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Pegozafermin Clinical Development in NASH

Phase 1a Clinical Trial of Single-Dose of Pegozafermin in Healthy Volunteers

We conducted a Phase 1a clinical trial to evaluate the safety, tolerability and PKpharmacokinetics (“PK”) of pegozafermin in 58 healthy volunteers. In this randomized, double-blind, placebo-controlled, Phase 1a, first-in-human, SAD clinical trial the PK profile of pegozafermin was generally dose-proportional or slightly more than dose-proportional with a half-life of approximately 55 to 100 hours. At single doses of 9.1 mg and higher, significant improvements were observed in key lipid parameters measured at Day 8 and Day 15 after dosing on Day 1. The mean changes versus baseline include significant reductions in triglycerides (up to 51%) and LDL-C (up to 37%) and increase in HDL-C (up to 36%) despite the baseline values being in the normal range. Pegozafermin demonstrated rapid (starting from Day 2), sustained and durable improvements on lipid parameters for two weeks or more after single-dose administration. PegozaferminPegozafermin was well tolerated across the dose range and there were no deaths, serious adverse events or discontinuations due to adverse events. The most commonly observed treatment-related adverse events, occurring in at least two subjects in the pooled pegozafermin group, were injection site reactions and headache, all of which were reported as mild. No clinically meaningful trends were observed in gastrointestinal events, laboratories or vital signs including blood pressure or heart rate changes.

Phase 1b/2a Proof of Concept Clinical Trial in NASH Patients

In September 2020 and January 2022, we presented positive topline results from cohorts 1 to 6 and cohort 7, respectively, in our Phase 1b/2a trial in NASH patients which has informed the advancement of our clinical strategy in NASH. NASH. The phasePhase 1b/2a trial for cohorts 1 to 6 was multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose-ranging and enrolled a total of 81 patients to receive weekly (3mg/9mg/18mg/27mg)(3 mg/9 mg/18 mg/27 mg) or every two-week (18mg/36mg)(18 mg/36 mg) dosing of pegozafermin or placebo for up to 12 weeks. Key endpoints assessed were safety, tolerability, and PK of pegozafermin as well as change in liver fat measured by MRI-PDFF and other metabolic markers. Cohort 7 was an open label cohort that enrolled 20 patients who received weekly dosing of pegozafermin at 27 mg for 20 weeks. Key endpoints assessed were changes in histology from baseline, liver fat changes from baseline and safety and tolerability. The trial design is shown in Figure 4 below.

Figure 4: Phase 1b/2a Trial Design

As shown in Figure 5 below, all dose groups in cohorts 1 to 6 demonstrated significant reductions in liver fat at week 13, with relative reductions up to 60% versus baseline and up to 70% versus placebo, as measured by MRI-PDFF. 43% of the patients at the highest dose achieved normal liver fat content of < 5%. A significant proportion of patients responded to therapy with up to 88% and 71% of patients achieving a ≥30%≥ 30% or a ≥50%≥ 50% reduction in liver fat versus baseline, respectively.

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Figure 5: Relative Reduction in Liver Fat vs. Placebo at Week 13

As shown in Figure 6 below for cohorts 1 to 6, treatment with pegozafermin also resulted in significant improvements in liver transaminases, with up to a 44% reduction in ALT and a 35 U/L decrease in ALT in patients with elevated baseline levels. Treatment with pegozafermin resulted in significant reductions in triglycerides (up to 28%; p<0.05), non-HDL (up to 16%; p<0.01) and LDL-C (up to 16%; p<0.05). Triglycerides were reduced to a greater extent in patients with elevated triglycerides at baseline (TG ≥200≥ 200 mg/dL), and 53% of the pegozafermin patients in this group normalized triglyceride levels versus 0% in the placebo group. Pegozafermin also demonstrated significant increases in the insulin-sensitizing hormone adiponectin (up to 61%; p<0.001). Improvements were also noted across the spectrum of metabolic marker data vs. placebo for the 27mg27 mg QW dose group including HOMA-IR, glucose, HbA1c, and body weight (p<0.05).

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Figure 6: Clinically Meaningful ALT Reduction; Greater Reduction in Patients with High ALT

Additional analyses presented at the Endocrine Society’s annual meeting in March 2021 demonstrated that pegozafermin treatment resulted in significant reductions in liver volume of up to 15% and liver fat volume of up to 65% in treated patients at 13 weeks compared to baseline, as measured by MRI-PDFF. A post-hoc analysis presented at The Liver Meeting of AASLD in November 2021 assessed the effect of pegozafermin on spleen volume (SV) in NASH patients without advanced fibrosis. SV was evaluated by MRI in all eligible patients on pegozafermin 27mg 27 mg every week dose (n=8), pegozafermin 36mg 36 mg every two-week dose (n=8) and 16 patients on placebo. At baseline, it was observed that SV was correlated with liver volume, vibration-controlled transient elastography (VCTE) score and body mass index (BMI), and negatively correlated with platelet count. Findings at study Day 50 and Day 92 demonstrated that treatment with pegozafermin led to a progressive and significant decrease in SV compared to placebo (on Day 50, treated patients saw an average 7.4% decrease in SV and by Day 92 patients saw an average 11.8% decrease in SV).

Paired-biopsy, Open-label Histology Cohort (Cohort 7)

Cohort 7 in the Phase 1b/2a trial was a single-arm cohort that enrolled 20 patients with biopsy-confirmed fibrosis stage F2 and F3 NASH who were treated once weekly for 20 weeks with 27 mg of pegozafermin. 19 of 20 patents received an end of treatment biopsy and one patient withdrew consent. A greater than or equal to 2-point improvement in NAS (with 1-point from either ballooning or inflammation) and no worsening of fibrosis was the nominal primary endpoint. Key secondary endpoints included response rates on NASH resolution without worsening of fibrosis, improvement in at least one stage of fibrosis without worsening NAS and safety/tolerability. Patients had a mean BMI of 37 and type 2 diabetes was prevalent in most patients. 65% had fibrosis stage F3 NASH and 35% had fibrosis stage F2 NASH, a higher proportion of F3 patients than is typical for most proof-of-concept NASH studies.NASH. The baseline values for VCTE, ProC3, and transaminases were consistent with a more advanced population.

74% of patients achieved a greater than or equal to 2-point improvement in NAS with at least a 1-point improvement in ballooning or inflammation.inflammation. Substantial reductions were observed across all 3 NAS components (≥1 point change) – ballooning (79%), inflammation (47%), and steatosis (74%). All patients had improvement or no change in ballooning and inflammation. The histology results demonstrate proof-of-concept for the translation of pegozafermin’s effects on liver fat, ALT, and other relevant non-invasive measures into histological improvement.

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Figure 7: Histology Results

NAS = NAFLD Activity Score

¹A 2-point improvement in NAS score required a 1-point improvement in either ballooning or inflammation

Data from a new analysis of the same histology slides by a panel of an additional three expert liver pathologists resulted in a wide range of response rates, with rates of NASH resolution without worsening of fibrosis up to 47% (range: 26%-47%) and rates of ≥ 1-stage improvement in fibrosis without worsening of NASH up to 42% (range: 12%-42%). This three-reader panel scored six of the nineteen patients as having F4 fibrosis at baseline (putative F4), which was an exclusion criterion for the Phase 1b/2a trial. Excluding the putative F4 patients (n=6) resulted in a higher proportion of patients meeting the registration enabling histological endpoints compared to the primary analysis based on the single central reader, as shown in Figure 8 below.

Figure 8: New Analysis of Cohort 7 Histology Slides By a Panel of Three Experts

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Pegozafermin also demonstrated beneficial effects in the subset of patients with F4 stage fibrosis as shown in Figure 9 below.

Figure 9: Pegozafermin Effects in Fibrosis Stage F4 Patients

To assess pegozafermin’s effect on the whole liver, a number of NITs including imaging, serum biomarkers, and risk stratification scores were built into the study. Clinically meaningful and significant changes were observed across these key NITs associated with fibrosis, risk of fibrosis, or NASH resolution. The consistency of data across all these endpoints and the magnitude of changes observed in these NITs suggest that pegozafermin is improving total liver health.

Figure 9:10: Non-Invasive Tests (NITs) [marker of]

*** p<0.001

1 Changes from baseline ≥ 30% and ≥ 50% have been correlated with NASH improvement

2 ALT changes ≥ 17 U/L have been correlated with histological improvement

3 In patients with elevated ALT as defined by ≥30≥ 30 U/L in women and ≥40≥ 40 U/L in men (n=14)

4 FAST score is a composite of imaging and blood markers and measured on 0-1 scale, a score ≤ 0.35 predicts Fibrosis Stage F0/F1 and NAS <4

5 VCTE is a Fibroscan assessment, >20%> 20% reduction has been correlated with fibrosis improvement

6 Pro-C3 is a blood-based measurement, >15%> 15% reduction has been correlated with fibrosis improvement

In addition to significant improvement in liver health, treatment with pegozafermin also had significant positive effects on glycemic control, lipids, adiponectin, and body weight.

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Figure 10:11: Cardio-Metabolic Endpoints

*p<0.05; **p<0.01; ***p<0.001

¹ In patients with HbA1c ≥ 6.5% at baseline (n=10); patients were all on concomitant diabetes medications

² In patients with elevated triglycerides at baseline (n=11); reduction was -26% across total population

In 83 patients treated with pegozafermin across the full Phase 1b/2a studytrial in cohorts 1 to 7, pegozafermin continues to be generally well tolerated with a favorable safety profile. There have been no drug-related serious adverse events and only one treatment-related discontinuation. Pooled pegozafermin treatment related adverse events in greater than or equal to 10% of patients were increased appetite (13% vs 0% placebo), diarrhea (13% vs 11% placebo), and nausea (12% vs 11% placebo). Most of the GI adverse events were mild and of short duration. A few mild injection site reactions were reported and there were no tremors and no hypersensitivity adverse events observed. Pegozafermin had no adverse effects on blood pressure or heart rate.

Phase 2b (ENLIVEN) Trial in Fibrosis Stage 2 or 3 NASH Patients

The ENLIVEN is a multicenter, randomized, double-blind, placebo-controlled Phase 2b trial is planned to enrollin biopsy-confirmed NASH patients with fibrosis stage 2 or 3 and NAS ≥4. These≥ 4. The trial enrolled a total of 219 patients willwho receive either 15a weekly dose (15 mg or 30 mg weekly dosesmg) or 44 mgan every two-week dose (44 mg) of pegozafermin in a liquid formulation or placebo for 24 weeks followed bywith a randomization schema of 4: 4: 2.5: 1 (placebo: 30 mg QW: 44 mg Q2W: 15 mg QW). All patients will continue treatment in a blinded extension phase of an additionalfor 24 weeks for a total treatment period of 48 weeks.weeks, with some of the placebo patients re-randomized to receive pegozafermin in the extension phase. The primary analysis will evaluate the effect of pegozafermin on the two FDA approvable histology endpoints 1-point fibrosis improvement with no worsening of NASH and NASH resolution with no worsening of fibrosis and will include patients who met histologic entry criteria F2/F3 patients and NAS ≥ 4 based on the three-panel consensus read of biopsies at baseline to ensure consistency between baseline and end of treatment biopsy reading methods. This three-panel consensus read was instituted after receipt of data from the expansion cohort of the Phase 1b/2a trial (cohort 7) to address biopsy reading variability and increase the likelihood of showing the true benefit of pegozafermin while maintaining adequate study power. Prior to this change, biopsy entry criteria for ENLIVEN was based on a single reader. We expect to report topline data in the first half of 2023March 2023.. Based on learnings from our recent cohort, developments in the field, and feedback from our steering committee, we are working on steps to optimize the ENLIVEN trial.

Pegozafermin Clinical Development in SHTG

Pegozafermin has demonstrated significant reduction in triglyceride levels across all our preclinical and clinical studies. In ourJune 2022 we reported positive topline results from the ENTRIGUE Phase 1b/2a2 trial treatment withof pegozafermin in cohorts 1 to 6 (mean baseline TG=174 mg/dL) and cohort 7 (mean baseline TG=170 mg/dL) resulted in significant reductions in triglycerides (up to 28% and 26% respectively) Triglycerides were reduced toSHTG patients. ENTRIGUE was a greater extent in patients with elevated levels at baseline across cohorts 1 to 6 (TG ≥ 200mg/mL) and cohort 7 (TG ≥ 150mg/mL)randomized, double-blind, placebo-controlled trial that enrolled a total of 37% and 32%, respectively. While

currently approved85 SHTG therapies decrease triglyceride levels, they generally do not have broader metabolic benefits such as reduction in liver fat content, reduction in transaminases, and improvement in glycemic control. We presented data at the National Lipid Association meeting in 2021 that demonstrated a mean liver fat content of 20% at baseline in the first 14 patients in the MRI-PDFF sub-study of the ENTRIGUE trial.

We initiated the ENTRIGUE trial in SHTG patients in the third quarter of 2020 and have closed enrollment with 85 patients either on stable background lipid treatment with statinstherapy (55% - statin/statin combos, and/or prescription fish oil, and/or fibratesfibrates) or not on any background therapy. In this randomized, double-blind, placebo-controlled study, patients receive pegozafermin administeredtherapy treated weekly (9 mg, 18 mg or 27 mg) or every two weeks (36 mg) with pegozafermin or placebo over an eight-week treatment period. The trial enrolled an advanced population of patients with high risk of cardiovascular disease as evidenced by mean baseline values of treated patients with TGs of 733 mg/dL, non-HDL-C of 211 mg/dL, 43.5% with HbA1c ≥ 6.5%, and liver fat content of 20.1%. The primary endpoint iswas the percentage change in fasting triglyceride levels from baseline. Key secondary endpoints include other lipids

As shown in Figure 12 below, results demonstrated statistically significant reductions in median triglycerides from baseline across all dose groups treated with pegozafermin compared to placebo after 8 weeks. Additionally, as shown in Figure 13 below, results were consistent in patients not on background therapy or on background therapy (consistent results on statins or statin combos, prescription fish oils, and metabolicfibrates) and across various subgroups, including those with the greatest disease burden, such as Type 2 diabetes and baseline TG levels ≥ 750 mg/dL.

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Figure 12: Median Percent Change in Triglycerides from Baseline at Week 8

* p<0.05; *** p<0.001 versus placebo based on Wilcoxon Rank-Sum Test

Figure 13: Median Percent Change in Triglycerides from Baseline at Week 8

1. Background therapy defined as concomitant lipid modifying therapy

Patients on background therapy: placebo (n=11), 9 mg QW (n=8), 18 mg QW (n=9), 27 mg QW (n=10), 36 mg Q2W (n=8)

Patients not on background therapy: placebo (n=6), 9 mg QW (n=8), 18 mg QW (n=8), 27 mg QW (n=6), 36 mg Q2W (n=8)

Responder analysis on primary endpoint of TG reduction demonstrated:

Pegozafermin treatment also resulted in significant improvements compared to placebo (mean percent change from baseline) and clinically meaningful changes on an absolute basis in non-HDL-C and apo B that are key markers of cardiovascular risk (absolute change from baseline of 55 mg/dL and 22 mg/dL in non-HDL-C and apo B respectively with 27 mg QW dose). As shown in Figure 14 below, patients treated across all doses with pegozafermin also demonstrated an improvement in HDL-C and no change in LDL-C vs. placebo.

