Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(MarkOne)

For the fiscal year ended December 31, 20192021

OR

FOR THE TRANSITION PERIOD FROM TO

Commission File Number001-36361

Aravive, Inc.

(Exact name of Registrant as specified in its Charter)

River Oaks Tower

3730 Kirby Drive, Suite 1200

Houston, Texas 77098

(Address of principal executive offices)

(936) 355-1910

(Registrant’sRegistrant’s Telephone Number, including area code)

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES  Yes  ☐    NO      No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    YES  Yes  ☐    NO      No  ☒

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    YES  Yes  ☒    NO      No  ☐

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on The Nasdaq Global Select Market on June 28, 2019,30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, was $45,315,713.$89,127,600.

The number of shares of registrant’s Common Stock outstanding as of March 16, 202025, 2022 was 15,015,932.21,094,357.

Documents incorporated by reference: None

Table of Contents

PART I

GENERAL

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PART I

GENERAL

Unless otherwise indicated, all references to “Aravive,” “we,” “us,” “our” or the “Company” in this Annual Report on Form 10-K refer to Aravive, Inc.(the combined company formerly known as Versartis, and our wholly owned subsidiary, Aravive Biologics, Inc.) and references to “Versartis, Inc.” or “Private Aravive” refer to those respective companies prior to the completion of the Merger.

“Aravive®” and our other registered and common law trade names, trademarks and service marks are the property of Aravive, Inc. Other trade names, trademarks and service marks used in this Annual Report on Form 10-K are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Annual Report on Form 10-K may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

We may announce material business and financial information to our investors using our investor relations website at http://ir.aravive.com/investors/financial-information. We therefore encourage investors and others interested in Aravive to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission or the SEC,(the “SEC”), webcasts, press releases and conference calls. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended or the(the “Securities Act”,) and Section 21E of the Securities Exchange Act of 1934, as amended or the Exchange Act.(the "Exchange Act"). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included under Part I, Item 1A below. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

This Annual Report on Form 10-K also contains market data related to our business and industry. These market data include projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may harm on our business, results of operations, financial condition and the market price of our common stock.

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Item 1. Business.

Merger of Versartis, Inc. and Aravive Biologics, Inc.Summary Risk Factors

On October 12, 2018, we, then known as Versartis, Inc. and Aravive Biologics, Inc. or Private Aravive, completed

The following is a merger and reorganization, or the Merger, pursuant to which Private Aravive survived as our wholly owned subsidiary.  In connection with the completionsummary of the Merger, on October 15, 2018, we changedkey risks relating to the Company. A more detailed description of each of the risks can be found below in Item 1A. Risk Factors.

Risks related to our name from Versartis, Inc.financial position and capital requirements

Our operating results may fluctuate significantly

Risks Related To Our Business

Risks Related to “Aravive, Inc.”Clinical Development, Regulatory Approval and on October 16, 2018, we effected a reverse splitCommercialization

Risks Related to Our Intellectual Property

Risks Related to the ownership of our common stock at a ratio

Item1. Business.

Overview

Aravive, Inc. was incorporated on December 10, 2008 in the Reverse Split. On October 16, 2018,State of Delaware. Aravive Biologics, Inc. (“Aravive Biologics”) our common stock began trading on the Nasdaq Global Market under the symbol “ARAV.” Unless otherwise stated, all share and per share amounts for all periods presentedwholly owned subsidiary was incorporated in this Annual Report on Form 10-K have been adjusted to reflect the Reverse Split.

Overview

We are2007. Aravive is a clinical-stage biopharmaceutical company developing treatments designed to halt the progression of life-threatening diseases, including cancer and fibrosis.

Our lead product candidate, AVB-500,batiraxcept (formerly AVB-500), is an ultrahigh-affinity, decoy protein that targets the GAS6-AXL signaling pathway by binding GAS6.pathway. By capturing serum GAS6, AVB-500batiraxcept starves the AXL pathway of its signal, potentially halting the biological programming that promotes disease progression. AXL receptor signaling plays an important role in multiple types of malignancies by promoting metastasis, cancer cell survival, resistance to treatments, and immune suppression. The GAS6-AXL signaling pathway also plays a significant role in fibrogenesis.

Our current development program benefits from the availability of a proprietary serum-based biomarker that we expect will help accelerateaccelerated batiraxcept drug development by allowing us to select a pharmacologically active dose.dose and may potentially identify the cancer patients that have the best chance of responding to batiraxcept.

In July 2016, Aravive Biologics was approved for a $20.0 million Product Development Award from the Cancer Prevention and Research Institute of Texas (“CPRIT Grant”). The CPRIT Grant was expected to allow Aravive Biologics to develop the product candidate referenced above through clinical trials. The CPRIT Grant was effective as of June 1, 2016 and terminated on November 30, 2019. Aravive Biologics’ royalty and other obligations, including its obligation to repay the disbursed grant proceeds under certain circumstances, survive the termination of the agreement. The CPRIT Grant was subject to customary CPRIT funding conditions including a matching funds requirement where Aravive Biologics matched 50% of funding from the CPRIT Grant. Consequently, Aravive Biologics was required to raise $10.0 million in matching funds over the three-year project. Aravive Biologics raised all its required $10.0 million in matching funds.

Aravive Biologics’ award from CPRIT requires it to pay CPRIT a portion of its revenues from sales of certain products, or received from its licensees or sublicensees, at tiered percentages of revenue in the low- to mid-single digits until the aggregate amount of such payments equals 400% of the grant award proceeds, and thereafter at a rate of less than one percent for as long as Aravive Biologics maintains government exclusivity. In addition, the grant contract also contains a provision that provides for repayment to CPRIT of the full amount of the grant proceeds under certain specified circumstances involving relocation of Aravive Biologics’ principal place of business outside Texas.

In our completed Phase 1 clinical trial in healthy volunteers with our clinical lead product candidate, AVB-500,batiraxcept, we have demonstrated proof of mechanism for AVB-500batiraxcept in neutralizing GAS6. Importantly, AVB-500batiraxcept had a favorable safety profile preclinically and in the first in human trial and Phase 1b clinical trial in healthy volunteers. cancer patients.

In August 2018, the U.S. Food and Drug Administration (“FDA”) designated as a Fast Track development program the investigation of batiraxcept for platinum-resistant recurrent ovarian cancer ("PROC").

In December 2018, we initiated thea Phase 1b portion of a Phase 1b/2 clinical trial of AVB-500batiraxcept combined with standard of care therapies in patients with platinum-resistant ovarianPROC for which it reported results in July 2020.

In April 2020, we entered into a license and collaboration agreement with WuXi Biologics (Hong Kong) Limited (“WuXi”), the objective of which is to identify and develop novel high-affinity bispecific antibodies against CCN2, also known as connective tissue growth factor ("CTGF"), implicated in cancer and are currently enrollingfibrosis, and identified from a similar target discovery screen that identified the expansion cohortsignificance of the AXL/GAS6 pathway in cancer. The goal is to generate a best-in-class therapeutic targeting desmoplasia and tumor growth for initial investigation in the clinic in 2023.

