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to vote generally in the election of directors, represented in person or by proxy, shall constitute a quorumare present at the Annual Meeting.Meeting by virtual attendance or represented by proxy. On the Record Date, there were 32,995,17858,656,689 shares of common stock outstanding and entitled to vote. Thus, 16,497,590

Your shares must be represented in person or by proxy at the Annual Meeting to have a quorum.

        Your sharesof common stock will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee)agent) or if you attendvote online during the Annual Meeting and vote in person.Meeting. Abstentions and broker non-votes will be counted fortowards the purpose of determining whether a quorum requirement. If there is present for the transaction of business. If ano quorum, is not present, the holders of a majority of the votesshares of common stock present at the Annual Meeting by virtual attendance or represented by proxy may adjourn the Annual Meeting to another date.

What matters will be voted on at the Annual Meeting?
How can I examine a list of stockholders?

 The following matters are scheduled to be voted on at the Annual Meeting:

•

Proposal 1: To elect the seven nominees to the Board named in this proxy statement to hold office until the 2016 annual meeting

A list of stockholders;



•

Proposal 2: To approve a series of alternate amendments to our amended and restated certificate of incorporation, to effect, at the discretion of the Board, a reverse stock split of the Company's common stock, whereby each outstanding 4, 5, 6, 7, 8, 9 or 10 shares would be combined, converted and changed into one share of common stock;



•

Proposal 3: To approve amendments to our 2012 Equity Incentive Plan to, among other things, increase the number of shares reserved for issuance thereunder by 2,500,000 shares on a pre-reverse stock split basis; and



•

Proposal 4: To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2015.

        No cumulative voting rights are authorized, and dissenters' rights are not applicable to these matters.

Could other matters be decided at the Annual Meeting?

        KaloBios does not know of any other matters that may be presented for action at the Annual Meeting. Should any other business come before the Annual Meeting, the persons named on the proxy card will have discretionary authority to vote the shares represented by proxies in accordance with their best judgment.

What will happen if I do not vote my shares?

        Stockholder of Record: Shares Registered in Your Name.    If you are the stockholder of record of your shares and you do not vote by proxy card, by telephone, via the Internet or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting.

        Beneficial Owner: Shares Registered in the Name of Broker or Bank.    Brokers or other nominees who hold shares of our common stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A "broker non-vote" occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Under the rules that govern brokers who are voting shares held for a beneficial owner, brokers have the discretion to vote those shares on routine matters but not on non-routine matters. Proposal 2 and Proposal 4 are the only routine matters in this proxy statement. As such, your

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broker has discretion to vote your shares on Proposal 2 and Proposal 4 but does not have discretion to vote your shares on Proposal 1 or Proposal 3.

How may I vote for each proposal and what is the vote required for each proposal?

Proposal 1: Election of Directors

        With respect to the election of nominees for director, you may:

•

vote "FOR" the election of the seven nominees for director;



•

vote "FOR" one or more nominees and "WITHHOLD" your vote for the remaining nominee or nominees; or



•

"WITHHOLD" your vote for all seven nominees.

        Directors will be elected by a plurality of the votes cast at the Annual Meeting, meaning the seven nominees who are properly nominated in accordance with our bylaws and receive the most "FOR" votes will be elected. Only votes cast "FOR" a nominee will be counted. An instruction to "WITHHOLD" authority to vote for one or more of the nominees will result in those nominees receiving fewer votes, but will not count as a vote against the nominees. Abstentions and "broker non-votes" will have no effect on the outcome of the election of directors. Because the election of directors is not a matter on which a broker or other nominee is generally empowered to vote, broker non-votes are expected to exist in connection with Proposal 1.

Proposal 2: To approve a series of alternate amendments to our amended and restated certificate of incorporation, to effect, at the discretion of the Board, a reverse stock split of the Company's common stock, whereby each outstanding 4, 5, 6, 7, 8, 9 or 10 shares would be combined, converted and changed into one share of common stock.

        You may vote "FOR" or "AGAINST" or abstain from voting. To approve a series of amendments to our amended and restated certificate of incorporation, the Company must receive a "FOR" vote from the holders of a majority of the outstanding shares of common stockstockholders entitled to vote at the Annual Meeting. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. Because Proposal 2 is a routine matter on which a broker or other nominee is generally empowered to vote, no broker non-votes are expected to exist in connection with Proposal 2.

Proposal 3: To approve amendments to our 2012 Equity Incentive Plan to, among other things, increase the number of shares reserved for issuance thereunder by 2,500,000 shares on a pre-reverse stock split basis.

        You may vote "FOR" or "AGAINST" or abstain from voting. To approve amendments to our 2012 Equity Incentive Plan to, among other things, increase the number of shares reserved for issuance thereunder by 2,500,000 shares on a pre-reverse stock split basis, the Company must receive a "FOR" vote from the holders of a majority of the votes cast in person or by proxy at the Annual Meeting. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. However, broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal. Because Proposal 3 is not a routine matter on which a broker or other nominee is generally empowered to vote, broker non-votes are expected to exist in connection with Proposal 3.

Proposal 4: Ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015.

        You may vote "FOR" or "AGAINST" or abstain from voting. To ratify the selection by the audit committee of our Board of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015, the Company must receive a "FOR" vote from the

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holders of a majority of the votes cast in person or by proxy at the Annual Meeting. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. However, broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal. Proposal 4 is a routine matter on which a broker or other nominee is generally empowered to vote, no broker non-votes are expected to exist in connection with Proposal 4.

What happens if a director nominee is unable to stand for election?

        If a nominee is unable to stand for election, our Board may either:

•

reduce the number of directors that serve on the board; or



•

designate a substitute nominee.

        If our Board designates a substitute nominee, shares represented by proxies voted for the nominee who is unable to stand for electionMeeting will be votedavailable for the substitute nominee.

How does our Board recommend that I vote?

        Our Board unanimously recommends a vote:

•

Proposal 1: "FOR" the election of each of Robert A. Baffi, Denise Gilbert, Ted W. Love, Gary Lyons, Ronald A. Martell, Laurie Smaldone Alsup and Raymond M. Withy as directors to serve until our 2016 annual meeting of stockholders;



•

Proposal 2: "FOR" approval of a series of alternate amendments to our amended and restated certificate of incorporation, to effect, at the discretion of the Board, a reverse stock split of the Company's common stock, whereby each outstanding 4, 5, 6, 7, 8, 9 or 10 shares would be combined, converted and changed into one share of common stock;



•

Proposal 3: "FOR" approval of the amendments to our 2012 Equity Incentive Plan to, among other things, increase the number of shares reservedexamination during normal business hours for issuance thereunder by 2,500,000 shares on a pre-reverse stock split basis; and



•

Proposal 4: "FOR" the ratification of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015.

What happens if I sign and return my proxy card but do not provide voting instructions?

        If you return a signed and dated proxy card without marking any voting selections, your shares will be voted:

•

Proposal 1: "FOR" the election of each of Robert A. Baffi, Denise Gilbert, Ted W. Love, Gary Lyons, Ronald A. Martell, Laurie Smaldone Alsup and Raymond M. Withy, as directors;



•

Proposal 2: "FOR" approval of a series of alternate amendments to our amended and restated certificate of incorporation, to effect, at the discretion of the Board, a reverse stock split of the Company's common stock, whereby each outstanding 4, 5, 6, 7, 8, 9 or 10 shares would be combined, converted and changed into one share of common stock;



•

Proposal 3: "FOR" approval of the amendments to our 2012 Equity Incentive Plan to, among other things, increase the number of shares reserved for issuance thereunder by 2,500,000 shares on a pre-reverse stock split basis; and



•

Proposal 4: "FOR" the ratification of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015.

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What do I need to show to attendten days before the Annual Meeting in person?

        Youat our address above. The stockholder list will need proof of your share ownership (such as a recent brokerage statement or letter from your broker showing that you owned shares of the Company's common stock as of May 18, 2015) and a form of photo identification. If you do not have proof of ownership and valid photo identification, you may notalso be admitted to the Annual Meeting. All bags, briefcases and packages will be held at registration and will not be allowed in the meeting. We will not permit the use of cameras (including cell phones with photographic capabilities) or other recording devices in the meeting room.

Who is paying for this proxy solicitation?

        The Company will pay for the entire cost of soliciting proxies. The accompanying proxy is being solicited by the Board. In addition to this solicitation, directors and employees of the Company may solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We have engaged Innisfree M&A Incorporated to aid in the solicitation of proxies from certain brokers, bank nominees and institutional and other stockholders. Our costs for such services will not be material.

What happens ifavailable online during the Annual Meeting is postponed or adjourned?

        Unless the polls have closed or you have revoked your proxy, your proxy will still be in effect and may be voted once the Annual Meeting is reconvened. However, you will still be able to change or revoke your proxy with respect to any proposal until the polls have closed for voting on such proposal.

How can I find out the results of the voting at the Annual Meeting?
following URL: www.virtualshareholdermeeting.com/HGEN2021.

 Preliminary voting results

When are expected to be announced at the Annual Meeting. Final voting results are expected to be reported on a Current Report on Form 8-K filed with the SEC no later than July 13, 2015.

Can I find KaloBios' proxy materials on the Internet?

        Yes. This proxy statement and the 2014 Annual Report are available at our corporate website at www.kalobios.com/investors. You also can obtain copies without charge at the SEC's website at www.sec.gov. Additionally, in accordance with SEC rules, you may access these materials at www.envisionreports.com/KBIO, which does not have "cookies" that identify visitors to the site. The inclusion of our website address in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.

How do I obtain a separate set of KaloBios' proxy materials if I share an address with other stockholders?

        In some cases, stockholders holding their shares in a brokerage or bank account who share the same surname and address and have not given contrary instructions received only one copy of the proxy materials. This practice is designed to reduce duplicate mailings and save printing and postage costs as well as natural resources. If you would like to have a separate copy of the proxy materials mailed to you or to receive separate copies of future mailings, please submit your request to the address or phone number that appears on your Notice or proxy card. We will deliver such additional copies promptly upon receipt of such request.

        In other cases, stockholders receiving multiple copies of the proxy materials at the same address may wish to receive only one. If you would like to receive only one copy if you now receive more than one, please submit your request to the address or phone number that appears on your Notice or proxy card.

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Whom should I call if I have any questions?

        If you have any questions, would like additional KaloBios proxy materials or proxy card, or need assistance in voting your shares, please contact the firm assisting us with the solicitation, Innisfree M&A Incorporated. Stockholders may call toll-free at (888) 750-5834.

Can I submit a proposal for consideration at the 2016 annual meeting of stockholders?

        Stockholders of the Company may submit proper proposals for inclusion in our proxy statement and for consideration at our 2016 annual meeting of stockholders by submitting their proposals in writing to the Secretary of the Company in a timely manner.

        Requirements for stockholder proposals toand director nominations due for next year’s annual meeting?

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 24, 2021, to us at 533 Airport Boulevard, Suite 400, Burlingame, California 94010, Attention: Corporate Secretary.

Pursuant to our proxy material —In orderSecond Amended and Restated Bylaws (the “Bylaws”), if you wish to be consideredsubmit a proposal (including a director nomination) at the 2022 annual meeting otherwise than for inclusion in ournext year’s proxy materials, foryou must do so not later than March 19, 2022, nor earlier than the 2016close of business on February 17, 2022. However, if the date of our 2022 annual meeting of stockholders,is not held between May 18, 2022 and August 26, 2022, to be timely, notice by the stockholder proposals must:

•

must be received bynot earlier than the Secretaryclose of business on the Company no120^th day prior to such 2022 annual meeting and not later than the close of business on January 27, 2016; and



•

otherwise comply with the requirements of Delaware law, Rule 14a-8later of the Securities Exchange Act90th day prior to such 2022 annual meeting or the 10^th day following the day on which public announcement of 1934, as amended (the "Exchange Act"), andthe date of the 2022 annual meeting is first made.

You are also advised to review our Bylaws.

        Requirements forBylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.

Who is paying for this proxy solicitation?

We will pay for the cost of soliciting proxies. We may reimburse brokers, banks and other agents for the cost of forwarding proxy materials to be brought before an annual meeting—In addition, our Bylaws establish an advance notice procedurebeneficial owners.

What is “householding”?

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single Notice of Internet Availability of Proxy Materials or other Annual Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.

A number of brokers with account holders who are our stockholders will be “householding” our proxy materials. A single Notice of Internet Availability of Proxy Materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to present certain matters before an annual meetingparticipate in “householding” and would prefer to receive a separate Notice of stockholders. In general, nominations for the electionInternet Availability of directors may be made (1) byProxy Materials, please notify your broker or at the directionus. Direct your written request to Humanigen, Inc., 533 Airport Boulevard, Suite 400, Burlingame, CA 94010, Attention: Corporate Secretary. Stockholders who currently receive multiple copies of the Notices of Internet Availability of Proxy Materials at their addresses and would like to request “householding” of their communications should contact their brokers.

PROPOSAL 1

ELECTION OF DIRECTORS

General

Our Board or (2) by any stockholder entitled to vote who has timely delivered written notice tocurrently consists of five members. Our Board, upon the Secretaryrecommendation of the Company during the Notice Period (as defined below), which notice must contain specified information concerning the nominees and concerning the stockholder proposing such nominations. However, if a stockholder wishes only to recommend a candidate for consideration by theits nominating and corporate governance committee, as a potential nomineehas nominated the following individuals for director, see the procedures discussed in "Corporate Governance—Board Committees—Nominating Process for Recommending Candidates for Election to the Board."

        The Bylaws also provide that the only business that may be conducted at an annual meeting is business that is brought (1) pursuant to the notice of meeting (or any supplement thereto), (2) by orreelection at the directionAnnual Meeting: Dr. Cameron Durrant, Ronald Barliant, Dr. Rainer Boehm, Cheryl Buxton and Dr. Dale Chappell. Each of these nominees has agreed to stand for reelection at the Board, or (3) by a stockholder whoAnnual Meeting. Our management has timely delivered written notice which sets forth all information required byno reason to believe that any nominee will be unable to serve. If elected at the Bylaws toAnnual Meeting, each of these nominees would serve until the Secretary of the Company during the Notice Period (as defined below).

        The "Notice Period" is defined as the period commencing on the date 120 days prior to the one year anniversary of the date on which KaloBios first mailed its proxy materials to stockholders for the previous year's annual meeting of stockholders and terminating on the date 90 days prior to the one year anniversary of the date on which KaloBios first mailed its proxy materials to stockholders for the previous year's annual meeting of stockholders. As a result, the Notice Period for the 2016 Annual Meeting of Stockholders will be from January 27, 2016 to February 26, 2016.

        If a stockholder who has notified KaloBios of his or her intention to present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, we need not present the proposal for vote at such meeting.

        A current copy of our bylaws also is available at our corporate website at www.kalobios.com. The inclusion of our website address in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement. Such requests and all notices of proposals and director nominations by stockholders should be sent to KaloBios Pharmaceuticals, Inc., 442 Littlefield Avenue, South San Francisco, CA 94080, Attention: Secretary of the Company.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be held on July 7, 2015

The proxy statementin 2022 and annual report to stockholders are available at www.envisionreports.com/KBIO.

