UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39402 ANNEXON, INC. (Exact name of Registrant as specified in its Charter) Delaware 27-5414423 (State or other jurisdiction of i ...

GAME-CHANGING MEDICINES FOR COMPLEMENT- MEDIATED DISEASES INVESTOR PRESENTATION MARCH 2023 Nasdaq: ANNX Forward-Looking Statements This p ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39402 ANNEXON, INC. (Exact name of Registrant as specified in its Charter) Delaware 27-5414423 (State or other jurisdiction of incorp ...

GAME-CHANGING MEDICINES FOR COMPLEMENT- MEDIATED DISEASES JANUARY 2023 Nasdaq: ANNX Forward-Looking Statements This p ...

Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Annexon develops C1q-inhibiting medicines for autoimmune, neurodegenerative, and ophthalmic disorders, leveraging a pipeline of clinical-stage assets - Annexon is a clinical-stage biopharmaceutical company pioneering therapies that target **C1q** to inhibit the classical complement pathway for autoimmune, neurodegenerative, and ophthalmic diseases[17](index=17&type=chunk) - The company's strategy leverages its **C1q inhibition approach** to address a broad range of diseases, advancing lead candidates ANX005 and ANX007, and expanding its portfolio with next-generation candidates[34](index=34&type=chunk)[36](index=36&type=chunk) - Annexon holds **worldwide development and commercialization rights** to its product candidates, planning to build its own commercial infrastructure for select markets while exploring partnerships[23](index=23&type=chunk)[36](index=36&type=chunk)[149](index=149&type=chunk) [Overview and Strategy](index=7&type=section&id=Item%201.%20Business-Overview) Annexon's strategy focuses on pioneering C1q inhibition for various diseases, advancing lead candidates, and expanding its portfolio - The company's core strategy leverages unique upstream C1q inhibition for broad applicability in classical complement-mediated diseases, aiming for complete pathway blockage while preserving healthy complement function[18](index=18&type=chunk)[34](index=34&type=chunk) - A key strategic element is a disciplined, **biomarker-driven development approach** to establish target engagement and de-risk clinical programs, as seen with NfL in GBS, HD, and ALS trials[34](index=34&type=chunk)[53](index=53&type=chunk) - Annexon plans to maximize the value of its wholly-owned product candidates through independent development in select markets and collaborations for larger indications[36](index=36&type=chunk) [Our Pipeline](index=8&type=section&id=Item%201.%20Business-Our%20Pipeline) Annexon's pipeline includes clinical-stage C1q inhibitors ANX005, ANX007, and ANX009 for autoimmune, neurodegenerative, and ophthalmic diseases, alongside next-generation candidates Annexon Clinical Pipeline Summary | Product Candidate | Formulation | Therapeutic Area | Indication(s) | Development Stage | Expected Data Readout | | :--- | :--- | :--- | :--- | :--- | :--- | | **ANX005** | IV mAb | Autoimmune / Neurodegeneration | Guillain-Barré Syndrome (GBS) | Phase 2/3 | 2023 | | | | | Warm Autoimmune Hemolytic Anemia (wAIHA) | Phase 2 | H2 2022 | | | | | Huntington's Disease (HD) | Phase 2 | Q2 2022 (Full Data) | | | | | Amyotrophic Lateral Sclerosis (ALS) | Phase 2 | 2023 | | **ANX007** | Intravitreal Fab | Ophthalmology | Geographic Atrophy (GA) | Phase 2 | 2023 | | **ANX009** | Subcutaneous Fab | Autoimmune | Lupus Nephritis (LN) | Phase 1b | H2 2022 (Initial Data) | | **ANX105** | mAb | Neurodegeneration | Chronic Neurodegenerative Diseases | Preclinical (FIH planned H1 2022) | 2023 | | **ANX1502** | Oral Small Molecule | Autoimmune | Autoimmune Indications | Preclinical (FIH planned H2 2022) | 2023 | - For ANX005 in GBS, a Phase 1b trial showed **full C1q target engagement**, a significant reduction in the nerve damage biomarker **NfL**, and positive trends on clinical outcome measures, with a pivotal Phase 2/3 trial ongoing[24](index=24&type=chunk)[27](index=27&type=chunk)[72](index=72&type=chunk) - Interim Phase 2 data for ANX005 in Huntington's Disease showed the drug was **well-tolerated**, achieved **full target engagement** in serum and CSF, and patients maintained clinical function by cUHDRS[29](index=29&type=chunk)[94](index=94&type=chunk) - ANX007 for ophthalmic diseases demonstrated **full target engagement** in the eye for at least four weeks in a Phase 1b glaucoma trial, supporting its ongoing Phase 2 development in Geographic Atrophy[30](index=30&type=chunk)[124](index=124&type=chunk) [Intellectual Property](index=33&type=section&id=Item%201.