In November 2020, we entered into a collaboration and license agreement with 3D Medicines Inc. ("3D Medicines") (the “Agreement” or the “3D Medicine Agreement”), whereby the Company granted 3D Medicines an exclusive license to develop and commercialize products that contain batiraxcept as the sole drug substance for the diagnosis, treatment or prevention of human oncological diseases, in mainland China, Taiwan, Hong Kong and Macau (the "Territory") for an upfront cash payment of $12 million. During the second quarter of 2021, we received a $6 million development milestone from 3D Medicines, for completing our first clinical milestone with 3D Medicines, dosing the first patient in our Phase 1b.3 trial of batiraxcept in PROC. Based upon this event, we received a $6 million cash payment during the second quarter of 2021. In August 2018,2021, we received a $3 million development milestone from 3D Medicines, based on the FDA granted fast track designation to AVB-500Center for platinum-resistant recurrent ovarian cancer. In January 2020, we announced thatDrug Evaluation ("CDE") of the FDA has cleared ourChina National Medical Products Administration ("NMPA") approval of the Investigational New Drug (IND) application for investigation("IND") submitted by 3D Medicines to participate in our international batiraxcept Phase 3 PROC clinical trial.

During the fourth quarter of AVB-500, in2020, we initiated the treatmentPhase 1b portion of our second oncology indication,Phase 1b/2 trial of batiraxcept in clear cell renal cell carcinoma (ccRCC).(“ccRCC”) and we dosed our first patient in the trial in March 2021.

During the first quarter of 2021, we initiated a registrational Phase 3 trial of batiraxcept in PROC and we dosed our first patient in the trial in April 2021.

In May 2021, we initiated the Phase 1b portion of our Phase 1b/2 trial of batiraxcept in first-line pancreatic adenocarcinoma, and we dosed our first patient in the trial in August 2021.

In June 2021, we announced positive initial safety, pharmacokinetic, and pharmacodynamic results from the Phase 1b portion of the Phase 1b/2 clinical trial in ccRCC in 3 patients dosed with 15mg/kg of batiraxcept. Based on the pharmacokinetics (“PK”), pharmacodynamics, and safety data at 15mg/kg of batiraxcept, and approval by the Data and Safety Monitoring Board ("DSMB"), we announced plans to expand the dosing of 15mg/kg of batiraxcept to additional patients to determine the potential of initiating the Phase 2 portion with this dose. We also announced plans to continue to investigate higher doses of batiraxcept in the Phase 1b to obtain additional safety, PK, and pharmacodynamics information.

In October 2021, the European Medicines Agency (“EMA”) granted orphan drug designation for batiraxcept for the treatment of ovarian cancer, following a recommendation from the Committee for Orphan Medicinal Products.

In November 2021, we announced positive preliminary safety, pharmacokinetic, and pharmacodynamic data for 18 patients and clinical activity data for 16 evaluable patients from the Phase 1b trial evaluating batiraxcept in combination with cabozantinib for treatment of ccRCC.

In January 2022, we provided updated safety, pharmacokinetic, and pharmacodynamic data encompassing a total of 26 patients and updated clinical activity data encompassing a total of 23 patients from the Phase 1b trial evaluating batiraxcept in combination with cabozantinib for treatment of ccRCC.  We also provided clinical activity data for 6 patients in a trial evaluating batiraxcept in combination with gemcitabine and nab-paclitaxel (Abraxane®) in patients with advanced or metastatic pancreatic adenocarcinoma eligible to receive gemcitabine and nab-paclitaxel as first-line treatment.

In March 2022, we announced updated safety and clinical activity data from the 26 patients from the Phase 1b trial evaluating batiraxcept in combination with cabozantinib for treatment of ccRCC.  We also provided updated clinical activity for 13 patients in a trial evaluating batiraxcept in combination with gemcitabine and nab-paclitaxel (Abraxane®) in first-line pancreatic adenocarcinoma patients. Additionally, we announced that the interim analysis from the P3 PROC trial had been eliminated as we had confidence that the study would enroll the required number of bevacizumab naïve patients to balance the bevacizumab populations without an interim analysis. We are in the process of communicating with the FDA regarding changes to the analysis plan.

In 2016, PrivateFigure 1: Aravive was approved for a $20 million Product Development Award from the Cancer Prevention & Research Institute of Texas, or CPRIT, which is one of the largest single grants that CPRIT has awarded to date based on information published on CPRIT’s website. All our revenue for the years ended December 31, 2019 and 2018 was grant revenue received from CPRIT.Pipeline

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Phase 1 Clinical Trial

In 2018, we completed our Phase 1 clinical trial with our lead protein, AVB-500, in 42 dosed normal healthy volunteers. Subjects in the Phase 1 trial were given single ascending intravenous, or IV, doses and 4 weekly repeat IV doses of AVB-500. The primary objective of the trial was to evaluate the safety and tolerability in healthy subjects of intravenously administered AVB-500. Secondary objectives were to characterize the pharmacokinetics and pharmacodynamics of intravenously administered AVB-500 over a range of dose levels and at a single dose level (5mg/kg) for a total of 4 weekly doses.

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There were no adverse events, or AEs, classified as serious and no dose-related AEs. Treatment-emergent AEs were generally mild, transient, and self-limiting. No anti-drug antibodies were noted. As anticipated from preclinical studies, a maximum tolerated dose was not reached and AVB-500 was well-tolerated across all doses (1-10mg/kg single doses and 4 weekly 5mg/kg doses). The clinical trial met the safety and tolerability endpoints for the trial and demonstrated clinical proof-of-mechanism for AVB-500 at all doses in neutralizing GAS6, as all doses tested in human subjects suppressed serum GAS6 for at least one week. Serum GAS6 levels were suppressed until 22 and 29 days following the 5 mg/kg and 10 mg/kg doses, respectively. Weekly administration of 5mg/kg resulted in suppression of sGAS6 in 4 out of 6 subjects for at least 3 weeks after the fourth dose.

Note: AVB-500 is AVB-S6-500

By conducting the Phase 1 trial in healthy volunteers, we expect that we will not need to conduct any additional Phase 1 studies for other indications in which AVB-500 is the product candidate, and instead expect to have the ability to have as our first clinical trial for such other indications a Phase 1b or Phase 2 trial, pending FDA review.

First Oncology Indication - Ovarian Cancerand Current Market Opportunity

The decision to select high grade platinum-resistant recurrent ovarian cancer as our first indication was based upon the preclinical data that we generated with batiraxcept in PROC, the fact that high grade serous ovarian cancer tumors are highly AXL positive and the high unmet medical need for effective therapies to treat PROC. In August 2018, the FDA granted Fast Track Designation to batiraxcept for PROC.

Ovarian cancer ranks fifth in cancer deaths among women in the U.S., accounting for more deaths than any other cancer of the female reproductive system.  According to the American Cancer Society, it is estimated that in 20202022 there will be approximately 21,75019,880 new cases of ovarian cancer diagnosed in the United States and approximately 13,94012,810 ovarian cancer deaths in the United States. A woman’s risk of getting ovarian cancer during her lifetime is about 1 in 78. Her lifetime chance of dying from ovarian cancer is about 1 in 108.  Ovarian cancer accounts for just 2.5% of all female cancer cases, but 5% of cancer deaths because of the disease’s low survival rate. Due to the nonspecific nature of disease symptoms, currently the majorityapproximately 70% of ovarian cancer patients are diagnosed with advanced-stage disease, at which point their prognosis is poor. Improving the ability to detect ovarian cancer early is a research priority, given that women diagnosed with localized-stage disease have more than a 90% five-year survival rate.