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PROPOSAL 1: ELECTION OF DIRECTORS

General

        Our Board consists of one class of directors, and each director will serve until his or her successor ishas been duly elected, or qualified. Currently,if sooner, until the director’s death, resignation or removal.

Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the five nominees described above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by us.

Our nominating and corporate governance committee seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise, diversity and high-level management experience necessary to oversee and direct our business. To that end, the committee has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the committee views as critical to effective functioning of the Board. To provide a mix of experience and perspective on the Board, the committee also takes into account geographic, gender, age, and ethnic diversity.

Nominees for Reelection as Directors at the Annual Meeting

The following table sets forth the names, ages and current positions of our director nominees, as of April 16, 2021, each of whom is authorizedcurrently serving as a member of our Board. Following the table is biographical information for each director nominee, including information on specific experiences, qualifications, attributes and skills that support the conclusion that the director should continue to have seven members. The authorized number of directors may be changed by resolutionserve on our Board.

Cameron Durrant, M.D., MBA, has served as our Chairman of our Board since January 2016, and vacanciesas our Chief Executive Officer since March 2016. In addition, Dr. Durrant served as our Interim Chief Financial Officer from July 1, 2019 to July 31, 2020. From May 2014 to January 2016, Dr. Durrant served as Founder and Director of Taran Pharma Limited, a private semi-virtual specialty pharma company developing and registering treatments in Europe for orphan conditions. Dr. Durrant served as President and Chief Executive Officer of ECR Pharmaceuticals Co., Inc., a subsidiary of Hi-Tech Pharmacal Co., Inc., from September 2012 to April 2014 until its acquisition by Akorn. He previously has been a senior executive at Johnson and Johnson, Pharmacia Corporation, GSK and Merck. Dr. Durrant was a director of Immune Pharmaceuticals Inc. from July 2014 to September 2018 and serves on the boards of directors of two privately held healthcare companies. Dr. Durrant earned his medical degree from the Welsh National School of Medicine, Cardiff, UK, his DRCOG from the Royal College of Obstetricians and Gynecologists, London, UK, his MRCGP from the Royal College of General Practitioners, London, UK, and his MBA from Henley Management College, Oxford, UK. Dr. Durrant brings to the Board extensive experience as a pharma/biotech entrepreneur, operating executive and board member, as well as his day-to-day operating experience as our Chief Executive Officer.

Ronald Barliant, JD, has served as a member of our Board can be filled by resolutionsince January 2016. Mr. Barliant has been Of Counsel to Goldberg Kohn, Ltd. since January 2016, and immediately prior to that had served as a principal in Goldberg Kohn’s Bankruptcy & Creditors’ Rights Group since September 2002. He previously served as U.S. bankruptcy judge for the Northern District of Illinois from 1988 to 2002. Mr. Barliant has represented debtors and creditors in complex bankruptcy cases, and counseled major financial institutions, business firms and boards of directors in connection with workouts. In February 2020, he was appointed the sole director of Suitable Technologies, Inc. and is helping guide that company through a District of Delaware Chapter 11 case. Mr. Barliant brings to the Board valuable experience gained from a distinguished legal career as a counselor to numerous boards, considered judgment and financial sophistication.

Rainer Boehm, M.D., MBA, has served as a member of our Board. OurBoard since February 2018. Mr. Boehm has been a biopharmaceutical industry leader for more than three decades. At Novartis for 29 years, he held roles of increasing responsibility culminating with his position as Chief Commercial and Medical Affairs Officer and as ad interim CEO of Novartis’ pharmaceuticals division. His background spans senior leadership, marketing, sales and medical affairs positions in both oncology and pharmaceuticals and he has led regions around the world, including North America, Asia and all emerging markets. Mr. Boehm has overseen the launch and commercialization of many new drugs in his career, including blockbuster breakthroughs Cosentyx and Entresto, and major oncology brands including Afinitor, Exjade, Tasigna, Femara, Zometa and Glivec. Mr. Boehm also currently serves on the board of directors for the following companies: Cellectis, a clinical-stage biopharmaceutical company focused on immunotherapies based on gene-edited CAR-T cells; Nordic Nanovector, a clinical-stage biopharmaceutical company focused on targeted radiotherapies; BioCopy, a preclinical-stage company focused on copying of biomolecules; and as an advisor in leadership development for senior executives at the GLG Institute in New York City. He graduated from the medical school at the University of Ulm in Germany and received his MBA from Schiller University at the Strasbourg campus in France. Mr. Boehm brings to the Board significant knowledge and experience within the biopharmaceutical industry, as well as financial acumen and operational experience.

Cheryl Buxton, M.A., has served as a member of our Board since December 2019. Until her retirement in December 2020, Ms. Buxton worked for over 25 years at Korn/Ferry International, the world’s largest executive search company.  Most recently, she served as the Korn/Ferry Vice Chairman, Global Sector Leader, Pharmaceuticals, based in the Princeton office. Ms. Buxton conducted senior level assignments, with a special focus on research driven organizations. She also led the R&D sector for the Pharmaceutical and Consumer divisions within Korn/Ferry.  Ms. Buxton joined Korn/Ferry’s London office and European headquarters before spending time in Paris and then relocating to Princeton in 1997. Prior to joining Korn/Ferry, Ms. Buxton was human resources director for Johnson & Johnson Pharmaceuticals (Cilag Ltd), based in the U.K., where her focus was on organizational issues and strategic resourcing and guidance on European directives. She also provided human resources support to three smaller companies in the group for Europe. Her human resources career started at Bristol Myers Ltd., where she was responsible for its consumer and pharmaceutical business. Ms. Buxton holds a master’s degree in employment law and industrial relations from Leicester University, a degree in Nursing, a diploma in personnel management and is a member of the Institute of Personnel and Development.  Ms. Buxton is on the Executive Council for Springboard, a non-profit organization encouraging women entrepreneurs in Life Sciences, and the Advisory Board for South Asia Pharmaceutical Council.  She previously was on the board of directors of SIFE. Ms. Buxton brings to the Board significant knowledge and experience within the biopharmaceutical industry, as well as leadership experience and an extensive executive network.

Dale Chappell, M.D., MBA, has served as a member of our Board since February 2021. In addition, Dr. Chappell was appointed as our Chief Scientific Officer on July 6, 2020. Dr. Chappell is the managing member of Black Horse Capital Management LLC (“BH Management”), a private investment manager that specializes in biopharmaceuticals, a position he has held since 2002, and is the beneficial owner of a significant number of shares of our common stock. Since April 2015, Dr. Chappell has served as CEO, President and CFO of Cheval US Holdings, Inc., a private investment company with holdings in the hospitality industry. Previously, Dr. Chappell was an associate with Chilton Investment Company, covering healthcare, and an analyst at W.P. Carey & Company. Dr. Chappell, who received his MD from Dartmouth Medical School and his MBA from Harvard Business School, began his career as a Howard Hughes Medical Institute fellow at the National Cancer Institute where he studied tumor immunology, worked as a researcher in the labs of Dr. Steven A. Rosenberg and Dr. Nicholas P. Restifo and is published in the field of GM-CSF. Dr. Chappell previously served as a member of the Board from June 2016 to November 2017. Prior to joining the Company in a full-time role as our Chief Scientific Officer, Dr. Chappell advised and consulted with management as our ex-officio chief scientific officer. Dr. Chappell brings to the Board his extensive experience in the biopharmaceuticals industry, provides our Board with unparalleled insight into the Company’s development pipeline in his capacity as Chief Scientific Officer, as well as the perspective of a significant stockholder in the Company.

OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF OUR DIRECTOR NOMINEES.

INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE

Director Independence

We use the definition of “independent” set forth in Nasdaq listing rules in determining whether a director is independent in the capacity of director. Nasdaq’s independence criteria include a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with us. In addition, as further required by Nasdaq listing rules, our Board has subjectively determined as to each director whether any relationship exists that, allin the opinion of the Board, would interfere with each such person's exercising independent judgment in carrying out his or her responsibilities as a director. In making these determinations on the independence of our directors, qualify as "independent" directors in accordance with the Nasdaq listing requirements. In making this determination, our Board considered the current and prior relationships that each non-employee director has with our companyus and all other facts and circumstances ourthe Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.such person.

 The nominating

Consistent with the foregoing independence criteria, our Board affirmatively determined that all of our directors who served in 2020, other than Dr. Durrant, our Chief Executive Officer, is independent. Mr. Morris was determined to be independent under the applicable Nasdaq criteria until he resigned from his position on the Board to join the Company as Chief Operating and corporate governance committeeFinancial Officer. Likewise, Robert G. Savage, a director from 2018 until resigning effective January 1, 2021, also was determined to be independent. Dr. Chappell, who serves as our Chief Scientific Officer and joined the Board in 2021, is not independent.

Board Leadership Structure

Dr. Durrant, our Chief Executive Officer, serves as Chairman of our Board. Our Board believes that it is advantageous to have a chairman with an extensive history with and knowledge of the Company and our industry, as is the case with Dr. Durrant, who has been a director of the Company since 2016. In addition, as both our Chairman and our Chief Executive Officer, Dr. Durrant is able to apprise our Board of the operational and financial results as they occur and provide insight into the environment in which the Company operates.

Role of the Board recommendedof Directors in Risk Oversight

Our Board takes an active role in overseeing management of the Company’s risks, both through its own consideration of risks associated with our business and strategic initiatives and through its committees’ consideration of various risks applicable to that committee’s areas of focus. In particular, our Board is responsible for monitoring and assessing strategic risk exposure and our audit committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The audit committee also monitors compliance with legal and regulatory requirements.

Meetings of the Board that Robert A. Baffi, Denise Gilbert, Ted W. Love, Gary Lyons, Ronald A. Martell, Laurie Smaldone Alsupof Directors and Raymond M. Withyits Committees

Our Board is responsible for the oversight of management and the strategy of our company and for establishing corporate policies. Our Board meets periodically during the year to review significant developments affecting us and to act on matters requiring the approval of our Board. Our Board met 16 times during 2020. During 2020, each be nominated for election at the Annual Meeting. If elected at the Annual Meeting, eachdirector attended 75% or more of the nominees would serve untilaggregate of the 2016 annual meetingmeetings of stockholdersour Board and until hisof the committees on which he or her successor is elected and qualified, or, if sooner, until the director's death, resignation or removal. Your proxy cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.

she served. We encourage our directors and nominees for director to attend the Annual Meeting.our annual meeting of stockholders.

 There are no family relationships among our directors or executive officers.

Nominees for Election as Directors at the Annual Meeting

        The names of the nominees and certain information about them as of April 23, 2015 are set forth below.

 The following is additional information about each of the nominees as of the date of this proxy statement, including their business experience, director positions held currently or at any time during the last five years, involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the nominating and corporate governance committee and our Board to determine that each nominee should serve as one of our directors.

Robert A. Baffi, Ph.D. has served as a member of our Board since November 2014. Dr. Baffi currently serves as Executive Vice President of Technical Operations at BioMarin Pharmaceutical Inc., where he is responsible for overseeing manufacturing, process development, quality, analytical chemistry and logistics departments. From May 2000 to December 2009, Dr. Baffi served as Senior Vice President of Technical Operations at BioMarin. From 1986 to 2000, Dr. Baffi served in a number of positions with increasing responsibility at Genentech Inc., primarily in the functional area of quality control. Prior to joining Genentech, Dr. Baffi worked for Cooper BioMedical as a research scientist and at Becton Dickinson Research Center as a post-doctoral fellow. Dr. Baffi has contributed to more than

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20 regulatory submissions for product approval in the United States and Europe and to more than 20 regulatory submissions for investigational new drug testing. Dr. Baffi received a Ph.D., M. Phil and a B.S. in biochemistry from the City University of New York and an M.B.A. from Regis University. Our Board determined that Dr. Baffi should serve as a director based on his experience as a senior executive in the biotechnology industry, as well as his experience in manufacturing and technical operations.

Denise Gilbert, Ph.D. has served as a member of our Board and chair of our audit committee since January 2008. Dr. Gilbert is a retired senior life science industry executive and has been serving as a director of various public and private life science companies since 2002. Previously, she served as chief executive officer of Entigen Corporation, a private life science information technology company, from 2001 to 2002. In addition, Dr. Gilbert has served as chief financial officer of two public life science companies, Incyte Pharmaceuticals Inc. from 1995 to 1999 and Affymax NV from 1993 until its sale to Glaxo in 1995. Dr. Gilbert started her career in biotechnology in 1984, first in venture capital and then as a senior biotechnology analyst with Smith Barney Harris & Upham and Montgomery Securities. She is currently on the Board and a member of the audit committee of Cytokinetics, Inc. and previously served on the Board of Dynavax Technologies Corporation. Dr. Gilbert holds a Bachelor of Arts from Cornell University and a Ph.D. in cell and development biology from Harvard University. Our Board determined that Dr. Gilbert should serve as a director based on her experience as a senior executive in the life science industry, as well as her experience and skills relating to financial statement and accounting matters.

Ted W. Love, M.D., has served as a member of our Board and of the audit committee since March 2009, and was appointed as Chairman of the Board as of May 2014. Dr. Love currently serves as Chief Executive Officer at Global Blood Therapeutics in South San Francisco, California. From February 2010 to August 2012, Dr. Love was Executive Vice President and Head of Research & Development at Onyx Pharmaceuticals, Inc., a publicly traded company. He is the former ChairmanCommittees of the Board of Directors of Nuvelo, Inc., a publicly traded biopharmaceutical company engaged in developing innovative drugs for acute cardiovascular and cancer therapy. He joined Nuvelo in 2001 as President and Chief Executive Officer and became Chairman of the Board in September 2005. Dr. Love joined Nuvelo from Theravance, Inc., where he served as Senior Vice President of Development. Previously, he spent six years at Genentech, Inc., where he held a number of senior management positions in medical affairs and product development and served as chairman of Genentech's Product Development Committee. As Vice President of Product Development and Regulatory Affairs at Genentech, Dr. Love oversaw all drugs in development, including Herceptin®, Rituxan®, and TNKase®. Dr. Love also serves as a member of the boards of directors of Santarus, Inc., Affymax and ARCA Biopharma. In addition, he serves on the California Independent Citizens' Oversight Committee (ICOC), the 29-member board that oversees the $3 billion allocated to stem cell research authorized by Proposition 71. Dr. Love earned his bachelor's degree in molecular biology from Haverford College and his medical degree from Yale University School of Medicine.

Our Board determined that Dr. Love should serve as a director based on his experience as a senior executive in the biotechnology industry, as well as his experience in research and product development.

Gary Lyonshas served as a member of our Board since January 2011, as chairman of our compensation committee since January 2011 and was appointed to our audit committee in May 2014. Mr. Lyons served as President, Chief Executive Officer and member of the Board of Neurocrine Biosciences, Inc., a public biotechnology company, from February 1993 to March 2008. Since March 2008, Mr. Lyons has served as President of GL Biomed, a life science consulting and advisory firm he founded. Prior to joining Neurocrine, Mr. Lyons held a number of senior management positions at Genentech, Inc., including Vice President of Business Development, Vice President of Sales, and Director of Sales and Marketing. In addition to serving on our Board, he also serves on the boards of directors of Neurocrine Biosciences, Rigel Pharmaceuticals, Inc. (where he serves as Board Chairman),

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Retrophin, Inc., Cytori Therapeutics, and Vical Incorporated, and he previously served on the boards of directors of NeurogesX, Inc., Poniard Pharmaceuticals, Inc., Facet Biotech Corporation, and PDL BioPharma, Inc. Mr. Lyons holds a Bachelor of Science in marine biology from the University of New Hampshire and a Master of Business Administration from Northwestern University's J.L. Kellogg Graduate School of Management. Our Board determined that Mr. Lyons should serve as a director based on his experience as a senior executive in the biotechnology industry, as well as his experience as a director of other public companies.

