and leaseback arrangement, partially offset by taxes paid related to net share settlement upon vesting of restricted stock awards of $2.5 million.
Our research and development expenses consist primarily of: ▪ personnel costs, including salaries, payroll taxes, employee benefits and stock-based compensation, for personnel in research and development functions; ▪ costs associated with medical affairs activities; ▪ fees paid to consultants, clinical testing sites and contract research organizations (CROs), including in connection with our preclinical studies and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation, analysis and reporting; ▪ contracted research and license agreement fees with no alternative future use; 68 Table of Contents ▪ costs related to acquiring, manufacturing and maintaining clinical trial materials and laboratory supplies; ▪ depreciation of equipment and facilities; ▪ legal expenses related to clinical trial agreements and material transfer agreements; and ▪ costs related to preparation of regulatory submissions and compliance with regulatory requirements.
Our research and development expenses consist primarily of: ▪ personnel costs, including salaries, payroll taxes, employee benefits and stock-based compensation, for personnel in research and development functions; ▪ costs associated with medical affairs activities; ▪ fees paid to consultants, clinical testing sites and contract research organizations (CROs), including in connection with our preclinical studies and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation, analysis and reporting; ▪ contracted research and license agreement fees with no alternative future use; ▪ costs related to acquiring, manufacturing and maintaining clinical trial materials and laboratory supplies; ▪ depreciation of equipment and facilities; ▪ legal expenses related to clinical trial agreements and material transfer agreements; and ▪ costs related to preparation of regulatory submissions and compliance with regulatory requirements.
Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under the section of this Annual Report on Form 10-K titled "Risk Factors," which you should carefully read to gain an 65 Table of Contents understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under 27 Table of Contents the section of this Annual Report on Form 10-K titled "Risk Factors," which you should carefully read to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
Furthermore, we will need to make continued investment in development studies, registration activities and the development of commercial support functions including quality assurance and safety pharmacovigilance before we will be in a position to sell any of our product candidates, if approved.
Furthermore, we would need to make continued investment in development studies, registration activities and the development of commercial support functions including quality assurance and safety pharmacovigilance before we would be in a position to sell any of our product candidates, if approved.
We enter into agreements under which it may obtain upfront payments, milestone payments, royalty payments and other fees.
We enter into agreements under which we may obtain upfront payments, milestone payments, royalty payments and other fees.
We evaluate the measure of proportional performance each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. 75 Table of Contents Milestone payments : We evaluate whether the regulatory and development milestones are considered probable of being reached and estimate the amounts to be included in the transaction price using the most likely amount method.
We evaluate the measure of proportional performance each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Milestone payments : We evaluate whether the regulatory and development milestones are considered probable of being reached and estimate the amounts to be included in the transaction price using the most likely amount method.
Promises under these arrangements may include licenses of intellectual property, research services, including selection campaign research services for certain replacement targets, the obligation to share information during the research and the participation of alliance managers and in joint research committees, joint patent committees and joint steering committees.
Promises under these arrangements may include licenses of intellectual property, research services, including selection campaign research services for certain replacement targets, the obligation to share information during the research and the participation of alliance managers and in joint research committees, 37 Table of Contents joint patent committees and joint steering committees.
If we raise funds through additional collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.
If we raise funds through additional collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to and/or 35 Table of Contents may reduce the value of our common stock.
Recent Accounting Pronouncements 77 Table of Contents See Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K for a full description of recent accounting standards.
Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K for a full description of recent accounting standards.
Under the Vifor License, we are responsible for executing a pre-specified clinical development plan designed to obtain regulatory approvals of ANG-3777 for DGF and CSA-AKI. For the years ended December 31, 2021 and 2020, we recognized license revenue related to the Vifor License of $27.5 million and $0.2 million, respectively.
Under the Vifor License, we are responsible for executing a pre-specified clinical development plan designed to obtain regulatory approvals of ANG-3777 for DGF and CSA-AKI. For the years ended December 31, 2022 and 2021, we recognized license revenue related to the Vifor License of $2.3 million and $27.5 million, respectively.
Until such time as we or our collaborators can generate significant revenue from sales of ANG-3070 or any other product candidate, if ever, we expect to finance our operations through public or private equity offerings or debt financings or other sources of capital, including collaborations, licenses, credit or loan facilities, receipt of research contributions or grants, tax credit revenue or a combination of one or more of these funding sources.