Figure 14: Mean Percent Change in non-HDL-C and apo B from Baseline at Week 8

* p<0.05; ** p<0.01; *** p<0.001 versus placebo based on MMRM analysis

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Pegozafermin treatment resulted in a sub-study evaluating changemean relative reduction in liver fat measured by MRI-PDFF. Screeningfrom baseline at week 8 across all dose groups versus placebo in the fibrate cohort was stoppedsub-study of patients with MRI-PDFF. The results are summarized in Figure 15 below.

Figure 15: Mean Relative Reduction in Liver Fat vs. Baseline at Week 8 in Sub-study

* p<0.05 versus placebo based on ANCOVA analysis

Pegozafermin continues to be generally well tolerated with a favorable safety profile across doses consistent with prior studies. In ENTRIGUE, the most commonly reported treatment-related adverse events were nausea, diarrhea and injection site reactions, all which were classified as mild or moderate. No tremors or transaminase elevation adverse events were observed. There were no drug-related serious adverse events and two Grade 2 treatment-related discontinuations.

We received feedback from the FDA supporting the advancement of pegozafermin into Phase 3. The FDA agreed that the pre-clinical and clinical data package support the advancement of pegozafermin into Phase 3 with the main studyproposed primary endpoint of reduction in triglycerides from baseline without the need for a clinical outcome study. The FDA also agreed to the proposed doses and will be analyzedproposed secondary endpoints and were generally aligned with other trial parameters. Since SHTG is a common, chronic condition and pegozafermin is a novel investigational biologic therapy, the agency recommended conducting two Phase 3 trials in SHTG, each of one year duration as part of main ENTRIGUE trial. Topline data from ENTRIGUE is expectedthe efficacy and safety database required to support the registration package. We have incorporated the agency’s feedback into our protocol and plan to initiate the first of two recommended Phase 3 trials in SHTG in the second quarter of 2022.

There is regulatory precedence for the approval of therapies for the treatment of SHTG2023. The primary endpoint in the United States based on the reduction in triglycerides from baseline as the primary endpoint for full approval. The FDA surrogate endpoint table for drug approval lists a reduction in triglycerides from baseline as the endpoint for full approval of a therapy in SHTG. A clinical outcome study was not required for certain third-party approvals in SHTG or as a post-marketing commitment. The SHTGplanned Phase 3 trial for some of these products consisted of a single study of 75trials is anticipated to 100 patients per treatment group with a 12-week duration. Based on the regulatory path followed by other companies that have successfully developed SHTG therapies, we believe that a combination of smaller clinical trials and shorter development timelines could mean that SHTG potentially represents a quicker path to market for pegozafermin. The Phase 3 trial could potentially evaluate pegozafermin as an add-on therapy in refractory patients or patients not on background therapy with a primary endpoint of percentage change in fasting triglyceride levels from baselinebe assessed at 12-24 weeks. The key secondary endpoints could include an assessment of liver fat reduction, glycemic control, weight, and other lipids. The safety database could potentially include trials in other hypertriglyceridemia patient populations.week 26.

Figure 11: Pegozafermin Could Potentially Address Metabolic Conditions Associated With SHTG

Agreements with Teva

Agreements Relating to FGF21 Program

In April 2018, we entered into an Asset Transfer and License Agreement (the “FGF21 Agreement”) with Teva Pharmaceutical Industries Ltd (“Teva”), under which we acquired certain patents, intellectual property and other assets relating to Teva’s glycoPEGylated FGF21 program. Under this agreement, Teva also granted a perpetual, non-exclusive (but exclusive as to pegozafermin), non-transferable, worldwide license to patents and know-how related to glycoPEGylation technology for use in the research, development, manufacture and commercialization of the compound pegozafermin and products containing pegozafermin. In addition, we entered into a Sublicense Agreement with ratiopharm (the “ratiopharm Sublicense”), under which we were granted a perpetual, exclusive, worldwide sublicense to patents and know-how related to glycoPEGylation technology used in the development, manufacture and commercialization of pegozafermin and products containing pegozafermin.

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Under the FGF21 Agreement, we are obligated to use commercially reasonable efforts to develop and commercialize pegozafermin in each of the United States and five major European countries. We have the right to sublicense all rights licensed to us by Teva under the FGF21 Agreement.

Pursuant to the FGF21 Agreement and the FASN Agreement (as defined and described below), we paid Teva a nonrefundable upfront payment of $6.0 million. In addition, under the FGF21 Agreement, we are required to make certain payments to Teva totaling $2.5 million for the achievement of certain clinical development milestones, and additional payments totaling up to $65.0 million upon achievement of certain commercial milestones. We are also obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales of products containing pegozafermin. Our royalty obligations will terminate, on a product-by-product and country-by-country basis, at the later of: (1) the date of expiration of the last to expire valid claim in the assigned patents that covers pegozafermin in such country, (2) the expiration of data or regulatory exclusivity for pegozafermin in such country and (3) 10 years from the first commercial sale of pegozafermin in such country. We are not required to make any payments to ratiopharm pursuant to the ratiopharm Sublicense.

The term of the FGF21 Agreement will continue, on a product-by-product and country-by-country basis, until the royalty term with respect to pegozafermin in such country expires. The ratiopharm Sublicense will continue until terminated in accordance with its terms. We may terminate the FGF21 Agreement and the ratiopharm Sublicense for any reason. Either party may terminate the FGF21 Agreement for cause for the other party’s uncured material breach. ratiopharm may terminate the ratiopharm Sublicense for certain material breaches by us. Either party may terminate the FGF21 Agreement or the ratiopharm Sublicense in the event of bankruptcy of the other party. Teva may terminate the FGF21 Agreement if we challenge the validity of any patent licensed to us under the FGF21 Agreement. Termination of the FGF21 Agreement or the ratiopharm Sublicense will impact our rights under the intellectual property licensed to us by Teva and ratiopharm, respectively, but will not affect our rights under the assets assigned to us.

In April 2018, we also entered into a Reagent Supply and Technology Transfer Agreement, under which Teva will supplysupplied us with certain reagents required for the glycoPEGylation process that are necessary for our development and commercialization of pegozafermin, and transfer to us certain know-how required for the production of such reagents. The term of thisThis agreement was extended by mutual agreement untilexpired in accordance with its terms on December 31, 2022. We transferred the manufacturing of such reagents to new suppliers prior to the end of 2022.

FASN Agreements

In April 2018, we entered into an Asset Transfer and License Agreement with Teva under which we acquired from Teva patents, intellectual property and other assets relating to Teva’s development program of small molecule inhibitors of FASN (the “FASN Agreement”). Under the FASN Agreement we are obligated to use commercially reasonable efforts to develop and commercialize FASN in the United States and five major European countries. We have the right to sublicense all rights licensed to us by Teva under the FASN Agreement.

Pursuant to the FASN Agreement and the FGF21 Agreement (as described above), we paid Teva a nonrefundable upfront payment of $6.0 million. In addition, under the FASN Agreement, we are required to make certain payments to Teva totaling $2.5 million for the achievement of certain clinical development milestones, and

additional payments totaling up to $65.0 million upon achievement of certain commercial milestones. We are also obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales of products arising from the FASN program. Our royalty obligations will terminate, on a product-by-product and country-by-country basis, at the later of: (1) the date of expiration of the last to expire valid claim in the assigned patents that covers FASN in such country, (2) the expiration of data or regulatory exclusivity for such product arising from the FASN program in such country and (3) 10 years from the first commercial sale of a product arising from the FASN program in such country.

The term of the FASN Agreement will continue, on a product-by-product and country-by-country basis, until the royalty term with respect to the product arising from the FASN program in such country expires. We may terminate the FASN Agreement for any reason. Either party may terminate the agreement for cause for the other party’s uncured material breach, or in the event of bankruptcy of the other party.

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Government Regulation and Product Approval

The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of biologics, such as those we are developing. We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates.

The process required by the FDA before biologic product candidates may be marketed in the United States is expensive and time-consuming. Generally, this process involves completing pre-clinical laboratory studies before the FDA will allow human clinical trials to commence. We are then required to complete human clinical trials to demonstrate that a product candidate is safe and effective. Following the completion of these clinical trials, we are required to prepare and submit a biologics license application (“BLA”) application,, which presents the FDA with detailed clinical and safety data, as well as manufacturing data. As part of the review of a BLA, the FDA may inspect manufacturing facilities to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and may also inspect selected clinical investigation sites to assess compliance with current Good Clinical Practices (“cGCP”). This process takes many years from inception through filing of a BLA application and the likelihood of success is highly uncertain.

Preclinical and Clinical Development

Prior to beginning the first clinical trial with a product candidate, we must submit an investigational new drug (“IND”) application to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is the general investigational plan and the protocol(s) for clinical studies. Submission of an IND may or may not result in FDA authorization to begin a clinical trial.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study. Furthermore, an independent review board (“IRB”) for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site, and must monitor the study until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.

For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

Concurrent with clinical trials, companies must finalize a process for manufacturing the product in commercial quantities in accordance with currentgood manufacturingpractices(“cGMP”) requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency.

BLA Submission and Review

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

Once a BLA has been submitted, the FDA’s goal is to review standard applications within ten months after it accepts the application for filing, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing. In both standard and priority reviews, the review process may be extended by FDA requests for additional information or clarification. The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity and potency. The FDA may convene an advisory committee to provide clinical insight on application review questions. Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with cGCP. If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

After the FDA evaluates a BLA and conducts necessary inspections, the FDA may either issue an approval letter or a Complete Response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A Complete Response letter will describe deficiencies that the FDA has identified in the BLA. The FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted

distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may require, or companies may voluntarily pursue, one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

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Expedited Programs for Serious Conditions

The FDA maintains several programs intended to facilitate and expedite development and review of new drugs and biologics to address unmet medical needs in the treatment of serious or life-threatening diseases or conditions. These programs include Fast Track designation, Breakthrough Therapy designation, Priority Review and Accelerated Approval. These programs can significantly reduce the time it takes for the FDA to review a BLA, but they do not guarantee that a product will receive FDA approval. Even if a product qualifies initially, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review will not be shortened. The Consolidated Appropriations Act 2023 strengthens the FDA’s authority to require and regulate post-approval studies of accelerated approval drugs and to expedite the rescission of accelerated approval based on these post-approval studies.

Post-Approval Requirements

Any products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon companies and third-party manufacturers. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

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

The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Biosimilars and Reference Product Exclusivity

The Patient Protection and Affordable Care Act, as amended (collectively, the “Affordable Care Act”) includes a provision called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-approved reference biological product.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies, and a clinical study or studies.

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

The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, recent government proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to significant uncertainty.

As discussed below, the Inflation Reduction Act of 2022 (“IRA”) is a significant new law that intends to foster generic and biosimilar competition and to lower drug and biologic costs.

Other U.S. Healthcare Laws and Compliance Requirements

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation: the federal Anti-Kickback Statute (“AKS”), the federal False Claims Act HIPAA(“FCA”), the Health Insurance Portability and Accountability Act (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.

The federal AKS prohibits, among other things, any person or entity from knowingly and willfully offering, paying, soliciting or receiving any remuneration, to induce or in return for either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program. The term remuneration has been interpreted broadly to include anything of value. The AKS has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand, and prescribers and purchasers on the other. Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the AKS. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The federal false claims laws, including the False Claims Act (“FCA”),FCA, which imposes significant penalties and can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of federal government funds, including federal healthcare programs, such as Medicare and Medicaid. Pharmaceutical and other healthcare companies have been prosecuted under these laws for engaging in a variety of different types of conduct that caused the submission of false claims to federal healthcare programs. Under the AKS, for example, a claim resulting from a violation of the AKS is deemed to be a false or fraudulent claim for purposes of the FCA. The FCA imposes mandatory treble damages and per-violation civil penalties up to approximately $23,000.$25,000.

HIPAA created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private third-party payors, and making false statements relating to healthcare matters. A person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate the statute in order to have committed a violation.

Also, many states have similar, and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

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The U.S. federal Physician Payments Sunshine Act requires certain manufacturers of drugs and biologics covered by Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMSthe Centers for Medicare & Medicaid Services (“CMS”) information related to payments or other transfers of value made to various healthcare professionals including physicians, physician assistants, nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Beginning in 2022, such reporting obligations will be expanded to include payments and other transfers of value provided in 2021 to certain other healthcare professionals.

Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a difficult and costly endeavor. If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to us, we may be subject to significant penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Data Privacy and Security

Numerous state, federal and foreign laws, govern the collection, dissemination, use, access to, confidentiality and security of personal information, including health-related information. In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations, govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. Entities that are found to be in violation of HIPAA or other laws may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations. Further, entities that knowingly obtain, use, or disclose certain individually identifiable health information in an improper fashion may be subject to criminal penalties.

Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we may obtain regulatory approval. In the United States and in foreign markets, sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products. In the United States, third-party payors include federal and state healthcare programs, private managed care providers, private health insurers and other organizations. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the United States, and commercial payors are critical to new product acceptance.

Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval. Decreases in third-party reimbursement for any product or a decision by a third-party not to cover a product could reduce physician usage and patient demand for the product.

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

For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization. In addition, companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion diagnostics.

In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Third-party payorsThe IRA provides CMS with significant new authorities intended to curb drug costs and to encourage market competition. For the first time, CMS will be able to directly negotiate prescription drug prices and to cap out-of-pocket costs. Each year, CMS will select and negotiate a preset number of high-spend drugs and biologics that are increasingly challengingcovered under Medicare Part B and Part D that do not have generic or biosimilar competition. These price negotiations will begin in 2023. The IRA also provides a new “inflation rebate” covering Medicare patients that will take effect in 2023 and is intended to counter certain price increases in prescriptions drugs. The inflation rebate provision will require drug manufacturers to pay a rebate to the prices chargedfederal government if the price for medical productsa drug or biologic under Medicare Part B and services, examiningPart D increases faster than the medical necessityrate of inflation. To support biosimilar competition, beginning in October 2022, qualifying biosimilars whose average sales price (“ASP”) is less than the ASP of its biologic reference product may receive a Medicare Part B payment increase for a period of five years. Separately, if a biologic drug for which no biosimilar exists delays a biosimilar’s market entry beyond two years, CMS will be authorized to subject the biologics manufacturer to price negotiations intended to ensure fair competition. Notwithstanding these provisions, the IRA’s impact on commercialization and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval. Decreases in third-party reimbursement for any product or a decision by a third-party not to cover a product could reduce physician usage and patient demand for the product.competition remains largely uncertain.

Healthcare Reform

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

For example, the Affordable Care Act has substantially changed healthcare financing and delivery by both governmental and private insurers. The Affordable Care Act and its implementing regulations, among other things, revised the methodology for calculating rebates for covered outpatient drugs and certain biologics owed by manufacturers to the state and federal government under the Medicaid Drug Rebate Program, increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected manufacturers to new annual fees and taxes for certain branded prescription drugs, and expanded programs designed to test innovative payment models, service delivery models, or value-based arrangements, and fund comparative effectiveness research.

There remain legal and political challenges to certain aspects of the Affordable Care Act. In December 2018, a United States District Court judge in Texas ruled that the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress in 2017. The decision was appealed to the United States Supreme Court, which overturned it on the basis that the plaintiffs lacked standing. The Supreme Court’s decision did not address the constitutionality of the Affordable Care Act, and left open the opportunity for additional challenges to the Affordable Care Act. It is unclear how such litigation and other efforts to repeal, replace or otherwise modify the Affordable Care Act will impact reimbursement of pharmaceutical and biological products.26

We anticipate that the Affordable Care Act if substantially maintained in its current form, will continue to result in additional downward pressure on coverage and the price that we receive for any approved product, and could seriously harm our business. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates.