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Current standard of care treatments forDecision Resources Group, LLC or DRG in its January 2021 Key Findings in Ovarian Cancer, Disease Landscape and Forecast Report estimates the total ovarian cancer market to grow in the major markets (United States, France, Germany, Italy, Spain, the United Kingdom and Japan) at an annual rate of 12.5% from nearly $3 billion in 2019 to nearly $10 billion in 2029.

Treatment of PROC patients (patients whose disease progresses within 6 months of their last platinum-based therapy) on their second- and third-line of therapy consists of a nonplatinum monotherapy as sequential single-agent salvage chemotherapy has been shown to be superior to multiagent chemotherapy in this setting (DRG- December 2019 Ovarian Cancer Disease Landscape and Forecast). Widely used single-agent therapies in this population include surgerygemcitabine, pegylated-liposomal doxorubicin, topotecan, and chemotherapy (cisplatin and carboplatin).paclitaxel (“PAC”) with or without bevacizumab or Avastin. The median progression free survival (“PFS”) rate for patients given standard of care (paclitaxel(PAC or doxil/pegylated liposomal doxirubicin)doxorubicin (“PLD”)) to treat platinum-resistant recurrent ovarian cancer is 3-4 months, with a median overall survival (“OS”) of 9-12 months. Targeted therapies includemonths (A. Davis et al. / Gynecologic Oncology 133 (2014) 624–631).  Adding bevacizumab (Avastin)to the chemotherapy resulted in a median PFS of 6.7 months (Pujade-Lauraine, et al., and other drugs, suchJ Clin Oncol 32:1302-1308) but there was no OS benefit (Stockler MR, et al. J Clin Oncol. 2014 May 1;32(13):1309-16). In the United States, another treatment option in third-line platinum-resistant/refractory ovarian cancer are poly ADP ribose polymerase inhibitors (PARPi) which are indicated as immune checkpoint inhibitors, are being investigated as well. Drugs that inhibita monotherapy for the enzyme PARP-1 (called PARP inhibitors)treatment of patients with deleterious BRCA mutation (germline and/or somatic) with advanced ovarian cancer who have been approvedtreated with two or more chemotherapies. There is no standard of care for patients with non-BRCA mutated/ HR proficient ovarian cancer caused by mutations in BRCA1 and BRCA2 or as maintenance treatment following a platinum-based chemotherapy. New evidence shows that ovarian cancers can also become resistant to treatment with PARP inhibitors, and research is being conducted in the field to find ways to counteract this process.fourth- and subsequent-line settings. The majority of these patients have become platinum-resistant and are typically managed with monotherapy chemotherapy treatments.

Decision Resources Group in its July 2018 Ovarian Cancer Disease Landscape and Forecast estimates the ovarian cancer market to grow at an annual compound rate

Overview of Our Phase 1b portionClinical Trial for the Treatment of the Phase 1b/2 Clinical TrialPatients with PROC

In December 2018, following a normal healthy volunteer trial that identified a dose of 10mg/kg batiraxcept as sufficient to suppress serum GAS6 levels for a two-week period, we began treating patients in theour Phase 1b portion of our Phase 1b/2 clinical trial combining AVB-50010mg/kg (administered every 2 weeks) batiraxcept with standard-of-care therapies (specifically, paclitaxel (“Pac”), and pegylated liposomal doxorubicin (“PLD”))PAC or PLD) in patients with platinum- resistant recurrent ovarian cancer. The decision to select platinum-resistant recurrent ovarian cancer as our first indication was based upon the preclinical data that we had generated with AVB-500 in platinum resistant ovarian cancer, the fact that platinum resistant ovarian tumors are highly AXL positive and the high unmet medical need for effective therapies to treat platinum resistant ovarian cancer. In August 2018, the FDA granted fast track designation to AVB-500 for platinum-resistant recurrent ovarian cancer.PROC.

The Phase 1b portion of the Phase 1b/2 clinical trial iswas designed, in part, to confirm the dosing regimen predicated on the Phase 1 trial in healthy volunteers and to identify the dose to investigate in the Phase 2 portion of the trial.later stage trials. The primary objective of the Phase 1b portion of the Phase 1b/2 clinical trial iswas to assess the safety and tolerability of AVB-500batiraxcept in combination with Pac andPAC or PLD, and secondary objectives arewere to assess PK/PDPK and pharmacodynamics (serum GAS6 and soluble AXL (“sAXL”) levels), efficacy, and potential immunogenicity of AVB-500.batiraxcept. Exploratory objectives includeincluded efficacy endpoints in biomarker (GAS6, AXL) defined populations based on expression of those biomarkers in serum and/or tumor tissue.

In July 2019, we announced the results of an independent safety monitoring committee review of data from the initial 12 patients of the ongoing Phase 1b portion of our Phase 1b/2 trial of AVB-500 in platinum-resistant recurrent ovarian cancer patients. The committee unanimously agreed that AVB-500 was well-tolerated and serum GAS6 levels were suppressed throughout the 2-week dosing interval in each of the two cohorts, and recommended the trial continue as planned and enroll additional patients into each cohort to collect additional preliminary efficacy, safety, biomarker and PK/PD data at the current dose of 10mg/kg.

Data from the Initial Twelve Patients of the Ongoing Phase 1b Presented in September 2019

In September 2019, we presented positive data from the initial 12 patients of the ongoing Phase 1b portion of theclinical trial in a late breaking oral presentation at the European Society for Medical Oncology (ESMO) Congress in Barcelona.  The Overall Response Rate (ORR) in patients given AVB-500Barcelona and eitherbased upon our analysis of the two chemotherapies (PAC or PLD) was found to be higher than the typical rate for PAC or PLD alone and AVB-500 was well-tolerated.  We also reported a finding of exposure-response relationship from the analysis of preliminary data from initial 28 patients (including the initial 12 patients) in September 2019.  The analysis suggested that higher AVB-500 blood levels were likely to result in higher clinical benefit rate in patients and higher peak and trough levels in patients after first dose of AVB-500 appeared to predict anti-tumor activity. The finding guided usdecided to study higher doses of the drug and the Company expanded the Phase 1b programtrial to study 15 mg/kg and 20 mg/kg dose levels.

Data from the Initial 31 PatientsPhase 1a and 1b Clinical Trials of the ongoing Phase 1b Presented in November 2019

In November 2019, we reported positive data from the initial 31 patients of the ongoing Phase 1b portion of the trial. The data from the first 31 patients treated at the 10mg/kg dose affirm earlier findings on the relationship between AVB-500 levels and anti-tumor response. In this data analysis, serum drug levels of AVB-500 > 13.8 mg/L at Cycle 1 Day 15 (defined as the minimal efficacious concentration or MEC) were found to be strongly predictive of anti-tumor activity with statistically significant correlation to progression-free survival (PFS; p=0.0066). PFS is the primary endpoint for platinum-resistant ovarian cancer clinical trials.

At the 10 mg/kg dose, patients that met or exceeded the minimal efficacious concentration (MEC) of AVB-500 (17 out of 31 patients) demonstrated a greater than four-fold increase in median PFS over those with low exposure (8.1 vs. 1.8 months; p=0.0016) and approximately two-fold improvement in ORR (29% vs. 14%), including one complete response (CR). Patients who achieved the MEC of AVB-500 in their blood also showed improvements in duration of response (from 7.6 to 3.9 months) and clinical benefit rate (CBR defined as ORR + SD) (82% vs. 43%), with reduced chance of progressing by 3.2-fold (from 57% to 18%).