Until such time as we or our collaborators can generate significant revenue from sales of product candidates, if ever, we expect to finance our operations through public or private equity offerings or debt financings or other sources of capital, including collaborations, licenses, credit or loan facilities, receipt of research contributions or grants, tax credit revenue or a combination of one or more of these funding sources.
However, research and development expenses were primarily driven by expenses relating to the development of ANG-3777 and ANG-3070 in 2021 and 2020.
However, research and development expenses were primarily driven by expenses relating to the development of ANG-3777 and ANG-3070 in 2022 and 2021.
See Note 9 in this Annual Report on Form 10-K for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options. Certain of such assumptions involve inherent uncertainties and the application of significant judgment.
See Note 7 to our consolidated financial statements included in this Annual Report on Form 10-K for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options. Certain of such assumptions involve inherent uncertainties and the application of significant judgment.
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 any other product candidates, and conducting preclinical studies and clinical trials; 72 Table of Contents ▪ the outcome of our ongoing and future clinical trials, including our Phase 2 clinical trial of ANG-3070 in patients with 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 completed, ongoing, and planned clinical trials and preclinical studies and other work, as the basis for review and approval of ANG-3070; ▪ the outcome, costs and timing of seeking and obtaining and maintaining FDA and any foreign regulatory approvals; ▪ the number and characteristics of product candidates that we pursue, including our product candidates in preclinical development; ▪ the ability of our product candidates to progress through clinical development successfully; ▪ our need to expand our research and development activities, including to conduct additional clinical trials; ▪ market acceptance of our product candidates, including physician adoption, market access, pricing and reimbursement; ▪ the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies; ▪ our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; ▪ our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel; ▪ the effect of competing technological, market developments and government policy; ▪ the costs associated with being a public company, including our need to implement additional internal systems and infrastructure, including financial and reporting systems; ▪ the costs associated with securing and establishing commercialization and manufacturing capabilities, as well as those associated with packaging, warehousing and distribution; ▪ the costs associated with being a commercial company with approved products for sale, including our obligation to meet applicable healthcare laws and regulations and implement robust compliance programs; ▪ the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future and timing and amount of payments thereunder; and ▪ the timing, receipt and amount of sales and general commercial success of any future approved products, if any.
The amount and timing of our future funding requirements will depend on many factors, including, but not limited to: • our ability to complete the Merger or, if the Merger is not completed, identify and consummate another strategic transaction; • the scope, progress, results and costs of researching and developing ANG-3070 or any other product candidates, and conducting preclinical studies and clinical trials; • the outcome of ongoing and future clinical trials, including the Phase 2 clinical trial of ANG-3070 in patients with 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 outcome, costs and timing of seeking and obtaining and maintaining FDA and any foreign regulatory approvals; • the number and characteristics of product candidates we pursue, including product candidates in preclinical development; • the ability of our product candidates to progress through clinical development successfully; • our need to expand our research and development activities, including to conduct additional clinical trials; • market acceptance of our product candidates, including physician adoption, market access, pricing and reimbursement; • the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments potentially required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel; • the effect of competing technological, market developments and government policy; • the costs associated with being a public company, including our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the costs associated with securing and establishing commercialization and manufacturing capabilities, as well as those associated with packaging, warehousing and distribution; • the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future and timing and amount of payments thereunder; and • the timing, receipt and amount of sales and general commercial success of any future approved products, if any.
To date, we have not generated any revenue from product sales. We have funded our operations primarily through the receipt of grants, the sale of debt and equity securities, and proceeds from license agreements. In February 2021, we generated aggregate net proceeds of approximately $107.0 million from our IPO and Concurrent Private Placement, after deducting the underwriting discounts and commissions.
We have funded our operations primarily through the receipt of grants, the sale of debt and equity securities, and proceeds from license agreements. In February 2021, we generated aggregate net proceeds of approximately $107.0 million from our IPO and Concurrent Private Placement, after deducting the underwriting discounts and commissions.
Please also see the section titled "Forward-Looking Statements" at the beginning of this report. 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.
Please also see the section titled "Forward-Looking Statements" at the beginning of this report. Overview Prior to our 2022 Strategic Realignment, we had been a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel small molecule therapeutics to address chronic and progressive fibrotic diseases.
In addition, if we seek regulatory approval for any of our wholly-owned product candidates or those for which we retain the right to commercialize in the future, we would need to incur additional expenses as we expand our clinical, regulatory, quality, manufacturing and commercialization capabilities, incur significant commercialization expenses for marketing, sales, manufacturing and distribution if we obtain marketing approval for such product candidates.