In addition, further legislation or regulation could be passed that could harm our business, financial condition and results of operations. Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

There has been increasingNotwithstanding the Inflation Reduction Act, continued legislative and enforcement interest exist in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal legislation designedwe expect regulators to among other things, bring morecontinue pushing for transparency to drug pricing, reducereducing the cost of prescription drugs under Medicare, reviewreviewing the relationship between pricing and manufacturer patient programs, and reformreforming government program reimbursement methodologies for drugs.

Drug and Biologic Development Process in the European Union

The conduct of clinical trials in the EU is governed by the EU Clinical Trials Regulation (EU) No. 536/2014 (“CTR”) which entered into force on January 31, 2022. Under the CTR, a sponsor will be able to submit a single application for approval of a clinical trial through a centralized EU clinical trials portal. One national regulatory authority (the reporting EU member state proposed by the applicant) will take the lead in validating and evaluating the application consult and coordinate with the other concerned member states. If an application is rejected, it may be amended and resubmitted through the EU clinical trials portal. If an approval is issued, the sponsor may start the clinical trial in all concerned member states. However, a concerned EU member state may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial from being conducted in such member state. The CTR also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU Database.

National laws, regulations and the applicable Good Clinical Practice (“GCP”) and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) guidelines on Good Clinical Practice and the ethical principles that have their origin in the Declaration of Helsinki.

During the development of a medicinal product, the European Medical Agency (“EMA”) and national regulators within the EU provide the opportunity for dialogue and guidance on the development program. At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”) on the recommendation of the Scientific Advice Working Party (“SAWP”). A fee is incurred with each scientific advice procedure, but is significantly reduced for designated orphan medicines. Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs. Advice is not legally binding with regard to any future Marketing Authorization Application (“MAA”) of the product concerned.

Drug Marketing Authorization in the European Union

In October 2020, the FDA issued guidanceEU and in Iceland, Norway and Liechtenstein (together the European Economic Area or “EEA”), after completion of all required clinical testing, pharmaceutical products may only be placed on the market after obtaining a Marketing Authorization (“MA”). To obtain an MA of a drug under European Union regulatory systems, an applicant can submit an MAA through, amongst others, a centralized or decentralized procedure.

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The centralized procedure provides for the grant of a single MA by the European Commission (“EC”) that is valid for all EU Member States and, after respective national implementing decisions, in the three additional EEA Member States. The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (“ATMP”) and medicinal products with a new active substance indicated for the treatment of certain diseases (AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases). For medicinal products containing a new active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other diseases, medicinal products that constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA through the centralized procedure would be in the interest of public health at EU level, an applicant may voluntarily submit an application for a marketing authorization through the centralized procedure.

Under the centralized procedure, the Committee for Medicinal Products for Human Use (“CHMP”), established at the EMA, is responsible for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure, the timeframe for the evaluation of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA. However, this timeline excludes clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP, so the overall process typically takes a year or more, unless the application is eligible for an accelerated assessment. Accelerated assessment might be granted by the CHMP in exceptional cases when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. On request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment. The CHMP will provide a positive opinion regarding the application only if it meets certain quality, safety and efficacy requirements. However, the EC has final authority for granting the MA within 67 days after receipt of the CHMP opinion.

The decentralized procedure permits companies to file identical MA applications for a medicinal product to the competent authorities in various EU Member States simultaneously if such medicinal product has not received marketing approval in any EU Member State before. This procedure is available for pharmaceutical products not falling within the mandatory scope of the centralized procedure. The competent authority of a single EU Member State, known as the reference EU Member State, is appointed to review the application and provide an assessment report. Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference EU Member State and concerned EU Member States. The reference EU Member State prepares a draft assessment report and drafts of the related materials within 120 days after receipt of a valid application. Subsequently each concerned EU Member State must decide whether to approve the assessment report and related materials. If an EU Member State cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision is binding for all EU Member States.

All new MAAs must include a Risk Management Plan (“RMP”), describing proceduresthe risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. RMPs and Periodic Safety Update Reports (“PSURs”) are routinely available to third parties requesting access, subject to limited redactions.

Marketing Authorizations have an initial duration of five years. After these five years, the authorization may subsequently be renewed on the basis of a reevaluation of the risk-benefit balance. Once renewed, the MA is valid for manufacturersan unlimited period unless the EC or the national competent authority decides, on justified grounds relating to facilitatepharmacovigilance, to proceed with only one additional five-year renewal. Applications for renewal must be made to the importationEMA at least nine months before the five-year period expires.

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Data and Market Exclusivity in the European Union

As in the United States, it may be possible to obtain a period of FDA-approved biologics manufactured abroad and originally intended for salemarket and/or data exclusivity in a foreign countrythe EU that would have the effect of postponing the entry into the United States. Previously,marketplace of a competitor’s generic, hybrid or biosimilar product (even if the Trump administration releasedpharmaceutical product has already received a “Blueprint,”MA) and prohibiting another applicant from relying on the MA holder’s pharmacological, toxicological and clinical data in support of another MA for the purposes of submitting an application, obtaining MA or plan,placing the product on the market. New Chemical Entities (“NCE”) approved in the EU qualify for eight years of data exclusivity and 10 years of marketing exclusivity.

An additional non-cumulative one-year period of marketing exclusivity is possible if during the data exclusivity period (the first eight years of the 10-year marketing exclusivity period), the MA holder obtains an authorization for one or more new therapeutic indications that are deemed to lower drug pricesbring a significant clinical benefit compared to existing therapies.

The data exclusivity period begins on the date of the product’s first MA in the EU. After eight years, a generic product application may be submitted and reducegeneric companies may rely on the MA holder’s data. However, a generic product cannot launch until two years later (or a total of 10 years after the first MA in the EU of the innovator product), or three years later (or a total of 11 years after the first MA in the EU of the innovator product) if the MA holder obtains MA for a new indication with significant clinical benefit within the eight-year data exclusivity period. Additionally, another noncumulative one-year period of data exclusivity can be added to the eight years of data exclusivity where an application is made for a new indication for a well-established substance, provided that significant pre-clinical or clinical studies were carried out in relation to the new indication. Another year of pocket costsdata exclusivity may be added to the eight years, where a change of drugsclassification of a pharmaceutical product has been authorized on the basis of significant pre-trial tests or clinical trials (when examining an application by another applicant for or holder of market authorization for a change of classification of the same substance the competent authority will not refer to the results of those tests or trials for one year after the initial chance was authorized).

Products may not be granted data exclusivity since there is no guarantee that contained proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers.

Although the Biden administration has stayed the effective dates of some last-minute drug price regulations issueda product will be considered by the Trump administration, CongressEuropean Union’s regulatory authorities to include a NCE. Even if a compound is considered to be a NCE and the Biden administration have each indicatedMA applicant is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the medicinal product if such company can complete a full MAA with their own complete database of pharmaceutical tests, preclinical studies and clinical trials and obtain MA of its product.

European Data Laws

The collection and use of personal health data and other personal data in the EU is governed by the provisions of the European General Data Protection Regulation (EU) 2016/679 (“GDPR”) and related data protection laws in individual EU Member States.

The GDPR imposes a number of strict obligations and restrictions on the ability to process (processing includes collecting, analyzing and transferring) personal data of individuals, in particular with respect to health data from clinical trials and adverse event reporting. The GDPR includes requirements relating to the legal basis of the processing (such as consent of the individuals to whom the personal data relates), the information provided to the individuals prior to processing their personal data, the notification obligations to the national data protection authorities, and the security and confidentiality of the personal data. EU Member States may also impose additional requirements in relation to health, genetic and biometric data through their national legislation.

In addition, the GDPR imposes specific restrictions on the transfer of personal data to countries outside of the EU/EEA that it will continueare not considered by the EC to seekprovide an adequate level of data protection (including the United States). Appropriate safeguards are required to enable such transfers.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, other administrative penalties and a number of criminal offenses (punishable by uncapped fines) for organizations and, in certain cases, their directors and officers, as well as civil liability claims from individuals whose personal data was processed. Data protection authorities from

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the different EU Member States may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional national regulations and guidelines, which adds to the complexity of processing personal data in the EU. Guidance developed at both the EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised.

Furthermore, there is a growing trend towards the required public disclosure of clinical trial data in the EU, which adds to the complexity of obligations relating to processing health data from clinical trials. Such public disclosure obligations are provided in the new legislative and/or administrative measuresEU CTR, EMA disclosure initiatives and voluntary commitments by industry. Failing to control drug costs.comply with these obligations could lead to government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business and operating results. The uncertainty regarding the interplay between different regulatory frameworks, such as the CTR and the GDPR, further adds to the complexity that we face with regard to data protection regulation.

Additional Regulation

In addition to the foregoing, local, state and federal laws, including in the United States and Israel, regarding such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of the environment or expose individuals to hazardous or biohazardous substances, we could be liable for damages, environmental remediation, and/or governmental fines. We believe that we are in material compliance with applicable environmental laws and occupational health and safety laws that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations. We may incur significant costs to comply with such laws and regulations now or in the future.

Competition

The biopharmaceutical industry is intensely competitive and subject to rapid innovation and significant technological advancements. We believe the key competitive factors that will affect the development and commercial success of pegozafermin and any future product candidates are efficacy, safety and tolerability profile, reliability, convenience of dosing, price, the level of generic competition and reimbursement. Our competitors include multinational pharmaceutical companies, specialized biotechnology companies, universities and other research institutions. A number of biotechnology and pharmaceutical companies are pursuing the development or marketing of pharmaceuticals that target the same diseases that we are targeting. Smaller or earlier-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Given the high incidence of NASH, it is likely that the number of companies seeking to develop products and therapies for the treatment of liver and cardio-metabolic diseases, such as NASH, will increase.

If pegozafermin is approved for the treatment of NASH, future competition could also arise from select products currently in development, including: Firsocostat/GS-0976, an ACC inhibitor, and Cilofexor/GS-9674, an FXR agonist, from Gilead Sciences, Inc.; Ervogastat/PF-06865571, a DGAT2 inhibitor, and Clesacostat/PF-05221304, an ACC inhibitor, and PF-06835919, a KHK inhibitor from Pfizer Inc.; Ocaliva, an FXR agonist from Intercept Pharmaceuticals, Inc.; Resmetirom, a beta-thyroid hormone receptor agonist from Madrigal Pharmaceuticals, Inc.; VK2809, a beta-thyroid hormone receptor agonist from Viking Therapeutics, Inc.; Aldafermin, an FGF19 analog from NGM Biopharmaceuticals, Inc.; MK-3655, an FGFR1c/KLB agonist antibody from Merck & Co., Inc.; Efruxifermin, a FGF21 fusion proteinanalog from Akero Therapeutics, Inc.; Belapectin, a Galectin-3 inhibitor from Galectin Therapeutics Inc.; Aramchol, a synthetic conjugate of cholic acid and arachidic acid from Galmed Pharmaceuticals Ltd.; Semaglutide, a GLP-1 receptor agonist from Novo Nordisk A/S; Pemvidutide/ALT-801, a dual GLP-1/glucagon agonist from Altimmune; Tirzepatide, a dual GIP/GLP-1 receptor agonist from Eli Lilly and Company; and Lanifibranor, a PPAR alpha/delta/gamma agonist from Inventiva; NNC0194-0499, an FGF21 analog from Novo Nordisk; and BOS-580, an FGF21 analog from Boston Pharmaceuticals; and BFKB8488A, an FGFR1/KLB agonist antibody from Genentech.Pharmaceuticals.

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If pegozafermin is approved for the treatment of SHTG, we would face competition from currently approved and marketed products, including statins, fibrates, Vascepa (Pure EPA), and Lovaza (EPA and DHA), as well as generic products. Further competition could arise from products currently in development, including: Olezarsen/AKCEA-APOCIII-LRx, an APOC3 inhibitor from Ionis; Evinacumab, an Anti-ANGPTL3 from Regeneron Pharmaceuticals, Inc.; Pemafibrate, a PPAR alpha agonist from Kowa Research Institute, Inc.; and ARO-APOC3, an ApoC-III inhibitor from Arrowhead Pharmaceuticals, Inc.

Many of our competitors have substantially greater financial, technical, human and other resources than we do and may be better equipped to develop, manufacture and market technologically superior products. In addition, many of these competitors have significantly longer operating histories and greater experience than we have in undertaking nonclinical studies and human clinical trials of new pharmaceutical products and in obtaining regulatory approvals of human therapeutic products. Many of our competitors have established distribution channels for the commercialization of their products, whereas we have no such channel or capabilities. In addition, many competitors have greater name recognition and more extensive collaborative relationships. As a result, our competitors may obtain regulatory approval of their products more rapidly than we do or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidate or any future product candidates. Our competitors may also develop and succeed in obtaining approval for drugs that are more effective, more convenient, more widely used and less costly or have a better safety profile than our products and these competitors may also be more successful than we are in manufacturing and marketing their products. If we are unable to compete effectively against these companies, then we may not be able to commercialize our product candidate or any future product candidates or achieve a competitive position in the market. This would adversely affect our ability to generate revenue. Our competitors also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and enrolling patients for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Manufacturing and Supply

We do not own or operate manufacturing facilities for the production of pegozafermin,, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely, and expect to continue to rely, on third parties for the manufacturing of our product candidates for preclinical and clinical testing, as well as for commercial manufacturing if pegozafermin or any future product candidate receives marketing approval.

Pegozafermin drug substance is manufactured by fermentation of a recombinant strain of the bacterium E. coli. Product accumulates as insoluble particles (inclusion bodies) within the cells and is recovered by cell disruption, followed by solubilization of the inclusion bodies, protein refolding and purification with two chromatographic separation columns. Purified material is glycoPEGylated in a 2-step enzymatic reaction where a 20kDa linear glycoPEG moiety is attached to the protein through GalNAc and Sialic Acid linkers.

GlycoPEGylated protein is purified with two chromatographic columns to yield product with target quality attributes. Purified glycoPEGylated protein is concentrated and then formulated to a target concentration with formulation buffer as drug product.

Northway Biotechpharma (“BTPH”) is currently our sole source supplier for pegozafermin.pegozafermin. Any reduction or halt in supply of drug productsubstance from BTPH could limit our ability to develop pegozafermin until a replacement contract manufacturer is found and qualified.

We are working with BTPH and a second vendorCMO currently based in China (with plans to expand into the United States) on process optimization to support large-scale production for future trials and commercialization.

We have successfully developed a new refrigerated liquid formulation. This formulation is approved by the FDA and is currently in use in our trials. We are currently developing an additional liquid formulation at various concentrations.concentrations in Pre-Filled Syringe (“PFS”). In parallel,addition, we have entered into a contract with a vendor for Pre-Filled Syringe (“PFS”) development and commercial fill.fill vendor.

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BTPH Agreement

In May 2018, we entered into a master services agreement with BTPH, under which BTPH agreed to provide us certain services, including development, manufacturing, and storing of pegozafermin,, under statements of work for such services to be agreed by the parties from time to time. The master services agreement will continue for the duration of time that BTPH is providing services to us, unless earlier terminated by either party upon its terms. We may terminate the agreement at any time after a specified notice period and subject to the payment of certain agreed upon fees where such termination results in cancellation of manufacturing scheduled within a certain period. In addition, either party may terminate the agreement for cause for the other party’s uncured material breach, in the event of bankruptcy of the other party, in the event of the commission of fraud by the other party or in the event of a force majeure.