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The baseline characteristics, demographics, and safety parameters were comparable between patients who achieved the minimal efficacious concentration and those who fell below that threshold. The analysis shows that the clinical benefit at this dose level in the trial can be primarily attributed to AVB-500 exposure.

The analysis of the best overall response by investigator determined RECIST v1.1 criteria data are summarized in the table below:batiraxcept

Other notable findings:

Enrollment of Patients at Higher Doses

The data from the initial 31 patients of the ongoing Phase 1b portion of the trial confirm our strategy to investigate higher doses in the current Phase 1b portion of the Phase 1b/2 clinical trial to determine if a greater proportion of patients can exceed the MEC. According to our modeling, a dose of 20 mg/kg should allow greater than 90% of the patients to achieve the MEC. We have treated 6 patients with 15mg/kg and anticipate treating an additional 12 patients with 20mg/kg. The safety and efficacy profile seenof batiraxcept was studied in the small number of patients84 subjects, including 31 healthy volunteers in the 15 mg/kg dose cohort is consistent with the hypothesis generated from the 10 mg/kg dose cohort.

In February 2020, we announced that an independent data monitoring committee reviewed the open-label data following the first 28-day treatment cycle for the three patients in each of the two 15 mg/kg dosing cohorts of thea Phase 1b portion of the Phase 1b/21a clinical trial and unanimously recommended the trial continue as planned with enrollment of53 PROC patients into the 20mg/kg dose cohorts. The DMC did not identify any safety concerns with AVB-500. We anticipate treating an additional 12 patients with 20mg/kg. With the expansion, thein a Phase 1b portion of the trial is expected to enroll 58-64 patients.

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We anticipate reporting safety and PK data from the Phase 1b portion of the Phase 1b/2 clinical trial (40 in mid-2020.

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Planned Phase 2/3 Clinical Trial Following Completion of Phase 1b Dose Escalation

With the expansion of the Phase 1b portion of the trial, the Phase 2 portion of the Phase 1b/2 clinical trial is expected to enroll the first patient10 mg/kg cohort, 6 in the second half of 202015 mg/kg cohort, and will be a double-blind, randomized, controlled trial comparing AVB-500 plus standard of care (PLD or Pac) to standard of care alone (PLD or Pac + placebo)7 in 20 mg/kg cohort). This Phase 2 portion is expected to enroll approximately 120 patients who will be randomized on a 2:1 basis to experimental arm versus control arm. The primary objective of the Phase 2 portion of the Phase 1b/21b clinical trial iswas to assess anti-tumor activitysafety of AVB-500batiraxcept in combination with PacPAC or PLD as a measure by progression free survival (PFS).PLD. Secondary objectives include assessment of PK/PD and additional efficacy endpoints (objectiveincluded objective response rate (ORR)(“ORR”), overall survival (OS), duration ofCA-125 response, (DOR), clinical benefit rate, (CBR)). DependingPFS, OS, PK profile, GAS6 serum levels, and anti-drug antibody titers.

Safety Data: Analysis of all safety data to date demonstrates that batiraxcept has been generally well-tolerated with no dose-limiting toxicities or unexpected safety signals. There were no batiraxcept-related significant adverse events reported. There were two types of adverse events that were considered related to batiraxcept, as determined by an independent medical monitor: infusion reactions and fatigue.  A premedication regimen was designed and implemented during the trial to manage potential infusion reactions.

Pharmacokinetics: Prior data analysis of 31 patients from the 10 mg/kg cohort showed that blood trough levels of batiraxcept demonstrated statistically significant correlation with clinical activity, as patients who achieved minimal efficacious concentration (MEC) >13.8 mg/L demonstrated a greater likelihood of response and prolonged PFS. Updated modeling using actual data from all enrolled patients demonstrated that the 20 mg/kg dose is not predicted to improve PFS relative to the 15 mg/kg dose so the dose of 15 mg/kg was selected as the recommended Phase 2 dose or RP2D for batiraxcept.

Clinical Activity: While the Phase 1b clinical trial was a safety trial and not powered to demonstrate efficacy, the investigator-assessed best response or RECIST V1.1 to batiraxcept across all cohorts supports promising clinical activity.  The Phase 1b study data is summarized as follows:

Table 1: Clinical Activity Data for 10mg/kg and 15mg/kg Patients whose First Trough Level was above

the MEC of 13.8mg/L

Phase 3 Registrational Trial Design in PROC

On November 19, 2020, we announced that we had received guidance from the FDA on a registrational Phase 3 trial design for batiraxcept in PROC. The FDA feedback received was that this trial, if successful, could support full approval of batiraxcept for the resultstreatment of PROC. No further preclinical or clinical pharmacology studies are required at this time. The global, randomized, double-blind, placebo-controlled is designed to evaluate efficacy and tolerability of batiraxcept at a dose of 15 mg/kg in combination with PAC.  The initial trial was an adaptive designed trial which included an interim analysis that would allow an additional 100 bevacizumab naïve patients to be enrolled to balance the bevacizumab populations should the interim analysis suggest additional bevacizumab naïve patients are potentially needed to increase the chance for success at the end of the expandedtrial.   The pivotal, adaptive Phase 1b3 trial was expected to enroll approximately 300-400 patients with high-grade serous ovarian cancer who have received one to four prior lines of therapy. In March 2022, we may seek advice fromannounced that we are seeking to omit the interim analysis in the trial as we believe we can enroll the number of bevacizumab naïve patients needed to have a potentially successful study. We are in the process of communicating with the FDA regarding proposed changes to the potentialtrial’s statistical analysis plan. This global trial is planned to makebe conducted at approximately 165 sites in the randomized, controlled, blinded portion ofU.S., Canada, China, and Europe. The primary endpoint for the trial registration enabling.is PFS, and secondary endpoints include OS, ORR based on RECIST 1.1, safety and tolerability, DoR, quality of life, clinical benefit rate, and pharmacokinetic and pharmacodynamic profile. Exploratory biomarkers include serum GAS6, serum sAXL and batiraxcept drug levels. We dosed our first patient in the trial in April 2021.

Figure 2: Phase 3 batiraxcept -OC-004 Design

Second Oncology Indication-ccRCC

Second Oncology Indication-Clear Cell Renal Cell Carcinoma (ccRCC)

Clear Cell Renal Cell CarcinomaccRCC and Current Market Opportunity

The decision to select ccRCC as our second indication was based upon the strong preclinical data that we generated with batiraxcept and the fact that AXL expression in primary tumors of ccRCC patients has been shown in third party studies as well as our own studies (Rankin et al, PNAS September 16, 2014 vol. 111 no. 37 13373–13378), to correlate with aggressive tumor behaviors.

Kidney cancer is a leading cause of cancer-related deaths in the United States and is among the 10 most common cancers in both men and women. Metastasis to distant organs including the lung, bone, liver and brain is the primary cause of death in kidney cancer patients as only 12% of metastatic kidney cancer will survive past 5 years. According to the American Cancer Society, it is estimated that there will be approximately 73,75079,000 new cases of kidney cancer and 14,83013,920 people will die from this disease in the United States during 2020.2022.