In addition, if we resume clinical development of our product candidates absent the completion of the announced Merger and if we seek regulatory approval for any of our product candidates or those for which we retain the right to commercialize in the future, we would need to incur additional expenses as we develop and expand our clinical, regulatory, quality, manufacturing and commercialization capabilities, and incur significant commercialization expenses for marketing, sales, manufacturing and distribution if we obtain marketing approval for such product candidates.
Of our total research and development expenses for the years ended December 31, 2021 and 2020, 62% and 73%, respectively, of such expenses were from external third-party sources and the remaining 38% and 27%, respectively, were from internal sources.
Of our total research and development expenses for the years ended December 31, 2022 and 2021, 79% and 62%, respectively, of such expenses were from external third-party sources and the remaining 21% and 38%, respectively, were from internal sources.
Future Cash Needs and Funding Requirements Based on our current operating plan, we believe that our cash and cash equivalents will be sufficient to fund our planned operations for at least 12 months, well into 2023, following the issuance date of our consolidated financial statements.
Future Cash Needs and Funding Requirements Based on our current operating plan, we believe our cash and cash equivalents are expected to be sufficient to fund planned operations for at least 12 months, well into 2024, following the issuance date of our consolidated 34 Table of Contents financial statements.
We will remain an emerging growth company until the earliest of (i) December 31, 2026, (ii) the last day of our first fiscal year in which we have total annual gross revenue of $1.07 billion or more, (iii) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (Exchange Act), which means the market value of equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting standards as of public company effective dates. 40 Table of Contents We will remain an emerging growth company until the earliest of (i) December 31, 2026, (ii) the last day of our first fiscal year in which we have total annual gross revenue of $1.235 billion or more, (iii) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (Exchange Act), which means the market value of equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Our net losses were $54.6 million and $80.1 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, we had an accumulated deficit of $215.1 million. We expect to continue to incur net losses for the foreseeable future.
Our net losses were $38.8 million and $54.6 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $253.9 million. We expect to continue to incur net losses for the foreseeable future.
However, we have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements.
However, we have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. We are unable to estimate the exact amount of our operating capital requirements.
In addition, we do not yet have a marketing or sales organization or commercial infrastructure. Accordingly, we will incur significant expenses to develop a marketing and sales organization and commercial infrastructure in advance of generating any product sales of wholly-owned product candidates or those for which we retain the right to commercialize.
Accordingly, if we are able to develop and obtain approval for one or more product candidates, we will incur significant expenses to develop a marketing and sales organization and commercial infrastructure in advance of generating any product sales of wholly-owned product candidates or those for which we retain the right to commercialize.
As of December 31, 2021, we had $88.8 million of cash and cash equivalents and an accumulated deficit of $215.1 million.
As of December 31, 2022, we had $50.5 million of cash and cash equivalents and an accumulated deficit of $253.9 million, compared to $88.8 million of cash and cash equivalents and an accumulated deficit of $215.1 million as of December 31, 2021.
We expect that any license revenue we generate from any future collaboration partners, will fluctuate in the future as a result of the timing and amount of upfront, milestones and other collaboration agreement payments and other factors. Operating Expenses Cost of Grant Revenue Our cost of grant revenue primarily relates to personnel-related costs and expenses for grant projects.
We expect that any license revenue we generate from any future collaboration partners, will fluctuate in the future as a result of the timing and amount of upfront, milestones and other collaboration agreement payments and other factors.
We do not have any products approved for sale and have not generated any revenue from product sales since our inception and do not expect to generate revenue from product sales unless we successfully develop and we or our collaborators commercialize our product candidates, which we do not expect to occur for several years, if ever.
We have currently suspended clinical development activities in anticipation of the announced Merger, and do not have any products approved for sale and have not generated any revenue from product sales since our inception and do not expect to generate revenue from product sales unless we successfully develop, and we or our collaborators commercialize, our product candidates, which we do not expect to occur in the near future, if ever.
The Initial Public Offering and Concurrent Private Placement The Initial Public Offering (IPO) and Concurrent Private Placement, which both closed on February 9, 2021, generated aggregate net proceeds of approximately $107.0 million, after deducting the underwriting discounts and commissions, private placement fee and estimated offering expenses payable by us. 66 Table of Contents COVID-19 Update The COVID-19 pandemic has placed strains on the providers of healthcare services, including the healthcare institutions where we conduct our clinical trials.