Sales and Marketing

We currently have no marketing, sales or distribution capabilities. In order to commercialize any products that are approved for commercial sale, we must either develop a sales and marketing infrastructure or collaborate with third parties that have sales and marketing experience.

We may elect to establish our own sales force to market and sell a product for which we obtain regulatory approval if we expect that the geographic market for a product we develop on our own is limited or that the prescriptions for the product will be written principally by a relatively small number of physicians. If we decide to market and sell any products ourselves, we do not expect to establish direct sales capability until shortly before the products are approved for commercial sale.

We plan to seek third-party support from established pharmaceutical and biotechnology companies for those products that would benefit from the promotional support of a large sales and marketing force. In these cases, we might seek to promote our products in collaboration with marketing partners or rely on relationships with one or more companies with large established sales forces and distribution systems.

Intellectual Property

Our success depends in part upon our ability to protect our core technology and intellectual property. To protect our intellectual property rights, we rely on patents, trademarks, copyrights and trade secret laws, confidentiality procedures, and employee disclosure and invention assignment agreements. Our intellectual property is critical to our business and we strive to protect it through a variety of approaches, including by obtaining and maintaining patent protection in the United States and internationally for our product candidates, novel biological discoveries, new targets and applications, and other inventions that are important to our business. For our product candidates, we generally intend to pursue patent protection covering compositions of matter, methods of making and methods of use. As we continue the development of our product candidates, we plan to identify additional means of obtaining patent protection that would potentially enhance commercial success, including pursuit of claims directed to new therapeutic indications.

FGF21 Patents

Our FGF21 patent portfolio includes foursix families:

The first family is entitled “Remodeling and GlycoPEGylation of Fibroblast Growth Factor (FGF)”. This patent family provides granted patent protection in 39 countries around the globe, including the United States (U.S. Patent Number 9,200,049, expiry date: June 25, 2028; and U.S. Patent No.Number 10,874,714, expiry date: October 10, 2028), Canada, Europe (broadly), and Japan (latter three expire October 31, 2025) for FGF21 conjugates comprising a variety of modifying groups that can be attached at several different amino acid positions. GlycoPEGylated FGF21 is specifically claimed. The granted claims broadly protect our lead drug candidate pegozafermin and pharmaceutical compositions thereof, as well as methods for making and using pegozafermin to treat FGF21 deficiency in a patient in need thereof. One U.S. application is pending in this family.

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The second family is entitled “Mutant FGF-21 Peptide Conjugate and Uses Thereof” and is specifically directed to pegozafermin. The PCTPatent Cooperation Treaty (“PCT”) Patent Application for this family was filed on September 4, 2018 (PCT/IB2018/00112). A U.S. Prioritized Examination Continuation Patent Application (Application Serial No. 16/225,640) was filed on December 19, 2018 as a continuation of PCT/IB2018/0112 and from which U.S. Patent Number 10,407,479 was issued on September 10, 2019. The term of the U.S. Patent Number 10,407,479 is September 4, 2038. The issued claims are directed to pegozafermin and a defined genus specifically encompassing pegozafermin and compositions thereof (including site-specific mutations at positions 173 and 176), as well as methods for making and using pegozafermin for a variety of therapeutic indications. Such indications include methods for treating NASH or metabolic syndrome. Subjects where there is a need to reduce blood glucose or to reduce HbA1C include those afflicted with diabetes Type 2, NASH and metabolic syndrome. The claims encompass different therapeutic regimens for administering pegozafermin (e.g., once a week or once every two weeks), which regimens are based on pegozafermin’s surprisingly long half-life in vivo. One U.S. application is pending in this family. National phase entry of this PCT Application has been initiated in Australia (granted), Korea (granted), Europe, China (allowed), Hong Kong, Japan (granted), Canada and Israel to pursue globalThis patent family provides granted patent protection of specific mutant FGF21 peptide conjugates, and particularly pegozafermin in these jurisdictions. Australian patent No. 2018322943 was granted on September 17, 202024 ex-United States jurisdictions around the globe: Australia, Canada, China, Europe (broadly), Israel, Japan, Korea and Hong Kong (expiry date: September 4, 2038). Korean patent No. 10-2229037 was granted on March 11, 2021 (expiry date: September 4, 2038). Japan patent No. 6852939 was granted on March 15, 2021 (expiry date: September 4, 2038).One U.S. Patent Application and one China Patent Application are pending in this family.

The third family is entitled “Methods Of Treatment Using Mutant FGF-21 Peptide Conjugates”. A U.S. patent application was filed on May 28, 2020 (US Serial Number 16/885,353). This patent applicationfamily provides granted patent protection in United States (U.S. Patent Number 11,427,623). The term of the U.S. Patent Number 11,427,623 is not published.September 4, 2038. One U.S. Patent Application is pending in this family.

The fourth family is entitled “Methods for promoting weight loss”. A PCT application was filed January 29, 2021 (PCT/IB2021/000044) with claims directed towards method to reduce total body weight, body fat content and/or BMI. A United States National phase entryapplication was filed July 20, 2022. This patent application has not yet been published.

The fifth family is entitled “Liquid Formulations Comprising Mutant FGF-21 Peptide Pegylated Conjugates” with claims directed to on stable liquid formulation of FGF21. A PCT Patent Application for this application is due by July 31,family was filed on March 10, 2022.

A U.S. Prioritized Examination Patent Application was filed on March 10, 2022. We will continue to file patent applications to cover various formulations of FGF21. We have filed a provisional application on March 11, 2021 on stable liquid formulation

The sixth family is entitled “Chemical Synthesis of FGF21.Cytidine-5'-Monophospho-N-Glycyl-Sialic Acid” with claims directed to the chemical synthesis of Cytidine-5'-Monophospho-N-Glycyl-Sialic Acid. A PCT Patent Application for this family was filed on December 20, 2022.

We expect to continue to file patent application claiming the benefit and priorityapplications to the provisional application will be filed by the March 11, 2022 deadline.cover method of treating different indications.

FASN Patents

Our FASN patent portfolio currently consists of three patent families, including patents and/or patent applications in the United States, the European Patent Convention, Canada, Mexico, Israel, China and Japan.

The first patent family, directed to TEV-48317, which we acquired from Teva under the FASN Agreement, and other 1,4-substituted piperidine-based FASN inhibitors, is currently protected by three granted U.S. patents that cover these compounds, pharmaceutical compositions comprising these compounds, and/or methods of treating FASN-mediated disorders using these compounds. The non-extended term for these patents would expire on June 17, 2036. A pending U.S. application has also been filed. The first patent family also includes twelve foreign patents and two foreign patent applications. The second patent family is directed to other 1,4-substituted piperidine-based FASN inhibitors, pharmaceutical compositions, and methods of treating FASN-mediated disorders. The second patent family includes one granted U.S. patent, one U.S. patent application, nine foreign patents, and two foreign patent applications. The third patent family is directed to spiropiperidine FASN inhibitors, pharmaceutical

compositions containing these compounds, and methods of treating FASN-mediated disorders using these compounds. The third patent family includes one granted U.S. patent, one U.S. patent application and five foreign patent applications.

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Employees

As of December 31, 2021,2022, we had 4145 full-time employees, of which 2833 employees are engaged in research and development activities. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

Corporate Information

We were incorporated in January 2018 in Israel under the name 89Bio Ltd. 89bio, Inc., the registrant whose name appears on the cover page of this Annual Report on Form 10-K, was incorporated in June 2019 for the purpose of an internal reorganization transaction. In September 2019, all of the equity holders of 89Bio Ltd. exchanged 100% of the equity of 89Bio Ltd. for 100% of the equity of 89bio, Inc. Following this exchange, 89Bio Ltd. became a wholly owned subsidiary of 89bio, Inc.

Our principal executive offices are located at 142 Sansome Street, San Francisco, California 94104 and our telephone number is (415) 432-9270. Our website is www.89bio.com. Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is an inactive textual reference only.

We file electronically with the SEC our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We make available on our website at www.89bio.com, under “Investors,” free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC.

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

We are an “emerging growth company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including relief from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, less extensive disclosure obligations regarding executive compensation in our registration statements, periodic reports and proxy statements, exemptions from the requirements to hold a nonbinding advisory vote on executive compensation, and exemptions from stockholder approval of any golden parachute payments not previously approved. We may also elect to take advantage of other reduced reporting requirements in future filings. As a result, our stockholders may not have access to certain information that they may deem important and the information that we provide to our stockholders may be different than, and not comparable to, information presented by other public reporting companies. We could remain an emerging growth company until the earlier of (1) the last day of the year following the fifth anniversary of the completion of our initial public offering (“IPO”), (2) the last day of the year in which we have total annual gross revenue of at least $1.07$1.235 billion, (3) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

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In addition, the JOBS Act also provides that an emerging growth company may take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. An emerging growth company may therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, as a result, will not be subject to the same implementation timing for new or revised accounting standards as are required of other public companies that are not emerging growth companies, which may make comparison of our consolidated financial information to those of other public companies more difficult.

We are also a smaller reporting company, as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

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Item 1A. Risk Factors.

Aninvestmentin our commonstockinvolvesa high degree of risk.Youshould carefullyconsiderthe risksand uncertaintiesdescribedbelow beforedecidingwhether to make an investment decision with respect to shares of our commonstock.You should also referto the other informationcontainedin thisAnnual Report on Form 10-K,including“Management’s “Management’s Discussionand Analysisof FinancialCondition and Resultsof Operations” and our auditedconsolidated financialstatementsand relatednotes. Ourbusiness,financialcondition,resultsof operationsand prospectscould be materiallyand adverselyaffectedby any of theserisksor uncertainties.In any such case, the tradingpriceof our commonstockcould decline,and you could lose all or part of your investment. We caution you that the risks, uncertainties and other factors referred to below and elsewhere in this Annual Report on Form 10-K may not contain all of the risks, uncertainties and other factors that may affect our future results and operations. Moreover, new risks will emerge from time to time. It is not possible for our management to predict all risks.

Risk Factor Summary

Investing in our common stock involves significant risks. You should carefully consider the risks described below before making a decision to invest in our common stock. If we are unable to successfully address these risks and challenges, our business, financial condition, results of operations, or prospects could be materially adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. Below is a summary of some of the risks we face.

Risks Related to Our Business and IndustryIndustry

We are a clinical-stage biopharmaceuticalcompany with a limitedoperatinghistoryandnoproducts approvedfor commercialsale. We have incurred net lossessince our inception,weexpectto incur significantand increasingoperatinglossesandwemay never be profitable.Ourstock is a highly speculative investment.investment.

We are a clinical-stagebiopharmaceuticalcompany with a limitedoperatinghistorythatmay make itdifficultto evaluatethe successof our businessto date and to assessour futureviability.We commenced operationsin 2018, and to date, our operationshave been focused on organizingand staffingour company, raisingcapital,acquiringour initialproductcandidate,pegozafermin, and licensingcertain relatedtechnology, conductingresearchand developmentactivities,includingpreclinicalstudiesand clinicaltrials,and providinggeneraland administrativesupportfor theseoperations.Investmentin biopharmaceuticalproductdevelopmentis highly speculativebecauseit entailssubstantialupfrontcapital expendituresand significantriskthatany potentialproductcandidatewill failto demonstrateadequateeffectand/or an acceptablesafetyprofile,gain regulatoryapprovaland becomecommerciallyviable.We have no products approved for commercialsale,wehave not generatedany revenuefromproductsalesto date and wecontinueto incursignificantresearchand developmentand otherexpensesrelatedto our ongoing operations.We have limitedexperienceas a company conductingclinicaltrialsand no experienceas a company commercializing any products.

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Pegozafermin is in development and, to date, we have not generated any revenue from the licensing or commercialization of pegozafermin. We will not be able to generate product revenue unless and until pegozafermin

or any future product candidate, alone or with future partners, successfully completes clinical trials, receives regulatory approval and is successfully commercialized. As pegozafermin is in development, we do not expect to receive revenue from it for a number of years, if ever. Although we may seek to obtain revenue from collaboration or licensing agreements with third parties, we currently have no such agreements that could provide us with material, ongoing future revenue and we may never enter into any such agreements.

We are not profitable and have incurred net losses since our inception. Consequently, predictions about our future success or viability may not be as accurate as they would be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. We have spent, and expect to continue to spend, significant resources to fund research and development of, and seek regulatory approvals for, pegozafermin and any future product candidates. We expect to incur substantial and increasing operating losses over the next several years as our research and development, clinical trialtrials and manufacturing activities increase. In addition, because of the numerous risks and uncertainties associated with pharmaceutical product development, including that our product candidates may not advance or may take longer than expected to advance through development or may not achieve the endpoints of applicable clinical trials, we are unable to predict the timing or amount of increased expenses, or if or when we will achieve or maintain profitability. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. The net losses we incur may fluctuate significantly from quarter-to-quarter such that a period-to-periodcomparisonof our resultsof operationsmay not be a good indicationof our future performance.Even if weeventuallygenerateproductrevenue,wemay never be profitableand, if wedo achieve profitability,wemay not be able to sustainor increaseprofitabilityon a quarterlyor annual basis.

Our business depends on the success of pegozafermin, our only product candidate under clinical development, which has not completed a pivotal trial. If we are unable to obtain regulatory approval for and successfully commercialize pegozafermin or other future product candidates, or we experience significant delays in doing so, our business will be materially harmed.

The primary focus of our product development is pegozafermin for the treatment of patients with NASH and the treatment of patients with SHTG. Currently, pegozafermin is our only product candidate under clinical development. This may make an investment in our company riskier than similar companies that have multiple product candidates in active development and that therefore may be able to better sustain a failure of a lead candidate. Successful continued development and ultimate regulatory approval of pegozafermin for the treatment of NASH or SHTG is critical to the future success of our business. We have invested, and will continue to invest, a significant portion of our time and financial resources in the clinical development of pegozafermin. If we cannot successfully develop, obtain regulatory approval for and commercialize pegozafermin, we may not be able to continue our operations. The future regulatory and commercial success of pegozafermin is subject to a number of risks, including that if approved for NASH or SHTG, pegozafermin will likely compete with products that may reach approval for the treatment of NASH prior to pegozafermin, products that are currently approved for the treatment of SHTG and the off-label use of currently marketed products for NASH and SHTG.

We will requiresubstantialadditionalcapitalto finance our operations, whichmay not be availableto us onacceptableterms,or at all. Asa result,wemay not completethe developmentandcommercializationof pegozaferminor developnewproduct candidates.

As a clinical-stage biopharmaceutical company, our operations have consumed significant amounts of cash since our inception. We expect our research and development expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of and seek regulatory approvals for pegozafermin. We believe that our existing cash and cash equivalents and short-term available-for-sale securities together with the proceeds available from our line of credit pursuant to our Loan and Security Agreement (as amended, the “2021 Loan Agreement”) with Silicon Valley Bank (“SVB”) will fund our projected operating requirements for a period of at least one year from the date of this Annual Report on Form 10-K is filed with the SEC.