Ronald A. Martell has served as a member of our Board since April 2015. From June 2014 to January 2015, Mr. Martell served as Chief Executive Officer at Sevion Therapeutics, Inc. From January 2012 through July 2013, Mr. Martell served as President and Chief Executive Officer and director of NeurogesX, Inc., where he sold the assets of the company to Acorda Therapeutics. From February 2010 through December 2011, Mr. Martell served as the Chief Executive Officer of Poniard Pharmaceuticals, Inc. From May 2007 through February 2010, Mr. Martell served as the President and Chief Operating Officer of Poniard Pharmaceuticals, Inc. and director from June 2006 through December 2011. From November 1998 through August 2006, Mr. Martell served as the Vice President, Marketing and then Senior Vice President, Sales, at ImClone Systems Incorporated, where he strengthened and expanded ImClone Systems commercial operations and field sales force in order to market and commercialize Erbitux® with partners Bristol-Myers Squibb and Merck KGaA. From 1988 to 1998, Mr. Martell worked at Genentech in a variety of positions. At Genentech, Mr. Martell was responsible for the launch of Herceptin ® for metastatic HER-2 positive breast cancer and Rituxan® for non-Hodgkin's lymphoma. Mr. Martell began his career at Roche Pharmaceuticals. Our Board determined that Mr. Martell should serve as a director based on his experience as a senior executive at large multinational, as well as development stage, life sciences companies and his corporate governance experience through service on boards of other companies and organizations.

Laurie Smaldone Alsup, M.D., has served as a member of our Board and of our compensation committee since October 2013 and was appointed to the nominating and corporate governance committee as of May 2014. Dr. Smaldone Alsup has over 25 years of global leadership experience in the pharmaceutical and biotechnology industries in drug development, regulatory strategy and regulatory approvals across all major therapeutic areas and since August 2011 has served as President and Chief Scientific Officer of PharmApprove, a regulatory communications consultancy firm. Dr. Smaldone Alsup served in clinical and regulatory roles of increasing responsibility and scope while at Bristol Myers Squibb, including Senior Vice President of Global Regulatory Science and Vice President of Corporate Strategy and Business Risk Management. During this time she led multiple teams in both U.S. FDA and European proceedings, including preparations for numerous key FDA meetings, Advisory Committee hearings and EU scientific advice and oral arguments. In this role, she has led the development and commercialization of drugs for a broad range of diseases including oncology, HIV/AIDS, hepatitis and other infectious diseases, cardiovascular, endocrine, neurology, dermatology, inflammatory and immune-based diseases including rheumatoid arthritis. In addition, she served as Chief Executive Officer of an early stage company focused on arthritis and inflammation. Dr. Smaldone Alsup received a B.A. in biology from Fordham College and an M.D. at Yale University School of Medicine, where she completed her residency in Internal Medicine and fellowship in Medical Oncology. Our Board determined that Dr. Smaldone Alsup should serve as a director based on her extensive experience in the life sciences industry.

Raymond M. Withy, Ph.D., has served as a member of our Board since July 2005, as a member of the compensation committee since March 2006 and as chair of our nominating and corporate governance committee since July 2012. He has over 25 years experience in the biotechnology industry. Most recently, he was President and Chief Executive Officer of Abgenix, Inc. until his retirement in 2004. He was also a member of the Board of Directors of Abgenix until June 2005. As one of the co-founders of Abgenix in 1996, Dr. Withy initially served as its Vice-President, Business Development,

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then its Chief Business Officer and then President before becoming its CEO. Prior to the founding of Abgenix, Dr.Withy held various business development positions at Cell Genesys, Inc. From 1991 to 1993, Dr. Withy was a consultant to the industry in the areas of business development and strategic planning. Dr. Withy held various research and development positions at Genzyme Corp. and Integrated Genetics, which he joined in 1984. Dr. Withy has served as a member of the Board of a number of companies, including Xenotech, Inc., Abgenix, Digitab, Inc. and Nuon Therapeutics, Inc., and has served as chairman of the board of Nuon Therapeutics, Inc. and Digitab, Inc. Dr. Withy received a B.Sc. in Chemistry and Biochemistry and a Ph.D. in Biochemistry, both from the University of Nottingham, UK and was a post-doctoral research fellow at the California Institute of Technology. Our Board determined that Dr. Withy should serve as a director based on his extensive experience in the biotechnology industry, including his experience in management, business development, research, and strategic planning.

Required Vote and Recommendation of the Board for Proposal 1

        The affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of our directors.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF ROBERT A. BAFFI, DENISE GILBERT, TED W. LOVE, GARY LYONS, RONALD A. MARTELL, LAURIE SMALDONE ALSUP AND RAYMOND M. WITHY.

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CORPORATE GOVERNANCE

Independent Directors

        As required by the listing standards of The Nasdaq Global Market ("Nasdaq"), a majority of the members of our Board must qualify as "independent," as affirmatively determined by our Board. Our Board consults with our legal counsel to ensure that its determinations are consistent with all relevant securities and other laws and regulations regarding the definition of "independent," including those set forth in the applicable Nasdaq listing standards. Consistent with these considerations, after review of all relevant transactions and relationships between each director, any of his or her family members, the Company, our executive officers and our independent registered public accounting firm, our Board has determined that all of our directors qualify as "independent" directors in accordance with the Nasdaq listing requirements.

Board Committees

        We have established an audit committee, a compensation committee, and a nominating and corporate governance committee. Our Board may establish other committees to facilitate the management of our business. Our Board has adopted written charters for each of our audit, compensation, and nominating and corporate governance committees, which are available on our website at https://www.humanigen.com/governance.

The chart below shows the current membership and chairperson of each of our three standing Board committees and the number of committee meetings held during our last fiscal year. Each member of the audit, compensation, and nominating and corporate governance committee meets the applicable independence requirements of the SEC and the Nasdaq listing rules for service on our Board and each committee on which she or he serves.

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(1) During 2020, our nominating and corporate governance committee did not hold any formal meetings. However, the committee was active within the broader involvement of our entire Board in reviewing and refreshing our corporate governance documents in connection with our application for our successful return to Nasdaq in September 2020. That involvement as part of the broader engagement of the Board continued in the first quarter of 2021, in the context of the appointment of Dr. Chappell to fill the vacancy on the Board created by the retirement of Bob Savage and, in connection with the Annual Meeting our nominating and corporate governance committee acted to recommend to the Board the nominations of our current directors for re-election to the Board.

Below is a description of each standing committee of our Board.

Audit Committee

Pursuant to the audit committee charter, the functions of the audit committee include, among other things:

Each member of our audit committee can read and understand fundamental financial statements in accordance with Nasdaq audit committee requirements. In arriving at this determination, our Board has examined each audit committee member’s scope of experience and the nature of their prior and/or current employment. Additionally, our Board has determined that each of Mr. Morris (who served as chairman of this committee before resigning from our Board to accept his executive role with the Company) and Mr. Boehm qualifies as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of the Nasdaq listing rules. Both our independent registered public accounting firm and management periodically meet privately with our audit committee.

Our audit committee also has the authority to retain special legal, accounting or other advisors or consultants as it deems necessary or appropriate to carry out its duties. We believe that the composition of these committees meets the criteria for independence under, and the functioning of these committeesour audit committee complies with theall applicable requirements of the Sarbanes-Oxley Act, of 2002 and currentall applicable SEC and Nasdaq listing rules and regulations. We intend to comply with future requirements asto the extent they become applicable to us. Each committee acts pursuant to a charter that is available at http://ir.kalobios.com/governance.cfm. Each committee has the composition and responsibilities described below.

Audit Committee

 In April 2005, our Board established an audit committee of the Board, which is currently comprised of Denise Gilbert, Ted W. Love and Gary Lyons, each of whom is "independent" as such term is defined for audit committee members by the Nasdaq listing requirements. Dr. Gilbert serves as the chair of the audit committee. The Board has determined that Dr. Gilbert is an "audit committee financial expert" as defined in the rules of the SEC. Pursuant to the audit committee charter, the functions of the committee include, among other things:

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appointing, approving the compensation of, and assessing the independence of our registered public accounting firm;



•

overseeing the work of our registered public accounting firm, including through the receipt and consideration of reports from such firm;

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reviewing and discussing with management and the registered public accounting firm our annual and quarterly financial statements and related disclosures;



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monitoring our internal control over financial reporting and our disclosure controls and procedures;



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meeting independently with our registered public accounting firm and management;



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preparing the audit committee report required by SEC rules;



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reviewing and approving or ratifying any related person transactions; and



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overseeing our risk assessment and risk management policies.

Compensation Committee

 In April 2005, our Board established a compensation committee of the Board, which is currently comprised of Raymond M. Withy, Gary Lyons and Laurie Smaldone Alsup. Mr. Lyons serves as the chair of the compensation committee.

Pursuant to the compensation committee charter, the functions of this committee include, among other things:

•

·

evaluating the performance of our chief executive officer and reviewing and recommending to the Board for its determination the chief executive officer's salary and contingent compensation based on his or her performance and other relevant criteria as determined by the compensation committee;

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identifying and recommending to our Board the corporate and individual objectives governing the chief executive officer's compensation;

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approving the compensation of our other executive officers;

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reviewing annually and making recommendations to our Board with respect to director compensation;

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reviewing and approving the terms of material compensatory agreements between us and our executive officers;

·

overseeing and administering our equity incentive plans;

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reviewing and approving policies and procedures relating to the perquisites and expense accounts of our executive officers; and

·

conducting a review of executive officer succession planning, as necessary, reporting its findings and recommendations to our Board, and working with the Board in evaluating potential successors to executive officer positions.

Each of the members of the compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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The compensation committee has the authority to retain special legal, accounting or other advisors or consultants as it deems necessary or appropriate to carry out its duties. In selecting a consultant, outside counsel and other advisors, the compensation committee evaluates its independence by considering applicable Nasdaq listing rules and any other factors that the compensation committee deems relevant to the consultant’s independence from management. We believe that the composition and functioning of our chiefcompensation committee complies with all applicable requirements of the Sarbanes-Oxley Act, and all applicable SEC and Nasdaq listing rules and regulations.

In 2020, the compensation committee retained Aon/Radford as an independent consultant to advise it on executive officer and determiningdirector compensation matters. Aon/Radford was engaged directly by and reported directly to our compensation committee and did no other work for the chief executive officer's salary and contingent compensation based on his or her performance and other relevant criteria;



•

identifying the corporate and individual objectives governing the chief executive officer's compensation;



•

approvingCompany. As requested, a representative of Aon/Radford attended certain meetings of the compensation committee and communicated with compensation committee members outside of meetings. The compensation committee considered the applicable Nasdaq listing rules and determined that Aon/Radford qualified as an independent compensation consultant in accordance with applicable SEC and Nasdaq listing rules and regulations. For additional information regarding the role of Aon/Radford in determining or recommending the amount or form of executive compensation in 2020, see “Executive Compensation — Narrative to Summary Compensation Table.” In addition, our Chief Executive Officer may periodically discuss the design of, and make recommendations with respect to, our compensation programs and the compensation levels of our other named executive officers;



•

making recommendationsofficers and certain key personnel with the compensation committee.

The compensation committee charter provides that the compensation committee may delegate its authority or responsibilities to our Board with respect to director compensation;



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reviewing and approvinga subcommittee of the terms of material agreements between us and our executive officers;



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overseeing and administering our equity incentive plans and employee benefit plans;



•

reviewing and approving policies and procedures relatingcompensation committee to the perquisitesextent permitted under applicable law, Nasdaq listing rules and expense accounts of our executive officers;



•

preparing the annual compensation committee report required by SEC rules;Company’s charter and



•

conducting a review of executive officer succession planning, as necessary, reporting its findings and recommendations to our Board, and working with the board in evaluating potential successors to executive officer positions.

��

Nominating and Corporate Governance Committee

 In April 2005, our Board established a nominating and corporate governance committee of the Board, which is currently comprised of Raymond M. Withy, Laurie Smaldone Alsup and Robert A. Baffi, who was appointed to the committee in May 2015. Dr. Withy serves as the chair of the nominating and corporate governance committee.

Pursuant to the nominating and corporate governance committee charter, the functions of this committee include, among other things:

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identifying, evaluating, and making recommendations to our Board and our stockholders concerning nominees for election to our Board, to each of the board's committees and as committee chairs;



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annually reviewing the performance and effectiveness of our Board and developing and overseeing a performance evaluation process;



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annually evaluating the performance of management, the Board and each board committee against their duties and responsibilities relating to corporate governance;

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annually evaluating adequacy of our corporate governance structure, policies, and procedures; and



•

providing reports to our Board regarding the committee's nominations for election to the board and its committees.

Nominating Process for Recommending and Nominating Candidates for Election to the Board

The nominating and corporate governance committee is responsible for making recommendations to our Board regarding candidates for directorships and the size and composition of our Board. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance guidelines and reporting and making recommendations to our Board concerning corporate governance matters.

The nominating and corporate governance committee is also responsible for reviewing with our Board from time to time the appropriate skills and guidelines required of directors in the context of the current make-up of the Board. These guidelines and skills of the Board, as a whole, may include (i) various and relevant career experience, (ii) relevant skills, such as an understanding of the Company's business, (iii) financial expertise, (iv) diversity and (v) local and community ties. The minimum qualifications and skills that each director should possess include (i) the highest professional and personal ethics and values, (ii) broad experience at the policy-making level in business, government, education, technology or public interest, (iii) a commitment to enhancing stockholder value and (iv) sufficient time to carry out his or her duties and to provide insight and practical wisdom based on experience. The nominating and corporate governance committee evaluates the foregoing factors, among others, and does not assign any particular weighting or priority to any of these factors.

The nominating and corporate governance committee also considers director candidates recommended by our stockholders. To recommend a candidate for election to our Board, a stockholder must notify the nominating and corporate governance committee by writing to: KaloBios Pharmaceuticals,Humanigen, Inc., 442 Littlefield Avenue, South San Francisco,533 Airport Boulevard, Suite 400, Burlingame, CA 94080,94010, Attention: Chief Executive Officer.Corporate Secretary. Such stockholder's notice shall set forth the following information:

•

·

to the extent reasonably available, information relating to such director candidate that would be required to be disclosed in a proxy statement pursuant to Regulation 14A under the Exchange Act in which such individual is a nominee for election to our Board;

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the director candidate's written consent to (A) if selected, be named in the Company's proxy statement and proxy and (B) if elected, to serve on our Board;

·

as further described in the Bylaws, certain additional information about the stockholder giving the notice, including, among other things, (A) such stockholder’s name, address and the number of shares of common stock owned, (B) a description of any agreement, arrangement or understanding with respect to the nomination between or among such stockholder, any of its respective affiliates or associates, and any others acting in concert with any of the foregoing, including the director nominee, (C) a representation that such stockholder intends to appear in person or by proxy at the applicable meeting of stockholders to propose such nomination, and (D) a representation as to whether the stockholder intends or is part of a group which intends (i) to deliver a proxy statement and/or form of proxy to stockholders and/or (ii) otherwise to solicit proxies or votes from stockholders in support of the nomination of the director nominee; and

·

any other information that such stockholder believes is relevant in considering the director candidate.