The Initial Public Offering and Concurrent Private Placement 28 Table of Contents The Initial Public Offering (IPO) and Concurrent Private Placement, which both closed on February 9, 2021, generated aggregate net proceeds of approximately $107.0 million, after deducting the underwriting discounts and commissions, private placement fee and estimated offering expenses payable by us.
Our convertible notes were subject to re-measurement each reporting period with gains and losses reported through our consolidated statements of operations. All of our convertible notes were converted into shares of our common stock upon the closing of our initial public offering.
The Exchanged Series C Shares were subject to re-measurement each reporting with gains and losses reported through our consolidated statements of operations. All shares of our Series C convertible preferred stock converted into common stock in connection with the IPO.
We rely on third parties in the conduct of our preclinical studies and clinical trials and for manufacturing and supply of our product candidates. We have no internal manufacturing capabilities, and we expect to continue to rely on third parties, many of whom are single-source suppliers, for our preclinical study and clinical trial materials.
We have no internal manufacturing capabilities, and if we continue to develop product candidates, we expect to continue to rely on third parties, many of whom are single-source suppliers, for our preclinical study and clinical trial materials. In addition, we do not have a marketing or sales organization or commercial infrastructure.
For the year ended December 31, 2020, net cash used in operating activities was $22.9 million, which primarily consisted of a net loss of $80.1 million, partially offset by net non-cash charges of $31.5 million and a change in net operating assets and liabilities of $25.8 million.
The remaining net non-cash charges fluctuations of $0.1 million were individually insignificant. For the year ended December 31, 2021, net cash used in operating activities was $52.6 million, which primarily consisted of a net loss of $54.6 million and a change in net operating assets and liabilities of $26.0 million, partially offset by net non-cash charges of $27.8 million.
Investing activities For the years ended December 31, 2021 and 2020, net cash used in investing activities of $0.4 million and $41,000, respectively, was primarily used to purchase of fixed assets for research activities.
Investing activities For the year ended December 31, 2022 no cash was provided or used in investing activities, and for the year ended December 31, 2021, net cash used in investing activities was $0.4 million, primarily used to purchase fixed assets for research activities. 36 Table of Contents Financing activities For the year ended December 31, 2022 net cash used in financing activities was immaterial.
As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation could be materially different. Warrant Liability We account for certain common stock warrants outstanding as a liability, in accordance with ASC 815, at fair value and adjust the instruments to fair value at each reporting period.
Warrant Liability We account for certain common stock warrants outstanding as a liability, in accordance with ASC 815, at fair value and adjust the instruments to fair value at each reporting period.
A portion of the general and administrative expenses are reimbursed through the overhead rates contained in our grants with the U.S. Government. We expect that our general and administrative expenses to be generally consistent in the near term to support our continued research and development activities.
A portion of the general and administrative expenses are reimbursed through the overhead rates contained in our grants with the U.S. Government.
As the exchange was accounted for as a modification, the Series C convertible preferred stock that was exchanged for the convertible notes (the Exchanged Series C Shares) continued to be recorded at fair value. The Exchanged Series C Shares were subject to re-measurement each reporting with gains and losses reported through our consolidated statements of operations.
During 2020, certain of the convertible notes were exchanged for Series C convertible preferred stock. As the exchange was accounted for as a modification, the Series C convertible preferred stock that was exchanged for the convertible notes (the Exchanged Series C Shares) continued to be recorded at fair value.
Research and Development Expenses To date, our research and development expenses have primarily related to discovery efforts and preclinical and clinical development of our product candidates.
Operating Expenses Cost of Grant Revenue Our cost of grant revenue primarily relates to personnel-related costs and expenses for grant projects. 30 Table of Contents Research and Development Expenses To date, our research and development expenses have primarily related to discovery efforts and preclinical and clinical development of our product candidates.
All shares of our Series C convertible preferred stock converted into common stock in connection with the IPO. Warrant Liability We have accounted for certain of our freestanding warrants to purchase shares of our common stock as liabilities measured at fair value, in accordance with ASC 815, Derivatives and Hedging (ASC 815).
Warrant Liability We have accounted for certain of our freestanding warrants to purchase shares of our common stock as liabilities measured at fair value, in accordance with ASC 815, Derivatives and Hedging (ASC 815). The warrants are subject to re-measurement at each reporting period with gains and losses reported through our consolidated statements of operations.
Liability Classified Series C Convertible Preferred Stock Recorded at Fair Value Series C convertible preferred stock includes settlement features that result in liability classification. The initial carrying value of the Series C convertible preferred stock was accreted to the settlement value, the fair value of the securities to be issued upon the conversion of the Series C Preferred Stock.