Clear cell renal cell carcinoma (ccRCC)

ccRCC is a cancer of the kidney. The name "clear cell" refers to the appearance of the cancer cells when viewed with a microscope. Clear cell renal cell carcinomaccRCC occurs when cells in the kidney quickly increase in number, creating a lump (mass). Though the exact cause of clear cell renal cell carcinomaccRCC is unknown, smoking, excessive use of certain medications, and genetic predisposition conditions, e.g., von Hippel Lindau syndrome which involves genetic mutation in VHL, a tumor suppressor gene controlling tumor initiation in ∼90%∼90% of ccRCC tumors, may contribute to the development of this type of cancer.

Treatment often begins with surgery to remove as much of the cancer as possible, and may be followed by radiation therapy, chemotherapy, biological therapy, or targeted therapy. Most kidney cancer is chemotherapy and radiation resistant, resulting in a large unmet need for treatment therapies.options. As reported in Decision Resources Group, LLC’s December 2019 Report on The Landscape & Forecast of Renal Cell Carcinoma, nivolumab and cabozantinib have experienced strong uptake as second-line therapies since their FDA approvals (in 2015 and 2016, respectively). However, DRG anticipates that nivolumab’s second-line patient shares, across the major markets, will begin to decline from 29-35% in 2018 to 22-27% in 2028, in part owing to its first-line label expansion in combination with ipilimumab and then later as other combination regimens with PD-1/PD-L1 inhibitors enter the first-line setting. In contrast, cabozantinib’s second-line patient share as monotherapy is expected to steadily increase over the forecast period as its use in the first-line setting correspondingly declines, and it solidifies its position as the treatment of choice following a first-line immune checkpoint inhibitor combination. By 2023, it is estimated by DRG that cabozantinib will overtake nivolumab as the second-line sales and patient-share leader in all major markets; in 2028, it is expected to earn patient shares of 31-43% across the major markets. Similarly, DRG expects axitinib’s second-line patient share will decline over the forecast period, corresponding to the uptake of cabozantinib and the notable uptake of pembrolizumab plus axitinib in the first-line setting; its major-market patient shares will then stabilize to 6-16% between 2024 and 2028. These assumptions in renal cell carcinoma suggest the greatest need may be with respect to second line therapies and in combination with cabozantanib.  

Planned Phase 1b/ 2 Clinical Trial

In February 2019, we announced our plans to develop AVB-500batiraxcept in our second oncology indication, ccRCC. The decision to select ccRCC as our second indication was based upon the strong preclinical data that we had generated with AVB-500 and the fact that AXL expression in primary tumors of ccRCC patients has been shown, in, third party studies as well as our own studies (Rankin et al, Direct regulation of GAS6/AXL signaling by HIF promotes renal metastasis through SRC and MET, PNAS September 16, 2014 vol. 111 no. 37 13373–13378), to correlate with aggressive tumor behaviors.

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On January 13, 2020, we announced that we had received FDA clearance of our IND for investigation of our lead candidate, AVB-500,batiraxcept, in the treatment of ccRCC. The trial has a

Figure 3: Phase 1b safety portion and a Phase 1b/2 randomized, controlled portion.  Trial Designed to Accelerate Development in ccRCC

The Phase 1b trial is evaluating batiraxcept at doses of 15 mg/kg and 20 mg/kg, plus cabozantinib 60 mg daily in previously treated (2L+) patients with ccRCC. Prior treatment with cabozantinib was not allowed. The primary objective is safety; secondary and exploratory objectives include identification of the recommended phase 2 dose (RP2D), overall response rate (ORR), and duration of response (DOR). Given baseline levels of serum soluble AXL (sAXL)/GAS6 correlated to clinical activity in the Company’s Phase 1b trial of batiraxcept in platinum-resistant ovarian cancer, one of the objectives of the ccRCC trial is to correlate baseline sAXL/GAS6 with response in patients with ccRCC treated with batiraxcept plus cabozantinib. We dosed two cohorts of patients, one at the 15 mg/kg dose and the second at 20mg/kg dose. A review of the Phase 1b data demonstrates that 15mg/kg batiraxcept is an appropriate dose to suppress serum GAS6 levels in these patients being treated with cabozantinib and that 20mg/kg batiraxcept does not provide additional clinical activity beyond that seen with 15mg/kg batiraxcept, consistent with the modeling done using the Phase 1b PROC data.

In January 2022, the Company announced the first patient was dosed in the Phase 2 portion of the ccRCC trial. The Phase 2 portion of the Phase 1b/2 clinical trial of batiraxcept in ccRCC is an open-label study in which 55 patients are anticipated to enroll across three parts. Part A is expected to enroll approximately 25 patients and will investigate the safety and tolerability of escalating doses of AVB-500batiraxcept 15 mg/kg in combination with cabozantanib (withcabozantinib in 2L+ ccRCC patients. Part B is expected to enroll approximately 20 patients and evaluate batiraxcept 15 mg/kg in combination with standard of care nivolumab and cabozantinib in first-line ccRCC patients. Part C is expected to evaluate batiraxcept 15 mg/kg monotherapy in approximately 10 patients with ccRCC who are not eligible for curative intent therapies. The primary endpoint of each part of the Phase 2 portion of the trial is ORR and key secondary endpoints include DoR, PFS, and OS. The Phase 2 portion of the ccRCC clinical trial will also explore batiraxcept effects on biomarkers (sAXL and GAS6) in serum.

As of February 4, 2022, 26 ccRCC patients have been treated with batiraxcept at doses of 15 mg/kg (n=16) and 20 mg/kg (n=10), plus cabozantinib 60 mg daily in previously treated (2L+) patients with ccRCC. Demographics of the evaluated 26 patients are representative of a 2L+ ccRCC population, with all patients having received a prior immunotherapy. Key findings include:

Biomarker Data

As previously reported, a key finding from the Company’s Phase 1b trial of batiraxcept in platinum-resistant ovarian cancer is an observable correlation of baseline levels of serum soluble AXL (sAXL)/GAS6 to clinical activity. As such, one of the objectives of the ongoing Phase 1b/2 ccRCC trial is to measure the correlation of baseline sAXL/GAS6 with radiographic response in patients with ccRCC treated with batiraxcept plus cabozantinib. Ratios of sAXL/GAS6 were evaluated retrospectively.

Among the 26 patients treated in the ccRCC trial, 25 were evaluable for baseline sAXL/GAS6. A high ratio optimized a patient’s ability to increase/ decreaserespond to batiraxcept plus cabozantinib. Key findings from biomarker high patients include:

The safety and clinical activity data continue to support 15 mg/kg batiraxcept as an appropriate dose basedto study in combination with cabozantinib in the Phase 2 ccRCC portion of the study. 

Third Oncology Indication-Advanced or Metastatic Pancreatic Adenocarcinoma (PA)

The pancreas is a gland about 6 inches long that is shaped like a thin pear lying on tolerability)its side and it is in upthe abdomen near the stomach, intestines, and other organs. The pancreas has two main jobs in the body: 1) to 18make juices that help digest (break down) food; and 2) to make hormones, such as insulin and glucagon, that help control blood sugar levels. Both of these hormones help the body use and store the energy it gets from food. The digestive juices are made by exocrine pancreas cells and the hormones are made by endocrine pancreas cells. About 95% of pancreatic cancers begin in exocrine cells and the most common pancreatic exocrine tumors are called adenocarcinomas. 