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We will require additional capital to discover, develop, obtain regulatory approval for and commercialize pegozafermin and any future product candidates. Our ability to complete new and ongoing clinical trials for pegozafermin may be subject to our ability to raise additional capital. We do not have any committed external source of funds other than the unused portion of the line of credit available to us pursuant to the 2021 Loan Agreement and as a result of any sales that we may make pursuant to the sales agreementSales Agreement for our “at-the-market” offering facility.ATM Facility (defined below) and proceeds from our 2023 Loan Agreement, which are subject to the achievement of certain milestones and/or consent of the lenders. We expect to finance future cash needs through public or private equity or debt offerings or product collaborations. Additional capital may not be available in sufficient amounts or on reasonable terms, if at all. The current market environment for small biotechnology companies, like 89bio, and broader macroeconomic factors may preclude us from successfully raising additional capital.

If we do not raise additional capital, we may not be able to expand our operations or otherwise capitalize on our business opportunities, our business and financial condition will be negatively impacted and we may need to: significantly delay, scale back or discontinue research and discovery efforts and the development or commercialization of any product candidates or cease operations altogether; seek strategic alliances for research and development programs when we otherwise would not, or at an earlier stage than we would otherwise desire or on terms less favorable than might otherwise be available; or relinquish, or license on unfavorable terms, our rights to technologies or any product candidates that we otherwise would seek to develop or commercialize ourselves.

In addition, if pegozafermin receives approval and is commercialized, we will be required to make milestone and royalty payments to Teva Pharmaceutical Industries Ltd (“Teva”), from whom we acquired certain patents and intellectual property rights relating to pegozafermin, and from whom we licensed patents and know-how related to glycoPEGylation technology that is used in the manufacture of pegozafermin. For additional information regarding this license agreement, please see Note 5 of our accompanying audited consolidated financial statements.

Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes, and the results of prior preclinical or clinical trials are not necessarily predictive of our future results.

Pegozafermin and any future product candidates will be subject to rigorous and extensive clinical trials and extensive regulatory approval processes implemented by the FDA and comparable foreign regulatory authorities before obtaining marketing approval from these regulatory authorities. The drug development and approval process is lengthy and expensive, and approval is never certain. Investigational new drugs, such as pegozafermin, may not prove to be safe and effective in clinical trials. We have no direct experience as a company in conducting pivotal trials required to obtain regulatory approval. We may be unable to conduct clinical trials at preferred sites, enlist clinical investigators, enroll sufficient numbers of participants or begin or successfully complete clinical trials in a timely fashion, if at all. In addition, the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. We may be unable to design and execute a clinical trial to support regulatory approval. Even if a current clinical trial is successful, it may be insufficient to demonstrate that pegozafermin is safe or effective for registration purposes.

There is a high failure rate for drugs and biologic products proceeding through clinical trials. Failure can occur at any time during the clinical trial process. The results of preclinical studies and early clinical trials of pegozafermin or any future product candidate may not be predictive of the results of later-stage clinical studies or trials and the results of studies or trials in one set of patients or line of treatment may not be predictive of those obtained in another. In fact, many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical studies and earlier stage clinical trials. In addition, data obtained from preclinical and clinical activities is subject to varying interpretations, which may delay, limit or prevent regulatory approval. It is impossible to predict when or if pegozafermin or any future product candidate will prove effective or safe in humans or will receive regulatory approval. Owing in part to the complexity of biological pathways, pegozafermin or any future product candidate may not demonstrate in patients the biochemical and pharmacological properties we anticipate based on laboratory studies or earlier stage clinical trials, and they may interact with human biological systems or other drugs in unforeseen, ineffective or harmful ways. The number of patients exposed to product candidates and the average exposure time in the clinical development programs may be inadequate to detect rare adverse events or findings that may only be detected once a product candidate is administered to more patients and for greater periods of time. To date, our Phase 1a, Phase 1b/2a and Phase 2 clinical trials have involved small patient populations and, because of the small sample size in

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such trials, the results of these clinical trials may be subject to substantial variability, including the inherent variability associated with biopsies in NASH patients, and may not be indicative of either future interim results or final results in future trials of patients with liver or cardio-metabolic diseases. If we are unable to successfully demonstrate the safety and efficacy of pegozafermin or other future product candidates and receive the necessary regulatory approvals, our business will be materially harmed.

The ongoing COVID-19 pandemic has resulted and may in the future result in significant disruptions to our clinical trials or other business operations, which could have a material adverse effect on our business.

Our business and its operations, including but not limited to our research and development activities, could behave been adversely affected by health epidemics in regions where we have business operations, and such health epidemics have caused and could continue to cause significant disruption in the operations of third parties upon whom we rely. In response to public health directives and orders related to COVID-19, and based on guidance from public health officials, we have implemented and may continue to implement work-from-home policies for our employees on an office-by-office basis.hybrid work policy. The effects of executive and similar government orders, shelter-in-place orders and our work-from-home policieswhich may negatively impact our growth, including our ability to recruit and onboard new employees, and productivity, disrupt our business and delay our preclinical and clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.productivity.

Our clinical trials have been and may continue to be affected by the COVID-19 pandemic. For example, while we initiated the Phase 2 trial (ENTRIGUE) of pegozafermin for the treatment of SHTG, our successful completion of these trials will depend on the external environment with respect to COVID-19 remaining conducive to executing the trial safely and effectively. The COVID-19 pandemic has impacted execution and enrollment of our trials. We expect to report topline data from this study in the second quarter of 2022. Given the surges in cases of COVID-19 experienced previously and uncertainty regarding other variants, we cannot predict how our ongoing or future trials may be impacted.

In addition, quarantines, shelter-in-place, executive and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases, havehas impacted and may continue to impact personnel at third-party manufacturing facilities in the United States, Europe and other countries, or the availability or cost of materials we use or require to conduct our business, including product development, which would disrupt our supply chain. In particular, BTPH, our sole source supplier for pegozafermin, has missed certain project deadlines for our manufacturing scale-up due to quarantine orders and has forecasted other delays due to COVID-19-related impacts on their suppliers. Furthermore, we have experienced and may continue to experience delays due to widespread supply chain issues relating to the COVID-19 pandemic, as well as historically the designation of certain supplies for vaccine production, which may limit our ability to obtain sufficient materials for our drug products. However, we have not experienced and do not expect to experience any delays to the overall timeline for the delivery of clinical supplies.

If COVID-19 continues to spread in the United States and elsewhere, we may experience additional disruptions that could severely impact our business, preclinical studies and clinical trials, including: delays in receiving authorization from local regulatory authorities to initiate our planned clinical trials; 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; delays in clinical sites receiving the supplies and materials needed to conduct 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 and result in unexpected costs, or discontinuing our clinical trials altogether; a 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 and data entry and verification, 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 completeness and integrity of clinical trial data and, as a result, determine the outcomes of the trial; the 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; the risk that participants enrolled in our clinical trials will not be able to travel to our clinical trial sites as a result of quarantines or other restrictions resulting from COVID-19 or comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services; interruptions or delays in preclinical studies due to restricted or limited operations at our research and development laboratory facilities; limitations in employee resources that would otherwise be focused on the conduct of our clinical trials; the refusal of the FDA to accept data from clinical trials in affected geographies; and interruption or delays to our clinical activities.

The COVID-19 pandemic continues to evolve rapidly.evolve. The ultimate impact of the COVID-19 pandemic or a similar public health emergency is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole. However, any one or a combination of these events could have an adverse effect on the operation of and results from our clinical trials and on our other business operations, including preventing or delaying approval for pegozafermin.

Our business depends on

40the success

of pegozafermin, our only product candidateunder clinicaldevelopment, whichhas not completeda pivotaltrial. If we are unable to obtain regulatory approval for and successfully commercialize pegozafermin or other future product candidates, or weexperiencesignificantdelaysin doing so, our business will be materiallyharmed.

To date, the primary focus of our product development has been pegozafermin for the treatment of patients with NASH. Currently, pegozafermin is our only product candidate under clinical development. This may make an investment in our company riskier than similar companies that have multiple product candidates in active development and that therefore may be able to better sustain a failure of a lead candidate. Successful continued development and ultimate regulatory approval of pegozafermin for the treatment of NASH or other indications, including SHTG, is critical to the future success of our business. We have invested, and will continue to invest, a significant portion of our time and financial resources in the clinical development of pegozafermin. If we cannot successfully develop, obtain regulatory approval for and commercialize pegozafermin, we may not be able to continue our operations. The future regulatory and commercial success of pegozafermin is subject to a number of risks, including that if approved for NASH or SHTG, pegozafermin will likely compete with products that may reach approval for the treatment of NASH prior to pegozafermin, products that are currently approved for the treatment of SHTG and the off-label use of currently marketed products for NASH and SHTG.

Clinicaldrug developmentinvolvesa lengthy andexpensiveprocesswith uncertain timelinesanduncertain outcomes,andthe resultsof prior preclinicalor clinicaltrialsare not necessarilypredictiveof our future results.

Pegozafermin and any futureproductcandidateswill be subjectto rigorousand extensiveclinicaltrialsand extensiveregulatoryapprovalprocessesimplementedby the FDAand comparableforeignregulatoryauthorities beforeobtainingmarketingapprovalfromtheseregulatoryauthorities.The drug developmentand approval processis lengthyand expensive,and approvalis never certain.Investigationalnewdrugs, such as pegozafermin, may not prove to be safeand effectivein clinicaltrials.We have no directexperienceas a company in conductingpivotaltrialsrequiredto obtainregulatoryapproval.We may be unable to conduct clinical trialsat preferredsites,enlistclinicalinvestigators,enrollsufficientnumbersof participantsor begin or successfullycompleteclinicaltrialsin a timelyfashion,if at all.In addition,the design of a clinicaltrialcan determinewhether itsresultswill supportapprovalof a product,and flaws in the design of a clinicaltrialmay not becomeapparentuntilthe clinicaltrialis well advanced. Wemay be unable to design and executea clinicaltrialto supportregulatoryapproval. Even if a currentclinicaltrialis successful,it may be insufficientto demonstratethatpegozafermin is safeor effectivefor registrationpurposes.

There is a high failureratefor drugs and biologicproductsproceedingthrough clinicaltrials.Failurecan occur at any timeduring the clinicaltrialprocess.The resultsof preclinicalstudiesand earlyclinicaltrialsof pegozafermin or any futureproductcandidatemay not be predictiveof the resultsof later-stageclinicalstudiesor trialsand the resultsof studiesor trialsin one set of patientsor lineof treatmentmay not be predictiveof those obtainedin another.In fact,many companiesin the pharmaceuticaland biotechnologyindustrieshave suffered significantsetbacksin late-stageclinicaltrialseven afterachievingpromisingresultsin preclinicalstudiesand earlierstageclinicaltrials.In addition,data obtainedfrompreclinicaland clinicalactivitiesis subjectto varying interpretations,which may delay, limitor preventregulatoryapproval.It is impossibleto predictwhenor if pegozafermin or any futureproductcandidatewill prove effectiveor safein humans or will receiveregulatory approval.Owingin partto the complexityof biologicalpathways, pegozafermin or any futureproductcandidate may not demonstratein patientsthe biochemicaland pharmacologicalpropertiesweanticipatebased on laboratorystudiesor earlierstageclinicaltrials,and they may interactwith human biologicalsystemsor other drugs in unforeseen,ineffectiveor harmfulways. The numberof patientsexposed to productcandidatesand the averageexposuretimein the clinicaldevelopmentprogramsmay be inadequateto detectrareadverseeventsor findingsthatmay only be detectedonce a productcandidateis administeredto morepatientsand for greater periodsof time.Todate, testing, our Phase 1a and Phase 1b/2a clinicaltrialshave involvedsmallpatientpopulationsand, becauseof the small

samplesizein such trials,the resultsof theseclinicaltrialsmay be subjectto substantial variability, including the inherent variability associated with biopsies in NASH patients,and may not be indicativeof eitherfutureinterimresultsor finalresultsin future trials of patientswith liveror cardio-metabolicdiseases.If weare unable to successfullydemonstratethe safetyand efficacyof pegozafermin or otherfutureproductcandidatesand receivethe necessaryregulatoryapprovals,our businesswill be materially harmed.

If weexperiencedelaysin clinicaltesting,our commercialprospectswill be adverselyaffected,our costsmay increaseandour business may be harmed.

We cannot guaranteethatwewill be able to initiateand completeclinicaltrials and successfullyaccomplish all requiredregulatoryactivitiesor otheractivitiesnecessaryto gain approval and commercialize pegozafermin or any future product candidates.We currentlyhave two activeinvestigational new drug (“IND”) applicationswith the FDAin the United Statesfor pegozafermin. In the future,wemay filean additionalINDwith anotherdivisionfor any futureindications or future product candidates.If any such futureINDis not approved by the FDA,our clinicaldevelopmenttimelinemay be negativelyimpactedand any futureclinical programsmay be delayedor terminated. Asa result,wemay be unable to obtainregulatoryapprovalsor successfullycommercializeour products.We do not knowwhether any otherclinicaltrialswill begin as planned, will need to be restructuredor will be completedon schedule,or at all.Our productdevelopmentcostswill increaseif weexperiencedelaysin clinicaltesting.Significantclinicaltrialdelaysalso could shortenany periods during which wemay have the exclusiverightto commercializepegozafermin and any futureproductcandidatesor allow our competitorsto bring productsto marketbeforewedo, which would impairour abilityto successfully commercializepegozafermin or any futureproductcandidatesand may harmour business,resultsof operationsand prospects.Our or our futurecollaborators’inabilityto timelycompleteclinicaldevelopmentcould resultin additionalcoststo us as well as impairour abilityto generateproductrevenue,continuedevelopment, commercializepegozafermin and any futureproductcandidates,reachsalesmilestonepaymentsand receive royaltieson productsales.In addition,if wemake changes to a productcandidate including, for example, a new formulation,wemay need to conduct additionalnonclinicalstudiesor clinicaltrialsto bridgeor demonstratethe comparabilityof our modifiedproduct candidateto earlierversions,which could delay our clinicaldevelopmentplan or marketingapprovalfor our currentproductcandidateand any future product candidates.productcandidates.

If weencounter difficultiesin enrollingpatientsin our clinicaltrials,our clinicaldevelopmentactivitiescould be delayedor otherwise adversely affected.adverselyaffected.

The timely completion of clinical trials largely depends on patient enrollment. We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our future clinical trials, and even once enrolled, we may be unable to retain a sufficient number of patients to complete any of our trials. Furthermore, there are inherent difficulties in diagnosing NASH, which can currently only be definitively diagnosed through a liver biopsy, and identifying SHTG patients. Specifically, identifying patients most likely to meet NASH enrollment criteria on biopsy is an on-going challenge, with existing clinical indicators lacking both sensitivity and specificity. As a result, NASH trials often suffer from high levels of screen failure following central review of the baseline liver biopsy, which can lead to lower enrollment. As a result of such difficulties and the significant competition for recruiting NASH and SHTG patients in clinical trials, we or our future collaborators may be unable to enroll the patients we need to complete clinical trials on a timely basis, or at all. We plan to leverage the safety database from the SHTG Phase 3 program across both the SHTG and NASH indications. If we are not able enroll enough patients in our trials sufficient to support the safety database, our ability to advance the development of pegozafermin may be adversely affected.