The initial carrying value of the Series C convertible preferred stock was accreted to the settlement value, the fair value of the securities to be issued upon the conversion of the Series C Preferred Stock. The discount to the settlement value was accreted to interest expense using the effective interest method.
Research and Development Expenses Research and development expenses increased by $9.7 million, or 24.9%, from the year ended December 31, 2020 to the year ended December 31, 2021.
Research and Development Expenses Research and development expenses decreased by $30.6 million, or 62.8%, from the year ended December 31, 2022 compared to the year ended December 31, 2021.
Interest Income Interest income consists of interest earned on our cash and cash equivalents. 70 Table of Contents Results of Operations Comparison for the Years Ended December 31, 2021 and 2020 The following table summarizes our results of operations for the periods indicated: Year Ended December 31, 2021 2020 $ Change % Change (In thousands, except percentages) Revenue: Contract revenue $ 27,506 $ 193 $ 27,313 * Grant revenue 806 2,687 (1,881) (70.0) % Total revenue 28,312 2,880 25,432 883.1 % Operating expenses: Cost of grant revenue 433 1,190 (757) (63.6) % Research and development 48,698 38,977 9,721 24.9 % General and administrative 18,488 17,986 502 2.8 % Total operating expenses 67,619 58,153 9,466 16.3 % Loss from operations (39,307) (55,273) 15,966 (28.9) % Other income (expense), net (15,266) (24,834) 9,568 * Net loss $ (54,573) $ (80,107) $ 25,534 (31.9) % _______________________ * Not meaningful Contract Revenue Contract revenue increased by $27.3 million, from the year ended December 31, 2020 to the year ended December 31, 2021.
Interest Income Interest income consists of interest earned on our cash and cash equivalents. 32 Table of Contents Results of Operations Comparison for the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the periods indicated: Year Ended December 31, 2022 2021 $ Change % Change (In thousands, except percentages) Revenue: Contract revenue $ 2,301 $ 27,506 $ (25,205) (91.6) % Grant revenue — 806 (806) (100.0) % Total revenue 2,301 28,312 (26,011) (91.9) % Operating expenses: Cost of grant revenue — 433 (433) (100.0) % Research and development 18,100 48,698 (30,598) (62.8) % General and administrative 14,637 18,488 (3,851) (20.8) % Restructuring and impairment expenses 9,185 — 9,185 100.0 % Total operating expenses 41,922 67,619 (25,697) (38.0) % Loss from operations (39,621) (39,307) (314) 0.8 % Other income (expense), net 814 (15,266) 16,080 (105.3) % Net loss $ (38,807) $ (54,573) $ 15,766 (28.9) % _______________________ Contract Revenue Contract revenue decreased by $25.2 million, for the year ended December 31, 2022 compared to the same period in 2021.
We make judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, we adjust our accrued liabilities. For the years ended December 31, 2021 and 2020, we have not experienced any material differences between accrued costs and actual costs incurred.
For the years ended December 31, 2022 and 2021, we have not experienced any material differences between accrued costs and actual costs incurred.
This decrease in expense is primarily attributable to a reduction in interest expense of $7.0 million due to interest associated with convertible notes and Series C convertible preferred stock in 2020 that were converted into equity upon our IPO in February 2021 and an increase of $2.6 million in fair value of our warrant liability, convertible notes, and Series C convertible preferred stock for which we have elected the fair value option.
There was also a reduction of $2.1 million in interest expense, primarily related to interest associated with convertible notes and Series C convertible preferred stock in 2020 that were converted into equity upon our IPO in February 2021.
We have agreements with various Contract Research Organizations ("CROs") and third-party vendors. We estimate research and development accruals of amounts due to the CRO based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs.
We estimate research and development accruals of amounts due to the CRO based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. We include the estimated costs of research and development provided, but not yet invoiced, in accrued liabilities on the consolidated balance sheet.
We include the 76 Table of Contents estimated costs of research and development provided, but not yet invoiced, in accrued liabilities on the consolidated balance sheet. We record payments made to CROs under this arrangement in advance of the performance of the related services as prepaid expenses and other current assets until the services are rendered.
We record payments made to CROs under this arrangement in advance of the performance of the related services as prepaid expenses and other current assets until the services are rendered. We make judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, we adjust our accrued liabilities.
The Vifor License includes additional milestone and royalty objectives related to the clinical development plan for ANG-3777 and we do not expect to receive any clinical, post-approval, or sales milestones, or royalties, as we do not intend to continue to pursue such clinical development plan for ANG-3777, which had included a Phase 3 study for CSA-AKI and a Phase 4 confirmatory study in DGF.