According to the American Association for Cancer Research (“AACR”), pancreatic cancer is difficult to detect and diagnose because there aren’t any noticeable signs or symptoms in the early stages of pancreatic cancer, the symptoms are similar to those of many other illnesses, and the pancreas is hidden behind other organs. Pancreatic cancer is the seventh leading cause of cancer death worldwide. There were approximately 495,800 new cases of pancreatic cancer and 466,000 deaths from the disease worldwide in 2020. The National Cancer Institute’s Surveillance, Epidemiology, and End Results (SEER) Program estimates that there will be approximately 60,430 new cases of pancreatic cancer and 48,220 deaths from the disease in the U.S. in 2021. Pancreatic cancer typically has a poor prognosis, and the five-year survival rate is approximately 11%. Per AACR, pancreatic cancer is projected to become the third leading cause of cancer death worldwide by 2025 and the second leading cause of cancer death in the U.S. by 2030.

Decision Resources Group, LLC or DRG in its December 2019 Pancreatic Cancer Disease Landscape and Forecast reports the first-line metastatic population is the largest drug-treatable population in pancreatic cancer. Correspondingly, the first-line metastatic population had the highest therapy sales ($901 million in 2018, with all but 62 million from the pancreatic exocrine tumor population), accounting for 53% of the total pancreatic cancer therapy market. By 2028, these sales will fall short by more than $100 million ($764 million in 2028), mainly because most products prescribed for metastatic pancreatic adenocarcinoma in the first-line have become generically available and due to failures of several highly anticipated late-phase pipeline drugs.  However, there is a clear need for additional therapies and there is a clear trend developing towards a combinatorial approach as a substantial percentage of early-phase studies are being conducted with two or more investigational agents. The addressable population (i.e., eligible to receive gemcitabine + nab-paclitaxel as first-line treatment) across the US and 5 major EU regions is estimated to be approximately 38,000.

On August 9, 2021, we announced that we had dosed the first patient in the Phase 1b portion of our Phase 1b/2 of AVB-500 as a first-line therapy in combination with gemcitabine and nab-paclitaxel (Abraxane®) in patients with advanced clear cell renal cell carcinoma that have progressed on or after or were intolerantmetastatic pancreatic adenocarcinoma eligible to front-line treatment.receive gemcitabine and nab-paclitaxel combination therapy. The primary endpoints for the Phase 1b portion of the clinical trial arewill evaluate safety, pharmacokinetictolerability, PK, pharmacodynamics, and pharmacodynamic measurementsclinical activity in approximately 20 patients dosed with secondary endpoints including preliminary activity measures.15 mg/kg of batiraxcept in combination with gemcitabine and nab-paclitaxel. The randomized, controlled Phase 2 portion of the clinical trial will investigate the recommended Phase 2 AVB-500 dose identified during the Phase 1b portionis designed to evaluate approximately 60 patients dosed with 15 mg/kg of batiraxcept as a first-line therapy in combination with cabozantinibgemcitabine and nab-paclitaxel versus cabozantinib alone in 90 patients with advanced ccRCC that have progressed on or after or were intolerant to front-line treatment.gemcitabine and nab-paclitaxel alone. The primary endpoint of the Phase 2 portion will be controlled and randomized with a primary endpoint of progression free survival (PFS) andthe trial is PFS. The secondary endpoints of overall response rate (ORR), duration of response (DOR),are ORR, DoR, clinical benefit rate, (CBR) and overall survival (OS). The clinical trial will also explore AVB-500 effects on biomarkers (GAS6) in serum. With the recent and rapidly evolving impact of COVID-19 on patient recruitment in clinical trials and considering patient safety and trial integrity,OS, and the exploratory endpoints are PK and pharmacodynamics.

In February 2022, we have decided to skipprovided updated safety and clinical activity data from the 10mg/kg dose initially planned. Givenpancreatic adenocarcinoma as of February 4, 2022.  The safety profile of batiraxcept in combination with gemcitabine plus nab-paclitaxel was consistent with the safety profile seen with the 15 mg/kg dosing cohort of the platinum-resistant ovarian cancer trialgemcitabine plus nab-paclitaxel alone. Thirteen patients had been followed for at least 8 weeks and the initiation4 out of the 20 mg/kg dosing cohort in the PROC trial, we intend to amend the ccRCC trial to initiate dosing13 (31%) had a best response of partial response, 5 out 13 (38%) had best response of stable disease and 4 out of 13 patients at a higher dose after iDMC review(31%) had best response of the 20 mg/kg cohort in the PROC trial. While this may delay first patient dosing, the overall timelines may not be significantly impacted given the higher starting dose and assuming the COVID-19 situation does not interfere with patient recruitment and retention.progressive disease. 

Non-Oncology Indication-IgA Nephropathy

IgA Nephropathy and Current Market Opportunity

IgA Nephropathy (IgAN) is a nonsystemic renal disease that is characterized by predominant IgA deposition in the glomerular mesangium, causing mesangial cell proliferation and fibrosis. IgAN is the most common cause of primary glomerulonephritis and responsible for 10% of patients on dialysis affecting approximately 150,000-180,000 people in the United States. Up to 50% of patients with IgAN develop end-stage renal disease and require dialysis within 20 years of diagnosis. There is a high unmet medical need for treatment for IgAN as there are currently no therapies approved for treatment of IgAN.

Phase 2a Proof of Concept Trial in IgAN Patients

In February 2019, we announced our intent to develop AVB-500 for potential use in patients with IgAN. On December 20, 2019, we announced initiation of the Phase 2a kidney fibrosis trial. The clinical trial with AVB-500 in patients with IgAN is a small open label clinical trial of 12-24 patients with IgAN treated for a 3-month period with 6 doses of AVB-500, with our ability to increase doses based upon data. We anticipate that the clinical trial will be performed at clinical sites in both the United States and the Ukraine. The primary objectives of the clinical trial will be to evaluate the safety and tolerability of AVB-500 in patients with IgAN and to

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assess the efficacy of AVB-500 in patients with IgAN at a dose that has the desired pharmacokinetic/pharmacodynamic profile. Secondary objectives will be to evaluate and compare changes in pharmacokinetic, pharmacodynamic, anti-drug antibodies and neutralizing antibody responses. The clinical trial will monitor proteinuria, hematuria and other renal functions. With the recent and rapidly evolving impact of COVID-19 on patient recruitment in clinical trials and considering patient safety and trial integrity, we will pause new enrollment in the IgA nephropathy (IgAN) trial until the risk of unnecessary exposure of patients to COVID-19 is reduced.

Role of GAS6 In IgAN

GAS6 is a growth factor that causes proliferation of mesangial cells in the development of glomerulonephritis. GAS6 is upregulated in either endothelial/mesangial cells or podocytes in IgAN (Nagai K, Miyoshi M, Kake T, Fukushima N, Matsuura M, et al. (2013) Dual Involvement of Growth Arrest-Specific Gene 6 in the Early Phase of Human IgA Nephropathy. PLoS ONE 8(6): e66759. doi:10.1371/journal.pone.0066759). and expression in the diseased kidney tissue correlates with severity of IgA nephropathy (Nagai K, Miyoshi M, Kake T, Fukushima N, Matsuura M, et al. (2013) Dual Involvement of Growth Arrest-Specific Gene 6 in the Early Phase of Human IgANephropathy. PLoS ONE 8(6): e66759. doi:10.1371/journal.pone.0066759). Preclinical data demonstrated that a lower affinity GAS6-trap improves fibrosis and proteinurea in experimental glomerulonephritis (Am J Pathol. 2001 Apr; 158(4): 1423–1432.doi: 10.1016/S0002-9440(10)64093-X).  Aravive has assessed serum levels in a small number of IgAN patients and found that they are elevated in comparison to age-matched subjects who do not have IgAN.

