UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DCD.C. 20549

FORM 10-Q

(Mark One)

☒
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly

period ended ~~September~~June 30, ~~2017~~

2023

☐
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37449

ALPINE IMMUNE SCIENCES, INC.

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in its ~~Charter)~~

charter)

~~Delaware~~	~~20-8969493~~
Delaware		20-8969493
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~201 Elliott Avenue West,~~188 East Blaine Street, Suite ~~230~~ ~~Seattle, WA 98119~~ ~~(206) 788-4545~~ 200

Seattle, WA 98102

(206) 788-4545

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

~~(Address, including zip code, and telephone number, including area code,~~Securities registered pursuant to Section 12(b) of ~~registrant’s principal executive offices)~~

the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

ALPN

The Nasdaq Stock Market LLC

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

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~

☐

~~Accelerated filer~~

☐

Large Accelerated Filer

☐

Accelerated Filer

☐

~~Non-accelerated filer~~

☒ ~~(Do not check if a smaller reporting company)~~

~~Smaller reporting company~~

☐

Non-accelerated Filer

☒

Smaller Reporting Company

☒

Emerging ~~growth company~~

Growth Company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

☐

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

As of ~~November 8, 2017,~~August 4, 2023, the ~~registrant had 13,881,645~~ registrant had 49,201,547shares of common stock, ~~$0.0001~~$0.001 par value per share, outstanding.

ALPINE IMMUNE SCIENCES, INC.

FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~

2023

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3 1
	Condensed Consolidated Balance Sheets	3 1
	Condensed Consolidated Statements of Operations and Comprehensive Income ~~(Loss~~(Loss))	4 2
	Condensed Consolidated Statements of ~~Convertible Preferred Stock and~~ Stockholders’ Equity ~~(Deficit)~~	5 3
	Condensed Consolidated Statements of Cash Flows	6 4
	Notes to Condensed Consolidated Financial Statements	7 5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19 14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28 27
Item 4.	Controls and Procedures	28 27

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58 73
Item 3.	Defaults Upon Senior Securities	58 73
Item 4.	Mine Safety Disclosure	58 73
Item 5.	Other Information	58 73
Item 6.	Exhibits	59 74
	Signatures	60

In this report, unless otherwise stated or as the context otherwise requires, references to “Alpine,” “the Company,” “we,” “us,” “our” and similar references refer to Alpine Immune Sciences, Inc. ~~“Variant Immunoglobulin Domain”, “vIgD”, “Transmembrane Immunomodulatory Protein”,~~“VIGD,” “SIP” and “TIP”~~, “Secreted Immunomodulatory Protein”, and “SIP”~~ are registered trademarks and “NEON-1,” “NEON-2,” “SYNERGY,” “RUBY” and the Company logo are trademarks of Alpine Immune Sciences, Inc. All rights reserved. This report also contains registered marks, trademarks, and trade names of other companies. All other trademarks, registered marks, and trade names appearing in this report are the property of their respective holders.

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report captioned “Risk Factors .” The following is a summary of the principal risks we face:

•Our approach to the discovery and development of innovative therapeutic treatments based on our technology is unproven and may not result in marketable products.

•Our therapeutic candidates are in early stages of development and may fail in development or suffer delays that materially and adversely affect their commercial viability.

•Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier preclinical and clinical trials may not be predictive of future clinical trial results.

•We face competition from entities that have developed or may develop therapeutic candidates for our target disease indications, including companies developing novel treatments and technology platforms based on modalities and technology similar to us.

•To date, our revenue has been primarily derived from our collaboration agreements, and our success will be dependent, in part, on our collaborators’ efforts to develop our therapeutic candidates.

•If third parties on which we depend to conduct our clinical or preclinical studies, or any future clinical trials, do not perform as expected, fail to satisfy regulatory or legal requirements, or miss expected deadlines, our development program could be delayed, which may result in materially adverse effects on our business, financial condition, results of operations, and prospects.

•We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability to develop and commercialize therapeutic candidates, impact our cash position, increase our expenses, and present significant distractions to our management.

•If any of our therapeutic candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we may be unable to successfully commercialize any such future products.

•We will need to raise substantial additional funds to advance development of our therapeutic candidates, and we cannot guarantee we will have sufficient funds available in the future to develop and commercialize our current or future therapeutic candidates.

•We are an early-stage biopharmaceutical company with a history of losses, we expect to continue to incur significant loses for the foreseeable future, we may never achieve or maintain profitability, and we have a limited operating history that may make it difficult for investors to evaluate the potential success of our business.

•Our computer systems, or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security or data privacy breaches or incidents or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.

•If we are not able to obtain and enforce patent protection for our technology, including therapeutic candidates, therapeutic products, and platform technology, development of our therapeutic candidates and platform, and commercialization of our therapeutic products may be materially and adversely affected.

•We may license patent rights from third-party owners or licensees. If such owners or licensees do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be materially and adversely affected.

•We or our licensors, collaborators, or any future strategic partners may become subject to third-party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, delay or prevent the development of our therapeutic candidates and commercialization of our therapeutic products, or put our patents and other proprietary rights at risk.

•If we fail to comply with our obligations under any license, collaboration, or other agreements, we may be required to pay damages and could lose intellectual property rights necessary for developing and protecting our technology, including our platform technology, therapeutic candidates, and therapeutic products, or we could lose certain rights to grant sublicenses, either of which could have a material adverse effect on our results of operations and business prospects.

•We may be unable to obtain U.S. or foreign regulatory approval and, as a result, may be unable to commercialize our therapeutic candidates.

•The healthcare industry is heavily regulated in the U.S. at the federal, state, and local levels, and in other jurisdictions in which we may conduct trials or other activities, and our failure to comply with applicable requirements may subject us to penalties and negatively affect our financial condition.

•Our stock price may be volatile, and an active, liquid, and orderly trading market may not develop for our common stock. As a result, stockholders may not be able to resell shares at or above their purchase price.

•Our officers and directors, and their respective affiliates, have a controlling influence over our business affairs and may make business decisions with which stockholders disagree and which may adversely affect the value of their investment.

Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

PART I. ~~FINANCI~~ALFINANCIAL INFORMATION

Item 1. Financial Statements

(unaudited).

ALPINE IMMUNE SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Inin thousands, except share and per share amounts)

	September 30, 2017			December 31, 2016
	(unaudited)							June 30, 2023		December 31, 2022
Assets							Assets	(unaudited)
Current assets:							Current assets:
Cash and cash equivalents	$	11,982		$	11,819		Cash and cash equivalents	$	34,076	$	13,376
Short-term investments		75,219			—		Short-term investments	169,724		224,265
Accounts receivable							Accounts receivable	284		392
Prepaid expenses and other current assets		884			36		Prepaid expenses and other current assets	3,237		2,960
Total current assets		88,085			11,855		Total current assets	207,321		240,993
Restricted cash		132			—
Restricted cash, noncurrent							Restricted cash, noncurrent	254		254
Property and equipment, net		1,116			740		Property and equipment, net	1,672		1,584
Intangible assets		1,453			—
Operating lease, right-of-use asset							Operating lease, right-of-use asset	7,877		8,219
Long-term investments							Long-term investments	35,561		35,481
Deferred tax asset							Deferred tax asset	151		155
Total assets	$	90,786		$	12,595		Total assets	$	252,836	$	286,686
Liabilities, convertible preferred stock, and stockholders’ deficit
Liabilities and stockholders’ equity							Liabilities and stockholders’ equity
Current liabilities:							Current liabilities:
Accounts payable	$	1,076		$	127		Accounts payable	$	1,645	$	4,286
Accrued liabilities		642			170		Accrued liabilities	13,684		14,003
Income taxes payable		67			66
Deferred revenue		405			2,008
Deferred rent, current portion		44			33

Deferred revenue, current							Deferred revenue, current	37,252		35,571
Operating lease liability, current							Operating lease liability, current	829		756
Current portion of long-term debt		490			—		Current portion of long-term debt	—		3,380
Total current liabilities		2,724			2,404		Total current liabilities	53,410		57,996
Deferred rent, long-term portion		81			113
Deferred tax liability		509			—
Long-term debt		4,500			—
Deferred revenue, noncurrent							Deferred revenue, noncurrent	20,475		39,185
Operating lease liability, noncurrent							Operating lease liability, noncurrent	9,563		10,085

Total liabilities		7,814			2,517		Total liabilities	83,448		107,266
Commitments and contingencies							Commitments and contingencies
Convertible preferred stock, $0.0001 par value per share; 10,000,000 and 22,081,852 shares authorized at September 30, 2017 and December 31, 2016, respectively; zero and 4,311,770 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively; aggregate liquidation preference of zero and $11,583 at September 30, 2017 and December 31, 2016, respectively		—			11,535
Stockholders’ deficit:
Common stock, $0.0001 par value per share; 200,000,000 and 46,500,000 shares authorized at September 30, 2017 and December 31, 2016, respectively; 13,881,645 and 608,701 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		1			—
Stockholders’ equity:							Stockholders’ equity:
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized at June 30, 2023 and December 31, 2022; zero shares issued and outstanding at June 30, 2023 and December 31, 2022							Preferred stock, $0.001 par value per share; 10,000,000 shares authorized at June 30, 2023 and December 31, 2022; zero shares issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value per share; 200,000,000 shares authorized at June 30, 2023 and December 31, 2022; 49,124,640 shares issued and outstanding at June 30, 2023; 47,234,900 shares issued and 45,984,433 shares outstanding at December 31, 2022							Common stock, $0.001 par value per share; 200,000,000 shares authorized at June 30, 2023 and December 31, 2022; 49,124,640 shares issued and outstanding at June 30, 2023; 47,234,900 shares issued and 45,984,433 shares outstanding at December 31, 2022	49		46
Treasury stock, at cost; 0 and 1,250,467 shares at June 30, 2023 and December 31, 2022, respectively							Treasury stock, at cost; 0 and 1,250,467 shares at June 30, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital		88,049			144		Additional paid-in capital	420,372		404,456
Accumulated other comprehensive loss		(12	)		—		Accumulated other comprehensive loss	(650)		(1,121)
Accumulated deficit		(5,066	)		(1,601	)	Accumulated deficit	(250,383)		(223,961)
Total stockholders’ equity (deficit)		82,972			(1,457	)
Total liabilities, convertible preferred stock, and stockholders’ equity	$	90,786		$	12,595
Total stockholders’ equity							Total stockholders’ equity	169,388		179,420
Total liabilities and stockholders’ equity							Total liabilities and stockholders’ equity	$	252,836	$	286,686

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE IMMUNE SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Inin thousands, except share and per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
	2017			2016			2017			2016				2023		2022		2023		2022
	(unaudited)													(unaudited)
Collaboration revenue	$	128		$	737		$	1,603		$	2,212		Collaboration revenue	$	8,593	$	5,292	$	17,980	$	18,921
Operating expenses:													Operating expenses:
Research and development		2,750			819			6,916			1,639		Research and development	19,241		17,587		38,822		33,898
General and administrative		1,932			299			4,872			774		General and administrative	5,007		4,194		10,405		8,969
Total operating expenses		4,682			1,118			11,788			2,413		Total operating expenses	24,248		21,781		49,227		42,867
Loss from operations		(4,554	)		(381	)		(10,185	)		(201	)	Loss from operations	(15,655)		(16,489)		(31,247)		(23,946)
Other income (expense):													Other income (expense):
Bargain purchase gain		6,539			—			6,539			—
Interest income													Interest income	2,528		314		4,946		459
Interest expense		(75	)		—			(76	)		—		Interest expense	(28)		(130)		(98)		(284)
Interest and other income		216			7			261			16
Income (loss) before taxes		2,126			(374	)		(3,461	)		(185	)
Other, net													Other, net	(1)		(15)		(23)		(72)
Loss before taxes													Loss before taxes	(13,156)		(16,320)		(26,422)		(23,843)
Income tax expense		(4	)		—			(4	)		—		Income tax expense	—		(1,778)		—		(1,782)
Basic and diluted net income (loss) attributable to common stockholders	$	2,122		$	(374	)	$	(3,465	)	$	(185	)
Net loss													Net loss	$	(13,156)	$	(18,098)	$	(26,422)	$	(25,625)
Comprehensive income (loss):													Comprehensive income (loss):
Unrealized loss on investments		(12	)		—			(12	)		—
Comprehensive income (loss)	$	2,110		$	(374	)	$	(3,477	)	$	(185	)
Weighted-average shares used to compute basic net income (loss) per share attributable to common stockholders		10,577,772			608,701			3,989,747			550,080
Basic net income (loss) per share attributable to common stockholders	$	0.20		$	(0.61	)	$	(0.87	)	$	(0.34	)
Weighted-average shares used to compute diluted net income (loss) per share attributable to common stockholders		11,586,795			608,701			3,989,747			550,080
Diluted net income (loss) per share attributable to common stockholders	$	0.18		$	(0.61	)	$	(0.87	)	$	(0.34	)
Unrealized (loss) gain on investments													Unrealized (loss) gain on investments	(238)		(304)		507		(1,078)
Unrealized loss on foreign currency translation													Unrealized loss on foreign currency translation	(5)		(4)		(36)		(18)
Comprehensive loss													Comprehensive loss	$	(13,399)	$	(18,406)	$	(25,951)	$	(26,721)
Weighted-average shares used to compute basic and diluted net loss per share													Weighted-average shares used to compute basic and diluted net loss per share	48,049,936		30,324,933		47,810,374		30,311,527
Basic and diluted net loss per share													Basic and diluted net loss per share	$	(0.27)	$	(0.60)	$	(0.55)	$	(0.85)

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE IMMUNE SCIENCES, INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~CONVERTIBLE PREFERRED STOCK AND~~

STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands, except share amounts)


	Shares		Common Stock, Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Common Stock	Treasury
Balance, December 31, 2022	45,984,433	1,250,467	$	46	$	404,456	$	(1,121)	$	(223,961)	$	179,420
Stock-based compensation	—	—	—		2,552		—		—		2,552
Issuance of common stock under equity incentive plans	65,039	—	—		113		—		—		113
Exercise of warrants	1,708,535	—	2		(2)		—		—		—
Adjustments to offering costs	—	—	—		10		—		—		10
Unrealized gain on investments	—	—	—		—		745		—		745
Unrealized loss on foreign currency translation		—	—		—		(31)		—		(31)
Net loss	—	—	—		—		—		(13,266)		(13,266)
Balance, March 31, 2023	47,758,007	1,250,467	48		407,129		(407)		(237,227)		169,543
Stock-based compensation	—	—	—		2,621		—		—		2,621
Issuance of common stock under equity incentive plans	210,653	—	—		928		—		—		928
Exercise of warrants	236,567	—	—		—		—		—		—
Issuance of common stock under at the market offering, net of issuance costs	919,413	—	1		9,694		—		—		9,695
Retirement of treasury stock	—	(1,250,467)	—		—		—		—		—
Unrealized loss on investments	—	—	—		—		(238)		—		(238)
Unrealized loss on foreign currency translation	—	—	—		—		(5)		—		(5)
Net loss	—	—	—		—				(13,156)		(13,156)
Balance, June 30, 2023	49,124,640	—	$	49	$	420,372	$	(650)	$	(250,383)	$	169,388









Balance, December 31, 2021	30,194,279	1,250,467	$	30	$	287,345	$	(273)	$	(166,199)	$	120,903
Stock-based compensation	—	—	—		2,289		—		—		2,289
Issuance of common stock under equity incentive plans	100,155	—	—		550		—		—		550
Unrealized loss on investments	—	—	—		—		(774)		—		(774)
Unrealized loss on foreign currency translation	—	—	—		—		(14)		—		(14)
Net loss	—	—	—		—		—		(7,527)		(7,527)
Balance, March 31, 2022	30,294,434	1,250,467	30		290,184		(1,061)		(173,726)		115,427
Stock-based compensation	—	—	—		2,335		—		—		2,335
Issuance of common stock under equity incentive plans	41,728	—	—		180		—		—		180
Unrealized loss on investments	—	—	—		—		(304)		—		(304)
Unrealized loss on foreign currency translation	—	—	—		—		(4)		—		(4)
Net loss	—	—	—		—				(18,098)		(18,098)
Balance, June 30, 2022	30,336,162	1,250,467	$	30	$	292,699	$	(1,369)	$	(191,824)	$	99,536

Convertible
Preferred Stock

Common Stock

Additional
Paid-in

Accumulated
Other Comprehensive

Accumulated

Total
Stockholders’

Shares

Amount

Shares

Amount

Capital

Loss

Deficit

Equity

Balance, December 31, 2016

4,311,770

$
11,535

608,701

$
—

$
144

$
—

$
(1,601
)

$
10,078

Issuance of Series A-1 convertible preferred stock

4,989,663

37,666

—

—

—

—

—

37,666

Conversion of convertible preferred stock to common stock

(9,301,433
)

(49,201
)

9,301,433

1

49,200

—

—

—

Common stock acquired in business combination

—

—

3,914,058

—

38,103

—

—

38,103

Conversion of warrant liability to equity

—

—

—

—

52

—

—

52

Exercise of stock options and common stock warrants

—

—

57,453

—

22

—

—

22

Stock-based compensation

—

—

—

—

528

—

—

528

Unrealized loss on investments

—

—

—

—

—

(12
)

—

(12
)
Net loss

—

—

—

—

—

—

(3,465
)

(3,465
)
Balance, September 30, 2017

—

$
—

13,881,645

$
1

$
88,049

$
(12
)

$
(5,066
)

$
82,972

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE IMMUNE SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Inin thousands)

Nine Months Ended
September 30,

2017

2016

(unaudited)

Operating activities

Net loss

$
(3,465
)

$
(185
)
Adjustments to reconcile net income (loss) to net cash used in operating activities:

Bargain purchase gain

(6,539
)

—

Depreciation and amortization

165

30

Non-cash interest expense

43

—

Stock-based compensation and warrant expense

528

57

Changes in operating assets and liabilities:

Prepaid expenses

(848
)

(4
)
Accounts payable

924

253

Deferred revenue

(1,603
)

(2,212
)
Accrued liabilities

82

10

Deferred rent and other

(22
)

21

Net cash used in operating activities

(10,735
)

(2,030
)
Investing activities

Purchases of property and equipment

(509
)

(459
)
Purchase of short-term investments

(72,239
)

—

Proceeds from the sale of short-term investments

9,960

—

Cash and cash equivalents acquired in connection with merger

31,130

—

Net cash used in investing activities

(31,658
)

(459
)
Financing activities

Proceeds from sale of preferred stock

37,666

10,973

Proceeds from borrowings

5,000

—

Proceeds from exercise of stock options and common stock warrants

22

49

Net cash provided by financing activities

42,688

11,022

Net increase in cash and cash equivalents and restricted cash

295

8,533

Cash and cash equivalents and restricted cash, beginning of period

11,819

5,423

Cash and cash equivalents and restricted cash, end of period

$
12,114

$
13,956

Supplemental Information

Discount in connection with issuance of debt

$
428

$
—

Convertible preferred stock exchanged for common stock

$
49,201

$
—

Reclass of preferred stock warrant liability to equity

$
52

$
—


	Six Months Ended June 30,
	2023		2022
	(unaudited)
Operating activities
Net loss	$	(26,422)	$	(25,625)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	5,173		4,624
Amortization of premium/discount on investments	(3,397)		591
Depreciation expense	282		304
Non-cash interest expense	45		105
Realized gain on investments	(33)		—
Loss on sale of property and equipment	2		70
Deferred income tax	—		107
Changes in operating assets and liabilities:
Accounts receivable	106		23,683
Prepaid expenses and other current assets	138		1,648
Operating lease, right-of-use asset	342		298
Accounts payable and accrued liabilities	(3,000)		1,558
Deferred revenue	(17,029)		(17,603)
Operating lease liability	(450)		(380)
Net cash used in operating activities	(44,243)		(10,620)
Investing activities
Purchases of property and equipment	(372)		(241)

Purchase of investments	(103,721)		(82,380)
Maturities of investments	161,771		51,382

Net cash provided by (used in) investing activities	57,678		(31,239)
Financing activities

Proceeds from sale of common stock, net of offering costs	9,695		—
Repayment of debt	(3,425)		(2,400)
Proceeds from exercise of stock options	1,041		730
Net cash provided by (used in) financing activities	7,311		(1,670)
Effect of exchange rate on cash and cash equivalents	(46)		(18)
Net increase (decrease) in cash and cash equivalents and restricted cash	20,700		(43,547)
Cash and cash equivalents and restricted cash, beginning of period	13,630		68,161
Cash and cash equivalents and restricted cash, end of period	$	34,330	$	24,614

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE IMMUNE SCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information as of ~~September~~June 30, ~~2017~~2023 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 is unaudited)

1. Description of ~~the~~ Business

Alpine Immune Sciences, Inc. (the “Company”, “Alpine”, “we”, “us”, or “our”), together with its consolidated subsidiaries, is ~~focused on~~a clinical-stage biopharmaceutical company dedicated to discovering and developing ~~modern,~~innovative, protein-based immunotherapies ~~targeting the immune synapse~~ to treat ~~cancer, inflammation,~~autoimmune and ~~other~~inflammatory diseases. Our approach includes a proprietary scientific platform ~~uses a process known as directed evolution, or an iterative scientific engineering process purposefully conducted to “evolve” a protein~~that converts native immune system proteins into differentiated, multi-targeted therapeutics. We are seeking to create ~~therapeutics potentially capable of modulating immune system interactions. In~~first- or best-in-class multifunctional immunotherapies via our ~~pre-clinical animal studies, our platform has proven capable of identifying novel molecules, including single domains capable of modulating multiple targets.~~unique protein engineering technologies to improve outcomes in patients with serious diseases. We were incorporated ~~on December 30, 2014~~ under the laws of the State of Delaware and are headquartered in Seattle, Washington.

~~Significant estimates inherent in the preparation of the accompanying financial statements include recoverability and useful lives of intangible assets and the fair value of equity based awards.~~

~~Reverse Merger and Subscription Agreement~~

On April 18, 2017, we entered into a merger agreement with Nivalis Therapeutics, Inc. (“Nivalis”), a public biotechnology company, and one of its wholly-owned subsidiaries pursuant to which, the subsidiary merged with and into Alpine, with Alpine continuing as a wholly owned subsidiary of Nivalis and the surviving corporation of the merger (the “Merger Agreement”). The merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. At the closing of the merger, each outstanding share of our capital stock (common stock and preferred stock) was converted into the right to receive shares of Nivalis common stock (subject to the payment of cash in lieu of fractional shares and after giving effect to a 1:4 reverse stock split of Nivalis common stock) such that, immediately following the effective time of the merger, preexisting Nivalis stockholders, optionholders, and warrantholders owned, or held rights to acquire, approximately 26% of the fully-diluted common stock of Nivalis, which changed its name to “Alpine Immune Sciences, Inc.” following the completion of the merger and Alpine’s preexisting stockholders, optionholders, and warrantholders owned, or held rights to acquire approximately 74% of the fully-diluted common stock of Nivalis. The issuance of the shares to our pre-existing stockholders was registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-4 (No. 333-218134) (the “Registration Statement”) declared effective by the Securities and Exchange Commission (the “SEC”) on June 6, 2017.

Contemporaneously with the execution and delivery of the Merger Agreement, certain of our pre-existing stockholders entered into a subscription agreement with us pursuant to which such stockholders purchased, immediately prior to the closing of the merger, 1,335,118 shares of our capital stock at a purchase price of $12.74 per share for an aggregate purchase price of approximately $17.0 million.

~~The merger and the subscription described above were consummated on July 24, 2017.~~

~~Exchange Ratio~~

At the effective time of the merger, each share of Alpine’s common stock and preferred stock was converted into the right to receive 0.4969 shares of Nivalis’ common stock, adjusted to account for the Nivalis reverse stock split. All issued and outstanding stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this exchange ratio for all periods presented.

2. Summary of Significant Accounting Policies

Basis of Presentation and Use of Estimates

The accompanying ~~unaudited~~ condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the ~~SEC~~Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the ~~unaudited~~ condensed consolidated financial statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying condensed consolidated financial statements include those used for revenue recognition, accruals for clinical trial activities and other accruals, the potential outcome of uncertain tax positions that have been recognized in our condensed consolidated financial statements or tax returns, and the estimated fair value of equity-based awards. We base our estimates and assumptions on historical experience when available and on various factors we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates. ~~The results of our operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year.~~

~~Principles of Consolidation~~

Our condensed consolidated financial statements include the financial position and results of operations of Alpine and AIS Operating Co., Inc., our wholly owned subsidiary and operating company. On July 24, 2017, we closed the merger on the terms described in more detail in Note 1. In connection with the merger, Nivalis effected a 1:4 reverse stock split of its common stock. Upon the closing of the merger, (1) a wholly-owned subsidiary of Nivalis merged with and into Alpine, with Alpine (renamed as “AIS Operating Co., Inc.”) remaining as the surviving entity; and (2) Nivalis was renamed as “Alpine Immune Sciences, Inc.”

~~Unaudited Interim Financial Information~~

The accompanying ~~unaudited~~ condensed consolidated financial statements as of ~~September~~June 30, ~~2017,~~2023 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 and the related interim information contained within the notes to the condensed consolidated financial statements are unaudited. The ~~unaudited~~ interim financial statements have been prepared on the same basis as the audited financial statements and in the opinion of management, reflect all normal recurring adjustments necessary for a fair statement of our financial position for the interim periods presented. The accompanying ~~unaudited~~ condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-Kfor the ~~years~~year ended December 31, ~~2016 and 2015, as~~2022, filed with the SEC on March 23, 2023. The results of our operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation

Our condensed consolidated financial statements include the financial position and results of operations of Alpine Immune Sciences, Inc. and our wholly owned operating company and subsidiary, AIS Operating Co., Inc., and our wholly-owned subsidiary, Alpine Immune Sciences Australia PTY LTD. All inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents and Restricted Cash

We consider all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits with commercial banks in checking and interest-bearing accounts, and highly liquid money market funds.

Restricted cash represents cash drawn on our ~~Registration Statement.~~

~~Unless indicated otherwise, all amounts presented~~line of credit used to establish collateral to support the security deposit on our operating lease to rent office and laboratory space in Seattle, Washington.

Periodically, we maintain deposits in financial ~~tables~~institutions in excess of government insured limits. We believe we are ~~presented in thousands, except for share, per share~~not exposed to significant credit risk as our deposits, which are held at financial institutions, are high credit quality securities such as money market funds, U.S. Treasury bills, and ~~par value amounts.~~

~~Short-Term~~ commercial paper. To date, we have not realized any losses on these deposits.

Investments

Our ~~short-term~~ investments include funds invested in highly liquid money market funds, U.S. Treasury bills, U.S. agency securities, ~~commercial paper,~~non-U.S. government securities, and corporate debt ~~securities~~and commercial paper with ~~a final maturity of each security~~contractual maturities of less than ~~one year. All~~two years. These investments are classified as available-for-sale debt securities, ~~and~~which are recorded at fair value based on quoted prices in active markets for Level 1 assets and based on market pricing and other observable market inputs for similar securities for Level 2 assets. We classify our investments maturing within one year of the reporting date as short-term investments.

If the estimated fair value of a debt security is below its amortized cost basis, we evaluate whether it is more likely than not that we will sell the security before its anticipated recovery in market value and whether credit losses exist for the related securities. A credit loss exists if the present value of expected cash flows is less than the amortized cost basis of the security. Credit-related losses are recognized as an allowance for credit losses on the balance sheet with ~~unrealized~~a corresponding adjustment to earnings. Unrealized gains and losses ~~excluded from earnings and~~that are unrelated to credit deterioration are reported in other comprehensive income (loss). Purchase premiums and discounts are recognized as interest income using the interest method over the terms of the securities. Realized gains and losses and declines in fair value for these investments deemed to be ~~other than temporary~~expected credit losses are reflected in ~~the condensed consolidated statements~~our Condensed Consolidated Statements of ~~operations~~Operations and ~~comprehensive income (loss)~~Comprehensive Income (Loss) using the specific-identification method.

~~Business Combination~~

We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Our estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to bargain purchase gain. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. Our management collects information and reevaluates these estimates and assumptions quarterly and records any adjustments to our preliminary estimates to bargain purchase gain during the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of operations and comprehensive income (loss).

We allocated the preliminary purchase price to the acquired tangible and intangible assets and assumed liabilities of Nivalis based on their estimated fair values as of the acquisition date. The fair value of our identifiable intangible asset is based on detailed valuations using information and assumptions provided by management.

~~Intangible Asset~~

Our intangible asset is our indefinite-life GSNOR inhibitor in-process research and development asset (“IPR&D”) acquired from Nivalis. The IPR&D represents the processes, expertise, and technology employed in the development of S-nitrosoglutathione reductase (“GSNOR”) inhibitors and Nivalis’ lead product candidate, cavosonstat. The IPR&D represents the estimated fair value as of the acquisition date of substantive in-process projects that have not reached technological feasibility. The primary basis for determining technological feasibility of these projects is obtaining regulatory approval. The valuation of IPR&D is determined using a discounted cash flow method. In determining the value of IPR&D, management considers, among other factors, the stage of completion of the projects, the technological feasibility of the projects, whether the projects have an alternative future use, and the estimated residual cash flows that could be generated from the various projects and technologies over their respective projected economic lives. The discount rate used is determined at the time of acquisition and includes a rate of return which accounts for the time value of money, as well as risk factors reflecting the economic risk that the projected cash flows may not be realized

We review our IPR&D at least annually for possible impairment. IPR&D is reviewed for possible impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the IPR&D below their carrying values. We test our IPR&D each year on October 1. Our IPR&D asset totaled $1.5 million at September 30, 2017.

~~Derivative Financial Instruments~~

We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features qualifying as embedded derivatives. For derivative financial instruments accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statement of operations and comprehensive income (loss). We use the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

~~Revenue Recognition~~

We derive our revenue from collaboration and licensing agreements. We recognize revenue when each of the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) products have been delivered or services have been rendered; (3) the sales price is fixed or determinable; and (4) collectability is reasonably assured.

We recognize revenue under our License and Research Agreement (the “Collaboration Agreement”) with Kite Pharma, Inc. (“Kite”) in accordance with the guidance on multiple element arrangements. Multiple elements or deliverables may include (1) grants of, or options to obtain, intellectual property licenses; (2) research and development services; and/or (3) manufacturing or supply services. Payments typically received under these arrangements include one or more of the following: non-refundable upfront license fees, option exercise fees, payment for research and/or development efforts, amounts due upon the achievement of specified objectives, and/or royalties on future product sales.

The evaluation of multiple-element arrangements requires management to make judgments about (1) the identification of deliverables; (2) whether such deliverables are separable from other aspects of the contractual relationship; (3) the estimated selling price of each deliverable; and (4) the expected period of performance for each deliverable. To determine the units of accounting under a multiple-element arrangement, management evaluates certain separation criteria, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances for each arrangement. Management then estimates the selling price for each unit of accounting and allocates the arrangement consideration to each unit using the relative selling price method. The allocated consideration for each unit of accounting is recognized based on the method most appropriate for that unit of account and in accordance with the revenue recognition criteria detailed above. If there are deliverables in an arrangement that are not separable from other aspects of the contractual relationship, they are treated as a combined unit of accounting, with the allocated revenue for the combined unit recognized in a manner consistent with the revenue recognition criteria applicable to the final deliverable in the combined unit. Payments received prior to satisfying the relevant revenue recognition criteria are recorded as deferred revenue in the accompanying condensed consolidated balance sheets and recognized as revenue when the related revenue recognition criteria are met.

The Collaboration Agreement provides for non-refundable milestone payments. We recognize revenue that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. A milestone is considered substantive when the consideration payable to us for such milestone (1) is consistent with our performance necessary to achieve the milestone or the increase in value to the collaboration resulting from our performance; (2) relates solely to our past performance; and (3) is reasonable relative to all of the other deliverables and payments within the arrangement. In making this assessment, we consider all facts and circumstances relevant to the arrangement, including factors such as the scientific, regulatory, commercial, and other risks that must be overcome to achieve the milestone, the level of effort and investment required to achieve the milestone and whether any portion of the milestone consideration is related to future performance or deliverables.

We will periodically review the estimated performance periods under the Collaboration Agreement which provides for non-refundable upfront payments and fees. We will adjust the periods over which revenue should be recognized when appropriate to reflect changes in assumptions relating to the estimated performance periods. We could accelerate revenue recognition in the event of early termination of programs or if our expectations change. Alternatively, we could decelerate revenue recognition if programs are extended or delayed. While such changes to our estimates have no impact on our reported cash flows, the timing of revenue recorded in future periods could be materially impacted.

~~Comprehensive Income (Loss)~~

Comprehensive income (loss) is comprised of net income (loss) and certain changes in equity excluded from net income (loss). For the three and nine months ended September 30, 2017, other comprehensive loss consists of unrealized losses on our short-term investments. There was no difference between comprehensive income (loss) and net income (loss) for the three and nine months ended September 30, 2016.

~~Recently Issued Accounting Pronouncements~~

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, as amended, which amends the guidance for revenue recognition to replace numerous industry specific requirements. ASU 2014-09, as amended, implements a five-step process for customer contract revenue recognition focusing on transfer of control, as opposed to transfer of risk and rewards. ASU 2014-09, as amended, also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. ASU 2014-09, as amended, is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before December 15, 2016. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently expecting to use the modified retrospective method to adopt this standard and are continuing to assess all of the potential impacts of the new standard on our financial statements and related disclosures, although we do not expect the implementation to have a material impact.

In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires a lessee to separate the lease components from the non-lease components in a contract and recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. It also aligns lease accounting for lessors with the revenue recognition guidance in ASU 2014-09. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and is to be applied at the beginning of the earliest period presented using a modified retrospective approach. We are continuing to evaluate the effect the standard will have on our financial statements and related disclosures.

In August 2016, the FASB issued ASU No. 2016-15 which provides new guidance on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. We will be required to adopt the new guidance beginning with the first fiscal quarter of 2018; early adoption is permitted. We are currently assessing the impact the new guidance will have on our condensed consolidated statements of cash flows.

In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. We are currently evaluating the impact of adopting this guidance.

~~In May 2017, the FASB issued ASU No. 2017-09 to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in~~ ~~Compensation - Stock Compensation (~~Topic 718) about a change to the terms and conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, and applied prospectively to modifications occurring on or after the adoption date. We are currently reviewing and evaluating this recent update and plan to adopt on the required adoption date. For the quarter ended September 30, 2017, there were no modifications to the terms or conditions of a share-based payment award.

~~Recently Adopted Accounting Pronouncements~~

In August 2014, the FASB issued ASU No.2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under the new guidance, management is required to assess an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. The provisions of this standard are effective for annual periods ending after December 31, 2016, and for annual and interim periods thereafter. We adopted this guidance this year and management believes our existing cash and cash equivalents as of September 30, 2017 are sufficient to fund our operations and do not raise substantial doubt about our ability to continue as a going concern.

~~In March 2016, the FASB issued ASU No. 2016-09-Improvements to Employee Share-Based Payment Accounting, wh~~ich simplified the accounting for share-based payment transactions, including the income tax consequences, the calculation of diluted earnings per share, the treatment of forfeitures, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. We adopted ASU 2016-09 with effect from January 1, 2015. The adoption of this standard did not have a material impact on our financial statements.

In November 2016, the FASB issued ASU No. 2016-18 relating to restricted cash. The new guidance requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the condensed consolidated statement of cash flows. This guidance is required to be adopted beginning with the first fiscal quarter of 2018; early adoption is permitted. We adopted this guidance effective June 30, 2017, which required us to include restricted cash within the beginning and ending balance of cash and cash equivalents for the nine-month period ended September 30, 2017. We had no restricted cash prior to adopting this guidance, thus we were not required to revise prior period statements of cash flows. The adoption of this guidance does not impact our financial position or results of operations.

3. ~~Business Combination~~

On July 24, 2017, we closed the merger on the terms described in more detail in Note 1. In connection with the merger, Nivalis effected a 1:4 reverse stock split of its common stock. Upon the closing of the merger, (1) a wholly-owned subsidiary of Nivalis merged with and into Alpine, with Alpine (renamed as “AIS Operating Co., Inc.”) remaining as the surviving entity; and (2) Nivalis was renamed as “Alpine Immune Sciences, Inc.”

Under the terms of the Merger Agreement, Nivalis issued shares of its common stock to Alpine’s stockholders, at an exchange rate of 0.4969 shares of Nivalis common stock, after taking into account the 1:4 reverse stock split, for each share of Alpine’s common stock and preferred stock outstanding immediately prior to the merger. The exchange rate was determined through arms’-length negotiations between Nivalis and Alpine. Nivalis also assumed all of the stock options outstanding under Alpine’s Amended and Restated 2015 Stock Plan, as amended (the “Alpine Plan”), and stock warrants for Alpine’s capital stock outstanding immediately prior to the merger, with such stock options and warrants henceforth representing the right to purchase a number of shares of the Nivalis common stock equal to 0.4969 multiplied by the number of shares of Alpine’s common stock or preferred stock previously represented by such options and warrants. Nivalis also assumed the Alpine Plan. Immediately after the merger, there were 13,881,645 shares of Nivalis common stock outstanding. Immediately after the merger, Alpine’s former stockholders, warrantholders, and optionholders owned, or held rights to acquire, approximately 74% of the fully-diluted common stock of Nivalis, which for these purposes is defined as the outstanding common stock of Nivalis, plus “in the money” options and warrants to purchase shares of Nivalis’ common stock, assuming all “in the money” options and warrants of Nivalis outstanding immediately prior to the merger are exercised on a cashless basis immediately prior to the closing of the merger, with Nivalis’ stockholders, optionholders, and warrantholders immediately prior to the merger owning, or holding rights to acquire, approximately 26% of the fully diluted common stock of Nivalis. More than 74% of Nivalis’ common stock outstanding immediately after the merger was held by stockholders party to lock-up agreements, pursuant to which such stockholders have agreed, except in limited circumstances, not to sell, transfer, or engage in swap or similar transactions with respect to shares of Nivalis’ common stock, including, as applicable, shares received in the merger and issuable upon exercise of certain warrants and options, for a period of 180 days following the completion of the merger.

The issuance of shares of Nivalis’ common stock to our pre-existing stockholders was registered with the SEC pursuant to the Registration Statement. Immediately prior to the merger, we issued and sold an aggregate of approximately $17.0 million of shares of our common stock to certain existing stockholders. For accounting purposes, our historical financial statements were not adjusted to reflect the merger, other than adjustments to the capital structure to reflect the historical capital structure of Nivalis. No other adjustments to our historical assets and liabilities were made as a result of the merger.

In addition to the operating assets and liabilities of Nivalis, we also acquired Nivalis’ tax attributes, which primarily consisted of net operating losses which begin to expire in 2032. Our ability to utilization the tax attributes of Nivalis may be limited under Section 382 of the U.S. Internal Revenue Service and as such, have been reserved. We recorded a deferred tax liability related to future tax benefits arising from IPR&D acquired in the Merger. The combined organization is focusing on the development and commercialization of our innovative immunotherapies. Following the merger, the increased cash resources and increased access to capital of the combined organization will help to support the clinical development of our products.

~~Consideration Transferred~~

The fair value of the consideration transferred was based on the most reliable measure, which was determined to be the market price of Nivalis shares of common stock as of the acquisition date. The fair value of the consideration transferred consisted of the following (in thousands except share and per share amounts):

Net Loss Per Share

Outstanding Nivalis common stock

3,914,058

Per share fair value of Nivalis common stock

$
9.60

Outstanding Nivalis stock options

421,992

Weighted average per share fair value of Nivalis stock options

$
1.25

Total fair value of consideration (in 000's)

$
38,103

~~Pursuant to the Merger Agreement, unvested Nivalis stock options immediately vested as of the closing of the business combination and were adjusted to give effect to the recapitalization.~~

~~Preliminary Purchase Price Allocation~~

As Alpine was the accounting acquirer in the merger, we allocated the preliminary purchase price to the acquired tangible and intangible assets and assumed liabilities of Nivalis based on their estimated fair values as of the acquisition date. The excess of the estimated fair values of net assets acquired over the acquisition consideration paid was recorded as a bargain purchase gain in the condensed consolidated statements of operations and comprehensive income (loss). The determination of the preliminary fair values of the assets acquired and liabilities assumed requires significant judgment, including third party valuation estimates relating to the value of the acquired IPR&D. The allocation of the purchase consideration to the assets acquired and liabilities assumed in our financial statements is preliminary and subject to change as management gathers additional information regarding these items.

~~The initial allocation of the purchase consideration is as follows (in thousands):~~

Preliminary
Fair Value

Assets:

Cash and cash equivalents

$
31,130

Marketable securities

12,952

IPR&D

1,453

Total assets acquired

45,535

Liabilities:

Accrued expenses

(384
)
Deferred tax liability

(509
)
Total liabilities assumed

(893
)
Bargain purchase gain

(6,539
)
Total

$
38,103

We relied on significant Level 3 unobservable inputs to estimate the fair value of our acquired IPR&D using management’s estimate of future royalties and expected earnings of the assets after taking into account an estimate of future expenses necessary to bring the products to completion. These projected cash flows were then discounted to their present values using a discount rate of 17%, which was considered commensurate with the risks and stages of development of the IPR&D.