On December 14, 2021, we announced that the Phase 2 trial of ANG-3777 in CSA-AKI did not achieve its primary endpoint. The Vifor License includes additional milestone and royalty objectives related to 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.
Cost of Grant Revenue Cost of grant revenue decreased by $0.8 million, or 63.6%, from the year ended December 31, 2020 to the year ended December 31, 2021. The decrease is primarily attributable to a decrease in personnel-related costs and expenses applied for the year ended December 31, 2021.
Grant Revenue Grant revenue decreased by $0.8 million, or 100%, for the year ended December 31, 2022 compared to the same period in 2021. The decrease is attributable to a decrease in reimbursable costs relating to our grant from the U.S. Department of Defense in the year ended December 31, 2022.
Our goal is to transform the treatment paradigm for patients suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have limitations. Our lead product candidate, ANG-3070, is a highly selective oral tyrosine kinase receptor inhibitor (TKI) in development as a treatment for fibrotic diseases, particularly in the kidney and lung.
Our goal was 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.
We believe the recognition of revenue as costs are incurred and amounts become realizable is analogous to the concept of transfer of control of a service over time under ASC 606.
We believe the recognition of revenue as costs are incurred and amounts become realizable is analogous to the concept of transfer of control of a service over time under ASC 606. 38 Table of Contents Research and Development Research and development costs include, but are not limited to, payroll and personnel expenses, laboratory supplies, preclinical studies, compound manufacturing costs, consulting costs and allocated overhead, including rent, equipment, depreciation and utilities.
The warrants are subject to re-measurement at each reporting period with gains and losses reported through our consolidated statements of operations. Foreign Exchange Transaction Gain Foreign currency transaction gains, primarily related to intercompany loans, are recorded as a component of other income (expense) in our consolidated statements of operations.
Foreign Exchange Transaction Gain Foreign currency transaction gains, primarily related to intercompany loans, are recorded as a component of other income (expense) in our consolidated statements of operations. Earnings in Equity Method Investment Earnings in equity method investment represents our 10% interest in NovaPark that is accounted for under the equity method.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves. 73 Table of Contents Summary Statement of Cash Flows The following table sets forth a summary of our net cash flow activity for the years ended December 31, 2021 and 2020 (in thousands): Year Ended December 31, 2021 2020 Net cash provided by (used in) Operating activities $ (52,643) $ (22,888) Investing activities (382) (41) Financing activities 107,171 52,409 Effect of foreign currency on cash 3 (444) Net increase in cash $ 54,149 $ 29,036 Operating activities For the year ended December 31, 2021, net cash used in operating activities was $52.6 million, which primarily consisted of a net loss of $54.6 million and a change in net operating assets and liabilities of $26.0 million, partially offset by net non-cash charges of $27.8 million.
Summary Statement of Cash Flows The following table sets forth a summary of our net cash flow activity for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Net cash provided by (used in) Operating activities $ (38,390) $ (52,643) Investing activities — (382) Financing activities (60) 107,171 Effect of foreign currency on cash 181 3 Net (decrease) increase in cash $ (38,269) $ 54,149 Operating activities For the year ended December 31, 2022, net cash used in operating activities was $38.4 million, which primarily consisted of a net loss of $38.8 million and a use of cash from the change in net operating assets and liabilities of $4.2 million, partially offset by net non-cash charges of $4.6 million.
In 2022, we and Vifor Pharma continue to work to complete the planned analyses of the results of the clinical trials announced in the fourth quarter of 2021 and to discuss the future of the collaboration based upon such analyses.
In 2022, we continue to discuss with Vifor Pharma the planned analyses of the results of the clinical trials announced in the fourth quarter of 2021 and the future of our collaboration. Components of Results of Operations The following discussion summarizes the key factors our management believes are necessary for an understanding of our financial statements.
The increase is attributable to revenue recognized related to the upfront payment from Vifor Pharma pursuant to the Vifor License Agreement entered into in 2020. As of December 31, 2021, we have substantially satisfied the performance obligation under the Agreement which caused an acceleration of the deferred revenue.
This accelerated the revenue recognition, in the year ended December 31, 2022, related to the upfront payment we received from Vifor Pharma when the license agreement with Vifor Pharma was entered into in 2020. As of December 31, 2022, we have completed all our performance obligations under the Vifor License and recognized all remaining deferred revenue under the agreement.