%20Business-Intellectual%20Property) Annexon's IP strategy relies on patents and trade secrets, with 15 patent families covering its C1q platform and candidates, including licensed and owned patents extending to 2041 - As of January 15, 2022, the company's patent portfolio consisted of **15 different patent families**, including both owned and in-licensed patents and applications[135](index=135&type=chunk) - A foundational patent family exclusively licensed from Stanford University, covering C1q inhibition for neurodegeneration, expires between **2026 and 2030**[136](index=136&type=chunk)[142](index=142&type=chunk) - Company-owned patent families for anti-C1q antibodies (ANX005, ANX007, ANX009, ANX105) provide protection expiring between **2034 and 2037**[137](index=137&type=chunk) - A pending patent family covers the oral small molecule candidate ANX1502, with any resulting patents expected to expire in **2041**[140](index=140&type=chunk) [Competition](index=36&type=section&id=Item%201.%20Business-Competition) Annexon faces intense competition from well-resourced pharmaceutical and biotech companies across its target indications, including GBS, wAIHA, HD, and GA - **Guillain-Barré Syndrome (GBS):** No FDA-approved therapies exist. Competitors include Hansa Biopharma (imlifidase, Phase 2) and AstraZeneca/Alexion (SOLIRIS, Phase 3 in Japan)[157](index=157&type=chunk) - **Autoimmune Hemolytic Anemias (wAIHA/CAD):** No approved therapies for wAIHA. Competitors include Rigel (Tavalisse, Phase 3), Incyte (parsaclisib, Phase 3), and Janssen (nipocalimab, Phase 2/3). Sanofi's sutimlimab is approved for CAD[158](index=158&type=chunk) - **Huntington's Disease (HD):** No approved disease-modifying therapies. Competitors include Prilenia (Pridopidine, Phase 3), PTC Therapeutics (PTC518, Phase 2), and uniQure (AMT-130, Phase 1)[160](index=160&type=chunk) - **Geographic Atrophy (GA):** No FDA-approved treatments. Competitors targeting the complement cascade include Apellis (APL-2, completed Phase 3), Iveric Bio (zimura, Phase 3), and NGM Pharma (NGM621, Phase 2)[163](index=163&type=chunk) [Government Regulation](index=37&type=section&id=Item%201.%20Business-Government%20Regulation) The company's operations are subject to extensive FDA regulation, requiring rigorous preclinical and clinical development, BLA submission, and post-approval compliance - The FDA drug approval process requires extensive preclinical and clinical testing (Phase 1, 2, 3) to establish safety and efficacy before a Biologics License Application (BLA) can be submitted and approved[165](index=165&type=chunk)[171](index=171&type=chunk)[175](index=175&type=chunk) - The company has received **Fast Track designation** for ANX005 for GBS, potentially expediting development and review[27](index=27&type=chunk)[181](index=181&type=chunk) - The company has received **Orphan Drug designation** for ANX005 for GBS and HD, potentially granting **seven years of market exclusivity** in the U.S. if approved first for these indications[27](index=27&type=chunk)[187](index=187&type=chunk)[284](index=284&type=chunk) - Approved products will be subject to the Biologics Price Competition and Innovation Act (BPCIA), providing a **12-year exclusivity period** before a biosimilar can be marketed[194](index=194&type=chunk)[195](index=195&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including financial needs, clinical trial uncertainties, third-party reliance, competition, and intellectual property challenges - **Financial Risk:** The company has a history of significant losses (**$130.3 million** in 2021) and will require substantial additional financing, with failure to obtain capital potentially leading to program delays or termination[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) - **Clinical Development Risk:** The business depends on the success of its early-stage product candidates, with clinical trials being long, expensive, and uncertain, where delays, negative results, or safety issues could prevent regulatory approval[234](index=234&type=chunk)[248](index=248&type=chunk)[255](index=255&type=chunk) - **Third-Party Reliance:** Annexon relies on third-party suppliers for manufacturing and CROs for clinical trials, where the loss or failure of these partners would materially harm the business[311](index=311&type=chunk)[318](index=318&type=chunk) - **Competition and Commercialization Risk:** The company faces significant competition from larger, better-resourced companies, and even if approved, its products may not achieve market acceptance or adequate reimbursement[323](index=323&type=chunk)[327](index=327&type=chunk) - **Intellectual Property Risk:** The company's success depends on its ability to obtain and enforce patents, facing potential infringement claims or challenges to its own patents, which could be costly and limit commercialization[360](index=360&type=chunk)[367](index=367&type=chunk) [Item 2. Properties](index=96&type=section&id=Item%202.