Please see the “Questions and Answers” section of this proxy statement pursuantfor deadlines to Regulation 14A undersubmit director nominations for consideration at the Exchange Act in which such individual is a nominee for election to our Board;



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the director candidate's written consent to (A) if selected, be named in the Company's proxy statement and proxy and (B) if elected, to serve on our Board; and



•

any other information that such stockholder believes is relevant in considering the director candidate.

The nominating and corporate governance committee considers bona fide candidates from all relevant sources, including current Board members, professional search firms, stockholders and other persons.persons or sources. The committee evaluates director candidates in light of the Board membership criteria described above, based on all relevant information and materials available to the committee. This includes information and materials provided by stockholders recommending director candidates, professional search firms and other parties.

 In 2014, Dr. Baffi was appointed

Stockholder Communications with our Board

Our Board has adopted a formal process by which stockholders may communicate with our Board or any of its directors. Stockholders who wish to communicate with our Board may do so by sending written communications addressed to our Corporate Secretary at 533 Airport Boulevard, Suite 400, Burlingame, California 94010. Our Corporate Secretary will review each communication and will forward such communication to the Board and in 2015, Mr. Martell was appointedor any of its directors to our Board, consistent withwhom the policies and practices set forth above. Our independent directors recommended Dr. Baffi and Mr. Martell to our nominating and corporate governance committeecommunication is addressed, unless the communication contains advertisements or solicitations or is unduly hostile, threatening or similarly inappropriate. Communications deemed by the Corporate Secretary to be nominatedinappropriate for election at the Annual Meeting. We did not pay any feepresentation will still be made available to any third party to identify or evaluate or assist in identifying or evaluating potential nominees.

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Board Meetings and Attendance
non-management director upon such director’s request.

 Our Board held 8 meetings in 2014. Each member

Code of the board attended at least 75% or more of the aggregate of (i) the total number of board meetings held during the period of such member's service and (ii) the total number of meetings of committees on which such member served, during the period of such member's service.

Director Attendance at Annual Meetings of Stockholders
Ethics

 Directors are encouraged, but not required, to attend our annual stockholder meetings. One of our directors attended our annual meeting in 2014.

Board Leadership

        Dr. Love serves as chairman of our Board. Our Board believes that it is advantageous toWe have an independent chairman with an extensive history with and knowledge of the Company and our industry, as is the case with Dr. Love, who has beenadopted a director of the Company since 2009.

Risk Oversight

        Risk assessment and oversight are an integral part of our governance and management processes. Our Board encourages management to promote a culture that incorporates risk management into the Company's corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing the Company. Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.

        Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, and our audit committee is responsible for overseeing our significant financial and operational risk exposures and the steps our management has taken to monitor and control these exposures. The audit committee also monitors compliance with legal and regulatory requirements. Our nominating and corporate governance committee monitors the effectiveness of our corporate governance guidelines and considers and approves or disapproves any related-persons transactions. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

Code of Business Conduct

        Our Board adopted a code of business conduct that applies to eachall of our directors, officers and employees.employees, including our principal executive officer and principal financial officer. The code addresses various topics, including:

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compliance with applicable laws, rules and regulations;



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conflictsCode of interest;



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public disclosure of information;



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insider trading;



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corporate opportunities;



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competition and fair dealing;

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•

gifts;



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discrimination, harassment and retaliation;



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health and safety;



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record-keeping;



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confidentiality;



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protection and proper use of company assets;



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payments to government personnel; and



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reporting illegal and unethical behavior.

        The code of business conductBusiness Conduct is posted on our website. Any waiverwebsite at www.humanigen.com/governance. If we make any substantive amendments to, or grant any waivers from, the Code of the code of business conductBusiness Conduct for an executiveany officer or director, may be granted only bywe will disclose the nature of such amendment or waiver on our Boardwebsite or in a committee thereof and must be timely disclosed as required by applicable law. We have implemented whistleblower procedures that establish format protocols for receiving and handling complaints from employees. Any concerns regarding accounting or auditing matters reported under these procedures will be communicated promptly to the audit committee.

Communications with the Board
Current Report on Form 8-K.

 Any stockholder who desires to contact

Proposal 2

Ratification of HORNE LLP as our Board, or specific membersIndependent Registered
Public Accounting Firm

The audit committee of our Board may do so electronically by sending an email through the following address: board@kalobios.com. Alternatively, a stockholder may contact our Board, or specific members of our Board, by writing to: Stockholder Communications, KaloBios Pharmaceuticals, Inc., 442 Littlefield Avenue, South San Francisco, CA 94080. All such communications will be initially received and processed by the office of our Secretary. Accounting, audit, internal accounting controls and other financial matters will be referred to the chair of the audit committee. Other matters will be referred to the Board or individual directors as appropriate.

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PROPOSAL 2: AMENDMENTS TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT

Background

        The Board has approved a series of proposed amendments to the Company's amended and restated certificate of incorporation, as amended (the "Certificate of Incorporation"), that would effect a reverse stock split of the Company's common stock, whereby each outstanding 4, 5, 6, 7, 8, 9 or 10 shares would be combined, converted and changed into one share of the Company's common stock. We refer to each of the alternative amendments in this proxy statement as a "Reverse Stock Split."

        The effectiveness of any one of these amendments and the abandonment of the other amendments, or the abandonment of all of these amendments, will be determined by the Board following the Annual Meeting and prior to the 2016 Annual Meeting. The Board has declared these proposed amendments to be advisable and has recommended that these proposed amendments be presented to the Company's stockholders for approval.

        Upon receiving stockholder approval of the proposed amendments, the Board will have the sole discretion, until the 2016 Annual Meeting, to elect, as it determines to be in the best interests of the Company and its stockholders, whether to effect a reverse stock split and, if so, the number of shares—4, 5, 6, 7, 8, 9 or 10—of common stock which will be combined into one share of common. The Board believes that stockholder approval of these seven selected reverse split ratios (as opposed to approval of a single reverse split ratio) provides the Board with maximum flexibility to achieve the purposes of a reverse stock split and, therefore, is in the best interests of the Company and its stockholders.

        If the Board determines to effect one of the alternative Reverse Stock Splits by filing the applicable amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, the Certificate of Incorporation would be amended accordingly, and all other amendments will be abandoned. Approval of the Reverse Stock Splits will authorize the Board in its discretion to effectuate the Reverse Stock Split in any of the ratios described above, or not to effect any of the Reverse Stock Splits. The text of the form of amendments to the Certificate of Incorporation, one of which would be filed with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, are set forth in Appendix A to this Proxy Statement. However, such text is subject to amendment to include such changes as may be required by the office of the Secretary of State of the State of Delaware or as the Board deems necessary and advisable to effect the Reverse Stock Split.

        If the Board elects to effect a Reverse Stock Split following stockholder approval, for Reverse Stock Splits in the range of 1-for-4 to 1-for-10, the number of issued and outstanding shares of common stock would be reduced in accordance with a reverse split ratio selected by the Board from among those set forth in this proposal. Except for adjustments that may result from the treatment of fractional shares as described below, each stockholder will hold the same percentage of outstanding common stock immediately following the Reverse Stock Split as such stockholder held immediately prior to the Reverse Stock Split. The par value of the common stock would remain unchanged at $0.001 per share. The Reverse Stock Splits would not change the number of authorized shares of common stock. There are currently no specific plans, arrangements, agreements or understandings for the issuance of the additional authorized but unissued and unreserved shares of common stock that would be created by the Reverse Stock Split.

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Reasons for the Reverse Stock Split

        Although the proposed Reverse Stock Split will not have the effect of increasing the Company's equity market capitalization, we believe that implementing one of the alternative Reverse Stock Splits will provide benefits to the Company and our existing stockholders in a number of ways, including:

1.

Maintain our listing on The Nasdaq Global Market.    Our common stock is traded on The Nasdaq Global Market. In February 2015, the Company was notified by Nasdaq that it no longer satisfied the minimum bid price requirement for continued listing of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2). In order to regain compliance, the minimum bid price per share of Common Stock must be at least $1.00 for at least ten consecutive business days during the 180-day grace period, which will end on August 19, 2015. In the event the Company does not regain compliance by August 19, 2015, the Company may be afforded an additional 180-day compliance period, provided it demonstrates that it meets all other applicable standards for initial listing on The Nasdaq Global Market (except the bid price requirement), and provides written notice of its intention to cure the minimum bid price deficiency during the second grace period, by effecting a reverse stock split, if necessary. If the Company fails to regain compliance after the second grace period, the Company's stock will be subject to delisting by Nasdaq.

        The Board has considered the potential harm to the Company and its stockholders should Nasdaq delist our common stock from The Nasdaq Global Market. Delisting could adversely affect the liquidity of our common stock because alternatives, such as the OTC Bulletin Board and the pink sheets, are generally considered to be less liquid and efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market. Many investors likely would not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. The Board believes that a reverse stock split is a potentially effective means for us to maintain compliance with the rules of Nasdaq and to avoid, or at least mitigate, the likely adverse consequences of our common stock being delisted from The Nasdaq Global Market by producing the immediate effect of increasing the bid price of our common stock.

2.

Stock Price Volatility.    We have been advised by certain institutional investors, as well as by our financial advisors, that a higher stock price may increase the acceptability of our common stock to a number of long-term investors who may not find shares of our common stock attractive at the current market price due to the trading volatility often associated with stocks below certain prices.



3.

Stock Price Requirements.    We understand that many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers or by restricting or limiting the ability to purchase such stocks on margin.



4.

Transaction Costs.    Investors also may be dissuaded from purchasing stocks below certain prices because the brokerage commissions, as a percentage of the total transaction value, tend to be higher for such low-priced stocks.

Board Discretion to Implement or Abandon Reverse Stock Split

        If the alternative Reverse Stock Splits are approved by the Company's stockholders at the Annual Meeting, the actual Reverse Stock Split will be effected, if at all, only upon a subsequent determination by the Board that one of the Reverse Stock Splits is in the best interests of the Company and its

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stockholders at the time. Such determination will be based upon many factors, including those described in the following paragraph. Notwithstanding approval of the Reverse Stock Splits by the stockholders, the Board may, in its sole discretion, abandon all of the proposed amendments and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect any of the Reverse Stock Splits. If the Board decides not to implement any of the Reverse Stock Splits before the 2016 Annual Meeting of Stockholders, further stockholder approval would be required prior to implementing any reverse stock split.

Criteria to Be Used for Decision to Effect a Reverse Stock Split

        If the stockholders approve the Reverse Stock Splits, the Board will be authorized to proceed with any of the alternative Reverse Stock Splits that it selects in its sole discretion. In determining whether to proceed with a Reverse Stock Split, the Board expects to consider a number of factors, including market conditions, existing and expected trading prices of our common stock, the Nasdaq Global Market listing requirements, our additional funding requirements, and the amount of our authorized but unissued common stock. The Board does not intend for this transaction to be the first step in a series of plans or proposals of a "going private" transaction within the meaning of Rule 13e-3 of the Exchange Act.

Effects of the Reverse Stock Split

        After any of the Reverse Stock Splits, each stockholder will own a reduced number of shares of common stock. This would affect all of the Company's stockholders uniformly and would not affect any stockholder's percentage ownership in the Company, except to the extent that the Reverse Stock Split results in a stockholder owning a fractional share as described below. The number of stockholders of record would not be affected by the Reverse Stock Split, except to the extent that any stockholder holds only a fractional share interest and receives cash for such interest after the Reverse Stock Split.

        Proportionate voting rights and other rights of the holders of common stock would not be affected by the Reverse Stock Split (other than as a result of the payment of cash in lieu of fractional shares as described below). For example, a holder of 5% of the voting power of the outstanding shares of common stock immediately prior to the Reverse Stock Split would continue to hold 5% of the voting power of the outstanding shares of common stock after the Reverse Stock Split.

        Our Certificate of Incorporation presently authorizes 85,000,000 shares of common stock. The Reverse Stock Splits would not change the number of authorized shares of common stock. Therefore, because the number of issued and outstanding shares of common stock would decrease, the number of shares remaining available for issuance by us in the future would increase. These additional shares would be available for issuance from time to time for corporate purposes such as issuances of common stock in connection with capital-raising transactions and acquisitions of companies or other assets, as well as for issuance upon conversion or exercise of securities such as convertible debt, warrants or options convertible into or exercisable for common stock. We believe that the availability of the additional shares will provide us with the flexibility to meet business needs as they arise, to take advantage of favorable opportunities and to respond effectively in a changing corporate environment. For example, we may elect to issue shares of common stock to raise equity capital, to make acquisitions through the use of stock, to establish strategic relationships with other companies, to adopt additional employee benefit plans or reserve additional shares for issuance under such plans, where the Board determines it advisable to do so, without the necessity of soliciting further stockholder approval, subject to applicable stockholder vote requirements under Delaware Corporation Law and the Nasdaq rules. If we issue additional shares for any of these purposes, the aggregate ownership interest of our current stockholders, and the interest of each such existing stockholder, would be diluted, possibly substantially. There are currently no specific plans, arrangements, agreements or understandings for the issuance of

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the additional authorized but unissued and unreserved shares of common stock that would be created by the Reverse Stock Split.

        The increase in the number of shares of authorized but unissued and unreserved common stock will have an 'anti-takeover effect' by permitting the issuance of shares to purchasers who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain provisions of the Certificate of Incorporation or Bylaws. The increased number of available authorized but unissued shares as a result of the Reverse Stock Split would give the Company's management more flexibility to resist or impede a third-party takeover bid that provides an above-market premium that is favored by a majority of the independent stockholders. Any such anti-takeover effect of a reverse stock split would be in addition to existing anti-takeover provisions of the Certificate of Incorporation and Bylaws.

        The Reverse Stock Split would reduce the number of shares of common stock available for issuance under the Company's 2012 Equity Incentive Plan and the 2012 Employee Stock Purchase Plan in proportion to the reverse split ratio of the Reverse Stock Split. On May 5, 2015 the number of shares of common stock authorized for issuance but unissued under the 2012 Equity Incentive Plan and the 2012 Employee Stock Purchase Plan is 643,226 and 160,801, respectively.

        The Company also has 4,067,743 shares of common stock subject to outstanding stock awards as of May 5, 2015, as well as 88,545 outstanding warrants convertible into shares of common stock. Under the terms of the various instruments governing the Company's outstanding stock awards and warrants, the Reverse Stock Split will effect a reduction in the number of shares of common stock issuable upon the exercise of such stock awards and warrants in proportion to the reverse split ratio of the Reverse Stock Split. The Reverse Stock Split will effect a proportionate increase in the exercise price of the Company's outstanding stock options and warrants. In connection with the Reverse Stock Split, the number of shares of common stock issuable upon exercise or conversion of outstanding stock awards and warrants will be rounded to the nearest whole share, and no cash payment will be made in respect of such rounding.

        The following tables contains approximate information relating to the common stock under each of the proposed amendments based on share information as of May 5, 2015:

        No fractional shares of common stock will be issued in connection with the proposed Reverse Stock Split. Holders of common stock who would otherwise receive a fractional share of common stock pursuant to the Reverse Stock Split will receive cash in lieu of the fractional share as explained more fully below.

        The common stock is currently registered under Section 12(b) of the Exchange Act, and the Company is subject to the periodic reporting and other requirements of the Exchange Act. The Reverse Stock Split would not affect the registration of the common stock under the Exchange Act. After the Reverse Stock Split, the common stock would continue to be reported on the Nasdaq Global Market under the symbol "KBIO".

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Certain Risks and Potential Disadvantages Associated with the Reverse Stock Split

        If the Reverse Stock Split is implemented, some stockholders may consequently own less than one hundred shares of common stock. A purchase or sale of less than one hundred shares (an "odd lot" transaction) may result in incrementally higher trading costs through certain brokers, particularly "full service" brokers. Therefore, those stockholders who own less than one hundred shares following the Reverse Stock Split may be required to pay modestly higher transaction costs should they then determine to sell their shares in the Company.

        The effect of the Reverse Stock Split upon the market prices for the common stock cannot be accurately predicted, and the history of similar stock split combinations for companies in like circumstances is varied. In particular, there is no assurance that the price per share of the common stock after the Reverse Stock Split will be four, five, six, seven, eight, nine or ten times, as applicable, the price per share of the common stock immediately prior to the Reverse Stock Split. Furthermore, there can be no assurance that the market price of the common stock immediately after the proposed Reverse Stock Split will be maintained for any period of time. Even if an increased share price can be maintained, the Reverse Stock Split may not achieve the other desired results which have been outlined above. In particular, we cannot assure you that the proposed Reverse Stock Split will increase our stock price and have the desired effect of maintaining compliance with the rules of Nasdaq. Moreover, because some investors may view a Reverse Stock Split negatively, there can be no assurance that approval of the Reverse Stock Splits will not adversely impact the market price of the common stock or, alternatively, that the market price following the Reverse Stock Split will either exceed or remain in excess of the current market price.

        In addition, although we believe the Reverse Stock Split may enhance the desirability of our common stock to certain potential investors, we cannot assure you that, if implemented, our common stock will be more attractive to institutional and other long term investors or that the liquidity of our common stock will increase since there would be a reduced number of shares outstanding after the Reverse Stock Split.

Effective Date

        If the proposed Reverse Stock Splits are approved at the Annual Meeting and the Board elects to proceed with the Reverse Stock Split in one of the approved ratios, the Reverse Stock Split would become effective as of 5:00 p.m., Eastern time, on the date of the filing (the "Effective Time") of the applicable certificate of amendment to the Certificate of Incorporation with the office of the Secretary of State of the State of Delaware. Except as explained below with respect to fractional shares, at the Effective Time, all shares of common stock issued and outstanding immediately prior thereto will be, automatically and without any action on the part of the stockholders, combined and converted into new shares of common stock in accordance with the Reverse Stock Split ratio determined by the Board among the choices set forth in this Proposal 2. If the Board decides not to implement any of the Reverse Stock Splits before the 2016 Annual Meeting of Stockholders, further stockholder approval would be required prior to implementing any reverse stock split.

Exchange of Stock Certificates

        As soon as practicable after the effective date of the Reverse Stock Split, stockholders will be notified that the Reverse Stock Split has been effected. Computershare, our transfer agent, will act as exchange agent for purposes of implementing the exchange of stock certificates. Holders of pre-split shares will be asked to surrender to the exchange agent certificates representing pre-split shares in exchange for certificates representing post-split shares in accordance with the procedures to be set forth in a letter of transmittal that will be delivered to our stockholders. No new certificates will be issued to a stockholder until the stockholder has surrendered to the exchange agent his, her or its outstanding

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certificate(s) together with the properly completed and executed letter of transmittal. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM FROM OUR EXCHANGE AGENT. STOCKHOLDERS ARE ENCOURAGED TO PROMPTLY SURRENDER CERTIFICATES TO THE EXCHANGE AGENT FOLLOWING RECEIPT OF TRANSMITTAL FORMS IN ORDER TO AVOID HAVING SHARES POSSIBLY BECOMING SUBJECT TO ESCHEAT LAWS.

        Stockholders whose shares are held by their stockbroker do not need to submit old share certificates for exchange. These shares will automatically reflect the new quantity of shares based on the selected Reverse Stock Split ratio. Beginning on the effective date of the Reverse Stock Split, each certificate representing pre-split shares will be deemed for all corporate purposes to evidence ownership of post-split shares.

Cash Payment In Lieu of Fractional Shares

        No fractional shares of common stock will be issued as a result of the Reverse Stock Split. Instead, in lieu of any fractional shares to which a holder of common stock would otherwise be entitled as a result of the Reverse Stock Split, the Company shall pay cash equal to such fraction multiplied by the closing sales price of the common stock as reported on the Nasdaq Global Market on the last trading day immediately preceding the Effective Time. As of May 18, 2015, there were approximately 34 stockholders of record of the common stock. Upon stockholder approval of this proposal, if the Board elects to implement the Reverse Stock Split the Company does not expect that cashing out fractional stockholders would significantly reduce the number of stockholders of record.

        The Board reserves the right to abandon the Reverse Stock Split without further action by our stockholders at any time before the effectiveness of the certificate of amendment, even if the Reverse Stock Split has been authorized by our stockholders. By voting in favor of the Reverse Stock Split, you are expressly also authorizing our Board to determine not to proceed with, and abandon, the Reverse Stock Split if it should so decide.

No Appraisal Rights

        Under the Delaware General Corporation Law, our stockholders do not have a right to dissent and are not entitled to appraisal rights with respect to the proposed amendments to our Certificate of Incorporation to effect the Reverse Stock Split, and we will not independently provide our stockholders with any such rights.

Certain Material U.S. Federal Income Tax Consequences

        The following summary describes certain material U.S. federal income tax consequences of the proposed reverse stock split to holders of our common stock, but does not purport to be a complete analysis of all potential tax effects. This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service ("IRS") in effect as of the date of this proxy statement. These authorities may change or be subject to differing interpretations. Any such change may be applied retroactively in a manner that could adversely affect a holder of our common stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance that the IRS or a court will not take a contrary position regarding the tax consequences of the proposed reverse stock split.

        This discussion is limited to holders that hold our common stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a holder's particular circumstances,

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including the impact of the Medicare contribution tax. In addition, it does not address consequences relevant to holders subject to special rules or to holders that are partnerships for U.S. federal income tax purposes. Holders should consult their own tax advisors regarding the U.S. federal, state, local, and foreign income and other tax consequences of the proposed reverse stock split.

Tax Consequences to U.S. Holders.

        For purposes of this discussion, a "U.S. holder" is a beneficial owner of our common stock who is for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia; or (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

        The proposed reverse stock split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, except as described below with respect to cash received in lieu of fractional shares, no gain or loss will be recognized upon the proposed reverse stock split. Accordingly, the aggregate tax basis of the U.S. holder in the new shares should equal the U.S. holder's aggregate tax basis in its old shares of common stock (excluding the portion of the tax basis that is allocable to any fractional share), and the holding period for the new shares should include the holding period for the old shares.

        A U.S. holder who receives cash in lieu of a fractional share of our common stock pursuant to the proposed reverse stock split should recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the portion of the U.S. holder's tax basis in the old shares that is allocated to such fractional share of our common stock. Such capital gain or loss will be long-term capital gain or loss if the U.S. holder has held the old shares for more than one year as of the effective date of the proposed reverse stock split. The deductibility of capital losses is subject to limitations.

Tax Consequences to Non-U.S. Holders.

        For purposes of this discussion, a "non-U.S. holder" is a beneficial owner of our common stock that is neither a U.S. holder nor a partnership (or an entity treated as a partnership for U.S. federal income tax purposes). Generally, a non-U.S. holder will not recognize any gain or loss upon the proposed reverse stock split. In particular, any gain or loss realized with respect to cash received in lieu of a fractional share generally will not be subject to U.S. federal income or withholding tax unless (a) such gain or loss is effectively connected with the non-U.S. holder's conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment maintained by the non-U.S. holder), (b) the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the proposed reverse stock split and certain other conditions are met, or (c) our common stock constitutes a U.S. real property interest by reason of our status as U.S. real property holding corporation for U.S. federal income tax purposes.

        Gain described in clause (a) above generally will be subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. holder. A non-U.S. holder that is a foreign corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items. A non-U.S. holder described in clause (b) above will be subject to U.S. federal income tax at a rate of 30% (or, if applicable, a lower treaty rate) on the gain realized with respect to cash received in lieu of a fractional share, which may be offset by certain U.S. source capital losses, even though the non-U.S. holder is not considered a resident of the United States. With respect to clause (c) above, we

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believe we are not currently and do not anticipate becoming a U.S. real property holding corporation. If we are or have been a U.S. real property holding corporation, any gain realized with respect to cash received in lieu of a fractional share may be treated as effectively connected with the conduct a trade or business in the United States subject to U.S. federal income tax and the cash proceeds may also be subject to a 10% withholding tax.

Information Reporting and Backup Withholding.

        Payments of cash made in lieu of a fractional share of our common stock may, under certain circumstances, be subject to information reporting and "backup withholding." To avoid backup withholding, each holder of our shares of common stock that does not otherwise establish an exemption should furnish its taxpayer identification number and comply with the applicable certification procedures. Backup withholding is not an additional tax and amounts withheld will be allowed as a credit against the holder's U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished to the IRS.

Required Vote and Recommendation of the Board for Proposal 2

        The affirmative vote of the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting is required for the approval of Proposal 2.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE "FOR" PROPOSAL 2.

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PROPOSAL 3: AMENDMENTS TO THE KALOBIOS PHARMACEUTICALS, INC. 2012 EQUITY
INCENTIVE PLAN

        Our Board initially adopted the KaloBios Pharmaceuticals, Inc. 2012 Equity Incentive Plan, or the 2012 Plan, in July 2012, to become effective upon the effectiveness of our registration statement filed with the SEC on Form 10. The 2012 Plan serves as our equity compensation program to provide eligible individuals with an opportunity to acquire shares of our common stock and to benefit from increases in value of our common stock, and thereby align their interests with the long-term interests of our stockholders. Our Board amended and restated the 2012 Plan on May 8, 2015, subject to stockholder approval.

        In this Proposal 3, the amended and restated 2012 Plan is being submitted to our stockholders in order to:

•

Increase the number of shares available for issuance by 2,500,000 (excluding the impact of Proposal 2);



•

Eliminate the automatic annual share reserve increase feature (the "evergreen") prospectively, so that no additional automatic annual share increases will occur hereafter;



•

Eliminate the discretion to reprice any outstanding stock award without prior stockholder approval;



•

Implement more conservative "share counting" provisions;



•

Implement a clawback provision that permits us to seek recovery of certain equity awards granted to executive officers if we determine that financial results used to determine the amount of the award are materially restated, and that the executive officer receiving the award engaged in fraud or intentional misconduct; and



•

Increase the maximum number of awards that any participant may receive in any calendar year so that certain awards granted under the 2012 Plan that are intended to qualify as "performance-based compensation" under Section 162(m) of the Code may so qualify.

        Should stockholder approval not be obtained, the proposed amendments to the 2012 Plan will not be implemented. The 2012 Plan will, however, continue in remain in effect, and stock awards will continue to be granted under the 2012 Plan to all eligible participants, as in effect immediately prior to the amendments that are the subject of this Proposal 3, until all the shares available for issuance under the 2012 Plan have been issued, or until the plan terminates on its currently scheduled expiration date in July 2022.

Description of the Amended 2012 Plan

        The principal terms and provisions of the amended and restated 2012 Plan are summarized below. The summary, however, is not intended to be a complete description of all the terms of the amended 2012 Plan. To the extent there is a conflict between this summary and the amended 2012 Plan, the terms of the amended 2012 Plan will govern. This summary is qualified in its entirety by reference to the complete text of the amended 2012 Plan, which is included as Appendix B of this proxy statement.

        Share Reserve.    The number of shares of our common stock reserved for issuance under the amended 2012 Plan may not exceed 6,483,998 shares. Such number consists of (a) 3,983,998 shares currently reserved for issuance, plus (b) an additional 2,500,000 shares subject to stockholder approval.

        All numbers hereunder have been adjusted to reflect the 1-for-3.56147 reverse split of our common stock effected on January 15, 2013. Should our stockholders approve Proposal 2, all numbers hereunder will be further adjusted proportionately to reflect any subsequently authorized reverse stock split.

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        Prior to the proposed amendment, the share reserve was scheduled to increase on the first business day of each fiscal year during the term of the 2012 Plan, beginning on January 1, 2016, by the least of (a) 5% of the total number of shares of common stock outstanding on December 31 of the prior year, (b) 842,348 shares, or (c) a lower number determined by our Board. The proposed amendment eliminates this automatic annual share reserve increasefeature prospectively. However, should the stockholders not approve this Proposal 3, the foregoing evergreen feature will continue in place for the remaining term of the 2012 Plan, until the last such scheduled increase occurs in January 2022.

        Plan Limits.    As amended, the 2012 Plan provides that no participant may receive options or SARs covering more than 1,000,000 shares in one calendar year (an increase from 842,348 shares), except that an employee may receive options or SARs covering up to an additional 1,000,000 shares in the calendar year in which his or her employment begins (an increase from an additional 842,348 shares). In addition, no participant may receive restricted stock or restricted stock units ("RSUs") covering more than 1,000,000 shares in one calendar year (an increase from an additional 701,957 shares), except that an employee may receive restricted stock or RSUs covering up to an additional 1,000,000 shares in the calendar year in which his or her employment begins (an increase from 701,957 shares). Stockholder approval of this Proposal 3 constitutes approval of the foregoing increased share limitations for purposes of Section 162(m) of the Code.

        Finally, no more than 6,483,998 shares of common stock may be issued upon exercise of incentive stock options.

        Share Counting.    If a stock award granted under the 2012 Plan expires, is forfeited, or otherwise terminates without being exercised or settled in full, the shares of our common stock not acquired pursuant to the stock award will become available for subsequent issuance under the 2012 Plan. If a stock award is settled in cash rather than shares, such cash settlement will not reduce the number of shares available for issuance under the 2012 Plan.

        Under the amended 2012 Plan, however, the following shares will no longer be available for subsequent issuance:

•

Shares not delivered to a participant because an award is exercised through a reduction in the number of shares subject to the award (i.e., "net exercised");



•

Shares tendered by a participant through actual delivery or attestation, to pay the exercise price of an option;



•

Shares not otherwise issued in connection with the stock settlement of stock appreciation rights;



•

Shares used to satisfy tax withholding obligations relating to any stock award; and



•

Shares reacquired by the Company using cash proceeds from the exercise of options.

        Outstanding Awards.    The following includes aggregated information regarding the overhang and potential dilution associated with the 2012 Plan. As of May 5, 2015, there were approximately 32,995,178 shares of common stock outstanding (plus 88,545 outstanding warrants convertible into shares of common stock), as well as the following:

•

4,067,743 shares of common stock subject to outstanding stock awards (representing 12.33% of our outstanding common stock), comprised of:



•

4,037,743 outstanding stock options (representing 12.24% of our outstanding common stock), with a weighted average exercise price of $2.58 per share, and a weighted average remaining term of 8.64 years;



•

30,000 outstanding RSUs (representing 0.09% of our outstanding common stock); and

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•

643,226 shares of common stock available for future award under the 2012 Plan (representing 1.95% of our outstanding common stock).

        Administration.    In general, the Compensation Committee of our Board administers the 2012 Plan. The term plan administrator, as used in this summary, means the Compensation Committee, our Board, or any other person, to the extent acting with the scope of its administrative jurisdiction under the 2012 Plan. The plan administrator has complete discretion to make all decisions relating to the interpretation and operation of the 2012 Plan, including the discretion to determine who will receive an award, the type of award to grant, the number of shares covered by the award, vesting requirements, if any, and the other features and conditions of each award.

        Notwithstanding the foregoing, the plan administrator does not have the discretion to (a) reduce the exercise price of any stock award after it has been granted, (b) cancel or allow the holder of a stock award to surrender the stock award in exchange for cash or a new stock award that has the effect of reducing the exercise price of an outstanding stock award, or (c) take any other action with respect to an outstanding stock award that would be treated as a repricing under Nasdaq rules, unless our stockholders have previously approved such an action. Should the stockholders not approve this Proposal 3, outstanding stock awards will remain subject to repricing by the plan administrator.

        In addition, the 2012 Plan has a clawback provision that permits us to seek repayment or recovery of certain equity awards granted to executive officers, if we determine that financial results used to determine the amount of the award are materially restated, and the plan administrator determines that the executive officer receiving the award engaged in fraud or intentional misconduct.

        Eligibility.    Employees, members of our Board who are not employees and consultants are eligible to participate in the 2012 Plan. As of May 5, 2015, approximately 35 persons (including 3 executive officers and 7 non-employee directors) were eligible to participate in the 2012 Plan.

        Types of Awards.    The 2012 Plan provides for the following types of awards:

•

Options to purchase shares of our common stock;



•

Stock appreciation rights ("SARs");



•

Restricted shares of our common stock ("restricted stock");



•

RSUs; and



•

Performance cash awards.

        Valuation.    For purposes of establishing the option price and for all other valuation purposes under the 2012 Plan, the fair market value of a share of common stock on any relevant date is the closing price per share of common stock on that date, as such price is reported on the Nasdaq Global Market. On May 5, 2015, the fair market value of the common stock determined on such basis was $0.52 per share.

        Stock Options.    A stock option gives the optionee a right to purchase shares of our common stock at a fixed price determined at the time the option is granted. Stock options are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the terms and conditions of options granted under the 2012 Plan, including whether they are incentive stock options ("ISOs") that may qualify for favorable tax treatment under Section 422 of the Code, or nonstatutory stock options ("NSOs") that do not so qualify. The exercise price of options granted under the 2012 Plan may not be less than 100% of the fair market value of our common stock on the grant date.

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        Optionees may pay the exercise price by using:

•

Cash;



•

Shares of common stock that the optionee already owns;



•

An immediate sale of the option shares through a designated broker;



•

Promissory note, to the extent permitted by applicable securities laws; and



•

Other forms of payment approved by the plan administrator.

        Options vest at the time or times determined by the plan administrator. In most cases, options granted to new hires vest over the four-year period following the date of grant, while options granted to existing employees vest over a three-year period. Options generally expire 10 years after they are granted, except that they expire earlier if the optionee's service terminates earlier.

        Stock Appreciation Rights.    A SAR allows a recipient to benefit from increases in the value of our common stock, but does not provide any ownership interest in our common stock. SARs are granted pursuant to SAR agreements adopted by the plan administrator. The plan administrator determines the strike price of each SAR, which cannot be less than 100% of the fair market value of our common stock on the date of grant. Upon exercise of a SAR, we will pay the participant an amount equal to the product of (a) the excess of the per share fair market value of our common stock on the date of exercise over the strike price, multiplied by (b) the number of shares of our common stock with respect to which the SAR is exercised. This amount may be paid in cash, shares of our common stock, or any combination thereof. Each SAR may or may not be subject to vesting, and vesting, if any, shall occur at such times or upon satisfaction of such conditions specified by the plan administrator. SARs generally expire 10 years after they are granted, except that they generally expire earlier if the recipient's service terminates earlier. The Company has not granted SARs under the 2012 Plan.

        Restricted Stock.    Restricted stock awards are granted pursuant to restricted stock agreements adopted by the plan administrator which include provisions regarding the number of shares the participant may be issued, the purchase price, if any, and the restrictions to which the shares will be subject. Awards of restricted stock may be granted in consideration for (a) cash, (b) property, (c) past or future services rendered to us or our affiliates, (d) a promissory note, to the extent permitted by applicable securities laws, or (e) any other form of legal consideration approved by the plan administrator. The issued shares may either be immediately vested upon issuance or subject to a vesting schedule tied to length of service or attainment of performance goals. Upon termination of the participant's service, the shares issued pursuant to a restricted stock award may be subject to forfeiture to, or repurchase by, the Company. The Company has not granted restricted stock under the 2012 Plan.

        RSUs.    RSUs represent the right to receive the value of shares of our common stock at a specified date in the future. RSU awards are granted pursuant to RSU agreements approved by the plan administrator. Upon settlement, the shares, their cash equivalent, or any combination thereof are delivered to the recipient. No cash consideration is required in connection with a RSU award. Each award of RSUs may or may not be subject to vesting tied to length of service or attainment of performance goals and may be settled immediately upon vesting or on a deferred basis. Dividend equivalents may be credited in respect of shares covered by a RSU award.

        Performance-Based Compensation.    The 2012 Plan is designed to allow the Compensation Committee to issue restricted stock and RSUs that qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, if certain conditions are met. Accordingly, the Compensation Committee may structure restricted stock and RSUs so that they are only granted or vest upon the attainment of certain pre-established objective performance goals. The performance

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criteria that may be used by the Compensation Committee for awards of restricted stock or RSUs consist of:

        Performance goals may be measured solely on a corporate, subsidiary or business unit basis, or a combination thereof. Further, performance goals may reflect absolute entity performance or a relative comparison of entity performance to the performance of a peer group of entities or other external measure of the selected performance criteria.

        The Compensation Committee may adjust the results under any performance criterion to exclude: (a) asset write-downs; (b) litigation, claims, judgments, or settlements; (c) effects of changes in tax law, accounting principles, or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e) extraordinary, unusual or non-recurring items; (f) exchange rate effects for non-U.S. Dollar denominated net sales and operating earnings; and (g) statutory adjustments to corporate tax rates.

        Performance Cash Awards.    Performance cash awards may be granted under the 2012 Plan that qualify as performance-based compensation that is not subject to the income tax deductibility limitations imposed by Section 162(m) of the Code, if the award is approved by the Compensation Committee and the grant or vesting of the award is tied solely to the attainment of performance goals during a designated performance period. To the extent a performance cash award is not intended to comply with Section 162(m) of the Code, the plan administrator may select other measures of performance.

        No participant may be paid more than $2,000,000 in cash in any calendar year pursuant to a performance cash award granted under the 2012 Plan, an increase from $1,000,000 prior to the amendment of the 2012 Plan. Stockholder approval of this Proposal 3 constitutes approval of the foregoing limitation for purposes of Section 162(m) of the Code.

        Capitalization Adjustments.    In the event there is a specified change in our capital structure, such as a stock split, proportionate adjustments will be made to (a) the number of shares reserved under the 2012 Plan, (b) the maximum number of shares that may be issued as incentive stock options, (c) the maximum number of options, SARs, and performance-based restricted stock and RSUs that can be granted to a participant in a calendar year, and (d) the number of shares and exercise prices or strike prices, if applicable, of all outstanding stock awards.

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        Corporate Transactions.    In the event that the Company is a party to a merger, consolidation, or a change in control transaction, all outstanding stock awards will be governed by the terms of the definitive transaction agreement or in a manner determined by the Board. Such treatment may include any of the following actions with respect to each outstanding stock award:

•

Continuation, assumption, or substitution of a stock award by a surviving corporation or its parent company;



•

Cancellation of options and SARs, provided that participants be given an opportunity to exercise their awards prior to the closing of the transaction;



•

Cancellation of options and SARs in exchange for a payment equal to the excess, if any, of (a) the value of the property the participant would have received upon exercise of the stock award over (b) the exercise price otherwise payable in connection with the stock award;



•

Cancellation of RSUs in exchange for a payment equal to the value that the holder of each share of common stock receives in the transaction; and



•

Full acceleration and cancellation of stock awards.

        For this purpose, a change in control transaction includes:

•

Any person acquiring beneficial ownership of more than 50% of our total voting power;



•

The sale or disposition of all or substantially all of our assets; or



•

Any merger or consolidation of the company where our voting securities represent 50% or less of the total voting power of the surviving entity or its parent.

        The Board is not obligated to treat all stock awards, or portions thereof, in the same manner.

        Changes in Control.    In the event of specified change in control transactions, our Board has the discretion to accelerate the vesting of individual stock awards (a) immediately upon the occurrence of the transaction, whether or not the stock award is continued, assumed, or substituted by a surviving corporation or its parent in the transaction, or (b) in connection with a termination of a participant's service following such a transaction.

        Amendment.    Our Board may amend or modify the 2012 Plan at any time. However, the approval of our stockholders is required for any amendment that

•

Materially increases the number of shares of common stock available for issuance under the 2012 Plan;



•

Materially expands the class of individuals eligible to receive awards under the 2012 Plan;



•

Materially increases the benefits accruing to participants under the 2012 Plan;



•

Materially extends the term of the 2012 Plan; or



•

Expands the types of awards available for issuance under the 2012 Plan, but only to the extent required by law or applicable listing standards.

        Termination.    Our Board may, at any time and for any reason, terminate the 2012 Plan. If not sooner terminated, the 2012 Plan will terminate automatically in July 2022. Any stock awards outstanding at the time of such termination will remain in force in accordance with the provisions of the instruments evidencing such grants.

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Federal Income Tax Consequences of Awards Granted under the 2012 Plan

        The following is a general summary as of the date of this proxy statement of the U.S. federal income tax consequences to participants and the Company with respect to stock awards granted under the 2012 Plan. This summary does not address state, local or foreign tax treatment, which may vary from the U.S. federal income tax treatment. In any event, each participant should consult his or her own tax advisor as to the tax consequences of particular transactions under the 2012 Plan.

        Incentive Stock Options.    No taxable income is recognized by an optionee upon the grant of an ISO, and no taxable income is recognized at the time an ISO is exercised unless the optionee is subject to the alternative minimum tax. The excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares is includable in alternative minimum taxable income.

        If the optionee holds the purchased shares for more than one year after the date the ISO was exercised and more than two years after the ISO was granted (the "required ISO holding periods"), then the optionee will generally recognize long-term capital gain or loss upon disposition of such shares. The gain or loss will equal the difference between the amount realized upon the disposition of the shares and the exercise price paid for such shares. If the optionee disposes of the purchased shares before satisfying either of the required ISO holding periods, then the optionee will recognize ordinary income equal to the fair market value of the shares on the date the ISO was exercised over the exercise price paid for the shares (or, if less, the amount realized on a sale of such shares). Any additional gain will be a capital gain and will be treated as short-term or long-term capital gain depending on how long the shares were held by the optionee.

        Nonstatutory Stock Options.    No taxable income is recognized by an optionee upon the grant of an NSO. The optionee will generally recognize ordinary income in the year in which the option is exercised equal to the excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares. If the optionee is an employee or former employee, the optionee will be required to satisfy the tax withholding requirements applicable to such income. Upon resale of the purchased shares, any subsequent appreciation or depreciation in the value of the shares will be treated as short-term or long-term capital gain depending on how long the shares were held by the optionee.

        Stock Appreciation Rights.    In general, no taxable income results upon the grant of a SAR. A participant will generally recognize ordinary income in the year of exercise equal to the value of the shares or other consideration received. In the case of a current or former employee, this amount is subject to withholding.

        Restricted Stock.    A participant who receives an award of restricted stock does not generally recognize taxable income at the time of the award. Instead, the participant recognizes ordinary income when the shares vest, subject to withholding if the participant is an employee or former employee. The amount of taxable income is equal to the fair market value of the shares on the vesting date(s) less the cash, if any, paid for the shares. A participant may make a one-time election to recognize income at the time the participant receives restricted stock in an amount equal to the fair market value of the restricted stock (less any cash paid for the shares) on the date of the award by making an election under Section 83(b) of the Code.

        RSUs.    In general, no taxable income results upon the grant of an RSU. The recipient will generally recognize ordinary income (subject to withholding if the recipient is an employee or former employee) equal to the fair market value of the shares that are delivered to the recipient upon settlement of the RSU award.

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        Section 409A.    The foregoing description assumes that Section 409A of the Code does not apply to an award. In general, options and SARs are exempt from Section 409A if the exercise price per share is at least equal to the fair market value per share of our common stock at the time the option or SAR was granted. RSUs are subject to Section 409A unless they are settled within two and one half months after the end of the later of (i) the end of our fiscal year in which vesting occurs or (ii) the end of the calendar year in which vesting occurs. Restricted stock awards are not generally subject to Section 409A. If an award is subject to Section 409A and the provisions for the exercise or settlement of that award do not comply with Section 409A, then the participant would be required to recognize ordinary income whenever a portion of the award vested (regardless of whether it had been exercised or settled). This amount would also be subject to a 20% federal taxin addition to the federal income tax at the participant's usual marginal rate for ordinary income.

        Tax Treatment of the Company.    The Company will generally be entitled to an income tax deduction at the time and to the extent a participant recognizes ordinary income as a result of an award granted under the 2012 Plan. As described herein, Section 162(m) of the Code may limit the deductibility of awards granted under the 2012 Plan.

        Section 162(m) Considerations.    Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation in excess of $1 million paid to a company's chief executive officer and three other highest compensated executive officers (other than the chief financial officer). Stock options and SARs are exempt from this limitation if (a) the exercise price is at least 100% of the fair market value of the underlying stock on the date the option or SAR is granted and (b) the plan under which the options are granted is approved by the stockholders and contains a limit on the number of options or SARs granted to any one individual under the plan during a specified period. Various other rules apply with regard to compensation committee independence and the procedures that must be followed by the committee in connection with performance-based awards that may be fully deducted under Section 162(m). Among other requirements, stock awards such as restricted stock and RSUs, and performance cash awards must vest contingent upon the achievement of performance goals, the material terms of which have been approved by the stockholders, in order to be exempt from this limitation. The 2012 Plan includes certain annual limits, as described above, on the number of shares or total dollars that may be granted to an individual under options, SARs, restricted stock, RSUs, and performance cash awards in order to comply with the Section 162(m) requirements.

New Plan Benefits and Grant Table

        Future awards to our directors, executive officers, employees and other eligible participants under the 2012 Plan are discretionary and not determinable at this time. However, our Directors Compensation Program provides that newly appointed directors receive an initial option to purchase 20,000 shares of our common stock and continuing directors receive an annual option to purchase 10,000 shares of our common stock following the completion of each annual stockholder meeting. Notwithstanding the foregoing, Dr. Baffi received an option to purchase 40,000 shares upon his appointment to our Board in November 2014. In April 2015, in connection with Mr. Martell's appointment to our Board, our Board approved the grant of an option to purchase 30,000 shares, and a grant of 30,000 RSUs.

        The table below shows the number of shares of common stock for which options and RSUs have been granted under the 2012 Plan from January 1, 2014 through May 5, 2015, as to each of the executive officers named in the Summary Compensation Table contained in this proxy statement in the

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section entitled "Executive Compensation," each nominee for election as a director and the various indicated groups. To date, only stock options and RSUs have been granted under the 2012 Plan.

Required Vote and Recommendation of the Board for Proposal 3

        Approval of the amendments to the 2012 Plan requires the affirmative vote of the holders of a majority of the votes cast in person or by proxy at the Annual Meeting. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. However, broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE "FOR" PROPOSAL 3.

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PROPOSAL 4: RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

        The audit committee appointed Ernst & YoungHORNE LLP as our independent registered public accounting firm for the fiscal year ending on December 31, 2015,2021 and urges you to votehas further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Representatives of Ernst & Young's appointment. Ernst & Young has auditedHORNE LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Neither our financial statements since 2006. Although we are not requiredBylaws nor other governing documents or law require stockholders’ ratification of the selection of HORNE LLP as our independent registered public accounting firm. However, the audit committee is submitting the selection of HORNE LLP to seek your approvalthe stockholders for ratification as a matter of this appointment, we believe it is good corporate governance to do so. No determination has been made as to what action our audit committee would take ifpractice. If the stockholders fail to ratify the appointment.selection, the audit committee will reconsider whether or not to retain that firm. Even if the appointmentselection is ratified, the audit committee retainsin its discretion to appoint a newmay direct the appointment of different independent registered public accounting firmauditors at any time during the year if the audit committee concludesthey determine that such a change would be in the best interests of the Company and itsour stockholders.

 We expect representatives

The affirmative vote of Ernst & Youngthe holders of a majority of the shares present by virtual attendance or represented by proxy and entitled to be presentvote on the matter at the meeting and availableAnnual Meeting will be required to respond to appropriate questions by stockholders. Additionally,ratify the representativesselection of Ernst & Young will have the opportunity to make a statement if they so desire.HORNE LLP.

Independent Registered Public Accounting Firm'sFirm’s Fees

The following table represents aggregate fees billed to the Companyus for the years ended December 31, 2014,2020 and December 31, 2013,2019 by Ernst & Youngour independent registered accounting firm, HORNE LLP.

All fees described above were pre-approved by the audit committee in accordance with the requirements of Regulation S-X under the Exchange Act.

Pre-Approval Policies and Procedures

The audit committee'scommittee’s policy is to pre-approve all audit and permissible non-audit services rendered by Ernst & Young LLP, our independent registered public accounting firm. The audit committee can pre-approve specified services in defined categories of audit services, audit-related services and tax services up to specified amounts, as part of the audit committee'scommittee’s approval of the scope of the engagement of Ernst & Young LLPour independent registered public accounting firm or on an individual case-by-case basis before Ernst &

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Young LLPour independent registered public accounting firm is engaged to provide a service. The audit committee has determined that the rendering of tax-related services by Ernst & Young LLPour independent registered public accounting firm is compatible with maintaining the principal accountant'saccountant’s independence for audit purposes. Ernst & Young LLPOur independent registered public accounting firm has not been engaged to perform any non-audit services other than tax-related servicesservices.

OUR BOARD RECOMMENDS A VOTE FOR PROPOSAL 2.

PROPOSAL 3

Advisory Vote on Executive Compensation

Under the Dodd-Frank Wall Street Reform and as indicated above.

        For more information on Ernst & Young LLP, please see "ReportConsumer Protection Act (“the Dodd-Frank Act”) and Section 14A of the Audit Committee."Exchange Act, our stockholders are entitled to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules.

Required Vote

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and Recommendationthe philosophy, policies and practices described in this proxy statement. The compensation of our named executive officers subject to the vote is disclosed in the compensation tables and the related narrative disclosure contained in this proxy statement. As discussed in those disclosures, we believe that our compensation policies and decisions are focused on pay-for-performance principles and strongly aligned with our stockholders’ interests. Compensation of our named executive officers is designed to enable us to attract, retain and motivate talented and experienced executives to lead us successfully in a competitive environment.

Accordingly, our Board is asking the stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement by casting a non-binding advisory vote “FOR” the following resolution:

“RESOLVED, that the stockholders of Humanigen, Inc. (the “Company”) approve, on an advisory basis, the compensation of the BoardCompany’s named executive officers disclosed in the Summary Compensation Table and the related compensation tables and narrative disclosure in the Proxy Statement for Proposal 4
the Company’s 2021 Annual Meeting of Stockholders.”

 Stockholder ratification

Because the vote is advisory, it is not binding on our Board. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and our Board and, accordingly, our Board and the compensation committee intend to consider the results of Ernst & Young LLP as our independent registered public accounting firmthis vote in making determinations in the future regarding executive compensation arrangements.

Advisory approval of this proposal requires the affirmative vote of the holders of a majority of the votes cast in personshares present by virtual attendance or represented by proxy and entitled to vote on the matter at the Annual Meeting. Abstentions

Our Board Recommends A Vote FOR the Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers.

Proposal 4

ADVISORY VOTE ON THE FREQUENCY OF SOLICITATION OF ADVISORY
STOCKHOLDER APPROVAL OF EXECUTIVE COMPENSATION

The Dodd-Frank Act and Section 14A of the Exchange Act enable our stockholders, at least once every six years, to indicate their preference regarding how frequently we should solicit a non-binding advisory vote on the compensation of our named executive officers as disclosed in our proxy statement. Accordingly, the Company is asking stockholders to indicate whether they would prefer an advisory vote every year, every other year or every three years. Alternatively, stockholders may abstain from casting a vote.

After considering the benefits and consequences of each alternative, our Board recommends that the advisory vote on the compensation of the Company’s named executive officers be submitted to the stockholders every year. Our Board believes that an annual advisory vote on the compensation of the Company’s named executive officers will allow stockholders to provide our Board with their regular direct input on the Company’s compensation philosophy, policies and practices as disclosed in the proxy statement.

While our Board believes that its recommendation is appropriate at this time, the stockholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preferences, on an advisory basis, as to whether the non-binding advisory vote on the approval of the Company’s executive officer compensation practices should be held every year, every other year or every three years. The option among those choices that receives the highest number of votes from the holders of shares present by virtual attendance or represented by proxy and entitled to vote on the matter at the Annual Meeting will be deemed to be votes castthe frequency preferred by the stockholders.

Our Board and haveour compensation committee value the same effect asopinions of the stockholders in this matter and, to the extent there is any significant vote in favor of one frequency over the other options, even if less than a majority, our Board will consider the stockholders’ concerns and evaluate any appropriate next steps. However, because this vote against this proposal. However, broker non-votes are not deemed to be votes castis advisory and, therefore, are not includedbinding on our Board or the Company, our Board may decide that it is in the tabulationbest interests of the voting resultsstockholders that the Company hold an advisory vote on this proposal.executive compensation more or less frequently than the option preferred by the stockholders. The vote will not be construed to create or imply any change or addition to the fiduciary duties of the Company or our Board.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE "FOR" PROPOSAL 4.

Our Board Recommends a Vote For “1 Year” on the Frequency of Solicitation of Advisory Stockholder Approval of Executive Compensation.

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REPORT OF THE AUDIT COMMITTEE
REPORT

The audit committee of our Board operates pursuant to a charter which is reviewed annually by the audit committee. Additionally, a brief description of the primary responsibilities of the audit committee is included in this proxy statement under the heading "Corporate Governance—Board Committees—Audit Committee." Under the audit committee charter, our management is responsible for the preparation, presentation and integrity of our financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.

        In the performance of its oversight function, the audit committeehas reviewed and discussed the audited financial statements offor the Companyfiscal year ended December 31, 2020 with managementour management. The audit committee has also reviewed and discussed with theHORNE LLP, our independent registered public accounting firm. The audit committee also discussed withfirm for the independent registered public accounting firmfiscal year ended December 31, 2020, the matters required to be discussed by standards adopted bythe applicable requirements of the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”), in Rule 3200T, including the quality, not just the acceptability of the accounting principles, the reasonableness of significant adjustments, and the clarity of the disclosures in the financial statements. In addition, theSEC. The audit committee has also received the written disclosures and the letter from the independent registered public accounting firmHORNE LLP required by applicable requirements of the PCAOB regarding the independent registered public accounting firm'saccountants’ communications with the audit committee concerning independence, and has discussed with HORNE LLP the independent registered public accounting firm theirfirm’s independence.

Based uponon the review and discussions described inforegoing, the preceding paragraph, our audit committee has recommended to theour Board that the audited financial statements of the Company be included in theour Annual Report on Form 10-K for the fiscal year ended December 31, 20142020 and filed with the SEC.

Rainer Boehm, Chair

Ronald Barliant

Cheryl Buxton

Executive Compensation

Summary Compensation Table

The following summary compensation table shows, for the fiscal years ended December 31, 2020 and December 31, 2019, information regarding the compensation awarded to, earned by or paid to our three most highly compensated executive officers for 2020: Dr. Cameron Durrant, our Chairman and Chief Executive Officer; Timothy Morris, our Chief Operating and Financial Officer; and David Tousley, our former Chief Accounting and Administrative Officer, who resigned from that role effective March 5, 2021. In addition, we have also elected to provide information regarding the compensation awarded to, earned by or paid to Dr. Dale Chappell, our Chief Scientific Officer, who was our fourth most highly compensated executive officer for 2020. We refer to these officers as our “named executive officers.”

Narrative to Summary Compensation Table

As described in more detail in the Annual Report, 2020 was a transformative year for our company. Following on the onset of the global coronavirus pandemic, we identified the possibility that our leading product candidate, lenzilumab^TM, might be used as a potential therapeutic for newly hospitalized and hypoxic COVID-19 patients. SubmittedIn April 2020, lenzilumab was granted emergency single use IND authorization from the FDA (often referred to as compassionate use) to treat patients with COVID-19. Based on published results of a case-cohort study, we designed and commenced enrollment of patients in a Phase 3 multi-center, randomized, placebo-controlled, double-blinded, clinical trial in the setting of COVID-19, intended to assess the safety and efficacy of lenzilumab in improving ventilator-free survival in hospitalized hypoxic adult patients with confirmed COVID-19 pneumonia. There were 18 clinical sites across the US and 11 sites in Brazil involved in the study.

In addition to our accomplishments on the clinical side, we achieved a number of financial objectives. Chief among these were two significant financing transactions, a private placement of our common stock completed in June 2020 (the “June 2020 Private Placement”), through which we generated approximately $71.8 million of gross proceeds; and an underwritten public offering in September 2020, through which we raised $78.2 million of gross proceeds and as a result of which our common stock attained a listing on Nasdaq. We used the proceeds from these financings to retire our outstanding debt, fund our Phase 3 clinical trial of lenzilumab, and invest in the manufacturing processes needed to prepare for the potential commercialization of lenzilumab in 2021.

The information presented in the Summary Compensation Table above reflects our 2020 transformation in another way, depicting our success in recruiting talented members of an executive management team to join Dr. Durrant in our efforts to bring lenzilumab to market. Information disclosed in the table for Dr. Durrant reflects his role in steering the Company throughout the year; information disclosed for the other named executive officers primarily reflects the inducement compensation arrangements negotiated in connection with their commencement of service in executive roles.

Our executive compensation and corporate governance programs are designed to attract, motivate and retain the executive talent, aligning the interests of our executives with the interests of our stockholders to ensure prudent actions that will drive long-term value. For 2020, working with its independent compensation consultant, Aon/Radford, our Board and compensation committee strived to create a market-competitive pay program providing an appropriate mix of fixed and variable, at risk compensation and fostering a shared, one-company mindset of performance and accountability. The 2020 executive compensation program included three primary components: 1) base salary, 2) annual cash incentive opportunities geared toward achievement of goals set by the Audit Committeecompensation committee, and 3) long-term incentives in the form of stock option grants. Given the dramatically different operations of our Company following completion of the Company'sJune 2020 Private Placement and the ensuing recruitment of three of our four named executive officers in the second half of the year, the 2020 annual cash incentive plan included a full-year component, in which only Dr. Durrant participated, and a component tied to strategic goals for the back half of the year, in which all our named executive officers participated. As further described below, each of Messrs. Morris, Chappell and Tousley received an initial grant of stock options in connection with their appointment and Dr. Durrant received additional grants of stock options based on his performance and continued employment in 2020.

The following paragraphs provide further detail regarding the compensation of our named executive officers for 2020.

Dr. Durrant

Under the terms of his employment agreement, Dr. Durrant was entitled to a base salary of $600,000 for 2020 and was eligible to earn an annual cash incentive payout targeted at 60% of his base salary. In addition, in recognition of Dr. Durrant deferring a portion of his salary through the course of the year and his extraordinary efforts and dedication to the development of the Company’s clinical development program, including our Phase 3 trial of lenzilumab, on May 20, 2020, Dr. Durrant was issued stock options to purchase 50,000 shares of common stock at an exercise price of $4.30. These stock options vested immediately with regard to 25,000 shares with the remaining 25,000 shares vesting in four equal installments on each three-month anniversary thereafter.

On October 5, 2020, the Board determined that we had achieved the fiscal year 2020 performance criteria and objectives that were previously established by the compensation committee in connection with our 2020 annual cash incentive plan. As a result, upon the recommendation of Directors:(1)
Denise Gilbert (Chair)
Gary Lyons
Ted W. Lovethe compensation committee and in recognition of his substantial contributions to our success in outperforming the relevant full-year performance targets, the Board (with Dr. Durrant abstaining) approved the acceleration of the payout of Dr. Durrant’s annual cash incentive for the full year. Based on our achievement of pre-established performance criteria and objectives relating to fundraising and the clinical development program for lenzilumab, Dr. Durrant was awarded a payout of $1,512,000, with 50% being paid in cash and 50% being awarded in immediately vested stock options, consistent with the terms of Dr. Durrant’s employment agreement. In December 2020, the Compensation Committee evaluated the achievement of additional performance criteria and milestone objectives set for the remainder of 2020 related to clinical development, manufacturing and production, and preparation for the potential commercialization of lenzilumab, in addition to financial and corporate development goals. Based on such review, the Compensation Committee determined that Dr. Durrant had earned an additional payout of $163,314, all of which was paid to Dr. Durrant in cash. Dr. Durrant’s total annual incentive payout for 2020 was $1,675,314, $919,314 of which was paid in cash, with the balance awarded in immediately vested stock options.

(1)

On October 29, 2020, the Company entered into an amended and restated employment agreement (the “Durrant 2020 Agreement”) with Dr. Durrant, replacing Dr. Durrant’s previous employment agreement with the Company (the “Durrant 2016 Agreement”).

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Consistent with the terms of the Durrant 2016 Agreement, the Durrant 2020 Agreement provides that Dr. Durrant’s initial annual base salary will remain at $600,000 and he will remain eligible for an annual bonus targeted at 60% of his base salary, with Dr. Durrant’s base salary and target bonus subject to review by the compensation committee and the Board in connection with its regular review of the Company’s executive compensation program. Based on a review of Dr. Durrant’s base salary for 2021 in accordance with the terms of the Durrant 2020 Agreement, the compensation committee recommended, and the Board approved, an increase in Dr. Durrant’s annual base salary to $640,000, effective January 1, 2021. In addition, on March 12, 2021, Dr. Durrant was issued stock options to purchase 652,640 shares of common stock at an exercise price of $16.07. These stock options vest in 12 ratable quarterly installments commencing June 30, 2021.

The materialDurrant 2020 Agreement provides for a term ending December 31, 2021, with such term extending automatically for successive one-year terms thereafter unless either Dr. Durrant or the Company gives six months prior notice of non-renewal.

Under the Durrant 2020 Agreement, Dr. Durrant is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates Dr. Durrant’s employment for any reason other than “Cause”, or if Dr. Durrant resigns for “Good Reason” (each as such term is defined in this report shall notthe Durrant 2020 Agreement), Dr. Durrant will receive a lump sum payment equal to the sum of (i) his then-current annual salary and (ii) the amount of the annual bonus earned by Dr. Durrant for the year prior to the year of termination. In addition, upon such a resignation or termination, Dr. Durrant will also be deemedentitled to be "soliciting material"reimbursed for certain monthly health plan continuation premiums for up to 12 months, and all outstanding stock options held by Dr. Durrant will immediately vest and become exercisable.

The Durrant 2020 Agreement additionally provides that if Dr. Durrant resigns for Good Reason or "filed"the Company terminates his employment other than for Cause within the three-month period prior to or the two year period following a change in control (as such term is defined in the Durrant 2020 Agreement), the Company must pay or cause its successor to pay Dr. Durrant a lump sum cash payment equal to two times (a) his annual salary plus (b) the aggregate bonus received by Dr. Durrant for the year immediately preceding the change in control. In addition, upon such a resignation or termination, Dr. Durrant will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 18 months, and all outstanding stock options held by Dr. Durrant will immediately vest and become exercisable.

Mr. Morris

The Company entered into an employment agreement with Mr. Morris in connection with his appointment as our Chief Operating and Financial Officer (the “Morris Agreement”). The Morris Agreement provides for an initial annual base salary for Mr. Morris of $475,000 as well as eligibility for an annual bonus targeted at 50% of his base salary. In addition, Mr. Morris is entitled to participate in certain of the SEC. This report shall not be deemed incorporatedCompany’s benefit plans available to other executives.

Under the Morris Agreement, Mr. Morris is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates Mr. Morris’s employment for any reason other than “Cause”, or if Mr. Morris resigns for “Good Reason” (each as such term is defined in the Morris Agreement), Mr. Morris will receive his annual salary and the amount of the actual bonus earned by reference into any of our other filingsMr. Morris under the Exchange ActMorris Agreement for the year prior to the year of termination, pro-rated based on the portion of the year Mr. Morris was employed by the Company during the year of termination, or if no bonus had been received, 50% of his target bonus. In addition, upon such a resignation or termination, Mr. Morris will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 12 months, and all outstanding stock options held by Mr. Morris will immediately vest and become exercisable.

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The Morris Agreement additionally provides that if Mr. Morris resigns for Good Reason or the Securities ActCompany terminates his employment other than for Cause within the three-month period prior to or the two year period following a change in control (as such term is defined in the Morris Agreement), the Company must pay or cause its successor to pay Mr. Morris a lump sum cash payment equal to one and one-half times (a) his annual salary plus (b) the aggregate bonus received by Mr. Morris for the year immediately preceding the change in control or, if no bonus had been received, 50% of 1933,the target bonus. In addition, upon such a resignation or termination, Mr. Morris will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 18 months, and all outstanding stock options held by Mr. Morris will immediately vest and become exercisable.

As prescribed in the Morris Agreement, following the effective time of the Humanigen, Inc. 2020 Omnibus Incentive Compensation Plan (the “2020 Equity Plan”), on September 18, 2020, Mr. Morris was issued stock options to purchase 151,316 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing December 31, 2020.

Mr. Morris’s annual incentive payout for 2020 was determined based on attainment of certain defined corporate and individual objectives. In December 2020, the compensation committee evaluated the achievement of certain performance criteria and milestone objectives for Mr. Morris in 2020 related to manufacturing and production, as well as financial and corporate development goals, pro-rated for his service since August 1, 2020. Based on such review, the compensation committee determined that Mr. Morris had earned a pro-rated annual incentive payout for 2020 of $88,342.

Dr. Chappell

The Company entered into an employment agreement with Dr. Chappell (such agreement, as subsequently amended exceptand restated, the “Chappell Agreement”). The Chappell Agreement provides for an initial annual base salary for Dr. Chappell of $410,000 as well as eligibility for an annual bonus targeted at 40% of his base salary. Dr. Chappell is entitled to participate in certain of the Company’s benefit plans available to other executives.

Under the Chappell Agreement, Dr. Chappell is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates Dr. Chappell’s employment for any reason other than “Cause”, or if Dr. Chappell resigns for “Good Reason” (each as such term is defined in the Chappell Agreement), Dr. Chappell will receive his annual salary and the amount of the actual bonus earned by Dr. Chappell under the Chappell Agreement for the year prior to the year of termination, pro-rated based on the portion of the year Dr. Chappell was employed by the Company during the year of termination, or if no bonus had been received, 50% of his target bonus. In addition, upon such a resignation or termination, Dr. Chappell will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 12 months, and all outstanding stock options held by Dr. Chappell will immediately vest and become exercisable.

The Chappell Agreement additionally provides that if Dr. Chappell resigns for Good Reason or the Company terminates his employment other than for Cause within the three-month period prior to or the two year period following a change in control (as such term is defined in the Chappell Agreement), the Company must pay or cause its successor to pay Dr. Chappell a lump sum cash payment equal to one and one-half times (a) his annual salary plus (b) the aggregate bonus received by Dr. Chappell for the year immediately preceding the change in control or, if no bonus had been received, 50% of the target bonus. In addition, upon such a resignation or termination, Dr. Chappell will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 18 months, and all outstanding stock options held by Dr. Chappell will immediately vest and become exercisable.

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In connection with his appointment as Chief Scientific Officer, in September 2020, following the effective date of the 2020 Equity Plan, Dr. Chappell was issued stock options to purchase 133,760 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing December 31, 2020.

Dr. Chappell’s annual incentive payout for 2020 was determined based on attainment of certain defined corporate and individual objectives. In December 2020, the compensation committee evaluated the achievement of certain performance criteria and milestone objectives for Dr. Chappell in 2020 related to clinical development and regulatory requirements, pro-rated for his service since July 6, 2020. Based on such review, the Compensation Committee determined that Dr. Chappell had earned a pro-rated annual incentive payout for 2020 of $67,609.

Mr. Tousley

Mr. Tousley served as the Company’s Chief Accounting and Administrative Officer, Corporate Secretary and Treasurer from July 6, 2020 until his resignation effective March 5, 2021. The Company entered into an employment agreement with Mr. Tousley in connection with his appointment, which provided for an initial annual base salary for Mr. Tousley of $375,000 as well as eligibility for an annual bonus targeted at 40% of his base salary. Pursuant to his employment agreement, Mr. Tousley was granted stock options to purchase 62,700 shares of common stock in September 2020, following the effective date of the 2020 Equity Plan, at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing December 31, 2020.

Mr. Tousley’s annual incentive payout for 2020 was determined based on attainment of certain defined corporate and individual objectives. In December 2020, the Compensation Committee evaluated the achievement of certain performance criteria and milestone objectives for Mr. Tousley in 2020 related to financial and corporate goals, pro-rated for his service since July 6, 2020. Based on such review, the Compensation Committee determined that Mr. Tousley had earned a pro-rated annual incentive payout for 2020 of $69,098.

Following the effective date of Mr. Tousley’s resignation, on March 6, 2021, the Company and Mr. Tousley entered into a Master Consulting Agreement (the “Tousley Consulting Agreement”) pursuant to which Mr. Tousley will perform certain consulting services on an as needed basis at the request of the Company. The Tousley Consulting Agreement may be terminated at any time, by either party, with 10 days written notice. All of Mr. Tousley’s outstanding stock options will continue to vest and become exercisable throughout the term of the Tousley Consulting Agreement. In addition, the expiration date of certain of Mr. Tousley’s stock options, to the extent vested, will be extended for one year from the termination of the Tousley Consulting Agreement, as further described below (see “Outstanding Equity Awards at 2020 Fiscal Year End”). Amounts reported for Mr. Tousley as “all other compensation” in the Summary Compensation Table relate to consulting services he provided to the Company specifically incorporatesprior to accepting his full-time role. See “Certain Relationships and Related Transactions” for more information regarding the consulting services and payments received by Mr. Tousley in 2020. 

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Outstanding Equity Awards at 2020 Fiscal Year End

The following table shows certain information regarding outstanding equity awards held by our named executive officers as of December 31, 2020.

				Option Awards
				Number of				Number of
				Securities				Securities
				Underlying				Underlying
				Unexercised				Unexercised		Option				Option
				Options				Options		Exercise				Expiration
Name				(#) Exercisable				(#) Unexercisable		Price ($)				Date
Cameron Durrant		(1)			208,604			—		$	16.90			9/12/2026
		(2)			1,463,349			—		$	3.33			3/8/2028
		(3)			28,571			—		$	4.20			1/24/2029
		(4)			63,620			—		$	2.00			1/27/2030
		(5)			37,500			12,500		$	4.30			5/19/2030
		(6)			82,622			—		$	12.14			10/4/2030
Timothy Morris		(7)			20,000			—		$	16.90			9/12/2026
		(8)			17,647			—		$	3.33			3/8/2028
		(9)			131,243			11,932		$	3.33			3/8/2028
		(10)			12,610			138,706		$	9.65			9/17/2030
Dale Chappell		(11)			11,147			122,613		$	9.65			9/17/2030
David Tousley (15)		(12)			132,650			18,950		$	2.00			1/27/2030
		(13)			15,000			5,000		$	4.30			5/19/2030
		(14)			5,225			57,475		$	9.65			9/17/2030

(1)

On September 13, 2016, Dr. Durrant was issued stock options to purchase 208,604 shares of common stock at an exercise price of $16.90. As of December 31, 2020, the options were fully vested.

(2)

On March 9, 2018, Dr. Durrant was issued stock options to purchase 1,493,349 shares of common stock at an exercise price of $3.33. As of December 31, 2020, these options were fully vested.

(3)

On January 25, 2019, Dr. Durrant was issued stock options to purchase 28,571 shares of common stock at an exercise price of $4.20 in lieu of cash in respect of 50% of Dr. Durrant’s 2018 bonus. These options were fully vested on the grant date.

(4)

On January 28, 2020, Dr. Durrant was issued stock options to purchase 63,620 shares of common stock at an exercise price of $2.00. These stock options were granted in lieu of a portion of the cash bonus payable to Dr. Durrant in respect of his services as Chief Executive Officer in 2019. These options were fully vested on the grant date.

(5)

On May 20, 2020, Dr. Durrant was issued stock options to purchase 50,000 shares of common stock at an exercise price of $4.30. These stock options vested immediately with regard to 25,000 shares with the remaining 25,000 shares vesting in four equal installments on each three-month anniversary thereafter.

(6)

On October 5, 2020, Dr. Durrant was issued stock options to purchase 82,622 shares of common stock at an exercise price of $12.14. These stock options were granted to Dr. Durrant as part of his fiscal year 2020 bonus pursuant to our 2020 annual incentive plan. These options were fully vested on the grant date.

(7)

On September 13, 2016, Mr. Morris was issued stock options to purchase 20,000 shares of common stock at an exercise price of $16.90. As of December 31, 2020, the options were fully vested.

(8)

On March 9, 2018, Mr. Morris was issued stock options to purchase 17,647 shares of common stock at an exercise price of $3.33. These stock options were granted in lieu of 50% of the cash compensation payable to Mr. Morris in respect of his services as a director during 2017. These options were fully vested on the grant date.

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(9)

On March 9, 2018, Mr. Morris was issued stock options to purchase 143,175 shares of common stock at an exercise price of $3.33. These stock options vest in 12 ratable quarterly installments commencing June 30, 2018.

(10)

On September 18, 2020, Mr. Morris was issued stock options to purchase 151,316 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing December 31, 2020.

(11)

On September 18, 2020, Dr. Chappell was issued stock options to purchase 133,760 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing December 31, 2020.

(12)

In connection with various finance and accounting consulting services rendered to the Company, Mr. Tousley received a stock option award granted on January 28, 2020 to purchase 151,600 shares of common stock at an exercise price of $2.00 per share. These stock options vested immediately with regard to 75,800 shares with the remaining 75,800 shares vesting in four equal installments on each three-month anniversary thereafter. For additional information, see “—Narrative to Summary Compensation Table—Mr. Tousley.”

(13)

In connection with various finance and accounting consulting services rendered to the Company, Mr. Tousley received a stock option award granted on May 20, 2020 to purchase 20,000 shares of common stock at an exercise price of $4.30 per share. These stock options vested immediately with regard to 10,000 shares with the remaining 10,000 shares vesting in four equal installments on each three-month anniversary thereafter. For additional information, see “—Narrative to Summary Compensation Table—Mr. Tousley.”

(14)

On September 18, 2020, Mr. Tousley was issued stock options to purchase 62,700 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing December 31, 2020. In addition, the expiration date of these stock options, to the extent vested, will be extended for one year from the termination of the Tousley Consulting Agreement.

(15)

All of Mr. Tousley’s outstanding stock options will continue to vest and become exercisable throughout the term of the Tousley Consulting Agreement. For additional information, see “—Narrative to Summary Compensation Table—Mr. Tousley.”

Retirement Benefits

We have established a 401(k) tax-deferred savings plan, which permits participants, including our named executive officers, to make contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code. We are responsible for administrative costs of the 401(k) plan. We may, in our discretion, make matching contributions to the 401(k) plan. No employer contributions were made during the years ended December 31, 2019 and 2020.

Employee, Officer and Director Hedging

Our insider trading policy prohibits our directors, officers and employees from:

·

engaging in short sales of our securities;

·

engaging in hedging transactions, including, but not limited to, zero-cost collars, forward sale contracts and many others, which involve the establishment of a short position in our securities and limit or eliminate a director, officer or employee’s ability to profit from an increase in the value of our securities;

·

engaging in transactions in publicly traded options on our securities, such as puts, calls and other derivative securities, on an exchange or in any other organized market; and

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·

holding securities in a margin account or pledging our securities as collateral for a loan.

2012 Equity Incentive Plan

On June 1, 2020, the Board determined not to grant further awards under the Company’s 2012 Equity Incentive Plan (the “2012 Equity Plan”), pending effectiveness of the 2020 Equity Plan described below.

2020 Omnibus Incentive Compensation Plan

On June 1, 2020, with a limited number of shares remaining available for grant, and with the 2012 Equity Plan set to expire in 2022, the Board determined that it was appropriate to replace the 2012 Equity Plan rather than merely request an additional share reserve be approved by reference into such filing.