The bargain purchase gain resulted from expenses incurred by Nivalis between the time the purchase price was negotiated and the close of the transaction, and changes in the Nivalis stock price during that period as the exchange ratio was fixed when the purchase price was negotiated.

We recognized acquisition-related costs of $1.3 million for the nine months ended September 30, 2017. These costs are included within general and administrative expense in our condensed consolidated statements operations and of comprehensive income (loss).

~~Pro Forma Financial Information~~

~~The following pro forma consolidated results of~~Basic net loss ~~for the nine months ended September 30, 2017 and 2016 assume the business combination was completed as of January 1, 2016 (in thousands, except~~ per share ~~amounts):~~

Nine Months Ended
September 30,

2017

2016

Pro forma revenues

$
1,603

$
2,212

Pro forma net loss

(13,634
)

(23,935
)
Pro forma basic and diluted net loss per share

$
(0.98
)

$
(1.74
)

For purposes of the pro forma disclosures above, the primary adjustments for the nine months ended September 30, 2017 include the elimination of acquisition related costs and acceleration of stock compensation expense upon the change in control.

~~4. Net Income (Loss) Per Share~~

We compute net income (loss) per share attributable to common stockholders using the two-class method required for participating securities. We consider our convertible preferred stock to be participating securities. In accordance with the two-class method, earnings allocated to these participating securities, which include participation rights in undistributed earnings, are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders. Net loss is not allocated to participating securities as there is no contractual obligation to share in net losses.

~~Basic net income (loss) per share attributable to common stockholders~~ is computed by dividing net ~~income (loss) attributable to common stockholders~~loss by the weighted-average number of common shares outstanding during the period. ~~All participating securities are excluded from basic weighted-average common shares outstanding. In computing both basic~~

The net ~~income (loss)~~loss per share ~~attributable to~~for the three and six months ended June 30, 2023 reflects the issuance of 15,509,282 shares of common ~~stockholders and diluted~~stock sold in our underwritten public offering in September 2022, including the subsequent partial exercise of the underwriters’ over-allotment option in October 2022. The increase in the number of shares outstanding impacts the comparability of our net ~~income (loss)~~loss per share attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities, including stock options and warrants. Diluted net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common equivalent shares outstanding for ~~the~~each period. ~~Diluted net income (loss) per share attributable to common stockholders includes any dilutive effect from outstanding stock options and warrants using the treasury stock method.~~

The common stock issuable upon the conversion or exercise of the following dilutive securities has been excluded from the diluted net loss per share ~~attributable to common stockholders~~ calculation because their effect would have been ~~antidilutive~~anti-dilutive. Diluted net loss per share, therefore, is the same as basic net loss per share for the periods ~~presented:~~

presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016			June 30,
	(unaudited)									2023	2022
Convertible preferred stock		-		4,311,770		-		4,311,770
										(unaudited)
Warrants to purchase common stock		7,069		12,422		19,491		12,422	Warrants to purchase common stock	6,893,321	8,838,694
Options to purchase common stock		280,992		520,739		1,791,066		520,739
Stock options and restricted stock units outstanding									Stock options and restricted stock units outstanding	8,288,540	7,117,820
Total		288,061		4,844,931		1,810,557		4,844,931	Total	15,181,861	15,956,514

The following is a reconciliation of the numerator (net income or loss) and the denominator (number of shares) used in the calculation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except share and per share amounts):

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

(unaudited)

Numerator

Basic and diluted net income (loss) attributable to common stockholders

$
2,122

$
(374
)

$
(3,465
)

$
(185
)
Denominator

Shares used in computing basic net income (loss) per share attributable to common stockholders

10,577,772

608,701

3,989,747

550,080

Effect of dilutive securities:

Options to purchase common stock

1,002,472

—

—

—

Warrants to purchase common stock

6,551

—

—

—

Shares used in computing diluted net income (loss) per share attributable to common stockholders

11,586,795

608,701

3,989,747

550,080

Basic net income (loss) per share attributable to
common stockholders

$
0.20

$
(0.61
)

$
(0.87
)

$
(0.34
)
Diluted net income (loss) per share attributable to
common stockholders

$
0.18

$
(0.61
)

$
(0.87
)

$
(0.34
)

4. Cash Equivalents and ~~Short-Term~~ Investments

The amortized cost and fair value of our cash equivalents and ~~short-term~~ investments are as follows (in thousands):


											June 30, 2023
	September 30, 2017										(unaudited)
Assets:	(unaudited)									Assets:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair market value
Money market funds	$	4,736	$	—	$	—		$	4,736	Money market funds	$	31,353	$	—	$	—	$	31,353
U.S. treasury bills		17,155		2		—			17,157	U.S. treasury bills	105,571		3		(326)		105,248
U.S. agency securities										U.S. agency securities	34,985		—		(247)		34,738

Corporate debt securities and commercial paper		63,323		—		(14	)		63,309	Corporate debt securities and commercial paper	65,361		—		(62)		65,299
Total	$	85,214	$	2	$	(14	)	$	85,202	Total	$	237,270	$	3	$	(635)	$	236,638

Classified as:										Classified as:
Cash equivalents										Cash equivalents							$	31,353
Short-term investments										Short-term investments							169,724
Long-term investments										Long-term investments							35,561
Total										Total							$	236,638


	December 31, 2022
Assets:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Money market funds	$	11,004	$	—	$	—	$	11,004
U.S. treasury bills	113,964		5		(721)		113,248
U.S. agency securities	10,921		5		(11)		10,915
Non-U.S. government securities	6,060		—		(22)		6,038
Corporate debt securities and commercial paper	129,940		4		(399)		129,545
Total	$	271,889	$	14	$	(1,153)	$	270,750

Classified as:
Cash equivalents							$	11,004
Short-term investments							224,265
Long-term investments							35,481
Total							$	270,750

All ~~short-term~~ investments held as of ~~September~~June 30, ~~2017~~2023 and December 31, 2022 were classified as available-for-sale debt securities and consist of highly liquid funds with high credit ratings that, on their date of purchase, had a contractual ~~maturities~~maturity of ~~less than one year.~~two years or less. Realized gains on investments were $28,000 and $33,000 for the three and six months ended June 30, 2023, respectively, and zero for the three and six months ended June 30, 2022. There were no realized losses on investments for the three and six months ended June 30, 2023 and 2022.

The following table summarizes the fair value and gross unrealized losses by category, disaggregated by the length of time that individual debt securities have been in a continuous unrealized loss position (in thousands):


	June 30, 2023
	(unaudited)
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. treasury bills	$	85,011	$	(303)	$	5,980	$	(23)	$	90,991	$	(326)
U.S. agency securities	34,738		(247)		—		—		34,738		(247)
Corporate debt securities and commercial paper	15,296		(54)		6,061		(8)		21,357		(62)
Total	$	135,045	$	(604)	$	12,041	$	(31)	$	147,086	$	(635)


	December 31, 2022
	(unaudited)
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. treasury bills	$	82,694	$	(368)	$	17,648	$	(353)	$	100,342	$	(721)
U.S. agency securities	7,552		(11)		—		—		7,552		(11)
Non-U.S. government securities	3,012		(16)		3,026		(6)		6,038		(22)
Corporate debt securities and commercial paper	27,839		(195)		22,171		(204)		50,010		(399)
Total	$	121,097	$	(590)	$	42,845	$	(563)	$	163,942	$	(1,153)

Unrealized gains and losses on investments were primarily due to changes in interest rates. We evaluated our investments that are in an unrealized loss position and believe it is more likely than not that we will hold these ~~securities for~~investments until maturity and will recover the ~~periods presented. There were no short-term investments as~~amortized cost basis of ~~December 31, 2016.~~

6.these investments.

5. Fair Value Measurements

Cash and cash equivalents, restricted cash, receivables, accounts payable and accrued liabilities, which are recorded at invoiced amount or cost, approximate fair value based on the short-term nature of these financial instruments. Fair value is defined as the exchange price received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value, is as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities.

As of June 30, 2023 and December 31, ~~2016, we had~~2022, cash of ~~$11.8~~$2.7 million and ~~no assets measured using Level 1, Level 2, or Level 3 inputs. As of September 30, 2017, cash of $2.0~~$2.4 million, respectively, is excluded from the fair value table below.

The following ~~table summarizes~~tables summarize our financial assets and liabilities measured at fair value on a recurring basis (in thousands):


										June 30, 2023
	September 30, 2017									(unaudited)
Assets:	(unaudited)								Assets:	Level 1		Level 2		Level 3		Total
	Level 1		Level 2		Level 3		Total
Money market funds	$	4,736	$	—	$	—	$	4,736	Money market funds	$	31,353	$	—	$	—	$	31,353
U.S. treasury bills		17,157		—		—		17,157	U.S. treasury bills	105,248		—		—		105,248
U.S. agency securities									U.S. agency securities	—		34,738		—		34,738

Corporate debt securities and commercial paper		—		63,309		—		63,309	Corporate debt securities and commercial paper	—		65,299		—		65,299
Total	$	21,893	$	63,309	$	—	$	85,202	Total	$	136,601	$	100,037	$	—	$	236,638


	December 31, 2022
Assets:	Level 1		Level 2		Level 3		Total
Money market funds	$	11,004	$	—	$	—	$	11,004
U.S. treasury bills	113,248		—		—		113,248
U.S. agency securities	—		10,915		—		10,915
Non-U.S. government securities	—		6,038		—		6,038
Corporate debt securities and commercial paper	—		129,545		—		129,545
Total	$	124,252	$	146,498	$	—	$	270,750

Our Level 2 assets consist of ~~commercial paper and~~U.S. agency securities, non-U.S. government securities, corporate debt ~~securities. W~~esecurities, and commercial paper. We review trading activity and pricing for our available-for-sale securities as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data.

6. Additional Balance Sheet Information

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30, 2023		December 31, 2022
	(unaudited)
Prepaid research and development	$	2,245	$	1,881
Prepaid insurance	175		368
Prepaid other	413		394
Other receivables	404		317
Prepaid expenses and other current assets	$	3,237	$	2,960

Accrued liabilities consist of the following (in thousands):


	June 30, 2023		December 31, 2022
	(unaudited)
Research and development services	$	9,460	$	7,657
Employee compensation	2,933		4,110
Accrued taxes	820		1,847
Legal and professional fees	445		334
Accrued other	26		55
Accrued liabilities	$	13,684	$	14,003

7. Long-term Debt

In August 2019, we entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”), pursuant to which SVB agreed to extend term loans to us with an aggregate principal amount of up to $15.0 million (the “Term Loans”). Borrowings under the Loan Agreement consisted of up to three separate tranches. The initial tranche of $5.0 million was funded in August 2019, the second tranche of $5.0 million was funded in March 2020, and we did not draw down the final tranche of $5.0 million, which expired in July 2020.

In May 2023, we voluntarily repaid in full the remaining outstanding carrying value of $1.4 million of our Term Loans, which consisted of $800,000 in principal and final payments of $625,000, plus prorated accrued interest. In connection with the debt payoff, we wrote-off the remaining unamortized debt discount. As of June 30, ~~2017,~~2023, we ~~issued Series A-1 preferred stock warrants~~had no remaining balance outstanding under our Loan Agreement with SVB.

8. Contingencies

Certain tax credits received related to our research and development expenditures, which were recorded in previous years within other income within our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), were subject to review by foreign taxing authorities. During 2022, we reached constructive agreement with the Australian Taxation Office and recorded an estimated current foreign income tax provision for the expected repayments of $1.3 million. As of June 30, 2023, accrued estimated remaining tax liabilities of $828,000, net of amounts paid in 2022, are recorded within accrued liabilities on our accompanying Condensed Consolidated Balance Sheets.

9. License and Collaboration Agreements

AbbVie Ireland Unlimited Company (“AbbVie”)

In June 2020, we entered into an option and license agreement with AbbVie (the “AbbVie Agreement”) for the development of ALPN-101 (“acazicolcept”). The AbbVie Agreement grants AbbVie the exclusive option to purchase an exclusive worldwide license to acazicolcept (the “License Option”). The License Option is exercisable by AbbVie at any time and will expire 90 days from the achievement of certain development milestones. If AbbVie exercises the License Option, AbbVie will take over the future development and commercialization. Prior to the exercise of the License Option, we will perform research and development services, including conducting our Phase 2 study in systemic lupus erythematosus, based on an agreed-upon development plan (the “Development Plan”). We will be fully responsible for all costs incurred to conduct the activities under the Development Plan, provided that, AbbVie may be responsible for increased costs under the Development Plan in connection with ~~long-term debt.~~ certain material amendments proposed by AbbVie. We will also be solely responsible, at our sole cost and expense, for manufacturing and regulatory filings for acazicolcept necessary to complete activities under the Development Plan.

In June 2020, in connection with the execution of the AbbVie Agreement, AbbVie paid us a nonrefundable upfront payment of $60.0 million. Prior to the exercise of the License Option, AbbVie has agreed to make cash payments upon our achievement of certain predefined pre-option development milestones (the “Alpine Development Milestones”) up to an aggregate amount of $75.0 million. In 2021, we received $45.0 million of the Alpine Development Milestones. If AbbVie exercises the License Option, they will pay a one-time cash payment of $75.0 million. Following the exercise of the License Option, AbbVie has also agreed to make aggregate cash payments of up to $205.0 million upon AbbVie’s achievement of certain development and commercial milestones and additional aggregate cash payments of up to $450.0 million upon AbbVie’s achievement of certain sales-based cash milestones, collectively referred to as (the “AbbVie Milestones”). Subsequent to commercialization, we are also eligible to receive high single-digit to low double-digit percentage royalties on worldwide net sales of licensed products.

For revenue recognition purposes, we determined that our contractual promises in the AbbVie Agreement are not distinct and are interdependent with our performance obligation to provide research and development services under the Development Plan. Thus, all contractual promises related to the upfront payment and Alpine’s Development Milestones were combined into a single performance obligation. We determined the Alpine Development Milestone payments are probable of significant revenue reversal as the achievement is highly dependent on factors outside our control. Therefore, these milestone payments were fully constrained and were not initially included in the transaction price. In June 2021, we re-evaluated and updated the transaction price to include the achieved portion of the Alpine Development Milestones. We will continue to re-evaluate the transaction price each reporting period and update as uncertain events are resolved or other changes in circumstances occur. We expect to recognize the remaining deferred revenue over the remaining life of the Development Plan, which began in June 2020 and ends upon the later of the exercise or expiration of the option.

The ~~warrant liability was classified~~License Option and the AbbVie Milestones were determined not to be performance obligations at the inception of the contract as they did not represent material rights. If exercised, the License Option and AbbVie Milestones will be accounted for as a ~~Level 3 liability~~separate contract and will be recognized as revenue if and when triggered. Any consideration related to sales-based royalties and profit-sharing payments will be recognized when the related sales occur.

Horizon Therapeutics Ireland DAC (“Horizon”)

In December 2021, we entered into an exclusive license and collaboration agreement with Horizon (the “Horizon Agreement”) for the development and commercialization of up to four preclinical candidates generated from our unique discovery platform. The agreement includes licensing of one of our existing preclinical biologic therapeutic programs (the “Existing Program”), as well as a research partnership to jointly develop candidates for up to three additional autoimmune and inflammatory disease programs for other designated biological targets (the “Research Programs”). These candidates include previously undisclosed multi-specific fusion protein-based therapeutic candidates for autoimmune and inflammatory diseases. We will advance candidate molecules to predefined preclinical milestones while Horizon will be responsible for the respective costs and, ultimately, Horizon will assume responsibility for development and commercialization activities and costs.

In connection with the execution of the Horizon Agreement in December 2021, we entered into a stock purchase agreement under which Horizon purchased 951,980 shares of our common stock in a private placement for approximately $15.76 per share and aggregate proceeds of $15.0 million. The shares were sold at a 25% premium to the volume-weighted average share price of our common stock for a specified 30-day period prior to entering into the agreement. The fair value of the common stock issued to Horizon of $11.9 million was ~~determined using~~recorded to equity, based on the ~~Black-Scholes option-pricing model with the following key assumptions: (1) stock~~closing price of ~~$9.64; (2) a risk-free rate~~common stock on the effective date of ~~2.31%; (3) an expected volatility of 78%;~~the Horizon Agreement. For accounting purposes, the $3.1 million difference between the cash proceeds and ~~(4) a term of 9.5 years. Both observable and unobservable inputs are used to determine~~ the fair value of the ~~warrant liability. As a result, the unrealized gains and losses of the warrant liability may include changes in fair value~~common stock was treated as additional consideration attributable to ~~both observable inputs (e.g., changes in market interest rates) and unobservable inputs (e.g., probabilities of~~ the ~~occurrence of an early termination event).~~

In July 2017, in connection with the closing of the merger, our preferred stock warrants converted to common stock warrants. As a result of the change in the underlying shares, the warrants were equity-classified beginning on July 24, 2017. As of the date of conversion, we remeasured the fair value of the warrants, which resulted in a $1,000 decrease in fair value, which was recorded as other income in our accompanying condensed consolidated statements of operations and comprehensive income (loss). See Note 11 for additional discussion of the warrants.

~~The following table shows the reconciliation of the Level 3 warrant liability measured and recorded at fair value on a recurring basis, using significant unobservable inputs (in thousands):~~

Horizon Agreement.

	~~Estimated~~ ~~Fair Value~~
~~Balance as of January 1, 2017~~	$	—
~~Fair value of warrants at issuance (June 30, 2017)~~		~~53,000~~
~~Change in fair value of warrant liability in connection~~ ~~with merger~~		~~(1,000~~	)
~~Conversion of warrant liability to equity~~		~~(52,000~~	)
~~Balance as of September 30, 2017~~	$	—

~~7. Accrued Liabilities~~

~~Accrued expenses and other current liabilities consisted of the following (in thousands):~~

September 30,
2017

December 31,
2016

(unaudited)

Accrued taxes and licenses

$
354

$
61

Accrued professional fees

50

5

Deferred compensation

—

61

Accrued other

238

43

Total

$
642

$
170

~~8. Long-term Debt~~

On June 30, 2017, we drew down a term loan of $5.0 million from Silicon Valley Bank with whom we had entered into a long-term financing arrangement on December 16, 2016. The loan has an interest-only period that expires on July 1, 2018, at which point

we will be obligated to make thirty consecutive equal monthly payments of principal (each in an amount that will fully amortize the loan), plus accrued interest. Interest accrues at a floating per annum rate equal to the lender’s prime rate minus 1.75%. As a condition to the loan, we agreed to pay a final payment fee of 7.5%, or $375,000, upon repayment of the loan. The final payment fee was recorded in long-term debt with an offsetting reduction in long-term debt and was accounted for as a debt discount.

The obligations under the loan agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations, financial, or other condition. We assessed the likelihood of the lender accelerating payment of the loan due to a material adverse change in our business, operations, financial, or other condition as remote. As such, as of September 30, 2017, the classification of the loan is split between current and noncurrent based on the timing of payment obligations. The term loan agreement contains customary conditions to borrowings, events of default and negative covenants, including covenants that could limit our ability to, among other things, incur additional indebtedness, liens or other encumbrances; make dividends or other distributions; buy, sell or transfer assets; engage in any new line of business; and enter into certain transactions with affiliates. We were in compliance with our covenants as of September 30, 2017.

Also, in connection with the drawdown of the loan, we also granted the financial institution 7,069 Series A-1 Preferred Stock warrants at an exercise price of $12.38 per share. The fair value of the warrants on the date of issuance was $53,000, determined using the Black-Scholes option-pricing model, and was recorded as a discount to the note and as a warrant liability on the accompanying condensed consolidated balance sheets. In connection with the merger and conversion of all outstanding Series A-1 preferred stock, the warrants became exercisable for 7,069 fully vested shares of our common stock. As a result of the change in the underlying shares, the warrants were equity-classified beginning on July 24, 2017. See Note 11 for further details of these warrants.

The debt discount is being amortized to interest expense using the effective interest method over the repayment term of the initial loan amount. Non-cash interest expense associated with the amortization of the discount was $43,000 for the three and nine months ended September 30, 2017. The unamortized discount was $385,000 as of September 30, 2017.

~~9. Commitments and Contingencies~~

~~Operating Lease~~

On April 1, 2017, we entered into an amendment to our existing lease pursuant to which we agreed to lease additional premises adjacent to our existing leased premises for an annual base rent of $38,000. The amendment is effective on April 12, 2017. The amendment does not alter the December 31, 2019 expiry date of the existing lease. As required byUnder the terms of the ~~lease,~~agreements, Horizon also paid us a non-refundable upfront payment of $25.0 million in the first quarter of 2022. In addition, we are eligible to receive up to $381.0 million per program, or up to approximately $1.5 billion in total, in future success-based payments related to development, regulatory and commercial milestones. Furthermore, we are eligible to receive tiered royalties from a mid-single digit percentage to a low double-digit percentage on global net sales. In addition to proceeds from the non-refundable upfront payment, we have recognized $1.7 million from research and development support provided by us through June 30, 2023.

For revenue recognition purposes, we determined the transaction price at inception was $28.1 million, which consists of the upfront payment of $25.0 million and the $3.1 million premium on the stock purchase, and that the Existing Program and each Research Program are distinct performance obligations. We allocated revenue to each performance obligation based on its relative stand-alone selling price. The future success-based payments related to development and regulatory milestones are probable of significant revenue reversal as the achievement is highly dependent on factors outside our control. Therefore, these milestone payments are fully constrained and are not initially included in the transaction price. We will continue to re-evaluate the transaction price each reporting period and update as uncertain events are resolved or other changes in circumstances occur. Any consideration related to commercial milestones and royalties will be recognized when the related sales occur.

Adaptimmune Therapeutics plc (“Adaptimmune”)

In May ~~2017,~~2019, we entered into a ~~line of credit~~collaboration and licensing agreement with Adaptimmune to ~~establish collateral to support~~develop next-generation SPEAR T cell products (the “Adaptimmune Agreement”). Under the ~~security deposit in an amount of $132,000. This is recorded as restricted cash in the accompanying condensed consolidated balance sheets.~~

~~10. License and Collaboration~~Adaptimmune Agreement,

~~In October 2015, we entered into the Collaboration Agreement with Kite to discover and develop protein-based immunotherapies targeting the immune synapse to treat cancer. Under our agreement,~~ we are to perform certain research services and grant ~~to Kite~~Adaptimmune an exclusive license to ~~two~~ programs from our ~~TIP technology, which Kite is planning to further engineer into chimeric antigen receptor~~secreted immunomodulatory protein (“~~CAR”~~SIP”) and ~~T cell receptor~~transmembrane immunomodulatory protein (“~~TCR”~~TIP”) ~~product candidates.~~

~~Under~~technologies.

Through June 30, 2023, we have recorded a total of $3.0 million in license payments under the terms of the ~~Collaboration~~Adaptimmune Agreement ~~Kite made~~consisting of a $2.0 million upfront license payment received in June 2019 and an additional $1.0 million license fee upon Adaptimmune’s selection of an additional research program in June 2022. We have also recognized $2.1 million in research support payments to usfund ongoing programs through June 30, 2023. In addition, we are eligible for research support payments, one-time payments and downstream development and commercialization milestones of ~~$5.5~~up to $288.0 million, ~~which were initially~~if respective pre-specified milestones for each program are achieved. We are also eligible to receive low-single digit percentage royalties on worldwide net sales of the applicable products.

For revenue recognition purposes, licensing and research support fees billed under the agreement are being recorded as deferred ~~revenue.~~ revenue and recognized to revenue based on employee hours contributed to each performance obligation.

Contract balances and revenue recognition

We report contract assets resulting from unconditional rights to consideration related to upfront payments, and for

completed but unpaid research and development services within accounts receivable in our accompanying Condensed Consolidated Balance Sheets. Contract liabilities, representing advance consideration for licensing rights bundled with research and development services and other promises for which the underlying performance obligations have not yet been satisfied, are reported as deferred revenue in our accompanying Condensed Consolidated Balance Sheets. Contract liabilities are presented as current and noncurrent based on estimated timing of when the underlying performance obligations will ~~also~~ be ~~eligible~~met. Respective balances are as follows (in thousands):


	June 30, 2023		December 31, 2022
	(unaudited)
Contract Assets	$	284	$	392
Contract Liabilities	$	57,727	$	74,756

We use cost-based input methods to ~~receive milestone payments~~measure progress towards completion of our performance obligations and to calculate the corresponding revenue to recognize under our contracts with customers each period. In applying the cost-based input, we use actual costs incurred relative to budgeted costs for each combined performance obligation. Actual costs consist primarily of labor related to internal personnel and third-party contracts. Revenue is recognized based ~~upon~~on the ~~successful achievement~~percentage of ~~pre-specified research, clinical,~~costs incurred relative to the total estimated costs for the performance obligation. A cost-based input method of revenue recognition requires management to estimate the costs to complete our performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete our performance obligations will be recorded in the period in which changes are identified and ~~regulatory milestones totaling up to $530.0~~amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.

Collaboration revenue recognized in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), disaggregated by customer, is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(unaudited)
AbbVie	$	6,748	$	4,563	$	12,346	$	10,523
Horizon	1,715		587		5,170		8,256
Adaptimmune	130		142		464		142
Total collaboration revenue	$	8,593	$	5,292	$	17,980	$	18,921

Revenue recognized during the period that was included in the opening contract liability balance was $17.0 million ~~plus royalty payments on product sales, if any. Kite will receive an exclusive, worldwide license to research, develop,~~ and ~~commercialize engineered autologous T cell therapies incorporating two programs coming from our platform.~~

~~On October 20, 2017,~~$18.6 million for the six months ended June 30, 2023 and 2022, respectively.

10. Stockholders’ Equity

Securities Offering

In April 2023, we entered into ~~an amendment~~a sales agreement (the “Sales Agreement”) with ~~Kite~~Cowen and Company, LLC (“TD Cowen”) to extend the research term of the Collaboration Agreement. Under the amended agreement, we are eligible to receive an additional $450,000 research support payment from Kite in two tranches (instead of a single tranche as previously contemplated by the original Collaboration Agreement) (the “Amendment”). ~~The Amendment also amended and restated the original research plan. We adjusted our estimated service period over the extended term and have adjusted the revenue recognition accordingly.~~

We recorded revenue of $128,000 and $737,000 for the three months ended September 30, 2017 and 2016, respectively, and $1.6 million and $2.2 million for the nine months ended September 30, 2017 and 2016, respectively.

~~11. Convertible Preferred Stock~~

In March 2017, we issued and sold 707,330 shares of Series A convertible preferred stock and received a total of $4.0 million. In April 2017, prior to the execution and delivery of the Merger Agreement certain holders of our Series A-1 convertible preferred stock purchased 2,947,211 shares of Series A-1 preferred stock for $16.7 million in proceeds. Contemporaneously with the execution and delivery of the Merger Agreement certain of our pre-existing stockholders entered into a subscription agreement with us pursuant to which such stockholders purchased immediately prior to the closing of the merger 1,335,118sell shares of our ~~convertible preferred~~common stock, ~~at a purchase price~~from time to time, through an “at the market” equity offering for up to $100.0 million in aggregate gross proceeds. TD Cowen will act as the sales agent and will be entitled to compensation for services of ~~$12.74 per share for an aggregate purchase price~~up to 3.0% of ~~approximately $17.0 million.~~

the gross sales proceeds from shares sold through TD Cowen under the Sales Agreement. The ~~rights, preferences, and privileges of convertible preferred stock are summarized in~~ shares will be issued pursuant to our ~~audited financial statements and accompanying notes for the years ended December 31, 2016 and 2015, as~~shelf registration statement on Form S-3 (File No. 333-271517), which was filed with the SEC inon April 28, 2023 and declared effective on May 9, 2023. On May 11, 2023, we filed a final prospectus supplement with the ~~Registration Statement.~~

~~Upon~~SEC relating to the ~~closing~~offer and sale of the ~~merger, all outstanding~~ shares pursuant to the Sales Agreement. As of ~~our convertible preferred stock converted into 9,301,433~~June 30, 2023, we have sold 919,413 shares of common ~~stock. As~~stock under the Sales Agreement for a price of ~~September 30, 2017,~~$10.93 per share. The associated gross proceeds of $10.0 million were recorded net of directly related financing costs of $354,000 within additional-paid-in-capital on our accompanying Condensed Consolidated Balance Sheets.

Treasury Shares

In June 2023, we ~~do not have any convertible preferred~~retired 1,250,467 shares of treasury stock, ~~outstanding.~~

~~Preferred~~and returned the shares of common stock to the status of

authorized but unissued shares.

Common Stock Warrants

In connection with ~~our draw down~~the exercise of ~~a term loan on~~certain prefunded warrants during the six months ended June 30, ~~2017,~~2023, we ~~granted~~issued 1,945,102 shares of common stock.

Equity Incentive Plans

On January 1, 2023, in connection with our 2018 Equity Incentive Plan (the “2018 Plan”) annual increase provision, a total of 1,500,000 additional shares were automatically added to the ~~lender 7,069 of fully vested Series A-1 preferred~~shares authorized under the 2018 Plan.

During the six months ended June 30, 2023, we issued stock ~~warrants at an~~option grants totaling 1,779,970 shares with a weighted average exercise price of ~~$12.38~~$7.68 per share and a term of ten years. The fair value of the warrants on the date of issuance was $53,000 and was recorded as a discount to the note and as a warrant liability within the accompanying condensed consolidated balance sheets. The warrants were initially classified as a liability because the underlying to the warrants were puttable shares.

~~On July 24, 2017, in connection with the merger and conversion of all outstanding Series A-1 preferred stock, the warrants became exercisable for 7,069 fully vested shares of~~under our common stock. As a result of the change in the underlying shares, the warrants were equity-classified beginning on July 24, 2017. As a result of the equity classification, the warrant liability was remeasured as of July 24, 2017 and the change in fair value was recognized within other (income) expense in our condensed consolidated statements of operations and comprehensive income (loss) and the carrying value of the revised warrant liability was reclassified to additional paid-in capital within stockholders’ deficit.

~~12. Stockholders’ Deficit~~

2018 Plan.

Stock-Based Compensation Expense

We use the Black-Scholes option pricing model to estimate the fair value of stock options ~~granted to employees~~ at the grant date. The fair value of restricted stock units (“RSUs”) is equal to the closing stock price on the date of grant. We recognize the fair value of stock-based compensation as compensation expense over the requisite service period, which is the vesting period. We also record stock options and other stock-based compensation issued to non-employees at their fair value as of their date of grant using the Black-Scholes option pricing model. Non-employee awards are then periodically remeasured to reflect the current fair value at each reporting period and expense is recognized over the related vesting period. Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life.

Stock-based compensation ~~expense~~ is classified in ~~the condensed consolidated statements~~our Condensed Consolidated Statements of ~~operations~~Operations and ~~comprehensive income (loss)~~Comprehensive Income (Loss) as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016			Three Months Ended June 30,				Six Months Ended June 30,
	(unaudited)									2023		2022		2023		2022
Employee:
Research and development	$	38	$	4	$	93	$	5
General and administrative	169		5		386		46
Non-Employee:
										(unaudited)
Research and development	16		1		40		3		Research and development	$	1,531	$	1,346	$	3,012	$	2,654
General and administrative	6		2		9		3		General and administrative	1,090		989		2,161		1,970
Total stock-based compensation expense	$	229	$	12	$	528	$	57	Total stock-based compensation expense	$	2,621	$	2,335	$	5,173	$	4,624

~~13.~~

11. Income Taxes

We are subject to income taxes in the United States and Australia and our effective tax rate is calculated quarterly based upon current assumptions relating to the full year’s estimated operating results and various tax-related items. Each quarter an estimate of the annual effective tax rate is updated should we revise our forecast of earnings based upon our operating results. If there is a change in the estimated effective annual tax rate, a cumulative adjustment is made. Our effective tax rate was 0% and 7.5% for the ~~three~~six months ended June 30, 2023 and ~~nine-month periods~~2022, respectively.

Our effective tax rate of 7.5% for the six months ended ~~September~~June 30, ~~2017~~2022 was ~~(0.04) %.~~ primarily due to the recognition of current foreign tax liabilities of $1.3 million as a result of a cumulative change to our income tax provision and a $0.1 million reduction to our deferred tax assets as a result of a change to our transfer pricing methodology for the activities of our wholly owned subsidiary, Alpine Immune Sciences Australia PTY, LTD, and $0.4 million in domestic federal income tax expense resulting from the mandatory capitalization of research and development expenses beginning with the 2022 tax year.

The ~~difference~~differences between the effective tax ~~rate~~rates of ~~(0.04) %~~0% and 7.5% and the U.S. federal statutory rate of ~~35%~~21% for the ~~three~~six months ended June 30, 2023 and ~~nine-month periods ended September 30, 2017 was~~2022, respectively, were primarily due to recognizing a full valuation allowance on deferred tax ~~assets.~~

assets, and partial valuation allowance on our foreign deferred tax assets, tax expense resulting from the acceptance of a voluntary disclosure agreement with the Australian Taxation Office, and tax benefits relating to research and development tax credits.

As of ~~September~~June 30, ~~2017,~~2023, we determined that, based on an evaluation of our sources of income and all available evidence, both positive and negative, including our latest forecasts and cumulative losses in recent years, it was more likely than not that none of our domestic deferred tax assets would be realized and, therefore, we continued to record a full domestic valuation allowance. ~~No current tax liability or expense associated with our deferred tax assets have been recorded in the financial statements.~~

As part of the merger with Nivalis, we identified $1.5 million of acquired IPR&D. IPR&D acquired in a business combination is an indefinite-lived intangible asset until the completion or abandonment of the associated R&D efforts. Once the research and development efforts are completed or abandoned, the IPR&D will either be impaired or amortized over the asset life as a finite-lived intangible.

As the acquired IPR&D is not completed, and has not been abandoned, it is considered indefinite-lived for accounting purposes. Any future reversal of a deferred tax liability resulting from IPR&D costs cannot be scheduled for tax purposes and therefore cannot be considered as a source of future taxable income. Thus, we have recorded a deferred tax liability of $509,000 as a result of the acquired IPR&D having a financial reporting basis of $1.5 million and a tax basis of $0.

Under Section 382 of the Internal Revenue Code of 1986, substantial changes in Alpine Immune Sciences’ ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset taxable income. Any such annual limitation may significantly reduce the utilization of the net operating losses before they expire.

~~Our net operating loss carry forward amounts expire starting in 2032.~~ As of ~~December 31, 2016,~~June 30, 2023, we ~~had accumulated approximately $75.7 million of federal tax losses and $0 (tax effected) of state tax losses.~~

Due to our operating loss carryforwards, all tax years remain open to examination by the major taxing jurisdictions to which we are subject. In the event we are assessed interest or penalties at some point in the future,determined that it ~~will be classified in the financial statements as tax expense.~~

~~Under ASC 740, the benefit of an uncertain tax position that is~~was more likely than not ~~of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount~~ that ~~is more likely than not to be sustained. No~~only a portion of ~~the benefit of an uncertain~~our foreign deferred tax ~~position may~~assets would be ~~recognized if the position has less than~~realized and have recorded a 50% likelihood of being sustained. We do have an uncertain tax position on our research and development credits as of the three and nine-month periods ended September 30, 2017. However, no deferred asset is recorded for the credits due to the fullpartial foreign valuation allowance.

~~14. Related Party Transactions~~

We ~~have a shared services agreement with Alpine BioVentures GP, LLC, pursuant to which we incurred no costs for~~did not record significant current tax liabilities or expense during the ~~three and nine~~six months ended ~~September~~June 30, 2017 and $3,000 and $12,000 for the three and nine months ended September 30, 2016, respectively. We had an accrual of $5,000 related to the shared services agreement at December 31, 2016, which was paid in April 2017.

~~15. Subsequent Events~~

On October 20, 2017, we entered into the Amendment of the Collaboration Agreement with Kite. Pursuant to the terms of the Amendment, the research term of the Collaboration Agreement was extended, providing us additional time to deliver the second of two program TIPs to Kite as set forth in the Collaboration Agreement. Kite previously paid us a research support payment of $450,000 and, pursuant to the terms of the Amendment, we are eligible to receive an additional $450,000 research support payment payable by Kite in two tranches (instead of a single tranche as previously contemplated by the Collaboration Agreement). The Amendment also amended and restated the original research plan.

2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following ~~management’s discussion~~Management’s Discussion and ~~analysis~~Analysis of ~~financial condition~~Financial Condition and ~~results~~Results of ~~operations~~Operations in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and related notes thereto and ~~management’s discussion~~Management’s Discussion and ~~analysis~~Analysis of ~~financial condition~~Financial Condition and ~~results~~Results of ~~operation~~Operations for the year ended December 31, ~~2016,~~2022, included in our ~~Registration Statement~~Annual Report on Form ~~S-4 (Reg No. 333-218134) (the “Registration Statement”)~~10-K, or the “Annual Report”, filed with the SEC on March 23, 2023.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. In some cases you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect,” or similar expressions, or the negative or plural of these words or expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements include, but are not limited to:

•

~~our ability to identify additional products or product candidates;~~

•

~~our estimates regarding our expenses, revenues, anticipated capital requirements and our needs for additional financing;~~

•our ability to identify, develop and commercialize additional products or product candidates;

•

~~our ability to obtain funding for our operations;~~

•our estimates regarding our expenses, revenues, anticipated capital requirements and our needs for additional financing;

•

~~the implementation of our business model and strategic plans for our business and technology;~~

•our ability to obtain funding for our operations;

•

~~the timing of the commencement, progress and receipt of data from any of our preclinical and potential clinical trials;~~

•the implementation of our business model and strategic plans for our business and technology;

•

~~the expected results of any preclinical or clinical trial and the impact on the likelihood or timing of any regulatory approval;~~

•the timing of the commencement, progress and receipt of data from any of our preclinical and clinical trials;

•

~~the scope of protection we are able to establish and maintain for intellectual property rights covering our technology and product candidates;~~

•the expected results of any preclinical or clinical trial and the impact on the likelihood or timing of any regulatory approval;

•

~~the timing or likelihood of regulatory filings and approvals;~~

•the scope of protection we are able to establish and maintain for intellectual property rights covering our technology and product candidates;

•

~~the therapeutic benefits, effectiveness and safety of our product candidates;~~

•the anticipated impact of pandemics or other health crises on our business, research and clinical development plans and timelines and results of operations;

•

~~the rate and degree of market acceptance and clinical utility of any future products~~

•the timing or likelihood of regulatory filings and approvals;

•

~~our ability to maintain and establish collaborations;~~

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

•

~~our expectations regarding market risk, including interest rate changes;~~

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

•

~~developments relating to our competitors and our industry; and~~

•our ability to maintain and establish collaborations;

•

~~our expectations regarding licensing, acquisitions and strategic operations.~~

•our ability to achieve milestones in our current and any future collaborations;

•our expectations regarding market risk, including interest rate changes and general macroeconomic conditions;

•our expectations regarding the sufficiency of our cash, cash equivalents and marketable securities to fund operations for at least the next 12 months;

•developments relating to our competitors and our industry; and

•our expectations regarding licensing, acquisitions and strategic operations.

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part II, Item 1A — ~~“Risk~~Risk Factors”, and elsewhere in this report. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such

information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Overview

We are a ~~development-stage immunotherapy~~clinical-stage biopharmaceutical company ~~focused on~~dedicated to discovering and developing ~~treatments for autoimmune/~~innovative, protein-based immunotherapies to treat autoimmune and inflammatory ~~diseases and cancer.~~diseases. Our approach includes a proprietary ~~Variant Immunoglobulin Domain~~^™ ~~(“vIgD~~^™”) scientific platform ~~uses a process known as directed evolution~~that converts native immune system proteins into differentiated, multi-targeted therapeutics. We are seeking to create ~~therapeutics potentially capable~~first- or best-in-class multifunctional immunotherapies via our unique protein engineering technologies to improve outcomes in patients with serious diseases.

Autoimmune and Inflammatory Diseases

ALPN-303, or povetacicept, is a dual antagonist of ~~modulating~~ the ~~human~~B cell activating factor, or BAFF, and a proliferation inducing ligand, or APRIL, cytokines, which play key roles in the activation, development, and survival of B cells. Based upon an engineered transmembrane activator and CAML interactor, or TACI, domain, povetacicept has exhibited greater potency in preclinical studies versus wild-type TACI-based comparators, as well as other inhibitors of BAFF and/or APRIL alone. In addition, povetacicept has been well-tolerated in preclinical models and exhibited superior pharmacokinetics and pharmacodynamics over wild-type TACI-Fc counterparts, including superior serum exposure, suppression of T-dependent antibody production, and/or serum immunoglobulins in mice and/or cynomolgus monkeys. In a randomized, placebo-controlled, first-in-human, Phase 1 study in adult healthy volunteers (NCT05034484), povetacicept was well tolerated at doses up to 960 mg, with dose-dependent pharmacokinetics and reductions in circulating immunoglobulins and antibody-secreting cells, which we believe supports the use of a once every four-week dose regimen for subsequent studies and enables a broad development plan in multiple indications. Povetacicept is in development for multiple autoimmune diseases, including systemic lupus erythematosus, or SLE, autoimmune glomerulonephritis, and autoimmune cytopenias. We are evaluating povetacicept in our RUBY-3 and RUBY-4 studies. RUBY-3 is a multiple ascending dose, multi-cohort, open label, phase 1b/2a study of povetacicept in IgA nephropathy, lupus nephritis, and primary membranous nephropathy, where povetacicept is being administered subcutaneously once every four-weeks for up to 48 weeks. Key endpoints include proteinuria, eGFR, renal response, and disease-related autoantibodies. RUBY-4 is a multi-cohort, open label phase 1b study of povetacicept in immune ~~system.~~

thrombocytopenia, autoimmune hemolytic anemia, and cold agglutinin disease, where povetacicept is being administered subcutaneously once every four-weeks for up to 48 weeks. Key endpoints include respective blood cell counts, including durable responses, as well as disease-related autoantibodies.