In addition, our competitors, some of whom have significantly greater resources than we do, are conducting clinical trials for the same indications and seek to enroll patients in their studies that may otherwise be eligible for our clinical studies or trials. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which could further reduce the number of patients who are available for our clinical trials in these sites. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Even if we are able to enroll a sufficient number of patients in our clinical studies or trials, delays in patient enrollment may result in increased costs or may affect the timing or outcome of our clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of pegozafermin and any future product candidates.

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We have relied on, and expect to continue to rely on, third-party manufacturers and vendors to produce and release pegozafermin or any future product candidates. Any failure by a third-party to produce and release acceptable product candidates for us pursuant to our specifications and regulatory standards may delay or impair our ability to initiate or complete our clinical trials, obtain and maintain regulatory approvals or commercialize approved products.

We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates, and we lack the resources and the capabilities to do so. As a result, we currently rely, and expect to rely for the foreseeable future, on third-party manufacturers to supply us with pegozafermin and any future product candidates. We currently have a sole source relationship with BTPH pursuant to which they supply us with pegozafermin. If there should be any disruption in our supply arrangement with BTPH, including any adverse events affecting BTPH, it could have a negative effect on the clinical development of pegozafermin and other operations while we work to identify and qualify an alternate supply source. In addition, we will require large quantities of pegozafermin for large clinical trials and to commercialize pegozafermin. Our current manufacturer may not be able to scale production to the larger quantities. We have identified a manufacturing partner for commercial-scale manufacturing, however, we cannot guarantee that such partner will be able to scale up and produce the quantities we would require to commercialize pegozafermin.

We do not have a long-term supply agreement with any third-party manufacturer. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufacture product candidates or products ourselves. For example, if we do not maintain our key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities in a timely manner or at all, which could delay or impair our ability to obtain regulatory approval for our products and substantially increase our costs or deplete profit margins, if any. If we do find replacement manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us, and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other comparable foreign regulatory authorities.

We have begun producing certain of the reagents required for the glycoPEGylation at BTPH using the know-how transferred to us from Teva Pharmaceutical Industries Ltd (“Teva”) under our Reagent Supply and Technology Transfer Agreement. We have not completed the manufacturing process for all these reagents and cannot guarantee that we will be able to produce them successfully, or scale up our production for the quantities needed for commercialization.

Teva continues to supplysupplied us with certain reagents and will continue to do so until December 31, 2022. We expecttransferred the manufacturing of such reagents will be transferred to a new suppliersuppliers prior to the end of 2022. Any complications arising under our agreement with Teva or any difficulties securing a new supplier could considerably delay the manufacture of pegozafermin. Any significant delay in the acquisition or decrease in the availability of these raw materials from Teva or any new suppliersuppliers could considerably delay the manufacture of pegozafermin, which could adversely impact the timing of any planned trials or the regulatory approvals of pegozafermin.

We rely on third-party vendors for our assay development and testing. If such third-party vendors are unable to successfully produce or test such assays, it may substantially increase our cost or could adversely impact the timing of any planned trials or the regulatory approvals of pegozafermin.

The FDA and other comparable foreign regulatory authorities require manufacturers to register manufacturing facilities. The FDA and other comparable foreign regulatory authorities also inspect these facilities to confirm compliance with cGMP. We have little to no control regarding the occurrence of third-party manufacturer incidents. Any failure to comply with cGMP requirements or other FDA or comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop pegozafermin or any future product candidates and market our products following approval. Our sole source supplier, BTPH, has not yet manufactured a commercial product, and as a result, has not been subject to inspection by the FDA and other comparable foreign regulatory authorities.

Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop our product candidates and commercialize any products that receive regulatory approval on a timely basis. Supply chain issues, including those resulting from the COVID-19 pandemic and the ongoing war in Ukraine, may affect our third-party vendors and cause delays. Furthermore, since we have engaged a manufacturer located in China, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the United States or Chinese

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governments, political unrest or unstable economic conditions in China. If we are required to change manufacturers for any

reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. For example, in the event that we need to switch our third-party manufacturer of pegozafermin from BTPH, which is our sole manufacturing source for pegozafermin, we anticipate that the complexity of the glycoPEGylation manufacturing process may materially impact the amount of time it may take to secure a replacement manufacturer. The delays associated with the verification of a new manufacturer, if we are able to identify an alternative source, could negatively affect our ability to develop product candidates in a timely manner or within budget.

Pegozafermin andany future product candidatesmay cause undesirableside effectsor have other propertiesthat could delay or preventtheirregulatoryapproval or limitthe commercialprofileof anapproved label.

Undesirableside effectscaused by pegozafermin or any futureproductcandidatescould cause us or regulatoryauthoritiesto interrupt,delay or haltclinicaltrialsand could resultin a morerestrictivelabelor the delay or denialof regulatoryapprovalby the FDAor othercomparableforeignregulatoryauthorities.Additional clinicalstudiesmay be requiredto evaluatethe safetyprofileof pegozafermin or any futureproductcandidates. As with other drugs, we have seen evidence of adverse effects in animal and human studies and it is possible that other adverse effects will become apparent in ongoing or future animal or human safety studies. It may be difficultto discernwhether certaineventsor symptomsobservedduring our clinicaltrialsor by patientsusing our approved productsare relatedto pegozafermin or any futureproductcandidatesor approved productsor some otherfactor.Asa result,weand our developmentprogramsmay be negativelyaffectedeven if such eventsor symptomsare ultimatelydeterminedto be unlikelyrelatedto pegozafermin or any futureproduct candidatesor approved products.Further,weexpectthatpegozafermin will requiremultipleadministrationsvia subcutaneous injectionin the courseof a clinicaltrial. Thischronicadministrationincreasesthe risk that rareadverseeventsor chance findings are discovered in the commercial setting, where pegozafermin would be administeredadministered to more patientsor for greaterperiodsof time, that were not uncovered by our clinicaldrug development programs.programs.

We are developing pegozafermin for the treatmentof NASH, an indication for which there are no approved products. Thisproducts, and the treatment of SHTG. The requirements for approval of pegozafermin by the FDA and comparable foreign regulatory authorities may be difficult to predict and may change over time, which makes it difficultto predictthe timingandcostsof the clinical development.developmentof pegozaferminfor the treatmentof NASH.

We are developing pegozafermin for the treatment of NASH, an indication for which there are no approved products. Although there are guidelines issued by the FDA for the development of drugs for the treatment of NASH, the development of a novel product candidates such as pegozafermin may be more expensive and take longer than for other, better known or extensively studied product candidates. As other companies are in later stages of clinical trials for their potential NASH therapies, we expect that the path for regulatory approval for NASH therapies may continue to evolve in the near term as these other companies refine their regulatory approval strategies and interact with regulatory authorities. Such evolution may impact our future clinical trial designs, including trial size and endpoints, in ways that we cannot predict today. In particular, regulatory authority expectations about liver biopsy data may evolve especially as more information is published about the inherent variability in liver biopsy data. Certain of our competitors have experienced regulatory setbacks for NASH therapies following communications from the FDA. We currently do not know the impact, if any, that these setbacks could have on the path for regulatory approval for NASH therapies generally or for pegozafermin. Furthermore, the histology endpoints from our Phase 2b ENLIVEN trial may not be accepted as primary endpoints for a pivotal Phase 3 trial or for FDA approval.

We are also developing pegozafermin for the treatment of SHTG. Clinical trials for the treatment of SHTG may be relatively costly and time-consuming. In addition, the requirements for approval by the FDA and comparable foreign regulatory authorities may change over time. If the FDA disagrees with our trial and program design for our planned Phase 3 program for SHTG or requires additional evidence to support a successful submission for approval, we may be required to make changes to our program design that could impact timelines and cost.

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Our anticipated development costs would likely increase if development of pegozafermin or any future product candidate is delayed because we are required by the FDA to perform studies or trials in addition to, or different from, those that we currently anticipate.

We are also developing pegozafermin for the treatment of SHTG. Clinical trials for the treatment of SHTG may be relatively costly and time consuming. The requirements for approval by the FDA and comparable foreign regulatory authorities may change over time and this may requireanticipate, or make changes to ongoing or future clinical trial designs that could impact timelinesdesigns. In addition, if we are unable to leverage our safety database for both SHTG and cost.NASH indications, we may be required to perform additional trials, which would result in increased costs and may affect the timing or outcome of our clinical trials.

Lack of efficacy, adverse events or undesirable side effects may emerge in clinical trials conducted by third parties developing FGF product candidates, which could adversely affect our stock price, our ability to attract additional capital and our development program.

Lack of efficacy, adverse events or undesirable side effects may emerge in clinical trials conducted by third parties developing FGF product candidates like ours. For example, Novo Nordisk, and Akero Therapeutics, Inc. and Boston Pharmaceuticals are also developing FGF21 product candidates for the treatment of NASH. We have no control over their clinical trials or development program, and lack of efficacy, adverse events or undesirable side effects experienced by subjects in their clinical trials could adversely affect our stock price, our ability to attract additional capital and our clinical development plans for pegozafermin or even the viability or prospects of pegozafermin as a product candidate, including by creating a negative perception of FGF therapeutics by healthcare providers or patients.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or topline data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline data should be viewed with caution until the final data are available. From time to time, we may also disclose interim data from our clinical trials. In addition, we may report interim analyses of only certain endpoints rather than all endpoints. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

Themanufactureof biologicproducts is complexandweare subjectto many manufacturingrisks,any of whichcould substantiallyincreaseour costsandlimitsupply of our products.

Todate, pegozafermin has been manufacturedby a singlethird-partymanufacturer,BTPH,solelyfor preclinicalstudiesand clinicaltrials.The processof manufacturing pegozafermin, and in particular,the glycoPEGylationprocess, is complex,highly regulated and subjectto severalrisks and requiressignificantexpertiseand capitalinvestment,including for the developmentof advanced manufacturing techniquesand processcontrols.Manufacturersof biologicproductsoftenencounterdifficultiesin production, including difficultieswith productioncostsand yields,qualitycontrol,includingstabilityof the product, qualityassurancetesting,operatorerrorand shortagesof qualifiedpersonnel,as well as compliancewith strictly enforcedfederal,stateand foreignregulations.We cannot assureyou thatany stabilityor otherissuesrelatingto the manufactureof pegozafermin will not occur in the future. We have limitedprocessdevelopmentcapabilitiesand have accessonly to externalmanufacturing capabilities.We do not have and wedo not currentlyplan to acquireor develop the facilitiesor capabilitiesto manufacturebulk drug substanceor filleddrug productfor use in human clinicaltrialsor commercialization.

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We face substantialcompetition,whichmay resultin others discovering,developingor commercializing competingproducts beforeor more successfullythan us.

The biopharmaceuticalindustryis intenselycompetitiveand subjectto rapidinnovationand significant technologicaladvancements.Our competitors includemultinationalpharmaceuticalcompanies,specializedbiotechnologycompanies,universitiesand other researchinstitutions.Anumberof biotechnologyand pharmaceuticalcompaniesare pursuingthe developmentor marketingof pharmaceuticalsthattargetthe samediseasesthatweare targeting. Certain of these companies have recently published positive data regarding their clinical trials, which may further increase the competition we face. Smalleror earlier-stage companiesmay also prove to be significantcompetitors,particularlythrough collaborativearrangementswith large,establishedcompanies.Given the high incidenceof NASHand SHTG, it is likelythatthe numberofcompaniesseekingto

develop productsand therapiesfor the treatmentof liverand cardio-metabolicdiseases, such as NASHand SHTG, will increase.

Thereare numerouscurrentlyapproved therapiesfor treatingdiseasesotherthan NASHand some of thesecurrentlyapproved therapiesmay exerteffectsthatcould be similarto pegozafermin in NASH. Many of theseapproved drugs are well-establishedtherapiesor productsand are widely acceptedby physicians,patientsand third-partypayors. Some of thesedrugs are branded and subjectto patentprotection,and othersare availableon a genericbasis.This may make it difficultfor us to differentiateour productsfromcurrentlyapproved therapies,which may adverselyimpactour businessstrategy. We expect thatif pegozafermin or any futureproductcandidatesare approved, they will be pricedat a significantpremium over competitivegenericproducts,includingbranded genericproducts.Insurersand otherthird-partypayors may also encouragethe use of genericproductsor specificbranded products prior to utilization of pegozafermin.In addition,many companiesare developingnewtherapeutics,and wecannot predictwhat the standardof care will be as pegozafermin or any futureproductcandidatesprogressthrough clinicaldevelopment.In addition,to the extentpegozafermin or any futureproductcandidatesare approved for liver or cardio-metabolicindications,such as SHTG, the commercialsuccessof our productswill also depend on our abilityto demonstratebenefitsover the then-prevailingstandardof care,includingdiet,exerciseand lifestyle modifications.modifications.

Further,if pegozafermin or any futureproductcandidatesare approved for the treatmentof SHTG,wewill competewith currentlyapproved therapiesand therapiesfurtheralong in development.Our competitorsboth in the United Statesand abroad includelarge,well-establishedpharmaceuticaland genericcompanieswith significantlygreatername recognition.Our competitorsmay be able to chargelower pricesthan wecan, which may adverselyaffectour marketacceptance.Many of thesecompetitorshave greaterresourcesthan wedo, includingfinancial,productdevelopment,marketing,personneland other resources.resources.

If our competitorsmarketproductsthatare moreeffective,saferor cheaperthan our productsor that reachthe marketsooner than our products,wemay not achievecommercialsuccess.Many of our competitorshave substantiallygreaterfinancial,technical,human and otherresourcesthan wedo and may be betterequipped to develop, manufactureand markettechnologicallysuperiorproducts.Asa result,our competitorsmay obtainregulatoryapprovalof theirproductsmorerapidlythan wedo or may obtainpatentprotectionor otherintellectualpropertyrightsthatlimitour abilityto develop or commercializeour productcandidateor any futureproductcandidates.Our competitorsmay also develop and succeedin obtainingapprovalfor drugs thatare moreeffective,moreconvenient,morewidely used and less costlyor have a bettersafetyprofilethan our productsand thesecompetitorsmay also be moresuccessfulthan weare in manufacturingand marketing their products.theirproducts.

Unstable marketandeconomicconditions, inflation, increases in interest rates, natural disasters, public health crises such as the COVID-19 pandemic, political crises, geopolitical events, such as the crisis in Ukraine, or other macroeconomic conditions, may have seriousadverseconsequences onour business and financial condition.condition.

GlobalThe global economy, including creditand financialmarkets,have experiencedextreme volatility and disruptionsat variouspointsover the last few decades.If anothersuch disruptiondecades, including, among other things, diminished liquidity and credit availability, declines in creditand financialmarketsand deteriorationofconsumer confidence, declines in economic growth, supply chain shortages, increases in inflation rates, higher interest rates, and uncertainty about economic stability. For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets. The Federal Reserve has raised interest rates multiple times in response to concerns about inflation and it may raiseconditions occurs,

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them again. Higher interest rates, coupled with reduced government spending and volatility in financial markets, may increase economic uncertainty and affect consumer spending. Similarly, the ongoing military conflict between Russia and Ukraine and the rising tensions between China and Taiwan have created extreme volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain. Any such volatility and disruptions may adversely affect our business or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessarydebt or equityfinancingmoredifficultto complete,morecostly,and moredilutive.Failureto secureany necessaryfinancingin a timelymannerand on favorabletermscould have a materialadverseeffecton our growth strategy,financialperformanceand sharepriceand could requireus to delay or abandon developmentor commercializationplans. In addition,thereis a riskthatone or moreof our serviceproviders,manufacturersor otherpartnerswould not surviveor be able to meettheircommitmentsto us under such circumstances,which could directlyaffectour abilityto attainour operatinggoals on scheduleand on budget.