We do not expect to receive any further substantial revenues under the Vifor License Agreement and we expect the remaining unearned revenue under the Vifor License Agreement to be recognized by the end of 2022. Grant Revenue Grant revenue decreased by $1.9 million, or 70.0%, from the year ended December 31, 2020 to the year ended December 31, 2021.
We do not expect to receive any grant revenues for the foreseeable future. Cost of Grant Revenue Cost of grant revenue decreased by $0.4 million, or 100%, for the year ended December 31, 2022 compared to the same period in 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 in CSA-AKI and a Phase 4 confirmatory study in donor kidney transplant patients who were at risk for developing DGF, given we do not believe the earlier Phase 2 and Phase 3 clinical trial results in the respective indications support a regulatory approval.
Since we do not intend to continue the clinical development plan for ANG-3777 currently set forth under our Vifor License agreement, which had included a Phase 3 study in cardiac surgery involving CSA-AKI and a Phase 4 confirmatory study in DGF, we performed a reassessment of the performance period and estimated costs for the completion of the performance obligations.
The convertible notes and warrants both require re-measurement at each balance sheet date with gains and losses reported through our consolidated statement of operations. Liquidity and Capital Resources Sources and Uses of Liquidity We have incurred losses and negative cash flows from operations since inception, and we anticipate that we will incur losses for at least the next several years.
Liquidity and Capital Resources Sources and Uses of Liquidity We have incurred losses and negative cash flows from operations since inception, and we anticipate that we will incur losses for the foreseeable future. To date, we have not generated any revenue from product sales.
As of December 31, 2021, we determined we have substantially completed our performance obligation under the Vifor License Agreement.
As of December 31, 2022, we had completed our 29 Table of Contents performance obligations under the Vifor License agreement and recognized all remaining deferred revenue as of December 31, 2022.
The change in net operating assets and liabilities was due to an increase of $29.8 million in deferred revenue due to the upfront fee from the Vifor License Agreement and $3.7 million in accrued expenses due to increased clinical-related activities, partially offset by an increase of $2.0 million in prepaid expenses and other current assets and a decrease of $5.6 million in accounts payable due to our overall growth, increased research and development spending and timing of payments.
The change in net operating assets and liabilities of $4.2 million was the result of a decrease in deferred revenue of $2.3 million resulting from revenue recognized in the period, a decrease of $2.1 million in accounts payable due to the timing of vendor payments, a decrease of $0.6 million in accrued expenses due to timing of invoices, and a decrease of $0.9 million due to lease liabilities payments.
These increases were partially offset by an employee retention credit of $1.2 million received in 2021 as a reduction to payroll taxes. 71 Table of Contents General and Administrative Expenses General and administrative expenses increased by $0.5 million, or 2.8%, from the year ended December 31, 2020 to the year ended December 31, 2021.
These decreases were offset in part by a net increase of $0.3 million in other operating expenses. General and Administrative Expenses General and administrative expenses decreased by $3.9 million, or 20.8%, from the year ended December 31, 2022 compared to the year ended December 31, 2021.
The decrease is primarily attributable to a decrease in reimbursable costs relating to our grant from the U.S. Department of Defense for the year ended December 31, 2021. We do not expect to receive any further substantial grant revenues for the foreseeable future.
The decrease is primarily due to a decrease in personnel-related costs and expenses applied as we believe the work under U.S. Department of Defense grant had been completed in the year ended December 31, 2021.
The increase in research and development expenses was primarily due to an increase of $8.5 million in personnel-related expenses, including salaries, benefits and stock-based compensation expenses, as a result from increases in headcount and an increase of $1.0 million in CRO and CMO expenses from increased clinical and non-clinical trial activities, primarily related to the development of ANG-3777 and ANG-3070.
The net decrease in research and development expenses was primarily due to a $16.1 million reduction in clinical trial related expenses and R&D 33 Table of Contents consulting and subcontractor expenses as a result of the completion of ANG-3777 trials, and a $14.8 million decrease in salary, bonus and stock-based compensation primarily due to lower headcount following the reductions in force announced in January and July 2022.
Other Income (Expense), Net Other income (expense), net changed by a reduction in expense of $9.6 million, from the year ended December 31, 2020 to the year ended December 31, 2021.
There were no restructuring and impairment expenses incurred during the year ended December 31, 2021. Other Income (Expense), Net Other income (expense) increased by $16.1 million for the year ending December 31, 2022 compared to the same period in 2021.