ALPN-101, or acazicolcept, is a dual Inducible T cell Costimulator, or ICOS, and CD28 antagonist intended for the treatment of autoimmune and inflammatory diseases. Preclinical studies with acazicolcept have demonstrated efficacy in models of SLE, Sjögren’s syndrome, or SjS, arthritis, inflammatory bowel disease, multiple sclerosis, type 1 diabetes, uveitis, and graft versus host disease. We have evaluated acazicolcept in a Phase 1 healthy volunteer study and are currently evaluating acazicolcept in Synergy, a global, randomized, double-blind, placebo-controlled Phase 2 study of acazicolcept in adults with moderate-to-severe SLE. In June 2020, we entered into an Option and License Agreement with AbbVie Ireland Unlimited Company, or AbbVie, which grants AbbVie an exclusive option to take an exclusive license to acazicolcept. Through June 30, 2023, we have received $105.0 million in upfront and pre-option exercise development milestones as part of the Option and License Agreement with AbbVie, or the AbbVie Agreement.

In December 2021, we entered into a license and collaboration agreement, or the Horizon Agreement, with Horizon Therapeutics Ireland DAC, or Horizon, which grants Horizon an exclusive license for the development, manufacture and commercialization of one of our existing preclinical biologic therapeutic programs, or the Existing Program, and up to three additional autoimmune and inflammatory disease programs for other designated biological targets, or the Research Programs, generated from our libraries of proteins and molecules for research, discovery and identification of additional compounds. Under the terms of the Horizon Agreement, Horizon made an upfront payment to us of $25.0 million as well as an equity investment for which they paid $15.0 million, a 25% premium to the 30-day volume-weighted average share price as of December 9, 2021. In addition, we are eligible to receive up to $381.0 million per program, or approximately $1.5 billion in total, in future success-based payments related to development, regulatory and commercial milestones as well as tiered royalties on global net sales.

Scientific Platform

Our scientific platform has also generated immune modulatory proteins with the potential of improving engineered cell therapies such as chimeric antigen receptor T cells, T cell receptor-engineered T cells, and tumor infiltrating lymphocytes. In May 2019, we signed a collaboration and license agreement with Adaptimmune Therapeutics plc, or Adaptimmune, to develop

next-generation SPEAR™ T cell products which incorporate our secreted and transmembrane immunomodulatory protein, termed SIP™ and TIP™, technology. We intend to continue to leverage our existing pipeline and platform for internal development and to actively explore and evaluate potential value-creating partnering opportunities.

Our Strategy

Our goal is to ~~create~~discover and develop modern therapies ~~targeting the immune synapse, using our directed-evolution based discovery platform~~ to ~~potentially~~ treat patients with serious ~~conditions such as cancer~~autoimmune and inflammatory diseases. To achieve our ~~goal,~~goals, we ~~currently plan~~intend to:

•

~~advance our lead program ALPN-101 for the treatment of inflammatory diseases to clinical trials;~~

•aggressively move our lead wholly-owned povetacicept program into clinical studies for the treatment of multiple B cell and/or autoantibody-related diseases;

•

~~advance our oncology programs;~~

•aggressively move our most advanced autoimmune and inflammatory program acazicolcept through clinical development as part of our collaboration with AbbVie including conducting Synergy, our Phase 2 study for the treatment of SLE; and

•

~~develop our inhibitory (checkpoint) receptor agonist and V-mAb programs; and~~

•maximize the value of our pipeline and platform for internal development and via potential partnering activities.

•

~~maximize the value of our pipeline and platform via partnering activities.~~

Our operations to date have been limited to business planning, raising capital, developing our platform technology, identifying potential immunotherapy candidates, clinical studies, and other research and development activities. To date, we have financed operations primarily through public offerings of common stock and warrants, private ~~placements~~placement sales of common stock, warrants and convertible preferred stock, funds received from a license and research ~~agreement,~~agreements, debt financing and assets acquired upon the close of our merger with Nivalis Therapeutics Inc. ~~(“Nivalis”).~~, or Nivalis. We do not have any products approved for sale and have not generated any product sales. Since inception and through ~~September~~June 30, ~~2017,~~2023, excluding amounts borrowed through debt financing, we have raised an aggregate of ~~$103.8~~approximately $537.4 million to fund operations, of which $302.0 million was from the sale of common stock and warrants, $142.1 million from license and collaboration agreements, $49.2 million ~~was~~ from the sale of convertible preferred stock, ~~$5.5 million was through a license and research agreement, $5.0 million advanced from a long-term loan,~~ and $44.1 million in the form of cash, cash equivalents, and marketable securities acquired through the merger with Nivalis. As of ~~September~~June 30, ~~2017,~~2023, we had cash, cash equivalents, restricted cash, and ~~marketable securities~~investments totaling ~~$87.2~~$239.6 million.

Our net ~~income~~loss was ~~$2.1~~$13.2 million and $18.1 million for the three months ended, ~~September 30, 2017~~ and ~~our net loss was $3.5~~$26.4 million and $25.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017, compared to net losses of $0.4 million~~2023 and ~~$0.2 million for the three and nine months ended September 30, 2016,~~2022, respectively. We expect to continue incurring significant expenses and operating losses for at least the next several years as we:

•

~~initiate and complete clinical trials for product candidates, including ALPN-101, a dual ICOS/CD28 antagonist program targeting inflammatory disorders;~~

•initiate and complete nonclinical studies and clinical trials for our product candidates, including povetacicept, a dual B cell cytokine antagonist for B cell-mediated autoimmune and inflammatory diseases, and acazicolcept, a dual ICOS/CD28 antagonist program targeting autoimmune and inflammatory disorders;

	•		~~contract to manufacture and perform additional process development for our product candidates;~~
	•		~~continue research and development efforts to build our pipeline beyond the current product candidates;~~
	•		~~maintain, expand, and protect our intellectual property portfolio;~~
	•		~~hire additional clinical, quality control, scientific, and management personnel; and~~
	•		~~add operational and financial personnel to support our product development efforts and operational support applicable to operating as a public company.~~

•contract to manufacture and perform additional process development for our product candidates;

•continue research and development efforts to build our pipeline beyond the current product candidates;

•maintain, expand, and protect our intellectual property portfolio;

•hire additional clinical, quality control, scientific, and management personnel; and

•add operational and financial personnel to support our product development efforts and operational capabilities applicable to operating as a public company.

We do not expect to generate ~~significant~~product revenue unless and until we successfully complete development of, obtain marketing approval for, and commercialize our product candidates, either alone or in collaboration with third parties. We expect these activities will take a number of years and our success in these efforts is subject to significant uncertainty. Accordingly, we will need to raise additional capital prior to the regulatory approval and commercialization of any of our product candidates. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our operating activities through ~~public or private~~ equity or debt financings, collaborations or licenses, capital lease transactions, or other available financing transactions. However, additional capital may not be available on reasonable terms, if at all, and if we raise additional funds through the issuance of additional equity or debt securities, it could result in dilution to our existing stockholders and increased fixed payment obligations. Management’s discussion and analysis of financial condition and results of operations is based upon the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, which we prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim periods and with Regulation S-X promulgated under the Securities and Exchange Act of 1934, as amended, or the Exchange Act.

~~Business Combination with Nivalis~~

On April 18, 2017, we entered into a merger agreement (the “Merger Agreement”) with Nivalis, a public biotechnology company, and one of its wholly-owned subsidiaries, pursuant to which, the subsidiary merged with and into Alpine, with Alpine continuing as a wholly owned subsidiary of Nivalis and the surviving corporation of the merger. On July 24, 2017, the business

combination of Alpine and Nivalis was completed. Under the terms of the Merger Agreement, Alpine’s preexisting stockholders, warrantholders and optionholders received approximately 76% of the fully-diluted shares of common stock of the combined organization in exchange for the transfer of all of Alpine’s common stock. This transaction was consummated to provide us with increased access to sources of capital and a broader range of investors to support the clinical development of our products. The acquired assets and liabilities of Nivalis are included in our condensed consolidated balance sheet as of September 30, 2017 and Nivalis’ results of operations and cash flows for the period from July 25, 2017 through September 30, 2017 are included in our condensed consolidated statement of comprehensive income and cash flows for the period from July 1, 2017 through September 30, 2017. See notes to the condensed consolidated financial statements included in this Form 10-Q for further information regarding the business combination.

Financial Overview

~~Revenue~~

Collaboration ~~and Licensing~~ Revenue

We derive ~~all~~ our collaboration revenue primarily from our ~~License~~collaboration and Research Agreement (the “Collaboration Agreement”), with Kite Pharma, Inc. (“Kite”). In October 2015, we entered into the Collaboration Agreement providing Kite with access to two transmembrane immunomodulatory protein (“TIP”) programs for use in Kite’s engineered cellular therapy programs. We received $5.5 million in upfront cash and are eligible to receive up to $530.0 million upon successful achievement of pre-specified research, clinical, and regulatory milestones in addition to royalties on any products containing our TIPs. In the collaboration, we provide the TIPs and perform ~~in vitro~~ ~~testing, while Kite is responsible for~~ ~~in vivo~~ testing, manufacturing, and clinical trials. Kite will receive an exclusive, worldwide license to research, develop, and commercialize engineered autologous T cell therapies incorporating two TIP programs coming from our platform.

On October 20, 2017, we entered into an amendment (the “Amendment”) with Kite to extend the research term of the Collaboration Agreement. Under the Amendment, we are eligible to receive an additional $450,000 research support payment from Kite in two tranches (instead of a single tranche as previously contemplated by the Collaboration Agreement). The Amendment also amended and restated the original research plan. We have adjusted our expected recognition period of the remaining deferred upfront payments over the expected life of the amended research plan and will recognize the potential $450,000 in additional research support only when the stated milestones have been completed.

~~We have recognized $5.0 million in revenue from inception through September 30, 2017 related to the Collaboration Agreement.~~licensing agreements. We may generate revenue in the future from milestone payments ~~made~~received pursuant to ~~the Collaboration Agreement,~~our collaboration and licensing agreements with AbbVie, Horizon, Adaptimmune, or from payments from future license or collaboration agreements, product sales, or government contracts and grants. We expect ~~any~~ revenue we generate, if any, will fluctuate from quarter to quarter.

AbbVie

In June 2020, we entered into the AbbVie Agreement for the development of acazicolcept. The agreement grants AbbVie the option to obtain an exclusive worldwide license to acazicolcept, or the License Option. The License Option is exercisable by AbbVie at any time and will expire 90 days from the achievement of certain development milestones. If AbbVie exercises the License Option, AbbVie will take over the future development and commercialization. Prior to the exercise of the License Option, we will perform research and development services, including conducting our Phase 2 study in SLE, based on an agreed-upon development plan, or the Development Plan. We will be fully responsible for all costs incurred to conduct the activities under the Development Plan, provided that, AbbVie may be responsible for increased costs under the Development Plan in connection with certain material amendments proposed by AbbVie. We will also be solely responsible, at our sole cost and expense, for manufacturing and regulatory filings for acazicolcept necessary to complete activities under the Development Plan.

In June 2020, in connection with the execution of the AbbVie Agreement, AbbVie paid us a nonrefundable upfront payment of $60.0 million. Prior to the exercise of the License Option, AbbVie has agreed to make cash payments upon our achievement of certain predefined pre-option development milestones, or the Alpine Development Milestones, up to an aggregate amount of $75.0 million. In the second quarter of 2021, we achieved $45.0 million of the Alpine Development Milestones. If AbbVie exercises the License Option, they will pay a one-time cash payment of $75.0 million. Following the exercise of the License Option, AbbVie has also agreed to make aggregate cash payments of up to $205.0 million upon AbbVie’s achievement of certain development and commercial milestones and additional aggregate cash payments of up to $450.0 million upon AbbVie’s achievement of certain sales-based cash milestones, collectively referred to as the AbbVie Milestones. Subsequent to commercialization, we are also eligible to receive high single-digit to low double-digit percentage royalties on worldwide net sales of licensed products.

For revenue recognition purposes, we determined that our contractual promises in the AbbVie Agreement are not distinct and are interdependent with our performance obligation to provide research and development services under the Development Plan. Thus, all contractual promises related to the upfront payment and Alpine’s Development Milestones were combined into a single performance obligation. We determined the Alpine Development Milestone payments are probable of significant revenue reversal as the achievement is highly dependent on factors outside our control. Therefore, these milestone payments were fully constrained and were not initially included in the transaction price. In 2021, we re-evaluated and updated the transaction price to include the achieved portion of the Alpine Development Milestones. We continue to re-evaluate the transaction price each reporting period and will update it as required if uncertain events are resolved or other changes in circumstances occur.

The License Option and the AbbVie Milestones were determined not to be performance obligations at the inception of the contract as they did not represent material rights. If exercised, the License Option and AbbVie Milestones will be accounted for as a separate contract and will be recognized as revenue if and when triggered. Any consideration related to sales-based royalties and profit-sharing payments will be recognized when the related sales occur.

We use a cost-based input method to measure progress toward completion of the performance obligation and to calculate the corresponding revenue to recognize each period. In applying the cost-based input, we use actual costs incurred relative to budgeted costs for the combined performance obligation. These costs consist primarily of internal personnel efforts and third-party contract costs relative to the level of patient enrollment in the study. Revenue will be recognized based on the level of costs incurred relative to the total budgeted costs for the performance obligation. A cost-based input method of revenue recognition requires management to make estimates of costs to complete our performance obligation. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete our performance obligation will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.

We recognized revenue from the AbbVie Agreement of $6.7 million and $4.6 million for the three months ended, and $12.3 million and $10.5 million for the six months ended June 30, 2023 and 2022, respectively. We expect to recognize the

remaining deferred revenue over the remainder of our Development Plan, which began in June 2020 and will end upon the later of the exercise or expiration of the option.

Horizon

In December 2021, we entered into the Horizon Agreement, which grants Horizon an exclusive license for the development, manufacture and commercialization of one Existing Program and up to three additional Research Programs generated from our libraries of proteins and molecules for research, discovery and identification of additional compounds.

Under the terms of the agreement, Horizon made an upfront payment to us of $25.0 million as well as an equity investment for which they paid $15.0 million, a 25% premium to the 30-day volume-weighted average share price as of December 9, 2021. In addition, we are eligible to receive up to $381.0 million per program, or approximately $1.5 billion in total, in future success-based payments related to development, regulatory and commercial milestones as well as tiered royalties on global net sales. We have completed our activities under the Existing Program and will conduct additional activities for up to three Research Programs to deliver compounds meeting agreed criteria. In addition, Horizon will pay us for the costs and expenses of conducting such activities under the deliverables plans. Horizon will then assume responsibility for development and commercialization activities and costs.

For revenue recognition purposes, we determined that the Existing Program and each Research Program are distinct performance obligations. We allocated revenue to each performance obligation based on its relative stand-alone selling price. The future success-based payments related to development and regulatory milestones are probable of significant revenue reversal as the achievement is highly dependent on factors outside our control. Therefore, these milestone payments are fully constrained and are not initially included in the transaction price. We will continue to re-evaluate the transaction price each reporting period and update as uncertain events are resolved or other changes in circumstances occur. Any consideration related to commercial milestones and royalties will be recognized when the related sales occur.

We recognized revenue from the Horizon Agreement of $1.7 million and $0.6 million for the three months ended, and $5.2 million and $8.3 million for the six months ended June 30, 2023 and 2022, respectively.

Adaptimmune

In May 2019, we entered into a collaboration and licensing agreement with Adaptimmune, or the Adaptimmune Agreement, to develop next-generation SPEAR T cell products. Under the Adaptimmune Agreement, we are to perform certain research services and grant Adaptimmune an exclusive license to programs from our SIP or TIP, technologies.

Through June 30, 2023, we have recorded a total of $3.0 million in license payments under the terms of the Adaptimmune Agreement consisting of a $2.0 million upfront license payment received in June 2019 and an additional $1.0 million license fee upon Adaptimmune’s selection of an additional research program in June 2022. Furthermore, we have recorded $2.1 million in research support payments to fund ongoing programs through June 30, 2023. If respective pre-specified milestones for each program are achieved, we are eligible for additional research support payments, one-time payments and downstream development and commercialization milestones of up to $288.0 million, and we are also eligible to receive low-single digit percentage royalties on worldwide net sales of the applicable products.

For revenue recognition purposes, licensing and research support fees billed under the agreement are being recorded as deferred revenue and recognized to revenue based on employee hours contributed to each performance obligation. We recognized revenue from the Adaptimmune Agreement of $0.1 million and $0.5 million for the three and six months ended June 30, 2023, respectively. Revenue of $0.1 million was recognized during the corresponding periods in 2022.

Research and Development Expenses

We focus our resources on research and development activities, including the conduct of preclinical studies, ~~and~~ product development, regulatory support, and ~~expense such costs~~clinical trials for our product candidates. We recognize research and development expenses as they are incurred. Our research and development expenses consist of:

•employee-related expenses, including salaries, benefits, taxes, travel, and stock-based compensation expense for personnel in research and development functions;

•expenses related to process development and production of product candidates paid to contract manufacturing organizations;

•costs associated with preclinical activities and regulatory operations, including the cost of acquiring, developing, and manufacturing research material; ~~and~~

•clinical trials and activities related to regulatory filings for our product candidates; and

•allocation of facilities, overhead, depreciation, and amortization of laboratory equipment and other expenses.

We expect our direct and indirect research and development expenses to increase for the foreseeable future as we continue to develop our platform and product candidates. We remain focused on using our resources to further advance povetacicept’s broad development plan. We expect the investment in this program, including a potential phase 2 study in SLE, and open label basket studies in glomerulonephritis and autoimmune cytopenias, to more than offset the significant decrease in previously planned costs to support davoceticept as a result of the voluntary termination of enrollment of davoceticept clinical studies as announced by us in October 2022.

The successful development of our platform and product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing, or costs of the efforts necessary to finish developing any of our product candidates or the period in which material net cash, if any, from these product candidates may commence. This is due to the numerous risks and uncertainties associated with developing therapeutics, including the uncertainty of:

•the scope, rate of progress, expense, and results of ~~planned~~ clinical ~~trials that we may conduct;~~

trials;

•the scope, rate of progress, and expense of process ~~development;~~

development and manufacturing;

•preclinical and other research activities; and

•the timing of regulatory approvals.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs for employees in executive, business development, finance, legal, and ~~finance~~administrative functions. Other significant general and administrative expenses include professional fees for accounting and legal services, expenses associated with obtaining and maintaining patents and other intellectual property, and allocation of ~~facilities~~facility and overhead costs.

We expect general and administrative expenses ~~will~~to increase as we expand infrastructure, headcount, and continue to ~~support operating as a public company. These~~prosecute our patents and other intellectual property. Other increases ~~will~~could potentially include increased costs for ~~director and officer liability~~ insurance, costs related to the hiring of additional personnel, and increased fees for directors, outside consultants, lawyers, and accountants. We expect to incur significant costs to comply with corporate governance, internal controls, and similar requirements applicable to public companies.

~~Bargain Purchase Gain~~

As Alpine was the accounting acquirer in the merger, we allocated the preliminary purchase price to the acquired tangible and intangible assets and assumed liabilities of Nivalis based on their estimated fair values as of the acquisition date. The excess of the estimated fair values of net assets acquired over the acquisition consideration paid was recorded as a bargain purchase gain in the condensed consolidated statements of operations and comprehensive income (loss). The determination of the preliminary fair values of the assets acquired and liabilities assumed requires significant judgment, including third party valuation estimates relating to the value of the acquired in-process research and development asset (“IPR&D”). Accordingly, should additional information become available, the preliminary purchase price allocation is subject to further adjustment.

Interest ~~Expense~~

~~Interest expense consists of accrued interest and the amortization of the debt discount associated with our $5.0 million term loan.~~

~~Interest and Other~~ Income

Interest income consists of interest earned on our cash, cash equivalents, and ~~short-term~~ investments. ~~We expect~~

Interest Expense

Interest expense consists primarily of interest associated with our ~~interest income to increase following~~term loans with Silicon Valley Bank, or SVB, and the ~~completion~~amortization of the ~~merger~~related debt discount.

Income Tax Expense

Income tax expense for the 2022 period primarily relates to a cumulative change to our foreign income tax provision as a result of filing amended tax returns under a revised transfer pricing model for the activities of our wholly owned subsidiary, Alpine Immune Sciences Australia PTY LTD, and domestic federal income tax expense resulting from the mandatory capitalization of research and development expenses beginning with the 2022 tax year.

JOBS Act

We ceased to be an “emerging growth company” under the JOBS Act effective December 31, 2020. However, for so long as we ~~have invested the net proceeds received~~are not classified as an “accelerated filer” or “large accelerated filer” pursuant to SEC rules, we will continue to be exempt from the ~~merger.~~

~~Income Tax Expense~~

~~We had federal taxable income in 2016, due to acceleration~~auditor attestation requirements of ~~our deferred revenue balance under Rev. Proc. 2004-34. Consequently, we have recorded current federal and state income tax payable for the year ended December 31, 2016.~~

Section 404(b) of Sarbanes-Oxley.

Critical Accounting Policies and ~~Significant Judgments and~~ Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which we have prepared in accordance with generally accepted accounting

principles in the United States, or GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions ~~affecting~~that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenues and expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying ~~values~~value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are more fully described in Note 2 of the accompanying ~~unaudited~~ condensed consolidated financial statements and in Note 2 to the audited financial statements contained in our ~~Registration Statement.~~Annual Report on Form 10-K for the year ended December 31, 2022. There have

been no significant or material changes in our significant accounting policies during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, as compared to those disclosed in our ~~Registration Statement, except the following:~~

~~Principles~~ ~~of Consolidation~~

~~Short-Term Investments~~

~~Our~~ short-term investments include funds invested in highly liquid money market funds, U.S. Treasury securities, commercial paper, and corporate debt securities with a final maturity of each security of less than one year. All investments are classified as available-for-sale securities and are recorded at fair value based on quoted prices in active markets, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss). Purchase premiums and discounts are recognized as interest income using the interest method over the terms of the securities. Realized gains and losses and declines in fair value deemed to be other than temporary are reflected in the condensed consolidated statements of operations and comprehensive income (loss) using the specific-identification method.

~~Business~~ ~~Combination~~

~~Intangible~~ ~~Asset~~

Our intangible asset is our indefinite-life GSNOR inhibitor IPR&D acquired from Nivalis. The IPR&D represents the processes, expertise, and technology employed in the development of S-nitrosoglutathione rectase (“GSNOR”) inhibitors and Nivalis’ lead product candidate, cavosonstat. The IPR&D represents the estimated fair value as of the acquisition date of substantive in-process projects that have not reached technological feasibility. The primary basis for determining technological feasibility of these projects is obtaining regulatory approval. The valuation of IPR&D is determined using a discounted cash flow method. In determining the value of IPR&D, management considers, among other factors, the stage of completion of the projects, the technological feasibility of the projects, whether the projects have an alternative future use, and the estimated residual cash flows that could be generated from the various projects and technologies over their respective projected economic lives. The discount rate used is determined at the time of acquisition and includes a rate of return which accounts for the time value of money, as well as risk factors reflecting the economic risk the projected cash flows may not be realized

We review our IPR&D at least annually for possible impairment. IPR&D is reviewed for possible impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the IPR&D below their carrying values. We test our IPR&D each year on December 31. Our IPR&D totaled $1.5 million at September 30, 2017.

~~Comprehensive~~ ~~Income (Loss)~~

~~Comprehensive income (loss) is comprised of net income (loss) and certain changes in equity that are excluded from net income (loss). For the three and nine months ended September 30, 2017, other comprehensive loss consists of unrealized losses on our short-term investments.~~

Annual Report.

Results of Operations

Comparison of Three Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~

2022

The following table summarizes our results of operations for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 (in thousands):


	Three Months Ended September 30,						Increase/				Three Months Ended June 30,
	2017			2016			(Decrease)				2023		2022		$ Change		% Change
	(unaudited)										(unaudited)
Collaboration revenue	$	128		$	737		$	(609	)	Collaboration revenue	$	8,593	$	5,292	$	3,301	62	%
Operating expenses:										Operating expenses:
Research and development		2,750			819			1,931		Research and development	19,241		17,587		1,654		9	%
General and administrative		1,932			299			1,633		General and administrative	5,007		4,194		813		19	%
Total operating expenses		4,682			1,118			3,564		Total operating expenses	24,248		21,781		2,467		11	%
Loss from operations		(4,554	)		(381	)		(4,173	)	Loss from operations	(15,655)		(16,489)		834		(5)	%
Bargain purchase gain		6,539			—			6,539
Other income (expense):										Other income (expense):
Interest income										Interest income	2,528		314		2,214		705	%
Interest expense		(75	)		—			(75	)	Interest expense	(28)		(130)		102		(78)	%
Interest and other income		216			7			209
Income (loss) before taxes		2,126			(374	)		2,500
Other, net										Other, net	(1)		(15)		14		(93)	%
Loss before taxes										Loss before taxes	(13,156)		(16,320)		3,164		(19)	%
Income tax expense		(4	)		—			(4	)	Income tax expense	—		(1,778)		1,778		(100)	%
Basic and diluted net income (loss) attributable to common stockholders	$	2,122		$	(374	)	$	2,496
Net loss										Net loss	$	(13,156)	$	(18,098)	$	4,942	(27)	%

~~Revenues~~

Collaboration Revenue

The ~~$0.6~~following table summarizes our collaboration revenue by partner (in thousands):


	Three Months Ended June 30,
	2023		2022		$ Change		% Change
	(unaudited)
AbbVie	$	6,748	$	4,563	$	2,185	48	%
Horizon	1,715		587		1,128		192	%
Adaptimmune	130		142		(12)		(8)	%
Total collaboration revenue	$	8,593	$	5,292	$	3,301	62	%

The $3.3 million, ~~decrease~~or 62%, increase in ~~revenues was~~collaboration revenue relates primarily ~~attributable~~ to ~~the timing of~~our AbbVie Agreement. AbbVie revenue increased by $2.2 million as our related clinical trial continued patient enrollment. Revenue recognized under the Horizon Agreement increased by $1.1 million, largely as the result of increased services rendered in connection with our ~~Collaboration Agreement with Kite.~~ ~~Under~~two ongoing Research Programs during the ~~terms~~2023 period, whereas the lower revenue during the 2022 period resulted from the completion of the ~~Collaboration Agreement, we received upfront payments of $5.5 million, which were initially recorded as deferred revenue~~Existing Program and ~~expensed over the period~~commencement of the first additional Research Program. Adaptimmune revenue relates to services rendered under the additional research ~~term. During~~program selected by Adaptimmune in June 2022, for which we completed final deliverables during the ~~current period, the expected research term was extended pursuant to the Amendment~~.

quarter ended June 30, 2023.

Research and Development Expenses

~~The $1.9 million increase in~~

Our direct research and development expenses ~~was~~consist primarily ~~attributable~~of expenses incurred pursuant to ~~an increase of $1.0 million in~~agreements with third-party manufacturing organizations for our product candidates, contract research organizations, or CROs, clinical trial sites, collaborators, and consultants. Other direct costs included direct research ~~contract manufacturing,~~ and ~~process~~ development ~~activities, an increase of $0.7 million in personnel-related expenses as~~costs incurred before a ~~result of growth in headcount to support ongoing discovery~~selected product candidate begins clinical trials.

We use our employee and infrastructure resources across multiple research and development programs that we are advancing in parallel, and therefore do not allocate salaries, stock-based compensation, employee benefit expenses or other indirect costs related to our research and development to specific product candidates. These expenses are included in indirect research and development expense by type in the table below.

Our research and development expenses are summarized as follows (in thousands):


	Three Months Ended June 30,
	2023		2022		$ Change		% Change
	(unaudited)
Direct research and development expense by program:
Acazicolcept	$	4,168	$	2,643	$	1,525	58	%
Davoceticept	540		2,654		(2,114)		(80)	%
Povetacicept	4,164		3,485		679		19	%
Other	173		259		(86)		(33)	%
Total direct research and development expense	9,045		9,041		4		—	%
Indirect research and development expense by type:
Personnel-related costs	8,379		6,829		1,550		23	%
Research and development supplies and services	896		786		110		14	%
Allocated facility, equipment and other expenses	921		931		(10)		(1)	%
Total indirect research and development expense	10,196		8,546		1,650		19	%
Total research and development expense	$	19,241	$	17,587	$	1,654	9	%

Total research and development expenses increased by $1.7 million, or 9%, for the three months ended June 30, 2023 primarily due to higher indirect expenses.

Direct research and development expenses in aggregate were consistent for the three months ended June 30, 2023 and 2022. Within direct program expenses, acazicolcept costs increased by $1.5 million primarily related to study drug manufacturing, and povetacicept costs increased by $0.7 million related to clinical trial costs as we move the program into clinical studies for the treatment of autoimmune diseases. These increases were substantially offset by a $2.1 million decrease in davoceticept costs resulting from the termination and close out of our NEON-1 and NEON-2 clinical studies.

Indirect research and development expenses increased by $1.7 million, or 19%, which primarily relates to personnel-related expenses. The rise in personnel costs, which includes an increase of $0.2 million in ~~allocated overhead and facilities.~~

non-cash stock-based compensation expense, was primarily due to increased headcount to support our clinical trial activities.

General and Administrative Expenses

The ~~$1.6~~$0.8 million, or 19%, increase in general and administrative expenses was primarily attributable to ~~a $0.9~~increases of $0.5 million in personnel-related expenses, which includes $0.1 million in higher non-cash stock-based compensation expense,

and $0.3 million in legal and professional services.

Interest Income

The $2.2 million increase in ~~professional~~interest income was attributable to higher investment balances and ~~legal service fees~~rising yields on cash equivalents and investments.

Interest Expense

The $0.1 million decrease in interest expense was due to ~~support~~lower principal balances on our term loans with SVB, which we voluntarily terminated and paid off in May 2023.

Income Tax Expense

The $1.8 million income tax expense for the ~~merger,~~three months ended June 30, 2022 relates to a ~~$0.6~~$1.3 million ~~increase in personnel-related expenses primarily related~~cumulative change to ~~an increase in administrative headcount,~~our foreign income tax provision and a $0.1 million ~~increase~~reduction to our deferred tax assets as a result of a change to our transfer pricing methodology for our wholly owned subsidiary, Alpine Immune Sciences Australia PTY LTD, and $0.4 million in ~~insurance~~domestic federal income tax expense resulting from the mandatory capitalization of research and ~~facility costs to support~~development expenses beginning with the ~~growth and expansion of our business.~~

~~Bargain Purchase Gain~~

~~The bargain purchase gain relates solely to the excess of the estimated fair values of net assets acquired over the acquisition consideration paid for Nivalis.~~

2022 tax year.

Comparison of ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~

2022

The following table summarizes our results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 (in thousands):


	Nine Months Ended September 30,						Increase/				Six Months Ended June 30,				$ Change		% Change
	2017			2016			(Decrease)				2023		2022
	(unaudited)										(unaudited)
Collaboration revenue	$	1,603		$	2,212		$	(609	)	Collaboration revenue	$	17,980	$	18,921	$	(941)	(5)	%
Operating expenses:										Operating expenses:
Research and development		6,916			1,639			5,277		Research and development	38,822		33,898		4,924		15	%
General and administrative		4,872			774			4,098		General and administrative	10,405		8,969		1,436		16	%
Total operating expenses		11,788			2,413			9,375		Total operating expenses	49,227		42,867		6,360		15	%
Loss from operations		(10,185	)		(201	)		(9,984	)	Loss from operations	(31,247)		(23,946)		(7,301)		30	%
Bargain purchase gain		6,539			—			6,539
Other income (expense):										Other income (expense):
Interest income										Interest income	4,946		459		4,487		978	%
Interest expense		(76	)		—			(76	)	Interest expense	(98)		(284)		186		(65)	%
Interest and other income		261			16			245
Income (loss) before taxes		(3,461	)		(185	)		(3,276	)
Other, net										Other, net	(23)		(72)		49		(68)	%
Loss before taxes										Loss before taxes	(26,422)		(23,843)		(2,579)		11	%
Income tax expense		(4	)		—			(4	)	Income tax expense	—		(1,782)		1,782		(100)	%
Basic and diluted net income (loss) attributable to common stockholders	$	(3,465	)	$	(185	)	$	(3,280	)
Net loss										Net loss	$	(26,422)	$	(25,625)	$	(797)	3	%

~~Revenues~~

Collaboration Revenue

The ~~$0.6~~following table summarizes our collaboration revenue by partner (in thousands):


	Six Months Ended June 30,
	2023		2022		$ Change		% Change
	(unaudited)
AbbVie	$	12,346	$	10,523	$	1,823	17	%
Horizon	5,170		8,256		(3,086)		(37)	%
Adaptimmune	464		142		322		227	%
Total collaboration revenue	$	17,980	$	18,921	$	(941)	(5)	%

The $0.9 million, or 5%, decrease in ~~revenues was~~collaboration revenue relates primarily ~~attributable~~ to ~~the timing of~~our Horizon Agreement, partially offset by higher revenue recognized under our ~~Collaboration Agreement~~AbbVie and Adaptimmune Agreements. Horizon revenue for the six months ended June 30, 2023 relates to services rendered in connection with ~~Kite.~~ ~~Under~~our two ongoing Research Programs, whereas the ~~terms~~higher revenue in the 2022 period was primarily the result of the ~~Collaboration Agreement, we received upfront payments of $5.5 million, which were initially recorded as deferred revenue and expensed over the period~~completion of the Existing Program, followed by the commencement of the first additional Research Program. AbbVie revenue increased by $1.8 million as the related clinical trial continues patient enrollment. The $0.3 million increase in Adaptimmune revenue relates to services rendered under the additional research ~~term. During~~program selected by Adaptimmune in June 2022, for which we completed final deliverables during the ~~current period, the expected research term was extended pursuant to the Amendment~~.

quarter ended June 30, 2023.

Research and Development Expenses

~~The $5.3 million increase in~~

Our research and development expenses ~~was~~are summarized as follows (in thousands):


	Six Months Ended June 30,
	2023		2022		$ Change		% Change
	(unaudited)
Direct research and development expense by program:
Acazicolcept	$	8,191	$	5,406	$	2,785	52	%
Davoceticept	1,959		6,081		(4,122)		(68)	%
Povetacicept	7,620		6,266		1,354		22	%
Other	374		343		31		9	%
Total direct research and development expense	18,144		18,096		48		—	%
Indirect research and development expense by type:
Personnel-related costs	17,395		12,708		4,687		37	%
Research and development supplies and services	1,619		1,450		169		12	%
Allocated facility, equipment and other expenses	1,664		1,644		20		1	%
Total indirect research and development expense	20,678		15,802		4,876		31	%
Total research and development expense	$	38,822	$	33,898	$	4,924	15	%

Total research and development expenses increased by $4.9 million, or 15%, for the six months ended June 30, 2023 primarily ~~attributable~~due to higher indirect expenses.

Direct research and development expenses in aggregate were consistent for the six months ended June 30, 2023 and 2022. Within direct program expenses, acazicolcept costs increased by $2.8 million primarily related to study drug manufacturing, and povetacicept costs increased by $1.4 million related to clinical trial costs as we move the program into clinical studies for the treatment of multiple autoimmune diseases. These increases were substantially offset by a $4.1 million decrease in davoceticept costs resulting from the termination and close out of our NEON-1 and NEON-2 clinical studies.

Indirect research and development expenses increased by $4.9 million, or 31%, which is largely due to personnel-related expenses. The rise in personnel costs, which includes an increase of ~~$2.0~~$0.4 million in ~~direct research, contract manufacturing and process development activities, an increase of $2.7 million in personnel-related expenses as a result of growth in~~non-cash stock-based compensation expense, was primarily due to increased headcount to support ~~ongoing discovery and development programs, and an increase of $0.5 million in allocated overhead and facilities~~

increased clinical trial activities.

General and Administrative Expenses

The ~~$4.1~~$1.4 million, or 16%, increase in general and administrative expenses was primarily attributable to ~~a $2.8~~increases of $0.9 million in personnel-related expenses, which includes $0.2 million in higher non-cash stock-based compensation expense, and $0.6 million in legal and professional services.

Interest Income

The $4.5 million increase in ~~professional~~interest income was attributable to higher investment balances and ~~legal service fees~~rising yields on cash equivalents and investments.

Interest Expense

The $0.2 million decrease in interest expense was due to ~~support~~lower principal balances on our term loans with SVB, which we voluntarily terminated and paid off in May 2023.

Income Tax Expense

The $1.8 million income tax expense for the ~~merger,~~six months ended June 30, 2022 relates to a ~~$1.1~~$1.3 million ~~increase in personnel-related expenses primarily related~~cumulative change to ~~an increase in administrative headcount,~~our foreign income tax provision and a ~~$0.2~~$0.1 million ~~increase~~reduction to our deferred tax assets as a result of a change to our transfer pricing methodology for our wholly owned subsidiary, Alpine Immune Sciences Australia PTY LTD, and $0.4 million in ~~insurance~~domestic federal income tax expense resulting from the mandatory capitalization of research and ~~facility costs to support~~development expenses beginning with the ~~growth and expansion of our business.~~

~~Bargain Purchase Gain~~

~~The bargain purchase gain relates solely to the excess of the estimated fair values of net assets acquired over the acquisition consideration paid for Nivalis.~~

2022 tax year.

Liquidity and Capital Resources

Sources of Liquidity

To date, we have financed our operations primarily through the sale of equity securities, payments received under our collaboration agreements, debt, and funds acquired upon the close of our merger with Nivalis. As of ~~September~~June 30, ~~2017,~~2023, we had cash, cash equivalents, restricted cash, and ~~marketable securities~~investments totaling ~~$87.2~~$239.6 million. WeExcept for any obligations of our collaborators to make milestone payments under our agreements with them, we do not have ~~raised~~any committed external sources of capital. Until such time as we can generate substantial product revenue, if ever, we expect to finance our cash needs through a combination of collaboration agreements and equity or debt financings.

Equity Financing Agreements

In April 2023, we entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or TD Cowen, to sell shares of our common stock through an “at the market” equity offering for aggregate sales proceeds of up to $100.0 million in gross cash proceeds. TD Cowen will act as the sales agent and will be entitled to compensation for services of up to 3.0% of the gross sales price per share of all shares sold through TD Cowen under the Sales Agreement. The shares will be issued pursuant to the our shelf registration statement on Form S-3 (File No. 333-271517), which was filed with the Securities and Exchange Commission, or the SEC, on April 28, 2023 and declared effective on May 9, 2023. On May 11, 2023, we filed a final prospectus supplement with the SEC relating to the offer and sale of the shares pursuant to the Sales Agreement. As of June 30, 2023, we have sold 919,413 shares of common stock under the Sales Agreement for a price of $10.93 per share and received $10.0 million in gross proceeds. Financing costs of $354,000 incurred in connection with this equity offering were netted against the gross proceeds within additional-paid-in-capital on our accompanying Condensed Consolidated Balance Sheets.

In September 2022, we entered into an underwriting agreement, the Underwriting Agreement, with Morgan Stanley & Co. LLC, SVB Securities LLC and Cowen and Company, LLC, acting as representatives of the several underwriters named therein, or, collectively, the Underwriters, pursuant to which we sold 15,509,282 shares of our common stock, or the Firm Shares, in an underwritten public offering, including the subsequent partial exercise of the underwriters’ over-allotment option in October 2022, pursuant to our effective shelf registration statement on Form S-3 (File No. 333-256107). The net proceeds of the public offering were approximately $106.7 million, after deducting underwriting discounts, commissions and offering expenses.

In December 2021, in connection with the execution of the Horizon Agreement, we entered into a Stock Purchase Agreement with Horizon, or the Purchase Agreement, in which Horizon made an equity investment in Alpine of 951,980 shares

of our common stock for approximately $15.76 per share, for an aggregate purchase price of ~~$103.8~~$15.0 million. The purchase price represents a 25% premium to the volume-weighted average share price of our common stock for the 30-day period ended December 9, 2021. The shares were recorded at the fair value of our common stock on the effective date of the Horizon Agreement, with the excess of the proceeds recorded to deferred revenue.

In September 2021, we entered into a securities purchase agreement, or the 2021 Securities Purchase Agreement, for a private placement with a select group of institutional investors, pursuant to which we sold 6,489,357 shares of our common stock, or the Shares, and prefunded warrants to purchase 3,191,487 Shares, or the Prefunded Warrants. The purchase price for each Share and for each Prefunded Warrant was $9.40 per share, for an aggregate purchase price of approximately $91.0 million. The Prefunded Warrants became fully exercisable upon the closing date and have an exercise price of $0.001 per share. In connection with the 2021 Securities Purchase Agreement, approximately 3.7 million of the Shares issued and approximately 2.3 million of the Prefunded Warrants issued, for gross proceeds of approximately $57.0 million, were issued to ~~fund operations,~~certain stockholders whose beneficial ownership exceeded 5% prior to completion of the 2021 Securities Purchases Agreement.