We have experienced and may in the future experience disruptions as a result of such macroeconomic conditions, including delays or difficulties in initiating or expanding clinical trials and manufacturing sufficient quantities of materials. Any one or a combination of these events could have a material and adverse effect on our results of operations and financial condition.

The 20212023 Loan Agreement contains certain covenants that could adversely affect our operations and, if an event of default were to occur, we could be forced to repay any outstanding indebtedness sooner than planned and possibly at a time when we do not have sufficient capital to meet this obligation.

Pursuant to the 20212023 Loan Agreement, we have pledged substantially all of our assets, other than our intellectual property rights, and have agreed that we may not sell or assign rights to our patents and other intellectual property without the prior consent of SVB.our lenders. Additionally, the 20212023 Loan Agreement contains certain affirmative and negative covenants that could prevent us from taking certain actions without the consent of our lenders. These covenants may limit our flexibility in operating our business and our ability to take actions that might be

advantageous to us and our stockholders. The 20212023 Loan Agreement also includes customary events of default, including, among other things, an event of default upon a change of control. Upon the occurrence and continuation of an event of default, all amounts due under the 20212023 Loan Agreement become automatically (in the case of a bankruptcy event)event of default) or may become (in the case of all other events of default and at the option of SVB)the administrative agent), immediately due and payable. If an event of default under the 20212023 Loan Agreement should occur and be continuing, we could be required to immediately repay any outstanding indebtedness. If we are unable to repay such debt, the lenders would be able to foreclose on the secured collateral, including our cash accounts, and take other remedies permitted under the 20212023 Loan Agreement. Even if we are able to repay any indebtedness onsuch accelerated debt amount under the 2023 Loan Agreement upon an event of default, the repayment of these sums may significantly reduce our working capital and impair our ability to operate as planned.

We may encounter difficultiesin managing our growth, whichcould adverselyaffectour operations.

We are in the earlystagesof buildingthe fullteamthatweanticipate wewill need to completethe developmentpegozafermin and otherfutureproductcandidates.As weadvance our preclinicaland clinicaldevelopmentprogramsfor productcandidates,seek regulatoryapproval in the United Statesand elsewhereand increasethe numberof ongoing productdevelopmentprograms,we anticipatethatwewill need to increaseour productdevelopment,scientificand administrativeheadcount.We will also need to establishcommercialcapabilitiesin orderto commercializeany productcandidatesthatmay be approved. Such an evolutionmay impactour strategicfocus and our deploymentand allocationof resources.Our ability to manage our operations and growth effectively depends upon the continual improvement of our procedures, reporting systems and operational, financial and management controls. We may not be able to implement administrative and operational improvements in an efficient or timely manner and may discover deficiencies in existing systems and controls. In addition, in order to continue to meet our obligations as a public company and to support our anticipated long-term growth, we will need to increase our general and administrative capabilities. Our management,personneland systemsmay experiencedifficultyin adjustingto our growth and strategic focus.focus.

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We must attractandretainhighly skilledemployeesin order to succeed. If weare not able to retainour current senior managementteamandour scientificadvisorsor continue to attractandretainqualified scientific,technicalandbusiness personnel, our business will suffer.

We may not be able to attractor retainqualifiedpersonneland consultantsdue to the intense competitionfor such individuals in the biotechnologyand pharmaceuticalindustries.If weare not able to attractand retainnecessarypersonneland consultantsto accomplishour businessobjectives,it may significantlyimpedethe achievementof our developmentand commercialobjectivesand our abilityto implementour businessstrategy. In addition, we are highly dependenton the development,regulatory, manufacturing, commercializationand financialexpertiseof the membersof our executiveteam,as well as otherkey employeesand consultants.If welose one or moreof our executiveofficersor otherkey employeesor consultants,our abilityto implementour businessstrategy successfullycould be seriously harmed.harmed.

We are developinga newdrug product presentations for the liquid formulationfor of pegozafermin andwemay be unsuccessful.Anychanges in methodsof product candidatemanufacturingor formulationmay resultin the need to performnewclinical trials or obtain new drug product,whichwouldrequireadditionalcostsandcause delay.

Our current drug product comes in two formulations, frozen and liquid, with the latter being used in all new studies, beginning with our ENLIVEN study. We are developing a new drug product formulation of pegozafermin for late-stage clinical trials and commercialization. We have commenced development of a pre-filled syringe for the new drug product formulation and we also plan to begin development of a pen-type autoinjector. Thereautoinjector to deliver the liquid formulation of pegozafermin. Any formulation and presentation intended for commercialization is subject to regulatory approval. While the FDA has approved our new drug product formulation, there is no assurance that we will be successful in developing a new drug product formulation,and receiving approval of a pre-filled syringe or an autoinjector on a timely basis or at all, any of which could impede our development and commercialization strategy for pegozafermin. In addition, there is no assurance comparable foreign regulatory authorities will approve our new drug product formulation. The FDA or other comparable foreign regulatory authorities could require nonclinical studies or clinical trials to support introduction of any new formulation, pre-filled syringe and autoinjector, which could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical

trials, increase our clinical trial costs, delay approval of pegozafermin and jeopardize our ability to commence product sales and generate revenue from pegozafermin, if approved.

We rely on third parties for certain aspects of our product candidate development process and we may not be able to obtain and maintain the third-party relationships that are necessary to develop, commercialize and manufacture some or all of our product candidates.

We expect to depend on collaborators, partners, licensees, clinical investigators, contract research organizations, manufacturers and other third parties to support our discovery efforts, to formulate product candidates, to conduct clinical trials for some or all of our product candidates, to manufacture clinical and commercial scale quantities of our drug substance and drug product and to market, sell and distribute any products we successfully develop. Anyof thesethirdpartiesmay terminatetheir engagementswith us at any time.If weneed to enterinto alternativearrangements,it would delay our product developmentactivitiesand such alternativearrangementsmay not be availableon termsacceptableto us. We also expectto relyon otherthirdpartiesto storeand distributedrug suppliesfor our clinicaltrials. Anyperformancefailureon the partof our distributorscould delay clinicaldevelopment,marketingapproval and/orcommercializationof pegozafermin or any futureproductcandidates,producingadditionallossesand deprivingus of potential revenue.revenue.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our contract research organizations, CMO, suppliers, and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, acts of war, medical pandemics or epidemics, such as the novel coronavirus, and other natural or man-made disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

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If we fail to develop and commercialize additional product candidates, we may be unable to grow our business.

Although the developmentand commercializationof pegozafermin is currentlyour primaryfocus, as part of our longer-termgrowth strategy,we plan to evaluatethe developmentand commercializationof other therapiesrelatedto NASHand otherliverand cardio-metabolicdiseases.The successof thisstrategydepends primarilyupon our abilityto identifyand validatenew therapeuticcandidates,and to identify,develop and commercializenew drugs and biologics.Our researcheffortsmay initiallyshow promisein discoveringpotential new drugs and biologicsyet failto yieldproductcandidatesfor clinicaldevelopmentfor a numberof reasons.

We may use our limitedfinancialandhumanresourcesto pursue a particularresearchprogram or product candidatethat is ultimatelyunsuccessfulor lesssuccessfulthan other programsor product candidatesthat we may have forgone or delayed.

Because we have limitedpersonneland financialresources,we may foregoor delay the developmentof certainprogramsor productcandidatesthatlaterprove to have greatercommercialpotentialthan the programsor productcandidatesthatwe do pursue. Our resourceallocationdecisionsmay cause us to failto capitalizeon viablecommercialproductsor profitablemarketopportunities.Our spending on currentand futureresearchand developmentprogramsfor productcandidatesmay not yieldany commerciallyviableproducts.Similarly,our decisionsto delay or terminatedrug developmentprogramsmay also be incorrectand could cause us to miss valuable opportunities.opportunities.

We may seek to establish commercial collaborations for our product candidates, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.

Our drug development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. We may decide to collaborate with other pharmaceutical and

biotechnology companies for the development and potential commercialization of our product candidates. Collaborations are complex and time-consuming to negotiate and document. We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities or increase our expenditures and undertake development or commercialization activities at our own expense.

We may not be successful in our efforts to identify, in-license or acquire, discover, develop or commercialize additional product candidates.

We may seek to identify, in-license or acquire, discover, develop and commercialize additional product candidates. We cannot assure you that our effort to in-license or acquire additional product candidates will be successful. Even if we are successful in in-licensing or acquiring additional product candidates, their requisite development activities may require substantial resources, and we cannot assure you that these development activities will result in regulatory approvals.

Ourinternationaloperationsmay expose us to business, regulatory,political,operational,financial,pricing andreimbursementrisksassociatedwith doing business outsideof the United States.

Our use of our internationalfacilitiessubjectsus to U.S.and foreigngovernmentaltrade,importand export,and customsregulationsand laws.laws, including various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls and the U.S. Export Administration Regulations. Compliancewith theseregulationsand laws is costlyand exposes us to penaltiesfor non-compliance.Doing businessinternationallypotentiallyinvolvesa numberof risks, any of which could harmour ongoing internationalclinicaloperationsand supply chain, as well as any futureinternationalexpansionand operationsand, consequently,our business,financialcondition, prospectsand resultsof operations.

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Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We facean inherentriskof productliabilityexposurerelatedto the testingof our productcandidatesin human clinicaltrialsand will facean even greaterriskif wecommercializeany resultingproducts.Product liabilityclaimsmay be brought againstus by subjectsenrolledin our clinicaltrials,patients,or othersusing our products.Our clinicaltrialliabilityinsurancecoveragemay not adequatelycover allliabilitiesthatwemay incur.

Ouremployees,contractors,vendors, principalinvestigators,consultantsandfuture partnersmay engage in misconductor other improperactivities,including noncompliancewith regulatorystandards andrequirements and insider trading.insidertrading.

We are exposed to the riskof fraudor othermisconductby our employees,contractors,vendors, principalinvestigators,consultantsor futurepartners.Misconductby thesepartiescould includefailuresto complywith FDAregulations,to provideaccurateinformationto the FDA,to complywith federaland state healthcarefraudand abuse laws and regulations,to reportfinancialinformationor data timely,completelyor accurately,or to discloseunauthorizedactivitiesto us. Most statesalso have statutesor regulationssimilarto thesefederallaws, which may apply to items such as pharmaceuticalproductsand servicesreimbursedby privateinsurers.We and/orour futurepartnersmay be subjectto administrative,civiland criminalsanctionsfor violationsof any of these laws.laws.

We depend onour informationtechnologysystemsandthose of our third-partycollaborators,service providers,contractorsor consultants.Ourinternalcomputersystems,or those of our third-partycollaborators, serviceproviders,contractorsor consultants,may failor suffersecuritybreaches, disruptions,or incidents, whichcould resultin a materialdisruptionof our developmentprogramsor loss of data or compromisethe privacy,security,integrityor confidentialityof sensitiveinformationrelatedto our business andhave a materialadverseeffectonour reputation,business, financialconditionor resultsof operations.

In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information. Our internal

technology systems and infrastructure, and those of our current or future third-party collaborators, service providers, contractors and consultants are vulnerable to damage from computer viruses, unauthorized access or use resulting from malware, natural disasters, terrorism, war and telecommunication and electrical failures, denial-of-service attacks, cyber-attacks or cyber-intrusions over the Internet, hacking, phishing and other social engineering attacks, persons inside our organizations (including employees or contractors), loss or theft, or persons with access to systems inside our organization. From time to time, we are subject to periodic phishing attempts. In the third quarter of 2021, we discovered a business email compromise caused by phishing. The phishing attack did not result in the misappropriation of any funds. Even thoughfunds and we are implementing remedial measures promptly following this incident and do not believe that it had a material adverse effect on our business,business. We implemented remedial measures promptly following this incident, however, we cannot guarantee that our implemented remedial measures will prevent additional related, as well as unrelated, incidents. If a material system failure, accident or security breach were to occur and cause interruptions in our operations or the operations of third-party collaborators, service providers, contractors and consultants, it could result in a material disruption of our development programs and significant reputational, financial, legal, regulatory, business or operational harm.

To the extent that any real or perceived security breach affects our systems (or those of our third-party collaborators, service providers, contractors or consultants), or results in the loss of or accidental, unlawful or unauthorized access to, use of, release of, or other processing of personally identifiable information or damage to our data or applications or other data or applications relating to our technology or product candidates, or inappropriate disclosure of confidential or proprietary information, we could incur liabilities and the further development of our product candidates could be delayed. Any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations, or any data security incidents or other security breaches that result in the accidental, unlawful or unauthorized access to, use of, release of, processing of, or transfer of sensitive information, including personally identifiable information, may result in negative publicity, harm to our reputation, governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties, including those that assert that we have breached our privacy,

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confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.

Risks Related to Regulatory Approvals

Pegozafermin has not received regulatory approval. If we are unable to obtain regulatory approvals to market pegozaferminor any future product candidates,our business will be adversely affected.affected.

We do not expect pegozafermin or any future product candidate to be commercially available for several years, if at all. Pegozafermin is and any future product candidate will be subject to strict regulation by regulatory authorities in the United States and in other countries. We cannot market any product candidate until we have completed all necessary preclinical studies and clinical trials and have obtained the necessary regulatory approvals. We do not know whether regulatory agencies will grant approval for pegozafermin or any future product candidate. Even if we complete preclinical studies and clinical trials successfully, we may not be able to obtain regulatory approvals or we may not receive approvals to make claims about our products that we believe to be necessary to effectively market our products. Data obtained from preclinical studies and clinical trials is subject to varying interpretations that could delay, limit or prevent regulatory approval, and failure to comply with regulatory requirements or inadequate manufacturing processes are examples of other problems that could prevent approval.

The regulatory authorities in the United States and the EU have not approved any products for the treatment of NASH, and while there are guidelines issued by the FDA for the development of drugs for the treatment of NASH, and an FDA surrogate endpoint table for drug approval that includes SHTG, it is unclear whether the requirements for approval will change in the future.future or whether the FDA will rely on regulatory precedent for future regulatory approvals. Any such changes may require us to conduct new trials that could delay our timeframe and increase the costs of our programs related to pegozafermin or any future product candidate for the treatment of NASH or SHTG. While the FDA has approved reductionIn addition, we cannot be certain which efficacy endpoints or presentation thereof clinical or regulatory agencies may require in triglycerides levels as a surrogate endpointPhase 3 clinical trial of NASH or for the full approval of drugs for the treatment of SHTG, it is unclear whether this endpoint will apply to any product candidates that we develop. If such endpoint is not deemed to apply to our product candidates, it would delay our development timeline and increase the costs of our programs for the treatment of SHTG. We have not had any discussions with the FDA regarding a surrogate endpoint or accelerated approval regulations. However,candidates.

Even if we currently expect that our SHTG program would be subject to smaller clinical trials and that we may expect a relatively quicker overall development timeline for this indication. These expectations are based on a published

FDA surrogate endpoint table for drug approval that includes SHTG, as well as the development path followed by other companies that developed an SHTG therapy.

Evenif weare able to obtain regulatoryapprovalsfor pegozafermin or any future product candidate,if they exhibitharmfulside effectsafterapproval, our regulatoryapprovalscould be revoked or otherwisenegatively impacted,andwecould be subjectto costlyanddamaging product liability claims.claims.