%20Properties) The company leases 65,818 square feet of office and laboratory space for its Brisbane, California headquarters under a lease extending to October 2031 - The company leases approximately **65,818 square feet** of office and laboratory space for its corporate headquarters in Brisbane, California[492](index=492&type=chunk) - The lease term runs from **November 2021 to October 2031**, with an option to extend for an additional ten years[492](index=492&type=chunk) [Item 3. Legal Proceedings](index=96&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings as of the report date - The company is not currently a party to any material legal proceedings[493](index=493&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=97&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Annexon's common stock trades on Nasdaq under 'ANNX' since July 2020, with no plans for cash dividends as earnings will be reinvested for growth - The company's common stock began trading on the Nasdaq Global Select Market under the symbol **"ANNX"** on **July 24, 2020**[495](index=495&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the foreseeable future[497](index=497&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=98&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company reported a **$130.3 million** net loss in 2021 due to increased R&D and G&A expenses, holding **$242.7 million** in cash to fund operations into Q1 2024 Fiscal Year 2021 vs 2020 Financial Results (in thousands) | Metric | 2021 | 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $100,066 | $49,271 | $50,795 | 103% | | General and administrative | $30,647 | $14,198 | $16,449 | 116% | | **Total operating expenses** | **$130,713** | **$63,469** | **$67,244** | **106%** | | **Net loss** | **($130,323)** | **($63,412)** | **($66,911)** | **106%** | - The increase in R&D expenses was primarily due to a **$23.7 million** rise in clinical services for ongoing trials, a **$12.5 million** increase in compensation from higher headcount, and a **$6.7 million** increase in contract manufacturing[524](index=524&type=chunk) - The increase in G&A expenses was driven by a **$7.9 million** rise in compensation, a **$6.4 million** increase in professional services and insurance, and a **$1.6 million** increase in facility costs[526](index=526&type=chunk) - As of December 31, 2021, the company had **$242.7 million** in cash, cash equivalents, and short-term investments, expected to fund operations into **Q1 2024**[508](index=508&type=chunk)[536](index=536&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=108&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements for 2021 and 2020 are presented, with KPMG LLP issuing an unqualified opinion on financial statements and internal controls - The independent registered public accounting firm, **KPMG LLP**, issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of the company's internal control over financial reporting as of December 31, 2021[554](index=554&type=chunk)[555](index=555&type=chunk) Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash, cash equivalents, and short-term investments | $242,715 | $351,206 | | Total Assets | $287,040 | $355,946 | | Total Liabilities | $55,131 | $11,668 | | Total Stockholders' Equity | $231,909 | $344,278 | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Total operating expenses | $130,713 | $63,469 | | Loss from operations | ($130,713) | ($63,469) | | Net loss | ($130,323) | ($63,412) | | Net loss per share | ($3.40) | ($4.15) | - The auditor identified the evaluation of accrued preclinical study and clinical trial expenses as a **critical audit matter**, due to the subjective judgment required to assess the status and level of effort of R&D activities performed by third-party organizations[564](index=564&type=chunk)[565](index=565&type=chunk) [Item 9A. Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and KPMG LLP concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2021[690](index=690&type=chunk) - Management and the independent auditor, **KPMG LLP**, both concluded that the company's internal control over financial reporting was **effective** as of December 31, 2021[691](index=691&type=chunk)[692](index=692&type=chunk) - During the first quarter of 2021, the company implemented a new **NetSuite ERP system**, resulting in modifications to internal control processes and procedures[693](index=693&type=chunk) Part III [Items 10-14](index=135&type=section&id=Item%2010,%2011,%2012,%2013,%2014) Information for Items 10 through 14 is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's forthcoming **2022 Proxy Statement**[698](index=698&type=chunk)[701](index=701&type=chunk)[702](index=702&type=chunk)[703](index=703&type=chunk)[704](index=704&type=chunk) - The company has adopted a **Code of Business Conduct and Ethics**, which is available on its website[699](index=699&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=136&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Annual Report on Form 10-K - This item contains the index of exhibits filed with the 10-K, including the Amended and Restated Certificate of Incorporation, material contracts, and required certifications[707](index=707&type=chunk)