In July 2020, we entered into a securities purchase agreement, or the 2020 Securities Purchase Agreement, for a private placement with a select group of institutional investors, pursuant to which ~~$49.2~~we sold 5,139,610 units, or the Common Units, and 790,710 units, or the Prefunded Warrant Units, for an aggregate purchase price of $60.0 million. Each Common Unit consists of one share of our common stock plus a warrant to purchase 0.3 shares of common stock, or the Common Stock Warrants, and each Prefunded Warrant Unit consists of one prefunded warrant to purchase one share of common stock, or the Prefunded Warrants, plus one Common Stock Warrant to purchase 0.3 shares of common stock. The Prefunded Warrant Units and the Common Units are collectively referred to as the Units and each Unit has a purchase price of $10.1175. The Common Stock Warrants have an exercise price of $12.74 and a term of 3.5 years. The Prefunded Warrants became fully exercisable upon the closing date and have an exercise price of $0.001 per share.

Debt Financing Agreements

In August 2019, we entered into an Amended and Restated Loan and Security Agreement, or the Loan Agreement, with Silicon Valley Bank, or SVB, pursuant to which SVB agreed to extend term loans to us with an aggregate principal amount of up to $15.0 million, or the Term Loans. Borrowings under the Loan Agreement consisted of up to three separate tranches. The initial tranche of $5.0 million was funded in August 2019; the second tranche of $5.0 million was funded in March 2020; and we did not draw down the final tranche of $5.0 million, which expired in July 2020.

In May 2023, we voluntarily repaid in full the remaining outstanding carrying value of $1.4 million under our Term Loans, which consisted of $0.8 million in principal and final payments of $0.6 million, plus prorated accrued interest. As of June 30, 2023, we had no remaining balance outstanding under our Loan Agreement with SVB.

Cash Flows

The following is a summary of our cash flows (in thousands):


	Six Months Ended June 30,
	2023		2022
	(unaudited)
Net cash used in operating activities	$	(44,243)	$	(10,620)
Net cash provided by (used in) investing activities	57,678		(31,239)
Net cash provided by (used in) financing activities	7,311		(1,670)

Net Cash Used in Operating Activities:

Net cash used in operating activities was $44.2 million during the six months ended June 30, 2023, and consisted of our net loss of $26.4 million, and a net change of $19.9 million in our operating assets and liabilities. This was partially offset by $2.1 million in net non-cash adjustments, which primarily related to stock-based compensation, amortization of premiums and discounts on our investments, and depreciation.

Net cash used in operating activities was $10.6 million during the six months ended June 30, 2022, and consisted of our net loss of $25.6 million. The net loss from operations was partially offset by a favorable net change of $9.2 million in our operating assets and liabilities, which was primarily due to the receipt of a $25.0 million upfront payment from Horizon, and $5.8 million in net non-cash adjustments, which primarily related to stock-based compensation, amortization of premiums and discounts on our investments, and depreciation.

Net Cash Provided by (Used in) Investing Activities:

Cash flows from investing activities primarily reflect cash used to purchase investments and proceeds from the ~~sale~~maturities and sales of ~~convertible preferred stock, $5.5 million was through~~investments, thus causing a ~~license~~shift between our cash and ~~research agreement, $5.0 million advanced from a long-term loan,~~cash equivalents and ~~$44.1 million in~~investment balances. We manage our cash usage with respect to our total cash, cash equivalents and ~~marketable securities acquired through~~investments.

Net cash provided by investing activities was $57.7 million during the ~~merger with Nivalis. In addition~~six months ended June 30, 2023, compared to ~~our existing~~$31.2 million cash used in investing activities during the six months ended June 30, 2022. Net investing cash ~~equivalents,~~flows for both periods consisted primarily of the net impact from purchases and ~~marketable securities, we are eligible~~maturities of investments, and purchases of property and equipment, primarily lab equipment to ~~receive~~support our research and development ~~funding and to earn milestone and other contingent payments~~efforts.

Net Cash Provided by (Used in) Financing Activities:

Net cash provided by financing activities was $7.3 million for the ~~achievement~~six months ended June 30, 2023 and consisted primarily of ~~defined collaboration objectives~~the net proceeds of $9.7 million received from sale of common stock under our Sales Agreement with TD Cowen and ~~certain development~~$1.0 million in proceeds received from the exercise of stock options. This was partially offset by $3.4 million cash used in the repayment of all outstanding principal and ~~regulatory milestones~~final fees on our Term Loans.

Net cash used in financing activities was $1.7 million for the six months ended June 30, 2022 and ~~royalty~~consisted of $2.4 million in principal payments ~~under~~on our debt, partially offset by $0.7 million proceeds received from the ~~Collaboration Agreement. Our ability to earn these milestone and contingent payments and the timing~~exercise of ~~achieving these milestones is primarily dependent upon the outcome Kite’s research and development activities and is uncertain at this time.~~

stock options.

Funding Requirements

We have incurred operating losses since inception. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we continue our research and preclinical and clinical development of our product candidates; expand the scope of our current studies for our product candidates; initiate additional preclinical, clinical or other studies for our product candidates, including under any collaboration agreements; change or add additional manufacturers or suppliers; seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical studies; seek to identify, evaluate and validate additional product candidates; acquire or in-license other product candidates and technologies; maintain, protect and expand our intellectual property portfolio; attract and retain skilled personnel; and experience any delays or encounter issues with any of the above.

Additionally, we have ongoing obligations with respect to our operating lease and certain contingencies, as described below.

Until such time as we can generate substantial product revenue, if ever, we expect to finance our cash needs through a combination of equity or debt financings and collaboration agreements. ~~Except for any obligations of our collaborator to make milestone payments under our agreement with them, we do not have any committed external sources of capital.~~ To the extent that we raise additional capital through the future sale of equity or debt, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. If we raise additional funds through collaboration agreements in the future, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Our future capital requirements are difficult to forecast and will depend on many factors, including:

•

~~the number and characteristics of the future product candidates we pursue either from our internal research efforts or through acquiring or in-licensing other product candidates or technologies;~~

•

~~the scope, progress, results and costs of independently researching and developing any of our future product candidates, including conducting preclinical research and clinical trials;~~

•the number and characteristics of the future product candidates we pursue either from our internal research efforts or through acquiring or in-licensing other product candidates or technologies;

•

~~whether our existing collaboration generates substantial milestone payments and, ultimately, royalties on future approved products for us;~~

•the scope, progress, results and costs of independently researching and developing any of our future product candidates, including conducting preclinical research and clinical trials;

•

~~the timing of, and the costs involved in, obtaining regulatory approvals for any future product candidates we develop independently;~~

•whether our existing collaborations generate substantial milestone payments and, ultimately, royalties on future approved products for us;

•

~~the cost of future commercialization activities, if any;~~

•the timing of, and the costs involved in, obtaining regulatory approvals for any future product candidates we develop independently;

•

~~the cost of manufacturing our future product candidates and products, if any;~~

•the cost of future commercialization activities, if any;

•

~~our ability to maintain our existing collaboration and to establish new collaborations, licensing or other arrangements and the financial terms of such arrangements;~~

•the cost of manufacturing our future product candidates and products, if any;

•

~~the costs of preparing, filing, prosecuting, maintaining, defending and enforcing patents, including litigation costs and the outcome of such litigation; and~~

•our ability to maintain our existing collaborations and to establish new collaborations, licensing or other arrangements and the financial terms of such arrangements;

•

~~the timing, receipt and amount of sales of, or royalties on, our current or future collaborators’ product candidates, and our future products, if any.~~

•the costs of preparing, filing, prosecuting, maintaining, defending and enforcing patents, including litigation costs and the outcome of such litigation; and

•the timing, receipt and amount of sales of, or royalties on, our current or future collaborators’ product candidates, and our future products, if any.

We have considered that our long-term operations anticipate continuing net losses and the need for potential equity or debt financing. We have also considered that new collaborations or selectively partnering our technology or programs may provide other sources of capital. However, there can be no assurances that additional funding or other sources of capital will be available on terms acceptable to us, or at all. Based on our ~~research~~current operating plan, we believe our available cash and ~~development plans and our timing expectations related to the progress of our programs, we expect that our existing cash,~~ cash equivalents and ~~marketable securities as of the date of this report and research funding that we expect to receive under our existing collaboration,~~investments, will ~~enable us~~be sufficient to fund our ~~operating expenses and capital expenditure requirements~~planned level of operations for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Additionally, the process of testing drug candidates in preclinical and clinical studies is costly, and the timing of progress in these studies remains uncertain.

~~Financing Agreements~~

~~Prior to execution~~ Further, inflation may affect our use of capital resources by increasing our cost of labor and ~~delivery~~clinical trial expenses. Our long-term funding requirements will consist of operational, capital, and manufacturing expenditures, including those contractual commitments described above. Because of the ~~Merger Agreement certain holders~~inherent risks and uncertainties associated with the development and commercialization of our ~~Series A-1 convertible preferred stock purchased shares~~product candidates, we are unable to estimate the amounts of capital outflows and operating expenditures associated with our ~~Series A-1 convertible preferred stock.~~ long-term anticipated preclinical studies and clinical trials.

Operating Lease

In March 2017, we issued and sold 707,330 shares of Series A convertible preferred stock and received a total of $4.0 million. In April 2017, we issued and sold 2,947,211 shares of our Series A-1 convertible preferred stock for an aggregate of $16.7 million in net proceeds. In addition, contemporaneously with the execution and delivery of the Merger Agreement certain existing stockholders of Alpine entered into the subscription agreement with Alpine to purchase 1,335,118 additional shares of Alpine’s capital stock for an aggregate of $17.0 million in net proceeds.

~~Long-Term Financing~~

~~In December 2016,~~2019, we entered into a lease with ARE-Seattle No. 28, LLC, or the Landlord, for 27,164 square feet of office and laboratory space located at 188 East Blaine Street, Seattle, Washington. The term ~~loan agreement~~of the lease is 10.8 years with ~~Silicon Valley Bank pursuant~~one option to ~~which up to $5.0 million could be borrowed. On~~extend the term by 5 years. The lease term commenced in June ~~30, 2017, we drew down a term loan of $5.0 million pursuant to~~2019. The “Rent Commencement Date” began in March 2020, nine months after the agreement. The loan has an interest-only period expiring on July 1, 2018, at which point we will make thirty consecutive equal monthly payments of principal (each in an amount that will fully amortize the loan), plus accrued interest. Interest accrues at a floating per annum rate equal to the lender’s prime rate minus 1.75%. As a condition to the loan, we agreedcommencement date. We were not required to pay ~~a final payment fee of 7.5%, or $375,000, upon repayment~~base rent from the Rent Commencement Date through November 2020, the last day of the ~~loan.~~ninth month following the Rent Commencement Date. The ~~final payment fee was recorded in long-term debt with an offsetting reduction in long-term debt and was accounted for as a debt discount.~~

~~The obligations~~annual base rent under the loan agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations or financial or other condition. The term loan agreement contains customary conditions to borrowings, events of default and negative covenants, including covenants that could limit our ability to, among other things, incur additional indebtedness, liens or other encumbrances, make dividends or other distributions; buy, sell or transfer assets; engage in any new line of business; and enter into certain transactions with affiliates. We were in compliance with our covenants as of September 30, 2017.

~~Cash Flows~~

~~The following~~lease is ~~a summary of our cash flows (in thousands):~~

Nine Months Ended
September 30,

2017

2016

(unaudited)

Net cash used in operating activities

$
(10,735
)

$
(2,030
)
Net cash used in investing activities

(31,658
)

(459
)
Net cash provided by financing activities

42,688

11,022

~~Net Cash Used in Operating Activities:~~

Net cash used in operating activities was $10.7 million during the nine months ended September 30, 2017 compared to $2.0 million during the nine months ended September 30, 2016. The increase in cash used in operations in 2017 as compared to the 2016 period was primarily attributable to personnel-related expenses as a result of increased headcount, increased direct contract research costs to support product development, and cash used to support the merger.

~~Net Cash Used in Investing Activities:~~

Net cash used in investing activities was $31.7 million during the nine months ended September 30, 2017 and consisted primarily of our purchase of short-term investments in U.S. Treasury securities, commercial paper, and corporate debt securities. Net cash used in investing activities was $0.5 million during the nine months ended September 30, 2016 and primarily related to the purchase of property and equipment to build out our laboratory at our Seattle facility.

~~Net Cash Provided by Financing Activities:~~

Net cash provided by financing activities was $42.7 million during the nine months ended September 30, 2017 and consisted primarily of $37.7 million in proceeds from the sale of preferred stock and $5.0 million from the advance of a long-term loan. Net cash provided by financing activities was $11.0$1.7 million for the ~~nine months ended September 30, 2016~~first year and ~~consisted primarily~~will increase by 3.0% each year thereafter. We received a tenant improvement allowance of $5.4 million, which is included in our base rent, and a maximum additional tenant improvement allowance of $1.8 million, which resulted in additional rent amortized over the term of the ~~sale~~lease at an annual rate of ~~preferred stock.~~

~~Contractual Obligations~~8.0%. The lease also requires us to pay additional amounts for operating and ~~Contingent Liabilities~~

maintenance expenses. In March 2019, in connection with the lease, we provided a $254,000 letter of credit as a security deposit, which is recorded as restricted cash in our accompanying Condensed Consolidated Balance Sheets.

Contingencies

Certain tax credits received related to our research and development expenditures, which were recorded in previous years within other income within our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), were subject to review by foreign taxing authorities. During 2022, we reached constructive agreement with the Australian Taxation Office and recorded an estimated current foreign income tax provision for the expected repayments of $1.3 million. As of ~~September~~June 30, ~~2017, there have been no material changes to our contractual obligations and commitments from December 31, 2016 as described under the section titled “Management’s Discussion and Analysis~~2023, accrued estimated remaining tax liabilities of ~~Financial Condition and Results~~$828,000, net of ~~Operations - Contractual Obligations and Commitments”~~amounts paid in ~~the Registration Statement.~~

~~Inflation~~

~~We do not believe that inflation has had a material effect~~2022, are recorded within accrued liabilities on our ~~business, financial condition or results of operations in the last three fiscal years.~~

~~Off-Balance Sheet Arrangements~~

~~We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.~~

accompanying ~~Recent Accounting Pronouncements~~

~~For information regarding recent accounting pronouncements, see Note 2 of the Notes to~~ Condensed Consolidated ~~Financial Statements under Item 1 of this report.~~

Balance Sheets.

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk.

~~We are exposed to market risk related to changes in interest rates.~~

As of September 30, 2017, we had cash, cash equivalents, and short-term investments of $87.2 million, consisting of deposits with commercial banks in checking, money market funds, U.S. Treasury securities, commercial paper, and corporate debt securities with a final maturity of each security of less than one year. The primary objectives of our investment policy are to preserve principal and maintain liquidity to meet operating needs, while also maximizing total returns in a manner that complies with our primary two objectives.

Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer, or type of investment. Our primary exposure to market risk is interest rate sensitivity, which is affected“smaller reporting company,” as defined by changes in the general level of U.S. interest rates, particularly because our investments are in short-term securities. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash equivalents and marketable securities. Declines in interest rates, however, would reduce future investment income. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 10% change in interest rates during anyRule 12b-2 of the ~~periods presented would~~Exchange Act, and pursuant to Item 305 of Regulation S-K, we are not ~~have had a material effect on the fair~~required to provide quantitative and qualitative disclosures about market ~~value of our portfolio, or on our financial statements.~~

We are subject to interest rate risk in connection with the borrowings under our term loan agreement. As of September 30, 2017, we had $5.0 million outstanding principal amount under our term loan agreement. The term loan bears interest at a rate equal to the lender’s prime rate minus 1.75%. A 10% change in interest rates during any of the periods presented would not have had a material effect on our interest obligations under the term loan agreement.

risk.

Item 4. Controls and ~~Procedures~~

Procedures.

Evaluation of Disclosure Controls and ~~Procedures.~~

~~Management, including~~Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of the end of the period covered by this report. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective, in design and operation, at the reasonable assurance level.

Changes in Internal Control over Financial ~~Reporting.~~

Reporting

Our management, including our ~~principal executive~~Chief Executive Officer and ~~principal financial officers,~~Chief Financial Officer, evaluated any changes in our internal control over financial reporting during the period ended ~~September~~June 30, ~~2017,~~2023, and has concluded that there were no changes that materially affected, or are reasonably likely to materially affect, our internal control over financial ~~reporting, except as follows:~~

~~On July 24, 2017, we completed the merger with Nivalis as described in Items 1 and 2 above.~~

reporting.

Inherent Limitation on the Effectiveness of Internal ~~Control.~~

Control

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the

inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal ~~Proceedings~~

Proceedings.

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of our management, would reasonably be expected to have a material adverse effect on our business, financial condition, operating results or cash flows if determined adversely to us. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk ~~Factors~~

Factors.

You should carefully consider the following risk factors, in addition to the other information contained in this ~~report,~~Quarterly Report on Form 10-Q, including ~~the section of this report captioned “Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operationsincluded in Part I, Item 2, and our condensed consolidated financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this report occurs, our business, operating results and financial condition could be seriously harmed. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part. This report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this report.

Risks Related to Our ~~Financial Position, Capital Needs~~Pipeline and ~~Business~~

We will need to raise substantial additional funds to advance development of our therapeutic candidates, and we cannot guarantee we will have sufficient funds available in the future to develop and commercialize our current or future therapeutic candidates.

We will need to raise substantial additional funds to expand our development, regulatory, manufacturing, marketing, and sales capabilities or contract with other organizations to provide these capabilities to us. We have used substantial funds to develop our therapeutic candidates and will require significant funds to conduct further research and development, preclinical testing, and clinical trials of our therapeutic candidates, to seek regulatory approvals for our therapeutic candidates, and to manufacture and market products, if any are approved for commercial sale. As of September 30, 2017, we had $87.2 million in cash and cash equivalents. Based on our current operating plan, we believe our available cash and cash equivalents, will be sufficient to fund our planned level of operations for at least the next 12 months. Our future capital requirements and the period for which we expect our existing resources to support our operations may vary significantly from what we expect. Our monthly spending levels vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with successful development of our therapeutic candidates are highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. To execute our business plan, we will need, among other things:

~~to obtainthehumanand financialresourcesnecessaryto develop,test,obtainregulatoryapprovalfor, manufacture,and marketourtherapeuticcandidates;~~

Product Development

~~to buildand maintaina strongintellectualpropertyportfolioand avoidinfringingintellectualproperty of thirdparties;~~

~~to establishand maintainsuccessfullicenses,collaborations,and alliances;~~

~~to satisfytherequirementsof clinicaltrialprotocols,includingpatientenrollment;~~

~~to establishand demonstratetheclinicalefficacyand safetyof ourtherapeuticcandidates;~~

~~to obtainregulatoryapprovals;~~

~~to manageourspendingas costsand expensesincreasedue to preclinicalstudies,clinicaltrials, regulatoryapprovals,manufacturingscale-up,and commercialization;~~

~~to obtainadditionalcapitalto supportand expand ouroperations;and~~

~~to marketourproductsto achieveacceptanceand use by themedicalcommunityin general.~~

Ifwe~~areunableto obtainnecessaryfundingon a timelybasisor on acceptableterms,~~we~~mayhave to delay,reduce,or terminateourresearchand developmentprograms,preclinicalstudies,or clinicaltrials,~~if~~any, limitstrategicopportunities,or undergoreductionsin ourworkforceor othercorporaterestructuring activities.~~We~~alsocouldbe requiredto seekfundsthrougharrangementswith collaboratorsor others requiring~~us~~to relinquishrightsto someof ourtechnologiesor therapeuticcandidates~~we~~would otherwisepursueon ourown. Wedo not expectto realizerevenuefromproductsales,milestonepayments, or royaltiesin theforeseeablefuture,~~ifat~~all.Ourrevenuesourcesare,and willremain,extremelylimited unlessand untilourtherapeuticcandidatesareclinicallytested,approvedforcommercialization,and successfullymarketed.~~

To date, we have financed our operations primarily through the sale of equity securities and payments received under our license and research agreement with Kite, a Gilead company. We will be required to seek additional funding in the future and intend to do so through a combination of public or private equity offerings, debt financings, credit and loan facilities, research collaborations, and license agreements. Our ability to raise additional funds from these or other sources will depend on financial, economic, and other factors, many of which are beyond our control. Additional funds may not be available to us on acceptable terms or at all.

If we raise additional funds by issuing equity securities, our stockholders will suffer dilution, and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, may involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of a liquidation or insolvency, debt holders would be repaid before holders of equity securities receive any distribution of corporate assets. Our failure to raise capital or enter into such other arrangements within a reasonable timeframe would have a negative impact on our financial condition, and we may have to delay, reduce, or terminate our research and development programs, preclinical or clinical trials, or undergo reductions in our workforce or other corporate restructuring activities.

We are an early stage biopharmaceutical company with a history of losses, we expect to continue to incur significant losses for the foreseeable future, and we may never achieve or maintain profitability and we have a limited operating history that may make it difficult for investors to evaluate the potential success of our business.

We are a development-stage immunotherapy company, with a limited operating history, focused on developing treatments for autoimmune/inflammatory diseases and cancer. Since inception, we have devoted our resources to developing novel protein-based immunotherapies using our proprietary ~~variant lg domain (vIgD) platform technology. We have had significant operating losses since inception. For the nine months ended September 30, 2017, our net loss was $3.5 millio~~n. Substantially all of our losses have resulted from expenses incurred in connection with our research programs and from general and administrative costs associated with our operations. Our technologies and therapeutic candidates are in early stages of development, and we are subject to the risks of failure inherent in the development of therapeutic candidates based on novel technologies.

We have historically generated revenue primarily from the receipt of research funding and upfront payments under our license and research agreement with Kite. We have not generated, and do not expect to generate, any revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development, preclinical studies, clinical trials, and the regulatory approval process for therapeutic candidates. The amount of future losses is uncertain. Our ability to achieve profitability, if ever, will depend on, among other things, our or our existing collaborators, or any future collaborators, successfully developing therapeutic candidates, obtaining regulatory approvals to market and commercialize therapeutic candidates, manufacturing any approved products on commercially reasonable terms, establishing a sales and marketing organization or suitable third party alternatives for any approved product, and raising sufficient funds to finance business activities. If we or our existing collaborators, or any future collaborators, are unable to develop and commercialize one or more of our therapeutic candidates or if sales revenue from any therapeutic candidate receiving approval is insufficient, we will not achieve profitability, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our approach to the discovery and development of innovative therapeutic treatments based on our technology is unproven and may not result in marketable products.

We plan to develop novel protein-based immunotherapies ~~using~~in part via our proprietary ~~vIgD~~directed evolution platform ~~technology~~ for the treatment of ~~cancer~~autoimmune and inflammatory diseases. The potential to create therapies capable of working within and/or modulating an immune synapse, forcing a synapse to occur, or preventing a synapse from occurring is an important, novel attribute of the majority of our ~~vIgD platform.~~approaches. However, the scientific research forming the basis of our efforts to develop therapeutic candidates based on ~~the vIgD~~our platform is relatively new. Further, the scientific evidence to support the feasibility of developing therapeutic treatments based on our ~~vIgD~~ platform is both preliminary and limited.

Relativelyfew therapeuticcandidatesbasedon immunoglobulinsuperfamily, orIgSF, domains, or tumor necrosis factor receptor super family, or TNFRSF, domains, have been testedin ~~animalsor humans,and a numberof clinicaltrialsconductedby othercompanies~~humans. We may discover the therapeutic candidates developed using~~IgSF domains technologieshave not been successful.~~We~~maydiscoverthetherapeuticcandidatesdevelopedusing~~our ~~vIgD~~scientific platformdo not possesscertainpropertiesrequiredforthetherapeutic candidate to be ~~effective,such as theabilityto remainstable~~ ~~or active~~ ~~in thehumanbody fortheperiodof timerequiredforthetherapeuticto reachthetargettissue and/or cell.~~effective. Wecurrently have only limiteddata~~and no conclusiveevidence,~~to suggestwecan introducethesenecessarytherapeutic propertiesinto~~vIgDs. Wemayspend substantialfundsattemptingto introducethesepropertiesand~~ variant Ig domain, or vIgD or variant TNF(R) domain, or vTD, based therapeutic candidates. In addition, vIgDs or vTDs may ~~neversucceedin doing so. In addition,vIgDs may~~demonstratedifferentchemicaland pharmacological propertiesin human subjects or patientsthantheydo in laboratorystudies.Even ifourprograms~~such as theALPN-101 program,~~have successfulresultsin animalstudies,theymaynot demonstratethesamechemicaland pharmacologicalpropertiesin humansand mayinteractwith humanbiologicalsystemsin unforeseen, ineffective,or harmfulways. ~~For example,~~While we continue to evaluate our vIgDs and vTDs preclinically and clinically, the risk profile in ~~thecontextof immunotherapies,~~humans is still being fully assessed. Undesirable side effects that may be caused by our therapeutic candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a ~~Phase I~~more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities. Such side effects could also affect patient recruitment or the ability of enrolled patients to complete clinical~~trial~~ trials or result in potential product liability claims. For example, we recently voluntarily terminated enrollment in both clinical studies involving davoceticept, including the NEON-1 study of ~~TeGenero AG’s productcandidateTGN1412,healthyvolunteersubjectsreceiving~~davoceticept as monotherapy and the~~productcandidate experienced~~ NEON-2 study of davoceticept in combination with pembrolizumab. The decision to terminate enrollment in the davoceticept studies was made following notification of a ~~systemic inflammatory response resulting~~second Grade 5 serious adverse event (death) in ~~renal~~the NEON-2 study. Occurrences like these may harm our business, financial condition and ~~pulmonary failure requiringinterventionssuch as dialysisand criticalcaresupport.Followingthisexperience,regulatoryagencies now ask forevaluationof immunomodulatoryantibodieswith a number~~of ~~in vitroassayswith humancells. Whilewe arecurrentlyperformingin vitroand~~ ~~in vivo~~ ~~proofof conceptstudiesforseveralof ourvIgDs preclinically, theriskprofilein humanshas yetto be assessed.~~prospects significantly. As a result,wemayneversucceedin developinga marketable therapeutic,wemaynot becomeprofitable,and thevalueof our common stock~~will~~ may decline.

Further, ~~to our knowledge,~~ we believe that the FDA has ~~no known~~little prior experience with vIgDs ~~and no regulatory authority has granted approval to any person~~ or ~~entity, including our company, to market and commercialize therapeutics using vIgDs,~~vTDs, which may increase the complexity, uncertainty, and length of the regulatory approval process for our therapeutic candidates. Our company and our current collaborators, or any future collaborators, may never receive approval to market and commercialize any therapeutic candidate. Even if our company or a collaborator obtains regulatory approval, the approval may be for disease indications or patient populations not as broad as we intended or desired or may require labeling, including significant use or distribution restrictions or safety warnings. Our company or a collaborator may be required to perform additional or unanticipated clinical trials to

obtain approval or be subject to post-marketing testing requirements to maintain regulatory approval. If therapeutic candidates we develop using our ~~vIgD~~scientific platform prove to be ineffective, unsafe, or commercially unviable, our entire platform and pipeline would have little, if any, value, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

The market may not be receptive to our therapeutic products based on a novel therapeutic modality, and we may not generate any future revenue from the sale or licensing of therapeutic products.

Even if approval is obtained for a therapeutic candidate, we may not generate or sustain revenue from sales of the therapeutic product due to factors such as whether the therapeutic product can be sold at a competitive price and otherwise accepted in the market. Therefore, any revenue from sales of the therapeutic product may not offset the costs of development. The therapeutic candidates we are developing are based on new technologies and therapeutic approaches. Market participants with significant influence over acceptance of new treatments, such as physicians and third-party payors, may not adopt a treatment based on our ~~vIgDs,~~therapeutic products, and we may not be able to convince the medical community and third-party payors to accept and use, or to provide favorable coverage or reimbursement for, any therapeutic products developed by our company, our existing collaborator, or any future collaborators. Market acceptance of our therapeutic products will depend on, among other factors:

•thetimingof ourreceiptof any marketingand commercializationapprovals;

•theterms and scope of any approvalsand thecountriesin which approvalsareobtained;

•thesafetyand efficacyof ourtherapeutic~~product~~s;

products;

•theprevalenceand severityof any adversesideeffectsassociatedwith our therapeutic~~product~~s;

products;

•theprevalenceand severityof any adversesideeffectsassociatedwith therapeuticsof thesametypeor classas our therapeutic~~product~~s;

products;

•limitationsor warningscontainedin any labelingapprovedby theFDAor otherregulatoryauthority;

•relativeconvenienceand easeof administrationof our therapeutic~~product~~s;

products;

•thewillingnessof patientsto accept, and the willingness of physicians to prescribe, any new methodsof administration;

•thesuccessof our physicianeducationprograms;

•theavailabilityof adequategovernmentand third-partypayorcoverageand reimbursement;

•the willingness of patients to pay out-of-pocket in the absence of coverage by government and third-party payors;

•thepricingof our products,particularlyas comparedto alternativetreatments;

•

~~ourabilityto compliantlymarketand sellour products;and~~

•our ability to compliantly and effectively market and sell our products;

•the timing of market introduction of our therapeutic products as well as alternative treatments; and

•availabilityof alternativeeffectivetreatmentsforthediseaseindicationsour therapeuticproducts areintendedto treatand therelativerisks,benefits,and costsof thosetreatments.

With our development focus, ~~on protein engineering wild-type IgSFs,~~ these risks may increase to the extent this field becomes more competitive or less favored in the commercial marketplace. Additional risks apply in relation to any disease indications we pursue which are classified as rare diseases and allow for orphan drug designation by regulatory agencies in major commercial markets, such as the United States, European Union, and Japan. Because of the small patient population for a rare disease, if pricing is not approved or accepted in the market at an appropriate level for an approved therapeutic product with orphan drug designation, such drug may not generate enough revenue to offset costs of development, manufacturing, marketing, and commercialization despite any benefits received from the orphan drug designation, such as market exclusivity, assistance in clinical trial design, or a reduction in user fees or tax credits related to development expense. Market size is also a variable in disease indications ~~not~~ classified as rare. Our estimates regarding potential market size for any rare indication may be materially different from what we discover to exist at the time we commence commercialization, if any, for a therapeutic product, which could result in significant changes in our business plan and have a material adverse effect on our business, financial condition, results of operations, and prospects.

If a therapeutic product with orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the therapeutic product is entitled to orphan product exclusivity, which means the FDA may not approve any other applications to market the same therapeutic product for the same indication, except in very limited circumstances, for seven years. Orphan drug exclusivity, however, could also block the approval of one of our therapeutic

products for seven years if a competitor obtains approval of the same therapeutic product as defined by the FDA or if our therapeutic product is determined to be within the same class as the competitor’s therapeutic product for the same indication or disease.

In Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021), the court disagreed with the FDA’s longstanding position that the orphan drug exclusivity only applies to the approved use or indication within an eligible disease. This decision created uncertainty in the application of the orphan drug exclusivity. On January 24, 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the court’s order in Catalyst, FDA intends to continue to apply its longstanding interpretation of the regulations to matters outside of the scope of the Catalyst order – that is, the agency will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved, which permits other sponsors to obtain approval of a drug for new uses or indications within the same orphan designated disease or condition that have not yet been approved. It is unclear how future litigation, legislation, agency decisions, and administrative actions will impact the scope of the orphan drug exclusivity.

As in the United States, we may apply for designation of a therapeutic product as an orphan drug for the treatment of a specific indication in the European Union before the application for marketing authorization is made. Sponsors of orphan drugs in the European Union can enjoy economic and marketing benefits, including up to ten years of market exclusivity for the approved indication unless another applicant can show ~~our~~its therapeutic product is safer, more effective, or otherwise clinically superior to the orphan-designated therapeutic product. The respective orphan designation and exclusivity frameworks in the United States and in the European Union are subject to change, and any such changes may affect our ability to obtain EU or U.S. orphan designations in the future.

Our therapeutic candidates are in early stages of development and may fail in development or suffer delays that materially and adversely affect their commercial viability.

We have no products on the market and all of our therapeutic candidates are in early stages of development. Our ability to achieve and sustain profitability depends on obtaining regulatory ~~approvals,~~approval and Institutional Review Board, or IRB, approval to conduct clinical trials at particular sites, obtaining regulatory approvals to market our therapeutic candidates and successfully commercializing our therapeutic candidates, either alone or with third parties, such as our ~~collaborator Kite.~~collaborators. Before obtaining regulatory approval for the commercial distribution of our therapeutic candidates, we or a collaborator must conduct extensive preclinical tests and clinical trials to demonstrate the safety and efficacy in humans of our therapeutic candidates. Preclinical testing and clinical trials are expensive, difficult to design and implement, can take many years to complete, and are uncertain as to outcome. For example, in October 2022, we announced the termination of enrollment of davoceticept clinical studies (NEON-1 and NEON-2) after we were notified of a second death in the NEON-2 study, which investigated davoceticept in combination with pembrolizumab. While we continue to monitor all NEON study participants previously enrolled in the NEON studies, we are currently focused on advancing the development of povetacicept and acazicolcept; however, even with the significant investment of time and funding to advance these product candidates, we cannot guarantee that our clinical and preclinical development efforts will be successful. The start or end of a clinical study is often delayed or halted due to delays in or failure to obtain regulatory approval to commence the study, delays in or failure to reach agreement on acceptable terms with prospective CROs or clinical trial sites, delays in or failure to obtain IRB approval at each site, changing regulatory requirements, manufacturing challenges, ~~required~~ clinical sites or CROs deviating from the trial ~~administrative actions,~~protocol or failing to comply with regulatory requirements or meet contractual obligations, slower than anticipated patient enrollment, changing standards of care, availability or prevalence of use of a comparative therapeutic or required prior therapy, clinical outcomes, failure of patients to complete the trial or return for post-treatment follow-up, or financial constraints. For instance, delays or difficulties in patient enrollment or difficulties in retaining trial participants can result in increased costs, longer development times, or termination of a clinical trial. Clinical trials of a new therapeutic candidate require the enrollment of a sufficient number of patients, ~~including~~which may include patients who are suffering from the disease the therapeutic candidate is intended to treat and who meet other eligibility criteria. Rates of patient enrollment are affected by many factors, including the size of the patient population, the eligibility criteria for the clinical trial, the age and condition of the patients, the stage and severity of disease, the nature of the protocol, the proximity of patients to clinical sites, and the availability of effective treatments or competing academic and other clinical trials for the relevant disease.

A therapeutic candidate can unexpectedly fail at any stage of preclinical and clinical development. The historical failure rate for therapeutic candidates is high due to scientific feasibility, safety, efficacy, changing standards of medical care, and other variables. The novelty of our platform may mean our failure rates are higher than historical norms. The results from preclinical testing or early clinical trials of a therapeutic candidate may not predict the outcome of later phase clinical trials of the therapeutic candidate, particularly in ~~immuno-oncology~~autoimmune and inflammatory ~~disorder~~s. disorders. We will have to conduct additional trials in our proposed indications to verify the results obtained to date in our preclinical and clinical studies and to support any future regulatory submissions. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles despite promising results in earlier, smaller clinical

trials. Moreover, clinical data are often susceptible to varying interpretations and analyses. We do not know whether Phase 1, Phase 2, Phase 3, or other clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety with respect to the proposed indication for use sufficient to receive regulatory approval or market our therapeutic candidates. To the extent that the results of the clinical trials are not satisfactory to the FDA or foreign regulatory authorities for supporting a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional clinical trials in support of potential approval of our product candidates.

We, the FDA, an IRB, an independent ethics committee, or other applicable regulatory authorities may suspend clinical trials of a therapeutic candidate at any time for various reasons, including a belief that subjects participating in such trials are being exposed to unacceptable health risks or adverse side effects. Similarly, an IRB or ethics committee may suspend a clinical trial at a particular trial site. We may not have the financial resources to continue

developmentof, or to enterinto collaborationsfor,a therapeuticcandidateifweexperienceany problemsor otherunforeseenevents delayingor preventing clinical development or regulatoryapprovalof, or our abilityto commercialize,therapeuticcandidates, including:

•negativeor inconclusiveresultsfromour clinicaltrials,or theclinicaltrialsof othersfor therapeuticcandidatessimilarto ours,leadingto a decisionor requirementto conductadditional preclinicaltestingor clinicaltrialsor abandon a program;

•seriousand unexpecteddrug-relatedsideeffectsexperiencedby participantsin our clinicaltrials or by individualsusingtherapeuticssimilarto our therapeuticcandidates;

•seriousdrug-relatedsideeffectsexperiencedin thepastby individualsusingtherapeuticssimilarto our therapeuticcandidates;

•delaysin submitting~~InvestigationalNewDrug, or~~ IND ~~applicationsor clinicaltrial~~applications or ~~CTAs,~~clinical trial applications, or comparableforeignapplications,or delaysor failurein obtainingthenecessaryapprovals fromregulatorsor IRBs to commencea clinicaltrial,or a suspensionor terminationof a clinicaltrial once commenced;

•conditionsimposedby theFDAor comparableforeignauthorities,such as theEuropeanMedicines Agency, or EMA, regardingthescopeor designof our clinicaltrials;

•delaysin enrollingresearchsubjectsin clinicaltrials;

•high drop-outratesof researchsubjects;

•inadequatesupplyor qualityof therapeutic~~product~~ candidate or therapeuticcandidatecomponents,or materials or othersuppliesnecessaryfortheconductof our clinicaltrials,includingthoseowned, manufactured,or providedby companiesotherthanours;

•greaterthananticipatedclinicaltrialcosts,includingthecostof any approveddrugsused in combinationwith our therapeuticcandidates;

•poor effectivenessof our therapeuticcandidatesduringclinicaltrials;

•unfavorableFDAor otherregulatoryagencyinspectionand reviewof a clinicaltrialsite;

•failureof our third-partycontractorsor investigatorsto complywith regulatoryrequirementsor otherwisemeettheircontractualobligationsin a timelymanner,or atall;

•delaysand changesin regulatoryrequirements,policies,and guidelines,includingtheimpositionof additionalregulatoryoversightaroundclinicaltestinggenerallyor with respectto ourtechnology in particular;or

•varying interpretations of data by the FDA and similar foreign regulatory agencies.

Because we have limited financial and operational resources, we must prioritize our research programs and will need to focus our discovery and development on select product candidates and indications. Correctly prioritizing our research and development activities is particularly important for us due to the breadth of potential product candidates and indications that we intend to utilize with our clinical development strategy. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may also relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

~~varyinginterpretationsof databy theFDAand similarforeignregulatoryagencies.~~

Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier ~~pre-clinical~~preclinical and clinical trials may not be predictive of future clinical trial results.

Clinical testing is expensive and generally takes many years to complete, and the outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. The results of ~~pre-clinical~~preclinical trials and early clinical trials of our product candidates may not be predictive of the results of larger, later-stage controlled clinical trials. Product candidates showing promising results in early-stage clinical trials may still suffer significant setbacks in subsequent clinical trials. We have evaluated acazicolcept in a Phase 1 healthy volunteer trial and previously initiated a Phase 1b/2 study of acazicolcept in patients with steroid-resistant or steroid-refractory active acute graft-versus-host disease, or SR-aGVHD. We terminated this Phase 1b/2 SR-aGVHD study in June 2020. Our Phase 2 study in SLE has materially increased our research and development spending and we expect this increased spend will continue. SLE is a challenging indication and a number of trials conducted ~~no clinical trials~~by other companies have failed after significant investment of time and funding. We cannot predict whether our efforts in this indication will be successful. If we are unsuccessful, it is unlikely that AbbVie would exercise its option for acazicolcept pursuant to ~~date.~~our option and license agreement and, as a result, we would not receive the option payment pursuant to this agreement and we would not be eligible for future milestones and royalties. In addition, we had initiated our Phase 1 studies of davoceticept, but terminated enrollment in these studies in October 2022 following notification of a second Grade 5 serious adverse event (death) in the NEON-2 study. We will have to conduct additional preclinical studies and human trials in our proposed indications of povetacicept and acazicolcept to verify the results obtained to date and to support any regulatory submissions for further clinical development. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles despite promising results in earlier, smaller clinical trials. Moreover, clinical data are often susceptible to varying interpretations and analyses. We do not know whether Phase 1, Phase 2, Phase 3, or other clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety with respect to the proposed indication for use sufficient to receive regulatory approval or market our therapeutic candidates.

Additionally, disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees. In response to the COVID-19 public health emergency, the FDA has postponed some inspections and continues to conduct “mission-critical” inspections on a case-by-case basis, or, where possible to do so safely, has resumed prioritized domestic inspections, such as pre-approval and surveillance inspections. In 2020 and 2021, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications. While the FDA has largely caught up with domestic preapproval inspections, it continues to work through its backlog of foreign inspections. However, the FDA may not be able to continue its current inspection pace, or be unable to complete required inspections during the review period, or the review timelines could be extended, including delays or disruptions due to a resurgence of COVID-19 cases, other health outbreaks or pandemics, travel restrictions, and staffing shortages. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to COVID-19 or other pandemics and may experience delays in their regulatory activities. If a prolonged government shutdown or other disruption occurs, or if global health or other concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities in a timely manner, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including supply chain disruptions, staffing shortages and other business and economic disruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires, as well as other disruptions resulting from the impact of public health factors, including pandemics or other health crises, business disruptions of our strategic partners, third-party manufacturers, suppliers and other third parties upon which we rely. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until completion of treatment and adequate follow-up. The enrollment of patients depends on many factors, including:

•Inability to enroll, or delay in enrollment of, patients due to outbreaks and public health crises;

•The patient eligibility criteria defined in the protocol;

•The perceived risks and benefits of the product candidate being studied;

•The size of the patient population required for analysis of the trial’s primary endpoints;

•The proximity of patients to trial sites;

•The design of the trial;

•Our ability to recruit clinical trial investigators with the appropriate competencies and experience;

•Our ability to obtain and maintain patient consent;

•Geopolitical events in countries where we have or seek to have clinical trial sites;

•Reporting of the preliminary results of any of our clinical trials; and

•The risk that patients enrolled in clinical trials will drop out of the trials before completion of treatment and adequate follow-up.

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigation sites is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites. Geopolitical events in countries where we have or seek to have clinical trial sites can also negatively impact our ability to enroll patients in our trials. For example, we had intended to open trial sites in Russia for both our ongoing Synergy trial and our planned Phase 2 trial in SLE with povetacicept. Following the start of the Russia-Ukraine conflict, we abandoned our plans to open these sites. Although no sites in Russia had been opened, we had to revise our plans and locate alternative trial sites in order to achieve targeted enrollment numbers and enrollment rates for these trials. While we have implemented various contingency plans to increase enrollment following the start of the Russia-Ukraine conflict, we cannot be certain that our contingency plans will be successful in replacing these anticipated sites or increasing enrollment rates generally. Any resulting delays in patient enrollment may increase our costs or may affect the timing or outcome of our ongoing and planned clinical trials, which could prevent completion or commencement of these trials and adversely affect our ability to advance the development of our product candidates.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, require expansion of the trial size, limit their commercial potential, or result in significant negative consequences.

Clinical trials that involve patients with significant co-morbidities are associated with increased risks as such participants may be particularly susceptible to safety and toxicity risks. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, as safety and toxicity monitoring may be complicated and difficult to manage, which could result in patient death or other significant issues. Additionally, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the product candidate or another factor, especially in subjects who may suffer from other medical conditions and take other medications. Such risks are increased in clinical trials that allow combinations of therapies.

If serious adverse events or undesirable side effects arise, we could be required to suspend, delay, or halt our clinical trials. For example, in October 2022 we voluntarily terminated enrollment in both clinical studies involving davoceticept following a second Grade 5 serious adverse event (patient death) in the NEON-2 trial. Additionally, serious adverse events or undesirable side effects could cause regulatory authorities to deny approval or require us to limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Undesirable side effects could also result in an expansion in the size of our clinical trials, increasing the expected costs and timeline of our clinical trials. Side effects that are observed during the trial, whether treatment related or not, could also affect patient recruitment for future trials or the ability of enrolled patients to complete the trial or result in potential product liability claims.

Further, if serious adverse events or undesirable side effects are identified during development or after approval and are determined to be attributed to any of our product candidates, we may be required to develop Risk Evaluation and Mitigation Strategies, or REMS, to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.

Any of these occurrences may harm our business, financial condition and prospects significantly.

We face competition from entities that have developed or may develop therapeutic candidates for our target disease indications, including companies developing novel treatments and technology platforms based on modalities and technology similar to us.

We participate in the highly competitive sector of biotechnology and pharmaceuticals and in the subsector of immune modulation. This subsector has undergone tremendous technological advancement over the last decade due to advancements in understanding the role of the immune system across multiple therapeutic areas, including autoimmune and inflammatory disease. While we believe our novel technology platform, discovery programs, knowledge, experience, and scientific resources offer competitive advantages, we face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies, public and private research institutions, and others.

Any products we successfully develop and commercialize will face competition from currently approved therapies and new therapies potentially available in the future.

The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our products. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our products, which could result in our competitors establishing a strong market position before we are able to enter the market.

Many of the companies we compete against may have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. If these companies develop technologies or therapeutic candidates more rapidly than we do, or their technologies, including delivery technologies, are more effective, our ability to develop and successfully commercialize therapeutic candidates may be adversely affected. For additional information regarding our competitors and the competitive landscape, please refer to the section of our Annual Report on Form 10-K for the year ended December 31, 2022 titled “Business—Competition.”

We face risks related to pandemics, other health epidemics and outbreaks, which could significantly disrupt our operations and/or business, including our clinical trials.

We face risks related to pandemics, other health epidemics and outbreaks, which could significantly disrupt our operations and/or business, including our clinical trials. For example, the COVID-19 pandemic had a broad adverse impact on the global economy across many industries and has resulted in significant government measures being implemented to control the spread of the virus, including quarantines, travel restrictions and business shutdowns, as well as significant volatility in global financial markets. Our business could be adversely impacted by the effects of future pandemics, other health epidemics or outbreaks, including any future resurgence of COVID-19 cases.

For example, we have experienced in the past and may experience in the future disruptions that could severely impact our business and clinical trials, including:

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

•delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

•diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

•interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;

•limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;

•delays in receiving approval from local regulatory authorities and ethics committees to initiate our planned clinical trials;

•delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

•interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials;

•changes in local regulations as part of a response to a pandemic, other health epidemic or outbreak which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

•delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and

•refusal of the FDA to accept data from clinical trials whose conduct has been affected by a pandemic, other health epidemic or outbreak, such as due to missing data.

Further, we may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from any future pandemic, other health epidemic or outbreak. For example, during the COVID-19 pandemic, FDA issued a number of COVID-19 related guidance documents for manufacturers and clinical trial sponsors, many of which have expired or were withdrawn with the termination of the COVID-19 public health emergency declaration on May 11, 2023, although some COVID-19 related guidance documents continue in effect.

Additionally, certain of our research and development efforts are also conducted globally. For example, the povetacicept healthy volunteer study includes investigative sites in Australia, and our Synergy trial includes investigative sites in Korea and Poland. A health epidemic or other outbreak, including a resurgence in COVID-19 cases, may materially and adversely affect our business, financial condition and results of operations. Our supply chain for raw materials, drug substance or drug product is also worldwide and, accordingly, could be subject to disruption. There may be restrictions on the export or shipment of raw materials, drug substance or drug product that could materially delay our business or clinical trials.

The extent to which pandemics, other health epidemics, or outbreaks may impact our business and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence.In addition, another pandemic or epidemic, or other infectious diseases, including a resurgence in COVID-19 cases, could disrupt the global financial markets, reducing our ability to access capital, which could negatively affect our liquidity. If a resurgence of COVID-19 cases, the emergence of another pandemic or epidemic, or the emergence of other infectious diseases were to occur, the volatility of the financial market may be heightened, which could adversely impact the value of our common stock.

We believe our development programs and platform have a particular mechanism of action, but this mechanism of action has not been proven conclusively.

Our scientific platform is novel, and the underlying science is not exhaustively understood nor conclusively proven. In particular, the interaction of vIgDs with the immune synapse, the ability of vIgDs to slow, stop, restart, or accelerate immune responses, and the ability of vIgD domains to interact with multiple counter structures is still largely theoretical. Graphical representations of proposed mechanisms of action of our therapies, the size, actual or relative, of our therapeutics, and how our therapeutics might interface with other cells within the human body, inside the immune synapse, or inside the disease and/or the tumor microenvironment are similarly theoretical and not yet conclusively proven. The lack of a proven mechanism of action may adversely affect our ability to raise sufficient capital, complete preclinical studies, adequately manufacture drug product, obtain regulatory clearance for clinical trials, gain marketing approval, or conclude collaborations, or interfere with our ability to market our product to patients and physicians or achieve reimbursement from payors.

Development of product candidates in combination with other therapies could expose us to additional risks.

Development of any of our product candidates in combination with one or more other therapies that have either been approved or not yet been approved for marketing by the FDA, EMA or comparable foreign regulatory authorities could expose us to additional risks, as combination therapies may increase the rate of serious or unexpected adverse events, which could result in a clinical hold as well as pre-approval and post-approval restrictions by the FDA or other regulatory authorities on the proposed combination therapy, including narrowing of the indication, warnings, additional safety data collection and monitoring procedures, and REMS, even if the cause of such serious or unexpected adverse events are not directly attributed to

our product candidate. Any of these events or restrictions could have a material adverse effect on our business, development of our product candidates, delay our regulatory approval, and decrease the market acceptance and profitability of our product candidate if approved for a combination therapy. For example, as discussed in the risk factor above, our NEON-2 trial evaluating davoceticept in combination with Merck’s pembrolizumab in adults with advanced malignancies was placed on partial clinical hold by the FDA between March 2022 and May 2022, during which time we were unable to enroll any additional participants in the clinical trial, and was later voluntarily terminated in October 2022 due to safety concerns.

We will not be able to market and sell any product candidate in combination with any unapproved therapies that do not ultimately obtain marketing approval. If the FDA, EMA or other comparable foreign regulatory authorities do not approve or revoke their approval of other therapies used in combination therapies, or if safety, efficacy, commercial adoption, manufacturing or supply issues arise with the therapies we choose to evaluate in combination with any of our product candidate, we may be unable to obtain approval of or successfully market any one or all of the product candidates we develop.

Even if any of our product candidates were to receive marketing approval or be commercialized for use in combination with other existing approved therapies, we would continue to be subject to the risks that the FDA, EMA or other comparable foreign regulatory authorities could revoke approval of the other therapy used in combination with any of our product candidates, or safety, efficacy, manufacturing or supply issues could arise with these existing therapies. In addition, it is possible that existing therapies with which our product candidates are approved for use could themselves fall out of favor or be relegated to later lines of treatment. This could result in the need to identify other combination therapies for our product candidates or our own products being removed from the market or being less successful commercially.

Additionally, if the third-party providers of therapies or therapies in development used in combination with our product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of our product candidates, or if the cost of combination therapies is prohibitive, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

Any inability to present our data in scientific journals or at scientific conferences could adversely impact our business and stock price.

We may from time to time submit data related to our research and development activities in peer-reviewed scientific publications or apply to present data related to our research and development activities at scientific or other conferences. We have no control over whether these submissions or applications are accepted. Even if accepted for a conference, we have no control over whether presentations at scientific conferences will be accepted for oral presentation, poster presentation, or abstract publication only. Even when accepted for publication, we have no control over the timing of the release of the publication. Rejection by publications, delays in publication, rejection for presentation, or a less-preferred format for a presentation may adversely impact our stock price, ability to raise capital, and business.

Our business may be affected by adverse scientific publications or editorial or discussant opinions.

We may from time to time publish data related to our research and development activities in peer-reviewed scientific publications or present data related to our research and development activities at scientific or other conferences. Editorials or discussants unrelated to us may provide opinions on our presented data unfavorable to us. In addition, scientific publications or presentations may be made which are critical of our science or research or the field of immunotherapy in general. This may adversely affect our ability to raise necessary capital, complete clinical and preclinical studies, adequately manufacture drug product, obtain regulatory clearance for clinical trials, or approval for marketing, or interfere with our ability to market our product to patients and physicians or achieve reimbursement from payors.

Risks Related to Our Relationships with Third Parties

To date, our revenue has been primarily derived from our ~~license~~collaboration agreements, and ~~research agreement with Kite, and we are~~our success will be dependent, in part, on ~~Kite for the successful development of~~our collaborators’ efforts to develop our therapeutic candidates.

Our success is dependent, in part, on our collaborators’ efforts to develop our therapeutic candidates and, historically, our revenue has been primarily derived from our agreements with collaborators. For example, in ~~the collaboration.~~

~~In October 2015,~~June 2020, we entered into ~~an exclusive, worldwide license~~the AbbVie Agreement for the development of acazicolcept and, in December 2021, we entered into the Horizon Agreement pursuant to which we granted to Horizon rights to one of our existing preclinical biologic therapeutic programs and we and Horizon agreed to collaborate in the discovery, research ~~agreement with Kite~~and preclinical development of up to ~~research, develop,~~three additional autoimmune and ~~commercialize engineered autologous T cell therapies incorporating two~~inflammatory disease programs ~~from our technology.~~ for other designated biological targets.

Pursuant to the ~~license~~terms of the AbbVie Agreement, we received an upfront payment of $60.0 million in cash and ~~research agreement, we will be potentially~~are eligible to receive up to ~~$530.0~~$75.0 million in ~~total milestone~~development milestones (of which $45.0 million was achieved in the second quarter of 2021), an additional $75.0 million if AbbVie exercises its option with respect to acazicolcept following our completion of certain development activities, additional development, commercial and sales-based milestones up to an aggregate of $655.0 million and royalties on any future net sales. Through June 30, 2023, we have received $105.0 million in upfront and pre-option exercise development milestones as part of the AbbVie Agreement.

Pursuant to the AbbVie Agreement, we will conduct certain development activities under a development plan that provides for, among other things, the generation of a data package in order for AbbVie to evaluate exercising its exclusive option, including all activities reasonably necessary to complete our Phase 2 study of acazicolcept in SLE. Even if we successfully complete these activities, AbbVie may not exercise its option, which would make achievement of future milestones and receipt of future royalties unattainable. If AbbVie exercises its option, our realization of additional milestones and royalty payments will depend upon the ~~successful completion~~efforts of ~~research, clinical, and~~AbbVie. If AbbVie fails to develop, obtain regulatory ~~milestones. We will also potentially be eligible to receive a low single~~-~~digit~~ ~~percentage~~ ~~royalty~~approval for, ~~sales on a licensed product-by-licensed product and country-by-country basis.~~

~~Continuedsuccessof our collaborationwith Kite,and ourrealizationof themilestoneand royalty paymentsundertheagreement,dependsupon theeffortsof Kite.Kitehas solediscretionin determining and directingtheeffortsand resources,includingtheabilityto discontinuealleffortsand resources,~~it~~appliesto thedevelopmentand, ifapproval~~is~~obtained,commercializationand marketingof thetherapeuticcandidates coveredby thecollaboration.Kitemaynot be effectivein obtainingapprovalsforthetherapeuticcandidates developedunderthecollaborationarrangementor marketingor arrangingfornecessarysupply,manufacturing, or distributionrelationshipsforany approvedproducts.Kitemaychangeitsstrategicfocusor pursuealternative technologiesin a mannerresultingin reduced,delayed,or no revenueto us.Kitehas a varietyof marketed productsand itsown corporateobjectivesand strategiesmaynot be consistentwith our bestinterests.If Kitefailsto develop,obtainregulatoryapprovalfor,~~or ultimatelycommercialize~~any therapeuticcandidateunder thecollaboration~~ acazicolcept or if~~Kite~~ AbbVie terminates~~thecollaboration,our business,financialcondition, resultsof operations,and prospectscouldbe materiallyand adverselyaffected.In addition,any disputeor litigationproceedings~~we~~mayhave with Kitein thefuturecoulddelaydevelopmentprograms,create uncertaintyas to ownershipof intellectualpropertyrights,distractmanagementfromotherbusinessactivitiesand generatesubstantialexpense.~~

~~If we are unable to secure intellectual property rights to programs covered under~~ the ~~license and research agreement, Kite may terminate the agreement and~~collaboration, our business, financial condition, results of operations, and prospects could be materially and adversely affected. For additional information regarding the AbbVie Agreement, please refer to the section of our Annual Report on Form 10-K for the year ended December 31, 2022 titled “Business—Partnerships.”

Pursuant to the terms of the Horizon Agreement, we received an upfront payment of $25.0 million as well as an equity investment for which they paid $15.0 million. We are also eligible to receive milestone payments upon our achievement of certain preclinical, clinical and regulatory and commercialization milestones, up to an aggregate amount of $381.0 million per program, or approximately $1.5 billion in total, if all milestones are met, as well as royalties on future product sales. Pursuant to the Horizon Agreement, we will conduct certain research activities under a research program; however, even if we successfully perform our obligations under the Horizon Agreement, there is no certainty that Horizon will continue the development of any of the programs, or, if development is continued, if such programs will ultimately succeed and receive regulatory approval. Horizon will have discretion in determining and directing its efforts and resources for future development activities and, if approval is obtained, commercialization and marketing of the approved drug. As a result, there can be no assurances that we will achieve additional milestones pursuant to the Horizon Agreement. For additional information regarding the Horizon Agreement, please refer to the section of our Annual Report on Form 10-K for the year ended December 31, 2022 titled “Business—Partnerships.”

Our collaborations may also result in reduced royalty revenues if we are unable to obtain and maintain patent protection, as well as if we are unable to obtain patent term extension, for therapeutic candidates or products developed under our agreements with collaborators. In ~~addition,~~the event of expiration or invalidation of patents covering a therapeutic candidate or product, for example, our collaborators may be entitled to a significant decrease in royalty revenues owed to us under the agreements. Invalidation of patents and failure to obtain patent term extension for one or more patents in our portfolio may occur as a result of factors beyond our control due to the complex legal and factual questions surrounding pharmaceutical and biotechnology patents. If we are unable to obtain and maintain patent protection, or if we unable to obtain patent term extension for therapeutic candidates or products developed under our agreements with collaborators, our revenue derived from our collaborators may be less than the full amount anticipated, and our business, financial condition, results of operations, and growth prospects could be materially harmed.

Continued advancement of our other product candidates and other development efforts depends, in part, upon the efforts of AbbVie, Horizon, and our other current or future collaborators. If our collaborators do not dedicate sufficient resources to the development of product candidates that are the subject of our agreements, such product candidates may never be successful and we may be ineligible to receive additional milestone payments or royalties pursuant to the terms of our arrangements, which could have a material adverse impact on our financial results and operations. Even if we and our collaborators dedicate sufficient resources to our collaboration agreements, neither we nor our collaborators may be effective in obtaining approvals for any ~~dispute~~therapeutic candidates or, if approved, the successful commercialization of any approved products. Collaborators may change their strategic focus or pursue alternative technologies after entering into a collaboration agreement with us, which could result in reduced, delayed or no revenue to us. Disputes regarding collaboration agreements, including disputes pertaining to ownership of intellectual property, may also arise and if we and our collaborators are unable to resolve such disputes, litigation proceedings we may ~~have with Kite related to intellectual property rights or other aspects of the agreement or the relationship~~occur, which could further delay development programs, create uncertainty as to ownership of intellectual property rights, ~~may~~ distract management from other business activities and generate substantial ~~expense.~~

~~In October 2017, Kite was acquired by Gilead Pharma, Inc., or Gilead. While the research term~~expenses, any of the collaboration was extended after the closing of the acquisition, there is no guarantee Gilead will place the same emphasis on the collaboration or wish to continue the collaboration. If either of these occurs, our business, financial condition, results of operations, and prospectswhich could be materially and ~~adversely affected.~~

negatively impact our business.

If third parties on which we depend to conduct our clinical or preclinical studies, or any future clinical trials, do not perform as expected, fail to satisfy regulatory or legal requirements, or miss expected deadlines, our development program could be delayed, which may result in materially adverse effects on our business, financial condition, results of operations, and prospects.

We rely, in part, on ~~third party~~third-party clinical investigators, ~~contract research organizations, or~~ CROs, clinical data management organizations, and consultants

to design, conduct, supervise, and monitor clinical trials and preclinical studies of our therapeutic candidates and may do the same for ~~any~~future clinical trials. Because we rely on third parties to conduct preclinical studies or clinical trials, we have less control over the timing, quality, compliance, and other aspects of preclinical studies and clinical trials than we would if we conducted all preclinical studies and clinical trials on our own. These investigators, CROs, and consultants are not our employees and we have limited control over the amount of time and resources they dedicate to our programs. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw their time and resources away from our programs. The third parties with which we contract might not be diligent, careful, compliant, or timely in conducting our preclinical studies or clinical trials, resulting in the preclinical studies or clinical trials being delayed or unsuccessful.

Further, if any of our relationships with third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms.

If we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not carry out their expected duties, satisfy legal and regulatory requirements for the conduct of preclinical studies or clinical trials, or meet expected deadlines, our clinical development programs could be delayed and otherwise adversely affected. In all events, we are responsible for ensuring each of our preclinical studies and clinical trials is conducted in accordance with the general investigational plan and protocols for the ~~trial.~~trial and with legal, regulatory and scientific standards. The FDA and certain foreign regulatory authorities, such as the EMA, require preclinical studies to be conducted in accordance with applicable Good Laboratory Practices, or GLPs, and clinical trials to be conducted in accordance with applicable FDA regulations and Good Clinical Practices, or GCPs, including requirements for conducting, recording, and reporting the results of preclinical studies and clinical trials to assure data and reported results are credible and accurate and the rights, integrity, and confidentiality of clinical trial participants are protected. Our reliance on third parties we do not control does not relieve us of these responsibilities and requirements. If we or any of our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the EMA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. Any such event could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In addition, switching or adding additional CROs involves additional cost and requires management time and focus. There is also a natural transition period when a new CRO commences work. As a result, delays may occur, which could materially impact our ability to meet our desired clinical development timelines. There can be no assurance that we will not encounter such challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

Because we rely on ~~third party~~third-party manufacturing and supply partners, our supply of clinical trial materials may become limited or interrupted or may not be of satisfactory quantity or ~~quality.~~

quality, and our dependence on these third parties may impair the advancement of our research and development programs.

We have established in-house recombinant protein generation capabilities for producing sufficient protein materials to enable a portion of our current preclinical studies. We rely on ~~third party~~third-party supply and manufacturing partners to supply the materials, components, and manufacturing services for a portion of preclinical studies and also rely on such third parties for all our clinical trial drug supplies. We do not own manufacturing facilities or supply sources for such components and materials for clinical trial supplies and our current manufacturing facilities are insufficient to supply such components and materials for all of our preclinical studies. Certain raw materials necessary for the manufacture of our therapeutic products, such as cell lines, are available from a single or limited number of source suppliers on a purchase order basis. There can be no assurance our supply of research and development, preclinical study, and clinical trial drugs

and othermaterialswillnot be limited,interrupted,restrictedin certaingeographicregions,of satisfactoryqualityor quantity,or continueto be availableatacceptableprices.In particular,any replacementof our therapeuticsubstancemanufacturer couldrequiresignificanteffortand expertiseand couldresultin significantdelayof our preclinicalor clinicalactivitiesbecausetheremaybe a limitednumberof qualifiedreplacements.

Even if we have sufficient quantities of drug product for planned or ongoing clinical trials, delays in trial initiation, patient enrollment or other extensions of trial timelines may result in the expiration of such drug product prior to its use in such trials and necessitate additional production runs and/or fill/finish work, which in turn could extend trial timelines. In addition, disruptions to ports and other shipping infrastructure, due, for example, to the impacts of a pandemic, such as COVID-19, may result in shortages or delays impacting the availability of materials and other supplies, which could negatively impact our manufacturers, suppliers and other third parties on whom we rely. While we have not yet suffered any direct, material negative impacts from these ongoing supply chain disruptions, we cannot be certain that we will not be impacted, which could increase our costs or negatively impact our development timelines.

The manufacturing process for a therapeutic candidate is subject to FDA and foreign regulatory authority ~~review.~~review, and the facilities used by our contract manufacturers to manufacture our therapeutic candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our marketing application(s) to the FDA. Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with cGMP regulations or other regulatory ~~standards, such as cGMPs.~~standards. In the event any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing, or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may experience shortages resulting in delayed shipments, supply constraints, and/or stock-outs of our products, be forced to manufacture the materials alone, for which we currently ~~does~~do not have the capabilities or resources, or enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all. In some cases, the technical skills or technology required to manufacture our therapeutic candidates may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual and intellectual property restrictions prohibiting us from, transferring such skills or technology to another third party and a feasible alternative may not exist. These factors may increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third party manufacture our therapeutic candidates. If we are required to change manufacturers for any reason, we will be required to verify the new manufacturer maintains facilities and procedures complying with quality standards and with all applicable regulations. The delays associated with the verification of a new manufacturer could negatively affect our ability to develop therapeutic candidates in a timely manner, within budget, or at all.

We expect to continue to rely on ~~third party~~third-party manufacturers if we receive regulatory approval for any therapeutic candidate. To the extent we have existing, or enter into future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistent with contractual and regulatory requirements, including those related to quality control and assurance. If we are unable to obtain or maintain third-party manufacturing for therapeutic candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our therapeutic candidates successfully. Our, or a third party’s, failure to execute on our manufacturing requirements could adversely affect our business in a number of ways, including as a result of:

•an inabilityto initiateor continuepreclinicalstudiesor clinicaltrialsof therapeuticcandidatesunder development;

•delayin submittingregulatoryapplications,or receivingregulatoryapprovals,fortherapeutic candidates;

•thelossof thecooperationof a collaborator;

•subjectingmanufacturingfacilitiesof our therapeuticcandidatesto additionalinspectionsby regulatoryauthorities;

•requirementsto ceasedistributionor to recallbatchesof our therapeuticcandidates;and

•in theeventof approvalto marketand commercializea therapeuticcandidate,an inabilityto meet commercialdemandsforour products.

As product candidates progress from preclinical studies to late-stage clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, materials and processes, are altered along the way in an effort to optimize yield, manufacturing batch size, minimize costs and achieve consistent purity, identity, potency, quality and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and could affect planned or other clinical trials conducted with product candidates produced using the modified manufacturing methods, materials, and processes. This could delay completion of clinical trials and could require non-clinical or clinical bridging and comparability studies, which could increase costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates, if approved.

We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability to develop and commercialize therapeutic candidates, impact our cash position, increase our expenses, and present significant distractions to our management.

From time to time, we ~~may~~ consider strategic transactions, such as collaborations, acquisitions of companies, asset purchases or divestitures, and out- or in-licensing of therapeutic candidates or technologies. In particular, ~~in addition to our current arrangements with Kite,~~ we intend to evaluate and, if strategically attractive, seek to enter into additional collaborations, including with major biotechnology or pharmaceutical companies. The competition for collaborative partners is intense, and the negotiation process is time-consuming and complex. Any new collaboration may be on suboptimal terms for us, and ultimately may not maximize value for our stockholders. In addition, we may be unable to maintain any new or existing collaboration if, for example, development or approval of a therapeutic candidate is delayed, sales of an approved therapeutic ~~candidate~~product do not meet expectations, or the collaborator terminates the collaboration. Any such collaboration, or other strategic transaction, may require us to incur ~~non-recurring~~non-

recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.

These transactions would entail numerous operational and financial risks, including:

•exposureto unknown liabilities;

•disruptionof our businessand diversionof ourmanagement’stimeand attentionin orderto managea collaborationor developacquiredtherapeuticcandidates,or technologies;

•incurrenceof substantialdebtor dilutiveissuancesof equitysecuritiesto pay transactionconsideration or costs;

•

~~higherthanexpectedcollaboration,acquisition,or integrationcosts;~~

•higher than expected collaboration, acquisition, or integration costs;

•write-downsof assets,~~or goodwill,~~or incurringimpairmentchargesor increasedamortizationexpenses; and

•difficultyand costin facilitatingthecollaborationor combiningtheoperationsand personnelof any acquiredbusinessor impairmentof relationshipswith key suppliers,manufacturers,or customersof any acquiredbusinessdue to changesin managementand ownershipand theinabilityto retainkey employeesof any acquiredbusiness.

Accordingly, although there can be no assurance we will undertake or successfully complete any transactions of the nature described above, any transactions we do complete may be subject to the foregoing or other risks and have a material adverse effect on our business, results of operations, financial condition, and prospects. Conversely, any failure to enter any collaboration or other strategic transaction beneficial to us could delay the development and potential commercialization of our therapeutic candidates and have a negative impact on the competitiveness of any therapeutic candidate reaching market.

~~We face competition from entities that have developed or may develop~~

Risks Related to Our Ability to Commercialize Product Candidates

If any of our therapeutic candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and distribution capabilities on our ~~target disease indications,~~own or enter into agreements with third parties to perform these functions on acceptable terms, we may be unable to successfully commercialize any such future products.

We currently have no sales, marketing, or distribution capabilities or experience. If any of our therapeutic candidates are approved, we will need to develop internal sales, marketing, and distribution capabilities to commercialize such products, which may be expensive and time-consuming, or enter into collaborations with third parties to perform these services. If we decide to market our products directly, we will need to commit significant financial, legal, and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution, administration, and compliance capabilities. If we rely on third parties with such capabilities to market our approved products, or decide to co-promote products with collaborators, we will need to establish and maintain marketing and distribution arrangements with third parties, and there can be no assurance we will be able to enter into such arrangements on acceptable, compliant terms or at all. In entering into third-party marketing or distribution arrangements, any revenue we receive will depend upon the efforts of the third parties and there can be no assurance such third parties will establish adequate sales and distribution capabilities or be successful in gaining market acceptance of any approved therapeutic. If we are not successful in commercializing any therapeutic approved in the future, either on our own or through third parties, our business, financial condition, results of operations, and prospects could be materially and adversely affected.

If we fail to comply with U.S. and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive and subject us to other penalties that could materially harm our business.

Our company, our therapeutic candidates, our suppliers, and our contract manufacturers, distributors, and contract testing laboratories are subject to extensive regulation by governmental authorities in the European Union, the United States, and other countries, with regulations differing from country to country.

Even if we receive marketing and commercialization approval of a therapeutic candidate, we and our third-party service providers will be subject to continuing regulatory requirements, including a broad array of regulations related to establishment registration and product listing, manufacturing processes, risk management measures, quality and pharmacovigilance systems, post-approval clinical studies, labeling and packaging, advertising and promotional activities, record keeping, distribution, adverse event reporting, import and export of pharmaceutical products, pricing, sales, and marketing, and fraud and abuse requirements.

Furthermore, the FDA strictly regulates manufacturers’ promotional claims of drug products. In particular, a drug product may not be promoted by manufacturers for uses that are not approved by the FDA, as reflected in the FDA-approved

labeling, although healthcare professionals are permitted to use drug products for off-label uses. The FDA, the Department of Justice, the Inspector General of the Department of Health and Human Services, among other government agencies, actively enforce the laws and regulations prohibiting manufacturers’ promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including large civil and criminal fines, penalties, and enforcement actions. The FDA has also imposed consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed for companies ~~developing novel treatments~~that engaged in such prohibited activities. If we cannot successfully manage the promotion of our approved product candidates, we could become subject to significant liability, which would materially adversely affect our business and ~~technology platforms~~financial condition.

We are required to submit safety and other post market information and reports, and are subject to continuing regulatory review, including in relation to adverse patient experiences with the product and clinical results reported after a product is made commercially available, both in the United States and in any foreign jurisdiction in which we seek regulatory approval. The FDA and certain foreign regulatory authorities, such as the EMA, have significant post-market authority, including the authority to require labeling changes based on ~~modalities~~new safety information and ~~technology similar~~ to ~~us.~~require post-market studies or clinical trials to evaluate safety risks related to the use of a product or to require withdrawal of the product from the market.

The FDA also has the authority to require a REMS plan either before or after approval, which may impose further requirements or restrictions on the distribution or use of an approved therapeutic. The EMA now routinely requires risk management plans, or RMPs, as part of the marketing authorization application process, and such plans must be continually modified and updated throughout the lifetime of the product as new information becomes available. In addition, the relevant governmental authority of any EU member state can request an RMP whenever there is a concern about the risk/benefit balance of the product.

The manufacturers and manufacturing facilities we use to make a future product, if any, will also be subject to periodic review and inspection by the FDA and other regulatory agencies, including for continued compliance with cGMP requirements. The discovery of any new or previously unknown problems with our third-party manufacturers, manufacturing processes or facilities may result in restrictions on the product, manufacturers or facilities, including withdrawal of the product from the market. If we rely on third-party manufacturers, we will have limited control over compliance with applicable rules and regulations by such manufacturers.

If we or our collaborators, manufacturers, or service providers fail to comply with applicable continuing regulatory requirements in the U.S. or foreign jurisdictions in which we seek to market our products, we may be subject to, among other things, fines, warning and untitled letters, clinical holds, a requirement to conduct additional clinical trials, delay or refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications, suspension, refusal to renew or withdrawal of regulatory approval, product recalls, seizures, or administrative detention of products, refusal to permit the import or export of products, operating restrictions, inability to participate in government programs including Medicare and Medicaid, and total or partial suspension of production or distribution, injunction, restitution, disgorgement, debarment, civil penalties, and criminal prosecution.

Imposed price controls may adversely affect our future profitability.

In most countries, the pricing of prescription drugs is subject to governmental control. In these ~~companies develop technologies~~countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. 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 and reimbursement negotiations, and pricing negotiations may continue after reimbursement has been obtained.

Reference pricing used by various EU member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries, we or our collaborators may be required to conduct a clinical trial or other studies comparing the cost-effectiveness of our therapeutic candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of any product candidate approved for marketing is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business, financial condition, results of operations, or prospects could be adversely affected.

Our business may become subject to economic, political, regulatory and other risks associated with international operations.

Our business is subject to risks associated with conducting business internationally, including our use of foreign clinical trial sites. Some of our suppliers, collaborators and clinical trial relationships are located outside the United States.

Accordingly, our future results could be harmed by a variety of factors, including:

•economic instability or weakness, including inflation, reduced growth, diminished credit availability, weakened consumer confidence or increased unemployment;

•sociopolitical instability in particular foreign economies and markets;

•difficulties in compliance with non-U.S. laws and regulations;

•changes in non-U.S. regulations and customs, tariffs and trade barriers, including any changes that China may impose as a result of political tensions between the United States and China;

•changes in non-U.S. currency exchange rates and currency controls;

•trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments;

•workforce uncertainty in countries where labor unrest is more ~~rapidly~~common than ~~we do,~~in the United States;

•production shortages resulting from any events affecting raw material supply or ~~their technologies,~~manufacturing capabilities outside the United States;

•ongoing ramifications of the United Kingdom’s withdrawal from the European Union;

•business interruptions resulting directly or indirectly from geopolitical actions, including ~~delivery technologies, are more effective,~~the Russia-Ukraine conflict, other regional conflicts, war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires; and

•changes in regulatory requirements and policies that apply to our ~~ability~~business, including changes in the regulatory approval process, clinical trial requirements, data standards, and export regulations and controls.

Risks Related to ~~develop~~Our Personnel and ~~successfully commercialize~~Operations

We will need to raise substantial additional funds to advance development of our therapeutic candidates, ~~may be adversely affected.~~

~~The development~~ and ~~commercialization of therapeutic candidates is highly competitive. We believe a significant number of products are currently under development, and may become commercially~~we cannot guarantee we will have sufficient funds available in the future ~~for the treatment of conditions for which we may try~~ to develop and commercialize our current or future therapeutic candidates. ~~There are also competitors~~

We will need to ~~our proprietary therapeutic candidates currently in development, some of which may become commercially available before our therapeutic candidates.~~

We compete with a variety of multinational pharmaceutical companies and specialized biotechnology companies, as well as with technologies being developed at universities and other research institutions. Our competitors have developed, are developing, or may develop therapeutic candidates and processes competitive with our therapeutic candidates. Competitive therapeutic treatments include those already approved and accepted by the medical community and any new treatments entering or aboutraise substantial additional funds to enter the market. We are aware of multiple companies developing therapies with the same target as at least one target of our lead program (ICOSL and/or CD28) as well as companies building novel platforms to generate multi-specific antibody or non-antibody-based targeting proteins. While it is still premature for us to determine which indications may be targeted by our lead program, potential competitors to our lead program include:

~~an anti-ICOSL/B7RP-1 monoclonalantibodybeingdevelopedby Amgen, Inc.(maybe referredto as AMG557or MEDI5872);~~

~~an anti-ICOSmonoclonalantibodybeingdevelopedby MedImmune,Inc.(MEDI570);~~

~~an anti-ICOSagonistmonoclonalantibodybeingdevelopedby GlaxoSmithKlineplc(GSK3359609);~~

~~an anti-CD28monoclonalantibodyfragmentbeingdevelopedby OSEImmunoTherapeutics~~SA~~and Johnson & Johnson Inc.(FR104);~~

~~a CTLA-4~~ ~~Ig fusion~~ ~~selectiveforCD86fusionproteinbeingdevelopedby AstellasPharmaInc.(ASP 2408/09);~~

~~a CD28superagonistmonoclonalantibodybeingdevelopedby TheraMabLLC(TAB08); and~~

~~an anti-CD28pegylatedmonoclonaldomainantibodybeingdevelopedby Bristol-MyersSquibb (Lulizumab pegol; BMS-931699).~~

~~Platforms potentially competitive with our vIgD platform include:~~

~~Nanobody® (Ablynx NV): Platformtechnologyof single-domain,heavy-chainantibodyfragments derivedfromcamelidae(e.g.,camelsand llamas);~~

~~DART®(Macrogenics Inc):Dual-Affinity Re-Targeting and Tridenttechnologyplatforms bind multiple targets with a singlemolecule;~~

~~Anticalin® (Pieris Pharmaceuticals Inc): Engineered proteins derived from natural lipocalins found in blood plasma;~~

~~Targeted Immunomodulation™ (Compass Therapeutics LLC): Antibody discovery targeting the tumor-immune synapse;~~

~~Harpoon TherapeuticsInc:Trispecificantigen-bindingprotein~~s;

•

~~Variousbispecificantibodyplatforms(e.g.,Amgen Inc(BiTE®—approved),Roche AG(RG7828), ZymeworksInc(Azymetri~~c~~™), Xencor Inc(XmAb Bispecific~~));

~~Five PrimeTherapeutics:Proprietaryproteinlibraryand rapidproteinproductionand testingplatform; and~~

~~Regeneron:VEGFTrap and VelociSuite®antibodytechnologyplatforms.~~

Additionally, there are a number of other therapies for inflammatory diseases or cancer approved or in development that are also competitive with our lead program and other programs in development. Many of the other therapies include other types of immunotherapies with different targets than our programs. Other potentially competitive therapies work in ways distinct fromexpand our development, ~~programs.~~

Many of our competitors have significantly greater financial, technical, manufacturing, marketing, sales, and supply resources or experience than we have. If we successfully obtain approval for any therapeutic candidate, we will face competition based on many different factors, including safety and effectiveness, ease with which our products can be administered and the extent to which patients accept relatively new routes of administration, timing and scope of regulatory, ~~approvals, availability and cost of~~ manufacturing, marketing, and sales capabilities ~~price, reimbursement coverage,~~or contract with other organizations to provide these capabilities to us. We have used substantial funds to develop our therapeutic candidates and ~~patent position~~will require significant funds to conduct further research and development, preclinical testing, and clinical trials of our products. Competing products could present superior treatment alternatives, including by being more effective, safer, less expensive, or marketed and sold more effectively than any products we may develop. Competitive products may make any products we develop obsolete or noncompetitive before we recover the expense of developing and commercializingtherapeutic candidates, to seek regulatory approvals for our therapeutic ~~candidates. Competitors could also recruit~~candidates, and to manufacture and market products, if any are approved for commercial sale. As of June 30, 2023, we had $239.6 million in cash and cash equivalents, restricted cash, and investments. Based on our ~~employees,~~current operating plan, we believe our available cash and cash equivalents and investments will be sufficient to fund our planned level of operations, including anticipated capital expenditures, for at least the next 12 months. Our future capital requirements and the period for which ~~could negatively impact~~we expect our ~~ability~~existing resources to support our operations may vary significantly from what we expect. Our monthly spending levels vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with successful development of our therapeutic candidates are highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. To execute our business ~~plan.~~

plan, we will need, among other things:

•to obtain the human and financial resources necessary to develop, test, obtain regulatory approval for, manufacture, and market our therapeutic candidates;

•to build and maintain a strong intellectual property portfolio and avoid infringing intellectual property of third parties;

•to establish and maintain successful licenses, collaborations, and alliances;

•to satisfy the requirements of clinical trial protocols, including patient enrollment;

•to establish and demonstrate the clinical efficacy and safety of our therapeutic candidates;

•to obtain regulatory approvals;

•to manage our spending as costs and expenses increase due to preclinical studies, clinical trials, regulatory approvals, manufacturing scale-up, and commercialization;

•to obtain additional capital to support and expand our operations; and

•to market our products to achieve acceptance and use by the medical community in general.

If we are unable to obtain necessary funding on a timely basis or on acceptable terms, we may have to delay, reduce, or terminate our research and development programs, preclinical studies, or clinical trials, if any, limit strategic opportunities, or undergo reductions in our workforce or other corporate restructuring activities. We also could be required to seek funds through arrangements with collaborators or others requiring us to relinquish rights to some of our technologies or therapeutic candidates we would otherwise pursue on our own. We do not expect to realize revenue from product sales, or royalties in the foreseeable future, if at all. Our revenue sources are, and will remain, extremely limited unless and until our therapeutic candidates are clinically tested, approved for commercialization, and successfully marketed.

To date, we have financed our operations primarily through the sale of equity securities, debt, and payments received under our collaboration agreements. We will be required to seek additional funding in the future and intend to do so through a combination of public or private equity offerings, debt financings, credit and loan facilities, research collaborations, and license agreements. Our ability to raise additional funds from these or other sources will depend on financial, economic, and other factors, many of which are beyond our control. Additional funds may not be available to us on acceptable terms or at all.