Even if we receive regulatory approval for pegozafermin or any future product candidates, we will have tested them in only a small number of patients during our clinical trials. If our applications for marketing are approved and more patients begin to use our product, new risks and side effects associated with our products may be discovered. As a result, regulatory authorities may revoke their approvals. We have not had any discussions with the FDA regarding a surrogate endpoint or accelerated approval regulations. However, based on recent guidelines issued by the FDA for the development of drugs for the treatment of NASH, if pegozafermin is approved by the FDA based on a surrogate endpoint pursuant to section 506(c) of the Federal Food, Drug, and Cosmetic Act and the accelerated approval regulations (21 C.F.R. part 314, subpart H; 21 C.F.R. part 601, subpart E), consistent with FDA guidance, we will be required to conduct additional clinical trials establishing clinical benefit on the ultimate outcome of NASH. If pegozafermin is approved by the FDA for the treatment of SHTG based on an endpoint of the reduction of triglycerides, the FDA may still require a cardiovascular outcomes study as part of a post-marketing authorization commitment. Such a study would be time consumingtime-consuming and costly and we cannot guarantee that we will see positive results, which could result in the revocation of the approval. Additionally, we may be required to conduct additional clinical trials, make changes in labeling of our product, reformulate our product or make changes and obtain new approvals for our and our suppliers’ manufacturing facilities for pegozafermin and any future product candidates. We might have to withdraw or recall our products from the marketplace. We may also experience a significant drop in the potential sales of our product if and when regulatory approvals for such product are revoked. As a result, we may experience harm to our reputation in the marketplace or become subject to lawsuits, including class actions. Any of these results could decrease or prevent any sales of our approved product or substantially increase the costs and expenses of commercializing and marketing our product.product.

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Theregulatoryapproval processesof the FDAandcomparableforeignregulatoryauthoritiesare lengthy, time-consumingandinherentlyunpredictable.Ourinabilityto obtain regulatoryapproval for pegozafermin or any future product candidateswouldsubstantiallyharm our business.

Currently,wedo not have any productcandidatesthathave receivedregulatoryapproval.The time requiredto obtainapprovalfromthe FDAand comparableforeignregulatoryauthoritiesis unpredictablebut typicallytakesmany yearsfollowingthe commencementof preclinicalstudiesand clinicaltrialsand depends upon numerousfactors,includingthe substantialdiscretionof the regulatoryauthorities.In addition,approval policies,regulationsor the type and amountof clinicaldata necessaryto gain approvalmay change during the courseof a productcandidate’sdevelopmentand may vary among jurisdictions.It is possiblethatnone of pegozafermin or any futureproductcandidateswill ever obtainregulatoryapproval. Pegozafermin or any futureproductcandidatecould failto receiveregulatoryapprovalfromthe FDAor comparableforeignregulatoryauthoritiesfor many reasons,, including those referenced in Part I, Item 1. “Business—Government“Business-Government Regulation and Product Approval”Approval” in this Annual Report on Form 10-K.10-K. If wewere to obtainapproval,regulatoryauthoritiesmay approve any of our productcandidatesfor fewer or morelimited indicationsthan werequest,may grantapprovalcontingenton the performanceof costlypost-marketingclinical trialsor may approve a productcandidatewith a labelthatdoes not includethe labelingclaimsnecessaryor desirablefor the successfulcommercializationof the product candidate.productcandidate.

Evenif pegozafermin or any future product candidatereceivesregulatoryapproval, it may stillface future development and regulatory difficulties.andregulatorydifficulties.

Even if weobtainedregulatoryapprovalfor a productcandidate,it would be subjectto ongoing requirementsby the FDAand comparableforeignregulatoryauthoritiesgoverningthe manufacture,quality control,furtherdevelopment,labeling,packaging,storage,distribution,safetysurveillance,import,export, advertising,promotion,recordkeepingand reportingof safetyand otherpost-marketinformation.In addition,manufacturersof drug productsand theirfacilitiesare subjectto continualreview and periodicinspectionsby the FDAand otherregulatoryauthoritiesfor compliancewith cGMP,regulationsand standards.If weor a regulatoryagency discoverpreviouslyunknownproblemswith a product,such as adverse eventsof unanticipatedseverityor frequency,or problemswith

the facilitywhere the productis manufactured,a regulatoryagency may imposerestrictionson thatproduct,the manufacturingfacilityor us, includingrequiring recallor withdrawalof the productfromthe marketor suspensionof manufacturing.If we,our product candidatesor the manufacturingfacilitiesfor our productcandidatesfailto complywith applicableregulatory requirements,or undesirableside effectscaused by such productsare identified,a regulatoryagency may: issuesafetyalerts,Dear HealthcareProviderletters,pressreleasesor othercommunications containingwarnings about such product; mandatemodificationsto promotionalmaterialsor requireus to providecorrectiveinformationto healthcarepractitioners; requirethatweconduct post-marketingstudies; requireus to enterinto a consentdecree,which can includeimpositionof variousfines, reimbursementsfor inspectioncosts,requireddue datesfor specificactionsand penaltiesfor noncompliance; seek an injunctionor imposecivilor criminalpenaltiesor monetaryfines; suspend marketingof, withdraw regulatoryapprovalof or recallsuch product; suspend any ongoing clinicalstudies; refuseto approve pending applicationsor supplementsto applicationsfiledby us; suspend or imposerestrictionson operations,includingcostlynewmanufacturingrequirements;or seizeor detainproducts,refuseto permitthe importor exportof productsor requireus to initiatea productrecall. The occurrenceof any event or penaltydescribedabove may inhibitour abilityto commercializeour productsand generateproductrevenue.

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Current and future legislation may increase the difficulty and cost for us, and any collaborators, to obtain marketing approval of and commercialize our drug candidates and affect the prices we, or they, may obtain.

Heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in reduced demand for our product candidates or additional pricing pressures. Most recently, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA”), which, among other provisions, included several measures intended to lower the cost of prescription drugs and related healthcare reforms. We cannot be sure whether additional legislation or rulemaking related to the IRA will be issued or enacted, or what impact, if any, such changes will have on the profitability of any of our drug candidates, if approved for commercial use, in the future.

Healthcare insurance coverage and reimbursement may be limited or unavailable for our product candidate, if approved, which could make it difficult for us to sell our product candidate or other therapies profitably.

The success of pegozafermin, if approved, depends on the availability of coverage and adequate reimbursement from third-party payors including governmental healthcare programs, such as Medicare and Medicaid, commercial payors, and health maintenance organizations. We cannot be sure that coverage and reimbursement will be available for, or accurately estimate the potential revenue from, our product candidates or assure that coverage and reimbursement will be available for any product that we may develop.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenue, if any.

In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a drug. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our drug candidate to other available procedures. If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.

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Risks Relating to Intellectual PropertyProperty

Oursuccessdepends uponour abilityto obtain andmaintainintellectualpropertyprotectionfor our products and technologies.technologies.

Our successwill depend in significantparton our currentor futurelicensors’,licensees’or collaborators’abilityto establishand maintainadequateprotectionof our ownedand licensedintellectual propertycoveringthe productcandidatesweplan to develop, and the abilityto develop theseproductcandidates and commercializethe productsresultingtherefrom,without infringingthe intellectualpropertyrightsof others. In additionto takingotherstepsto protectour intellectualproperty,wehold issuedpatents,wehave appliedfor patents,and weintendto continueto apply for patents,with claimscoveringour technologies,processesand productcandidateswhenand where wedeem it appropriateto do so. We have filednumerouspatentapplications both in the United Statesand in certainforeignjurisdictionsto obtainpatentrightsto inventionswehave discovered,with claimsdirectedto compositionsof matter,methodsof use and othertechnologiesrelatingto our programs.There can be no assurancethatany of thesepatentapplicationswill issueas patentsor, for those applicationsthatdo matureinto patents,thatthe claimsof the patentswill excludeothersfrommaking,using or sellingour productcandidatesor productsthatcompetewith or are similarto our productcandidates.In countries where wehave not sought and do not seek patentprotection,thirdpartiesmay be able to manufactureand sellour productcandidateswithout our permission,and wemay not be able to stop themfromdoing so.

Withrespectto patentrights,wedo not knowwhether any of the pending patentapplicationsfor any of our productcandidateswill resultin the issuanceof patentsthateffectivelyprotectour technologies,processes and productcandidates,or if any of our issuedpatentsor our currentor futurelicensors’,licensees’or collaborators’issuedpatentswill effectivelypreventothersfromcommercializingcompetitivetechnologies, processesand products.We cannot be certain that we or our current or future licensors, licensees or collaborators were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we or our current or future licensors, licensees or collaborators were the first to file for patent protection of such inventions.

Any changes we make to our pegozafermin or any future product candidates to cause them to have what we view as more advantageous propertiesmay not be coveredby our existingpatentsand patentapplications, and wemay be requiredto filenewapplicationsand/orseek otherformsof protectionfor any such altered productcandidates.The patentlandscapesurroundingthe technologyunderlyingour productcandidatesis crowded, and therecan be no assurancethatwewould be able to securepatentprotectionthatwould adequately cover an alternativeto pegozafermin or any future product candidates.productcandidates.

Weand our currentor future licensors,licenseesor collaboratorsmay not be able to prepare,fileand prosecuteallnecessaryor desirable patentapplicationsat a reasonablecost or in a timelymanner.It is also possiblethatweor our currentor future licensors,licenseesor collaboratorswill failto identifypatentableaspectsof inventionsmade in the courseof developmentand commercializationactivitiesbeforeit is too lateto obtainpatentprotectionfor them.Moreover, in some circumstances,wemay not have the rightto controlthe preparation,filing

and prosecutionof patent applications,or to maintainor enforcethe patents,coveringtechnologythatwelicensefromor licenseto third partiesand may be relianton our currentor futurelicensors,licenseesor collaboratorsto performtheseactivities, which meansthatthesepatentapplicationsmay not be prosecuted,and thesepatentsenforced,in a manner consistentwith the best interestsof our business.If our currentor futurelicensors,licenseesor collaboratorsfail to establish,maintain,protector enforcesuch patentsand otherintellectualpropertyrights,such rightsmay be reducedor eliminated.If our currentor futurelicensors,licenseesor collaboratorsare not fullycooperativeor disagreewith us as to the prosecution,maintenanceor enforcementof any patentrights,such patentrightscould be compromised.

Similar to the patent rights of other biotechnology companies, the scope, validity and enforceability of our owned and licensed patent rights generally are highly uncertain and involve complex legal and factual questions. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad. In recent years, these areas have been the subject of much litigation in the industry. As a result, the issuance, scope, validity, enforceability and commercial value of our and our current or future licensors’, licensees’ or collaborators’ patent rights are highly uncertain. Our and our current or future licensors’, licensees’ or collaborators’ pending and future patent applications may not result in patents being issued that protect our technology or product candidates, or products

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resulting therefrom, in whole or in part, or that effectively prevent others from commercializing competitive technologies and products. The patent examination process may require us or our current or future licensors, licensees or collaborators to narrow the scope of the claims of pending and future patent applications, which would limit the scope of patent protection that is obtained, if any. Our and our current or future licensors’, licensees’ or collaborators’ patent applications cannot be enforced against third parties practicing the technology that is currently claimed in such applications unless and until a patent issues from such applications, and then only to the extent the claims that issue are broad enough to cover the technology being practiced by those third parties.

Furthermore,given the amountof timerequiredfor the development,testingand regulatoryreview of new productcandidates,patentsprotectingsuch candidatesmightexpirebeforeor shortlyafterthe resulting productsare commercialized.As a result,our owned and in-licensedpatentsmay not provideus with sufficient rightsto excludeothersfromcommercializingproductssimilaror identicalto ours. We expectto seek extensions of patenttermsfor our issuedpatents,where available.The applicableauthorities,includingthe FDA in the United States,and any comparableforeignregulatory authorities,may not agreewith our assessmentof whether such extensionsare available,and may refuseto grant extensionsto our patents,or may grantmorelimitedextensionsthan we request.In addition,we may not be grantedan extensionbecauseof, for example,failingto apply within applicabledeadlines,failingto apply prior to the expirationof relevantpatentsor otherwisefailingto satisfy applicable requirements.applicablerequirements.

We may not be able to protectour intellectualpropertyrightsthroughout the world.

The legalprotectionaffordedto inventorsand owners of intellectualpropertyin countriesoutsideof the United Statesmay not be as protective or effective as that in the United States and we may, therefore, be unable to acquire and enforce intellectual property rights outside the United States to the same extent as in the United States. Whether filed in the United States or abroad, our patent applications may be challenged or may fail to result in issued patents. Filing, prosecuting, enforcing and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States are less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and certain state laws in the United States.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with pegozafermin or any future product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

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We rely on a license from Teva and a sublicense from ratiopharm to patents and know-how related to glycoPEGylation technology that are used in the development, manufacture and commercialization of pegozafermin. Any termination or loss of significant rights, including the right to glycoPEGylation technology, or breach, under these agreements or any future license agreement related to our product candidates, would materially and adversely affect our ability to continue the development and commercialization of the related product candidates.

In April 2018, weenteredinto an Asset Transferand LicenseAgreement(the“FGF21 (the “FGF21 Agreement”) with Teva under which weacquiredcertainpatents,intellectualpropertyand otherassetsrelatingto Teva’s glycoPEGylatedFGF21program,includingpegozafermin. Under thisagreement, wewere granteda perpetual,non-exclusive(but (but exclusiveas to pegozafermin), non-transferable,worldwide licenseto patentsand know-how relatedto glycoPEGylationtechnologyused in the development,manufactureand commercializationof pegozafermin and productscontainingpegozafermin. The FGF21Agreementalso containsnumerouscovenantswith which wemustcomply,includingthe utilizationof commerciallyreasonableeffortsto develop and ultimately commercializepegozafermin, as well as certainreportingcovenantsand the obligationto make royaltypayments,if and whenpegozafermin is approved for commercialization.Our failureto satisfyany of thesecovenantscould resultin the terminationof the FGF21Agreement.In addition,weenteredinto a SublicenseAgreementwith ratiopharm(the“ratiopharm (the “ratiopharm Sublicense”),under which wewere granteda perpetual,exclusive,worldwide sublicenseto patentsand know-howrelatedto glycoPEGylationtechnologyused in the development, manufactureand commercializationof pegozafermin and productscontainingpegozafermin. Terminationof the FGF21Agreementor the ratiopharmSublicensewill impactour rightsunder the intellectualpropertylicensedto us by Teva and ratiopharm,respectively, includingour licenseto glycoPEGylationtechnology,but will not affectour rightsunder the assetsassignedto us.

Beyond thisagreement,our commercialsuccesswill also depend upon our ability,and the abilityof our licensors,to develop, manufacture,marketand sellour productcandidatesand use our proprietarytechnologies without infringingthe proprietaryrightsof thirdparties.A thirdpartymay hold intellectualpropertyrights, includingpatentrights,thatare importantor necessaryto the developmentof our productcandidates.As a result, we may enterinto additionallicenseagreementsin the future.If we failto complywith the obligationsunder theseagreements,includingpaymentand diligenceobligations,our licensorsmay have the rightto terminate theseagreements,in which event we may not be able to develop, manufacture,marketor sellany productthatis coveredby theseagreementsor to engage in any otheractivitiesnecessaryto our businessthatrequirethe freedomto operateaffordedby the agreements,or we may faceotherpenaltiesunder the agreements.