Removed
Enrollment is ongoing in a dose-finding Phase 2 trial of ANG-3070 in primary proteinuric kidney diseases (PPKD) and we expect to file an IND in idiopathic pulmonary fibrosis (IPF) by the end of 2022. We are also continuing to develop our preclinical programs. Our ROCK2 program is targeted towards the treatment of fibrotic diseases.
Added
Our product candidates and programs included ANG-3070, a TKI formerly in development as a treatment for fibrotic diseases; a ROCK2 preclinical program targeted towards the treatment of fibrotic diseases; a CYP11B2 preclinical program targeted towards diseases related to aldosterone synthase dysregulation; and a CYP26 (retinoic acid metabolism) inhibitor program targeted towards a number of indications, including cancer; and ANG-3777, a HGF mimetic.
Removed
Our CYP11B2 program is targeted towards diseases related to aldosterone synthase dysregulation. Prior to January 2022 our lead product was ANG-3777, a hepatocyte growth factor (HGF) mimetic we were evaluating in multiple indications of acute organ injury, including delayed graft function (DGF) and for the treatment of AKI associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI).
Added
Our 2022 Strategic Realignment was announced following our June 2022 termination of our Phase 2 “JUNIPER” dose-finding trial for ANG-3070 in patients with primary proteinuric kidney diseases, specifically FSGS and IgAN. The JUNIPER trial was terminated in the interests of patient safety based upon a reassessment of the risk/benefit profile of ANG-3070 in patients with established serious kidney disease.
Removed
In 2021, we also studied ANG-3777 in patients with severe COVID-19 related pneumonia at high risk for acute respiratory distress syndrome (ARDS).
Added
We completed the data collection work necessary related to the JUNIPER trial to ascertain whether the drug had any effect, positive or negative, in patients with fibrotic kidney diseases and determined there was no economically-viable path forward for ANG-3070 in primary proteinuric kidney diseases.
Removed
On October 26, 2021, we announced the Phase 3 trial of ANG-3777 in DGF did not achieve its primary endpoint and the data were not expected to be sufficient evidence to support an indication in the studied DGF population. On December 9, 2021, we announced the Phase 2 trial of ANG-3777 in CSA-AKI did not achieve its primary endpoint.
Added
On January 17, 2023, we entered into and announced a definitive merger agreement with Elicio Therapeutics Inc. (Elicio) under which Elicio will merge with a wholly-owned subsidiary of Angion in an all-stock transaction (Merger).
Removed
We have no funds budgeted for additional clinical trials for ANG-3777.
Added
Upon completion of the Merger, the combined company will focus on advancing Elicio’s proprietary lymph node AMP technology to develop immunotherapies, with a focus on ELI-002, a therapeutic cancer vaccine targeting mKRAS-driven tumors.
Removed
As we seek to advance ANG-3070 in clinical trials and our other product candidates through preclinical development, our expenses and operating losses may increase over time.
Added
We have relied on third parties in the conduct of our preclinical studies and clinical trials and for manufacturing and supply of our product candidates.
Removed
These strains have resulted in institutions prohibiting the initiation of new clinical trials, enrollment in existing trials and restricting the on-site monitoring of clinical trials. We also follow FDA guidance on clinical trial conduct during the COVID-19 pandemic, including the remote monitoring of clinical data. The global pandemic of COVID-19 continues to rapidly evolve.
Added
Restructuring and Long-Lived Asset impairment On January 4, 2022, we announced a reduction in force impacting less than half of our employees at that time.
Removed
The extent to which COVID-19 may continue impact our business, including our clinical trials, and financial condition will depend on future developments, which are highly uncertain due to the continuing emergence of new variants and cannot be predicted with confidence, such as the ultimate duration of the pandemic and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
Added
Our decision to engage in this reduction resulted from an assessment of our internal resource needs, given the results of the Phase 3 study of ANG-3777 in patients at risk for DGF would likely not support a regulatory approval in that population and the Phase 2 study in CSA-AKI would not support a Phase 3 trial in that indication.
Removed
At this time, we do not expect any disruption in our supply chain of drugs necessary to conduct our clinical trials, and we believe we will be able to supply the drug needs of our clinical trials in 2022. However, we are continuing to evaluate our clinical supply chain in light of the COVID-19 pandemic.
Added
This reduction was a cost-cutting measure across the organization to support our 2022 primary focus on the clinical development of our investigational asset ANG-3070, a highly selective, oral tyrosine kinase receptor inhibitor in development as a treatment for fibrotic diseases, as well as advancing preclinical assets to IND-enabling studies.

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