If we raise additional funds by issuing equity securities, our stockholders will suffer dilution, and the terms of any financing may adversely affect the rights of our stockholders. For example, in September 2021, we issued in a private placement 6,489,357 shares of common stock and prefunded warrants to purchase an additional 3,191,487 shares of common stock for gross proceeds of approximately $91.0 million. In December 2021, in connection with the Horizon Agreement, we sold 951,980 shares of our common stock to Horizon for which they paid $15.0 million. In September 2022, we sold an aggregate of 15,509,282 shares of common stock in an underwritten public offering, including the partial exercise of the underwriters’ over-allotment option in October 2022, from which we received resulting net proceeds of $106.7 million after deducting underwriting discounts, commissions and offering costs. In addition, in April 2023, we entered into a sales agreement with Cowen and Company, LLC, or TD Cowen, to sell shares of our common stock, from time to time, through an “at the market” equity offering for up to $100.0 million in aggregate gross proceeds. TD Cowen will also act as our sales agent, and any shares sold will be issued pursuant to our shelf registration statement on Form S-3 (File No. 333-271517), filed with the Securities and Exchange Commission, or the SEC, on April 28, 2023 and declared effective on May 9, 2023. On May 11, 2023, we filed a final prospectus supplement with the SEC relating to the offer and sale of the shares pursuant to the Sales Agreement. As of June 30, 2023, we have sold 919,413 shares of common stock under the Sales Agreement for a price of $10.93 per share and have received gross proceeds of $10.0 million. Financing costs of $354,000 incurred directly in connection with this equity offering were netted against the gross proceeds within additional-paid-in-capital on our accompanying Condensed Consolidated Balance Sheets.

In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, may involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of a liquidation or insolvency, debt holders would be repaid before holders of equity securities receive any distribution of corporate assets. Our failure to raise capital or enter into such other arrangements within a reasonable timeframe would have a negative impact on our financial condition, and we may have to delay, reduce, or terminate our research and development programs, preclinical or clinical trials, or undergo reductions in our workforce or other corporate restructuring activities.

We are an early stage biopharmaceutical company with a history of losses, we expect to continue to incur significant losses for the foreseeable future, we may never achieve or maintain profitability, and we have a limited operating history that may make it difficult for investors to evaluate the potential success of our business.

We are a clinical-stage immunotherapy company, with a limited operating history, focused on developing treatments for autoimmune and inflammatory diseases. Since inception, we have devoted our resources to developing novel protein-based immunotherapies primarily using our proprietary directed evolution platform, which converts native immune system proteins into potential differentiated, multi-targeted therapeutics designed to modulate the immune system. We have had significant operating losses since inception. For the six months ended June 30, 2023, our net loss was $26.4 million. Substantially all of our losses have resulted from expenses incurred in connection with our research programs and from general and administrative costs associated with our operations. In addition, inflationary pressure could adversely impact our financial results. Our operating costs have increased, and may continue to increase, due to the continued inflationary environment. Our technologies and therapeutic candidates are in early stages of development, and we are subject to the risks of failure inherent in the development of therapeutic candidates based on novel technologies.

We have historically generated revenue primarily from the receipt of research funding and upfront and other payments under our collaboration agreements. We have not generated, and do not expect to generate, any revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost

of research and development, preclinical studies, clinical trials, and the regulatory approval process for therapeutic candidates. The amount of future losses is uncertain. Our ability to achieve profitability, if ever, will depend on, among other things, our or our existing collaborators, or any future collaborators, successfully developing therapeutic candidates, obtaining regulatory approvals to market and commercialize therapeutic candidates, manufacturing any approved products on commercially reasonable terms, establishing a sales and marketing organization or suitable third-party alternatives for any approved product, and raising sufficient funds to finance business activities. If we or our existing collaborators, or any future collaborators, are unable to develop and commercialize one or more of our therapeutic candidates or if sales revenue from any therapeutic candidate receiving approval is insufficient, we will not achieve profitability, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Interim, preliminary, or topline 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 publish interim, preliminary or topline data from clinical trials. 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. Interim or preliminary data from clinical trials that we may conduct may not be indicative of the final results of the trial and are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data becomes available. Interim or preliminary data also remains subject to audit and verification procedures that may result in the final data being materially different from the interim or preliminary data. As a result, interim or preliminary data should be viewed with caution until the final data are available. Adverse differences between interim, preliminary or topline data and final data could significantly harm our reputation and business prospects. We do not know whether any clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain marketing approval to market our product candidates.

Moreover, preliminary, interim and topline data are subject to the risk that one or more of the clinical outcomes may materially change as more patient data become available when patients mature on study, patient enrollment continues or as other ongoing or future clinical trials with a product candidate further develop. Past results of clinical trials may not be predictive of future results. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically more extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure. Any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. Similarly, even if we are able to complete our planned and ongoing preclinical studies and clinical trials of our product candidates according to our current development timeline, the positive results from such preclinical studies and clinical trials of our product candidates may not be replicated in subsequent preclinical studies or clinical trial results. Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or other regulatory approval.

Any inability to attract and retain qualified key management and technical personnel would impair our ability to implement our business plan.

Our success largely depends on the continued service of key management and other specialized personnel, including Mitchell H. Gold, M.D., our Executive Chairman and Chief Executive Officer, ~~Jay R. Venkatesan, M.D., our President and a member of our board of directors,~~ Stanford Peng, M.D., Ph.D., our ~~Executive Vice~~ President and Head of Research and Development, ~~and Chief Medical Officer, Ryan Swanson, our Vice President of Immunology, Michael Kornacker, Ph.D., our Vice President of Protein Engineering~~ and Paul Rickey, our Senior Vice President and Chief Financial Officer.

The loss of one or more members of our management team or other key employees or advisors could delay our research and development programs and materially harm our business, financial condition, results of operations, and prospects. The relationships our key managers have cultivated within our industry make us particularly dependent upon their continued employment with us. We are dependent on the continued service of our technical personnel because of the highly technical nature of our therapeutic candidates and technologies, and the specialized nature of the regulatory approval process. Because our management team and key employees are not obligated to provide us with continued service, they could terminate their employment with us at any time without penalty. We do not maintain key person life insurance policies on any of our management team members or key employees. Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical, and management personnel, as well as personnel with expertise in clinical testing, manufacturing, governmental regulation, and commercialization. We face competition for personnel from other companies, universities, public and private research institutions, government entities, and other organizations, including significant competition in the Seattle employment market.

As our therapeutic candidates advance into clinical trials, we may experience difficulties in managing our growth and expanding our operations.

We have limited experience in therapeutic development and very limited experience with clinical trials of therapeutic candidates. As our therapeutic candidates enter and advance through preclinical studies and ~~any~~ clinical trials, we will need to expand our development, regulatory, and manufacturing capabilities or contract with other organizations to provide these capabilities for us. InFor example, as we continue enrollment in our Phase 2 study in SLE of acazicolcept and continue with the ~~future,~~development of our other product candidates, we ~~expect~~will need to ~~have to~~hire additional personnel in clinical operations. We also must manage ~~additional~~ relationships with collaborators or partners, suppliers, and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial, and management controls, reporting systems, and procedures. We may not be able to implement improvements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls.

If any of our therapeutic candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we may be unable to successfully commercialize any such future products.

~~be expensiveand time-consuming,or enterinto collaborationswith thirdpartiesto performtheseservices.~~If~~we decideto marketour productsdirectly, wewillneed to commitsignificantfinancial,legal,and managerialresourcesto developa marketingand salesforcewith technicalexpertiseand supportingdistribution,administration,and compliancecapabilities.If we relyon thirdpartieswith such capabilitiesto marketour approvedproducts,or decideto co-promoteproductswith collaborators,~~we~~willneed to establishand maintainmarketingand distribution arrangementswith thirdparties,and therecan be no assurance~~we~~willbe ableto enterintosuch arrangementson acceptable,complianttermsor atall.In enteringintothird-partymarketingor distribution arrangements,any revenuewe receivewilldepend upon theeffortsof thethirdpartiesand therecan be no assurancesuch thirdpartieswillestablishadequatesalesand distributioncapabilitiesor be successfulin gaining marketacceptanceof any approvedtherapeutic.~~If~~we arenot successfulin commercializingany therapeutic approvedin thefuture,eitheron ourown or throughthirdparties,our business,financialcondition,resultsof operations,and prospectscouldbe materiallyand adverselyaffected.~~

Even if we receive marketing and commercialization approval of a therapeutic candidate, we and our third-party service providers will be subject to continuing regulatory requirements, including a broad array of regulations related to establishment registration and product listing, manufacturing processes, risk management measures, quality and pharmacovigilance systems, post-approval clinical studies, labeling, advertising and promotional activities, record keeping, distribution, adverse event reporting, import and export of pharmaceutical products, pricing, sales, and marketing, and fraud and abuse requirements. Any product promotion and advertising will also be subject to regulatory requirements and continuing regulatory review.

We are required to submit safety and other post market information and reports, and are subject to continuing regulatory review, including in relation to adverse patient experiences with the product and clinical results reported after a product is made commercially available, both in the United States and in any foreign jurisdiction in which we seek regulatory approval. The FDA and certain foreign regulatory authorities, such as the EMA, have significant post-market authority, including the authority to require labeling changes based on new safety information and to require post-market studies or clinical trials to evaluate safety risks related to the use of a product or to require withdrawal of the product from the market.

The FDA also has the authority to require a Risk Evaluation and Mitigation Strategies, or REMS, plan either before or after approval, which may impose further requirements or restrictions on the distribution or use of an approved therapeutic. The EMA now routinely requires risk management plans, or RMPs, as part of the marketing authorization application process, and such plans must be continually modified and updated throughout the lifetime of the product as new information becomes available. In addition, the relevant governmental authority of any EU member state can request an RMP whenever there is a concern about the risk/ benefit balance of the product.

The manufacturers and manufacturing facilities we use to make a future product, if any, will also be subject to periodic review and inspection by the FDA and other regulatory agencies, including for continued compliance with cGMP requirements. The discovery of any new or previously unknown problems with our third-party manufacturers, manufacturing processes or facilities may result in restrictions on the product, manufacturers or facilities, including withdrawal of the product from the market. If we rely on third-party manufacturers, we will not have control over compliance with applicable rules and regulations by such manufacturers.

If we or our collaborators, manufacturers, or service providers fail to comply with applicable continuing regulatory requirements in the U.S. or foreign jurisdictions in which we seek to market our products, we may be subject to, among other things, fines, warning and untitled letters, clinical holds, delay or refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications, suspension, refusal to renew or withdrawal of regulatory approval, product recalls, seizures, or administrative detention of products, refusal to permit the import or export of products, operating restrictions, inability to participate in government programs including Medicare and Medicaid, and total or partial suspension of production or distribution, injunction, restitution, disgorgement, debarment, civil penalties, and criminal prosecution.

~~Price controls imposed in foreign markets may adversely affect our future profitability.~~

In most countries, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. 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 and reimbursement negotiations, and pricing negotiations may continue after reimbursement has been obtained.

~~Referencepricingused by various~~EU~~memberstatesand paralleldistribution,or arbitragebetween low-pricedand high-pricedmemberstates,can furtherreduceprices.In somecountries,we or our collaboratorsmaybe requiredto conducta clinicaltrialor otherstudiescomparingthecost-effectivenessof our vIgD therapeuticcandidatesto otheravailabletherapiesin orderto obtainor maintainreimbursementor pricingapproval.Publicationof discountsby third-partypayorsor authoritiesmayleadto furtherpressureon the pricesor reimbursementlevelswithinthecountryof publicationand othercountries.~~If~~reimbursementof any productcandidateapprovedformarketing~~is~~unavailableor limitedin scopeor amount,or ifpricing~~is~~setat unsatisfactorylevels,our business,financialcondition,resultsof operations,or prospectscouldbe adverselyaffected.~~

Our business entails a significant risk of product liability and our ~~ability~~inability to obtain sufficient insurance coverage could harm our business, financial condition, results of operations, or prospects.

Our business exposes us to significant product liability risks inherent in the development, testing, manufacturing, and marketing of therapeutic treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing products, such claims could result in an investigation by certain regulatory authorities, such as FDA or foreign regulatory authorities, of the safety and effectiveness of our products, our manufacturing processes and facilities, or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used, or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products, injury to our reputation, costs to defend the related litigation, a diversion of management’s time and our resources, substantial monetary awards to trial participants or patients, and a decline in our valuation. We currently have product liability insurance we believe is appropriate for our stage of development and may need to obtain higher levels of product liability insurance prior to marketing any therapeutic candidates. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims with a potentially material adverse effect on our business.

Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include, but is not limited to:

•intentionalfailuresto complywith FDAor U.S.healthcarelaws and regulations,or applicablelaws, regulations,guidance,or codesof conductsetby foreigngovernmentalauthoritiesor self-regulatory industryorganizations;

•a provisionof inaccurateinformationto any governmentalauthoritiessuch as FDA;

•noncompliancewith manufacturingstandardswemayestablish;

•noncompliancewith federaland statehealthcarefraudand abuselaws and regulations;~~and~~

•noncompliance with the U.S. Foreign Corrupt Practices Act (the FCPA) and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate; and

•a failureto reportfinancialinformationor dataaccuratelyor a failureto discloseunauthorized activitiesto us.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws, regulations, guidance and codes of conduct intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws, regulations, guidance statements, and codes of conduct may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive program, health care professional, and other business arrangements.

As our business is heavily regulated, it involves significant interaction with government officials, including potentially officials of non-U.S. governments. Additionally, in many countries, healthcare providers are employed by the government, and the purchasers of biopharmaceuticals are government entities. As a result, our dealings with are subject to regulation and such healthcare providers and employees of such purchasers may be considered “foreign officials” as defined in the FCPA. Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology companies. We also may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations and if we fail to comply with these laws and regulations, we may face significant penalties, finds and/or denial of certain export privileges.

Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions, including debarment or disqualification of those employees from participation in FDA regulated activities and serious harm to our reputation. This could include violations of provisions of the U.S. federal Health Insurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or ~~HITEC~~H,HITECH, other U.S. federal and state law, and requirements of non-U.S. jurisdictions, including the European Union General Data Protection ~~Directive.~~

Regulation.

It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, regulations, guidance or codes of conduct. Furthermore, we may be held liable under the FCPA and similar laws in other jurisdictions for the corrupt or other illegal activities of our employees, our third-party business partners, representatives and agents, even if we do not explicitly authorize such activities. If any such governmental investigations or other actions or lawsuits are instituted against us, and we are not successful in defending such actions or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines, exclusion from government programs, or other sanctions.

Ourbusinessinvolvesthe use of hazardous materialsand we and ourthird-partymanufacturersmust complywith environmentallaws and regulations,which maybe expensiveand restricthowweconduct business.

Our third-party manufacturers’ activities and our own activities involve the controlled storage, use and disposal of hazardous and flammable materials, including the components of our pharmaceutical product candidates, test samples and reagents, biological materials and other hazardous compounds. We and our manufacturers are subject to federal, state, local, and foreign laws and regulations governing the use, generation, manufacture, storage, handling, and disposal of these hazardous materials. Although we believe our safety procedures for handling and disposing of these materials and waste products comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental injury or contamination from the use, storage, handling, or disposal of hazardous materials. In the event of an accident, state, or federal or other applicable authorities may curtail our use of these materials and/or interrupt our business operations. In addition, if an accident or environmental discharge occurs, or if we discover contamination caused by prior operations, including by prior owners and operators of properties we acquire, we could be liable for cleanup obligations, damages, and fines. If such unexpected costs are substantial, this could significantly harm our financial condition and results of operations.

Compliance with governmental regulations regarding the treatment of animals used in research could increase our operating costs, which would adversely affect the commercialization of our technology.

The Animal Welfare Act, or AWA, is the federal law covering the treatment of certain animals used in research. Currently, the AWA imposes a wide variety of specific regulations governing the humane handling, care, treatment, and transportation of certain animals by producers and users of research animals, most notably relating to personnel, facilities, sanitation, cage size and feeding, watering, and shipping conditions. Third parties with whom we contract are subject to registration, inspections, and reporting requirements under the AWA. Furthermore, some states have their own regulations, including general anti-cruelty legislation, which establish certain standards in handling animals. Comparable rules, regulations, and or obligations exist in many foreign jurisdictions. If we or our contractors fail to comply with regulations concerning the treatment of animals used in research, we may be subject to fines and penalties and adverse publicity, and our operations could be adversely affected.

~~Our information technology systems could face serious disruptions adversely affecting our business.~~

Our information technology and other internal infrastructure systems, including corporate firewalls, servers, leased lines, and connection to the Internet, face the risk of systemic failure potentially disruptive to our operations. A significant disruption in the availability of our information technology and other internal infrastructure systems could cause interruptions in our collaborations with our partners and delays in our research and development work.

Our current operations are concentrated in one location and any events affecting this location may have material adverse consequences.

Our current operations are located in facilities situated in ~~Seattle.~~Seattle, Washington. Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics, power shortage, power outage, telecommunication failure, or other natural or ~~manmade~~man-made accidents or incidents resulting in our company being unable to fully utilize the facilities, may have a material adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions. Loss of access to these facilities may result in increased costs, delays in the development of our therapeutic candidates, or interruption of our business operations. As part of our risk management policy, we maintain insurance coverage at levels we believe are appropriate for our business. However, in the event of an accident or incident at these facilities, we cannot assure you the amounts of insurance will be sufficient to satisfy any damages and losses or that the insurance covers all risks. If our facilities are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed. Any business interruption may have a material adverse effect on our business, financial position, results of operations, and prospects.

Our business may be affected by litigation and government investigations.

From time to time, we receive inquiries and other types of information requests from government authorities as well as correspondence from other third parties regarding various disputes and allegations. We cannot predict whether any such inquiries or correspondence may ultimately subject us to claims and other actions related to our business activities. While the ultimate outcome of investigations, inquiries, information requests, disputes, and legal proceedings is difficult to predict, responding to such investigations, inquiries and information requests or defending such claims can be expensive, time-consuming and distracting, and adverse resolutions or settlements of those matters may result in, among other things, modification of our business practices, costs, and significant payments, any of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Risks Related to Our Financial Position and Capital Needs

The investment of our cash and cash equivalents ~~and~~in fixed income inand other marketable securities is subject to risks which may cause losses and affect the liquidity of these investments.

As of ~~September~~June 30, ~~2017,~~2023, we had ~~$87.2~~$239.6 million in cash, and cash equivalents, restricted cash, and ~~investments.~~investments; our investments primarily include highly liquid funds with a contractual maturity of each security of less than two years. We expect to continue to invest our excess cash in fixed income and other marketable ~~securitie~~s.securities. These investments are subject to general credit, liquidity, market and interest rate risks, including potential future impacts similar to the impact of U.S. sub-prime mortgage defaults previously affecting various sectors of the financial markets and which caused credit and liquidity issues.risks. We may realize losses in the fair value of these investments, an inability to access cash in these investments for a potentially meaningful period, or a complete loss of these investments, which would have a negative effect on our financial statements.

~~In addition,should~~

Adverse events or perceptions affecting the financial services industry could adversely affect our ~~investmentsceasepaying~~operating results, financial condition and prospects.

Limited liquidity, defaults, non-performance or ~~reduce~~other adverse developments affecting financial institutions or parties with which we do business, or perceptions regarding these or similar risks, have in the~~amount~~ past and may in the future lead to market-wide liquidity problems. For example, in March 2023, Silicon Valley Bank, or SVB, was closed and placed in receivership and, subsequently, additional financial institutions have been placed into receivership. We have a banking relationship with SVB and, prior to paying off the remaining balance outstanding in May 2023, were also party to an Amended and Restated Loan and Security Agreement with SVB. While we do not believe our exposure to a potential loss of ~~interestpaid~~cash, cash equivalents and investments as a result of SVB’s receivership was material compared to our ~~company, our interestincomewould suffer.The marketrisksassociatedwith our investmentportfoliomayhave an adverseeffecton our results~~total cash, cash equivalents and investments, we faced:

•delayed access to deposits or other financial assets, and potential uninsured loss of ~~operations,liquidity,~~deposits or other financial assets;

•the inability to access, roll over or extend the maturity of, or enter into new credit facilities or raise other working capital resources;

•potential breach of obligations, including U.S. federal and ~~financialcondition.~~

~~Changes in accounting rules~~state wage laws and ~~regulations, or interpretations thereof, could result in unfavorable accounting charges or~~contracts that require us to ~~change~~maintain letters of credit or other credit support arrangements; and

•termination of cash management arrangements or delays in accessing funds subject to cash management arrangements.

As a result of the U.S. government intervention, we subsequently regained access to our ~~compensation~~accounts, including the uninsured portion of our deposit accounts. However, there is no guarantee that the U.S. government will intervene to provide access to uninsured funds in the future in the event of the failure of other financial institutions, or that they would do so in a timely fashion. In such an event, we and our counterparties to commercial agreements may be unable to satisfy our respective obligations or enter into new commercial arrangements and may face liquidity issues.

Concerns regarding the U.S. or international financial systems could impact the availability and cost of financing, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

Any of these risks could materially impact our results of operations, liquidity, financial condition and prospects.

Our business may be materially affected by changes to fiscal and tax policies.

~~Accounting methods~~ Negative or unexpected tax consequences could adversely affect our results of operations.

New tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations, and ~~policies for biopharmaceutical companies, including policies governing revenue recognition,~~our business and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, the Tax Cuts and Jobs Act of 2017,

or TCJA, enacted in December 2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, enacted in April 2020, significantly changed the U.S. Internal Revenue Code, or IRC. Such changes include a reduction in the corporate tax rate and limitations on certain corporate deductions and credits, among other changes. In addition, beginning in 2022, the TCJA eliminated the option to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to IRC Section 174. Although Congress is considering legislation that would repeal or defer this capitalization and amortization requirement, it is not certain that this provision will be repealed or otherwise modified. If the requirement to capitalize Section 174 expenditures is not modified, it may increase our effective tax rate and our cash tax liability.

We have generally accounted for changes related ~~expenses, and accounting for stock-based compensation, are subject~~ to ~~review, interpretation,~~the TCJA in accordance with our understanding of the legislation and guidance ~~from our auditors and relevant accounting authorities, including~~available as of the ~~SEC. Changes to accounting methods or policies, or interpretations thereof, may require us to reclassify, restate, or otherwise change or revise~~date of this filing as described in more detail in our financial ~~statements.~~

~~Nivalis’ pre-merger~~statements and will continue to monitor and assess the impact of the federal legislation on our business and the extent to which various states conform to federal tax law. As another example, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, with tax provisions primarily focused on implementing a 15% minimum tax on global adjusted financial statement income, effective for tax years beginning after December 31, 2022, and a 1% excise tax on share repurchases occurring after December 31, 2022. Given its recent pronouncement, it is unclear at this time what, if any, impact the IRA will have on our company's tax rate and financial results. We will continue to evaluate the IRA’s impact (if any) as further information becomes available. In addition, adverse changes in the financial outlook of our operations or further changes in tax laws or regulations could lead to changes in our valuation allowances against deferred tax assets on our accompanyingCondensed Consolidated Balance Sheets, which could materially affect our results of operations.

Our net operating loss carryforwards and certain other tax attributes may be subject to limitations. ~~The pre-merger net operating loss carryforwards~~

In general, under IRC Section 382 and ~~certain other tax attributes of Alpine and of the combined organization may also be subject to limitations as a result of ownership changes resulting from the merger.~~

~~In general,~~383, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating loss carryforwards, or ~~NOLs,~~NOL carryforwards, to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders, generally stockholders beneficially owning five percent or more of a corporation’s common stock, applying certain look-through and aggregation rules, increases by more than 50 percentage points (by value) over such stockholders’ lowest percentage ownership during the testing period, generally three years. ~~Nivalis may~~We have determined that we have experienced several ownership changes in the past and, ~~may experience ownership changes in~~as a result, a portion of our NOL carryforwards and certain other tax attributes are subject to limitations with respect to the ~~future. In addition, the closing of the merger may~~ ~~have~~ ~~resulted in an ownership change for Nivalis.~~amounts which can be utilized annually. It is also possible that ~~Alpine’s net operating loss~~our NOL carryforwards and certain other tax attributes may ~~also~~ be subject to ~~limitation~~additional limitations as a result of ownership changes in the ~~past and/or the closing~~future because of, ~~the merger.~~among other things, shifts in our stock ownership, many of which are outside our control. Consequently, even if we achieve profitability, we may not be able to utilize a material portion of ~~Nivalis’, Alpine’s or the combined organization’s net operating loss~~our NOL carryforwards and certain other tax attributes, which could have a material adverse effect on cash flow and results of operations.

Based on a Section 382 study that was commissioned during the fourth quarter of 2022 and concluded during the first quarter of 2023, which focused on our wholly owned operating company and subsidiary, AIS Operating Co., Inc., we believe we experienced ownership changes in 2016 and 2021. As a result of this determination, our ability to utilize research and development tax credits and NOL carryforwards created prior to September 17, 2021 has been limited. While we continue to record a full valuation allowance for our domestic tax assets and have not reduced our research and development tax credit carryforwards as of June 30, 2023, the limitations could impact our ability to use the NOL carryforwards and research and development tax credit carryforwards before expiration.

Furthermore, the 2017 merger with Nivalis Therapeutics Inc., or Nivalis, is likely considered an ownership change with respect to the potential limitation of the Nivalis federal tax credits and NOLs. As such, it is likely that any future utilization of Nivalis federal tax credits and NOLs is substantially limited. Therefore, as of December 31, 2018, all Nivalis tax credit and NOL carryforwards have been reduced to zero.

Provisions of our debt instruments may restrict our ability to pursue our business strategies.

Our term loan ~~agreement requires~~agreements required us, and any debt financing we may obtain in the future may require us, to comply with various covenants that limit our ability to, among other things:

•dispose of assets;

~~compete~~•complete mergers or acquisitions;

•incur indebtedness;

•encumber assets;

•pay dividends or make other distributions to holders of our capital stock;

•use institutions other than our lender for certain banking services;

•make specified investments;

•engage in any new line or business; and

•engagement in certain transactions with our ~~affiliates~~

affiliates.

~~These~~

If we enter into future debt financing arrangements similar to our recently repaid term loan facility, such debt financing arrangements may include similar restrictions.If we do pursue such debt financing with such restrictions, these restrictions could inhibit our ability to pursue our business strategies. In addition, if we are required to use our lender for certain banking services, we could be exposed to the risks discussed in “Adverse events or perceptions affecting the financial services industry could adversely affect our operating results, financial condition and prospects.” If we default under future debt financing arrangements, including a material adverse change in our ~~term loan agreement,~~business, operations or condition (financial or otherwise), and such event of default is not cured or waived, the lenders could terminate commitments to lend and cause all amounts outstanding with respect to the debt to be due and payable immediately, which in turn could result in cross defaults under other debt ~~instruments.~~instruments, if any. Our assets and cash flow may not be sufficient to fully repay borrowings under ~~our~~any outstanding debt instruments if some or all of these instruments are accelerated upon a default. We may incur additional indebtedness in the future. The debt instruments governing such indebtedness could contain provisions that are as, or more, restrictive than our existing debt instruments. If we are unable to repay, refinance or restructure our indebtedness when payment is due, the lenders could proceed against the collateral granted to them to secure such indebtedness or force us into bankruptcy or liquidation.

Risks Related to Cybersecurity

Our computer systems, or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security or data privacy breaches or incidents or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.

Despite the implementation of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems, and those of our third-party CROs, other contractors (including sites performing clinical trials) and consultants, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches and incidents from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including supply chain cyber-attacks or the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), which may compromise our system infrastructure or lead to the loss, destruction, alteration, prevention of access to, disclosure, or dissemination of, or damage or unauthorized access to, our data (including trade secrets or other confidential information, intellectual property, proprietary business information, and personal information) or data that is processed or maintained on our behalf, or other assets, which could result in financial, legal, business and reputational harm to us. The increase in remote working in recent years has increased certain security threats, and phishing and social engineering attacks have increased in recent years. Additionally, cybersecurity researchers have warned of heightened risks of cyberattacks in connection with Russia’s activities in Ukraine. To the extent that any disruption or security incident were to result in any loss, destruction, unavailability, alteration, disclosure, or dissemination of, or damage or unauthorized access to, our applications, any other data processed or maintained on our behalf or other assets, or for it to be ~~affected by litigation~~believed or reported that any of these occurred, we could incur liability, financial harm and ~~government investigations.~~

reputational damage and the development and commercialization of our product candidates could be delayed. We ~~may~~cannot assure you that our data protection efforts and our investment in information technology, or the efforts or investments of CROs, consultants or other third parties, will prevent significant breakdowns or breaches in systems or other cyber incidents that cause loss, destruction, unavailability, alteration or dissemination of, or damage or unauthorized access to, our data and other data processed or maintained on our behalf or other assets that could have a material adverse effect upon our reputation, business, operations or financial condition. We and certain of our contractors and consultants are, from time to time, ~~receive inquiries~~subject to cyberattacks and ~~subpoenas~~security incidents. While we do not believe that we have experienced any significant system failure, accident or security breach to date, if any system failure, accident, or other disruption, or any security breach or incident, impacting us or any of our third-party CROs or other contractors or consultants, were to occur and cause interruptions in our operations, it could result in a material disruption of our programs and the development of our product candidates could be delayed. In addition, the loss of clinical trial data for our product candidates could result in delays in our marketing approval efforts and significantly increase our costs to recover or reproduce the data. Further, any such event that leads to loss, damage, or unauthorized access to, or use, alteration, or disclosure, dissemination or other ~~types~~processing of, personal information, ~~requests~~including personal information regarding our clinical trial subjects or employees, could harm our reputation directly, compel us to comply with federal and/or state breach

notification laws and foreign law equivalents, subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business.

Notifications and follow-up actions related to a security breach or incident could impact our reputation and cause us to incur significant costs, including legal expenses and remediation costs. For example, the loss of clinical trial data from ~~government authorities~~completed or future clinical trials could result in delays in our regulatory approval efforts and ~~others~~significantly increase our costs to recover or reproduce the lost data. We expect to incur significant costs in an effort to detect and prevent security breaches and incidents, and we may ~~become subject~~face increased costs and requirements to ~~claims~~expend substantial resources in the event of an actual or perceived security breach or incident. We also rely on third parties to manufacture our product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business. Any disruption or security breach or incident resulting in any loss, destruction, or alteration of, unavailability of, or damage or unauthorized access to, our data or other ~~actions related~~information that is processed or maintained on our behalf, or inappropriate disclosure of or dissemination of any such information, or if any of these were perceived or reported to have occurred, could expose us to litigation and governmental investigations, delays in further development and commercialization of our product candidates, and significant fines, penalties, or other liabilities.

Our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach or incident of or impacting our systems or third-party systems where information important to our business ~~activities. While~~operations or commercial development is stored. In addition, such insurance may not be available to us in the ~~ultimate outcome~~future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of ~~investigations, inquiries,~~its merit, could be costly and divert management attention.

Our information ~~requests,~~technology systems could face serious disruptions adversely affecting our business.

Our information technology and ~~legal proceedings is difficult~~other internal infrastructure systems, including corporate firewalls, servers, leased lines, and connection to ~~predict, defense~~the Internet, face the risk of ~~litigation claims can be expensive, time-consuming and distracting, and adverse resolutions or settlements of those matters may result~~systemic failure potentially disruptive to our operations. A significant disruption in ~~among other things,~~

~~modification~~the availability of our ~~businesspractices,costs,~~information technology and ~~significantpayments,any~~other internal infrastructure systems, or those of ~~which~~third parties that perform services or supply materials to us, could~~have a materialadverseeffect on~~ cause interruptions in our ~~business,financialcondition,resultsof operations,and prospects.~~

~~We believe our development programs and platform have a particular mechanism of action, but this mechanism of action has not been proven conclusively.~~

~~Our vIgD platform is novel and the underlying science is not exhaustively understood~~ nor conclusively proven. In particular, the interaction of vIgDs with the immune synapse, the ability of vIgDs to slow, stop, restart, or accelerate immune responses, and the ability of vIgD domains to interact with multiple counterstructures is still largely theoretical. Graphical representations of proposed mechanisms of action of our therapies, the size, actual or relative, of our therapeutics, and how our therapeutics might interface with other cells within the human body, inside the immune synapse, or inside ~~the disease and/or~~ the tumor microenvironment are similarly theoretical and not yet conclusively proven. The lack of a proven mechanism of action may adversely affect our ability to raise sufficient capital, complete preclinical studies, adequately manufacture drug product, obtain regulatory clearance for clinical trials, or approval for marketing, or interferecollaborations with our ~~ability to market our product to patients~~partners and ~~physicians or achieve reimbursement from payors.~~

~~Because we have no products currently~~delays in ~~human clinical trials, any inability to present our data in scientific journals or at scientific conferences could adversely impact our business and stock price.~~

~~We may from time to time submit data related to~~ our research and development work.

Our facility is located in ~~peer-reviewed scientific publications or apply~~Seattle, Washington. We have not undertaken a systematic analysis of the potential consequences to ~~present data related to~~ our ~~research~~ business and ~~development at scientific~~financial results from a major flood, blizzard, fire, earthquake, power loss, terrorist activity, pandemics or other ~~conferences. We~~disasters and do not have ~~no control over whether these submissions~~a recovery plan for such disasters. Also, our contract development and manufacturing organizations’ and suppliers’ facilities are located in multiple locations where other natural disasters or ~~applications are accepted. Even if accepted for~~similar events which could severely disrupt our operations, could expose us to liability and could have a conference, we have no control over whether presentations at scientific conferences will be accepted for oral presentation, poster presentation, or abstract publication only. Even when accepted for publication, we have no control over the timing of the release of the publication. Rejection by publications, delays in publication, rejection for presentation, or a less-preferred format for a presentation may adversely impact ~~our~~ ~~stock price, ability to raise capital, and business.~~

~~Our business may be affected by~~material adverse ~~scientific publications or editorial or discussant opinions.~~

We may from time to time publish data related to our research and development in peer-reviewed scientific publications or present data related to our research and development at scientific or other conferences. Editorials or discussants unrelated to us may provide opinionseffect on our ~~presented data unfavorable to us. In addition, scientific publications or presentations may be made which are critical~~business. The occurrence of any of these business disruptions could seriously harm our ~~science or research or the field of immunotherapy in general. This may adversely affect~~operations and financial condition and increase our ~~ability to raise necessary capital, complete preclinical studies, adequately manufacture drug product, obtain regulatory clearance for clinical trials,~~ ~~or approval for marketing,~~ ~~or interfere with our ability to market our product to patients~~costs and ~~physicians or achieve reimbursement from payors.~~

expenses.

Risks Related to Our Intellectual Property

If we are not able to obtain and enforce patent protection for our technology, including therapeutic candidates, therapeutic products, and platform ~~technolog~~y,technology, development of our therapeutic candidates and platform, and commercialization of our therapeutic products may be materially and adversely affected.

Our success depends in part on our ability to obtain and maintain patents and other forms of intellectual property rights, including in-licenses of intellectual property rights of others, for our technology, including platform technology and therapeutic candidates and products, methods used to manufacture our therapeutic candidates and products, and methods for treating patients using our therapeutic candidates and products, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights, and to operate without infringing upon the proprietary rights of others. Our scientific platform and substantially all of our intellectual property have been developed internally. As of ~~September~~June 30, ~~2017,~~2023, our patent portfolio consists of over 1155 granted patents and over 215 pending patent applications. We may not be able to apply for patents on certain aspects of our technology, including therapeutic candidates and products, in a timely fashion or at all. Any future patents we obtain may not be sufficiently broad to prevent others from using our technology or from developing competing therapeutics and technology. There is no guarantee that any of our pending patent applications will result in issued or granted patents, any of our issued or granted patents will not later be found to be invalid or unenforceable, or any issued or granted patents will include claims sufficiently broad to cover our technology, including platform technology and therapeutic candidates and products, or to provide meaningful protection from our competitors. Moreover, the patent position of pharmaceutical and biotechnology companies can be highly uncertain because it involves complex legal and factual questions.

We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent our current and future technology, including platform technology and therapeutic candidates and products, are covered by valid and enforceable patents or are effectively maintained as trade secrets. If third parties disclose or misappropriate our proprietary rights, it may materially and adversely impact our competitive position in the market.

The U.S. Patent and Trademark Office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other provisions during the patent process. There are situations in which

noncompliancecan resultin abandonmentor lapseof a patentor patentapplication,resultingin partialor completelossof patentrightsin therelevantjurisdiction. Patent offices may be affected by COVID-19 or other health epidemic shut-downs, resulting in, for example, non-essential administrative tasks being delayed or eliminated. This could affect patent rights, including the partial or complete loss of patent rights in jurisdictions such as the USPTO and international patent offices. In such an event,competitorsmightbe ableto enterthemarketearlierthanwould otherwisehave been thecase.~~The~~ Further, the standardsappliedby theUSPTOand foreignpatentofficesin grantingpatentsarenot alwaysapplieduniformly or predictably.For example,thereisno uniformworldwidepolicyregardingpatentablesubjectmatteror the scopeof claimsallowablein biotechnologyand pharmaceuticalpatents.As such, we do not know the degreeof futureprotectionwewillhave on our technology,including platform technology and therapeuticcandidatesand products. Whilewewillendeavorto tryto protectour technology,including platform technology and therapeuticcandidatesand products,with intellectualpropertyrightssuch as patents,as appropriate,theprocessof obtainingpatentsistime-consuming, expensive,and sometimesunpredictable,and wecan provideno assurancesour technology,including our platform technology, therapeuticcandidatesand products,willbe adequatelyprotectedin thefutureagainstunauthorizedusesor competingclaimsby thirdparties.

In addition, recent and future changes to the patent laws and to the rules of the USPTO ~~or other~~and foreign patent offices may have a significant impact on our ability to protect our technology, including therapeutic candidates and products, and enforce our intellectual property rights. For example, the Leahy-Smith America Invents Act enacted in 2011 involves significant changes in patent legislation. In addition, we cannot assure ~~you~~that court rulings or interpretations of any court decision will not adversely impact our patents or patent applications. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, there also may be uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, ~~and~~ the USPTO, or made in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents we might obtain in the future.

Moreover, beginning June 1, 2023, European applications have the option, upon grant of a patent, of requesting unitary effect and, thereby, obtaining a Unitary Patent which will provide uniform patent protection in certain Member States of the European Union. These Unitary Patents would be subject to the exclusive jurisdiction of the Unified Patent Court, or UPC. Beginning June 1, 2023, the UPC also has shared jurisdiction over previously-granted European Patents and later-granted European Patents that do not opt out of this UPC jurisdiction over the next seven to fourteen years. These are significant changes in European patent practice. As the UPC is a new court system, and there is no precedent established, there will be increased uncertainty for patent litigation that occurs before the UPC. We may choose to opt out of UPC jurisdiction for current and future European Patents and decline to request unitary effect for future European Patent grants.

The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability. Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, revocation, nullification, or derivation action in court or before patent offices or similar proceedings ~~for a given period~~ before or after allowance or grant, during which time third parties can raise objections against such initial grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the pending, allowed or granted claims thus attacked or may lose the allowed or granted claims altogether. Our patent risks include that:

•othersmay,or maybe ableto, make,use, offer to sell, or sellcompoundsthatarethesameas or similarto our therapeuticcandidatesand productsbut thatarenot coveredby theclaimsof thepatents we own or license;

•weor ourlicensors,collaborators,or any futurecollaboratorsmaynot be thefirstto filepatent applicationscoveringcertainaspectsof our technology,including our platform technology, therapeuticcandidatesand products;

•othersmayindependentlydevelopsimilaror alternativetechnologyor duplicateany of our technologywithoutinfringingour intellectualpropertyrights;

•a thirdpartymaychallengeour patentsand, ifchallenged,a courtmaynot hold that our patentsarevalid,enforceable,~~and non-infringing;~~

or that a thirdparty is infringing;

•a third party maychallengeour patentsin variouspatentofficesand, ifchallenged,wemay be compelledto limitthescopeof our pending, allowed~~or grantedclaimsor losetheallowed~~or granted claims or lose the allowed or granted claims altogether;

•any issuedpatentswe own or have licensedmaynot provideuswith any competitive advantages,or maybe challengedby thirdparties;

•wemaynot developadditionalproprietarytechnologiesthatarepatentable;

•the patentsof otherscouldharmour business;and

•ourcompetitorscouldconductresearchand developmentactivitiesin countrieswhere we do not or willnot have enforceablepatentrightsand thenuse theinformationlearnedfromsuch activitiesto developcompetitiveproductsforsalein majorcommercialmarketswhere we do not or willnot have enforceablepatent~~right~~s.

rights.

We may license patent rights from third-party owners or ~~licensees.~~licensors. If such owners or ~~licensees~~licensors do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be materially and adversely affected.