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Investigator Sponsored Trials

In May 2019 we entered into an institution sponsored clinical trial agreement with M.D. Anderson Cancer Center for the use of, and our supply of, AVB-500,batiraxcept, in combination with AstraZeneca Pharmaceuticals LP’s medicinal product durvalumab in a Phase 1/2 trial being conducted by the M.D. Anderson Cancer Center for the treatment of patients with platinum-resistant, recurrent epithelial ovarian cancer.

In March 2020, we announced that the first patient was dosed in a Phase 1/2 trial for the use of, and our supply of, AVB-500,batiraxcept, in combination with EMD Serono’s medicinal product avelumab being conducted by the University of Oklahoma for the treatment of patients with advanced urothelial cancer (COAXIN trial).

Other Indications

We expect, subjectStrategic Collaborations

In April 2020, we entered into a license and collaboration agreement with WuXi, the objective of which is to sufficient funding, to initiate additional clinical trials. Such additional clinical trials may involve combining AVB-500 with standard of careidentify and develop novel high-affinity bispecific antibodies against CCN2, also known as CTGF, implicated in a number of tumor types in addition to ovarian cancer and ccRCC, triple negative breast cancer, acute myeloid leukemia,fibrosis and pancreaticidentified from a similar target discovery screen that identified the significance of the AXL/GAS6 pathway in cancer. We are also considering conducting studiesThe goal is to generate a best-in-class therapeutic targeting desmoplasia and tumor growth in non-oncology indications suchthe clinic in 2023.

On November 6, 2020, we entered into the 3D Medicines Agreement, whereby we granted 3D Medicines an exclusive license to develop and commercialize products that contain batiraxcept as lungthe sole drug substance for the diagnosis, treatment or liver fibrosisprevention of human oncological diseases, in addition to the clinical trial with patients with IgAN.Territory.

GAS6-AXL Pathway

As illustrated in the following graphic, AXL receptor signaling plays an important role in multiple types of malignancies by promoting metastasis, cancer cell survival, resistance to treatments, and immune suppression.  

Figure 4: GAS6 and AXL are Overexpressed in Many Cancers and Associated with Tumor Growth,

Metastasis, Drug Resistance, and Poor Survival

In preclinical studies, we have also identified high AXL expression on tumors resistant to the combination of radiotherapy and immunotherapy and that genetically inactivating AXL in tumors resistant to immunotherapy and radiotherapy restored anti-tumor immune response.

In preclinical studies conducted in Dr. Giaccia’s laboratories at Stanford University, Dr. Giaccia was able to demonstrate that the immune response generated by loss of AXL leads to adaptive immune resistance through PD-L1 expression and Treg (regulatory T cells) infiltration. This resulted in tumors that became sensitive to checkpoint immunotherapy when they were previously resistant. Thus, GAS6-AXL pathway inhibitors, in combination with radiation or chemotherapy and immunotherapy, may be a promising treatment regimen and may restore anti-tumor immune response.

Aravive-S6 (AVB-S6)

AVB-S6 is comprised of a family of novel, high-affinity, soluble Fc-fusion proteins designed to block the activation of the GAS6-AXL signaling pathway by intercepting GAS6 and interfering with its binding to its receptor AXL. AVB-S6 proteins have been engineered to have approximately 50 to 200 times greater affinity for human GAS6 compared to the native AXL receptor, effectively sequestering GAS6 and abrogating AXL signaling. We believe this ‘decoy receptor’ approach is well suited for AXL inhibition compared to small molecule receptor tyrosine kinase inhibitors or antibodies, as illustrated by the following graphic.

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Figure 5: Approaches to Inhibiting the GAS6/AXL Signaling Pathway

RTK - receptor tyrosine kinase

mAb - monoclonal antibody

Preclinical Results

Our AVB-S6 proteins have been shown to bind GAS6 with higher affinity than the endogenous AXL protein and inhibit GAS6/AXL signaling. Initial preclinical pharmacology studies were conducted with a variety of engineered AVB-S6 proteins. The preclinical program demonstrated that high GAS6 binding affinity was critical and correlative with the ability of AVB-S6 to inhibit metastasis and disease progression in vivo. AVB-S6 proteins have demonstrated significant efficacy in mouse models of metastatic ovarian, breast, renal, and pancreatic cancers.

AVB-S6 proteins are selective for the AXL signaling pathway and demonstrate potent anti-metastatic activity in preclinical models. The following graphic indicates that AVB-S6 is selective for the AXL signaling pathway and is potent in a preclinical breast cancer lung metastasis model. The left panel shows western blot analysis of OVCAR8 (human platinum-resistant ovarian cancer) cells after 4-hour treatment with BGB324, foretinib, or AVB-S6. The right panel shows representative bioluminescent images of lung metastases in the 4T1 mouse model following treatment with vehicle (negative control), foretinib, BGB324 or AVB-S6.

Biomarker

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Figure 4 of OVCAR8 JCI 2017 127(1) 183-195

The following graphic indicates that the affinity of AVB-S6 proteins relates to anti-metastatic effect in preclinical studies. The left panel shows the number of metastases from the peritoneum of OVCAR8 (human platinum-resistant ovarian cancer) mouse model following treatment with three AVB-S6 proteins having different affinity (330 fM, 10 pM and >2 nM). The right panel shows the total tumor weight from the peritoneum of OVCAR8 mouse model following treatment with the same three AVB-S6 proteins.

AVB-S6 proteins inhibit invasion and migration of highly invasive and metastatic cells, MDA-MB-231 and OVCAR8. In vivo studies with AVB-S6 proteins demonstrated significant reductions in metastatic tumor weight and number in platinum resistant ovarian (SKOV3.IP and OVCAR8) cancer models. In combination with the chemotherapy drug doxorubicin (Dox), the anti-metastatic effect was greater, and 20-30% of the animals were tumor-free after the combination treatment in both platinum-resistant ovarian cancer studies.

The following graphic indicates that AVB-S6 augments the efficacy of doxorubicin in a preclinical platinum resistant ovarian cancer model (SKOV3.IP).

Figure 6B from JCI 2017; (127)(1) 183-198

AVB-S6 proteins also demonstrated significant reductions in metastatic disease in triple negative breast (4T1), pancreatic (PDA1-1), and renal (SN12L1) cancer models. Additionally, in an orthotopic pancreatic model (LM-P) the AVB-S6 protein significantly increased survival in combination with the chemotherapy drug gemcitabine relative to gemcitabine or vehicle alone. The combination studies also demonstrated a relationship between AXL signaling and the cellular response to DNA damage in breast, pancreatic and ovarian cancer models. This relationship was even more pronounced in combination with cytotoxic chemotherapies such as doxorubicin and gemcitabine.

Notably, treatment with the AVB-S6 protein alone or in combination with gemcitabine demonstrated a significant decrease in tumor fibrosis. Decreasing fibrosis in the tumor microenvironment may increase efficacy of co-administered chemotherapeutics and potentially immuno-therapeutics by allowing greater access of T cells to the tumor cells.

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Once the development candidate, AVB-500, was selected, in vitro and in vivo pharmacology studies were conducted to demonstrate that AVB-500 had the same biological activity as the other AVB-S6 proteins.