We may rely ~~and will continue to rely,~~ uponupon intellectual property rights licensed from third parties to protect our technology, including platform technology and therapeutic candidates and products. ~~We are a party to a number of licenses granting us rights to third-party~~To date, we have in-licensed some intellectual property, ~~necessary or useful for~~including on a non-exclusive basis intellectual property relating to commercially-available cell lines involved in the manufacture of our ~~business. We~~therapeutic candidates and products; however, we may also license additional third-party intellectual property in the ~~future.~~future, to protect our technology, including intellectual property relating to our platform technology and therapeutic candidates and products. Our success will depend in part on the ability of our licensors to obtain, maintain, and enforce patent protection for our licensed intellectual property, in particular those patents to which we have secured exclusive rights. Our licensors may elect not to prosecute, or may be unsuccessful in prosecuting, ~~the~~any patent applications licensed to us. Even if patents issue or are granted, our licensors may fail to maintain these patents, may determine not to pursue litigation against other companies infringing these patents, or may pursue litigation less aggressively than we would. Further, ~~substantially all of our existing~~any additional licenses ~~are~~we enter into may be non-exclusive and we may not be able to obtain exclusive rights, ~~in licenses obtained in the future,~~ which would potentially allow third parties to develop

competingproductsor technology.Withoutprotectionfor,or exclusiverightto, ~~the~~any intellectualpropertywe may license,othercompaniesmightbe ableto offersubstantiallyidentical~~products~~ or similar product(s) for sale,which couldadverselyaffectour competitivebusinesspositionand harmour businessprospects. In addition,wemay need to sublicense~~our~~ any rights we have under~~our~~ third-partylicensesto currentor futurecollaboratorsor any futurestrategicpartners.Any impairmentof thesesublicensedrightscouldresultin reducedrevenueunderor resultin terminationof an agreementby one or moreof our collaboratorsor any futurestrategicpartners.

Patent terms may be inadequate to protect our competitive position on our platform technology and therapeutic candidates and products for an adequate amount of time.

Patents have a limited lifespan. In the United States and abroad, if all maintenance fees and annuity fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest non-provisional filing date. The protection a patent affords is limited. Even if patents covering our products are obtained, once the patent life has expired, we may be open to competition from competitive products. Given the amount of time required for the development, testing and regulatory review of new products, patents protecting such products might expire before or shortly after such products are approved and commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

We may be unable to protect our patent intellectual property rights throughout the world.

Obtaining a valid and enforceable issued or granted patent covering our technology, including therapeutic candidates and products, in the United States and worldwide can be extremely costly. In jurisdictions where we have not obtained patent protection, competitors may use our technology, including our platform technology and therapeutic candidates and products, to develop their own products, and further, may commercialize such products in those jurisdictions and export otherwise infringing products to territories where we have not obtained patent protection. In certain instances, a competitor may be able to export otherwise infringing products in territories where we will obtain patent protection. In jurisdictions outside the United States where we will obtain patent protection, it may be more difficult to enforce a patent as compared to the United States. Competitor products may compete with our future products in jurisdictions where we do not or will not have issued or granted patents or where our issued or granted patent claims or other intellectual property rights are not sufficient to prevent competitor activities in these ~~jurisdiction~~s.jurisdictions. The legal systems of certain countries, particularly certain developing countries, make it difficult to enforce patents and such countries may not recognize other types of intellectual property protection, particularly relating to biopharmaceuticals. Geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors. This

could make it difficult for us to prevent the infringement of our patents or marketing of competing products in violation of our proprietary rights generally in certain jurisdictions. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

We generally file a provisional patent application first (a priority filing) at the USPTO. ~~A U.S. utility application and~~An international application under the Patent Cooperation Treaty, or PCT, ~~are~~is usually filed within twelve months after the priority filing, at times with a United States filing. Based on the PCT filing, national and regional patent applications may be filed in various international jurisdictions, such as ~~the European Union,~~in Europe, Japan, Australia, Canada, and ~~Canada.~~the United States. We have so far not filed for patent protection in all national and regional jurisdictions where such protection may be available. In addition, we may decide to abandon national and regional patent applications before they are granted. Finally, the grant proceeding of each national or regional patent is an independent proceeding which may lead to situations in which applications might in some jurisdictions be refused by the relevant registration authorities, while granted by others. It is also quite common that, depending on the country, various scopes of patent protection may be granted on the same therapeutic candidate, product, or technology. The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws in the United States, and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions. If we or our licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished, and we may face additional competition from others in those jurisdictions. Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business and results of operations may be adversely affected.

We or our licensors, collaborators, or any future strategic partners may become subject to ~~third party~~third-party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, delay or prevent the development of our therapeutic candidates and commercialization of our therapeutic products, or put our patents and other proprietary rights at risk.

We or our licensors, licensees, collaborators, or any future strategic partners may be subject to third-party claims for infringement or misappropriation of patent or other proprietary rights. We are generally obligated under our license or collaboration agreements to indemnify and hold harmless our licensors, licensees, or collaborators for damages arising from intellectual property infringement by us. If we or our licensors, licensees, collaborators, or any future strategic partners are found to infringe a ~~third-party~~third-party patent or other intellectual property rights, we could be required to pay damages, potentially including treble damages, if we are found to have willfully infringed. In addition, we or our licensors, licensees, collaborators, or any future strategic partners may choose to seek, or be required to seek, a license from a third party, which may not be available on acceptable terms, if at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to or from us. If we fail to obtain a required license, we or our licensee or collaborator, or any future licensee or collaborator, may be unable to effectively market therapeutic products based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations. In addition, we may find it necessary to pursue claims or initiate lawsuits to protect or enforce our patent or

otherintellectualpropertyrights.The costto usin defendingor initiatingany litigationor otherproceedingrelatingto patentor otherproprietaryrights,even ifresolvedin our favor,couldbe substantial,and litigationwould divertour management’sattention.Some of our competitorsmaybe ableto sustainthecostsof complexpatentlitigationmoreeffectivelythanwecan becausetheyhave substantiallygreaterresources.Uncertaintiesresultingfromtheinitiationand continuationof patentlitigationor otherproceedingscoulddelayourresearchand developmenteffortsand limitour abilityto continue our soperations.

Although we do not believe our technology infringes the intellectual property rights of others, we are aware of one or more patents or patent applications that may relate to our technology, and third parties may assert against our ~~claims~~products alleging infringement of their intellectual property rights regardless of whether their claims have merit. Infringement claims could harm our reputation, may result in the expenditure of significant resources to defend and resolve such claims, and could require us to pay monetary damages if we are found to have infringed the intellectual property rights of others.

If we were to initiate legal proceedings against a third party to enforce a patent covering our technology, including therapeutic candidates and products, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements,including for example, patent ineligibility, lack of novelty, lack of written description, obviousness, or non-enablement. Recent cases, for example, including

the recent United States Supreme Court decision in Amgen Inc. v. Sanofi, may impact the claim scope of biological therapeutic products, including certain of our therapeutic candidates and products. Grounds for an unenforceability assertion could be an allegation someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our technology, including our platform technology and therapeutic candidates and products. Such a loss of patent protection could have a material adverse impact on our business. Patents and other intellectual property rights also will not protect our technology, including our platform technology and therapeutic candidates and products, if competitors design around our protected technology, including our platform technology and therapeutic candidates and products, without legally infringing our patents or other intellectual property rights.

It is also possible we have failed to identify relevant ~~third-party~~ third-party patents or applications. For example, patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our technology, including our platform technology and therapeutic candidates and products, could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our technology, including our platform technology and therapeutic candidates and products. ~~Third party~~Third-party intellectual property rights holders may also actively bring infringement claims against us. We cannot guarantee we will be able to successfully settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable, and time-consuming litigation and may be prevented from, or experience substantial delays in, marketing our technology, including therapeutic candidates and products. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing our technology, including a therapeutic product, held to be infringing. We might, if possible, also be forced to redesign therapeutic candidates or products so we no longer infringe the ~~third party~~third-party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources we would otherwise be able to devote to our business.

If we ~~fail to comply with our obligations under~~do not obtain patent term extension and data exclusivity for any ~~license, collaboration,~~therapeutic candidate or ~~other agreements,~~product we may develop, our business may be ~~required~~materially harmed.

Depending upon the timing, duration, and specifics of any FDA marketing approval of any therapeutic candidate or product we may develop, one or more of our or in-licensed U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent term extension of up to ~~pay damages~~five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. Similar extensions as compensation for patent term lost during regulatory review processes are also available in certain foreign countries and territories, such as in Europe under a Supplementary Patent Certificate. However, we may not be granted an extension in the United States and/or foreign countries and territories because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could ~~lose intellectual property rights necessary for developing~~be less than we request. If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request, our competitors may obtain approval of competing products following our patent expiration, and ~~protecting~~ our technology, including our platform technology, therapeutic candidates, and therapeutic products, or we could lose certain rights to grant sublicenses, either of which could have a material adverse effect on ourbusiness, financial condition, results of operations, and ~~business prospects.~~

Our current licenses impose, and any future licenses we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement, and other obligations on us. growth prospects could be materially harmed.

If we breach any of these obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture, and sell products covered by the licensed technology or enable a competitor to gain access to the licensed technology. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on future sales of licensed products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in therapeutic products we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize therapeutic products, we may be unable to achieve or maintain profitability.

If~~we are~~unable to protectthe confidentialityof ourtradesecrets,ourbusinessand competitive positionwould be harmed.

In addition to seeking patent protection for certain aspects of our technology, including platform technology and therapeutic candidates and ~~product~~s,products, we also consider trade secrets, including confidential and unpatented know-how, important to the maintenance of our competitive position. We protect trade secrets and confidential and unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors, and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants obligating them to maintain confidentiality and assign their inventions to us. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. We also cannot guarantee that we have entered into such agreements with each

party that may have or has had access to our trade secrets or proprietary technology and processes. Enforcing a claim ~~that~~in the event of a party illegally ~~disclosed~~disclosing or ~~misappropriated~~misappropriating a trade secret is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, some courts in the United States and certain foreign jurisdictions are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

We are also subject both in the United States and outside the United States to various regulatory schemes regarding requests for the information we provide to regulatory authorities, which may include, in whole or in part, trade secrets or confidential commercial information. While we are likely to be notified in advance of any disclosure of such information and would likely object to such disclosure, there can be no assurance our challenge to the request would be successful.

We may be in the future subject to claims we or our employees or consultants have wrongfully used or disclosed alleged trade secrets of our employees’ or consultants’ former employers or their clients. These claims may be costly to defend and if we do not successfully do so, we may be required to pay monetary damages, may be prohibited from using some of our research and development and may lose valuable intellectual property rights or personnel.

Many of our employees were previously employed at universities or biotechnology or pharmaceutical companies, including our current and potential ~~competitors~~competitors. We may receive correspondence from other companies alleging the improper use or disclosure, and have received, and may in the future receive, correspondence from other companies regarding the use or disclosure, by certain of our employees who have previously been employed elsewhere in our industry, including with our competitors, of their former employer’s trade secrets or other proprietary information. Responding to these allegations can be costly and disruptive to our business, even when the allegations are without merit, and can be a distraction to management. We may be subject to claims in the future that our employees have, or we have, inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail in defending current or future claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, personnel, or the ability to use some of our research and development. A loss of intellectual property, key research personnel, or their work product could hamper our ability to commercialize, or prevent us from commercializing, our therapeutic candidates, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be materially and adversely affected.

Our trademarks or trade names may be challenged, infringed, circumvented, or declared generic or determined to be infringing on other marks. Any trademark litigation could be expensive. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, and our business may be materially and adversely affected.

Third parties may independently develop similar or superior technology.

There can be no assurance others will not independently develop, or have not already developed, similar or more advanced technologies than our technology or that others will not design around, or have not already designed around, aspects of our technology or our trade secrets developed therefrom. If third parties develop technology similar or superior to our technology, or they successfully design around our current or future technology, our competitive position, business prospects, and results of operations could be materially and adversely affected.

If we fail to comply with our obligations under any license, collaboration, or other agreements, we may be required to pay damages and could lose intellectual property rights necessary for developing and protecting our technology, including our platform technology, therapeutic candidates, and therapeutic products, or we could lose certain rights to grant sublicenses, either of which could have a material adverse effect on our results of operations and business prospects.

Any material future licenses we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement, and other obligations on us. If we breach any of these obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture, and sell or offer to sell products covered by the licensed technology or enable a competitor to gain access to the licensed technology. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a

result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, while we cannot currently determine the amount of the royalty obligations we may be required to pay on any future sales of licensed products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in therapeutic products we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize therapeutic products, we may be unable to achieve or maintain profitability.

Breaches of ourinternalcomputersystems,or thoseof ourcontractors, vendors,or consultants,mayplace ourpatentsor proprietaryrightsat risk.

The loss of clinical or preclinical data or data from any future clinical trial involving our technology, including therapeutic candidates and products, could result in delays in our development and regulatory filing efforts and significantly increase our costs. In addition, theft or other exposure of data may interfere with our ability to protect our intellectual property, including trade secrets, and other information critical to our operations. We have experienced in the past, and may experience in the future, unauthorized intrusions into our internal computer systems, including portions of our internal computer systems storing information related to our platform technology, therapeutic candidates and products, and we can provide no assurances that certain sensitive and proprietary information relating to one or more of our therapeutic candidates or products has not been, or will not in the future be, compromised. Although we have invested significant resources to enhance the security of our computer systems, there can be no assurances we will not experience additional unauthorized intrusions into our computer systems, or those of our CROs, vendors, contractors, and consultants, that we will successfully detect future unauthorized intrusions in a timely manner, or that future unauthorized intrusions will not result in material adverse effects on our financial condition, reputation, or business prospects. Payments related to the elimination of ransomware may materially affect our financial condition and results of operations.

Certain data breaches must also be reported to affected individuals and the government ~~and in some cases to the media,~~ under ~~provisions of HIPAA, as amended by HITECH, other U.S. federal and state law, and requirements of non-U.S. jurisdictions, including the European Union Data Protection Directive,~~applicable data protection laws, and financial penalties may also apply.

Risks Related to Government Regulation

We may be unable to obtain U.S. or foreign regulatory approval and, as a result, may be unable to commercialize our therapeutic candidates.

Our therapeutic candidates are subject to extensive governmental regulations relating to, among other things, research, development, testing, manufacture, quality control, approval, labeling, packaging, promotion, storage, record-keeping, advertising, distribution, sampling, pricing, sales and marketing, safety, post-approval monitoring and reporting, and export and import of drugs. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process are required to be completed successfully in the United States and in many foreign jurisdictions before a new therapeutic can be marketed. Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain, and subject to unanticipated delays. ItWe have not obtained regulatory approval for any therapeutic candidates, and it is possible none of the therapeutic candidates we may develop will obtain the regulatory approvals necessary for us or our collaborators to begin selling them.

We have very limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA as well as foreign regulatory authorities, such as the EMA. The time required to obtain FDA and foreign regulatory approvals is unpredictable but typically takes many years following the commencement of clinical trials, depending upon the type, complexity, and novelty of the therapeutic ~~candidate.~~candidate, and at the substantial discretion of the regulatory authorities. The standards the FDA and its foreign counterparts use when regulating us are not always applied predictably or uniformly and can change. Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, who could delay, limit, or prevent regulatory approval. We may also encounter unexpected delays or increased costs due to new government regulations, ~~for example, from~~ future legislation or administrative action, or from changes in the policy of FDA or foreign regulatory authorities during the period of product development, clinical trials, and regulatory review by the FDA or foreign regulatory authorities. It is impossible to predict whether legislative changes will be enacted, or whether FDA or foreign, ~~laws,~~ regulations, guidance, or interpretations will be changed, or what the impact of such changes, if any, may be.

Because the ~~therapeutics~~therapeutic candidates we are developing may represent a new class of therapeutics, ~~the FDA and its foreign counterparts have~~we are not ~~yet established~~aware of any definitive policies, practices, or guidelines that the FDA or its foreign counterparts have established in relation to these drugs. While we believe the therapeutic candidates we are currently developing are regulated as new biological products under the Public Health Service Act, or ~~PHS~~A,PHSA, the FDA could decide ~~to reclassify them, namely~~ to regulate them or other products we may develop as drugs under the Federal Food, Drug, and Cosmetic Act, or ~~FDC~~A.FDCA. The lack of policies, practices, or guidelines may hinder or slow review by the FDA or foreign regulatory authorities of any regulatory filings we may submit. Moreover, the FDA or foreign

regulatory authorities may respond to these submissions by defining requirements we may not have anticipated. Such responses could lead to significant delays in the clinical development of our therapeutic candidates. ~~In addition, because there may be approved treatments for some of the diseases for which we may seek approval, in order~~

Our therapeutic candidates could fail to receive regulatory approval for many reasons, including the following:

•the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

•we may ~~need~~be unable to demonstrate ~~through clinical trials~~to the satisfaction of the FDA or comparable foreign regulatory authorities that a therapeutic ~~candidates we develop to treat these diseases, if any, are not only~~candidate is safe and effective ~~but safer~~for its proposed indication;

•the results of clinical trials may not meet the level of statistical significance required by the FDA or ~~more effective than existing products.~~

comparable foreign regulatory authorities for approval;

•we may be unable to demonstrate that a therapeutic candidate’s clinical and other benefits outweigh its safety risks;

•the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

•the data collected from clinical trials of our therapeutic candidates may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States, the European Union or elsewhere;

•the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

•the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Any delay or failure in obtaining required approvals could have a material adverse effect on our ability to generate revenues from the particular therapeutic candidate for which we are seeking approval. The FDA, the EMA and other regulatory authorities have substantial discretion in the approval process, and in determining when or whether regulatory approval will be obtained for any of our therapeutic candidates. Even if we believe the data collected from preclinical and clinical trials of our therapeutic candidates are promising, such data may not be sufficient to support approval by the FDA, the EMA or any other regulatory authority. Furthermore, any regulatory approval to market a product may be subject to limitations on the approved uses for which we may market the product or in the product labeling or be subject to other restrictions. Regulatory authorities also may impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor

thesafetyor efficacyof thetherapeutic.In addition,theFDAhas theauthorityto requirea REMSplanas part of the approval of a ~~Biologics LicenseApplication, or~~BLA or ~~NewDrug Application, or~~NDA,NDA, or afterapproval,which mayimposefurther requirementsor restrictionson thedistributionor use of an approveddrug or biologic,such as limiting prescribingto certainphysiciansor medicalcentersthathave undergonespecializedtraining,limitingtreatment to patientswho meetcertainsafe-usecriteria,and requiringtreatedpatientsto enrollin a registry.These limitationsand restrictionsmaylimitthesizeof themarketforthetherapeuticand affectcoverageand reimbursementby third-partypayors.

We are also subject to numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing, marketing authorization, pricing, and third-party reimbursement. The foreign regulatory approval process varies among countries and may include all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. We are subject to regulation by foreign regulatory authorities, ethics committees, and other governmental entities with respect to the clinical trials we conduct or sponsor outside of the U.S. For example, the EU Clinical Trials Regulation, or CTR, became applicable on January 31, 2022, repealing the EU Clinical Trials Directive. The implementation of the CTR includes the implementation of the Clinical Trials Information System, a new clinical trial portal and database that will be maintained by the EMA in collaboration with the European Commission and the EU Member States. Complying with changes in regulatory requirements can incur additional costs, delay our clinical development plans, or expose us to greater liability if we are slow or unable to adapt to changes in existing requirements or new requirements or policies governing our business operations, including our clinical trials. Moreover, the time required to obtain approval may differ from that required to obtain FDA approval. Approval by the FDA does not ensure approval by regulatory authorities outside the U.S. and vice versa.

If we fail to obtain orphan drug designation or obtain or maintain orphan drug exclusivity for certain of our products, our competitors may sell products to treat the same conditions and our revenue may be reduced.

Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to treat a rare disease or condition, defined as a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. In addition, if a therapeutic product with orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the therapeutic product is entitled to orphan product exclusivity, which means the FDA may not approve any other applications to market the same therapeutic product for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity.

As discussed above, in Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021), the court disagreed with the FDA’s longstanding position that the orphan drug exclusivity only applies to the approved use or indication within an eligible disease, and not to all uses or indications within the entire disease or condition. On January 24, 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the court’s order in Catalyst, FDA intends to continue to apply its longstanding interpretation of the regulations to matters outside of the scope of the Catalyst order – that is, the agency will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved, which permits other sponsors to obtain approval of a drug for new uses or indications within the same orphan designated disease or condition that have not yet been approved. It is unclear how future litigation, legislation, agency decisions, and administrative actions will impact the scope of the orphan drug exclusivity.

As in the United States, we may apply for designation of a therapeutic candidate as an orphan drug for the treatment of a specific indication in the European Union before the application for marketing authorization is made. In the European Union, the EMA’s Committee for Orphan Medicinal Products, grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Union. Additionally, designation is granted for products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biological product or where there is no satisfactory method of diagnosis, prevention or treatment, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition. Sponsors of orphan drugs in the European Union can enjoy economic and marketing benefits, including reduction of fees or fee waivers and up to ten years of market exclusivity for the approved indication unless another applicant can show its therapeutic product is safer, more effective, or otherwise clinically superior to the orphan-designated therapeutic product. This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

We may seek orphan drug designation from the FDA and the EMA for certain of our product candidates. However, we may never receive such designation. Even if we are able to obtain orphan designation, we may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products. In addition, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition. Even after an orphan drug is approved, regulatory authorities may subsequently approve the same drug with the same active moiety for the same condition if they conclude that the later drug is safer, more effective, or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a product candidate nor gives the product candidate any advantage in the regulatory review or approval process. In addition, orphan drug exclusivity could block the approval of one of our therapeutic candidates if a competitor obtains approval of the same therapeutic product as defined by the FDA before we do, or if our therapeutic candidate is determined to be within the same class as the competitor’s therapeutic product for the same indication or disease.

The respective orphan designation and exclusivity frameworks in the United States and in the European Union are subject to change, and any such changes may affect our ability to obtain EU or U.S. orphan designations in the future.

If we or our existing or future collaborators, manufacturers, or service providers fail to comply with healthcare laws and regulations, we or such other parties could be subject to enforcement actions, which could adversely affect our ability to develop, market, and sell our therapeutics and may harm our reputation.

Although we do not currently have any products on the market, once we begin commercializing our therapeutic candidates, if approved, we will be subject to additional healthcare statutory and regulatory requirements and enforcement by the federal, state, and foreign governments of the jurisdictions in which we conduct our business. Healthcare providers, physicians, and third-party payors play a primary role in the recommendation and prescription of any therapeutic candidates for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud, abuse, and other healthcare laws and regulations constraining the business or financial arrangements and relationships through which we market, sell, and distribute the therapeutic candidates for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations include the following:

•theU.S.federalAnti-KickbackStatute,which prohibits,amongotherthings,personsfromsoliciting, receiving,offering,or providingremuneration,directlyor indirectly,to induceeitherthereferralof an individualfora healthcareitemor service,or thepurchasingor orderingof an itemor service,for which paymentmaybe made,in whole or in part,undera federalhealthcareprogramsuch as Medicare or Medicaid;

•theU.S.federalFalseClaimsAct, which imposescriminaland civilpenalties,includingthroughcivil whistlebloweror qui tamactions,againstindividualsor entitiesforknowingly presenting,or causingto be presented,to thefederalgovernment,falseor fraudulentclaimsforpaymentor makinga false statementto avoid,decrease,or concealan obligationto pay moneyto thefederalgovernment.In addition,thegovernmentmayasserta claimincludingitemsand servicesresultingfroma violationof thefederalAnti-KickbackStatuteconstitutesa falseor fraudulentclaimforpurposesof theFalse ClaimsAct;

~~HIPAA,All Payor Fraud Law,~~•state all-payor fraud laws, which ~~imposes~~impose criminaland civilliabilityforexecutinga schemeto defraudany healthcarebenefitprogram,or knowingly and willfullyfalsifying,concealing,or covering up a materialfactor makingany materiallyfalsestatementin connectionwith thedeliveryof or paymentforhealthcarebenefits,itemsor services;similarto thefederalAnti-KickbackStatute,a personor entitydoes not need to have actualknowledge of thestatuteor specificintentto violateitin orderto have committeda violation;

•HIPAA,HITECH,and ~~its~~their implementingregulations,which imposeobligationson certaincovered entityhealthcareproviders,healthplans,and healthcareclearinghousesas wellas theirbusiness associatesperformingcertainservicesinvolvingtheuse or disclosureof individuallyidentifiablehealth information,includingmandatorycontractualterms,with respectto safeguardingtheprivacy,security, and transmissionof individuallyidentifiablehealthinformation,and requirenotificationto affected individualsand regulatoryauthoritiesof certainbreachesof securityof individuallyidentifiablehealth information;

•thefederalPhysicianPaymentSunshineAct and ~~the~~its implementingregulations,alsoreferredto as “Open Payments,”~~issuedunderthePatientProtection~~ require applicable manufacturers of pharmaceutical and ~~AffordableCare Act,~~biological drugs, among other covered medical products, reimbursable under Medicare, Medicaid, or Children’s Health Insurance Programs to track and report to the CMS certain payments and transfers of value made in the previous year, including but not limited to, consulting fees, travel reimbursements, and research grants made to cover recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as ~~amended~~physician assistants and nurse practitioners, among others), and teaching hospitals, as well as information regarding physicians’ and their immediate family members’ ownership and investment interests in the applicable manufacturer, with limited exceptions; and

•analogous and similar state and foreign laws and regulations, such as, state anti-kickback and false claims laws potentially applicable to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the ~~HealthCare~~federal government in addition to requiring drug manufacturers to report information related to payments to physicians and ~~EducationAffordabilityReconciliationAct,~~other healthcare providers or ACA, ~~and any subsequent amending legislation or executive actions, which requiremanufacturersof pharmaceuticaland biologicaldrugsreimbursableunderMedicare,Medicaid,and Children’sHealth InsuranceProgramsto reportto theDepartmentof Healthand Human Servicesallconsultingfees, travelreimbursements,researchgrants,and otherpayments,transfersof valueor giftsmadeto physiciansand teachinghospitalswith limitedexceptions;and~~

marketing expenditures.

•

~~analogousstatelaws and regulations,such as, stateanti-kickbackand falseclaimslaws potentially applicableto salesor marketingarrangementsand claimsinvolvinghealthcareitemsor services reimbursedby non-governmentalthird-partypayors,includingprivateinsurers;and somestatelaws requirepharmaceuticalcompaniesto complywith the~~

~~pharmaceuticalindustry’svoluntarycompliance guidelinesand therelevantcomplianceguidancepromulgatedby thefederalgovernmentin additionto requiringdrug manufacturersto reportinformationrelatedto paymentsto physiciansand other healthcareprovidersor marketingexpenditures,and statelaws governingtheprivacyand securityof healthinformationin certaincircumstances,manyof which differfromeachotherin significantways and oftenarenot preemptedby HIPAA,thuscomplicatingcomplianceefforts.~~

Ensuring our future business arrangements with ~~third-parties~~third parties comply with applicable healthcare laws and regulations could involve substantial costs. If our operations are found to be in violation of any such requirements, we may be subject to penalties, including civil or criminal penalties, monetary damages, the curtailment or restructuring of our operations, or exclusion from participation in government contracting, healthcare reimbursement, or other government programs, including Medicare and Medicaid, any of which could adversely affect our financial results. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action against us for an alleged or suspected violation could cause our company to incur significant legal expenses and could

divert our management’s attention from the operation of our business, even if our defense is successful. In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time, and resources.

If we or our current or future collaborators, manufacturers, or service providers fail to comply with applicable federal, state, or foreign laws or regulations, we could be subject to enforcement actions, which could affect our ability to develop, market, and sell our therapeutics successfully and could harm our reputation and lead to reduced acceptance of our therapeutics by the market. These enforcement actions include, among others:

~~adverseregulatoryinspectionfindings;~~

•adverse regulatory inspection findings;

•warningor untitledletters;

•voluntaryproductrecallswith publicnotificationor medicalproductsafetyalertsto healthcare professionals;

•restrictionson, or prohibitionsagainst,marketingour therapeutics;

•restrictionson, or prohibitionsagainst,importationor exportationof our therapeutics;

•suspensionof reviewor refusalto approvependingapplicationsor supplementsto approved applications;

•exclusionfromparticipationin government-fundedhealthcareprograms;

•exclusionfromeligibilityfortheaward of governmentcontractsforour therapeutics;

•FDA debarment;

•suspension or withdrawal of therapeutic approvals;

•seizures or administrative detention of therapeutics;

•injunctions; and

•restitution, disgorgement of profits, or civil and criminal penalties and fines.

Enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of our therapeutic candidates.

The policies of the FDA or similar regulatory authorities may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. For example, in 2016, the 21st Century Cures Act, or Cures Act, was signed into law. The Cures Act, among other things, is intended to modernize the regulation of drugs and biologics and spur innovation, but it is still being implemented and its ultimate implementation is unclear. If we or our collaborators are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or our collaborators are not able to maintain regulatory compliance, our therapeutic candidates may not obtain or maintain regulatory approval, and we may not achieve or sustain profitability, which would adversely affect our business.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or executive or administrative action, either in the United States or abroad. The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability. For example, the Consolidated Appropriations Act, 2023, including the Food and Drug Omnibus Reform Act, or FDORA, was signed into law in December 2022. FDORA made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements. It is difficult to predict how current and future legislation, executive actions, and litigation, including the executive orders, will be implemented, and the extent to which they will impact our business, our clinical development, and the FDA’s and other agencies’ ability to exercise their regulatory authority, including FDA’s pre-approval inspections and timely review of any regulatory filings or applications we submit to the FDA. To the extent any legislative or executive actions impose constraints on FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

~~FDAdebarment;~~

~~suspensionor withdrawalof therapeuticapprovals;~~

~~seizuresor administrativedetentionof therapeutics;~~

~~injunctions;and~~

~~civiland criminalpenaltiesand fines.~~

Any therapeutics we develop may become subject to unfavorable pricing regulations, third-party coverage and reimbursement practices, or healthcare reform initiatives, thereby harming our business.

The regulations governing marketing approvals, pricing, coverage, and reimbursement for new drugs and biologics vary widely from country to country. Many countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. Although we intend to monitor these regulations, our programs are currently in the early stages of development and we will not be able to assess the impact of price regulations for a number of years. As a result, we might obtain regulatory approval for a product in a particular country but then be subject to price regulations delaying our commercial launch of the product and negatively impacting the revenues we are able to generate from the sale of the product in that country.

Our ability to commercialize any therapeutics successfully also will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers, and other organizations. However, there may be significant delays in obtaining coverage for newly-approved therapeutics. Moreover, eligibility for coverage does not necessarily signify a therapeutic will be reimbursed in all cases or at a rate covering our costs, including research, development, manufacture, sale, and distribution costs. Also, interim payments for new therapeutics, if applicable, may be insufficient to cover our costs and may not be made permanent. Thus, even if we succeed in

bringingone or moretherapeuticsto themarket,these~~therapeutics~~ products maynot be consideredcost-effective,and theamountreimbursedforany ~~therapeutics~~of them maybe insufficientto allowusto sell~~our therapeutics~~ them on a competitivebasis.Becauseour programsare~~in theearlystagesof development,we areunable~~at~~thistimeto determinetheircosteffectiveness,coverageprospect~~s~~, potential compendialistin~~g~~s, or thelikelylevelor methodof reimbursement,~~if~~covered.Increasingly,third-partypayors who reimbursepatientsor healthcareproviders,such as governmentand privateinsuranceplans,areseeking greaterupfrontdiscounts,additionalrebates,and otherconcessionsto reducethepricesfortherapeutics.~~If~~the pricewe areableto chargeforany therapeutics~~we~~develop,or thereimbursementprovidedforsuch products, isinadequat~~e~~, our returnon investmentcouldbe adverselyaffected.~~

We currently expect certain therapeutics we develop may need to be administered under the supervision of a physician on an outpatient basis. Under currently applicable U.S. law, certain drugs not usually self-administered (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B. Medicare Part B is part of original Medicare, the federal health care program providing health care benefits to the aged and disabled, and covers outpatient services and supplies, including certain pharmaceutical products medically necessary to treat a beneficiary’s health condition. Specifically, Medicare Part B coverage may be available for eligible beneficiaries when the following, among other requirements, have been satisfied:

~~theproduct~~is~~reasonableand necessaryforthediagnosisor treatmentof theillnessor injuryforwhich theproduct~~is~~administeredaccordingto acceptedstandardsof medicalpractice;~~

~~theproduct~~is~~typicallyfurnishedincidentto a physician’sservices;~~

~~theindicationforwhich theproductwillbe used isincludedor approvedforinclusionin certain~~

~~Medicare-designated pharmaceutical compendia (when used for an off-label use); and~~

~~theproducthas been approvedby theFDA.~~

Under current law, as a condition of receiving Medicare Part B reimbursement (the Medicare program generally covering physician-administered, outpatient drugs) for a manufacturer’s eligible drugs or biologicals, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate Program and the 340B Drug Pricing Program. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. Under the 340B Drug Pricing Program, the manufacturer must extend discounts to entities eligible to participate in the ~~program. Average prices for drugs may be reduced by mandatory discounts~~early stages of development, we are unable at this time to determine their cost effectiveness, coverage prospects, potential compendia listings, or ~~rebates required by government healthcare programs~~the likely level or ~~private payors and by any future relaxation~~method of laws presently restricting imports of drugs from countries where they may be sold at lower prices than in the United States. Reimbursement rates under Medicare Part B would depend in part on whether the newly approved product would be eligible for a unique billing code. Self-administered, outpatient drugs are typically reimbursed by Medicare under Medicare Part D, and drugs administered in an inpatient hospital setting are typically reimbursed under Medicare Part A under a bundled payment.reimbursement, if covered. It is equally difficult for us to predict how Medicare coverage and reimbursement policies will be applied to our products in the future, and coverage and reimbursement under different federal healthcare programs are not always consistent. Medicare reimbursement rates may also reflect budgetary constraints placed on the Medicare program.

Third-party payors often rely upon Medicare coverage policies and payment limitations in setting their own reimbursement rates. These coverage policies and limitations may rely, in part, on compendia listings for approved therapeutics. Our inability to promptly obtain relevant compendia listings, coverage, and adequate reimbursement from both government-funded and private payors for new therapeutics we develop and for which we obtain regulatory approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products, and our financial condition.

We believe the efforts of governments and third-party payors to contain or reduce the cost of healthcare, and legislative and regulatory proposals to broaden the availability of healthcare, will continue to affect the business and financial condition of pharmaceutical and biopharmaceutical companies. A number of legislative and regulatory changes in the healthcare system in the United States and other major healthcare markets have been proposed or enacted, and such efforts have expanded substantially in recent years. These developments could, directly or indirectly, affect our ability to sell our products, if approved, at a favorable price.

~~For example, in the U.S., in 2010, Congress passed the ACA, a sweeping law intended to broaden access to health insurance, reduce~~ In addition, third-party payors who reimburse patients or ~~constrain the growth of health spending, enhance remedies against fraud and abuse, add new transparency requirements for the~~ healthcare ~~and health insurance industries, impose new taxes and fees on the health industry and impose additional policy reforms.~~

~~Among theprovisionsof theACAaddressingcoverageand reimbursementof pharmaceuticalproducts,of importanceto our potentialtherapeuticcandidatesarethefollowing:~~

~~increasesto pharmaceuticalmanufacturerrebateliabilityundertheMedicaidDrug RebateProgramdue to an increasein theminimumbasicMedicaidrebateon mostbrandedprescriptiondrugsand the applicationof Medicaidrebateliabilityto drugsused in risk-basedMedicaidmanagedcareplans;~~

~~the expansionof the340B Drug PricingProgramto requirediscountsfor“coveredoutpatientdrugs” soldto certainchildren’shospitals,criticalaccesshospitals,freestandingcancerhospitals,ruralreferral centers,and solecommunityhospitals;~~

~~requirementsimposedon pharmaceuticalcompaniesto offerdiscountson brand-namedrugsto patientswho fallwithintheMedicarePartD coveragegap, commonlyreferredto as the“Donut Hole;”~~

~~requirementsimposedon pharmaceuticalcompaniesto pay an annualnon-tax-deductiblefeeto the federalgovernmentbasedon eachcompany’smarketshareof prioryeartotalsalesof brandeddrugsto certainfederalhealthcareprograms,~~providers, such as ~~Medicare,Medicaid,Departmentof VeteransAffairs,~~government and ~~Departmentof Defense.Since~~we~~currentlyexpect ourbrandedpharmaceuticalsalesto constitutea smallportionof thetotalfederalhealthcareprogrampharmaceuticalmarket,we do not currentlyexpectthisannualassessmentto have a materialimpacton our financialcondition;~~private insurance plans, are seeking greater upfront discounts, additional rebates, and

~~for therapeuticcandidatesclassifiedas biologics,marketingapprovalfora follow-onbiologic therapeuticmaynot becomeeffectiveuntil12 yearsafterthedateon which thereferenceinnovator biologictherapeuticwas firstlicensedby theFDA,with a possiblesix-monthextensionforpediatric therapeutics.Afterthisexclusivityends, itmaybe possibleforbiosimilarmanufacturersto enterthe market,which islikely~~ other concessions to reducethe~~pricing~~ prices for therapeutics. If the price we are able to charge for any therapeutics we develop, or the reimbursement provided for such ~~therapeuticsand~~products, is inadequate, our return on investment could~~affectour profitability~~if~~ourtherapeuticsareclassifiedas biologics.~~

be adversely affected.

~~Separately, pursuant~~

Pursuant to ~~the~~ health reform legislation and related initiatives, the Centers for Medicare and Medicaid Services, or CMS, are working with various healthcare providers to develop, refine, and implement Accountable Care Organizations, or ACOs, and other innovative models of care for Medicare and Medicaid beneficiaries, including the Bundled Payments for Care Improvement Initiative, the Comprehensive Primary Care Initiative, the Duals Demonstration, and other models. The continued development and expansion of ACOs and other innovative models of care will have an uncertain impact on any future reimbursement we may receive for approved therapeutics administered by such organizations.

In addition, in recent years, the U.S. Congress has enacted various laws seeking to reduce the federal debt level and contain healthcare expenditures. For example, as a result of the Budget Control Act of 2011 and the Bipartisan Budget Act of 2015, an annual 2% reduction to Medicare payments that took effect ~~on April 1,~~in 2013 and ~~has been~~will remain in effect through 2031, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through March 31, 2022. Under the Consolidated Appropriations Act, 2023, the 2% Medicare sequester is extended ~~through 2025.~~for the first six months of fiscal year 2032 and revises the sequester percentage up to 2% for fiscal years 2030 and 2031. These across-the-board spending cuts could adversely affect our future revenues, earnings, and cash flows.

There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program

reimbursement methodologies for drugs. For example, under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business. In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at increasing competition for prescription drugs. In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes. Various industry stakeholders, including pharmaceutical companies, the U.S. Chamber of Commerce, the National Infusion Center Association, the Global Colon Cancer Association, and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional. The ~~financial~~ impact of ~~U.S.~~these judicial challenges, legislative, executive, and administrative actions and any future healthcare ~~reform legislation~~measures and ~~executive orders~~ ~~over~~agency rules implemented by the ~~next few years will depend~~government on us and the pharmaceutical industry as a whole is unclear. Any reduction in reimbursement from Medicare or other government programs may result in a reduction in payments from private payors. Additionally, a number of ~~factors, including the policies reflected in implementing regulations~~states are considering or have recently enacted state drug price transparency and ~~guidance and changes in sales volumes for therapeutics affected by the legislation.~~

~~From time to time, legislation is drafted, introduced, and passed in Congress~~reporting laws that could ~~significantly change the statutory provisions governing coverage, reimbursement,~~substantially increase our compliance burdens and ~~marketing~~expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of ~~products regulated by CMS~~our products.

The implementation of cost containment measures or other ~~government agencies. In addition~~healthcare reforms may prevent us from being able to ~~new legislation, CMS coverage~~generate revenue, attain profitability or commercialize our product candidates. The impact of legislative, executive, and reimbursement policies are often revised or interpreted in ways that may significantly affect our business and our products. In particular, we expect the new Administration and Congress will seek to modify, repeal, or otherwise invalidate all, or certain provisionsadministrative actions of the ~~U.S.~~Biden administration on us and the biopharmaceutical industry as a whole is unclear. We expect that additional state and federal healthcare reform ~~legislation. Since taking office, President Trump has continued to support~~measures will be adopted in the ~~repeal~~future, any of ~~all~~which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or ~~portions of~~additional pricing pressures.

The healthcare industry is heavily regulated in the ~~ACA. President Trump has also issued an executive order in which he stated it is his Administration’s policy to seek~~U.S. at the ~~prompt repeal of the ACA~~federal, state, and local levels and in which he directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of the ACA to the maximum extent permitted by law. A number of additional executive orders have been issued affecting, or potentially affecting, the ACA and other ~~aspects of the healthcare market~~jurisdictions in ~~the United States. There is~~ ~~a high degree of~~ uncertainty with respect to the impact President Trump’s Administration and Congress may have, and any changes will likely take time to unfold. Such reforms could have an adverse effect on anticipated revenues from therapeutic candidates we may successfully develop and for which we may ~~obtain regulatory approval~~conduct trials or other activities, and our failure to comply with applicable requirements may subject us to penalties and negatively affect our ~~overall~~ financial condition and ability to develop therapeutic candidates. However, we cannot predict the ultimate content, timing, or effect of any healthcare reform legislation or executive orders or the impact of potential legislation ~~and executive orders~~ ~~on us.~~

~~The healthcareindustry~~is~~heavilyregulatedin the U.S.at the federal,state,and locallevels,and our failureto complywith applicablerequirementsmaysubjectus to penaltiesand negativelyaffectour financial~~condition.

As a healthcare company, our operations, clinical trial activities, and interactions with healthcare providers ~~may~~will be subject to extensive regulation in the United States, particularly if we receive FDA approval for any of our products in the ~~future.~~future, and we may be subject to laws and regulations in other jurisdictions as we conduct clinical trials or engage in other activities in foreign jurisdictions. For example, if we receive FDA approval for a therapeutic for which reimbursement is available under a federal healthcare program, it would be subject to a variety of federal laws and regulations, including those prohibiting the filing of false or improper claims for payment by federal healthcare programs, prohibiting unlawful inducements for the referral of business reimbursable by federal healthcare programs, and requiring disclosure of certain payments orand other transfers of value made to covered recipients in the previous year, including U.S.-licensed physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching ~~hospital~~s~~. We are not able to predict how third parties will interpret these laws~~hospitals, as well as information regarding certain physicians’ and ~~apply~~their immediate family members’ ownership and investment interests in the applicable ~~governmental guidance and may challenge our practices and activities under one or more of these laws.~~manufacturer with limited exceptions. If our past or present operations, or those of our contractors or agents who conduct business on our behalf, are found to be in violation of any of these laws, we could be subject to enforcement action, government investigation, civil and criminal penalties, which could hurt our business, operations, and financial condition.

It is not always possible to identify and deter misconduct by parties we may contract with, including employees, contractors, collaborators, CROs, and suppliers, and the precautions we take to detect and prevent misconduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations.

Similarly, ~~HIPAA prohibits,~~some state laws prohibit, among other offenses, knowingly and willfully executing a scheme to defraud any health care benefit program, including private payors, or falsifying, concealing, or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for items or services under a health care benefit program. ~~To the extent we act as a business associate to a healthcare provider engaging in electronic transactions, we~~We may also be subject to the privacy and security provisions of HIPAA, as amended by HITECH,

which restricts the use and disclosure of patient-identifiable health information, mandates the adoption of standards relating to the privacy and security of patient-identifiable health information, and requires the reporting of certain security breaches to healthcare provider customers with respect to such information. Additionally, many states have enacted similar laws imposing more stringent requirements on entities like us. Failure to comply with applicable laws and regulations could result in substantial penalties and adversely affect our financial condition and results of operations.

Complying with new regulatory requirements and changes in the laws and regulations will increase our compliance cost and exposure to potential liability.

Additionally, the collection and use of health data in the EU is governed by the General Data Protection Regulation, or GDPR, which extends the geographical scope of EU data protection law to non-EU entities under certain conditions and imposes substantial obligations upon companies and new rights for individuals. Further, state and foreign laws may apply generally to the privacy and security of information we maintain, and may differ from each other in significant ways, thus complicating compliance efforts, as discussed in the risk factor below titled, “Data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information, and actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations and financial condition.”

Data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information, and actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations and financial condition.

The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, regulations, and other actual and asserted obligations governing the collection, use, disclosure, retention, and security of personal information, such as information collected or otherwise processed in connection with clinical trials in the U.S. and abroad. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or other actual or asserted obligations, or any perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations, standards, and obligations is high and is likely to increase in the future. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures, our contractual obligations governing our processing of personal information, or any other standards or other actual or asserted obligations, could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our business, results of operation, and financial condition.

In conducting and/or enrolling patients in our current or future clinical trials, we are subject to restrictions relating to privacy, data protection and data security and may be subject to additional restrictions as our clinical operations expand. For example, the collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the European Economic Area, or EEA, including personal health data, is subject to the GDPR. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches (initially to supervisory authorities and, if the breach is serious enough, to individuals), and taking certain measures when engaging third-party processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater, for the most serious of violations. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. In addition, the GDPR includes restrictions on cross-border data transfers. Certain aspects of cross-border data transfers under the GDPR are uncertain as the result of legal proceedings in the EU, including a July 2020 decision by the Court of Justice for the European Union, or CJEU, that invalidated the EU-U.S. Privacy Shield and, to some extent, called into question the efficacy and legality of using standard contractual clauses approved by the European Commission, or SCCs. To address certain concerns of the CJEU, the European Commission issued revised SCCs in June 2021 that are required to be implemented. Regulatory guidance and other developments relating to cross-border personal data transfers, including the necessity of putting in place those revised SCCs and UK SCCs, as discussed below, may increase the complexity of transferring personal data across borders and may require us to engage in additional contractual negotiations and to modify our policies and practices relating to the transfer and other processing of personal data. The GDPR increased our responsibility and liability in relation to personal data that we process where such processing is subject to the

GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries.

In the United Kingdom, or UK, the Data Protection Act of 2018 is effective along with a version of the GDPR referred to as the UK GDPR. Collectively, the Data Protection Act of 2018 and the UK GDPR authorize significant fines, up to the greater of £17.5 million or 4% of global turnover, and expose us to two parallel regimes and other potentially divergent enforcement actions for certain violations. Further, aspects of data protection in the UK remain uncertain. On June 28, 2021, the European Commission issued an adequacy decision under the GDPR and the Law Enforcement Directive, pursuant to which personal data generally may be transferred from the EU to the UK without restriction; however, this adequacy decision is subject to a four-year “sunset” period, after which the European Commission’s adequacy decision may be renewed, and this decision may be revoked or modified in the interim. Additionally, on February 2, 2022, the UK’s Information Commissioner’s Office issued new standard contractual clauses to support personal data transfers out of the UK, or the UK SCCs. The UK SCCs became effective March 21, 2022 and, similar to the EU SCCs, are required to be implemented. We may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing personal data on our behalf or localize certain personal data.

Other jurisdictions also increasingly maintain laws and regulations addressing privacy, data protection, and information security. We may incur liabilities, expenses, costs, and other operational losses under GDPR and local laws of applicable EU member states, Switzerland, the UK, and other regions in connection with any measures we take to comply with them. Working to comply with the GDPR and other laws and regulations to which we are subject in Europe and other regions outside the United States relating to privacy, data protection, and information security will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our activities in those regions.

In addition, in California, the California Consumer Privacy Act, or CCPA, creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households. The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action in data breach situations. The CCPA went into effect on January 1, 2020, and the California Attorney General commenced enforcement actions for violations on July 1, 2020. Moreover, the California Privacy Rights Act, or CPRA, was approved by California voters in the November 3, 2020 election. The CPRA significantly modified the CCPA, creating obligations beginning on January 1, 2022, and becoming effective January 1, 2023. The CPRA creates further uncertainty and may require us to incur additional costs and expenses. The CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the United States. The CCPA has prompted a number of proposals for federal and state privacy legislation. For example, Colorado, Utah, Virginia and Connecticut all have enacted general privacy legislation that has become, or will become, effective in 2023, Florida, Montana, Oregon, and Texas have enacted general privacy legislation that becomes effective in 2024; Tennessee and Iowa have enacted similar legislation that becomes effective in 2025 and 2026, respectively. The U.S. federal government also is contemplating federal privacy legislation. Washington also has enacted the My Health, My Data Act, which, among other things, provides for a private right of action. While certain of these laws exempt some data regulated by HIPAA and certain clinical trial data, they may increase our compliance costs and potential liability. These and other new laws that may be proposed or enacted could require us to modify our policies and practices and may increase our potential liability and adversely affect our business.

Compliance with U.S. and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Any actual or alleged failure to comply with U.S. or international laws and regulations relating to privacy, data protection, and data security could result in governmental investigations, proceedings and enforcement actions (which could include civil or criminal penalties), private litigation or adverse publicity, harm to our reputation, and could negatively affect our operating results and business. Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information or impose other obligations or restrictions in connection with our use, retention and other processing of information, and we may otherwise face contractual restrictions applicable to our use, retention, and other processing of information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

Our ability to obtain services, reimbursement, or funding from the federal government may be impacted by possible reductions in federal spending.

The U.S. federal budget remains in flux ~~which~~and could, among other things, cut Medicare payments to providers. The Medicare program is frequently mentioned as a target for spending cuts. The full impact on our business of any future cuts in Medicare or other programs is uncertain. ~~In addition, we~~We cannot predict ~~any impact President Trump’s~~the extent of legislative, executive, and administrative actions of the Biden administration ~~and Congress may~~will have on us and the ~~federal budget.~~biopharmaceutical industry as a whole. If federal spending is reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies such as the FDA or the National Institutes of Health to continue to function at current levels. Amounts allocated to federal grants and contracts may be reduced or eliminated. These reductions may also impact the ability of relevant agencies to timely review and approve drug research and development, manufacturing, and marketing activities, which may delay our ability to develop, market, and sell any therapeutics we may develop.

If any of our therapeutic candidates receives marketing approval and we or others later identify undesirable side effects caused by the therapeutic ~~candidate,~~product, our ability to market and derive revenue from the therapeutic ~~candidates~~products could be compromised.

In the event any of our therapeutic candidates receive regulatory approval and we or others identify undesirable side effects, adverse events, or other problems caused by one of our therapeutics, any of the following adverse events could occur, which could result in the loss of significant revenue to us and materially and adversely affect our results of operations and business:

•regulatoryauthoritiesmaywithdrawtheirapprovalof theproduct and require us to take the product off the market or seizetheproduct;

•wemayneed to recallthetherapeuticor changetheway thetherapeuticisadministeredto patients;

•additionalrestrictionsmaybe imposedon themarketing and promotion of theparticulartherapeuticor the manufacturingprocessesforthetherapeuticor any componentthereof;

•wemaynot be ableto secureor maintainadequatecoverageand reimbursementforour proprietarytherapeutic~~candidates~~ products fromgovernment~~(including~~ (including U.S.federalhealthcareprograms)and privatepayors;

•wemayloseor seeadversealterationsto compendialistingsor treatmentprotocolsspecifiedby accountablecareorganizations;

•wemaybe subjectto fines,restitution,or disgorgementof profitsor revenues,injunctions,or the impositionof civilpenaltiesor criminalprosecution;

•regulatoryauthoritiesmayrequiretheadditionof labelingstatements,such as a “blackbox” warning, or equivalent,or a contraindication;

•

~~regulatoryauthoritiesmayrequire~~us~~to implementa REMS,or to conductpost-marketingstudies or clinicaltrialsand surveillanceto monitorthesafetyor efficacyof theproduct;~~

•regulatory authorities may require us to implement a REMS plan, or to conduct post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product;

•wemaybe requiredto createa MedicationGuide outliningtherisksof such sideeffectsfor distributionto patients;

•wecouldbe sued and heldliableforharmcausedto patients;

•thetherapeuticmaybecomelesscompetitive;and

•our reputation may suffer.

~~ourreputation~~Our therapeutic candidates for which we intend to seek approval as biologic products may~~suffer.~~

face competition sooner than anticipated.

~~Significant developments stemming~~

The Patient Protection and Affordable Care Act, signed into law in 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. 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 ~~United Kingdom’s recent referendum~~date on ~~membership in~~which the ~~European Union~~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 the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the

safety, purity and potency of their product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. While it is uncertain when such processes intended to implement BPCIA may be fully adopted by the FDA, any such processes could have a material adverse effect on ~~us.~~

On June 23, 2016, the United Kingdom held a referendum and voted in favor of leaving the European Union. This referendum has created political and economic uncertainty, particularly in the United Kingdom and the European Union, and this uncertainty may last for years. Any business we conduct, now and in the future incommercial prospects for our biological products.

We believe that any of our therapeutic candidates approved as a biological product under a BLA should qualify for the ~~United Kingdom, the European Union, and worldwide~~12-year period of exclusivity. However, there is a risk that this exclusivity could be ~~affected during this period of uncertainty, and perhaps longer, by~~shortened due to congressional action or otherwise, or that the ~~impact~~FDA will not consider our therapeutic candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Other aspects of the ~~United Kingdom’s referendum. There are many ways in which our business could be affected, only~~BPCIA, some of which ~~we can identify as~~may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the ~~date of this filing.~~

~~The referendum, and the likely withdrawal of the United Kingdom from the European Union it triggers, has caused and, along with events potentially occurring in the future as~~extent to which a consequence of the United Kingdom’s withdrawal, including the possible breakup of the United Kingdom, may continue to cause significant volatility in global financial markets, including in global currency and debt markets. This volatility could cause a slowdown in economic activity in the United Kingdom, Europe, or globally, which could adversely affect our operating results and growth prospects. In addition, our business couldbiosimilar, once approved, will be negatively affected by new trade agreements between the United Kingdom and other countries, including the United States, and by the possible imposition of trade or other regulatory barriers in the United Kingdom.

~~It is currently unknown how regulations affecting clinical trials, the approval~~substituted for any one of our ~~future~~reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and ~~the sale~~will depend on a number of ~~these products will be affected by this referendum either in the United Kingdom or elsewhere in Europe.~~

~~These possible negative impacts,~~marketplace and ~~others resulting from the United Kingdom’s actual or threatened withdrawal from the EU, may adversely affect our operating results and growth prospects.~~

regulatory factors that are still developing.

Risks Related to Ownership of Our Common Stock

Our stock price may be volatile, and an active, liquid, and orderly trading market may not develop for our common stock. As a result, stockholders may not be able to resell shares at or above their purchase price.

Although our common stock is listed on ~~NASDAQ,~~the Nasdaq Global Market, an active trading market for our common stock ~~may not develop or, if it develops,~~ may not be sustained. The lack of an active market may impair the ability of our stockholders to sell their shares at the time they wish to sell them or at a price that they consider reasonable, which may reduce the fair market value of their shares. Further, an inactive market may also impair our ability to raise capital by selling our common stock should we determine additional funding is required.

The market price of our common stock could be subject to significant fluctuations. Market prices for securities of early-stage pharmaceutical, biotechnology, and other life sciences companies have historically been particularly volatile. Some of the factors that may cause the market price of our common stock to fluctuate ~~following the merger~~ include:

•our and our collaborators’ abilityto obtainregulatoryapprovalsforproductcandidates,and delaysor failuresto obtainsuch approvals;

•thefailureof any of ourproductcandidates,ifapproved,to achieve commercialsuccess;

•issuesin manufacturingourapprovedproducts,ifany, or productcandidates;

•theresultsof current,and any future,preclinicalor clinicaltrialsof our productcandidates;

•our ability to achieve development milestones and receive associated milestone payments pursuant to the terms of our collaboration agreements;

•theentryinto,or terminationof, key agreements,includingkey licensing,collaboration or acquisition agreements;

•theinitiation of, or materialdevelopmentsin, or conclusionof litigationto enforceor defendany of ourintellectualpropertyrightsor defendagainsttheintellectualpropertyrightsof others;

•announcementsby commercialpartnersor competitorsof new commercialproducts,clinicalprogress (orthelackthereof),significantcontracts,commercialrelationships,or capitalcommitments;

•

~~adversepublicityrelatingto ourmarkets,includingwith respectto other productsand potentialproductsin such markets;~~

•adverse publicity relating to our markets, including with respect to other products and potential products in such markets;

•adverse publicity about our company, employees, therapeutic candidates, and/or therapeutic products in the media or on social media;

•the impact of pandemics, other health epidemics and outbreaks, including COVID-19, on our company or the economy generally;

•the introductionof technologicalinnovationsor new therapiescompetingwith our potentialproducts;

•thelossof key employees;

•changesin estimatesor recommendationsby securitiesanalysts,ifany, who coverourcommonstock;

•general and industry-specific economic conditions potentially affecting our research and development expenditures;

~~generaland industry-specificeconomicconditionspotentiallyaffectingour researchand developmentexpenditures;~~

•changesin thestructureof healthcarepaymentsystems;

•unanticipated serious safety concerns related to the use of any of our product candidates;

•failureto meetor exceedfinancialand developmentprojectionswemay provideto thepublic;

•failureto meetor exceedthefinancialand developmentprojectionsof theinvestmentcommunity;

•theperceptionof thepharmaceuticalindustryby thepublic,legislators,regulators,and theinvestment community;

•adverseregulatorydecisions;

•disputesor otherdevelopmentsrelatingto proprietaryrights,includingpatents,litigationmatters,and ourabilityto obtainpatentprotectionforour~~technologie~~s;

technologies;

•threats of, commencement of, or our involvement in, litigation;

•salesof ourcommonstockby usor ourstockholdersin thefuture;

•tradingvolumeof ourcommonstock;

•additional instability in the domestic or global banking system;

•period-to-periodfluctuationsin ourfinancialresults; and

•the other factors described in this ~~“Risk Factors”~~“Risk Factors” section.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies or the biotechnology sector. These broad market fluctuations may also adversely affect the trading price of our common stock.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our business and reputation.

Our officers and directors, and their respective affiliates, have ~~a controlling~~significant influence over our business affairs and may make business decisions with which stockholders disagree and which may adversely affect the value of their investment.

Our executive officers and directors together with their respective affiliates, beneficially own approximately ~~68%~~42% of our ~~outstanding~~ common stock as of ~~September~~June 30, ~~2017.~~2023. As a result, if some of these persons or entities act together, they will have the ability to exercise significant influence over matters submitted to the stockholders for approval, including the election of directors, amendments to the certificate of incorporation and bylaws and the approval of any strategic transaction requiring the approval of the stockholders. These actions may be taken even if they are opposed by other stockholders. This concentration of ownership may also have the effect of delaying or preventing a change of control of our company or discouraging others from making tender offers for our shares, which could prevent our stockholders from receiving a premium for their shares. Some of these persons or entities who make up our principal stockholders may have interests different from other stockholders. The significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors’ perception that conflicts of interest may exist or arise.

Future sales, or the perception of future sales, of a substantial amount of our common stock could depress the trading price of our common stock.

Our stock price could decline as a result of sales of a large number of shares of our common stock or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

~~The resale of approximately 10.3 million shares, or approximately 74% of our outstanding shares, is currently prohibited as a result of lock-up agreements entered into by certain of our stockholders~~

For example, in connection with our ~~merger~~July 2020 private placement, we entered into a registration rights agreement with ~~Alpine Immune Sciences, Inc. in July 2017; however, subject~~the private placement investors that required us to ~~applicable securities law restrictions, these~~prepare and file a resale registration statement, which was declared effective by the SEC on August 18, 2020 and permits the resale by the private placement investors of approximately 5.1 million shares ~~will be able to be sold~~of our common stock as well as approximately 2.6 million shares of common stock issuable upon the exercise of prefunded warrants and warrants issued in the ~~public market~~

July 2020 private placement. Additionally, in connection with our September 2021 private placement, we entered into a registration rights agreement with the private placement investors that required us to prepare and file a resale registration statement, which was declared effective by the SEC on November 19, 2021 and permits the resale by the private placement investors of approximately 6.5 million shares of our common stock as well as approximately 3.2 million shares of common stock issuable upon the exercise of prefunded warrants issued in the September 2021 private placement. We have in the past and may again in the future sell shares of our common stock to strategic partners in connection with

~~beginning January 21, 2018. In addition, the~~

collaboration agreements, as we did in December 2021 in connection with our agreement with Horizon. The shares subject to outstanding options and warrants ~~of which options and warrants to purchase 583,114 shares and 1,559 shares, respectively, were exercisable as of September 30, 2017,~~ and the shares reserved for future issuance under our equity incentive plans will become available for sale immediately upon the exercise of such options and ~~the expiration~~warrants. As of ~~any applicable market stand-off or lock-up agreements.~~

~~Certain pre-merger stockholders of Nivalis have rights, subject~~June 30, 2023 we had exercisable options and warrants (including prefunded warrants) to ~~some conditions, to require us to file registration statements covering the sale of their~~purchase 4.5 million shares ~~or to include their~~and 6.9 million shares, ~~in registration statements that we may file for ourselves or other stockholders.~~ respectively.

We also register the offer and sale of all shares of common stock that we may issue under our equity incentive plans. Once we register the offer and sale of shares for the holders of registration rights and option holders, they can be freely sold in the public market upon issuance, subject to any related lock-up agreements or applicable securities laws.

~~The JOBS~~

In addition, in the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition, litigation settlement, employee arrangements or otherwise. Any such future issuance, including any additional issuances pursuant to our “at the market” equity offering sales agreement with TD Cowen, could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

We have broad discretion over the use of the proceeds to us from our financing activities and may apply the proceeds to uses that do not improve our operating results or the value of your securities.

We have broad discretion over the use of proceeds to us from our financing activities and our stockholders rely solely on the judgment of our board of directors and management regarding the application of these proceeds. Our use of proceeds may not improve our operating results or increase the value of our common stock. Any failure to apply these proceeds effectively could have a material adverse effect on our business, delay the development of our product candidates and cause the market price of our common stock to decline.

Anti-takeover provisions in our charter documents and under Delaware or Washington law could discourage, delay or prevent a change in control of our company, limit attempts by our stockholders to replace or remove our current management and may affect the trading price of our common stock.

Our corporate documents contain provisions that may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our stock. Among other things, our certificate of incorporation and bylaws:

•stagger the terms of our board of directors and require 66 and 2/3% stockholder voting to remove directors, who may only be removed for cause;

•provide that the authorized number of directors may be changed only by resolution of the board of directors;

•provide that all vacancies, including newly-created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

•authorize our board of directors to issue “blank check” preferred stock and to determine the rights and preferences of those shares, which may be senior to our common stock, without prior stockholder approval;

•establish advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholders’ meetings;

•prohibit our stockholders from calling a special meeting and prohibit stockholders from acting by written consent;

•require 66 and 2/3% stockholder voting to effect certain amendments to our certificate of incorporation and bylaws; and

•prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act ~~allows~~may apply to us under certain circumstances now or in the future. These provisions prohibit a “target corporation” from engaging in any of a broad range of business combinations with any stockholder constituting an “acquiring person” for a period of five years following the date on which the stockholder became an “acquiring person.” These provisions could discourage, delay or prevent a transaction

involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and cause us to ~~postpone the date~~take other corporate actions our stockholders desire.

Claims for indemnification by ~~which we must comply with certain laws~~our directors and ~~regulations intended~~officers may reduce our available funds to ~~protect investors~~satisfy successful third-party claims against us and tomay reduce the amount of ~~information~~available cash.

Our amended and restated certificate of incorporation provides that we will indemnify our directors to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the DGCL, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:

•We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

•We may, in our ~~reports filed~~discretion, indemnify other employees and agents in those circumstances where indemnification is permitted by applicable law.

•We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, unless the ~~SEC.~~ proceeding is excluded pursuant to the amended and restated bylaws, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

•We ~~cannot~~will not be obligated pursuant to our amended and restated bylaws to indemnify any director or officer in connection with any proceeding (or part thereof) (a) for which payment has actually been made to such person, (b) for an accounting or disgorgement of profits pursuant to Section 16(b) of the Exchange Act, (c) for any reimbursement of the Company by such person of any bonus or other incentive-based or equity-based compensation, (d) initiated by such person unless the proceeding was authorized in the specific case by our board of directors or such indemnification is required to be made pursuant to our amended and restated bylaws or applicable law, nor (e) if prohibited by applicable law.

•The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.

•We may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to our directors or officers.

As a result, if we are required to indemnify one or more of our directors or officers, it may reduce our available funds to satisfy successful third-party claims against us, may reduce the amount of available cash and may have a material adverse effect on our business and financial condition.

Our amended and restated certificate of incorporation and our amended and restated bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our amended and restated certificate of incorporation and/or our amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, stockholders, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein and the claim not being one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction. Any person purchasing or otherwise acquiring any interest in any shares of our common stock shall be deemed to have notice of and to have consented to this provision of our amended and restated certificate of incorporation. In addition, our amended and restated bylaws provide that the U.S. federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

These choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action, if ~~this~~successful, might benefit our stockholders. Stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The Court of Chancery may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. Alternatively, if a court were to find these choice of forum provisions in our amended and restated certificate of incorporation and amended and restated bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations.

We do not expect to pay any dividends on our common stock for the foreseeable future.

We currently expect to retain all future earnings, if any, for future operations and expansion, and have no current plans to pay any cash dividends to holders of our common stock for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. As a result, stockholders may not receive any return on an investment in our common stock unless stockholders sell our common stock for a price greater than that which they paid for it.

The Nasdaq Global Market may delist our common stock from its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our shares of common stock are listed on the Nasdaq Global Market under the trading symbol “ALPN.” Our securities may fail to meet the continued listing requirements to be listed on the Nasdaq Global Market. If Nasdaq delists our shares of common stock from trading on its exchange, we could face significant material adverse consequences, including:

•significant impairment of the liquidity for our common stock, which may substantially decrease the market price of our common stock;

•a limited availability of market quotations for our securities;

•a determination that our common stock qualifies as a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

•a limited amount of news and analyst coverage for our company; and

•a decreased ability to issue additional securities or obtain additional financing in the future.

Risks Related to Our Financial Reporting and Disclosure

We are a smaller reporting company, and any decision on our part to comply only with reduced reporting and disclosure ~~will~~requirements applicable to such companies could make our common stock less attractive to investors.

~~The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies.~~

We are a “smaller reporting company,” Asas defined in the ~~JOBS~~Securities Exchange Act of 1934, as amended, or the Exchange Act. For as long as we ~~qualify as an “emerging growth company”~~continue to be a smaller reporting company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and ~~could~~proxy statements.

We will remain ~~an “emerging growth company” until as late as December 31, 2020. For~~a smaller reporting company so long as, ~~we are an “emerging growth company,” we will, among other things:~~

~~not be requiredto complywith theauditorattestationrequirements~~as of ~~Section404(b)of Sarbanes- Oxley;~~

~~not be requiredto hold a nonbindingadvisorystockholdervoteon executivecompensationpursuantto Section14A~~June 30 of the~~Exchange Act;~~

preceding year, (i) the market value of our shares of common stock held by non-affiliates, or our public float, is less than $250 million; or (ii) we have annual revenues less than $100 million and either we have no public float or our public float is less than $700 million.

~~not be requiredto seekstockholderapprovalof any goldenparachutepaymentsnot previously approvedpursuantto Section14A of theExchange Act;~~

~~be exemptfromany ruleadoptedby thePublicCompany AccountingOversightBoard, requiring mandatoryauditfirmrotationor a supplementalauditordiscussionand analysis;and~~

~~be subjectto reduceddisclosureobligationsregardingexecutivecompensationin ourperiodic reportsand proxy statements.~~

We have previously decided to opt out of an extended transition period under the JOBS Act that permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Our decision is irrevocable. As a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other companies.

~~Furthermore, if~~If we take advantage of some or all of the reduced disclosure requirements ~~above,~~available to smaller reporting companies, investors may find our common stock less attractive, which may result in a less active trading market for our common stock and greater stock price volatility.

For so long as we are a smaller reporting company and not classified as an “accelerated filer” or “large accelerated filer” pursuant to SEC rules, we will continue to be exempt from the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of The ~~NASDAQ~~Nasdaq Stock Market LLC. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.

We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of ~~its~~our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. An internal control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the internal control system’s objectives will be met. Because of the inherent limitations in all internal control systems, no evaluation of internal controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all internal control issues and instances of fraud will be detected.

If we are not able to comply with the requirements of Section 404 of the ~~Sarbanes- Oxley~~Sarbanes-Oxley Act, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of our common stock could decline and we could be subject to sanctions or investigations by The ~~NASDAQ~~Nasdaq Stock Market LLC, the SEC, or other regulatory authorities.

Ourdisclosurecontrolsand proceduresmaynot preventor detectallerrorsor actsof fraud.

Our disclosure controls and procedures are designed to reasonably ensure that information required to be disclosed by us in reports we file or submits under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures as well as internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are and will be met. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

We will continue to incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

We will incur significant legal, accounting, and other expenses ~~Alpine did not incur as a private company, including costs~~ associated with public company reporting requirements. We will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as new rules implemented by the SEC and The ~~NASDAQ~~Nasdaq Stock Market LLC. Although ~~the JOBS Act~~our status as a smaller reporting company may for a limited period of time somewhat lessen the cost of complying with these additional regulatory and other requirements, we nonetheless expect that these rules and regulations will increase our legal and financial compliance costs and to make some activities more time-consuming and ~~costly. For example, our management team will consist of the executive officers of Alpine prior to the merger, some of whom may not have previously managed and operated a public company. These~~costlier. Our executive officers and other personnel will need to devote substantial time to ~~gaining expertise regarding~~oversee our operations as a public company and compliance with applicable laws and regulations. These rules and regulations may also make it difficult and expensive for us to obtain directors and officer’s liability insurance. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers of our company, which may adversely affect investor confidence in us and could cause our business or stock price to suffer.

~~Anti-takeover provisions~~

General Risk Factors

Changes in accounting rules and regulations, or interpretations thereof, could result in unfavorable accounting charges or require us to change our ~~charter documents~~compensation policies.

Accounting methods and ~~under Delaware~~policies for biopharmaceutical companies, including policies governing revenue recognition, research and development and related expenses, and accounting for stock-based compensation, are subject to review, interpretation, and guidance from our auditors and relevant accounting authorities, including the SEC. Changes to accounting methods or ~~Washington law could discourage, delay~~policies, or ~~prevent a~~interpretations thereof, may require us to reclassify, restate, or otherwise change ~~in control of~~or revise our ~~company, limit attempts by our stockholders to replace or remove our current management and may affect the trading price of our common stock.~~

financial statements.

~~staggerthetermsof ourboardof directorsand require66 and 2/3%stockholdervotingto remove directors,who mayonly be removedforcause;~~

Environmental, social and governance matters may impact our business and reputation.

~~provide~~Companies are increasingly being judged by their performance on a variety of environmental, social and governance, or ESG, matters, which are considered to contribute to the long-term sustainability of companies’ performance.

A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the ~~authorized number~~importance of such ESG measures to their investment decisions. Topics considered in such assessments include, among others, the role of the company’s board of directors ~~may~~in supervising various ESG issues and board diversity.

In light of investors’ increased focus on ESG matters, there can be ~~changed only by resolution of the board of directors;~~

provide that all vacancies, including newly-created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

~~authorizeourboardof directorsto issue“blankcheck”preferredstockand to determinetherights and preferencesof thoseshares,which maybe seniorto ourcommonstock,withoutprior stockholderapproval;~~

~~establishadvancenoticerequirementsfornominatingdirectorsand proposingmattersto be votedon by stockholders~~at~~stockholders’meetings;~~

~~prohibitourstockholdersfromcallinga specialmeetingand prohibitstockholdersfromactingby writtenconsent;~~

~~require66 and 2/3%stockholdervotingto effectcertainamendmentsto ourcertificateof incorporationand bylaws;and~~

~~prohibitcumulativevotingin theelectionof directors,which limitstheabilityof minoritystockholders to electdirectorcandidates.~~

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances now or in the future. These provisions prohibit a “target corporation” from engaging in any of a broad range of business combinations with any stockholder constituting an “acquiring

~~person” for a period of five years following the date on which the stockholder became an “acquiring person.” These provisionscoulddiscourage,delayor preventa transactioninvolvinga changein controlof our company. These provisionscouldalsodiscourageproxy contestsand make~~it~~moredifficultforstockholdersto elect directorsof theirchoosingand cause~~us~~to takeothercorporateactionsourstockholdersdesire.~~

~~Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of available cash.~~

~~Our amended and restated certificate of incorporation provides~~no certainty that we will ~~indemnify our directors to the fullest extent permitted by Delaware law.~~

~~In addition, as permitted by Section 145 of the DGCL, our amended and restated bylaws and our indemnification agreements~~manage such issues successfully, or that we ~~have entered into with our directors and officers provide that:~~

we~~willindemnifyourdirectorsand officersforserving~~us~~in thosecapacitiesor forserving otherbusinessenterprises~~at~~ourrequest,to thefullestextentpermittedby Delawarelaw. Delaware law providesthata corporationmayindemnifysuch person~~if~~such personactedin good faithand in a mannersuch personreasonablybelievedto be in or not opposed to thebestinterestsof thecorporation and, with respectto any criminalproceeding,had no reasonablecauseto believesuch person’sconduct was unlawful.~~

we~~may,in ourdiscretion,indemnifyotheremployeesand agentsin thosecircumstanceswhere indemnification~~is~~permittedby applicablelaw.~~

we~~arerequiredto advanceexpenses,as incurred,to ourdirectorsand officersin connectionwith defendinga proceeding,exceptthatsuch directorsor officersshallundertaketo repaysuch advancesif it~~is~~ultimatelydeterminedthatsuch person~~is~~not entitledto indemnification.~~

we~~willnot be obligatedpursuantto ouramendedand restatedbylaws to indemnifyany directoror officerin connectionwith any proceeding(orpartthereof)initiatedby such personunlessthe proceedingwas authorizedin thespecificcaseby ourboardof directorsor such indemnificationis requiredto be madepursuantto ouramendedand restatedbylaws.~~

~~The rightsconferredin ouramendedand restatedbylaws arenot exclusive,and weare authorizedto enterintoindemnificationagreementswith ourdirectors,officers,employeesand agentsand to obtaininsuranceto indemnifysuch persons.~~

we~~maynot retroactivelyamendouramendedand restatedbylaw provisionsto reduceour indemnificationobligationsto ourdirectorsor officers.~~

As a result, if we are required to indemnify one or more of its directors or officers, it may reduce our available funds to satisfy successful third-party claims against us, may reduce the amount of available cash and may have a material adverse effect on our business and financial condition.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

~~Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware~~ will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties namedsuccessfully meet expectations as defendants therein and the claim not being one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction. Any person purchasing or otherwise acquiring any interest in any shares of our common stock shall be deemed to have notice of and to have consented to this provision of our amended and restated certificate of incorporation. This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders. Stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The Court of Chancery may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our ~~stockholders. Alternatively, if a court were to find~~proper role. Any failure or perceived failure by us in this ~~provision of our~~

amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, whichregard could have a material adverse effect on our reputation and on our business, share price, financial condition, or results of ~~operations.~~

~~We do not expect to pay any dividends on our common stock for~~operations, including the ~~foreseeable future.~~

~~We currently expect to retain all future earnings, if any, for future operations and expansion, and have no current plans to pay any cash dividends to holders~~sustainability of our common stock for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. As a result, stockholders may not receive any return on an investment in our common stock unless stockholders sell our common stock for a price greater than that which they paid for it.

business over time.

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. Equity research analysts may elect not to provide research coverage of our common stock or discontinue existing research coverage, and such lack of research coverage may adversely affect the market price of our common stock. We do not have any control over the analysts, or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of us or fails to publish reports regularly, demand for our common stock could decrease, which in turn could cause our stock price or trading volume to decline.

~~NASDAQ may delist our common stock from its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.~~

Our common shares are listed on NASDAQ under the trading symbol “ALPN.” Our securities may fail to meet the continued listing requirements to be listed on NASDAQ. If NASDAQ delists our common shares from trading on its exchange, we could face significant material adverse consequences, including:

~~significant impairment of the liquidity for our common stock, which may substantially decrease the market price of our common stock;~~

~~a limited availability of market quotations for our securities;~~

a determination that our common stock qualifies as a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

~~a limited amount of news and analyst coverage for our company; and~~

~~a decreased ability to issue additional securities or obtain additional financing in the future.~~

Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds~~

~~None.~~

Proceeds.

Warrant Exercises

On April 13, 2023, we issued 201,972 shares of our common stock, $0.001 par value per share, or the April Warrant Net Exercise Shares, to warrant holders upon their exercise of outstanding prefunded warrants to purchase an aggregate of 202,000 shares of our common stock, $0.001 par value per share, pursuant to a net exercise mechanism under the warrants. Each prefunded warrant had an exercise price of $0.001 per share. The issuances of the April Warrant Net Exercise Shares were exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) thereof as an exchange with an existing security holder where no commission or other remuneration is paid or given for soliciting such exchange.

On May 10, 2023, we issued 34,595 shares of our common stock, $0.001 par value per share, or the May Warrant Net Exercise Shares, to warrant holders upon their exercise of outstanding prefunded warrants to purchase an aggregate of 34,600 shares of our common stock, $0.001 par value per share, pursuant to a net exercise mechanism under the warrants. Each prefunded warrant had an exercise price of $0.001 per share. The issuances of the May Warrant Net Exercise Shares were exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) thereof as an exchange with an existing security holder where no commission or other remuneration is paid or given for soliciting such exchange.

Item 3. Defaults Upon Senior ~~Securities~~

Securities.

None.

Item 4. Mine Safety ~~Disclosures~~

Disclosures.

Not applicable.

Item 5. Other Information

None.

Item 6. ~~Exhibits~~

Exhibits.

Exhibit
Number

Exhibit Description

Incorporation by Reference

Filed
Herewith

Form

File No.

Exhibit

Filing
Date

3.1

Amended and Restated Certificate of Incorporation of the Registrant, as amended

8-K

001-37449

3.1

June 14, 2023

3.2

Amended and Restated Bylaws of the Registrant

8-K

001-37449

3.1

January 26, 2023

10.1

Sales Agreement, dated as of April 28, 2023, between Alpine Immune Sciences, Inc. and Cowen and Company, LLC.

S-3

333-271517

1.2

April 28, 2023

10.2+

Employment Agreement, dated as of January 1, 2020, by and between the Registrant and Remy Durand M.D., Ph.D.

10-Q

001-37449

10.2

May 11, 2023

31.1

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2

Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1*

Certification of Principal Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350

32.2*

Certification of Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Linkbase Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover page formatted as Inline XBRL and contained in Exhibit 101

Indicates a management contract or a compensatory plan, contract or arrangement.

~~Exhibit~~

~~Number~~

~~Exhibit Description~~

~~Incorporation by Reference~~

~~Filed Herewith~~

~~Form~~

~~Date~~

~~Number~~

~~2.1~~

~~Agreement and Plan of Merger and Reorganization, dated as of April 18, 2017, by and among Nivalis Therapeutics, Inc., Nautilus Merger Sub, Inc. and Alpine Immune Sciences, Inc.~~^†

~~8-K~~

~~4/18/2017~~

~~001-37449~~

~~3.1~~

~~Amended and Restated Certificate of Incorporation of the Registrant~~

~~S-8~~

~~6/25/2015~~

~~333-205220~~

~~3.2~~

~~Certificate of Amendment to the Amended and Restated Certificate of Incorporation~~

~~8-K~~

~~7/25/2017~~

~~001-37449~~

~~3.3~~

~~Certificate of Amendment to the Amended and Restated Certificate of Incorporation~~

~~8-K~~

~~7/25/2017~~

~~001-37449~~

~~10.1~~

~~Separation and Release Agreement between R. Michael Carruthers and Nivalis Therapeutics, Inc.~~

~~8-K~~

~~7/20/2017~~

~~001-37449~~

~~10.2~~

~~Separation and Release Agreement between Janice Troha and Nivalis Therapeutics, Inc.~~

~~8-K~~

~~7/20/2017~~

~~001-37449~~

~~31.1~~

~~Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended~~

~~31.2~~

~~Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended~~

32.1*

~~Certification of Principal Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350~~

32.2*

~~Certification of Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350~~

~~101.INS~~

~~XBRL Instance Document~~

~~101.SCH~~

~~XBRL Taxonomy Extension Schema Linkbase Document~~

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~

~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~

~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase Document~~

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Alpine Immune Sciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

^†	~~A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.~~

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALPINE IMMUNE SCIENCES, INC.

Date: ~~November 13, 2017~~

August 14, 2023

~~By:~~

By:

/s/ Mitchell H. Gold,

M.D.

~~Name:~~

Name:

Mitchell H. Gold,

M.D.

~~Title:~~

Title:

Executive Chairman and Chief Executive Officer

ALPINE IMMUNE SCIENCES, INC.

Date: ~~November 13, 2017~~

August 14, 2023

~~By:~~

By:

/s/ Paul Rickey

~~Name:~~

Name:

Paul Rickey

~~Title:~~

Title:

Senior Vice President and Chief Financial Officer

	Convertible Preferred Stock						Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital		Loss			Deficit			Equity

Balance, December 31, 2016		4,311,770		$	11,535			608,701	$	—	$	144	$	—		$	(1,601	)	$	10,078
Issuance of Series A-1 convertible preferred stock		4,989,663			37,666			—		—		—		—			—			37,666
Conversion of convertible preferred stock to common stock		(9,301,433	)		(49,201	)		9,301,433		1		49,200		—			—			—
Common stock acquired in business combination		—			—			3,914,058		—		38,103		—			—			38,103
Conversion of warrant liability to equity		—			—			—		—		52		—			—			52
Exercise of stock options and common stock warrants		—			—			57,453		—		22		—			—			22
Stock-based compensation		—			—			—		—		528		—			—			528
Unrealized loss on investments		—			—			—		—		—		(12	)		—			(12	)
Net loss		—			—			—		—		—		—			(3,465	)		(3,465	)
Balance, September 30, 2017		—		$	—			13,881,645	$	1	$	88,049	$	(12	)	$	(5,066	)	$	82,972

Outstanding Nivalis common stock		3,914,058
Per share fair value of Nivalis common stock	$	9.60
Outstanding Nivalis stock options		421,992
Weighted average per share fair value of Nivalis stock options	$	1.25
Total fair value of consideration (in 000's)	$	38,103

	Preliminary Fair Value
Assets:
Cash and cash equivalents	$	31,130
Marketable securities		12,952
IPR&D		1,453
Total assets acquired		45,535
Liabilities:
Accrued expenses		(384	)
Deferred tax liability		(509	)
Total liabilities assumed		(893	)
Bargain purchase gain		(6,539	)
Total	$	38,103