Biomarker

GAS6 expression in tumors has been reported to be an adverse prognostic factor in several cancers, including urothelial, ovarian, lung adenocarcinoma, gastric cancer, glioblastoma, oral squamous cell carcinoma, liver carcinoma, and renal cell carcinoma. In studies conducted by us, AVB-S6 proteins bind GAS6 with higher affinity than the endogenous AXL protein and prevent GAS6 signaling at the AXL receptor. Preclinical efficacy data for the AVB-S6 program demonstrated a relationship between reduced serum GAS6 and an anti-metastatic effect. We have developed an assay designed to measure GAS6 levels in the blood before and after dosing of our development candidate. In the presence of a pharmacologically active dose of AVB-S6, serum GAS6 has not been detectable. Thus, GAS6 levels in the blood of patients may be a pharmacodynamic biomarker that can aid AVB-S6 dose selection and potentially serve as a predictive biomarker for response to treatment with AVB-S6. Additionally, our Phase1b clinical trial identified a relationship between sAXL / GAS6 ratios as every patient that responded to treatment, regardless of chemotherapy being administered in combination, had a sAXL / GAS6 of >0.773. We will continue to explore these biomarkers in our other clinical trials.

The following graphic indicates the relationship between AVB-500batiraxcept protein levels and GAS6 levels in blood from humans participating in the AVB-500batiraxcept first in human trial.

Manufacturing

Manufacturing of our clinical trial material consists of three main phases, the production of bulk protein (drug substance), formulation/filling operations, and labelling/packaging operations of the finished product. The protein has been manufactured at high yield and with high purity. The clinical bulk drug substance is produced using industry standard manufacturing processes, as is the drug product.

Since September 2017, we have relied on WuXi, a third partythird-party contract manufacturer to manufacture clinical bulk drug substance and drug product of AVB-500batiraxcept using a cell line and process developed by our contract manufacturer that has been licensed to us on a non-exclusive basis. We have manufactured enough AVB-500batiraxcept to dose approximately 400 patients for a six-month period, which is expected to be sufficient to completethrough the planned Phase 1b/Phase 23 ovarian cancer trial. The clinical bulk drug substance and drug product is manufactured pursuant to the terms of a five yearfive-year Master Manufacturing Services Agreement that we entered into with our contract manufacturer in July 2016, which agreement automatically renews for successive one (1) year periods, unless either party provides written notice to the other party of its desire not to renew at least 90 days prior to the expiration of the then-current term.  The Master Manufacturing Services Agreement is terminable by us upon 45 days prior written notice, by our contract manufacturer Limited upon 180 days prior written notice provided that all statements of work in progress at such time are completed and upon 60 days prior written notice upon a breach of the terms of the agreement if such breach is not cured within such 60 day60-day period.

We have also contracted with an independent third party located in Texas for the labeling, packaging, and distribution of our injectable protein.

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Our personnel have significant technical, manufacturing, analytical, quality and project management experience to execute and manage manufacturing process development, plus oversee the manufacture, testing, quality release, storage and distribution of drug products according to the current Good Manufacturing Practice or cGMPs,(“cGMPs”), promulgated by the FDA and other regulatory requirements. The cGMP regulations include requirements relating to the organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports, and returned or salvaged products. Our facilities, and our third-party manufacturers, may be subject to periodic inspections by FDA and local authorities, which include, but are not limited to procedures and operations used in the testing and manufacture of our biological drug candidates to assess our compliance with applicable regulations. Failure to comply with statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including warning letters, the seizure or recall of products, injunctions, and consent decrees causing significant restrictions on or suspending manufacturing operations plus causing possible civil and criminal penalties. These actions could have a material impact on the availability of its biological drug candidates. Similar to contract manufacturers, we may encounter difficulties involving production yields, quality control and quality assurance, as well as shortages of qualified personnel.

Research and Development

We have made and will continue to make substantial investments in research and development. Our research and development expenses totaled $12.8approximately $37.5 million and $11.1$17.6 million for the years ended December 31, 20192021 and 2018,2020, respectively.

In the ordinary course of business, we enter into agreements with third parties, such as clinical research organizations,CROs, medical institutions, clinical investigators and contract laboratories, to conduct clinical trials and aspects of research and preclinical testing. These third parties provide project management and monitoring services and regulatory consulting and investigative services.

Competition

The biotechnology and pharmaceutical industries are characterized by intense competition to develop new technologies and proprietary products. We face competition from many different sources, including biotechnology and pharmaceutical companies, academic institutions, government agencies, as well as public and private research institutions. Any products that we may commercialize will have to compete with existing products and therapies as well as new products and therapies that may become available in the future.

At this time, there are no FDA or European Medicines AgencyEMA approved therapies targeting GAS6. We believe this mechanism of action represents a novel approach to inhibiting tumor growth and metastasis, as well as addressing tumor immune evasion and resistance to other anticancer agents. Exelixis, Inc. markets cabozantinib, a Tyrosine Kinase Inhibitor which is the only currently marketed compound that inhibits AXL in addition to inhibiting several other kinases. We are aware of a number of companies focused on developing AXL inhibitors in various indications, including BerGenBio ASA, Astellas Pharma Inc., Mirati Therapeutics, Inc., Les Laboratoires Servier, SAS, Eli Lilly and Company, Bristol-Myers Squibb Company, Tolero Pharmaceuticals, Inc., Ignyta, Inc., as well as several companies addressing AXL inhibitors, and PARP 1/2 inhibitors and related signaling pathways.

Our competition may also include companies that are or will be developing therapies for the same therapeutic areas that we are targeting, including ovarian cancer, renal cell carcinoma and IgAN.pancreatic cancer. Many of our potential competitors, alone or with their strategic partners may have substantially greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific and management personal, establishing clinical trial sites and patient registration for clinical trials, and in acquiring technologies complementary to, or necessary for our programs.

There are no approved drugs for the treatment of IgA nephropathy and a few therapies are currently in development.  Three current development programs target the complement pathway: Omeros Corporation is conducting a phase 3 clinical trial with an injectable MASP-2 inhibitor; Novartis AG is conducting a phase 2 clinical trial with their oral compound, LNP023; and Apellis Pharmaceuticals, Inc. is conducting a phase 2 clinical trial with APL2. Two other programs target B cell activity: EMD Serono Research & Development Institute, Inc. is testing Atacicept in a phase 2 clinical trial and Visterra Inc. is in the midst of testing VIS649in a phase I healthy volunteer clinical trial.  AVB-500 has a mechanism of action unique from these other therapies.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that itwe may develop. Our competitors also may obtain approval from the FDA or other regulatory approvalagencies for their products more rapidly than we may obtain approval for our product candidates, which could result in our competitors establishing a strong market position before itour product is able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third partythird-party payors seeking to encourage the use of generic products.

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License Agreement

In 2012, Private Aravive Biologics entered into an exclusive license agreement with Leland Stanford Junior University or ("Stanford University,University") for intellectual and tangible property rights relating to biologic inhibitors for therapeutic targeting the receptor tyrosine kinase AXL. The license agreement was amended in 2012, 2015 and 2017 to modify certain of the stated milestones and expand the patent rights granted to Private Aravive.Aravive Biologics. The term of the license is the length of the last to expire patent. The license agreement grants Private Aravive Biologics exclusive, worldwide rights to make, use or sell licensed materials based upon the following patent-related rights: