10-K

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, 2020

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 001-39122

89bio, Inc.

(Exact name of Registrant as specified in its Charter)

Delaware	36-4946844
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
142 Sansome Street, Second Floor San Francisco, California 94104	94104
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 500-4614

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001 per share	ETNB	Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

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

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

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

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

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

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of June 30, 2020, the last business day of the Registrant’s most recently completed second fiscal quarter, was approximately $72,707,052, based on the closing price on The Nasdaq Global Market reported for such date. Shares of common stock held by each officer and director and by each person who is known to own 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates of the Registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of March 1, 2021, there were 19,946,426 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement relating to its 2021 Annual Meeting of Stockholders, to be held on or about June 2, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Table of Contents

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	32
Item 1B.	Unresolved Staff Comments	51
Item 2.	Properties	51
Item 3.	Legal Proceedings	51
Item 4.	Mine Safety Disclosures	51
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	52
Item 6.	Selected Financial Data	52
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	60
Item 8.	Financial Statements and Supplementary Data	61
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	83
Item 9A.	Controls and Procedures	83
Item 9B.	Other Information	84
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	85
Item 11.	Executive Compensation	85
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	85
Item 13.	Certain Relationships and Related Transactions, and Director Independence	85
Item 14.	Principal Accounting Fees and Services	85
PART IV
Item 15.	Exhibits, Financial Statement Schedules	86
Item 16.	Form 10-K Summary	89
SIGNATURES		90

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. All statements, other than statements of historical facts included in this Annual Report on Form 10-K, including statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to acquisitions, business trends and other information referred to in “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan,” “anticipate,” “target,” “forecast,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. Forward-looking statements are not historical facts and reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this Annual Report on Form 10-K. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth in “Risk Factors,” and the following risks, uncertainties and factors:

• our plans to develop and commercialize BIO89-100 or any future product candidates;    

• our ongoing and planned clinical trials;

• the timing of and our ability to obtain regulatory approvals for BIO89-100 or any future product candidates;

• the effect of the ongoing COVID-19 pandemic on our business;

• our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

• our ability to identify additional products or product candidates with significant commercial potential that are consistent with our commercial objectives;

• the rate and degree of market acceptance and clinical utility of BIO89-100 or any future product candidates, if approved;

• our commercialization, marketing and manufacturing capabilities and strategy;

• significant competition in our industry;

• our intellectual property position;

• loss of key members of management;

• failure to successfully execute our growth strategy, including any delays in our planned future growth; and

• our failure to maintain effective internal controls.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should evaluate all forward-looking statements made in this Annual Report on Form 10-K in the context of these risks and uncertainties.

We caution you that the risks, uncertainties and other factors referred to above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements in this Annual Report on Form 10-K apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

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PART I

In this Annual Report on Form 10-K, unless context otherwise requires or where otherwise indicated, the terms “89bio” “we,” “us,” “our,” “our company,” “the company,” and “our business” refer to 89bio, Inc. and its consolidated subsidiaries.

Item 1. Business.

Overview

89bio is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. Our lead product candidate, BIO89-100, a specifically engineered glycoPEGylated analog of fibroblast growth factor 21 (“FGF21”), is currently being developed for the treatment of nonalcoholic steatohepatitis (“NASH”) and for the treatment of severe hypertriglyceridemia (“SHTG”). NASH is a severe form of nonalcoholic fatty liver disease (“NAFLD”), characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, hepatocellular carcinoma (“HCC”) and death. There are currently no approved products for the treatment of NASH. In September 2020, we announced positive topline data from the Phase 1b/2a trial of BIO89-100 in NASH. We plan to initiate a Phase 2b trial in NASH patients in the first half of 2021. In December 2020, we initiated a paired-biopsy open-label cohort as part of the Phase 1b/2a trial in NASH patients assessing histology endpoints with topline data anticipated by the end of 2021. SHTG is a condition identified by severely elevated levels of triglycerides (greater than or equal to 500 mg/dL), which is associated with an increased risk of NASH, cardiovascular events and acute pancreatitis. We initiated our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020 and expect to report topline data in the second half of 2021.

FGF21 is a metabolic hormone that regulates energy expenditure and glucose and lipid metabolism. FGF21 analogs represent a promising class of drugs to treat NASH, because they not only address the liver manifestations, but also have an effect on the multiple co-morbidities that worsen NASH. FGF21 is a clinically-validated mechanism that has been shown in humans to reduce steatosis, improve the histological features of NASH and address cardio-metabolic dysregulation. It is thought to exert effects on liver fibrosis by improving metabolic regulation, which reduces ongoing liver injury thus giving the liver time to heal. FGF21 also generates an on-target effect to increase adiponectin, a hormone released from adipose tissue that, among other functions, can suppress development and progression of hepatic fibrosis. However, FGF21 in its native form suffers from a short half-life and a tendency to aggregate in solution, both of which impact its suitability as a viable drug. To address these challenges, we have specifically engineered BIO89-100 to extend the half-life of the molecule while maintaining potency and thereby the clinical benefits of FGF21.

BIO89-100 may be a differentiated FGF21 therapy based on its robust and durable biological effects, a favorable tolerability profile and its potential for every two-week dosing. Combining these characteristics with the ability to address the key liver pathologies in NASH, as well as the underlying metabolic dysregulation in NASH patients, BIO89-100 has the potential to become a backbone of treatment in NASH. BIO89-100 also has a long half-life which allows convenient weekly or every-two-week dosing that will support adoption and compliance amongst patients living with this chronic, progressive and generally asymptomatic liver disease. It is currently the only FGF21 analog being tested for every-two-week dosing. BIO89-100 is also being developed as a liquid formulation, which will be convenient for patients to administer.

BIO89-100 has been evaluated in multiple animal studies of NASH, diabetes and obesity, including studies in mice and non-human primates and has completed a Phase 1a first-in-human single ascending dose (“SAD”) clinical trial in 58 healthy volunteers. In these preclinical studies and in the SAD trial, consistent beneficial effects across a range of relevant endpoints were observed. In the SAD trial, BIO89-100 demonstrated a favorable tolerability profile and a half-life of 55 to 100 hours. At doses of 9.1 mg and higher, significant improvements in key lipid parameters were observed at Day 8 and Day 15 after dosing on Day 1. BIO89-100 was well tolerated across the dose range in this trial. There were no deaths, serious adverse events or discontinuations due to adverse events. The most commonly observed treatment-related adverse events, occurring in at least two subjects in the pooled BIO89-100 group, were injection site reactions and headache, all of which were reported as mild. In April 2020, we announced data from a preclinical study with BIO89-100 demonstrating low nanomolar potency against FGF receptors 1c, 2c and 3c similar to recombinant human FGF21 (“rhFGF21”).

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In September 2020, weannouncedpositivetopline data from a Phase 1b/2a study in NASH patients, which has informed the advancement of our clinical strategy in NASH. This 13-week phase 1b/2a multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose-ranging trial enrolled a total of 81 patients with biopsy-confirmed NASH and phenotypic NASH (“PNASH”). All dose groups in the trial demonstrated statistically significant reductions in liver fat at week 13, with relative reduction of up to 60% versus baseline, and up to 70% versus placebo, as measured by magnetic resonance imaging—proton density fat factor (“MRI-PDFF”).A majority of patients achieved a ≥ 30% (up to 88%) or a ≥ 50% (up to 71%) reduction in liver fat from baseline. ALT, a liver enzyme, was significantly reduced (up to 44%) in these patients and key lipid markers like triglycerides, LDL, and non-HDL were also significantly improved. Baseline characteristics were similar across the sub-populations of biopsy-confirmed NASH and PNASH patients enrolled in the trial and results were also consistent across the two sub-groups. In this study, BIO89-100 presenteda favorable safety and tolerability profile with rates of gastrointestinal side effects such as nausea, diarrhea and vomiting similar to placebo.No adverse effects on blood pressure or heart rate were observed and no hypersensitivity adverse events were reported. In March 2021, we presented a new analysis of data from this study that showed that BIO89-100 treatment resulted in significant reductions in liver volume of up to 15% and liver fat volume of up to 65% in treated patients at 13 weeks compared to baseline, as measured by MRI-PDFF.

In December 2020, we initiated a paired-biopsy, open-label cohort as part of the Phase 1b/2a trial assessing histology endpoints, with data anticipated by the end of 2021. This cohort is expected to enroll approximately 20 patients with biopsy-confirmed NASH who will be treated for 20 weeks with 27 mg of BIO89-100 once weekly. The cohort will build on the recent data from 89bio’s Phase 1b/2a trial and will provide an early opportunity to demonstrate BIO89-100’s benefits on histology endpoints.

Given the potential of FGF21 to meaningfully reduce triglycerides and provide other metabolic benefits, and the established regulatory path for approval, we are developing BIO89-100 for the treatment of SHTG. We initiated our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020 and expect to enroll approximately 90 patients, who could be on stable background medications. ENTRIGUE is a Phase 2 multi-center, randomized, double-blind, placebo-controlled study designed to evaluate safety, efficacy and tolerability in patients who will receive BIO89-100 administered weekly (9 mg, 18 mg or 27 mg) or every two weeks (36 mg) or placebo. The primary endpoint is the reduction in fasting triglycerides from baseline. Key secondary endpoints include other lipid and metabolic markers and change in liver fat measured by MRI-PDFF. Topline data from ENTRIGUE are expected in the second half of 2021. We have recently expanded ENTRIGUE with an additional cohort of patients on fibrates to assess the benefit of 27 mg weekly BIO89-100 when added to background fibrates. In this cohort, a total of 36 patients will be randomized to either receive BIO89-100 or placebo. The primary endpoint and key secondary endpoint are the same as in ENTRIGUE. We also expect to initiate registrational trials in SHTG in 2022, pending positive data from ENTRIGUE.

Impact of COVID-19 Pandemic

The ongoing COVID-19 pandemic has disrupted and may continue to disrupt our business and delay our preclinical and clinical programs and timelines. The extent to which the COVID-19 pandemic may impact our future operating results and financial condition is uncertain. We initiated our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020 as well as a new paired-biopsy open-label histology cohort as part of the Phase 1b/2a trial in the fourth quarter of 2020. The COVID-19 surge observed late in the fourth quarter of 2020 and the first quarter of 2021 has impacted enrollment in these studies. We plan to initiate a Phase 2b trial in NASH patients in the first half of 2021. We do not yet know the full extent of potential delays, which could prevent or delay us from obtaining approval for BIO89-100. For more information regarding risks related to the ongoing COVID-19 pandemic, please see the risk factor entitled “The ongoing COVID-19 pandemic has resulted and may in the future result in significant disruptions to our clinical trials or other business operations, which could have a material adverse effect on our business,” in Part I. Item 1A of this Annual Report on Form 10-K. To the extent the ongoing COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth under “Risk Factors” in this Annual Report on Form 10-K.

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Strategy

Our goal is to become a leading biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. The key components of our strategy are to:

• Rapidly advance BIO89-100 through clinical development for the treatment of NASH. We believe BIO89-100 may be a differentiated FGF21 therapy based on its robust and durable biological effects, a favorable tolerability profile and its potential for every two-week dosing. Following positive results in September 2020 from our Phase 1b/2a trial in NASH patients we plan to initiate a Phase 2b trial in NASH patients with F2 and F3 fibrosis in the first half of 2021. Additionally, we recently initiated a paired-biopsy, open-label histology cohort in NASH patients and are also evaluating the opportunity to test BIO89-100 in NASH patients with cirrhosis while we analyze and await data in cirrhotic patients from other FGF21 analogs.

• Pursue SHTG as a second indication with BIO89-100 given its unique profile and its potential for a quicker path to market. While we are focused on becoming a leader in the treatment of NASH, BIO89-100’s mechanism of action supports its potential to become the treatment leader in other cardio-metabolic and liver diseases. In the third quarter of 2020, we initiated our Phase 2 trial (ENTRIGUE) in SHTG. Based on U.S. Food and Drug Administration (“FDA”) guidance for the development of SHTG treatments, as well as the regulatory path followed by other companies that have successfully developed SHTG therapies, we believe that a combination of smaller clinical trials and shorter development timelines could mean that SHTG potentially represents a quicker path to market for BIO89-100.

• Scale-up and optimize the manufacturing of BIO89-100. We currently use an external contract manufacturing organization (“CMO”) to manufacture BIO89-100 for our ongoing and planned clinical trials. While these trials are ongoing, we plan to work with our CMO to optimize and scale-up the manufacturing process for BIO89-100 to support the increased production that will be needed for later-stage clinical trials and commercialization, if BIO89-100 is approved.

• Establish a commercial infrastructure in key geographies. We have worldwide rights to BIO89-100 and intend to develop the sales infrastructure required for commercialization in the United States. We also plan to evaluate options, including strategic collaborations, for commercializing BIO89-100, if approved, in other key markets, such as Europe and China.

• Build a diversified multi-asset pipeline of novel therapies. We intend to employ a value-driven strategy to identify, acquire, develop and commercialize product candidates for liver and cardio-metabolic diseases. We intend to focus on product candidates that we believe have attractive profiles and address a clear unmet medical need and can advance quickly and efficiently into late-stage development.

Our Focus on Liver and Cardio-Metabolic Disease

We are focused on developing and commercializing therapeutic interventions that have a clinically meaningful impact on patients with liver and cardio-metabolic diseases. These diseases, including NASH and SHTG, represent leading global causes of morbidity and mortality. Despite a wave of public health campaigns to promote better diet and exercise habits and a range of treatment options available for many of these diseases, there is a significant unmet medical need for more effective therapies to improve patient outcomes and reduce the burden on global healthcare systems.

We are currently developing our lead product candidate, BIO89-100, a specifically engineered glycoPEGylated analog of FGF21, for the treatment of NASH and SHTG. We believe BIO89-100 is an ideal candidate for the treatment of NASH based on its ability to address the key liver pathologies in NASH, its ability to address the underlying metabolic dysregulation in NASH patients, its favorable tolerability profile, and its potential for a longer dosing interval. Multiple epidemiological studies have linked NAFLD to increased cardiovascular disease, concluding that the majority of deaths among NAFLD patients are attributable to cardiovascular disease. As a result, we believe it is important that new therapeutics options for NASH address the underlying cardiovascular and metabolic dysregulations in these patients.

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Given the potential of BIO89-100 to meaningfully reduce triglycerides, we are also developingBIO89-100 for the treatment of SHTG. BIO89-100 may have a competitive differentiation from approved therapies and other molecules in development based on its impact on improving liver fat and other metabolic markers in addition to triglyceride reduction. There is regulatory precedence for the approval of therapies for the treatment of SHTG in the United States based on the reduction in triglycerides from baseline as the primary endpoint for full approval. Based on the regulatory path followed by other companies that have successfully developed SHTG therapies, we believe that a combination of smaller clinical trials and shorter development timelines could mean that SHTG potentially represents a quicker path to market for BIO89-100.

Disease Overview - NASH

NASH, a severe form of NAFLD, is characterized histologically by the additional presence of inflammation and hepatocellular injury such as visible ballooning and has a significantly worse prognosis, with the potential to progress to liver fibrosis, cirrhosis or HCC.

NASH represents a large and rapidly growing problem in the United States and worldwide. Diagnoses have been on the rise and are expected to increase dramatically in the next decade. The prevalence of NAFLD, which affects approximately 25% of the global population, and NASH, which develops in approximately 20% to 25% of NAFLD patients, is driven primarily by the worldwide obesity epidemic. As a result, the prevalence of NASH has increased significantly in recent decades, paralleling similar trends in the prevalence of obesity, insulin resistance and Type 2 diabetes. The prevalence of these conditions is expected to increase further in view of the unhealthy nutrition habits, such as consumption of a diet high in fructose, sucrose and saturated fats, and sedentary behavior that characterize modern lifestyle.

The number of NASH cases in the United States is projected to expand from 16.5 million in 2015 to 27 million in 2030, with similar prevalence growth expected in Europe, yet there are no approved treatments. Approximately 20% of the 16.5 million NASH cases in 2015 had F3 or F4 fibrosis, a number that is expected to increase to 7.9 million by 2030, which will be approximately 30% of the total NASH population. Similar growth trends for NASH cases are expected in Europe (12.6 million in 2016 to 18.3 million in 2030 within France, Germany, Italy, Spain and the United Kingdom) as well as China (32.6 million in 2016 to 48.3 million in 2030). Figure 1 below shows the increase in prevalence and liver-related mortality rates by fibrosis stage. The expected lifetime economic burden of all patients with NASH in the United States in 2017 was estimated at $223 billion. Diet and exercise are currently the standard of care for NAFLD and NASH, but adherence to this treatment regimen is poor and there remains a high unmet need in the treatment of NASH.

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Figure 1: Prevalence and Liver-Related Mortality Rate by Fibrosis Stage

The critical pathophysiologic mechanisms underlying the development and progression of NASH include reduced ability to handle lipids, increased insulin resistance, injury to hepatocytes and liver fibrosis in response to hepatocyte injury. NASH patients have an excessive accumulation of fat in the liver resulting primarily from a caloric intake above and beyond energy needs. A healthy liver contains less than 5% fat, but a liver in someone with NASH can contain more than 20% fat. This abnormal liver fat contributes to the progression to NASH, a liver necro-inflammatory state, that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure—cirrhosis develops in approximately 20% and 45% of patients. In some cases, cirrhosis progresses to decompensated cirrhosis, which results in permanent liver damage that can lead to liver failure. In addition, it is estimated that 8% of patients with advanced fibrosis will develop HCC. NASH is a complex, multifaceted disease that doesn’t just affect the liver. Patients with NASH frequently have other significant metabolic co-morbidities such as obesity, hyperglycemia, dyslipidemia and systemic hypertension (a constellation of which is commonly referred to as metabolic syndrome) and these further contribute to the risk of cardiovascular disease.

Disease Overview - SHTG

We are also developing BIO89-100 for the treatment of SHTG. Hypertriglyceridemia (“HTG”) is characterized by elevated fasting plasma triglyceride levels higher than 200 mg/dL and SHTG is typically defined as triglyceride levels of greater than or equal to 500 mg/dL. SHTG is associated with an increased risk of NAFLD, NASH and cardiovascular diseases, as well as acute pancreatitis, accounting for up to 10% of all acute pancreatitis episodes. A recent third-party study utilizing an omega-3 fatty acid (“omega-3 FA”) demonstrated the linkage between a reduction in triglycerides and favorable cardiovascular clinical outcomes. Additionally, SHTG increases the risk of developing NAFLD, NASH and cardiovascular disease.

It is estimated that there are 4 million patients in the United States with triglyceride levels of greater than or equal to 500 mg/dL. Of these patients, it is estimated that 56% have hepatic fat and up to 72% have other dyslipidemias or Type 2 diabetes. This patient population is expected to increase due to the triple epidemic of obesity, metabolic syndrome and Type 2 diabetes. In addition, the addressable market has the potential to expand as a result of increasing awareness of the importance of treating elevated triglyceride levels, similar to the focus today of physicians on managing LDL levels, as well as due to third party commercial efforts expected to promote triglyceride reduction.

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The treatment regimen for SHTG includes dietary restrictions and lipid-lowering drug treatment such as fibrates, omega-3 fish oils and niacin. Some statins are indicated in HTG but do not have an indication for use in SHTG.Despite multiple agents approved for the treatment of SHTG, these agents have limitations that may not make them ideal for all patients. For example, fibrates have demonstrated reductions in triglycerides of up to approximately 55% at 12 weeks of treatment. However, they have also shown increases in LDL-C (up to 45%), a detrimental effect in this patient population, risk of drug-drug interactions and increases in transaminases, as well as tolerability issues including myopathy. Omega 3 fish oils have shown more modest benefits in reduction of triglycerides from baseline of approximately 25% to 45%. Some fish oils have also showed major increases in LDL-C (up to 45%). Fish oils also have a significant pill burden given the high daily doses required. In addition, these agents fail to meaningfully address the related co-morbidities of SHTG, including glycemic control, which, when left untreated, may further exacerbate the condition. In third-party studies, up to 50% of treated SHTG patients were unable to reduce their triglyceride levels to < 500 mg/dL despite using approved drugs and are considered refractory patients. These refractory patients have substantial unmet medical need and represent a significant market opportunity. Despite these limitations, the existing drugs have achieved commercial success with two third parties each generating peak sales of approximately $1 billion or greater. Given the continuing unmet need in SHTG and limitations of current treatments, there are several agents in development for the treatment of SHTG, including a fibrate, and novel drugs targeting aspects of HTG and SHTG, including ANGPTL3 and ApoC III inhibitors.

Etiology of NASH

Understanding of the pathophysiologic mechanisms that lead to NASH has evolved in recent years. Excessive caloric overload, metabolic dysregulation, cardio-metabolic co-morbidities and genetic risk factors increase the likelihood of developing NASH, with a multitude of potential mechanistic contributors to pathophysiology. In NASH, the liver’s capacity to handle the primary metabolic energy substrates, carbohydrates and fatty acids, is overwhelmed. This occurs when there is an excess of free fatty acids deposited in the liver or their disposal from the liver is impaired. The accumulation of surplus free fatty acids leads to the formation of toxic lipid species. These toxic lipids then induce endoplasmic reticulum stress, oxidative stress and an inflammatory response, which can result in hepatocellular injury and death. This may lead to fibrosis and genomic instability, which may worsen over time to cirrhosis and HCC, respectively.

The critical pathophysiologic mechanisms underlying development and progression of NASH include (1) reduced ability to handle lipids, (2) increased insulin resistance, (3) injury to hepatocytes and (4) development and progression of liver fibrosis in response to hepatocyte injury.

Reduced Ability to Handle Lipids

Excess consumption of calories, poor diet and a sedentary lifestyle, each often associated with obesity, can burden the body with a surplus of carbohydrates and lipids. This burden can be progressively more difficult for the liver to handle thereby resulting in steatosis in the liver. The problem is compounded further as insulin resistance develops.

Free fatty acids (“FFA”) accumulate in the liver primarily from three sources, namely, through (1) the transfer from peripheral adipose tissues where triglycerides are mobilized, (2) de-novo lipogenesis (“DNL”), and (3) direct dietary intake. The FFA that lead to NASH are believed to arise primarily from the peripheral tissue pool and secondarily through DNL. The increase in the influx of FFA to the liver from the peripheral tissues is driven by excessive caloric intake greater than the body’s demand and increased insulin resistance resulting in deposition of fat to the liver for processing. DNL is a distinct process in the liver by which hepatocytes convert excess carbohydrates, especially fructose, to fatty acids.

The three main fates of fatty acids in the liver are (1) mitochondrial beta-oxidation (to release ATP, or energy), (2) re-esterification to form triglyceride, which can then be exported into the blood as very low density lipoproteins, or (3) stored in lipid droplets, resulting in liver steatosis and ultimately NASH. Adiponectin, a hormone derived from adipose tissue, appears to have a pivotal role in improving fatty acid oxidation and decreasing fatty acid synthesis, components of lipid handling.

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An increase in cholesterol accumulation in the liver can also contribute to NASH, though its role is not as clearly defined as in the case of triglycerides. The dysregulation of the cholesterol pathway can result in an increase in the cholesterol levels in the liver. The increased cholesterol can accumulate in the liver cell membranes and activate Kupffer cells (activated stellate macrophages), thereby triggering inflammatory pathways and resulting in the progression of NASH.

Increased Insulin Resistance

Insulin resistance, which typically develops in obese individuals, is considered to be a fundamental underlying mechanism in the majority of NASH patients. Fatty acids are primarily delivered to the liver from blood following lipolysis of triglycerides in adipose tissue, a process that is regulated by the actions of insulin on adipocytes. Insulin resistance in adipose tissue manifests as dysregulated lipolysis resulting in excessive delivery of FFA to the liver. The liver tries to cope with the large influx of FFA; however, the build-up of metabolic intermediates interferes with signaling, resulting in hepatic insulin resistance and the inability of the liver to process this excess FFA influx. The state of hepatic insulin resistance further exacerbates the problem by triggering DNL and the build-up of excess fat in the liver.

Injury to Hepatocytes

When the disposal of fatty acids through beta-oxidation or the formation of triglycerides is chronically overwhelmed, fatty acids can form lipotoxic species that lead to stress on the endoplasmic reticulum, oxidative stress and inflammation, all of which are pivotal processes in the development of NASH. Liver inflammation may be an important link between the initial metabolic stress and subsequent hepatocyte death and stimulation of fibrogenesis in NASH by promotion of the expression of pro-inflammatory cytokines and of apoptosis (cell death). These processes are core to the steatohepatitis that gives NASH its name. For example, hepatocyte apoptosis results in the ballooning of cells, a classic pathological feature of NASH. While hepatocytes are the primary and major target of toxic lipids, other cells such as Kupffer cells and hepatic stellate cells are also affected by lipotoxicity and contribute to the development of NASH pathology.

Additional factors, including dysregulation of cytokines and adipokines, energy depletion, anti-oxidant deficiencies, products of the gut microbiome and iron load may modulate hepatocyte vulnerability to the development of lipotoxic stress, injury and inflammation.

Development and Progression of Liver Fibrosis in Response to Hepatocyte Injury

Signaling from stressed or injured hepatocytes and Kupffer cells leads to activation of quiescent hepatic stellate cells. Upon activation, hepatic stellate cells release collagen and other factors. When the production of collagen and matrix proteins is faster than their degradation, accumulation of these proteins in the extracellular matrix can lead to progressive fibrosis. As the lipotoxicity and inflammation continue to damage the liver, the hepatic stellate cells continue to be activated resulting in greater collagen deposition that ultimately leads to fibrosis and cirrhosis.

Co-morbidities Associated with NASH

Patients with NASH frequently have other significant co-morbidities—hypertriglyceridemia, obesity, hyperlipidemia/dyslipidemia, hyperglycemia (including Type 2 diabetes) and systemic hypertension, a constellation of which is commonly referred to as metabolic syndrome—which also increase the risk of developing cardiovascular disease. Figure 2 below shows certain co-morbidities associated with NASH.

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Figure 2: NASH Co-morbidities

Selected Co-morbidities	Prevalence in NASH Population
Hypertriglyceridemia	83%
Obesity	82%
Hyperlipidemia / Dyslipidemia	72%
Metabolic syndrome	71%
Type 2 diabetes	44%

In addition, NASH was found to independently increase the risk of non-liver-related adverse outcomes, including cardiovascular risk and malignancy. Multiple epidemiological studies have linked NASH to increased cardiovascular morbidity, concluding that the majority of deaths among NASH patients are attributable to cardiovascular disease (cardiovascular death is four times higher than death related to liver disease).

In considering therapeutic options to treat NASH, we believe it is important to address the underlying metabolic co-morbidities in addition to the liver pathology.

Diagnosis

Most people with NASH are asymptomatic and their disease is often discovered incidentally following a liver imaging procedure, such as an ultrasound, prescribed for other reasons or as part of an investigation for elevated liver enzymes. Once suspected clinically, a liver biopsy is required to definitively diagnose NASH, which necessitates the joint presence of steatosis, ballooning and lobular inflammation. Once pathologically confirmed, the severity of NAFLD and NASH is determined using the histologically validated NAS, which grades disease activity on a scale of 0 to 8. The NAS is the sum of the individual scores for steatosis (0 to 3), lobular inflammation (0 to 3), and hepatocellular ballooning (0 to 2) but does not include a score for fibrosis. Fibrosis staging (F0-F4) relies on the Kleiner classification (F0 = no fibrosis; F1 = perisinusoidal or periportal fibrosis (not both); F2 = both perisinusoidal and periportal fibrosis; F3 = bridging fibrosis; F4 = cirrhosis).

Histological diagnosis remains the gold standard for assessment of NASH and fibrosis. However, given that liver biopsy is associated with risks of pain, bleeding and other morbidity, as well as significant cost, the procedure is not practical for general patient screening. Several non-invasive tools such as clinical risk scores and imaging techniques are increasingly used to assess NASH patients. Clinical risk scores such as the NAFLD fibrosis score, Fibrosis-4 index, the Enhanced Liver Fibrosis score and vibration-controlled transient elastography (“VCTE”), have been validated and are increasingly used. These tools have an excellent negative predictive value and an acceptable positive predictive value for detection of advanced (≥ F3) fibrosis and are increasingly used in clinical settings. Additionally, evidence is emerging that shows a correlation between reduction in steatosis as measured by MRI-PDFF and improvement in histological changes in the liver. Extensive efforts are also under way to develop non-invasive means to identify patients with NAS ≥ 4 or fibrosis ≥ F2 patients without a need for a liver biopsy. In draft guidance, the FDA encouraged sponsors to identify biochemical or noninvasive imaging biomarkers that, once characterized and agreed by the FDA, could replace liver biopsies for patient selection and efficacy assessment in clinical trials.

We expect that the validation and subsequent adoption of these new tools will result in an increase in the diagnosis and treatment rates for NASH in the future.

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FGF21 Overview

Fibroblast growth factors (“FGFs”), including FGF21 and FGF19, are a large family of cell-signaling proteins involved in the regulation of many processes within the body. FGF21 is an endogenous metabolic hormone that regulates energy homeostasis, glucose-lipid-protein metabolism and insulin sensitivity, and modulates the pathways that mitigate against intracellular stress. FGF21 is secreted primarily by the liver but is also secreted by the white adipose tissue (“WAT”), skeletal muscle and the pancreas. FGF21 exerts its biological benefits through the activation of three fibroblast growth factor receptors (“FGFRs”), FGFR1c, FGFR2c and FGFR3c, and requires co-activation of the transmembrane protein cofactor beta Klotho (“ß-Klotho”). FGF21 is not believed to activate FGFR4, which has been associated with adverse effects. FGF21 can act directly or indirectly on target organs by mediating downstream regulators, such as adiponectin, and upstream regulators that induce FGF21, such as nutritional stress or transcription factors.

Biological Effects of FGF21:

Reducing Liver Steatosis by Improving Lipid Handling and Insulin Sensitivity

FGF21 has been clinically shown to reduce liver steatosis. FGF21 reduces liver steatosis by (1) increasing fatty acid oxidation in the liver, (2) reducing the deposition of free fatty acids from peripheral tissue to the liver and (3) reducing DNL in the liver. FGF21 exerts its systemic effects by reducing the serum levels of lipids (e.g., triglycerides, LDL cholesterol) and increasing insulin sensitivity. Increasing insulin sensitivity reduces lipolysis and can also reduce serum levels of lipids. In particular, FGF21 has been demonstrated to reduce liver fat in patients with NASH in multiple clinical trials.

Improving Liver Inflammation and Fibrosis

FGF21 is also believed to reduce liver fibrosis, the pathological change mostly clearly linked to liver-related morbidity in NASH patients via two potential pathways. One pathway is through the metabolic benefits of FGF21 described above. Long-term improvements in metabolic regulation reduce the ongoing liver injury that drives fibrosis and thus allows the liver time to heal. The other pathway is a direct anti-fibrotic effect mediated via adiponectin, an adipokine that is upregulated by FGF21. Increased adiponectin downregulates the hepatic stellate cells that are activated upon hepatic injury and responsible for collagen deposition and subsequent fibrosis. FGF21 demonstrated an improvement in liver fibrosis in patients in NASH in a clinical trial.

FGF21 Signaling

As noted above, FGF21 exerts its biological benefits through the co-activation of FGFRs and ß-Klotho. FGFRs are expressed widely throughout the body whereas ß-Klotho is primarily expressed in metabolic tissues such as adipose tissue, liver, and pancreas, thereby providing organ specificity to FGF21.The binding of FGF21 is a two-step process. The C-terminus of FGF21 initially binds to ß-Klotho enabling the N-terminus to form an expanded complex with one of the FGFRs. Once the co-receptor complex has formed with ß-Klotho and one of the FGFRs, a series of intracellular signaling cascades is initiated. These signaling cascades enable FGF21 to exert its biological functions.

FGF21 activates three specific FGFRs (FGFR1c, FGFR2c and FGFR3c), which based on nonclinical studies and clinical trials, appear to be responsible for mediating the desired therapeutic actions of FGF21 in NASH. FGF21 is not believed to activate FGFR4. Activation of FGFR4 results in an increase in LDL cholesterol and has been implicated in the etiology or progression of HCC.

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BIO89-100

Overview

We are developing BIO89-100, a specifically engineered glycoPEGylated analog of FGF21, for the treatment of NASH and SHTG. BIO89-100 has been specifically engineered to retain the activity of native FGF21 while extending its half-life. Specifically, it has been engineered to: (1) protect against proteolysis and reduce renal clearance, (2) have an extended half-life, (3) minimize susceptibility to aggregate in solution and (4) optimize its potency, enabling the potential use of lower dosage/doses. Additionally, we believe that BIO89-100 may enhance binding affinity for ß-Klotho, by altering the conformation of the C-terminus which could have a positive impact on efficacy.

Primary Structure and Protein Engineering of BIO89-100

BIO89-100 has been optimally constructed with two mutations via substitutions with natural amino acids at site-specific positions (173 and 176) toward the C-terminus end of the hormone. The mutations were incorporated into the FGF21 sequence after existing proline to create a consensus sequence for glycosylation. Subsequently, the glycosyl linker and a single 20 kDa glycoPEG moiety were enzymatically introduced at the O-linked glycosylation consensus site (position 173) via the proprietary glycoPEGylation technology. Our glycoPEG moiety is an activated form of the PEG molecule with the use of Sialic Acid, CMP-SA-PEG. The proximity of the mutations ensures consistent and efficient attachment of the glycoPEG moiety.

BIO89-100 has two modified natural amino acid residues:

• S173T: Serine modified to Threonine at position 173; and

• R176A: Arginine modified to Alanine at position 176.

In addition, a Methionine residue was introduced at the N-terminus which acts as the translation initiation signal. Figure 3 below shows the structure of BIO89-100.

Figure 3: Structure of BIO89-100

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The increase in the size of the molecule from 19.4 kDa to 40 kDa together with the site-specific mutations adjacent to the primary cleavage site of FGF21 (by the FAP enzyme between positions 171 and 172 on the native amino acid chain, which would be represented by positions 172 and 173 in our molecule starting with Methionine in position 1) are designed to prolong the half-life of the molecule. Additionally, we believe that the use of glycoPEGylation technology produces a comparatively stronger and more flexible structure, which aids in the development of a stable formulation. PEGylation technology has been used successfully in many pharmaceutical products including products that have been marketed for more than 10 years.

BIO89-100 uses a proprietary glycoPEGylation technology that has been previously validated by a third party, as this technology is incorporated in another pharmaceutical product (Lonquex® by Teva) that has received regulatory approval and is currently commercialized in the European Union.

The Development and Selection of BIO89-100

The discovery program that led to the selection of BIO89-100 was directed towards achieving an optimal pharmacokinetic (“PK”) and efficacy profile. It has been shown that the in vivo half-life of FGF21 can be extended by covalently linking a single glycoPEG moiety to the molecule. We performed extensive screening of FGF21 analogs with mutations at different positions including close to the N-terminus, as well as different glycoPEGylations to select an optimized molecule based on its potency, PK and in-vivo efficacy.

Stage I—Optimizing Selection of Mutation Sites—In Vitro Potency Testing

Mutations were inserted at different sites for both non-PEGylated FGF21 analogs and corresponding glycoPEGylated analogs and screened in a cell-based potency assay to select analogs that did not lose potency relative to the native hormone. Amongst the multiple glycoPEGylated analogs tested, only mutations at sites towards either N-terminus or C-terminus showed potency comparable to that of native FGF21 hormone and were selected for further development.

Stage II—Optimizing for glycoPEG (20 kDa vs 30 kDa)—In Vitro Potency Testing

Analogs selected in Stage I were prepared with either a 20 kDa or a 30 kDa glycoPEG moiety and tested for potency in mouse adipocytes (3T3-L1) and human embryonic kidney (HEK-293) cell lines. Minimal differences in potencies were observed between the 20 kDa and 30 kDa glycoPEGylated analogs. However, only the glycoPEGylated analogs that had mutations and a glycoPEG attachment at the C-terminus, as distinct from those with mutations at the N-terminus, maintained their potency in both mouse and human cell lines. These analogs were selected for future development.

Stage III—Optimizing for PK Properties and Efficacy—In Vivo Testing

Selected analogs from Stage II with either a 20 kDa or a 30 kDa glycoPEG moiety, were chosen for in vivo testing in a diabetic mouse model. In addition to PK, changes from baseline in glucose, triglycerides and insulin were measured. The data showed that the circulating half-life of the glycoPEGylated analogs for both glycoPEG sizes was extended (range 15 to 30 hours) as compared to native FGF21 (2 hours). As expected, all analogs were observed to cause a reduction in blood glucose levels. However, the 20 kDa glycoPEGylated analogs were observed to outperform the 30 kDa analogs by improving triglycerides at lower doses and across broader dose ranges. BIO89-100 resulted in the greatest reduction of insulin and was selected as the candidate for clinical development.

In summary, the mutations made to the native FGF21 molecule and the addition of the 20 kDA glycoPEG moiety via the use of the glycoPEGylation technology were observed to significantly improve the PK properties of the molecule while retaining the therapeutic benefits. We believe that BIO89-100 is a well-balanced molecule with a unique profile, which has the potential to have therapeutic benefits in NASH and cardio-metabolic diseases. Figure 4 below sets forth what we believe are the key features and potential benefits of BIO89-100:

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Figure 4: Summary of BIO89-100 Attributes and Benefits

Features	Description	Potential Benefit
Use of PEG (via glycoPEGylation)	▪      Increases protein size and hydrodynamic volume that reduces renal filtration ▪      Prevents degradation by endocytosis and proteolytic enzymes	▪      Prolongs half-life
	▪      Protects antigenic sites present on the protein surface (i.e. antigenic epitopes)	▪      Reduces immunogenicity
	▪      Steric repulsion between the PEGylated surfaces increases water solubility and reduces aggregates	▪      Results in more stable formulation
Site-Specific Mutations	▪      Mutation at position 173 is immediately adjacent to the primary cleavage (FAP enzyme) site of FGF21	▪      Prolongs half-life
GlycoPEGylation Technology	▪      Allows site specific linkage (glycoPEG moiety to position 173) ▪      Proximity of the glycoPEG moiety to the C-terminus induces conformational changes to the molecule	▪      Retains potency against receptor to improve efficacy
	▪      Provides a strong and flexible glycosyl bond that helps the glycoPEG moiety remain intact, further reducing degradation	▪      Further enhances half-life

Therapeutic Potential of BIO89-100 Supported by Preclinical Animal Models of NASH, Diabetes and Obesity

BIO89-100 was evaluated in multiple distinct animal models of NASH, diabetes and obesity, including non-human primate studies. In each of these studies, consistent and significant beneficial effects were observed across a range of endpoints, specifically, robust improvements in lipid handling, glycemic control and insulin resistance as well as significant improvements in hepatic steatosis, injury and fibrosis. We believe these results demonstrate the potential of BIO89-100 to simultaneously address the multiple drivers of NASH pathogenesis. The histological endpoints, NAS and fibrosis score, mirror the endpoints we expect to assess in our clinical development. In addition, treatment with BIO89-100 in animal models was observed to result in consistent reductions in body weight.

BIO89-100 has been evaluated in three animal models of direct relevance to NASH. These included: (1) Stelic Animal Model (“STAM”), (2) Diet-induced NASH (“DIN”) model and (3) spontaneous diabetic obese cynomolgus monkey model. Additional studies done in diabetes mouse model and diet induced obesity mouse model showed benefits in key markers of relevance in NASH.

A wide range of doses were tested in these studies as well as weekly and once every two-week dosing regimen was tested in a cynomolgus monkey study. The key outcomes of these studies are summarized in Figure 5 below.

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Figure 5: Summary of NASH Pharmacology Studies

Preclinical pharmacology study with BIO89-100	Improved Insulin Sensitivity	Improved Triglycerides and Cholesterol	Reduced Hepatocyte Injury	Reduced Liver Steatosis, Inflammation & Fibrosis	Body Weight Reduction
DIN mouse model I (10 weeks)	✓	✓	✓	✓	✓
DIN mouse model II (19 weeks)	✓	✓	✓	✓	✓
Diabetic obese cynomolgus monkey study 1 (8 weeks; weekly dosing)	✓	✓	✓	Not evaluated	✓
Diabetic obese cynomolgus monkey study 2 (4 weeks; QW or Q2W dosing)	✓	✓	✓	Not evaluated	✓

Legend:

✓ Statistically significant benefit observed.

* Improvement observed, but did not achieve statistical significance.

BIO89-100 Clinical Development in NASH

Phase 1a Clinical Trial of Single Dose of BIO89-100 in Healthy Volunteers

We conducted a Phase 1a clinical trial to evaluate the safety, tolerability and PK of BIO89-100 in 58 healthy volunteers. In this randomized, double-blind, placebo-controlled, Phase 1a, first-in-human, SAD clinical trial the PK profile of BIO89-100 was generally dose-proportional or slightly more than dose-proportional with a half-life of approximately 55 to 100 hours. The observed median time of maximum serum concentration ranged from 36 to 60 hours. At single doses of 9.1 mg and higher, significant improvements were observed in key lipid parameters measured at Day 8 and Day 15 after dosing on Day 1. The mean changes versus baseline include significant reductions in triglycerides (up to 51%) and LDL-C (up to 37%) and increase in HDL-C (up to 36%) despite the baseline values being in the normal range. BIO89-100 demonstrated rapid (starting from Day 2), sustained and durable improvements on lipid parameters for two weeks or more after single dose administration. The effect on lipid parameters was generally dose-dependent. BIO89-100 was well tolerated across the dose range and there were no deaths, serious adverse events or discontinuations due to adverse events. The most commonly observed treatment-related adverse events, occurring in at least two subjects in the pooled BIO89-100 group, were injection site reactions and headache, all of which were reported as mild. No clinically meaningful trends were observed in gastrointestinal events, laboratories or vital signs including blood pressure or heart rate changes.

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

In September 2020, we presented positive topline results from our Phase 1b/2a trial in NASH patients which has informed the advancement of our clinical strategy in NASH. We plan to initiate a Phase 2b trial in NASH patients in the first half of 2021.The 13-week phase 1b/2a multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose-ranging trial enrolled a total of 81 patients to receive weekly (3mg/9mg/18mg/27mg) or every two-week (18mg/36mg) dosing of BIO89-100 or placebo for up to 12 weeks. Key endpoints assessed were safety, tolerability, and PK of BIO89-100 as well as change in liver fat measured by MRI-PDFF and other metabolic markers. The trial design is shown in Figure 6 below.

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Figure 6: Phase 1b/2a Trial Design

As shown in Figure 7 below, all dose groups demonstrated significant reductions in liver fat at week 13, with relative reductions up to 60% versus baseline and up to 70% versus placebo, as measured by MRI-PDFF. 43% of the patients at the highest dose achieved normal liver fat content of < 5%. A significant proportion of patients responded to therapy with up to 88% and 71% of patients achieving a ³30% or a ³50% reduction in liver fat versus baseline, respectively.

Figure 7: Relative Reduction in Liver Fat vs. Placebo at Week 13

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As shown in Figure 8 below, treatment with BIO89-100 also resulted in significant improvements in liver transaminases, with up to a 44% reduction in ALT and a 35 U/L decrease in ALT in patients with elevated baseline levels. Treatment with BIO89-100 resulted in significant reductions in triglycerides (up to 28%; p <0.05), non-HDL (up to 16%; p<0.01) and LDL-C (up to 16%; p<0.05). Triglycerides were reduced to a greater extent in patients with elevated triglycerides at baseline (TG ≥200 mg/dL), and 53% of the BIO89-100 patients in this group normalized triglyceride levels versus 0% in the placebo group. BIO89-100 also demonstrated significant increases in the insulin-sensitizing hormone adiponectin (up to 61%; p<0.001). Improvements were also noted across the spectrum of metabolic marker data vs. placebo for the 27mg QW dose group including HOMA-IR, glucose, HbA1c, weight (p<0.05) and adiponectin (p<0.001).

Figure 8: Clinically Meaningful ALT Reduction; Greater Reduction in Patients with High ALT

Baseline characteristics were similar across the sub-populations of biopsy-confirmed NASH and PNASH patients enrolled in the trial and results were also consistent across the two sub-groups. Specifically, the reductions in liver fat, percentage of responders on MRI-PDFF, and BIO89-100’s effect on reducing ALT and triglycerides were also similar across these sub-populations.

As shown in Figures 9 and 10 below, BIO89-100 was well-tolerated across all doses with no deaths or serious adverse events related to treatment and a low incidence of treatment-related adverse events (“TRAEs”) that occurred in ≥ 10% of patients. The only treatment-related adverse event that occurred in ≥10% of all BIO89-100-treated subjects was mild, increased appetite (15.9%) consistent with other investigational FGF21 analogs. Low frequency of gastrointestinal (“GI”) related adverse events was observed with a profile for BIO89-100 that was similar to placebo. Low rates of diarrhea (9.5% vs. 11.1% for placebo) and nausea (4.8% vs. 11.1% for placebo) and importantly, no vomiting were reported in BIO89-100 treated patients. No adverse effects on heart rate or blood pressure were observed.

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Figure 9: Safety Overview

Figure 10: Treatment-Related Emergent AEs in ≥ 10% of Pooled BIO89-100 Group

Paired-biopsy, Open-label Histology Cohort

In December 2020, we initiated a paired-biopsy, open-label cohort as part of the Phase 1b/2a trial assessing histology endpoints, with data anticipated by the end of 2021. This cohort is expected to enroll approximately 20 patients with biopsy-confirmed NASH who will be treated for 20 weeks with 27 mg of BIO89-100 once weekly. The cohort will build on the recent data from 89bio’s Phase 1b/2a trial and will provide an early opportunity to demonstrate BIO89-100’s benefits on histology endpoints.

BIO89-100 Clinical Development in SHTG

BIO89-100 has demonstrated significant reduction in triglyceride levels across all our preclinical and clinical studies. In diabetic obese cynomolgus monkeys with elevated triglyceride levels, BIO89-100 showed significant effects on triglycerides with a maximal reduction of 78% and 76% at doses of 1 mg/kg. In monkeys treated with baseline levels of triglycerides greater than 500mg/dL (n=4), the three monkeys treated with BIO89-100 1 mg/kg weekly had triglyceride reductions >90% at study end. In our Phase 1a clinical study, in patients with baseline triglyceride values in the normal range (mean baseline 94 mg/dL), BIO89-100 demonstrated reductions of triglycerides from baseline up to 51% at Day 8 after a single dose in healthy volunteers. In our Phase 1b/2a trial, treatment with BIO89-100 resulted in significant reductions in triglycerides (up to 28%; p <0.05). Triglycerides were reduced to a greater extent in patients with elevated triglycerides at baseline (TG ³200 mg/mL), and 53% of the BIO89-100 patients in this group normalized triglyceride levels versus 0% in the placebo group. While currently approved SHTG therapies decrease triglyceride levels, they generally do not have broader metabolic benefits.

We initiated our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020 and expect to enroll approximately 90 patients who could be on stable background medications. In this Phase 2 multi-center, randomized, double-blind, placebo-controlled study designed to evaluate safety, efficacy and tolerability, patients will receive BIO89-100 administered weekly (9 mg, 18 mg or 27 mg) or every two weeks (36 mg) or placebo. The primary endpoint is the reduction in fasting triglycerides from baseline. Key secondary endpoints include other lipids and metabolic markers and change in liver fat measured by MRI-PDFF. Topline data from ENTRIGUE are expected in the second half of 2021. We have expanded ENTRIGUE with an additional cohort of patients on fibrates to assess the benefit of 27 mg weekly BIO89-100 when added to background fibrates. In this cohort, a total of 36 patients will be randomized to either BIO89-100 or placebo. The primary endpoint and key secondary endpoint are the same as in ENTRIGUE. We also expect to initiate registrational trials in SHTG in 2022, pending positive data from ENTRIGUE.

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There is regulatory precedence for the approval of therapies for the treatment of SHTG in the United States based on the reduction in triglycerides from baseline as the primary endpoint for full approval. The FDA surrogate endpoint table for drug approval lists a reduction in triglycerides from baseline as the endpoint for full approval of a therapy in SHTG. A clinical outcome study was not required for certain third-party approvals in SHTG or as a post-marketing commitment. The SHTG Phase 3 trial for some of these products consisted of a single study of a 12-week duration with 75 to 100 patients per treatment group. Based onthe regulatory path followed by other companies that have successfully developed SHTG therapies, we believe that a combination of smaller clinical trials and shorter development timelines could mean that SHTG potentially represents a quicker path to market for BIO89-100.

Agreements with Teva

Agreements Relating to FGF21 Program

In April 2018, we entered into an Asset Transfer and License Agreement (the “FGF21 Agreement”) with Teva Pharmaceutical Industries Ltd (“Teva”), under which we acquired certain patents, intellectual property and other assets relating to Teva’s glycoPEGylated FGF21 program. Under this agreement, Teva also granted a perpetual, non-exclusive (but exclusive as to BIO89-100), non-transferable, worldwide license to patents and know-how related to glycoPEGylation technology for use in the research, development, manufacture and commercialization of the compound BIO89-100 and products containing BIO89-100. In addition, we entered into a Sublicense Agreement with ratiopharm (the “ratiopharm Sublicense”), under which we were granted a perpetual, exclusive, worldwide sublicense to patents and know-how related to glycoPEGylation technology used in the development, manufacture and commercialization of BIO89-100 and products containing BIO89-100.

Under the FGF21 Agreement, we are obligated to use commercially reasonable efforts to develop and commercialize BIO89-100 in each of the United States and five major European countries. We have the right to sublicense all rights licensed to us by Teva under the FGF21 Agreement.

Pursuant to the FGF21 Agreement and the FASN Agreement (as defined and described below), we paid Teva a nonrefundable upfront payment of $6.0 million. In addition, under the FGF21 Agreement, we are required to make certain payments to Teva totaling $2.5 million for the achievement of certain clinical development milestones, and additional payments totaling up to $65.0 million upon achievement of certain commercial milestones. We are also obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales of products containing BIO89-100. Our royalty obligations will terminate, on a product-by-product and country-by-country basis, at the later of: (1) the date of expiration of the last to expire valid claim in the assigned patents that covers BIO89-100 in such country, (2) the expiration of data or regulatory exclusivity for BIO89-100 in such country and (3) 10 years from the first commercial sale of BIO89-100 in such country. We are not required to make any payments to ratiopharm pursuant to the ratiopharm Sublicense.

The term of the FGF21 Agreement will continue, on a product-by-product and country-by-country basis, until the royalty term with respect to BIO89-100 in such country expires. The ratiopharm Sublicense will continue until terminated in accordance with its terms. We may terminate the FGF21 Agreement and the ratiopharm Sublicense for any reason. Either party may terminate the FGF21 Agreement for cause for the other party’s uncured material breach. ratiopharm may terminate the ratiopharm Sublicense for certain material breaches by us. Either party may terminate the FGF21 Agreement or the ratiopharm Sublicense in the event of bankruptcy of the other party. Teva may terminate the FGF21 Agreement if we challenge the validity of any patent licensed to us under the FGF21 Agreement. Termination of the FGF21 Agreement or the ratiopharm Sublicense will impact our rights under the intellectual property licensed to us by Teva and ratiopharm, respectively, but will not affect our rights under the assets assigned to us.

In April 2018, we also entered into a Reagent Supply and Technology Transfer Agreement, under which Teva will supply us with certain reagents required for the glycoPEGylation process that are necessary for our development and commercialization of BIO89-100, and transfer to us certain know-how required for the production of such reagents. The term of this agreement was recently extended by mutual agreement until December 31, 2022.

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FASN Agreements

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

Pursuant to the FASN Agreement and the FGF21 Agreement (as described above), we paid Teva a nonrefundable upfront payment of $6.0 million. In addition, under the FASN Agreement, we are required to make certain payments to Teva totaling $2.5 million for the achievement of certain clinical development milestones, and additional payments totaling up to $65.0 million upon achievement of certain commercial milestones. We are also obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales of products arising from the FASN program. Our royalty obligations will terminate, on a product-by-product and country-by-country basis, at the later of: (1) the date of expiration of the last to expire valid claim in the assigned patents that covers FASN in such country, (2) the expiration of data or regulatory exclusivity for such product arising from the FASN program in such country and (3) 10 years from the first commercial sale of a product arising from the FASN program in such country.

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

Government Regulation and Product Approval

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

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

Preclinical and Clinical Development

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

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

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

• Phase 1—The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

• Phase 2—The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

• Phase 3—The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.

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

BLA Submission and Review

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

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

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

If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may require, or companies may voluntarily pursue, one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

Expedited Programs for Serious Conditions

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

Post-Approval Requirements

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

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

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

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among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Biosimilars and Reference Product Exclusivity

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

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

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

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

Other U.S. Healthcare Laws and Compliance Requirements

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

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

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

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claim for purposes of the FCA. The FCA imposes mandatory treble damages and per-violation civil penalties up to approximately $23,000.

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

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

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

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

Data Privacy and Security

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

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Coverage, Pricing and Reimbursement

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

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

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

In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval. Decreases in third-party reimbursement for any product or a decision by a third-party not to cover a product could reduce physician usage and patient demand for the product.

Healthcare Reform

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

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

There remain legal and political challenges to certain aspects of the Affordable Care Act. In December 2018, a United States District Court judge in Texas ruled that the Affordable Care Act is unconstitutional in its entirety

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because the “individual mandate” was repealed by Congress in 2017. The decision hasbeen appealed to the United States Supreme Court.A decision is expected by spring 2021. It is unclear how such litigation and other efforts to repeal, replace or otherwise modify the Affordable Care Act will impact reimbursement of pharmaceutical and biological products.

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

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

There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. In October 2020, the FDA issued guidance describing procedures for manufacturers to facilitate the importation of FDA-approved biologics manufactured abroad and originally intended for sale in a foreign country into the United States. Previously, the Trump administration released a “Blueprint,” or plan, to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers.

Although the Biden administration has stayed the effective dates of some last-minute drug price regulations issued by the Trump administration, Congress and the Biden administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

Additional Regulation

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

Competition

The biopharmaceutical industry is intensely competitive and subject to rapid innovation and significant technological advancements. We believe the key competitive factors that will affect the development and commercial success of BIO89-100 and any future product candidates are efficacy, safety and tolerability profile, reliability, convenience of dosing, price, the level of generic competition and reimbursement. Our competitors include multinational pharmaceutical companies, specialized biotechnology companies, universities and other research institutions. A number of biotechnology and pharmaceutical companies are pursuing the development or

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marketing of pharmaceuticals that target the same diseases that we are targeting. Smaller or earlier-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Given the high incidence of NASH, it is likely that the number of companies seeking to develop products and therapies for the treatment of liver and cardio-metabolic diseases, such as NASH, will increase.

If BIO89-100 is approved for the treatment of NASH, future competition could also arise from products currently in development, including: GS-0976, an ACC inhibitor, and GS-9674, an FXR agonist, from Gilead Sciences, Inc.; PF-05221304, an ACC inhibitor, and PF-06835919, a KHK inhibitor, from Pfizer Inc.; Ocaliva, an FXR agonist from Intercept Pharmaceuticals, Inc.; Resmetirom, a beta-thyroid hormone receptor agonist from Madrigal Pharmaceuticals, Inc.; VK2809, a beta-thyroid hormone receptor agonist from Viking Therapeutics, Inc.; Aldafermin, an FGF19 analog from NGM Biopharmaceuticals, Inc.; MK-3655, an FGFR1c/KLB agonist antibody from Merck & Co., Inc.; Pegbelfermin, a PEGylated FGF21 analog from Bristol-Myers Squibb Company; Efruxifermin, a FGF21 fusion protein from Akero Therapeutics, Inc.; Elobixibat, an IBAT-inhibitor from Albireo Pharma, Inc.; a Galectin-3 inhibitor from Galectin Therapeutics Inc.; a synthetic conjugate of cholic acid and arachidic acid from Galmed Pharmaceuticals Ltd.; MET409/MET642, FXR agonists from Metacrine, Inc, Novartis AG and Terns Pharmaceuticals; Semaglutide, a GLP-1 receptor agonist from Novo Nordisk A/S; ALT-801, a dual GLP-1/glucagon agonist from Altimmune; Tirzepatide, a dual GIP/GLP-1 receptor agonist from Eli Lilly and Company; and Lanifibranor, a PPAR alpha/delta/gamma agonist from Iventiva;

If BIO89-100 is approved for the treatment of SHTG, we would face competition from currently approved and marketed products, including statins, fibrates, Vascepa, and Lovaza, as well as generic products. Further competition could arise from products currently in development, including: AKCEA-APOCIII-LRx, an ApoC III inhibitor from Ionis; Vupanorsen/AKCEA-ANGPTL3, an anti-ANGPTL3 from Pfizer; Evinacumab, an Anti-ANGPTL3 from Regeneron Pharmaceuticals, Inc.; Pemafibrate, a PPAR alpha agonist from Kowa Research Institute, Inc.; and ARO-APOC3, an ApoC III inhibitor and ARO-ANG3, an anti-ANGPTL3 from Arrowhead Pharmaceuticals, Inc.

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

Manufacturing and Supply

We do not own or operate manufacturing facilities for the production of BIO89-100, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely, and expect to continue to rely, on third parties for the manufacturing of our product candidates for preclinical and clinical testing, as well as for commercial manufacturing if BIO89-100 or any future product candidate receives marketing approval.

BIO89-100 drug substance is manufactured by fermentation of a recombinant strain of the bacterium E. coli. Product accumulates as insoluble particles (inclusion bodies) within the cells and is recovered by cell disruption, followed by solubilization of the inclusion bodies, protein refolding and purification with two chromatographic separation columns. Purified material is glycoPEGylated in a 2-step enzymatic reaction where a 20kDa linear glycoPEG moiety is attached to the protein through GalNAc and Sialic Acid linkers.

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

Northway Biotechpharma (“BTPH”) is our sole source supplier for BIO89-100. Any reduction or halt in supply of drug product from BTPH could limit our ability to develop BIO89-100 until a replacement contract manufacturer is found and qualified. We currently have material available to support our ongoing clinical trials for the treatment of NASH and SHTG.

We are working with BTPH on process optimization to support large-scale production for future trials and commercialization. In parallel, we have entered into a contract with a formulation development company to explore the potential for a new refrigerated liquid formulation and/or a freeze-dried, or lyophilized product.

BTPH Agreement

In May 2018, we entered into a master services agreement with BTPH, under which BTPH agreed to provide us certain services, including development, manufacturing, and storing of BIO89-100, under statements of work for such services to be agreed by the parties from time to time. The master services agreement will continue for the duration of time that BTPH is providing services to us, unless earlier terminated by either party upon its terms. We may terminate the agreement at any time after a specified notice period and subject to the payment of certain agreed upon fees where such termination results in cancellation of manufacturing scheduled within a certain period. In addition, either party may terminate the agreement for cause for the other party’s uncured material breach, in the event of bankruptcy of the other party, in the event of the commission of fraud by the other party or in the event of a force majeure.

Sales and Marketing

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

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

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

Intellectual Property

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

FGF21 Patents

Our FGF21 patent portfolio includes four families:

The first family is entitled “Remodeling and GlycoPEGylation of Fibroblast Growth Factor (FGF)”. This patent family provides granted patent protection in 39 countries around the globe, including the United States (U.S. Patent Number 9,200,049, expiry date: June 25, 2028; and U.S. Patent No. 10,874,714, expiry date: October 10, 2028), Canada, Europe (broadly), and Japan (latter three expire October 31, 2025) for FGF21 conjugates comprising a variety of modifying groups that can be attached at several different amino acid positions. GlycoPEGylated FGF21 is specifically claimed. The granted claims broadly protect our lead drug candidate BIO89-100 and pharmaceutical compositions thereof, as well as methods for making and using BIO89-100 to treat FGF21 deficiency in a patient in need thereof. One U.S. application is pending in this family.

The second family is entitled “Mutant FGF-21 Peptide Conjugate and Uses Thereof” and is specifically directed to BIO89-100. The PCT Application for this family was filed on September 4, 2018 (PCT/IB2018/00112). A U.S. Prioritized Examination Continuation Patent Application (Application Serial No. 16/225,640) was filed on December 19, 2018 as a continuation of PCT/IB2018/0112 and from which U.S. Patent Number 10,407,479 was issued on September 10, 2019. The term of the U.S. Patent Number 10,407,479 is September 4, 2038. The issued claims are directed to BIO89-100 and a defined genus specifically encompassing BIO89-100 and compositions thereof (including site-specific mutations at positions 173 and 176), as well as methods for making and using BIO89-100 for a variety of therapeutic indications. Such indications include methods for treating NASH or metabolic syndrome. Subjects where there is a need to reduce blood glucose or to reduce HbA1C include those afflicted with diabetes Type 2, NASH and metabolic syndrome. The claims encompass different therapeutic regimens for administering BIO89-100 (e.g., once a week or once every two weeks), which regimens are based on BIO89-100’s surprisingly long half-life in vivo. One U.S. application is pending in this family. National phase entry of this PCT Application has been initiated in Australia (granted), Korea (allowed), Europe, China, Hong Kong, Japan (allowed), Canada and Israel to pursue global protection of specific mutant FGF21 peptide conjugates, and particularly BIO89-100, in these jurisdictions. Australian patent No. 2018322943 was granted on September 17, 2020 (expiry date: September 4, 2038).

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The third family is entitled “Methods Of Treatment Using Mutant FGF-21 Peptide Conjugates”. A U.S. patent application was filed on May 28, 2020 (US Serial Number 16/885,353). This patent application is not published.

The fourth family is entitled “Methods for promoting weight loss”. A PCT application was filed January 29, 2021 (PCT/IB2021/000044) with claims directed towards method to reduce total body weight, body fat content and/or BMI. National phase entry of this application is due by July 31, 2022.

We will continue to file patent applications to cover various formulations of FGF21. We have filed a provisional application on March 11, 2021 on stable liquid formulation of FGF21.

FASN Patents

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

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

Employees

As of December 31, 2020, we had 26 full-time employees and 27 total employees. 19 employees are engaged in research and development activities. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

Corporate Information

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

Our principal executive offices are located at 142 Sansome Street, San Francisco, California 94104 and our telephone number is (415) 500-4614. Our website is www.89bio.com. Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is an inactive textual reference only.

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

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

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

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

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

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Item 1A. Risk Factors.

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

Risk Factor Summary

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

• We are a clinical-stage biopharmaceutical company with a limited operating history and no products approved for commercial sale. We have incurred net losses since our inception, we expect to incur significant and increasing operating losses and we may never be profitable. Our stock is a highly speculative investment.

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

• Our business depends on the success of BIO89-100, our only product candidate under clinical development, which has not completed a pivotal trial. If we are unable to obtain regulatory approval for and successfully commercialize BIO89-100 or other future product candidates, or we experience significant delays in doing so, our business will be materially harmed.

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

• If we experience delays in clinical testing, our commercial prospects will be adversely affected, our costs may increase and our business may be harmed.

• If we encounter difficulties in enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

• BIO89-100 and any future product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval or limit the commercial profile of an approved label.

• We are developing BIO89-100 for the treatment of NASH, an indication for which there are no approved products. This makes it difficult to predict the timing and costs of the clinical development of BIO89-100 for the treatment of NASH.

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

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

• We have relied on, and expect to continue to rely on, third-party manufacturers to produce BIO89-100 or any future product candidates. Any failure by a third-party manufacturer to produce acceptable product candidates for us pursuant to our specifications and regulatory standards may delay or impair our ability to initiate or complete our clinical trials, obtain and maintain regulatory approvals or commercialize approved products.

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• The manufacture of biologic products is complex and we are subject to many manufacturing risks, any of which could substantially increase our costs and limit supply of our products.

• We will require substantial additional capital to finance our operations, which may not be available to us on acceptable terms, or at all. As a result, we may not complete the development and commercialization of BIO89-100 or develop new product candidates.

• We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than us.

• Unstable market and economic conditions may have serious adverse consequences on our business and financial condition.

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

• BIO89-100 has not received regulatory approval. If we are unable to obtain regulatory approvals to market BIO89-100 or any future product candidates, our business will be adversely affected.

• Our success depends upon our ability to obtain and maintain intellectual property protection for our products and technologies.

• We rely on a license from Teva and a sublicense from ratiopharm to patents and know-how related to glycoPEGylation technology that are used in the development, manufacture and commercialization of BIO89-100. Any termination or loss of significant rights, including the right to glycoPEGylation technology, or breach, under these agreements or any future license agreement related to our product candidates, would materially and adversely affect our ability to continue the development and commercialization of the related product candidates.

Risks Related to Our Business andIndustry

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

We are a clinical-stagebiopharmaceuticalcompany with a limitedoperatinghistorythatmay make itdifficultto evaluatethe successof our businessto date and to assessour futureviability.We commenced operationsin 2018, and to date, our operationshave been focused on organizingand staffingour company, raisingcapital,acquiringour initialproductcandidate,BIO89-100 and licensingcertain relatedtechnology, conductingresearchand developmentactivities,includingpreclinicalstudiesand clinicaltrials,and providinggeneraland administrativesupportfor theseoperations.Investmentin biopharmaceuticalproductdevelopmentis highly speculativebecauseit entailssubstantialupfrontcapital expendituresand significantriskthatany potentialproductcandidatewill failto demonstrateadequateeffectand/or an acceptablesafetyprofile,gain regulatoryapprovaland becomecommerciallyviable.We have no products approved for commercialsale,wehave not generatedany revenuefromproductsalesto date and wecontinueto incursignificantresearchand developmentand otherexpensesrelatedto our ongoing operations.We have limitedexperienceas a company conductingclinicaltrialsand no experienceas a company commercializing any products.

BIO89-100 is in development and, to date, we have not generated any revenue from the licensing or commercialization of BIO89-100. We will not be able to generate product revenue unless and until BIO89-100 or any future product candidate, alone or with future partners, successfully completes clinical trials, receives regulatory approval and is successfully commercialized. As BIO89-100 is in development, we do not expect to receive revenue from it for a number of years, if ever. Although we may seek to obtain revenue from collaboration or licensing agreements with third parties, we currently have no such agreements that could provide us with material, ongoing future revenue and we may never enter into any such agreements.  

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We are not profitableand have incurrednet lossessinceour inception.Consequently,predictionsabout our futuresuccessor viabilitymay not be as accurateas they would be if wehad a longeroperatinghistoryor a historyof successfullydevelopingand commercializingpharmaceuticalproducts.We have spent, and expectto continueto spend, significantresources to fund researchand developmentof, and seek regulatoryapprovalsfor, BIO89-100 and any futureproduct candidates.We expectto incursubstantialand increasingoperatinglossesover the next severalyearsas our research,developmentclinicaltrialand manufacturing activitiesincrease. In addition, because of the numerous risks and uncertainties associated with pharmaceutical product development, including that our product candidates may not advance through development or achieve the endpoints of applicable clinical trials, we are unable to predict the timing or amount of increased expenses, or if or when we will achieve or maintain profitability. The sizeof our futurenet losseswill depend, in part,on the rateof futuregrowth of our expensesand our abilityto generaterevenue.The net lossesweincurmay fluctuatesignificantlyfromquarter-to-quartersuch that a period-to-periodcomparisonof our resultsof operationsmay not be a good indicationof our future performance.Even if weeventuallygenerateproductrevenue,wemay never be profitableand, if wedo achieve profitability,wemay not be able to sustainor increaseprofitabilityon a quarterlyor annual basis.

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

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

Our clinical trials have been and may continue to be affected by the COVID-19 pandemic. For example, while we initiated the Phase 2 trial (ENTRIGUE) of BIO89-100 for the treatment of SHTG and a paired-biopsy histology cohort as part of the Phase 1b/2a trial of BIO89-100 in NASH in 2020, our successful completion of these trials will depend on the external environment with respect to COVID-19 remaining conducive to executing the trial safely and effectively. Similarly, while we expect to initiate a Phase 2b trial of BIO89-100 in NASH patients in the first half of 2021, we may be delayed in the initiation of such trial due to COVID-19 or the related government restrictions.  

In addition, quarantines, shelter-in-place, executive and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases, have impacted and may continue to impact personnel at third-party manufacturing facilities in the United States, Europe and other countries, or the availability or cost of materials we use or require to conduct our business, including product development, which would disrupt our supply chain. Furthermore, some of our manufacturers and suppliers are in Europe and may be impacted by port closures and other restrictions resulting from the COVID-19 pandemic, which may disrupt our supply chain or limit our ability to obtain sufficient materials for our drug products. In particular, BTPH, our sole source supplier for BIO89-100, has missed certain project deadlines for our manufacturing scale-up due to quarantine orders and has forecasted other delays due to COVID-19-related impacts on their suppliers; however, we do not expect delays to the overall timeline for the delivery of clinical supplies.

If COVID-19 continues to spread in the United States and elsewhere, we may experience additional disruptions that could severely impact our business, preclinical studies and clinical trials, including: delays in receiving authorization from local regulatory authorities to initiate our planned clinical trials; delays or difficulties in enrolling patients in our clinical trials; delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted and result in unexpected costs, or

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discontinuing our clinical trials altogether; a diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; interruption of key clinical trial activities, such as clinical trial site monitoring and data entry and verification, due to limitations on travel imposed or recommended by federal or state governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the completeness and integrity of clinical trial data and, as a result, determine the outcomes of the trial; the risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; the risk that participants enrolled in our clinical trials will not be able to travel to our clinical trial sites as a result of quarantines or other restrictions resulting from COVID-19 or comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services; interruptions or delays in preclinical studies due to restricted or limited operations at our research and development laboratory facilities; limitations in employee resources that would otherwise be focused on the conduct of our clinical trials; the refusal of the FDA to accept data from clinical trials in affected geographies; and interruption or delays to our clinical activities.

The COVID-19 pandemic continues to evolve rapidly. The ultimate impact of the COVID-19 pandemic or a similar public health emergency is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems, or the global economy as a whole. However, any one or a combination of these events could have an adverse effect on the operation of and results from our clinical trials and on our other business operations, including preventing or delaying approval for BIO89-100.

Ourbusiness depends onthe successof BIO89-100,our only product candidateunder clinicaldevelopment, whichhas not completeda pivotaltrial.If weare unable to obtain regulatoryapproval for andsuccessfullycommercializeBIO89-100or other future product candidates, or weexperiencesignificantdelaysin doing so, our business will be materiallyharmed.

Todate, the primaryfocus of our productdevelopmenthas been BIO89-100 for the treatmentof patients with NASH.Currently,BIO89-100 is our only productcandidateunder clinicaldevelopment.This may make an investmentin our company riskierthan similarcompaniesthathave multipleproductcandidatesin active developmentand thatthereforemay be able to bettersustaina failureof a lead candidate.Successfulcontinued developmentand ultimateregulatoryapprovalof BIO89-100 for the treatmentof NASHor otherindications, includingSHTG,is criticalto the futuresuccessof our business.We have invested,and will continueto invest,a significantportionof our timeand financialresourcesin the clinicaldevelopmentof BIO89-100. If wecannot successfullydevelop, obtainregulatoryapprovalfor and commercializeBIO89-100, wemay not be able to continueour operations.The futureregulatoryand commercialsuccessof BIO89-100 is subjectto a numberof risks,includingthat if approved for NASH or SHTG, BIO89-100 will likely compete with products that may reach approval for the treatment of NASH prior to BIO89-100, products that are currently approved for the treatment of SHTG and the off-label use of currently marketed products for NASH and SHTG.

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

BIO89-100 and any futureproductcandidateswill be subjectto rigorousand extensiveclinicaltrialsand extensiveregulatoryapprovalprocessesimplementedby the FDAand comparableforeignregulatoryauthorities beforeobtainingmarketingapprovalfromtheseregulatoryauthorities.The drug developmentand approval processis lengthyand expensive,and approvalis never certain.Investigationalnewdrugs, such as BIO89-100, may not prove to be safeand effectivein clinicaltrials.We have no directexperienceas a company in conductinglaterstageclinicaltrialsrequiredto obtainregulatoryapproval.We may be unable to conduct clinical trialsat preferredsites,enlistclinicalinvestigators,enrollsufficientnumbersof participantsor begin or successfullycompleteclinicaltrialsin a timelyfashion,if at all.In addition,the design of a clinicaltrialcan determinewhether itsresultswill supportapprovalof a product,and flaws in the design of a clinicaltrialmay not becomeapparentuntilthe clinicaltrialis well advanced. Wemay be unable to design and executea clinicaltrialto supportregulatoryapproval. Even if a currentclinicaltrialis successful,it may be insufficientto demonstratethatBIO89-100 is safeor effectivefor registrationpurposes.

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There is a high failureratefor drugs and biologicproductsproceedingthrough clinicaltrials.Failurecan occur at any timeduring the clinicaltrialprocess.The resultsof preclinicalstudiesand earlyclinicaltrialsof BIO89-100 or any futureproductcandidatemay not be predictiveof the resultsof later-stageclinicalstudiesor trialsand the resultsof studiesor trialsin one set of patientsor lineof treatmentmay not be predictiveof those obtainedin another.In fact,many companiesin the pharmaceuticaland biotechnologyindustrieshave suffered significantsetbacksin latestageclinicaltrialseven afterachievingpromisingresultsin preclinicalstudiesand earlierstageclinicaltrials.In addition,data obtainedfrompreclinicaland clinicalactivitiesis subjectto varying interpretations,which may delay, limitor preventregulatoryapproval.It is impossibleto predictwhenor if BIO89-100 or any futureproductcandidatewill prove effectiveor safein humans or will receiveregulatory approval.Owingin partto the complexityof biologicalpathways, BIO89-100 or any futureproductcandidate may not demonstratein patientsthe biochemicaland pharmacologicalpropertiesweanticipatebased on laboratorystudiesor earlierstageclinicaltrials,and they may interactwith human biologicalsystemsor other drugs in unforeseen,ineffectiveor harmfulways. The numberof patientsexposed to productcandidatesand the averageexposuretimein the clinicaldevelopmentprogramsmay be inadequateto detectrareadverseeventsor findingsthatmay only be detectedonce a productcandidateis administeredto morepatientsand for greater periodsof time.Todate, our Phase 1a and Phase 1b/2a clinicaltrialshave involvedsmallpatientpopulationsand, becauseof the smallsamplesizein such trials,the resultsof theseclinicaltrialsmay be subjectto substantial variabilityand may not be indicativeof eitherfutureinterimresultsor finalresultsin future trials of patientswith liveror cardio-metabolicdiseases.If weare unable to successfullydemonstratethe safetyand efficacyof BIO89-100 or otherfutureproductcandidatesand receivethe necessaryregulatoryapprovals,our businesswill be materially harmed.

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

We cannot guaranteethatwewill be able to initiateand completeclinicaltrials and successfullyaccomplish all requiredregulatoryactivitiesor otheractivitiesnecessaryto gain approval and commercialize BIO89-100 or any future product candidates.We currentlyhave two activeinvestigational new drug (“IND”) applicationswith the FDAin the United Statesfor BIO89-100. In the future,wemay filean additionalINDwith anotherdivisionfor any futureindications or future product candidates.If any such futureINDis not approved by the FDA,our clinicaldevelopmenttimelinemay be negativelyimpactedand any futureclinical programsmay be delayedor terminated. Asa result,wemay be unable to obtainregulatoryapprovalsor successfullycommercializeour products.We do not knowwhether any otherclinicaltrialswill begin as planned, will need to be restructuredor will be completedon schedule,or at all.Our productdevelopmentcostswill increaseif weexperiencedelaysin clinicaltesting.Significantclinicaltrialdelaysalso could shortenany periods during which wemay have the exclusiverightto commercializeBIO89-100 and any futureproductcandidatesor allow our competitorsto bring productsto marketbeforewedo, which would impairour abilityto successfully commercializeBIO89-100 or any futureproductcandidatesand may harmour business,resultsof operationsand prospects.Our or our futurecollaborators’inabilityto timelycompleteclinicaldevelopmentcould resultin additionalcoststo us as well as impairour abilityto generateproductrevenue,continuedevelopment, commercializeBIO89-100 and any futureproductcandidates,reachsalesmilestonepaymentsand receive royaltieson productsales.In addition,if wemake changes to a productcandidate including, for example, a new formulation,wemay need to conduct additionalnonclinicalstudiesor clinicaltrialsto bridgeor demonstratethe comparabilityof our modifiedproduct candidateto earlierversions,which could delay our clinicaldevelopmentplan or marketingapprovalfor our currentproductcandidateand any futureproductcandidates.

If weencounter difficultiesin enrollingpatientsin our clinicaltrials,our clinicaldevelopmentactivitiescould be delayedor otherwiseadverselyaffected.

The timelycompletionof clinicaltrialslargelydepends on patientenrollment.We may encounterdelays in enrolling,or be unable to enroll,a sufficientnumberof patientsto completeany of our future clinicaltrials,and even once enrolled,wemay be unable to retaina sufficientnumberof patientsto completeany of our trials. Furthermore,as a resultof the inherentdifficultiesin diagnosingNASH, which can currentlyonly be definitivelydiagnosedthrough a liverbiopsy, and identifying SHTG patients, and the significantcompetitionfor recruitingNASH and SHTG patientsin clinicaltrials, weor our futurecollaboratorsmay be unable to enrollthe patientsweneed to completeclinicaltrialson a timely basis,or at all. In addition,our competitors,some of whom have significantlygreaterresourcesthan wedo, are conductingclinicaltrialsfor the same indicationsand seek to enroll

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patientsin theirstudiesthatmay otherwise be eligiblefor our clinicalstudiesor trials.Sincethe numberof qualifiedclinicalinvestigatorsis limited,weexpectto conduct some of our clinicaltrialsat the sameclinicaltrialsitesthatsome of our competitorsuse, which could furtherreducethe numberof patientswhoare availablefor our clinicaltrialsin thesesites.Our inabilityto enrolla sufficientnumberof patientsfor our clinicaltrialswould resultin significant delaysor may requireus to abandon one or moreclinicaltrialsaltogether.Even if weare able to enrolla sufficientnumberof patientsin our clinicalstudiesor trials,delaysin patientenrollmentmay resultin increased costsor may affectthe timingor outcomeof our clinicaltrials,which could preventcompletionof thesetrials and adverselyaffectour abilityto advance the developmentof BIO89-100 and any futureproductcandidates.

BIO89-100andany future product candidatesmay cause undesirableside effectsor have other propertiesthat could delay or preventtheirregulatoryapproval or limitthe commercialprofileof anapproved label.

Undesirableside effectscaused by BIO89-100 or any futureproductcandidatescould cause us or regulatoryauthoritiesto interrupt,delay or haltclinicaltrialsand could resultin a morerestrictivelabelor the delay or denialof regulatoryapprovalby the FDAor othercomparableforeignregulatoryauthorities.Additional clinicalstudiesmay be requiredto evaluatethe safetyprofileof BIO89-100 or any futureproductcandidates. As with other drugs, we have seen evidence of adverse effects in animal and human studies and it is possible that other adverse effects will become apparent in ongoing or future animal or human safety studies. It may be difficultto discernwhether certaineventsor symptomsobservedduring our clinicaltrialsor by patientsusing our approved productsare relatedto BIO89-100 or any futureproductcandidatesor approved productsor some otherfactor.Asa result,weand our developmentprogramsmay be negativelyaffectedeven if such eventsor symptomsare ultimatelydeterminedto be unlikelyrelatedto BIO89-100 or any futureproduct candidatesor approved products.Further,weexpectthatBIO89-100 will requiremultipleadministrationsvia subcutaneous injectionin the courseof a clinicaltrial. Thischronicadministrationincreasesthe risk that rareadverseeventsor chance findings are discovered in the commercial setting, where BIO89-100 would be administeredto more patientsor for greaterperiodsof time, that were not uncovered by our clinicaldrug developmentprograms.

We are developingBIO89-100for the treatmentof NASH, an indication for which there are no approved products. This makes it difficultto predictthe timingandcostsof the clinicaldevelopmentof BIO89-100for the treatmentof NASH.

We are developingBIO89-100 for the treatmentof NASH,an indication for which there are no approved products. Because there is no established regulatoryapprovalprocess for NASH, the development of a novelproductcandidatessuch as BIO89-100 may be moreexpensiveand take longerthan for other,betterknownor extensivelystudiedproductcandidates.Asothercompaniesare in laterstagesof clinicaltrialsfor theirpotential NASHtherapies,weexpectthatthe path for regulatoryapprovalfor NASHtherapiesmay continueto evolve in the near termas theseothercompaniesrefinetheirregulatoryapprovalstrategiesand interactwith regulatory authorities.Such evolutionmay impactour futureclinicaltrialdesigns,includingtrialsizeand endpoints,in ways thatwecannot predicttoday. Certain of our competitors have recently experienced regulatory setbacks for NASH therapies following communications from the FDA. We currently do not know the impact, if any, that these setbacks could have on the path for regulatory approval for NASH therapies generally or for BIO89-100. Our anticipateddevelopmentcostswould likelyincreaseif developmentof BIO89-100 or any futureproductcandidateis delayedbecauseweare requiredby the FDAto performstudiesor trialsin additionto, or differentfrom,those thatwecurrentlyanticipate.

We are also developing BIO89-100 for the treatment of SHTG. Clinical trials for the treatment of SHTG may be relatively costly and time consuming. The requirements for approval by the FDA and comparable foreign regulatory authorities may change over time and this may require changes to ongoing or future clinical trial designs that could impact timelines and cost.

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

Lack of efficacy,adverseeventsor undesirableside effectsmay emergein clinicaltrialsconductedby thirdpartiesdevelopingFGFproductcandidateslikeours. For example,Bristol-MyersSquibb Company and Akero

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Therapeutics,Inc. are also developingFGF21productcandidatesfor the treatmentof NASH.We have no controlover theirclinicaltrialsor developmentprogram,and lack of efficacy,adverseeventsor undesirableside effectsexperiencedby subjectsin theirclinicaltrialscould adverselyaffectour stock price,our abilityto attract additionalcapitaland our clinical developmentplans for BIO89-100 or even the viabilityof BIO89-100 as a productcandidate, includingby creatinga negativeperceptionof FGFtherapeuticsby healthcareprovidersor patients.

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

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

We have relied on, and expect to continue to rely on, third-party manufacturers to produce BIO89-100 or any future product candidates. Any failure by a third-party manufacturer to produce acceptable product candidates for us pursuant to our specifications and regulatory standards may delay or impair our ability to initiate or complete our clinical trials, obtain and maintain regulatory approvals or commercialize approved products.

We do not ownor operatemanufacturing facilitiesfor the productionof clinicalor commercialquantitiesof our productcandidates,and welack the resourcesand the capabilitiesto do so. Asa result,wecurrentlyrely,and expectto relyfor the foreseeablefuture, on third-partymanufacturersto supply us with BIO89-100 and any futureproductcandidates. We currentlyhave a sole sourcerelationshipwith BTPH pursuantto which they supply us with BIO89-100. If thereshould be any disruptionin our supply arrangementwith BTPH, includingany adverseeventsaffectingBTPH,it could have a negativeeffecton the clinicaldevelopmentof BIO89-100 and otheroperationswhile wework to identifyand qualifyan alternatesupply source. In addition, we will require large quantities of BIO89-100 for large clinical trials and to commercialize BIO89-100. Our current manufacturer may not be able to scaleproductionto the larger quantities and we may not be able to find another manufacturer who has the capacity to manufacture a commercial-scale quantity of BIO89-100.

We do not have a long-termsupply agreementwith any third-partymanufacturer.Relianceon third-partymanufacturersentailsrisksto which wewould not be subjectif wemanufactureproductcandidatesor productsourselves.For example,if wedo not maintainour key manufacturingrelationships,wemay failto find replacementmanufacturersor develop our ownmanufacturingcapabilitiesin a timelymanneror at all,which could delay or impairour abilityto obtainregulatoryapprovalfor our productsand substantiallyincreaseour costsor depleteprofitmargins,if any. If wedo find replacementmanufacturers,wemay not be able to enterinto agreementswith themon termsand conditionsfavorableto us, and therecould be a substantialdelay beforenew facilitiescould be qualifiedand registeredwith the FDAand othercomparableforeignregulatoryauthorities.

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

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Teva continues to supply us with certain reagents and will continue to do so untilDecember31, 2022. We expect the manufacturing of such reagents will be transferredto a newsupplierpriorto the end of 2022. Anycomplications arisingunder our agreementwith Teva or any difficulties securinga newsuppliercould considerablydelay the manufactureof BIO89-100. Anysignificantdelay in the acquisitionor decreasein the availabilityof theseraw materialsfromTeva or any newsuppliercould considerablydelay the manufactureof BIO89-100, which could adverselyimpactthe timingof any planned trials or the regulatoryapprovalsof BIO89-100.

The FDAand othercomparableforeignregulatoryauthoritiesrequiremanufacturersto register manufacturingfacilities.The FDAand othercomparableforeignregulatoryauthoritiesalso inspectthese facilitiesto confirmcompliancewith cGMP.We have littleto no controlregardingthe occurrenceof third-partymanufacturerincidents.Anyfailureto complywith cGMPrequirementsor otherFDAor comparableforeignregulatoryrequirementscould adversely affectour clinicalresearchactivitiesand our abilityto develop BIO89-100 or any futureproductcandidatesand marketour productsfollowingapproval.Our sole sourcesupplier,BTPH,has not yet manufactureda commercial product,and as a result,has not been subjectto inspectionby the FDAand othercomparableforeignregulatory authorities.

Our currentand anticipatedfuturedependenceupon othersfor the manufactureof our product candidatesmay adverselyaffectour futureprofitmarginsand our abilityto develop our productcandidatesand commercializeany productsthatreceiveregulatoryapprovalon a timelybasis. If weare requiredto change manufacturersfor any reason,wewill be requiredto verifythatthe newmanufacturermaintainsfacilitiesand proceduresthatcomplywith quality standardsand with allapplicableregulationsand guidelines.For example,in the event thatweneed to switch our third-partymanufacturerof BIO89-100 fromBTPH,which is our sole manufacturingsourcefor BIO89-100, we anticipatethatthe complexityof the glycoPEGylationmanufacturingprocessmay materiallyimpactthe amount of timeit may take to securea replacementmanufacturer.The delaysassociatedwith the verificationof a new manufacturer, if weare able to identifyan alternativesource,could negativelyaffectour abilityto developproductcandidatesin a timelymanneror within budget.

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

Todate, BIO89-100 has been manufacturedby a singlethird-partymanufacturer,BTPH,solelyfor preclinicalstudiesand clinicaltrials.The processof manufacturing BIO89-100, and in particular,the glycoPEGylationprocess, is complex,highly regulated, subjectto severalrisks and requiressignificantexpertiseand capitalinvestment,includingthe developmentof advanced manufacturing techniquesand processcontrols.Manufacturersof biologicproductsoftenencounterdifficultiesin production, including difficultieswith productioncostsand yields,qualitycontrol,includingstabilityof the product, qualityassurancetesting,operatorerrorand shortagesof qualifiedpersonnel,as well as compliancewith strictly enforcedfederal,stateand foreignregulations.We cannot assureyou thatany stabilityor otherissuesrelatingto the manufactureof BIO89-100 will not occur in the future. We have limitedprocessdevelopmentcapabilitiesand have accessonly to externalmanufacturing capabilities.We do not have and wedo not currentlyplan to acquireor develop the facilitiesor capabilitiesto manufacturebulk drug substanceor filleddrug productfor use in human clinicaltrialsor commercialization.

Wewill requiresubstantialadditionalcapitalto finance our operations, whichmay not be availableto us onacceptableterms,or at all. Asa result,wemay not completethe developmentandcommercializationof BIO89-100or developnewproduct candidates.

Asa clinical-stagebiopharmaceuticalcompany, our operationshave consumedsignificantamountsofcash sinceour inception.We expectour researchand developmentexpensesto increasesubstantiallyin connectionwith our ongoing activities,particularlyas weconduct clinical trials of and seek regulatoryapprovalsfor BIO89-100. Webelievethat our existing cash, cash equivalents and short-term investments, together with the proceeds available from our line of credit pursuant to our Loan Agreement (as defined above), willfundourprojectedoperatingrequirementsinto the second quarter of 2023.

We will requireadditionalcapitalto discover,develop, obtainregulatoryapprovalfor and commercializeBIO89-100 and any futureproductcandidates. We do not have any committedexternalsourceof funds other than the unused portion of the line of credit available to us pursuant to the Loan Agreement.We expectto financefuturecash needs through publicor privateequityor debt offeringsor product collaborations.Additionalcapitalmay not be availablein sufficientamountsor on reasonableterms,if at all.If wedo not raiseadditionalcapital,wemay not

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be able to expand our operationsor otherwisecapitalizeon our businessopportunities,our businessand financialconditionwill be negativelyimpactedand wemay need to: significantly delay, scale back or discontinue research and discovery efforts and the development or commercialization of any product candidates or cease operations altogether;seek strategic alliances for research and development programs when we otherwise would not, or at an earlier stage than we would otherwise desire or on terms less favorable than might otherwise be available; orrelinquish, or license on unfavorable terms, our rights to technologies or any product candidates that we otherwise would seek to develop or commercialize ourselves.

In addition, if BIO89-100 receives approval and is commercialized, we will be required to make milestone and royalty payments to Teva, from whom we acquired certain patents and intellectual property relating to BIO89-100, and from whom we licensed patents and know-how related to glycoPEGylation technology that is used in the manufacture of BIO89-100. For additional information regarding this license agreement, please see Note 5 to of our accompanying audited consolidated financial statements.

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

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

Thereare numerouscurrentlyapproved therapiesfor treatingdiseasesotherthan NASHand some of thesecurrentlyapproved therapiesmay exerteffectsthatcould be similarto BIO89-100 in NASH. Many of theseapproved drugs are well-establishedtherapiesor productsand are widely acceptedby physicians,patientsand third-partypayors. Some of thesedrugs are branded and subjectto patentprotection,and othersare availableon a genericbasis.This may make it difficultfor us to differentiateour productsfromcurrentlyapproved therapies,which may adverselyimpactour businessstrategy. We expect thatif BIO89-100 or any futureproductcandidatesare approved, they will be pricedat a significantpremium over competitivegenericproducts,includingbranded genericproducts.Insurersand otherthird-partypayors may also encouragethe use of genericproductsor specificbranded products prior to utilization of BIO89-100.In addition,many companiesare developingnewtherapeutics,and wecannot predictwhat the standardof care will be as BIO89-100 or any futureproductcandidatesprogressthrough clinicaldevelopment.In addition,to the extentBIO89-100 or any futureproductcandidatesare approved for liver or cardio-metabolicindications,such as SHTG, the commercialsuccessof our productswill also depend on our abilityto demonstratebenefitsover the then-prevailingstandardof care,includingdiet,exerciseand lifestylemodifications.

Further,if BIO89-100 or any futureproductcandidatesare approved for the treatmentof SHTG,wewill competewith currentlyapproved therapiesand therapiesfurtheralong in development.Our competitorsboth in the United Statesand abroad includelarge,well-establishedpharmaceuticaland genericcompanieswith significantlygreatername recognition.Our competitorsmay be able to chargelower pricesthan wecan, which may adverselyaffectour marketacceptance.Many of thesecompetitorshave greaterresourcesthan wedo, includingfinancial,productdevelopment,marketing,personneland otherresources.

If our competitorsmarketproductsthatare moreeffective,saferor cheaperthan our productsor that reachthe marketsooner than our products,wemay not achievecommercialsuccess.Many of our competitorshave substantiallygreaterfinancial,technical,human and otherresourcesthan wedo and may be betterequipped to develop, manufactureand markettechnologicallysuperiorproducts.Asa result,our competitorsmay obtainregulatoryapprovalof theirproductsmorerapidlythan wedo or may obtainpatentprotectionor otherintellectualpropertyrightsthatlimitour abilityto develop or commercializeour productcandidateor any futureproductcandidates.Our competitorsmay also develop and succeedin obtainingapprovalfor drugs thatare moreeffective,

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moreconvenient,morewidely used and less costlyor have a bettersafetyprofilethan our productsand thesecompetitorsmay also be moresuccessfulthan weare in manufacturingand marketingtheirproducts.

Unstable marketandeconomicconditionsmay have seriousadverseconsequences onour business and financialcondition.

Global creditand financialmarketshave experiencedextremedisruptionsat variouspointsover the last few decades.If anothersuch disruptionin creditand financialmarketsand deteriorationof confidencein economicconditions occurs,it may make any necessarydebt or equityfinancingmoredifficultto complete,morecostly,and moredilutive.Failureto secureany necessaryfinancingin a timelymannerand on favorabletermscould have a materialadverseeffecton our growth strategy,financialperformanceand sharepriceand could requireus to delay or abandon developmentor commercializationplans. In addition,thereis a riskthatone or moreof our serviceproviders,manufacturersor otherpartnerswould not surviveor be able to meettheircommitmentsto us under such circumstances,which could directlyaffectour abilityto attainour operatinggoals on scheduleand on budget.

Our Loan and Security Agreement with Silicon Valley Bank (the “Loan Agreement”) contains certain covenants that could adversely affect our operations and, if an event of default were to occur, we could be forced to repay any outstanding indebtedness sooner than planned and possibly at a time when we do not have sufficient capital to meet this obligation.

Pursuant to the Loan Agreement, we have pledged substantially all of our assets, other than our intellectual property rights, and have agreed that we may not sell or assign rights to our patents and other intellectual property without the prior consent of Silicon Valley Bank (“SVB”). Additionally, the Loan Agreement contains certain affirmative and negative covenants that could prevent us from taking certain actions without the consent of our lenders. These covenants may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our stockholders. The Loan Agreement also includes customary events of default, including, among other things, a change of control. Upon the occurrence and continuation of an event of default, all amounts due under the Loan Agreement become (in the case of a bankruptcy event), or may become (in the case of all other events of default and at the option of SVB), immediately due and payable. If an event of default under the Loan Agreement should occur, we could be required to immediately repay any outstanding indebtedness. If we are unable to repay such debt, the lenders would be able to foreclose on the secured collateral, including our cash accounts, and take other remedies permitted under the Loan Agreement. Even if we are able to repay any indebtedness on an event of default, the repayment of these sums may significantly reduce our working capital and impair our ability to operate as planned.

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

We are in the earlystagesof buildingthe fullteamthatweanticipate wewill need to completethe developmentBIO89-100 and otherfutureproductcandidates.As weadvance our preclinicaland clinicaldevelopmentprogramsfor productcandidates,seek regulatoryapproval in the United Statesand elsewhereand increasethe numberof ongoing productdevelopmentprograms,we anticipatethatwewill need to increaseour productdevelopment,scientificand administrativeheadcount.We will also need to establishcommercialcapabilitiesin orderto commercializeany productcandidatesthatmay be approved. Such an evolutionmay impactour strategicfocus and our deploymentand allocationof resources.Our ability to manage our operations and growth effectively depends upon the continual improvement of our procedures, reporting systems and operational, financial and management controls. We may not be able to implement administrative and operational improvements in an efficient or timely manner and may discover deficiencies in existing systems and controls. In addition, in order to continue to meet our obligations as a public company and to support our anticipated long-term growth, we will need to increase our general and administrative capabilities. Our management,personneland systemsmay experiencedifficultyin adjustingto our growth and strategicfocus.

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

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

We are developinga newdrug product formulationfor BIO89-100andwemay be unsuccessful.Anychanges in methodsof product candidatemanufacturingor formulationmay resultin the need to performnewclinical trials or obtain new drug product,whichwouldrequireadditionalcostsandcause delay.

We are developing a new drug productformulationof BIO89-100 for latestageclinicaltrialsand commercialization.Our currentdrug productis storedas a frozenliquidand is thereforenot well-suitedto larger clinicaltrialsor commercialization.We have developed a new refrigeratedliquidformulation and have engaged a formulationdevelopmentcompany to also explorea freeze-dried,or lyophilized,formulation. We have commenced development of a pre-filled syringe for the new drug productformulation and we also plan to begin development of a pen-typeautoinjector.There is no assurancethatwe will be successful in developinga new drug productformulation, a pre-filled syringeor an autoinjectoron a timelybasisor at all,which could impede our developmentand commercializationstrategyfor BIO89-100. The FDA or othercomparableforeign regulatoryauthoritiescould requirenonclinicalstudiesor clinicaltrialsto supportintroductionof any new formulation, pre-filled syringeand autoinjector, which could delay completionof clinicaltrials,requirethe conduct of bridging clinicaltrialsor the repetitionof one or moreclinicaltrials,increaseour clinicaltrialcosts,delay approvalof BIO89-100 and jeopardizeour abilityto commenceproductsalesand generaterevenuefromBIO89-100, if approved.

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

We expect to depend on collaborators, partners, licensees, clinical investigators, CROs, manufacturers and other third parties to support our discovery efforts, to formulate product candidates, to conduct clinical trials for some or all of our product candidates, to manufacture clinical and commercial scale quantities of our drug substance and drug product and to market, sell and distribute any products we successfully develop. Anyof thesethirdpartiesmay terminatetheir engagementswith us at any time.If weneed to enterinto alternativearrangements,it would delay our product developmentactivitiesand such alternativearrangementsmay not be availableon termsacceptableto us. We also expectto relyon otherthirdpartiesto storeand distributedrug suppliesfor our clinicaltrials. Anyperformancefailureon the partof our distributorscould delay clinicaldevelopment,marketingapproval and/orcommercializationof BIO89-100 or any futureproductcandidates,producingadditionallossesand deprivingus of potentialrevenue.

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

Although the developmentand commercializationof BIO89-100 is currentlyour primaryfocus, as part of our longer-termgrowth strategy,we plan to evaluatethe developmentand commercializationof other therapiesrelatedto NASHand otherliverand cardio-metabolicdiseases.The successof thisstrategydepends primarilyupon our abilityto identifyand validatenew therapeuticcandidates,and to identify,develop and commercializenew drugs and biologics.Our researcheffortsmay initiallyshow promisein discoveringpotential new drugs and biologics,yet failto yieldproductcandidatesfor clinicaldevelopmentfor a numberof reasons.

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

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

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

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

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

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

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

Our use of our internationalfacilitiessubjectus to U.S.and foreigngovernmentaltrade,importand export,and customsregulationsand laws. Compliancewith theseregulationsand laws is costlyand exposes us to penaltiesfor non-compliance.Doing businessinternationallypotentiallyinvolvesa numberof risks, any of which could harmour ongoing internationalclinicaloperationsand supply chain, as well as any futureinternationalexpansionand operationsand, consequently,our business,financialcondition, prospectsand resultsof operations.

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

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

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Ouremployees,contractors,vendors, principalinvestigators,consultantsandfuture partnersmay engage in misconductor other improperactivities,including noncompliancewith regulatorystandards andrequirements andinsidertrading.

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

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

In the ordinarycourseof our business,wecollect,storeand transmitlargeamountsof confidential information,includingintellectualproperty,proprietarybusinessinformationand personalinformation.Our internaltechnologysystemsand infrastructure,and those of our currentor futurethird-partycollaborators, serviceproviders,contractorsand consultantsare vulnerableto damagefromcomputerviruses,unauthorized accessor use resultingfrommalware,naturaldisasters,terrorism,war and telecommunicationand electrical failures,denial-of-serviceattacks,cyber-attacksor cyber-intrusionsover the Internet,hacking, phishingand other socialengineeringattacks,personsinsideour organizations(includingemployeesor contractors),loss or theft,or personswith accessto systemsinsideour organization.Whileto our knowledge wehave not experiencedany materialsystemfailure,accidentor securitybreachto date we have been subject to periodic phishing attempts. If a material systemfailure,accidentor securitybreach were to occur and cause interruptionsin our operationsor the operationsof third-partycollaborators,serviceproviders, contractorsand consultants,it could resultin a materialdisruptionof our developmentprogramsand significant reputational,financial,legal,regulatory,businessor operationalharm.

Tothe extentthatany realor perceivedsecuritybreachaffectsour systems(or those of our third-partycollaborators,serviceproviders,contractorsor consultants),or resultsin the loss of or accidental,unlawfulor unauthorizedaccessto, use of, releaseof, or otherprocessingof personallyidentifiable informationor damageto our data or applicationsor otherdata or applicationsrelatingto our technologyor productcandidates,or inappropriatedisclosureof confidentialor proprietaryinformation,wecould incur liabilitiesand the furtherdevelopmentof our productcandidatescould be delayed.Anyfailureor perceivedfailureby us or any third-partycollaborators,serviceproviders,contractorsor consultantsto complywith our privacy,confidentiality,data securityor similarobligations,or any data security incidentsor othersecuritybreachesthatresultin the accidental,unlawfulor unauthorizedaccessto, use of, releaseof, processingof, or transferof sensitiveinformation,includingpersonallyidentifiableinformation,may resultin negativepublicity,harmto our reputation,governmentalinvestigations,enforcementactions,regulatory fines,litigationor publicstatementsagainstus, could cause thirdpartiesto lose trustin us or could resultin claimsby thirdparties,includingthose thatassertthatwehave breachedour privacy,confidentiality,data securityor similarobligations,any of which could have a materialadverseeffecton our reputation,business, financialconditionor resultsof operations.

Risks Related to Regulatory Approvals

BIO89-100has not receivedregulatoryapproval. If weare unable to obtain regulatoryapprovalsto market BIO89-100or any future product candidates,our business will be adverselyaffected.

We do not expectBIO89-100 or any futureproductcandidateto be commerciallyavailablefor several years,if at all.BIO89-100 is and any futureproductcandidatewill be subjectto strictregulationby regulatory authoritiesin the United Statesand in othercountries.We cannot marketany productcandidateuntilwehave completedallnecessarypreclinicalstudiesand clinicaltrialsand have obtainedthe necessaryregulatory approvals.We do not knowwhether regulatoryagencieswill grantapprovalfor BIO89-100 or any futureproduct candidate.Even if wecompletepreclinicalstudiesand clinicaltrialssuccessfully,wemay not be able to obtain regulatoryapprovalsor wemay not receiveapprovalsto make claimsabout our productsthatwebelieveto be necessaryto effectivelymarketour products.Data obtainedfrompreclinicalstudiesand clinicaltrialsis subject to varyinginterpretationsthatcould

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delay, limitor preventregulatoryapproval,and failureto complywith regulatoryrequirementsor inadequatemanufacturingprocessesare examplesof otherproblemsthatcould preventapproval.The regulatoryauthoritiesin the United Statesand the EUhave not approved any productsfor the treatmentof NASH,and while thereare recentguidelinesissuedby the FDAfor the developmentof drugs for the treatmentof NASHand a FDAsurrogateendpointtablefor drug approvalthatincludesSHTG, it is unclearwhether the requirementsfor approvalwill change in the future.Anysuch changes may requireus to conduct newtrialsthatcould delay our timeframeand increasethe costsof our programsrelatedto BIO89-100 or any futureproductcandidatefor the treatmentof NASHor SHTG. Whilethe FDAhas approved reductionintriglycerideslevelsas a surrogateendpointfor the fullapprovalof drugs for the treatmentof SHTG,it is unclear whether thisendpointwill apply to any productcandidatesthatwedevelop. If such endpointis not deemedto apply to our productcandidates,it would delay our developmenttimelineand increasethe costsof our programs for the treatmentof SHTG. We have not had any discussions with the FDAregardinga surrogateendpointoracceleratedapprovalregulations.However, wecurrentlyexpectthatour SHTGprogramwould be subjectto smallerclinicaltrialsand thatwemay expecta relativelyquicker overalldevelopmenttimelinefor thisindication. These expectationsare based on a publishedFDAsurrogateendpointtablefor drug approvalthatincludes SHTG, as well as the developmentpath followedby othercompaniesthatdevelopedan SHTGtherapy.

Evenif weare able to obtain regulatoryapprovalsfor BIO89-100or any future product candidate,if they exhibitharmfulside effectsafterapproval, our regulatoryapprovalscould be revoked or otherwisenegatively impacted,andwecould be subjectto costlyanddamaging product liabilityclaims.

Even if we receiveregulatoryapprovalforBIO89-100 or any futureproductcandidates, we willhavetestedthem in onlyasmallnumber of patientsduringourclinicaltrials. If ourapplicationsformarketingareapprovedandmorepatientsbegin to useourproduct,new risksandsideeffectsassociatedwithourproductsmaybe discovered. As aresult,regulatoryauthoritiesmayrevoketheirapprovals. We havenothadanydiscussionswiththeFDA regardingasurrogateendpoint or acceleratedapprovalregulations.However,based on recentguidelinesissued by theFDA forthedevelopment of drugsforthetreatment of NASH, if BIO89-100 is approved by theFDAbased on asurrogateendpointpursuant to section506(c) of theFederalFood,Drug,andCosmeticActandtheacceleratedapprovalregulations(21C.F.R.part314,subpart H; 21 C.F.R.part601,subpartE),consistentwithFDA guidance, we will be required to conductadditionalclinicaltrialsestablishingclinicalbenefit on theultimateoutcome of NASH. If BIO89-100 is approved by theFDA forthetreatment of SHTG based on an endpoint of thereduction of triglycerides,theFDA maystillrequireacardiovascularoutcomesstudy as part of apost-marketingauthorizationcommitment.Suchastudywould be timeconsumingandcostlyandwecannotguaranteethat we willseepositiveresults, which could result in therevocation of theapproval. Additionally, wemay be required toconductadditionalclinicaltrials, makechanges in labeling of ourproduct, reformulateourproduct or makechangesandobtainnew approvalsforourandoursuppliers’manufacturingfacilitiesforBIO89-100andanyfutureproductcandidates. We mighthave to withdraw or recallourproductsfromthemarketplace. We may alsoexperienceasignificantdrop in thepotentialsales of ourproduct if andwhenregulatoryapprovalsforsuchproductarerevoked. As aresult, we mayexperienceharm to ourreputation in themarketplace or becomesubjectto lawsuits,includingclassactions.Any of theseresultscoulddecrease or preventanysales of ourapprovedproductor substantiallyincreasethecostsandexpenses of commercializingandmarketingourproduct.

Theregulatoryapproval processesof the FDAandcomparableforeignregulatoryauthoritiesare lengthy, time-consumingandinherentlyunpredictable.Ourinabilityto obtain regulatoryapproval for BIO89-100or any future product candidateswouldsubstantiallyharm our business.

Currently,wedo not have any productcandidatesthathave receivedregulatoryapproval.The time requiredto obtainapprovalfromthe FDAand comparableforeignregulatoryauthoritiesis unpredictablebut typicallytakesmany yearsfollowingthe commencementof preclinicalstudiesand clinicaltrialsand depends upon numerousfactors,includingthe substantialdiscretionof the regulatoryauthorities.In addition,approval policies,regulationsor the type and amountof clinicaldata necessaryto gain approvalmay change during the courseof a productcandidate’sdevelopmentand may vary among jurisdictions.It is possiblethatnone of BIO89-100 or any futureproductcandidateswill ever obtainregulatoryapproval. BIO89-100 or any futureproductcandidatecould failto receiveregulatoryapprovalfromthe FDAor comparableforeignregulatoryauthoritiesfor many reasons, including those referenced in Part I, Item 1. “Business—Government Regulation and Product Approval”. If wewere to obtainapproval,regulatoryauthoritiesmay approve any of our productcandidatesfor fewer or morelimited indications

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than werequest,may grantapprovalcontingenton the performanceof costlypost-marketingclinical trialsor may approve a productcandidatewith a labelthatdoes not includethe labelingclaimsnecessaryor desirablefor the successfulcommercializationof theproductcandidate.

Evenif BIO89-100or any future product candidatereceivesregulatoryapproval, it may stillface future developmentandregulatorydifficulties.

Even if weobtainedregulatoryapprovalfor a productcandidate,it would be subjectto ongoing requirementsby the FDAand comparableforeignregulatoryauthoritiesgoverningthe manufacture,quality control,furtherdevelopment,labeling,packaging,storage,distribution,safetysurveillance,import,export, advertising,promotion,recordkeepingand reportingof safetyand otherpost-marketinformation.In addition,manufacturersof drug productsand theirfacilitiesare subjectto continualreview and periodicinspectionsby the FDAand otherregulatoryauthoritiesfor compliancewith cGMP,regulationsand standards.If weor a regulatoryagency discoverpreviouslyunknownproblemswith a product,such as adverse eventsof unanticipatedseverityor frequency,or problemswith the facilitywhere the productis manufactured,a regulatoryagency may imposerestrictionson thatproduct,the manufacturingfacilityor us, includingrequiring recallor withdrawalof the productfromthe marketor suspensionof manufacturing.If we,our product candidatesor the manufacturingfacilitiesfor our productcandidatesfailto complywith applicableregulatory requirements,or undesirableside effectscaused by such productsare identified,a regulatoryagency may: issuesafetyalerts,Dear HealthcareProviderletters,pressreleasesor othercommunications containingwarnings about such product; mandatemodificationsto promotionalmaterialsor requireus to providecorrectiveinformationto healthcarepractitioners; requirethatweconduct post-marketingstudies; requireus to enterinto a consentdecree,which can includeimpositionof variousfines, reimbursementsfor inspectioncosts,requireddue datesfor specificactionsand penaltiesfor noncompliance; seek an injunctionor imposecivilor criminalpenaltiesor monetaryfines; suspend marketingof, withdraw regulatoryapprovalof or recallsuch product; suspend any ongoing clinicalstudies; refuseto approve pending applicationsor supplementsto applicationsfiledby us; suspend or imposerestrictionson operations,includingcostlynewmanufacturingrequirements;or seizeor detainproducts,refuseto permitthe importor exportof productsor requireus to initiatea productrecall. The occurrenceof any event or penaltydescribedabove may inhibitour abilityto commercializeour productsand generateproductrevenue.

Risks Relating to IntellectualProperty

Oursuccessdepends uponour abilityto obtain andmaintainintellectualpropertyprotectionfor our products andtechnologies.

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

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

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Anychanges wemake to our BIO89-100 or any futureproductcandidatesto cause themto have what weview as moreadvantageouspropertiesmay not be coveredby our existingpatentsand patentapplications, and wemay be requiredto filenewapplicationsand/orseek otherformsof protectionfor any such altered productcandidates.The patentlandscapesurroundingthe technologyunderlyingour productcandidatesis crowded, and therecan be no assurancethatwewould be able to securepatentprotectionthatwould adequately cover an alternativeto BIO89-100 or any futureproductcandidates.

Weand our currentor future licensors,licenseesor collaboratorsmay not be able to prepare,fileand prosecuteallnecessaryor desirable patentapplicationsat a reasonablecost or in a timelymanner.It is also possiblethatweor our currentor future licensors,licenseesor collaboratorswill failto identifypatentableaspectsof inventionsmade in the courseof developmentand commercializationactivitiesbeforeit is too lateto obtainpatentprotectionfor them.Moreover, in some circumstances,wemay not have the rightto controlthe preparation,filingand prosecutionof patent applications,or to maintainor enforcethe patents,coveringtechnologythatwelicensefromor licenseto third partiesand may be relianton our currentor futurelicensors,licenseesor collaboratorsto performtheseactivities, which meansthatthesepatentapplicationsmay not be prosecuted,and thesepatentsenforced,in a manner consistentwith the best interestsof our business.If our currentor futurelicensors,licenseesor collaboratorsfail to establish,maintain,protector enforcesuch patentsand otherintellectualpropertyrights,such rightsmay be reducedor eliminated.If our currentor futurelicensors,licenseesor collaboratorsare not fullycooperativeor disagreewith us as to the prosecution,maintenanceor enforcementof any patentrights,such patentrightscould be compromised.

Similarto the patentrightsof otherbiotechnologycompanies,the scope, validityand enforceabilityof our owned and licensedpatentrightsgenerallyare highly uncertainand involvecomplexlegaland factual questions.The issuanceof a patentis not conclusiveas to itsinventorship,scope, validityor enforceability,and our patentsmay be challengedin the courtsor patentofficesin the United Statesand abroad. In recentyears, theseareashave been the subjectof much litigationin the industry.As a result,the issuance,scope, validity, enforceabilityand commercialvalue of our and our currentor futurelicensors’,licensees’or collaborators’ patentrightsare highly uncertain.Our and our currentor futurelicensors’,licensees’or collaborators’pending and futurepatentapplicationsmay not resultin patentsbeing issuedthatprotectour technologyor product candidates,or productsresultingtherefrom,in whole or in part,or thateffectivelypreventothersfrom commercializingcompetitivetechnologiesand products.The patentexaminationprocessmay requireus or our currentor futurelicensors,licenseesor collaboratorsto narrow the scope of the claimsof pending and future patentapplications,which would limitthe scope of patentprotectionthatis obtained,if any. Our and our current or futurelicensors’,licensees’or collaborators’patentapplicationscannot be enforcedagainstthirdparties practicingthe technologythatis currentlyclaimedin such applicationsunlessand untila patentissuesfromsuch applications,and then only to the extentthe claimsthatissueare broad enough to cover the technologybeing practicedby those thirdparties.

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

We may not be able to protectour intellectualpropertyrightsthroughout the world.

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

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Consequently,wemay not be able to preventthirdpartiesfrompracticingour inventionsin allcountriesoutside the United States,or fromsellingor importingproductsmade using our inventionsin and into the United States or otherjurisdictions.Competitorsmay use technologiesin jurisdictionswhere wehave not obtainedpatent protectionto develop theirownproductsand, further,may exportotherwiseinfringingproductsto territories where wehave patentprotection,but enforcementis not as strongas thatin the United States.These products may competewith BIO89-100 or any futureproductcandidatesand our patentsor otherintellectualproperty rightsmay not be effectiveor sufficientto preventthemfromcompeting.

We rely on a license from Teva and a sublicense from ratiopharm to patents and know-how related to glycoPEGylation technology that are used in the development, manufacture and commercialization of BIO89-100. Any termination or loss of significant rights, including the right to glycoPEGylation technology, or breach, under these agreements or any future license agreement related to our product candidates, would materially and adversely affect our ability to continue the development and commercialization of the related product candidates.

In April 2018, weenteredinto an Asset Transferand LicenseAgreement(the“FGF21Agreement”) with Teva under which weacquiredcertainpatents,intellectualpropertyand otherassetsrelatingto Teva’s glycoPEGylatedFGF21program,includingBIO89-100. Under thisagreement, wewere granteda perpetual,non-exclusive(but exclusiveas to BIO89-100), non-transferable,worldwide licenseto patentsand know-how relatedto glycoPEGylationtechnologyused in the development,manufactureand commercializationof BIO89-100 and productscontainingBIO89-100. The FGF21Agreementalso containsnumerouscovenantswith which wemustcomply,includingthe utilizationof commerciallyreasonableeffortsto develop and ultimately commercializeBIO89-100, as well as certainreportingcovenantsand the obligationto make royaltypayments,if and whenBIO89-100 is approved for commercialization.Our failureto satisfyany of thesecovenantscould resultin the terminationof the FGF21Agreement.In addition,weenteredinto a SublicenseAgreementwith ratiopharm(the“ratiopharmSublicense”),under which wewere granteda perpetual,exclusive,worldwide sublicenseto patentsand know-howrelatedto glycoPEGylationtechnologyused in the development, manufactureand commercializationof BIO89-100 and productscontainingBIO89-100. Terminationof the FGF21Agreementor the ratiopharmSublicensewill impactour rightsunder the intellectualpropertylicensedto us by Teva and ratiopharm,respectively, includingour licenseto glycoPEGylationtechnology,but will not affectour rightsunder the assetsassignedto us.

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

We may be unable to obtain intellectualpropertyrightsor technologynecessaryto developandcommercialize BIO89-100andany future product candidates.

The patentlandscapearound our programsis complex,and weare aware of severalthird-partypatents and patentapplicationscontainingsubjectmatterthatmightbe relevantto BIO89-100. Depending on what claimsultimatelyissuefromthesepatentapplications,and howcourtsconstruethe issuedpatentclaims,as well as depending on the ultimateformulationand methodof use of BIO89-100 or any futureproductcandidates,we may need to obtaina licenseto practicethe technologyclaimedin such patents.There can be no assurancethat such licenseswill be availableon commerciallyreasonableterms,or at all.

We may becomeinvolvedin lawsuitsor other proceedingsto protector enforceour intellectualproperty, whichcould be expensive,time-consumingandunsuccessfulandhave a materialadverseeffectonthe success of our business.

Third partiesmay infringeour patentsor misappropriateor otherwiseviolateour intellectualproperty rights.In the future,wemay initiatelegalproceedingsto enforceor defend our intellectualpropertyrights,to protectour

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tradesecretsor to determinethe validityor scope of intellectualpropertyrightsweownor control. Also, thirdpartiesmay initiatelegalproceedingsagainstus to challengethe validityor scope of intellectual propertyrightsweown,controlor to which wehave rights.Anadverseresultin any litigationproceedingcould put one or moreof our patentsat riskof being invalidated,narrowed, held unenforceableor interpretedin such a mannerthatwould not precludethirdpartiesfromenteringthe marketwith competingproducts.

Third-partypre-issuancesubmissionof priorartto the USPTO,or opposition,derivation,revocation, reexamination,interpartesreview or interferenceproceedings,or otherpre-issuanceor post-grantproceedingsor otherpatentofficeproceedingsor litigationin the United Statesor otherjurisdictionsprovoked by thirdpartiesor brought by us, may be necessaryto determinethe inventorship,priority,patentabilityor validityof inventions with respectto our patentsor patentapplications.Anunfavorableoutcomecould leaveour technologyor product candidateswithout patentprotection,allow thirdpartiesto commercializeour technologyor productcandidates and competedirectlywith us, without paymentto us, or could requireus to obtainlicenserightsfromthe prevailingpartyin orderto be able to manufactureor commercializeour productcandidateswithout infringing third-partypatentrights.Our businesscould be harmedif the prevailingpartyin such a case does not offerus a licenseon commerciallyreasonableterms,or at all.Even if weobtaina license,it may be non-exclusive,thereby giving our competitorsaccessto the sametechnologieslicensedto us. In addition,if the breadthor strengthof protectionprovidedby our patentsand patentapplicationsis threatened,it could dissuadecompaniesfrom collaboratingwith us to license,develop or commercializecurrentor futureproductcandidates.Even if we successfullydefend such litigationor proceeding,wemay incursubstantialcostsand our defensemay distract our managementand otheremployees.

Furthermore,becauseof the substantialamountof discoveryrequiredin connectionwith intellectual propertylitigation,thereis a riskthatsome of our confidentialinformationcould be compromisedby disclosure during thistype of litigation.In addition,many foreignjurisdictionshave rulesof discoverythatare different than those in the United Statesand thatmay make defendingor enforcingour patentsextremelydifficult.There could also be publicannouncementsof the resultsof hearings,motionsor otherinterimproceedingsor developments.If securitiesanalystsor investorsperceivetheseresultsto be negative,it could have a material adverseeffecton the priceof sharesof our commonstock.

Third partiesmay initiatelegalproceedingsagainst us allegingthat weinfringetheirintellectualproperty rightsor wemay initiatelegalproceedingsagainst third partiesto challengethe validityor scope of intellectualpropertyrightscontrolledby third parties.

Third partiesmay initiatelegalproceedingsagainstus allegingthatweinfringetheir intellectualpropertyrightsor wemay initiatelegalproceedingsagainstthirdpartiesto challengethe validityor scope of intellectualpropertyrightscontrolledby thirdparties,includingin oppositions,interferences, revocations,reexaminations,interpartesreview or derivationproceedingsbeforethe USPTOor itscounterparts in otherjurisdictions.These proceedingscan be expensiveand time-consumingand many of our adversariesin theseproceedingsmay have the abilityto dedicatesubstantiallygreaterresourcesto prosecutingtheselegal actionsthan wecan. We could be found liablefor monetarydamages,includingtrebledamagesand attorneys’fees,if weare found to have willfullyinfringeda patentof a thirdparty.Afindingof infringementcould preventus from commercializingour BIO89-100 or any futureproductcandidatesor forceus to ceasesome of our business operations,which could materiallyharmour business.

Although wehave reviewedcertainthird-partypatentsand patentfilingsthatwebelievemay be relevantto our therapeuticcandidatesor products,wehave not conducteda freedom-to-operatesearchor analysis for any of our therapeuticcandidatesor products,and wemay not be aware of patentsor pending or futurepatent applicationsthat,if issued,would block us fromcommercializingour productcandidates.Thus, wecannot guaranteethatour product candidates,or our commercializationthereof,do not and will not infringeany thirdparty’sintellectualproperty.

Risks Related to Ownership of Our Common Stock

Thepriceof our common stock may be volatile,andyou may lose all or part of your investment.

The marketpriceof our commonstock could fluctuatesignificantly,and you may not be able to resell your sharesat or above the price you paid for your shares.Those fluctuationscould be based on variousfactorsin additionto those otherwisedescribedin thisprospectus,includingthose describedin these“Risk Factors.”Anyof

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these factorsmay resultin largeand sudden changes in the volumeand tradingpriceof our commonstock. In the past, followingperiodsof volatilityin the marketpriceof a company’ssecurities,stockholdershave ofteninstituted securitiesclassactionlitigationagainstthatcompany.

Sales of our common stock, or the perception that such sales may occur, could depress the price of our common stock.

Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could depress the market price of our common stock. Certain holders of shares of our common stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. In addition, we have filed a registration statement registering under the Securities Act the shares of our common stock reserved for issuance under our 2019 Equity Incentive Plan, including shares issuable upon exercise of outstanding options. These shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates. Further, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt or equity securities.

Raising additionalcapitalmay cause dilutionto existing stockholders,restrictour operationsor requireus to relinquishrightsto our technologies.

Existing stockholderscould sufferdilutionor be negativelyaffectedby fixed paymentobligationswemay incurif weraiseadditionalfunds through the issuanceof additionalequity securitiesor debt or the Loan Agreement. Furthermore,thesesecuritiesmay have rightsseniorto those of our commonstock and could containcovenantsor protective rightsthatwould restrictour operationsand potentiallyimpairour competitiveness,such as limitationson our abilityto incuradditionaldebt, limitationson our abilityto acquire,sellor licenseintellectualpropertyrightsand otheroperatingrestrictionsthatcould adverselyimpactour abilityto conduct our business.

General Risk Factors

Ourdirectors,executiveofficersandcurrent holders of 5% or more of our capitalstock have substantialcontrolover our company,whichcould limityour abilityto influencethe outcomeof matterssubjectto stockholderapproval, including a change of control.

As of December 31, 2020, our executive officers, directors and other holders of 5% or more of our common stock beneficially owned a majority of our outstanding common stock. Asa result, our executive officers,directorsand other holders of 5% or more of our common stock, if they act, will be able to influence or control mattersrequiring approval by our stockholders,including the election of directorsand the approval of mergers, acquisitionsor other extraordinarytransactions.In addition, our current directors,executive officersand other holders of 5% or more of our common stock, acting together, would have the ability to control the managementand affairsof our company. They may also have intereststhat differ from yours and may vote in a waywith which you disagree and that may be adverse to your interests.This concentrationof ownership may have the effect of delaying, preventing or deterringa change of control of our company, could deprive our stockholdersof an opportunity to receive a premium for their shares of our common stock as part of a sale of our company.

We previously identifiedmaterialweaknesses in our internalcontrolover financialreporting, which have been remediated. If we identify additional material weaknesses in the future or otherwise fail to maintainaneffectivesystemof internalcontrols, wemay not be able to produce timely and accurate financialstatements, and we or our independent registered public accounting firm may conclude that our internal control over financial reporting is not effective,whichcould adverselyaffect our investors’confidence and our stock price.

As an emerging growth company under the JOBS Act, our management is required to report upon the effectiveness of our internal control over financial reporting under Section404 of the Sarbanes-OxleyAct. Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until the date we are no longer an emerging growth company and reach accelerated filer status. Any failureto implementrequirednewor improvedcontrols,or difficultiesencounteredin theirimplementation, could cause us to failto meetour reportingobligations.In addition,any testingby us conductedin connection with Section404, or any subsequenttestingby our independentregisteredpublicaccountingfirm,may revealdeficienciesin our internalcontrolsover financialreportingthatare deemedto be materialweaknessesor thatmay require prospectiveor retroactivechanges to our consolidatedfinancialstatementsor identifyotherareasfor further attentionor improvement. As previously disclosed, in connectionwith our financialstatementcloseprocess

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for 2018, weidentifiedmaterialweaknesses in the design and operatingeffectivenessof our internalcontrolover financialreporting. While we have remediated such material weaknesses, wecannot assureyou that we have identifiedallmaterialweaknessesor thattherewill not be additionalmaterialweaknessesor deficiencies thatwewill identify in the future.

Our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could prevent a third party from acquiring us (even if an acquisition would benefit our stockholders), may limit the ability of our stockholders to replace our management and limit the price that investors might be willing to pay for shares of our common stock.

Our amended and restated certificate of incorporationand our amended and restated bylaws could have the effectof makingit moredifficultfor a thirdpartyto acquire,or of discouraginga thirdpartyfromattemptingto acquire,controlof us. These provisionscould delay or preventa change in controlof the company and could limitthe pricethatinvestors mightbe willingto pay in the futurefor sharesof our commonstock. In addition, asa Delaware corporation,weare subjectto the anti-takeoverprovisionsof Section203 of the Delaware GeneralCorporationLaw,which prohibitsa Delaware corporationfromengaging in a business combinationspecifiedin the statutewith an interestedstockholder(as definedin the statute)for a periodof three yearsafterthe date of the transactionin which the person firstbecomesan interestedstockholder,unlessthe businesscombinationis approved in advance by a majorityof the independentdirectorsor by the holdersof at leasttwo-thirdsof the outstandingdisinterestedshares.The applicationof Section203 of the Delaware General CorporationLawcould also have the effectof delayingor preventinga change of controlof us.

Ouramended and restated certificate of incorporation providesthat the Court of Chancery of the State of Delaware andthe federaldistrictcourts of the United Stateswill be the exclusiveforum for substantiallyall disputesbetween us andour stockholders,whichcould limitour stockholders’abilityto obtain a favorablejudicialforum for disputeswith us or our directors,officersor employees.

Our amended and restated certificate of incorporationprovidesthatthe Court of Chancery of the Stateof Delaware is the exclusiveforumfor certain actionsor proceedingsunder Delaware statutoryor commonlaw.Our amended and restated certificate of incorporationprovides furtherthatthe federaldistrictcourtsof the United Stateswill be the exclusiveforumfor resolvingany complaintassertinga cause of actionarisingunder the SecuritiesAct.These choiceof forumprovisionsmay limita stockholder’s abilityto bring a claimin a judicialforumthatit findsfavorablefor disputeswith us or our directors,officersor otheremployees.If a courtwere to find the choiceof forumprovisioncontainedin our amended and restated certificate of incorporationto be inapplicableor unenforceable,wemay incuradditionalcostsassociatedwith resolvingsuch actionin otherjurisdictions.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We leaseofficespace, which consistsof approximately1,600 squarefeetlocatedat 6 Hamada Street, Herzliya,4673340, Israel.This leaseexpireson April 30, 2021. We also leaseofficespace at 142 SansomeStreet,San Francisco,California94104, which consists of approximately 3,600 square feet.This leaseexpireson January 14, 2022. We believethatour currentspaces are adequatefor our needs. We also believewewill be able to obtainadditionalspace, as needed, on commerciallyreasonableterms.

Item 3. Legal Proceedings.

We are currently not a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors, and there can be no assurances that favorable outcomes will be obtained.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock is traded on The Nasdaq Global Market under the symbol “ETNB.”

As of March 1, 2021, there were approximately 12 stockholders of record of our common stock.

Dividend Policy

We have never declared or paid cash dividends on our capital stock and have no present intention to pay cash dividends on our common stock for the foreseeable future. Any determination to pay dividends to holders of our common stock will be at the discretion of our board of directors and will depend on many factors, including our financial condition, results of operations, liquidity, earnings, projected capital and other cash requirements, legal requirements, restrictions in the agreements governing any indebtedness we may enter into, business prospects and other factors that our board of directors deems relevant.

Use of Proceeds from our Initial Public Offering

On November 13, 2019, we completed our IPO, pursuant to which we issued and sold an aggregate of 6,100,390 shares of common stock (inclusive of 795,703 shares pursuant to the underwriters’ option to purchase additional shares) at the IPO price of $16.00 per share. The aggregate gross proceeds from our IPO were $97.6 million, and the net proceeds were $87.7 million after deducting underwriting discounts and commissions of $6.8 million and other offering expenses of $3.1 million. The offer and sale of the shares of common stock in the IPO were registered pursuant to registration statements on Form S-1 (File Nos. 333-234174 and 333-234617), which the SEC declared effective on November 8, 2019. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates. The underwriters for our IPO were BofA Securities, Inc., SVB Leerink LLC, RBC Capital Markets, LLC, and Oppenheimer & Co. Inc.

There has been no material change in the intended use of proceeds from our IPO as described in our final prospectus filed with the SEC pursuant to Rule 424(b)(4) on November 12, 2019.

Item 6. Selected Financial Data.

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934 and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Youshould read the followingdiscussionand analysisof our financialconditionand resultsof operationstogetherwith our consolidatedfinancialstatementsand relatednotes and other financialinformation includedelsewherein this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K.

Overview

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. Our lead product candidate, BIO89-100, a specifically engineered glycoPEGylated analog of FGF21, is currently being developed for the treatment of NASH and for the treatment of SHTG. NASH is a severe form of NAFLD, characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, HCC and death. There are currently no approved products for the treatment of NASH. In September 2020, we announced positive topline data from the Phase 1b/2a trial of BIO89-100 in NASH. We plan to initiate a Phase 2b trial in NASH patients in the first half of 2021. In December 2020, we initiated a paired-biopsy open-label cohort as part of the Phase 1b/2a trial in NASH patients assessing histology endpoints with topline data anticipated by the end of 2021. SHTG is a condition identified by severely elevated levels of triglycerides (greater than or equal to 500 mg/dL), which is associated with an increased risk of NASH, cardiovascular events and acute pancreatitis. We initiated our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020 and expect to report topline data in the second half of 2021.

We commencedoperationsin 2018 and have devoted substantiallyallof our resourcesto raisingcapital,acquiringour initialproductcandidate, identifying and developing BIO89-100, licensingcertainrelatedtechnology,conductingresearchand developmentactivities (includingpreclinical studiesandclinicaltrials)and providinggeneraland administrativesupportfor theseoperations. Prior to our initial public offering (“IPO”), we had funded our operations primarily from the issuance and sale of capital stock. In November 2019, we completed our IPO pursuant to which we issued 6,100,390 shares of our common stock at a price of $16.00 per share. We received net proceeds of $87.7 million from the IPO.

In July 2020, we completed an underwritten public offering of 3,047,040 shares of our common stock, including 397,440 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares, at a public offering price of $27.50 per share. We raised a total of $83.8 million in gross proceeds from the offering, or approximately $78.2 million in net proceeds after deducting underwriters’ discounts and commissions of $5.0 million and offering costs of approximately $0.6 million.

In September 2020, we completed an underwritten public offering of 3,025,000 shares of our common stock, at a public offering price of $28.00 per share. We raised a total of $84.7 million in gross proceeds from the offering, or approximately $79.5 million in net proceeds after deducting underwriting discounts and commissions of $4.6 million and offering costs of approximately $0.6 million.

Asof December 31, 2020, our cash, cash equivalents and short-term investments totaled$204.6 million.Based on our currentoperatingplan, webelievethatour cash, cash equivalents and short-term investments together with the proceeds available under our term loan facility will be sufficientto meetour anticipated cash requirements through the second quarter of 2023.

We have incurrednet lossessinceour inception.Our net losses for the years ended December 31, 2020 and 2019 were $49.5 million and $57.4 million, respectively. Asof December 31, 2020, wehad an accumulateddeficitof$123.1 million.We expectto continueto incursignificantexpensesand increasingoperatinglossesas weadvance BIO89-100 and any futureproductcandidatesthrough clinicaltrials,seek regulatoryapprovalfor BIO89-100 and any futureproductcandidates,expand our clinical,regulatory,quality,manufacturingand commercialization capabilities,protectour intellectualproperty,preparefor and, if approved, proceedto commercializationof BIO89-100 and any futureproductcandidates,expand our generaland administrativesupportfunctions, includinghiringadditionalpersonnel,and incuradditionalcostsassociatedwith operatingas a public

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company. Our net lossesmay fluctuatesignificantlyfromquarter-to-quarterand year-to-year,depending on the timingof our clinicaltrialsand our expenditureson otherresearchand developmentactivities.

Impact of COVID-19 Pandemic

The ongoing COVID-19 pandemic has disrupted and may continue to disrupt our business and delay our preclinical and clinical programs and timelines. The extent to which the COVID-19 pandemic may impact our future operating results and financial condition is uncertain. We initiated our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020 as well as a new paired-biopsy open-label histology cohort as part of the Phase 1b/2a trial in the fourth quarter of 2020. The COVID-19 surge observed late in the fourth quarter of 2020 and the first quarter of 2021 has impacted enrollment in these studies. We plan to initiate a Phase 2b trial in NASH patients in the first half of 2021. We do not yet know the full extent of potential delays, which could prevent or delay us from obtaining approval for BIO89-100. For more information regarding risks related to the ongoing COVID-19 pandemic, please see the risk factor entitled “The ongoing COVID-19 pandemic has resulted and may in the future result in significant disruptions to our clinical trials or other business operations, which could have a material adverse effect on our business,” in Part I. Item 1A of this Annual Report on Form 10-K. To the extent the ongoing COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth under “Risk Factors” in this Annual Report on Form 10-K.

Components of Results of Operations

Research andDevelopment Expenses

Researchand developmentexpensesconsistprimarilyof costsincurredfor the developmentof our lead productcandidate,BIO89-100. Our researchand developmentexpensesconsistprimarilyof externalcosts relatedto preclinicaland clinicaldevelopment,includingcostsrelatedto acquiringpatentsand intellectual property,expensesincurredunder licenseagreementsand agreementswith contractresearchorganizationsand consultants,costsrelatedto acquiringand manufacturingclinicaltrialmaterials,includingunder agreementswith contractmanufacturingorganizationsand othervendors, costsrelatedto the preparationof regulatory submissionsand expensesrelatedto laboratorysuppliesand services,as well as personnelcosts.Personnelcosts consistof salaries,employeebenefitsand share-basedcompensationfor individualsinvolvedin researchand developmentefforts.

We expense allresearchand developmentexpensesin the periodsin which they are incurred.We accrue for costsincurredas the servicesare being providedby monitoringthe statusof specificactivitiesand the invoicesreceivedfromour externalserviceproviders.We adjustour accrued expensesas actualcostsbecomeknown.

Paymentsassociatedwith licensingagreementsto acquirelicensesto develop, use, manufactureand commercializeproductsthathave not reachedtechnologicalfeasibilityand do not have alternatecommercialuse are expensed as incurred.Wherecontingentmilestonepaymentsare due to thirdpartiesunder researchand developmentarrangementsor licenseagreements,the milestonepaymentobligationsare expensed whenthe milestoneresultsare probableand estimable,which is generallyupon achievementof milestones.

We expectour researchand developmentexpensesto increasesubstantiallyfor the foreseeablefutureas wecontinuethe developmentof BIO89-100 and continueto investin researchand developmentactivities.The processof conductingthe necessaryclinicalresearchto obtainregulatoryapprovalis costlyand timeconsuming, and the successfuldevelopmentof BIO89-100 and any futureproductcandidatesis highly uncertain.Tothe extentthatBIO89-100 continuesto advance into largerand laterstageclinicaltrials,our expenseswill increase substantiallyand may becomemorevariable.The actualprobabilityof successfor BIO89-100 or any future productcandidatemay be affectedby a varietyof factors,includingthe safetyand efficacyof our product candidates,investmentin our clinicalprograms,manufacturingcapabilityand competitionwith otherproducts. Asa result,weare unable to determinethe timingof initiation,durationand completioncostsof our researchand developmenteffortsor whenand to what extentwewill generaterevenuefromthe commercializationand saleof BIO89-100 or any futureproductcandidate.

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General andAdministrative Expenses

Generaland administrativeexpensesconsistprimarilyof personnelcosts,expensesfor outside professionalservices,includinglegal,human resource,auditand accountingservices,consultingcostsand allocatedfacilitiescosts.Personneland relatedcostsconsistof salaries,benefitsand share-basedcompensation for personnelin executive,financeand otheradministrativefunctions.Facilitiescostsconsistof rentand maintenanceof facilities.We expectour generaland administrativeexpensesto increasefor the foreseeable futureas weincreasethe sizeof our administrativefunctionto supportthe growth of our businessand support our continuedresearchand developmentactivities.

Other Expenses, Net

Other expenses,net primarily consistsoftherevaluationofourconvertiblepreferredstockliability, prior to extinguishment upon our IPO.

Results of Operations

Years EndedDecember 31, 2020and2019

The followingtablesummarizesour resultsof operationsfor the periodspresented(in thousands):

	Year Ended December 31,
	2020			2019			Change
Operating expenses:
Research and development	$	36,199		$	21,346		$	14,853
General and administrative		13,156			5,294			7,862
Total operating expenses		49,355			26,640			22,715
Loss from operations		(49,355	)		(26,640	)		(22,715	)
Other expenses, net		(203	)		(30,562	)		30,359
Income tax benefit (expense)		59			(218	)		277
Net loss	$	(49,499	)	$	(57,420	)	$	7,921

Research andDevelopmentExpenses

The followingtablesummarizesthe period-over-periodchanges in researchand developmentexpenses for the periodsindicated (in thousands):

	Year Ended December 31,
	2020		2019		Change
Clinical development	$	13,613	$	5,453	$	8,160
Contract manufacturing		12,995		7,257		5,738
Preclinical costs		1,684		4,072		(2,388	)
Personnel-related expenses		6,841		3,688		3,153
Other expenses		1,066		876		190
Total research and development expenses	$	36,199	$	21,346	$	14,853

Researchand developmentexpensesincreasedby $14.9 million,or 70%, to $36.2 million in 2020 compared to $21.3 million in 2019. The changewas primarilydue to an increase of $8.2 millionin clinicaldevelopmentcosts as a result of our ongoing Phase 1b/2a study in NASH and the initiation of our Phase 2 trial (ENTRIGUE) in SHTG patients in the third quarter of 2020, as well as our new paired-biopsy histology cohort as part of the Phase 1b/2a trial in the fourth quarter of 2020, an increase of $5.7 million in contract manufacturing costs as a result of the manufacture of additional supplies for our ongoing clinical trials, including our clinical trials initiated in the second half of 2020 and an increase of $3.2 million in personnel-related costs, including share-based compensation, due to higher headcount. The increases were partially offset by a decrease of $2.4 million in preclinical costs. The timing of such preclinical costs is dependent upon the status and stage of our clinical trials.

55

GeneralandAdministrativeExpenses

Generaland administrativeexpensesincreasedby $7.9 million,or 149%, to $13.2 million in 2020 compared to $5.3 million in 2019. The change was primarilydue to an increaseof $4.2 millionin personnel-relatedcosts,includingshare-based compensation,drivenby higher headcount, an increaseof $2.5 millionin professionalservices including legal and accounting consulting service fees and an increase of $1.4 million in insurance related costs. The increases were partially offset by a decrease of $0.3 million in travel related expenses.

OtherExpenses, Net

Other expenses,net decreasedby $30.4 million to $0.2 million in 2020compared to $30.6 million in 2019. In 2019, other expenses, net consisted primarily of the revaluationof our convertiblepreferredstockliability which was extinguished upon our IPO in November 2019.

Liquidity andCapital Resources

To date, we have incurred significant net losses and negative cash flows from operations. Asof December 31, 2020, wehad availablecash, cash equivalents and short-term investments of $204.6 millionand an accumulateddeficitof $123.1 million. Prior to our IPO, we funded our operations from the issuance and sale of capital stock. In connection with our IPO, we issued and sold an aggregate of 6,100,390 shares of common stock at a price of $16.00 per share. We received proceeds of $87.7 million, net of underwriting discounts and commissions and estimated offering costs.

In April 2020, we entered into a secured term loan facility with an aggregate committed principal amount of up to $15.0 million. As of December 31, 2020, we had not drawn any amount under the term loan facility.

In July 2020, we completed an underwritten public offering of 3,047,040 shares of our common stock, including 397,440 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares, at a public offering price of $27.50 per share. Upon completion of the offering, we received gross proceeds of $83.8 million, before deducting underwriting discounts and commissions and offering expenses.

In September 2020, we completed an underwritten public offering of 3,025,000 shares of our common stock, at a public offering price of $28.00 per share. Upon completion of the offering, we received gross proceeds of $84.7 million, before deducting underwriting discounts and commissions and offering expenses.

Our primaryuse of cash is to fund operatingexpenses,which consistprimarilyof researchand developmentexpendituresrelatedto our lead productcandidate,BIO89-100. We plan to increaseour research and developmentexpensessubstantiallyfor the foreseeablefutureas wecontinuethe clinicaldevelopmentof our currentand futureproductcandidates.At thistime,due to the inherentlyunpredictablenatureof clinical development,wecannot reasonablyestimatethe costswewill incurand the timelinesthatwill be requiredto completedevelopment,obtainmarketingapproval,and commercializeour currentproductcandidateor any futureproductcandidates.For the samereasons,weare also unable to predictwhen,if ever, wewill generate revenuefromproductsalesor our currentor any futurelicenseagreementswhich wemay enterinto or whether, or when,if ever, wemay achieveprofitability.Clinicaland preclinicaldevelopmenttimelines,the probabilityof success,and developmentcostscan differmateriallyfromexpectations.In addition,wecannot forecastthe timingand amountsof milestone,royaltyand otherrevenuefromlicensingactivities,which futureproduct candidatesmay be subjectto futurecollaborations,whensuch arrangementswill be secured,if at all,and to what degreesuch arrangementswould affectour developmentplans and capitalrequirements.

Based on our researchand developmentplans, weexpectthatour existingcash, cash equivalents and short-term investments together with the proceeds available under our term loan facility,will be sufficientto fund our operationsthrough the second quarter of 2023.However, our operatingplans and otherdemandson our cash resourcesmay change as a resultof many factors,and wemay seek additionalfunds sooner than planned. There can be no assurancethatwewill be successfulin acquiringadditionalfunding at levelssufficientto fund our operationsor on termsfavorableto us.

56

Our futurefunding requirementswill depend on many factors,includingthe following:

• the progress,timing,scope, resultsand costsof our clinicaltrialsof BIO89-100 and preclinical studiesor clinicaltrialsof otherpotentialproductcandidateswemay choose to pursue in the future, includingthe abilityto enrollpatientsin a timelymannerfor our clinicaltrials;

• the costsand timingof obtainingclinicaland commercialsuppliesand validatingthe commercial manufacturingprocessfor BIO89-100 and any otherproductcandidateswemay identifyand develop;

• the cost, timingand outcomesof regulatoryapprovals;

• the timingand amountof any milestone,royaltyor otherpaymentsweare requiredto make pursuantto currentor any futurecollaborationor licenseagreements;

• costsof acquiringor in-licensingotherproductcandidatesand technologies;

• the termsand timingof establishingand maintainingcollaborations,licensesand othersimilar arrangements;

• the costsassociatedwith attracting,hiringand retainingadditionalqualifiedpersonnelas our businessgrows;

• our effortsto enhance operationalsystemsand hireadditionalpersonnelto satisfyour obligationsas a publiccompany, includingenhanced internalcontrolsover financialreporting;and

• the cost of preparing,filing,prosecuting,defendingand enforcingany patentclaimsand other intellectualpropertyrights.

We expectto continueto generatesubstantialoperatinglossesfor the foreseeablefutureas weexpand our researchand developmentactivities.We will continueto fund our operationsprimarilythrough utilizationof our currentfinancialresourcesand through additionalraisesof capital to advance our current product candidate through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future.However, thereis no assurancethatsuch funding will be availableto us or thatit will be obtainedon termsfavorableto us or will provideus with sufficientfunds to meetour objectives.Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

Tothe extentthatweraiseadditionalcapitalthrough partnershipsor licensingarrangementswith third parties,wemay have to relinquishvaluablerightsto our productcandidates,futurerevenuestreamsor research programsor to grantlicenseson termsthatmay not be favorableto us. If weraiseadditionalcapitalthrough publicor privateequityofferings,the ownership interestof our then-existingstockholderswill be diluted,and the termsof thesesecuritiesmay includeliquidationor otherpreferencesthatadverselyaffectour stockholders’ rights.If weraiseadditionalcapitalthrough debt financing,wemay be subjectto covenantslimitingor restrictingour abilityto take specificactions,such as incurringadditionaldebt, makingcapitalexpendituresor declaringdividends.If weare unable to obtainadequatefinancingwhenneeded, wemay have to delay, reduce the scope of or suspend one or moreof our clinicaltrialsor preclinicalstudies,researchand development programsor commercializationeffortsor grantrightsto develop and marketour productcandidateseven if we would otherwisepreferto develop and marketsuch productcandidatesourselves.

CashFlows

The followingtablesummarizesour cash flows for the periods presented(in thousands):

	Year Ended December 31,
	2020			2019
Net cash used in operating activities	$	(46,244	)	$	(25,460	)
Net cash used in investing activities		(106,832	)		(139	)
Net cash provided by financing activities		157,924			107,702
Net increase in cash and cash equivalents, and    restricted cash	$	4,848		$	82,103

57

Net CashUsed in Operating Activities

During the year ended December 31, 2020, net cash used in operatingactivitieswas $46.2 million, which consistedof a net loss of $49.5 million and a net change of $1.0 million in our net operating assets and liabilities,partiallyoffsetby non-cashchargesof $4.3 million. The change in our operatingassetsand liabilitieswas primarilydue to a $3.6 millionincreasein prepaid and other current assetsdue to the timingof payments as well as increased scale of operations and the initiation of clinical trials in the second half of 2020, offset in part by a $2.6 million increase in accounts payable and accrued expenses as we grew our operations.The non-cashchargesare primarilycomprised of $3.8 millionin share-based compensation, $0.3 million in amortization of premium on available-for-sale securities and $0.2 million in amortization of debt issuance costs.

During the year ended December 31, 2019, net cash used in operatingactivitieswas $25.5 million, which consistedof a net loss of $57.4 million,partiallyoffsetby non-cashchargesof $31.0 millionand a net change of $0.9 millionin our net operatingassetsand liabilities.The non-cashchargesare primarilycomprised of the revaluationof our convertiblepreferredstockliabilityof $30.6 million and$0.4 millionin share-based compensation.The change in our operatingassetsand liabilitieswas primarilydue to a $2.9 millionincreasein accounts payable and accruedexpensesas wegrew our operations, offset in part by a $2.0 millionincreasein other current assets and other assetsdue to the timingof payments.

Net CashUsed in InvestingActivities

During the year ended December 31, 2020, net cash used in investing activities was $106.8 million, which consistedof $118.9 million in purchasesof available-for-sale securities and $0.1 million in purchases of property and equipment, offset in part by $12.2 million in proceeds from maturities of available-for-sale securities.

During the yearended December 31, 2019, net cash used in investing activitiesconsistedof purchasesof property and equipment.

Net CashProvided by Financing Activities

During the year ended December 31, 2020 net cash provided by financingactivities was $157.9 million, whichconsisted of $157.7 million in net proceeds from the issuance of common stock from our public offerings and $0.4 million in proceeds from the issuance of common stock upon exercise of stock options and employee share purchase plan (“ESPP”) purchases, offset in part by a $0.2 million payment of debt issuance costs.

During the yearended December 31, 2019 net cash providedby financingactivitieswas $107.7 million, which consistedof $87.7 million in net proceeds from our initial public offering and $20.0 million in net proceeds fromthe issuanceand saleof our convertiblepreferredstock.

Contractual ObligationsandOtherCommitments

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934 and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

Off-BalanceSheet Arrangements

We have not enteredinto any off-balancesheetarrangements,as definedin the rulesand regulationsof the SEC,and do not have any holdingsin variableinterestentities.

CriticalAccounting PolicesandEstimates

Our management’sdiscussionand analysisof our financialconditionand resultsof operationsis based on our consolidatedfinancialstatements,which have been preparedin accordancewith United Statesgenerally acceptedaccountingprinciples (“GAAP”). The preparationof theseconsolidatedfinancialstatementsrequiresus to makeestimatesand assumptionsthataffectthe reportedamountsof assetsand liabilitiesand the disclosureof contingent

58

assetsand liabilitiesas of the date of the consolidatedfinancialstatements,as well as the reported expensesincurredduring the reportingperiods.Our estimatesare based on our historicalexperienceand on variousotherfactorsthatwebelieveare reasonableunder the circumstances,the resultsof which formthe basis for makingjudgmentsabout the carryingvalue of assetsand liabilitiesthatare not readilyapparentfromother sources.Actual resultsmay differfromtheseestimatesunder differentassumptionsor conditions.We believe thatthe accountingpoliciesdiscussedbelow are criticalto understandingour historicaland futureperformance, as thesepoliciesrelateto the moresignificantareasinvolvingmanagement’sjudgmentsand estimates.

While our significant accounting policies are described in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

Accrued Research and Development Expenses

We record accrued expenses for estimated preclinical and clinical trial and research expenses related to the services performed but not yet invoiced pursuant to contracts with research institutions, contract research organizations and clinical manufacturing organizations that conduct and manage preclinical studies, and clinical trials, and research services on our behalf. Payments for these services are based on the terms of individual agreements and payment timing may differ significantly from the period in which the services were performed. Our estimates are based on factors such as the work completed, including the level of patient enrollment. We monitor patient enrollment levels and related activity to the extent reasonably possible and make judgments and estimates in determining the accrued balance in each reporting period. Our estimates of accrued expenses are based on the facts and circumstances known at the time. If we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. As actual costs become known, we adjust our accrued expenses. To date, we have not experienced significant changes in our estimates of preclinical studies and clinical trial accruals.

Share-Based Compensation

We measure compensation expense related to share-based awards granted to employees, directors, and non-employee service providers, including stock options, based on the estimated fair value. We estimate the fair value of the awards on the date of grant, and the resulting share-based compensation, using the Black-Scholes option-pricing model. The grant date fair value of the share-based awards, which have graded vesting, is recognized as an expense using the straight-line method over the requisite service period of each award, which is generally the vesting period of the respective awards. We recognize forfeitures as they occur.

We use the Black-Scholes option-pricing model to estimate the fair value of stock option awards that requires the use of subjective assumptions to determine the fair value of share-based awards. These assumptions include:

• Expected volatility—Since we have limited trading history for our common stock due to our short trading history, the expected volatility is estimated based on the volatility of comparable publicly traded biotechnology companies during the equivalent period of the calculated expected term of the options granted. The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty.

• Expected term—The expected term of options granted to employees and directors is determined using the “simplified” method. Under this approach, the expected term is presumed to be the midpoint between the weighted-average vesting term and the contractual term of the option. The simplified method makes the assumption that the employee will exercise share options evenly over the period when the share options are vested and ending on the date when the share options would expire. The expected option term for options granted to non-employees is estimated on a grant-by-grant basis.

• Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon bonds in effect on the grant date for periods with an equivalent expected term as the option.

• Expected dividend—We have never paid dividends and have no foreseeable plans to pay dividends on our shares of common stock. Therefore, we use an expected dividend of zero.

59

We will continue to use judgment in evaluating the expected volatility and expected term utilized for our share-based compensation calculations on a prospective basis.

Recent Accounting Pronouncements

See Note 2 to our consolidatedfinancialstatementsappearing under Part II Item 8for more informationabout recentaccountingpronouncements,the timingof theiradoption,and our assessment,to the extentwehave made one yet, of theirpotentialimpacton our financialconditionof resultsof operations.

JOBSAct Accounting Election

We are an emerginggrowth company,as definedin the JOBSAct. Under the JOBSAct, emerging growth companiescan delay adoptingnewor revisedaccountingstandardsissuedsubsequentto the enactmentof the JOBSAct untilsuch timeas those standardsapply to privatecompanies.

We have electedto use thisextendedtransitionperiodto enableus to complywith newor revised accountingstandardsthathave differenteffectivedatesfor publicand privatecompaniesuntilthe earlierof the date we(i)are no longeran emerginggrowth company or (ii)affirmativelyand irrevocablyopt out of the extendedtransitionperiodprovidedin the JOBSAct. Asa result,our consolidatedfinancialstatementsand our interimconsolidated financialstatementsmay not be comparableto companiesthatcomplywith new or revisedaccountingpronouncements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934 and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

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Item 8. Financial Statements and Supplementary Data.

89BIO, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firms	62
Financial Statements:
Consolidated Balance Sheets	64
Consolidated Statements of Operations and Comprehensive Loss	65
Consolidated Statements of Stockholders’ Equity	66
Consolidated Statements of Cash Flows	67
Notes to Consolidated Financial Statements	68

61

Report of Independent RegisteredPublic Accounting Firm

To the Stockholders and the Board of Directors
89bio, Inc.:

Opinion on theConsolidated Financial Statements

We have audited the accompanying consolidated balance sheet of 89bio, Inc. and subsidiaries (the Company) as of December 31, 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2020.

San Francisco, California
March 24, 2021

62

Report of Independent RegisteredPublic Accounting Firm

Tothe stockholders and the Board of Directorsof 89bio, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of 89bio, Inc. and subsidiaries (the “Company”) as of December 31, 2019, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flow, for the year ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

San Francisco, California

March 18, 2020

We began serving as the Company’s auditor in 2019. In 2020, we became the predecessor auditor.

63

89bio, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	As of December 31,
	2020			2019
Assets
Current assets:
Cash and cash equivalents	$	98,183		$	93,335
Restricted cash		25			25
Short-term investments		106,446			—
Prepaid and other current assets		5,548			1,966
Total current assets		210,202			95,326
Property and equipment, net		166			155
Other assets		706			72
Total assets	$	211,074		$	95,553
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,065		$	989
Accrued expenses		6,048			4,620
Total current liabilities		8,113			5,609
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares    authorized as of December 31, 2020 and 2019, respectively, no shares    issued and outstanding as of December 31, 2020 and 2019, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares    authorized as of December 31, 2020 and 2019, respectively; 19,931,660    and 13,788,982 shares issued and outstanding as of December 31, 2020    and 2019, respectively		20			14
Additional paid-in capital		326,046			163,526
Accumulated other comprehensive loss		(10	)		—
Accumulated deficit		(123,095	)		(73,596	)
Total stockholders’ equity		202,961			89,944
Total liabilities and stockholders’ equity	$	211,074		$	95,553

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

64

89bio, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

	Year Ended December 31,
	2020			2019
Operating expenses:
Research and development	$	36,199		$	21,346
General and administrative		13,156			5,294
Total operating expenses		49,355			26,640
Loss from operations		(49,355	)		(26,640	)
Other expenses, net		(203	)		(30,562	)
Net loss before income tax		(49,558	)		(57,202	)
Income tax benefit (expense)		59			(218	)
Net loss	$	(49,499	)	$	(57,420	)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities		8			—
Foreign currency translation adjustments		(18	)		—
Total other comprehensive loss	$	(10	)	$	—
Comprehensive loss	$	(49,509	)	$	(57,420	)
Net loss per share, basic and diluted	$	(3.08	)	$	(24.49	)
Weighted-average shares used to compute net loss per share,    basic and diluted		16,087,785			2,344,191

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

65

89bio, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

													Accumulated
											Additional		Other						Total
	Convertible Preferred Stock						Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders’
	Shares			Amounts			Shares		Amounts		Capital		Loss			Deficit			Equity
Balance as of December 31, 2018		24,000,000		$	23,073			611,226	$	1	$	118	$	—		$	(16,176	)	$	(16,057	)
Issuance of convertible preferred stock, net of    issuance costs of $0 and settlement of    the convertible preferred stock liability of $6,673		20,000,000			26,673			—		—		—		—			—			—
Conversion of convertible preferred stock into    common stock upon completion of initial public    offering		(44,000,000	)		(49,746	)		7,077,366		7		49,739		—			—			49,746
Issuance of common stock in connection with    initial public offering, net of issuance costs    of $3,083		—			—			6,100,390		6		87,685		—			—			87,691
Capital contribution related to extinguishment of convertible    preferred stock liability		—			—			—		—		25,595		—			—			25,595
Share-based compensation		—			—			—		—		389		—			—			389
Net loss		—			—			—		—		—		—			(57,420	)		(57,420	)
Balance as of December 31, 2019		—			—			13,788,982		14		163,526		—			(73,596	)		89,944
Issuance of common stock upon public offerings,    net of issuance costs of $1,208		—			—			6,072,040		6		157,674		—			—			157,680
Issuance of common stock upon exercise of stock options		—			—			63,366		—		271		—			—			271
Issuance of common stock upon ESPP purchase		—			—			7,272		—		134		—			—			134
Issuance of common stock warrant in connection with debt financing		—			—			—		—		634		—			—			634
Share-based compensation		—			—			—		—		3,807		—			—			3,807
Net loss		—			—			—		—		—		—			(49,499	)		(49,499	)
Other comprehensive loss		—			—			—		—		—		(10	)		—			(10	)
Balance as of December 31, 2020		—		$	—			19,931,660	$	20	$	326,046	$	(10	)	$	(123,095	)	$	202,961

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

66

89bio, Inc.

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2020			2019
Cash flows from operating activities:
Net loss	$	(49,499	)	$	(57,420	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		60			17
Share-based compensation		3,807			389
Deferred tax assets		(69	)		20
Revaluation of convertible preferred stock liability		—			30,597
Amortization of premium on available-for-sale securities		268			—
Amortization of debt issuance costs		230			—
Changes in operating assets and liabilities:
Prepaids and other current assets		(3,600	)		(1,918	)
Other assets		—			(72	)
Accounts payable		1,131			(520	)
Accrued expenses		1,428			3,447
Net cash used in operating activities		(46,244	)		(25,460	)
Cash flows from investing activities:
Purchases of available-for-sale securities		(118,895	)		—
Proceeds from maturities of available-for-sale securities		12,189			—
Purchases of property and equipment		(126	)		(139	)
Net cash used in investing activities		(106,832	)		(139	)
Cash flows from financing activities:
Proceeds from issuance of common stock upon public offerings,    net of issuance costs		157,680			—
Proceeds from issuance of common stock upon initial public offering,    net of issuance costs		—			87,691
Proceeds from issuance of convertible preferred stock and convertible preferred    stock liability, net of issuance costs		—			20,000
Proceeds from issuance of common stock upon stock option exercises		271			—
Proceeds from issuance of common stock upon ESPP purchases		134			—
Proceeds from issuance of common stock		—			11
Payment of debt issuance costs		(161	)		—
Net cash provided by financing activities		157,924			107,702
Net increase in cash and cash equivalents, and restricted cash		4,848			82,103
Cash and cash equivalents, and restricted cash at beginning of period		93,360			11,257
Cash and cash equivalents, and restricted cash at end of period	$	98,208		$	93,360
Components of cash and cash equivalents, and restricted cash:
Cash and cash equivalents	$	98,183		$	93,335
Restricted cash		25			25
Total cash and cash equivalents, and restricted cash	$	98,208		$	93,360
Supplemental disclosures of noncash information:
Issuance of common stock warrant in connection with term loan facility	$	634		$	—
Property and equipment purchases included in accounts payable	$	—		$	55
Cash paid for taxes	$	142		$	106
Conversion of convertible preferred stock into common stock at close of initial    public offering	$	—		$	49,746
Capital contribution related to extinguishment of convertible preferred    stock liability	$	—		$	25,595

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

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89bio, Inc.

Notes to Consolidated Financial Statements

1. Organization and Basis of Presentation

Description of Business

89bio, Inc. (“89bio” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. The Company’s lead product candidate, BIO89-100, a specifically engineered glycoPEGylated analog of fibroblast growth factor 21, is currently being developed for the treatment of nonalcoholic steatohepatitis and for the treatment of severe hypertriglyceridemia.

89bio, Inc. was formed as a Delaware corporation in June 2019, for the purpose of completing an initial public offering (“IPO”) and related transactions in order to carry on the business of 89Bio Ltd., which was incorporated in Israel in January 2018.

The Company completed an internal reorganization transaction in September 2019, pursuant to which 89Bio Ltd. became a wholly owned subsidiary of 89bio, Inc. (the “Reorganization”). As part of the Reorganization, all of the equity holders of 89Bio Ltd. exchanged 100% of the equity of 89Bio Ltd. for 100% of the equity of 89bio, Inc. The Reorganization was considered a transaction between entities under common control.  

Public Offerings

In November 2019, 89bio, Inc. completed its IPO, pursuant to which it issued and sold an aggregate of 6,100,390 shares of common stock (inclusive of 795,703 shares pursuant to the underwriters’ option to purchase additional shares), at the IPO price of $16.00 per share, resulting in net proceeds of $87.7 million after deducting underwriting discounts and commissions of $6.8 million and other offering expenses of $3.1 million. Upon the closing of the IPO, the Company’s outstanding convertible preferred stock automatically converted into 7,077,366 shares of common stock of 89bio, Inc. based on a proportional adjustment to the conversion ratio of the convertible preferred stock on a 1-for-6.217 basis.

In July 2020, the Company completed an underwritten public offering of 3,047,040 shares of its common stock (inclusive of 397,440 shares pursuant to the underwriters’ option to purchase additional shares), at the public offering price of $27.50 per share. The Company raised a total of $83.8 million in gross proceeds from the offering, or approximately $78.2 million in net proceeds after deducting underwriting discounts and commissions of $5.0 million and offering costs of approximately $0.6 million.

In September 2020, the Company completed an underwritten public offering of 3,025,000 shares of its common stock, at a public offering price of $28.00 per share. The Company raised a total of $84.7 million in gross proceeds from the offering, or approximately $79.5 million in net proceeds after deducting underwriting discounts and commissions of $4.6 million and offering costs of approximately $0.6 million.

Liquidity

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. To date, the Company has not generated revenues from its activities and has incurred substantial operating losses. Management expects the Company to continue to generate substantial operating losses for the foreseeable future until it completes development of its products and seeks regulatory approvals to market such products. The Company had cash, cash equivalents and short-term investments of $204.6 million as of December 31, 2020.

The Company expects that its cash, cash equivalents and short-term investments as of December 31, 2020, together with proceeds available from the Company’s term loan (see Note 6), will be sufficient to fund operating expenses and capital expenditure requirements for a period of at least one year from the date these audited consolidated financial statements are filed with the Securities and Exchange Commission (“SEC”).

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89bio, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassification

Certain prior year footnote amounts have been updated for consistency with the current year presentation. Such reclassification has no effect on the consolidated financial statements.

Foreign Currencies

Certain transactions during the years ended December 31, 2020 and 2019 were denominated in currencies other than the U.S. dollar. Gains and losses from foreign currency transactions were not material for all periods presented and are reflected in the consolidated statements of operations and comprehensive loss as a component of other expenses, net. The Company’s subsidiary in Lithuania uses the Euro as its functional currency for financial reporting. The re-measurement from Euros to U.S. dollars results in translation gain and loss adjustments, which are reflected as a component of comprehensive loss as foreign currency translation adjustments.  

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not limited to the fair value of stock options and certain accrued expenses. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

Fair Value Measurements

Financial assets and liabilities are recorded at fair value on a recurring basis in the balance sheets. The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable, and accrued expenses approximate to their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;

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

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89bio, Inc.

Notes to Consolidated Financial Statements

Concentrations of Credit Risk

Financialinstrumentsthatpotentiallysubjectthe Company to a concentrationof creditriskconsist primarilyof cash and cash equivalents.Bankdepositsare held by accreditedfinancialinstitutionsand these depositsmay at timesbe in excessof insuredlimits. The Company limitsitscreditriskassociatedwith cash and cash equivalentsby placingthemwith financialinstitutionsthatit believesare of high quality.The Company has not experiencedany losseson itsdepositsof cash or cash equivalents.

Other Risks and Uncertainties

The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, the Company’s early stages of clinical drug development; the Company’s ability to advance product candidates into, and successfully complete, clinical trials on the timelines it projects; the Company’s ability to adequately demonstrate sufficient safety and efficacy of its product candidates; the Company’s ability to enroll patients in its ongoing and future clinical trials; the Company’s ability to successfully manufacture and supply its product candidates for clinical trials; the Company’s ability to obtain additional capital to finance its operations; uncertainties related to the projections of the size of patient populations suffering from the diseases the Company is targeting; the Company’s ability to obtain, maintain, and protect its intellectual property rights; developments relating to the Company’s competitors and its industry, including competing product candidates and therapies; general economic and market conditions; and other risks and uncertainties.

The Company’s product candidates will require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company.

The ongoing COVID-19 pandemic has disrupted and may continue to disrupt the Company’s business and delay its preclinical and clinical programs and timelines. The Company does not yet know the full extent of potential delays to clinical trials, which could prevent or delay the Company from obtaining approval for BIO89-100. The extent to which the COVID-19 pandemic may impact the Company’s future operating results and financial condition is uncertain.

Segment Reporting

The Company has one operatingsegment.The Company’s chiefoperatingdecisionmaker,itsChief ExecutiveOfficer,managesthe Company’s operationson a consolidatedbasisfor the purposesof allocating resourcesand evaluatingfinancialperformance.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper that are stated at fair value.

Restricted Cash

Restricted cash consists of a money market account that serves as collateral for the Company’s operating lease agreement for its facility in Israel.

Investments

Investments have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase. Generally, investments with original maturities beyond three months at the date of purchase are classified as short-term because it is management’s intent to use the investments to fund current operations or to make them available for current operations.  

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89bio, Inc.

Notes to Consolidated Financial Statements

Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in other expenses, net. The cost of investments sold is based on the specific-identification method. There are no material realized gains or losses on investments for the periods presented. Interest on available-for-sale securities is included in other expenses, net and is not material for all periods presented.

PropertyandEquipment, Net

Propertyand equipmentare statedat cost, lessaccumulateddepreciation.Depreciationis calculatedon a straight-linebasisover the estimatedusefullivesof the relatedassets,generallyrangingfromthreeto seven years.Leaseholdimprovementsare amortizedon a straight-linebasisover the shorterof the assets’estimated usefullifeor the remainingtermof the lease.Upon retirement or sale of the assets, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gains or losses are recorded in the consolidated statements of operations and comprehensive loss. Maintenanceand repaircostsare expensed as incurred.

Impairmentof Long-Lived Assets

The Company periodicallyevaluatesitslong-livedassets,includingpropertyand equipment,for impairmentwhenever eventsor changes in businesscircumstancesindicatethatthe carryingamountof the assets or group of assetsmay not be fullyrecoverable.If indicatorsof impairmentexistand the undiscountedfuture cash flows thatthe assetsare expectedto generateare lessthan the carryingvalue of the assets,the Company reducesthe carryingamountof the assetsthrough an impairmentcharge,to theirestimatedfairvaluesbased on a discountedcash flow approachor, whenavailableand appropriate,to comparablemarketvalues.There were no such indicatorsfor the periodspresented.

Accrued Research and Development Expenses

The Company estimates preclinicaland clinicalstudy and researchexpensesbased on the servicesperformed,pursuantto contractswith researchinstitutionsthatconduct and managepreclinicaland clinicalstudiesand researchserviceson itsbehalf. The Company recordsthe costsof researchand developmentactivitiesbased upon the estimatedamountof servicesprovidedbut not yet invoicedand includesthesecostsin accruedexpensesin the consolidatedbalance sheets.These costsare a componentof the Company’s researchand developmentexpenses.

The Company accrues for thesecostsbased on factorssuch as estimatesof the work completedand in accordancewith agreements establishedwith itsthird-partyserviceprovidersunder the serviceagreements.The Company makesjudgmentsand estimatesin determiningthe accruedexpensesbalance.Asactualcostsbecomeknown,the Company adjustsitsaccruedexpenses. The Company has not experiencedany materialdifferencesbetween accruedcostsand actualcostsincurred.However, the statusand timingof actualservicesperformedmay vary fromthe Company’s estimates,resultingin adjustmentsto expense in futureperiods.Changes in theseestimates thatresultin materialchanges to the Company’s accrued expensescould materiallyaffectthe Company’s resultsof operations.Contingentmilestonepayments,if any, are expensed whenthe milestoneresultsare probable and estimable, which is generallyupon achievementof the milestone.

Leases

The Company leasesitsofficefacilitiesunder non-cancelableoperatingleaseagreementsand recognizes relatedrentexpense on a straight-linebasisover the termof the lease.

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89bio, Inc.

Notes to Consolidated Financial Statements

Convertible Preferred Stock Liability

The freestanding instruments related to the commitment by the Series A convertible preferred stockholders to purchase and by the Company to sell its Series A convertible preferred stock in subsequent closings, contingent upon the achievement of certain developmental milestones and approval by the board of directors, at a fixed price per stock, were considered a liability (or an asset), measured at fair value as the shares underlying the rights contained liquidation preferences upon certain “deemed liquidation events” that were not solely within the Company’s control and which were considered in-substance contingent redemption features. The instruments were subject to revaluation at each balance sheet date until settlement or extinguishment, with revaluations recognized as either a component of other expenses, net in the consolidated statements of operations and comprehensive loss, or additional paid-in capital in the consolidated balance sheets. Upon the completion of the Company’s IPO, the remaining shares of convertible preferred stock that were previously issuable under subsequent closings were no longer issuable. Accordingly, the preferred stock liability was extinguished and because the transaction occurred between related parties, the resulting $25.6 million was accounted for as a capital contribution by the preferred stockholders.  

Research andDevelopmentExpenses

Researchand developmentexpensesconsistprimarilyof costsincurredfor the developmentof the Company’s lead productcandidate,BIO89-100. Researchand developmentexpensesconsistprimarilyof externalcostsrelatedto acquiringand licensingpatentsand intellectualproperties,preclinicaland clinical developmentand relatedsupplies, and personnelcosts.Personnelcostsconsistof salaries,employeebenefitsandshare-basedcompensationfor individualsinvolvedin researchand developmentefforts. Paymentsassociatedwith licensingagreementsto acquirelicensesto develop, use, manufactureand commercializeproductsthathave not reachedtechnologicalfeasibilityand do not have alternatecommercialuse are expensed as incurred.

Share-Based Compensation

The Company measuresitsshare-basedpaymentawards made to employees,directors,andnon-employeeserviceprovidersbased on estimated fair values and recognizes compensation over the requisite service period.

The Company estimatesthe fairvalue of share-basedpaymentawards on the date of grantusing aBlack-Scholesoption pricingmodel.The Company recognizescompensationfor the value of share-basedpaymentawards, which have graded vesting,using the straight-linemethodover the requisiteserviceperiodof each award. The Company accountsfor forfeituresas they occur.

The Black-Scholesoption pricingmodelrequiresa numberof assumptions,of which the most significantare expectedvolatility,expectedoption term(thetimefromthe grantdate untilthe optionsare exercisedor expire),risk-freerate,and expecteddividedrate. These assumptions include:

• Expected volatility—Since the Company has limited trading history for its common stock due to its short trading history, the expected volatility is estimated based on the volatility of comparable publicly traded biotechnology companies during the equivalent period of the calculated expected term of the options granted. The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty.

• Expected term—The expected term of options granted to employees and directors is determined using the “simplified” method. Under this approach, the expected term is presumed to be the midpoint between the weighted-average vesting term and the contractual term of the option. The simplified method makes the assumption that the employee will exercise share options evenly over the period when the share options are vested and ending on the date when the share options would expire. The expected option term for options granted to non-employees is estimated on a grant-by-grant basis.

• Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon bonds in effect on the grant date for periods with an equivalent expected term as the option.

• Expected dividend—The Company has never paid dividends and has no foreseeable plans to pay dividends on its shares of common stock. Therefore, an expected dividend of zero is used.

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89bio, Inc.

Notes to Consolidated Financial Statements

Income Taxes

Incometaxesare accountedfor under the assetand liabilitymethod.Under thismethod,deferredtax assetsand liabilitiesare recognizedfor the futuretax consequencesattributableto differencesbetween the consolidatedfinancialstatementscarryingamountsof existingassetsand liabilitiesand theirrespectivetax bases and operatingloss and tax creditcarryforwards.Deferredtax assetsand liabilitiesare measuredusing enactedtax ratesappliedto taxableincomein the yearsin which those temporarydifferencesare expectedto be realized.The effecton deferredtax assetsand liabilitiesof a change in tax ratesis recognizedas incomeor loss in the period thatincludesthe enactmentdate. Avaluationallowanceis establishedwhennecessaryto reducedeferredtax assetsto the amountexpectedto be realized.Interestand penaltiesrelatedto unrecognizedtax benefitsare includedwithin the provisionof incometax.

Basic andDiluted Net Loss per Share

Basic loss per shareis computedby dividingthe net loss by the weighted averagenumberof common stockoutstandingduring the period.Dilutedloss per shareis computedby dividingthe net loss by the weighted averagenumberof common stockoutstandingtogetherwith the numberof additionalcommon stockthatwould have been outstandingif allpotentiallydilutivecommon stockhad been issued.Since the Company is in a loss positionfor the periodspresented,basicnet loss per shareis the sameas dilutednet loss per sharesincethe effects of potentiallydilutivesecuritiesare antidilutive.

ComprehensiveLoss

The Company’s comprehensive loss is comprised of changes in unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments.

Recently Adopted Accounting Standards

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The Company adopted this standard effective from January 1, 2020, with the removed and modified disclosures adopted on a retrospective basis and the new disclosures adopted on a prospective basis. The standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02—Leases (“ASU 2016-02”), requiring the recognition of lease assets and liabilities on the balance sheet. The standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The standard is effective for public entities for fiscal years beginning after December 15, 2018 and for nonpublic entities for fiscal years beginning after December 15, 2021. As an emerging growth company, ASU 2016-02 is effective for the Company for the year ending December 31, 2022 and interim periods within the year ending December 31, 2023. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

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89bio, Inc.

Notes to Consolidated Financial Statements

3. Fair Value Measurements

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2020 (in thousands):

		As of December 31, 2020
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	Cost		Gains		Losses			Fair Value
Money market funds	Level 1	$	46,134	$	—	$	—		$	46,134
Commercial paper	Level 2		76,605		—		(2	)		76,603
Agency bonds	Level 2		29,654		15		—			29,669
Corporate debt securities	Level 2		11,890		—		(6	)		11,884
U.S. government bonds	Level 2		7,093		—		—			7,093
Municipal bonds	Level 2		5,592		2		(1	)		5,593
U.S. treasury bills	Level 2		4,680		—		—			4,680
Agency discount securities	Level 2		200		—		—			200
Total cash equivalents and available-for-sale securities		$	181,848	$	17	$	(9	)	$	181,856
Classified as:
Cash equivalents									$	75,410
Short-term investments										106,446
Total cash equivalents and available-for-sale securities									$	181,856

The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2020 (in thousands):

	As of December 31, 2020
Within one year	$	160,304
After one year through two years		21,552
Total cash equivalents and available-for-sale securities	$	181,856

The Company did not hold any financial assets as of December 31, 2019.

The Company’s convertible preferred stock liability represented a Level 3 financial liability measured at fair value on a recurring basis prior to its extinguishment in the fourth quarter of 2019. Accordingly, there was no Level 3 financial liability outstanding during the year ended and as of December 31, 2020.

For the year ended December 31, 2019, changes in the fair value of the Company’s Level 3 financial liability measured on a recurring basis were as follows (in thousands):

	Year Ended December 31,
	2019
Beginning balance	$	1,671
Revaluation of convertible preferred stock liability    recorded in other expenses (income), net		30,597
Partial settlement of convertible preferred stock    liability upon third closing		(6,673	)
Capital contribution related to extinguishment of    preferred stock liability		(25,595	)
Ending balance	$	—

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89bio, Inc.

Notes to Consolidated Financial Statements

The Company’s convertible preferred stock liability resulted from the initial sale of Series A convertible preferred stock where the investors’ committed to purchase additional shares of Series A convertible preferred stock in subsequent closings, contingent upon the achievement by the Company of certain development milestones and approval by the board of directors. The investors’ commitment to purchase and the Company’s commitment to sell shares of Series A convertible preferred stock represented a freestanding instrument accounted for at fair value and re-measured at each reporting date. The Company estimated the fair value of this commitment using the Black Scholes option pricing model using the following assumptions:

	Year Ended
	December 31,
	2019
Stock price	$0.99-$2.57
Exercise price	$1.00
Expected term (years)	0.00-2.25
Expected volatility		72.0	%
Risk-free interest rate	0.0-2.4%

4. Consolidated Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

	As of December 31,
	2020			2019
Computer equipment	$	105		$	67
Furniture and office equipment		144			111
Total property and equipment		249			178
Less: accumulated depreciation		(83	)		(23	)
Total property and equipment, net	$	166		$	155

Depreciation expense for property and equipment was $60,000 and $17,000 for the years ended December 31, 2020 and 2019, respectively.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

	As of December 31,
	2020		2019
Accrued research and development expenses	$	2,884	$	2,326
Accrued employee and related expenses		2,552		1,396
Accrued professional and legal fees		453		573
Accrued other		159		325
Total accrued expenses	$	6,048	$	4,620

5. Commitments and Contingencies

Leases

In May 2018, the Company enteredinto an operatingleaseagreementfor itsfacilityin Israel.The lease term expires in April 2021 and the Company has an option to renew for an additional 12 months. Under the lease agreement,monthlyleasepaymentsare approximately$4,000.

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89bio, Inc.

Notes to Consolidated Financial Statements

In December 2019, the Company entered into an operating lease for its headquarters in San Francisco. The lease term is for 24 months, expiring in January 2022, and monthly lease payments during 2020 were approximately $17,500.

Future minimumleasepaymentsunder the Company’s non-cancellableoperatingleaseobligationsas of December31, 2020, are as follows(in thousands):

	As of December 31, 2020
2021	$	232
2022		8
Total future minimum annual payments	$	240

Rent expense was $273,000 and $159,000 for years ended December 31, 2020 and 2019, respectively. The Company has security deposit balances of $95,000, which are included in restricted cash and other assets in the consolidated balance sheets as of December 31, 2020 and 2019.

Asset Transfer and License Agreement with Teva Pharmaceutical Industries Ltd

In April 2018, the Company concurrently entered into two Asset Transfer and License Agreements (the “Teva Agreements”) with Teva Pharmaceutical Industries Ltd (“Teva”) under which it acquired certain patents and intellectual property relating to two programs: (1) Teva’s glycoPEGylated FGF21 program, including the compound TEV-47948 (BIO89-100), a glycoPEGylated long-acting FGF21 and (2) Teva’s development program of small molecule inhibitors of Fatty Acid Synthase. Pursuant to the Teva Agreements, the Company paid Teva an initial nonrefundable upfront payment of $6.0 million and the Company could be obligated to pay Teva up to $67.5 million under each program, for a total of $135.0 million, upon the achievement of certain clinical development and commercial milestones. In addition, the Company is obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales on all products containing the Teva compounds.

The Teva Agreements can be terminated (i) by the Company without cause, after the first anniversary of the effective date, upon 120 days’ written notice to Teva, (ii) by either party, if the other party materially breaches any of its obligations under the Agreements and fails to cure such breach within 60 days after receiving notice thereof, or (iii) by either party, if a bankruptcy petition is filed against the other party and is not dismissed within 60 days. In addition, Teva can also terminate the agreement related to the Company’s glycoPEGylated FGF21 program in the event the Company, or any of its affiliates or sublicensees, challenges any of the Teva patents licensed to the Company, and the challenge is not withdrawn within 30 days of written notice from Teva.

During the years ended December 31, 2020 and 2019, there were no license payment expenses related to the Teva Agreements.

6. Term Loan

Loan and Security Agreement

In April 2020, the Company and certain of its subsidiaries entered into a Loan and Security Agreement (the “Loan Agreement”) with the lenders referred to therein (the “Lenders”), and Silicon Valley Bank, as collateral agent. The Loan Agreement provides for (i) a secured term A loan facility (the “Term A Loan Facility”) of up to $10.0 million and (ii) a secured term B loan facility (the “Term B Loan Facility”) of up to $5.0 million that is available upon the Company satisfying certain milestones. The Term A Loan Facility matures on November 1, 2022, provided, that if the Term B Loan Facility is funded, the facilities instead mature on September 1, 2023. The loans will bear interest at the greater of (i) 4.50% and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b) 1.25%. As of December 31, 2020, the Company had not drawn any amount under the Loan Agreement.

In connection with the execution of the Loan Agreement, the Company agreed to issue the Lenders warrants to purchase shares of the Company’s common stock. In April 2020, the Company issued Silicon Valley Bank a

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89bio, Inc.

Notes to Consolidated Financial Statements

warrant to purchase 25,000 shares of the Company’s common stock with a warrant exercise price of $22.06 per share that is immediately exercisable. The initial expiration date ofApril 7, 2030 was changed to June 30, 2025 in connection with the July 2020 offering. The Company determined the fair value of the warrant at the issuance date by using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 0.75%, no dividends, expected volatility of 92.3% and expected term of 10.0 years. Upon issuance, the fair value allocated to the warrant of $0.6 million was recorded as a debt issuance cost and classified within other assets and met the requirements for equity classification within additional paid-in capital on the consolidated balance sheets. An additional warrant to purchase 8,333 shares of the Company’s common stock will be issued in connection with the Term B Loan Facility, if funded, with the exercise price determined on the Company’s stock price at the time of issuance.

Additionally, the Company incurred $0.2 million in closing costs that were recorded as debt issuance costs and classified within other assets on the consolidated balance sheets.

The deferred assets related to the debt issuance cost and warrant are recognized as interest expense over the duration of the Loan Agreement and are recorded within other expenses, net on the consolidated statements of operations and comprehensive loss. As of December 31, 2020, the remaining unamortized debt issuance costs classified within other assets on the consolidated balance sheet is $0.6 million.

7. Convertible Preferred Stock

In April 2018, the Company entered into the Series A Share Purchase Agreement (the “Series A SPA”), pursuant to which the investors committed to invest an aggregate amount of up to $60.0 million for the issuance of shares of Series A convertible preferred stock at a price of $1.00 per share in subsequent closings. Upon the completion of the Company’s IPO on November 13, 2019, there were 16,000,000 remaining shares of convertible preferred stock that were previously issuable that were no longer issuable. Accordingly, the preferred stock liability was extinguished and because the transaction occurred between related parties, the resulting $25.6 million was accounted for as a capital contribution by the preferred stockholders during 2019. Additionally, immediately prior to the completion of the Company’s IPO, all outstanding shares of convertible preferred stock automatically converted into 7,077,366 shares of common stock and the related carrying value was reclassified to common stock and additional paid-in capital.

8. Share-Based Compensation

Equity Incentive Plans

In 2018, the Company’s board of directors adopted the 89Bio Ltd. 2018 Equity Incentive Plan (the “2018 Plan”). In connection with the Reorganization in September 2019, the Company’s board of directors approved the 2019 Equity Incentive Plan (the “2019 Plan”), which became effective in September 2019. From and after the effective date of the 2019 Plan, the Company will no longer be making any future awards under the 2018 Plan.

The Company initially reserved 2,844,193 shares of common stock for issuance under the 2019 Plan. In addition, the number of shares of common stock reserved for issuance under the 2019 Plan will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2020, in an amount equal to 4% of the total number of shares of the Company’s capital stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. As of December 31, 2020, there were 1,433,991 shares of common stock available for issuance as future option grants under the 2019 Plan.

The Board determines the period over which options become exercisable and options generally vest over a four-year period, with 25% of options vesting on the first anniversary of employment, and thereafter, the remaining options vesting quarterly, over the following 36-month period. The options will expire within ten years from the date of grant. The exercise price of awards granted will not be less than the estimated fair value of the shares on the date of grant.

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89bio, Inc.

Notes to Consolidated Financial Statements

Employee Stock Purchase Plan

In October 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective following the date of the IPO. The Company initially reserved 225,188 shares of common stock for purchase under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on the first day of January for a period of up to ten years, in an amount equal to 1% of the total number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. Purchases will be accomplished through the participation of discrete offering periods and each offering is expected to be 6 months long. For each offering period, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s common stock on (1) the first trading day of the applicable offering period or (2) the last trading day of the applicable offering period.

The first six-month offering period under the ESPP commenced on January 1, 2020 and ended on June 30, 2020 and the second six-month offering period commenced on July 1, 2020 and ended on December 31, 2020. A total of 7,272 shares of common stock were purchased pursuant to the ESPP for the year ended December 31, 2020.As of December 31, 2020, there were 355,806 shares of common stock available for issuance under the ESPP.

The Company recorded share-based compensation for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020		2019
Research and development	$	1,250	$	30
General and administrative		2,557		359
Total share-based compensation	$	3,807	$	389

The fair value of option awards granted for the periods indicated was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

	Year Ended December 31,
	2020		2019
Expected term (years)	4.0-6.1		5.9-6.1
Contractual term (years)		10.0		10.0
Expected volatility	86.4-97.6%		61.8-87.6%
Risk-free interest rate	0.2-1.5%		1.6-2.6%
Expected dividend		—		—

The following table summarizes stock option activity for the year ended December 31, 2020:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
						(In years)		(In thousands)
Balance outstanding as of December 31, 2019		1,320,243		$	3.34		9.23	$	30,353
Granted		682,000			29.78
Exercised		(63,366	)		4.29
Cancelled		(40,482	)		2.87
Balance outstanding as of December 31, 2020		1,898,395			12.79		8.60	$	25,918
Exercisable as of December 31, 2020		535,084		$	2.58		8.11	$	11,684

During the year ended December 31, 2020, the estimated total grant date fair value of options vested was $0.8 million. The weighted-averagegrantdate fairvalue of optionsgrantedfor the years ended December 31, 2020 and 2019 was $21.88 and $2.90 per share, respectively.Asof December31, 2020, therewas $13.5 million of

78

89bio, Inc.

Notes to Consolidated Financial Statements

unrecognizedshare-based compensationcost relatedto stock optionsgrantedunder the 2019 Plan, which is expectedto be recognizedover a weighted-averageperiodof 2.5 years.

9. Income Taxes

Tax Rates Applicable to the Income of the Company and its Subsidiaries

As a result of the Reorganization described in Note 1, the Company is taxed according to U.S. federal and state tax laws and Israeli tax laws. The statutory tax rates applicable to the income of the Company and its subsidiaries are as follows:

	Year Ended December 31,
	2020			2019
89bio, Inc.		21	%		21	%
89Bio Ltd		23	%		23	%
89bio Management, Inc.		21	%		21	%
UAB 89bio Lithuania		15	%		15	%

The incometax benefit (expense)is comprisedof (in thousands):

	Year Ended December 31,
	2020			2019
Current:
Federal	$	(11	)	$	(167	)
State		1			(1	)
Foreign		—			(30	)
Total		(10	)		(198	)
Deferred:
Federal		69			(20	)
Total		69			(20	)
Income tax benefit (expense)	$	59		$	(218	)

DeferredIncome Taxes

Deferredincometaxesreflectthe net tax effectsof temporarydifferencesbetween the carryingamounts of assetsand liabilitiesfor financialreportingpurposesand the amountsused for incometax purposes. Significantcomponentsof the Company’s deferredtax assetsare as follows(in thousands):

	As of December 31,
	2020			2019
U.S. net operating loss carryforwards	$	11,342		$	1,916
Israel net operating loss carryforwards		3,978			4,328
Research and development expenses		5,392			3,419
Accrued expenses		635			349
Other		658			10
Total deferred tax assets		22,005			10,022
Less: valuation allowance		(21,936	)		(10,022	)
Net deferred tax assets	$	69		$	—

U.S. research and development expenses and accrued expenses disclosed for the year ended December 31, 2019 were previously reported in the 2019 notes to the consolidated financial statements as a component of other. The reclassification had no impact on the consolidated financial statements for the year ended December 31, 2019.

79

89bio, Inc.

Notes to Consolidated Financial Statements

Asof December31, 2020 and 2019, the Company recordeda valuationallowanceof $21.9million and $10.0 million, respectively,in respectof deferredtax assetsresultingfromtax loss carryforwardsand othertemporarydifferences.Realization of deferred tax assets is dependent upon future earnings, if any, the time and amount of which are uncertain. The Company regularly assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes based upon the weight of available evidence that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through an adjustment to income tax expense. The valuation allowance increased by $11.9 million in 2020, which primarily relates to significant taxable losses. The change in valuation allowance during 2020 also includes a partial release of the valuation allowance against deferred tax assets in Israel due to achievement of recent profitability and the expectation of future profitability in the jurisdiction, which decreased the valuation allowance by $69,000 in 2020. The valuation allowance increased by $6.5 million in 2019, which primarily relates to significant taxable losses. It also includes a recapture of the valuation allowance against the Company’s deferred tax assets in the United States due to the Reorganization that occurred in 2019, which increased the valuation allowance by $20,000.

AvailableCarryforwardTax Losses and Credits

As of December 31, 2020, the Company has an accumulatedtax loss carryforwardof approximately $54.1 million and $17.3 million for U.S. and Israeli tax purposes, respectively. As of December 31, 2019, the Company has an accumulated tax loss carryforward of approximately $9.1 million and $23.8 million for U.S. and Israeli tax purposes. Federal net operating losses generated after 2017 can be carried forward indefinitely but utilization will be limited to 80% of taxable income in the period that net operating losses are being utilized. Carryforward tax losses in Israel have no expiration date.

As of December 31, 2020, the Company has federal research and development credit carryforwards of approximately $0.6 million, which expire beginning in 2040. As of December 31, 2020 and 2019, the Company has state research and development credit carryforwards of approximately $0.7 million and $0.2 million, respectively, which will carry forward indefinitely.

Loss from Continuing Operations, Before Income Tax

The Company recorded a loss from continuing operations, before income tax for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020			2019
United States	$	(58,760	)	$	(19,502	)
Lithuania		(73	)		200
Israel		9,275			(37,900	)
Net loss before income tax	$	(49,558	)	$	(57,202	)

80

89bio, Inc.

Notes to Consolidated Financial Statements

Reconciliation of Income Tax Benefit (Expense)

The reconciliationof income tax benefit (expense) based on the statutorytax rateto the effectivetax rateis as follows(in thousands):

	Year Ended December 31,
	2020			2019
Income tax benefit computed at statutory rates	$	8,285		$	13,095
Research and development credits, net of   uncertain tax position		815			93
Change in valuation allowance		(11,914	)		(6,520	)
Change in Israel effective tax rate due to the 2019    reorganization		647			(734	)
Foreign rate differential		1,671			—
Revaluation of convertible preferred stock liability		—			(6,039	)
Other		555			(113	)
Income tax benefit (expense)	$	59		$	(218	)

Research and development credits, net of uncertain tax position disclosed for the year ended December 31, 2019 were previously reported in the 2019 notes to the consolidated financial statements as a component of other. The reclassification has no impact on the consolidated financial statements for the year ended December 31, 2019.

Utilization of the U.S. federal and state net operating losses and credit carryforwards may be subject to an annual limitation provided for in Section 382 of the Internal Revenue Code and similar state codes. Any annual limitation could result in a deferral of the utilization of the net operating loss and credit carryforwards.

Unrecognized Tax Benefits

During the years ended December 31, 2020 and 2019, the amount of gross unrecognized tax benefits increased by $0.3 million and $39,000, respectively. If the total amount of unrecognized tax benefits was recognized, it would not have an impact to the effective tax rate as it would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance.   

The Company recognizes interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2020 and 2019, such interest and penalties are not material.

The Company is subject to taxation in the United States, California, and several foreign jurisdictions. To date, the Company has not been subject to any federal or state income tax audits. The Company is currently under examination by the Israeli taxing authorities for 2019 and 2018. As of December 31, 2020, all tax years remain open to examination.

In March 2020 and December 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and the Consolidated Appropriation Act (“CAA”), respectively, as a result of the COVID-19 pandemic, which contain among other things, numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. The Company has evaluated the current legislation and at this time, does not anticipate the CARES Act or the CAA to have a material impact on its consolidated financial statements.

81

89bio, Inc.

Notes to Consolidated Financial Statements

10. Net Loss Per Share

The following outstanding potentially dilutive shares, including all outstanding stock options, have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect:

	Year Ended December 31,
	2020		2019
Stock options to purchase common stock		1,898,395		1,320,243
Shares available for future option grants		1,433,991		1,523,950
Total		3,332,386		2,844,193

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of December 31, 2020, our management, with the participation and supervision of our principal executive officer and our principal financial officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2020 to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Remediation Efforts on Previously Reported Material Weaknesses

During the audit of our consolidated financial statements for the period from January 18, 2018 (inception) to December 31, 2018, material weaknesses were identified in our internal control over financial reporting. A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis by the company’s internal controls. The material weaknesses that were identified related to the following:

• We did not have an internal finance department. Consequently, we lacked sufficient personnel with an appropriate level of knowledge and requisite U.S. generally accepted accounting principles expertise to identify, evaluate and account for complex and non-routine transactions and an adequate supervisory review structure that is needed to comply with financial reporting requirements.

• We did not have an adequate assessment of risks that could significantly impact internal controls over financial reporting and did not effectively design and monitor controls in response to the risks of material misstatement.

In 2019 and 2020, we implemented controls to remedy these material weaknesses. In 2019, we hired our Chief Financial Officer, principal accounting officer and additional qualified accounting and finance personnel, formalized our hiring practices and engaged financial consultants to enable the implementation of internal controls over financial reporting. In April 2020, we added a financial expert to the audit committee of the board of directors and in June 2020, we appointed a new board member, who also serves as audit committee chair.

As a result of these remediation activities and based on testing of the new and modified controls for operating effectiveness, our management concluded that we remediated the previously reported material weakness as of December 31, 2020.

83

Changes in Internal Control over Financial Reporting

Other than the changes in connection with the remediation of our previously disclosed material weaknesses, no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

As of December 31, 2020, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (“2013 Framework”). Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

Attestation Report of Registered Public Accounting Firm

As an emerging growth company, we are not required to provide and this Annual Report on Form 10-K does not include an attestation report on our internal control over financial reporting issued by the Company’s independent registered public accounting firm. Our auditors will not be required to formally opine on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 until we are no longer an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, and are no longer a non-accelerated filer.

Item 9B. Other Information.

None.

84

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 is incorporated herein by reference to information in our proxy statement for our 2021 Annual Meeting of Stockholders (the “2021 Proxy Statement”), which we expect to be filed with the SEC within 120 days of the end of our fiscal year ended December 31, 2020, including under the heading “Directors, Executive Officers and Corporate Governance.”

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code is available on our website located at www.89bio.com, under “Corporate Governance.” We intend to disclose on our website any amendments to, or waivers from, the code of business conduct and ethics that are required to be disclosed pursuant to the disclosure requirements of Item 5.05 of Form 8-K within four business days following the date of the amendment or waiver.

Item 11. Executive Compensation.

The information required by this Item 11 is incorporated herein by reference to information in our 2021 Proxy Statement, including under headings “Executive Compensation” and “Directors, Executive Officers and Corporate Governance.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 is incorporated herein by reference to information in our 2021 Proxy Statement, including under headings “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation-Securities Authorized for Issuance Under Equity Compensation Plans.”

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 is incorporated herein by reference to information in our 2021 Proxy Statement, including under headings “Directors, Executive Officers and Corporate Governance” and “Certain Relationships and Related Party Transactions.”

Item 14. Principal Accounting Fees and Services.

The information required by this Item 14 is incorporated herein by reference to information in our 2021 Proxy Statement, including under headings “Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm.”

85

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as a part of this report:

(1) Financial Statements

See Index to Consolidated Financial Statements at Part II Item 8 “Financial Statements and Supplementary Data.”

(2) Financial Statement Schedules

The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto under Part II Item 8 “Financial Statements and Supplementary Data.”

(3) Exhibits:

86

Exhibit Index

Exhibit Number	Description
2.1	Contribution and Exchange Agreement, dated as of September 17, 2019, by and among 89Bio Ltd., the Company and its shareholders (filed with the SEC as Exhibit 2.1 to the Company’s Form S-1 filed on October 11, 2019)
3.1	Second Amended and Restated Certificate of Incorporation of the Company (filed with the SEC as Exhibit 3.1 to the Company’s Form 8-K filed on November 15, 2019)
3.2	Second Amended and Restated Bylaws of the Company (filed with the SEC as Exhibit 3.2 to the Company’s Form 8-K filed on November 15, 2019)
4.1	Specimen common stock certificate of the Company (filed with the SEC as Exhibit 4.1 to the Company’s Form S-1/A filed on October 28, 2019)
4.2	Investors’ Rights Agreement, dated as of September 17, 2019, by and among the Company and certain of its shareholders (filed with the SEC as Exhibit 4.2 to the Company’s Form S-1 filed on October 11, 2019)
4.3*	Description of Securities
4.4	Form of Warrant to Purchase Common Stock for Silicon Valley Bank (filed with SEC as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 13, 2020)
10.1+	Form of Indemnification Agreement for directors and executive officers (filed with the SEC as Exhibit 10.1 to the Company’s Form S-1 filed on October 11, 2019)
10.2+	Amended and Restated 2019 Equity Incentive Plan and form of agreements thereunder (filed with the SEC as Exhibit 10.2 to the Company’s Form S-1/A filed on October 28, 2019)
10.3+	2019 Employee Stock Purchase Plan (filed with the SEC as Exhibit 10.3 to the Company’s Form S-1/A filed on October 28, 2019)
10.4+	Executive Employment Offer Letter, dated April 15, 2020, by and between the Company and Rohan Palekar (filed with the SEC as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2020)
10.5+	Amended and Restated Executive Employment Agreement, dated July 28, 2020, by and between 89Bio Ltd. and Ram Waisbourd (filed with the SEC as Exhibit 10.5 to the Company’s S-1 filed on September 14, 2020)
10.6+	Executive Employment Offer Letter, dated April 15, 2020, by and between the Company and Hank Mansbach (filed with the SEC as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on May 4, 2020)
10.7+	Executive Employment Offer Letter, dated April 15, 2020, by and between the Company and Quoc Le-Nguyen (filed with the SEC as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on May 4, 2020)
10.8+	Executive Employment Offer Letter, dated April 15, 2020, by and between the Company and Ryan Martins (filed with the SEC as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 4, 2020)
10.9+	Director Offer Letter, dated July 1, 2018, by and between 89Bio Ltd. and Michael Hayden (filed with the SEC as Exhibit 10.9 to the Company’s Form S-1 filed on October 11, 2019)
10.10+	Non-Employee Director Compensation Policy (filed with the SEC as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2020)

87

Exhibit Number	Description
10.11†	Asset Transfer and License Agreement—FGF21 by and among 89Bio Ltd., ratiopharm GmbH, Teva Branded Pharmaceutical Products R&D, Inc. and Teva Pharmaceutical Industries Ltd, dated as of April 16, 2018 (filed with the SEC as Exhibit 10.11 to the Company’s Form S-1 filed on October 11, 2019)
10.12+	Reagent Supply and Technology Transfer Agreement by and between 89Bio Ltd. and Teva Biotech GmbH, dated as of April 16, 2018, as amended (filed with the SEC as Exhibit 10.12 to the Company’s Form S-1 filed on October 11, 2019)

10.13+	Sublicense Agreement by and between 89Bio Ltd. and ratiopharm GmbH, dated as of April 16, 2018 (filed with the SEC as Exhibit 10.13 to the Company’s Form S-1 filed on October 11, 2019)
10.14+	Master Services Agreement by and between 89Bio Ltd. and Biotechpharma UAB, dated as of May 7, 2018, as amended (filed with the SEC as Exhibit 10.14 to the Company’s Form S-1 filed on October 11, 2019)
10.15	Office Lease by and between 89bio, Inc. and King Family Irrevocable Trust, dated as of December 5, 2019 (filed with the SEC as Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on March 18, 2020)
10.16	Loan and Security Agreement, dated as of April 7, 2020, among Silicon Valley Bank, the Lenders party thereto, 89bio, Inc., 89bio Management, Inc. and 89Bio Ltd. (filed with the SEC as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 13, 2020)
16.1	Letter from Deloitte & Touche LLP, dated April 21, 2020 (filed with the SEC as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed on April 23, 2020)
21.1+	List of subsidiaries (filed with the SEC as Exhibit 21.1 to the Company’s Form S-1 filed on October 11, 2019)
23.1*	Consent of Independent Registered Public Accounting Firm
23.2*	Consent of Independent Registered Public Accounting Firm
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934.
32.1#	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

+ Indicates management contract or compensatory plan.

† Portions of the exhibit have been omitted for confidentiality purposes.

88

# Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 16. Form 10-K Summary.

None.

89

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	89bio, Inc.
Date: March 24, 2021	By:	/s/ Rohan Palekar
		Rohan Palekar
		Chief Executive Officer and Director (principal executive officer)
Date: March 24, 2021	By:	/s/ Ryan Martins
		Ryan Martins
		Chief Financial Officer (principal financial and accounting officer)

90

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Rohan Palekar, Ram Waisbourd and Ryan Martins, and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, to sign in any and all capacities (including, without limitation, the capacities listed below), this Annual Report on Form 10-K, any and all amendments thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done to enable the registrant to comply with the provisions of the Securities Exchange Act and all the requirements of the Securities and Exchange Commission, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name	Title	Date
/s/ Rohan Palekar	Chief Executive Officer and Director	March 24, 2021
Rohan Palekar	(principal executive officer)
/s/ Ryan Martins	Chief Financial Officer	March 24, 2021
Ryan Martins	(principal financial and accounting officer)
/s/ Steven Altschuler	Director	March 24, 2021
Steven Altschuler, M.D.
/s/ Derek DiRocco	Director	March 24, 2021
Derek DiRocco, Ph.D.
/s/ Gregory Grunberg	Director	March 24, 2021
Gregory Grunberg, M.D.
/s/ Michael Hayden	Director	March 24, 2021
Michael Hayden, M.B., Ch.B., Ph.D.
/s/ Anat Naschitz	Director	March 24, 2021
Anat Naschitz
/s/ Lota Zoth	Director	March 24, 2021
Lota Zoth, C.P.A.

91

EX-4.3

Exhibit 4.3

DESCRIPTION OF REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

The following description of our capital stock is intended as a summary only and therefore is not a complete description of our capital stock. This description is based upon, and is qualified by reference to, our second amended and restated certificate of incorporation (the “Amended Certificate”), our second amended and restated bylaws (the “Amended Bylaws”) and applicable provisions of Delaware corporate law. You should read our Amended Certificate and Amended Bylaws, which are filed as exhibits to our Annual Report on Form 10-K, to which this exhibit is also appended.

Our authorized capital stock consists of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock.

Common Stock

Our Amended Certificate authorizes the issuance of up to 100,000,000 shares of our common stock. All outstanding shares of our common stock are validly issued, fully paid and nonassessable.

The holders of our common stock are entitled to one vote per share on all matters submitted to a vote of stockholders. A majority vote of the shares present in person or represented by proxy and entitled to vote on the subject matter is required for the holders of our common stock to take action on all matters (except for election of directors (as discussed below)), except as otherwise required by law, our Amended Certificate or our Amended Bylaws. Our Amended Certificate does not provide for cumulative voting in the election of directors. The holders of our common stock will receive ratably any dividends declared by our board of directors out of funds legally available therefor. In the event of our liquidation, dissolution or winding-up, the holders of our common stock will be entitled to share ratably in all assets remaining after payment of or provision for any liabilities.

Preferred Stock

Under the terms of our Amended Certificate, our board of directors has the authority, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the dividend, voting and other rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.

Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock.

Registration Rights

Certain holders of shares of our common stock are entitled to rights with respect to the registration of these securities under the Securities Act of 1933, as amended (the “Securities Act”). These rights are provided under the terms of our investors’ rights agreement, effective as of September 17, 2019 (the “IRA”). The IRA includes demand registration rights, short-form registration rights and piggyback registration rights. All fees, costs and expenses of underwritten registrations under this agreement will be borne by us and all selling expenses, including underwriting discounts and selling commissions, will be borne by the holders of the shares being registered.

Demand Registration Rights

Certain holders of shares of our common stock are entitled to demand registration rights. Under the terms of the IRA, we will be required, upon the written request of at least 50% of the holders of the registrable securities, including either OrbiMed Israel Partners II, L.P. or OrbiMed Private Investments VI, LP, provided that the anticipated aggregate offering price is at least $10 million, to file a registration statement on Form S-1 and use commercially reasonable efforts to effect the registration of these shares for public resale. The right to have such shares registered on Form S-1 is further subject to other specified conditions and limitations.

Piggyback Registration Rights

Pursuant to the IRA, if we register any of our common stock either for our own account or for the account of other security holders, the holders of registrable shares party to the IRA are entitled to include their shares in the registration, subject to certain marketing and other limitations. We may terminate or withdraw any registration initiated before the effective date of such registration in our sole discretion.

Form S-3 Registration Rights

Pursuant to the IRA, if we are eligible to file a registration statement on Form S-3, upon the written request of at least 10% of the holders of registrable securities to sell registrable securities at an aggregate price of at least $5 million, we will be required to use commercially reasonable efforts to effect a registration of such shares. The right to have such shares registered on Form S-3 is further subject to other specified conditions and limitations.

Anti-Takeover Effects of Our Amended Certificate, Amended Bylaws and Delaware Law

Our Amended Certificate and our Amended Bylaws include a number of provisions that may have the effect of delaying, deferring or preventing another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts.

• Issuance of undesignated preferred stock: Under our Amended Certificate, our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to make it more difficult to attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

• Classified board: Our Amended Certificate establishes a classified board of directors consisting of three classes of directors, with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. This provision may have the effect of delaying a change in control of our board of directors.

• Election and removal of directors and board vacancies: Our Amended Bylaws provide that directors will be elected by a plurality vote. Our Amended Certificate and Amended Bylaws also provide that our board of directors has the right to increase or decrease the size of the board and to fill vacancies on the board. Directors may be removed only for cause by the affirmative vote of the holders of at least 66²⁄₃% of the votes that all our stockholders would be entitled to cast in an annual election of directors. Only our board of directors is authorized to fill vacant directorships. In addition the number of directors constituting our board of directors may be set only by resolution adopted by a majority vote of the directors then in office. These provisions prevent stockholders from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.

2

• Requirements for advance notification of stockholder nominations and proposals: Our Amended Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors that specify certain requirements as to the timing, form and content of a stockholder’s notice. Business that may be conducted at an annual meeting of stockholders will be limited to those matters properly brought before the meeting. These provisions may make it more difficult for our stockholders to bring matters before our annual meeting of stockholders or to nominate directors at annual meetings of stockholders.

• No written consent of stockholders: Our Amended Certificate provides that all stockholder actions be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting. This limit may lengthen the amount of time required to take stockholder actions and would prevent the amendment of our Amended Bylaws or removal of directors by our stockholders without holding a meeting of stockholders.

• No stockholder ability to call special meetings: Our Amended Certificate and Amended Bylaws provide that only a majority of the members of our board of directors then in office may be able to call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders.

• Amendments to certificate of incorporation and bylaws: Any amendment to our Amended Certificate will be required to be approved by a majority of our board of directors as well as, if required by law or the Amended Certificate, a majority of the outstanding shares entitled to vote on the amendment and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of provisions to board classification, stockholder action, certificate amendments, and liability of directors must be approved by not less than 66²⁄₃% of the outstanding shares entitled to vote on the amendment, voting together as a single class. Any amendment to our Amended Bylaws must be approved by either a majority of our board of directors or not less than 66²⁄₃% of the outstanding shares entitled to vote on the amendment, voting together as a single class.

These provisions are designed to enhance the likelihood of continued stability in the composition of our board of directors and its policies, to discourage certain types of transactions that may involve an actual or threatened acquisition of us and to reduce our vulnerability to an unsolicited acquisition proposal. We also designed these provisions to discourage certain tactics that may be used in proxy fights. However, these provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they may also reduce fluctuations in the market price of our shares that could result from actual or rumored takeover attempts.

Section 203 of the Delaware General Corporation Law

We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner.

Choice of Forum

Our Amended Certificate requires that the Court of Chancery of the State of Delaware be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a breach of fiduciary duty owed by any director, officer or other employee to us or our stockholders; (3) any action asserting a claim against us or any director or officer or other employee arising pursuant to the Delaware General Corporation Law, our Amended Certificate or Amended Bylaws; or (4) any action asserting a claim against us or any director or officer or other employee that is governed by the internal affairs doctrine. This provision would not apply to claims brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. Our Amended Certificate provides further that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, subject to and contingent upon a final adjudication in the State of Delaware of the enforceability of such exclusive forum provision. Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors or officers.

3

Transfer Agent and Registrar

American Stock Transfer and Trust Company, LLC serves as the transfer agent and registrar for our common stock.

Listing

Our common stock is listed on The Nasdaq Global Market under the symbol “ETNB.”

4

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
89bio, Inc.:

We consent to the incorporation by reference in the registration statements (Nos. 333-237263 and 333-235577) on Form S-8 of 89bio, Inc. of our report dated March 24, 2021, with respect to the consolidated balance sheet of 89bio, Inc. as of December 31, 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes, which report appears in the December 31, 2020 annual report on Form 10-K of 89bio, Inc.

/s/ KPMG LLP

San Francisco, California
March 24, 2021

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-235577 and 333-237263 on Form S-8 of our report dated March 18, 2020, relating to the financial statements of 89bio, Inc. appearing in this Annual Report on Form 10-K for the year ended December 31, 2020.

/s/ Deloitte & Touche LLP

San Francisco, California

March 24, 2021

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rohan Palekar, certify that:

1. I have reviewed this Annual Report on Form 10-K of 89bio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 24, 2021	By:	/s/ Rohan Palekar
		Rohan Palekar
		Chief Executive Officer (principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ryan Martins, certify that:

1. I have reviewed this Annual Report on Form 10-K of 89bio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 24, 2021	By:	/s/ Ryan Martins
		Ryan Martins
		Chief Financial Officer (principal financial and accounting officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of 89bio, Inc. (the “Company”) on Form 10-K for the year ending December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 24, 2021	By:	/s/ Rohan Palekar
		Rohan Palekar
		Chief Executive Officer (principal executive officer)

Date: March 24, 2021	By:	/s/ Ryan Martins
		Ryan Martins
		Chief Financial Officer (principal financial and accounting officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Note: A signed original of this written statement required by §906 has been provided to 89bio, Inc. and will be retained by 89bio, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2020

Mar. 01, 2021

Jun. 30, 2020

Cover [Abstract]

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2020

Document Fiscal Year Focus

2020

Document Fiscal Period Focus

FY

Entity Registrant Name

89bio, Inc.

Entity Central Index Key

0001785173

Entity Current Reporting Status

Yes

Entity Voluntary Filers

No

Entity Interactive Data Current

Yes

Current Fiscal Year End Date

--12-31

Entity Filer Category

Non-accelerated Filer

Entity Well-known Seasoned Issuer

No

Entity Public Float

$ 72,707,052

Entity Common Stock, Shares Outstanding

19,946,426

ICFR Auditor Attestation Flag

false

Entity Shell Company

false

Entity Small Business

true

Entity Emerging Growth Company

true

Entity Ex Transition Period

false

Title of 12(b) Security

Common stock, par value $0.001 per share

Trading Symbol

ETNB

Security Exchange Name

NASDAQ

Entity File Number

001-39122

Entity Incorporation, State or Country Code

DE

Entity Tax Identification Number

36-4946844

Entity Address, Address Line One

142 Sansome Street

Entity Address Address Line Two

Second Floor

Entity Address, City or Town

San Francisco

Entity Address, State or Province

CA

Entity Address, Postal Zip Code

94104

City Area Code

415

Local Phone Number

500-4614

Document Annual Report

true

Document Transition Report

false

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement relating to its 2021 Annual Meeting of Stockholders, to be held on or about June 2, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 98,183	$ 93,335
Restricted cash	25	25
Short-term investments	106,446
Prepaid and other current assets	5,548	1,966
Total current assets	210,202	95,326
Property and equipment, net	166	155
Other assets	706	72
Total assets	211,074	95,553
Current liabilities:
Accounts payable	2,065	989
Accrued expenses	6,048	4,620
Total current liabilities	8,113	5,609
Commitments and contingencies (Note 5)
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized as of December 31, 2020 and 2019, respectively; 19,931,660 and 13,788,982 shares issued and outstanding as of December 31, 2020 and 2019, respectively	20	14
Additional paid-in capital	326,046	163,526
Accumulated other comprehensive loss	(10)
Accumulated deficit	(123,095)	(73,596)
Total stockholders’ equity	202,961	89,944
Total liabilities and stockholders’ equity	$ 211,074	$ 95,553

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	19,931,660	13,788,982
Common stock, shares outstanding	19,931,660	13,788,982

XML

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating expenses:
Research and development	$ 36,199	$ 21,346
General and administrative	13,156	5,294
Total operating expenses	49,355	26,640
Loss from operations	(49,355)	(26,640)
Other expenses, net	(203)	(30,562)
Net loss before income tax	(49,558)	(57,202)
Income tax benefit (expense)	59	(218)
Net loss	(49,499)	(57,420)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities	8
Foreign currency translation adjustments	(18)
Total other comprehensive loss	(10)
Comprehensive loss	$ (49,509)	$ (57,420)
Net loss per share, basic and diluted	$ (3.08)	$ (24.49)
Weighted-average shares used to compute net loss per share, basic and diluted	16,087,785	2,344,191

XML

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Public Offerings	Common Stock	Common Stock Public Offerings	Additional Paid-in Capital	Additional Paid-in Capital Public Offerings	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Public Offerings	Retained Earnings	Convertible Preferred Stock
Beginning balance at Dec. 31, 2018	$ (16,057)		$ 1		$ 118		$ 0		$ (16,176)
Beginning balance, shares at Dec. 31, 2018										24,000,000
Beginning balance at Dec. 31, 2018										$ 23,073
Beginning balance, shares at Dec. 31, 2018			611,226
Issuance of convertible preferred stock, net of issuance costs							0			$ 26,673
Issuance of convertible preferred stock, net of issuance costs, shares										20,000,000
Conversion of convertible preferred stock into common stock upon completion of initial public offering	49,746		$ 7		49,739		0
Temporary Equity, Conversion of convertible preferred stock into common stock upon completion of initial public offering, shares										(44,000,000)
Temporary Equity, Conversion of convertible preferred stock into common stock upon completion of initial public offering										$ (49,746)
Conversion of convertible preferred stock into common stock upon completion of initial public offering, shares			7,077,366
Issuance of common stock		$ 87,691		$ 6		$ 87,685		$ 0
Issuance of common stock, shares				6,100,390
Capital contribution related to extinguishment of convertible preferred stock liability	25,595				25,595		0
Share-based compensation	389				389		0
Net loss	(57,420)						0		(57,420)
Ending balance at Dec. 31, 2019	$ 89,944		$ 14		163,526		0		(73,596)
Ending balance, shares at Dec. 31, 2019	0
Ending balance, shares at Dec. 31, 2019			13,788,982
Issuance of common stock		$ 157,680		$ 6		$ 157,674		$ 0
Issuance of common stock, shares				6,072,040
Issuance of common stock upon exercise of stock options	$ 271				271		0
Issuance of common stock upon exercise of stock options, shares			63,366
Stock Issued During Period Value Employee Stock Purchase Plan	134				134		0
Issuance of common stock upon ESPP purchase, Shares			7,272
Issuance Of Common Stock Warrants In Connection With Debt Financing	634				634		0
Share-based compensation	3,807				3,807		0
Net loss	(49,499)						0		(49,499)
Other comprehensive loss	(10)						(10)
Ending balance at Dec. 31, 2020	$ 202,961		$ 20		$ 326,046		$ (10)		$ (123,095)
Ending balance, shares at Dec. 31, 2020	0
Ending balance, shares at Dec. 31, 2020			19,931,660

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Stock issuance costs		$ 3,083
Convertible Preferred Shares
Temporary equity, issuance costs	$ 1,208	0
Temporary equity, settlement of convertible preferred stock liability		$ 6,673

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net loss	$ (49,499,000)	$ (57,420,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	60,000	17,000
Share-based compensation	3,807,000	389,000
Deferred tax assets	(69,000)	20,000
Revaluation of convertible preferred stock liability		30,597,000
Amortization of premium on available-for-sale securities	268,000
Amortization of debt issuance costs	230,000
Changes in operating assets and liabilities:
Prepaids and other current assets	(3,600,000)	(1,918,000)
Other assets		(72,000)
Accounts payable	1,131,000	(520,000)
Accrued expenses	1,428,000	3,447,000
Net cash used in operating activities	(46,244,000)	(25,460,000)
Cash flows from investing activities:
Purchases of available-for-sale securities	(118,895,000)
Proceeds from maturities of available-for-sale securities	12,189,000
Purchases of property and equipment	(126,000)	(139,000)
Net cash used in investing activities	(106,832,000)	(139,000)
Cash flows from financing activities:
Proceeds from issuance of common stock upon public offerings, net of issuance costs	157,680,000
Proceeds from issuance of common stock upon initial public offering, net of issuance costs		87,691,000
Proceeds from issuance of convertible preferred stock and convertible preferred stock liability, net of issuance costs		20,000,000
Proceeds from issuance of common stock upon stock option exercises	271,000
Proceeds from issuance of common stock		11,000
Payment of debt issuance costs	(161,000)
Net cash provided by financing activities	157,924,000	107,702,000
Net increase in cash and cash equivalents, and restricted cash	4,848,000	82,103,000
Cash and cash equivalents, and restricted cash at beginning of period	93,360,000	11,257,000
Cash and cash equivalents, and restricted cash at end of period	98,208,000	93,360,000
Components of cash and cash equivalents, and restricted cash:
Cash and cash equivalents	98,183,000	93,335,000
Restricted cash	25,000	25,000
Cash and cash equivalents, and restricted cash at end of period	98,208,000	93,360,000
Supplemental disclosures of noncash information:
Issuance of common stock warrant in connection with term loan facility	634,000
Property and equipment purchases included in accounts payable		55,000
Cash paid for taxes	142,000	106,000
Conversion of convertible preferred stock into common stock at close of initial public offering		49,746,000
Capital contribution related to extinguishment of convertible preferred stock liability		$ 25,595,000
ESPP Purchases
Cash flows from financing activities:
Proceeds from issuance of common stock	$ 134,000

XML

Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

1. Organization and Basis of Presentation

Description of Business

89bio, Inc. (“89bio” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. The Company’s lead product candidate, BIO89-100, a specifically engineered glycoPEGylated analog of fibroblast growth factor 21, is currently being developed for the treatment of nonalcoholic steatohepatitis and for the treatment of severe hypertriglyceridemia.

89bio, Inc. was formed as a Delaware corporation in June 2019, for the purpose of completing an initial public offering (“IPO”) and related transactions in order to carry on the business of 89Bio Ltd., which was incorporated in Israel in January 2018.

The Company completed an internal reorganization transaction in September 2019, pursuant to which 89Bio Ltd. became a wholly owned subsidiary of 89bio, Inc. (the “Reorganization”). As part of the Reorganization, all of the equity holders of 89Bio Ltd. exchanged 100% of the equity of 89Bio Ltd. for 100% of the equity of 89bio, Inc. The Reorganization was considered a transaction between entities under common control.  

Public Offerings

In November 2019, 89bio, Inc. completed its IPO, pursuant to which it issued and sold an aggregate of 6,100,390 shares of common stock (inclusive of 795,703 shares pursuant to the underwriters’ option to purchase additional shares), at the IPO price of $16.00 per share, resulting in net proceeds of $87.7 million after deducting underwriting discounts and commissions of $6.8 million and other offering expenses of $3.1 million. Upon the closing of the IPO, the Company’s outstanding convertible preferred stock automatically converted into 7,077,366 shares of common stock of 89bio, Inc. based on a proportional adjustment to the conversion ratio of the convertible preferred stock on a 1-for-6.217 basis.

In July 2020, the Company completed an underwritten public offering of 3,047,040 shares of its common stock (inclusive of 397,440 shares pursuant to the underwriters’ option to purchase additional shares), at the public offering price of $27.50 per share. The Company raised a total of $83.8 million in gross proceeds from the offering, or approximately $78.2 million in net proceeds after deducting underwriting discounts and commissions of $5.0 million and offering costs of approximately $0.6 million.

In September 2020, the Company completed an underwritten public offering of 3,025,000 shares of its common stock, at a public offering price of $28.00 per share. The Company raised a total of $84.7 million in gross proceeds from the offering, or approximately $79.5 million in net proceeds after deducting underwriting discounts and commissions of $4.6 million and offering costs of approximately $0.6 million.

Liquidity

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. To date, the Company has not generated revenues from its activities and has incurred substantial operating losses. Management expects the Company to continue to generate substantial operating losses for the foreseeable future until it completes development of its products and seeks regulatory approvals to market such products. The Company had cash, cash equivalents and short-term investments of $204.6 million as of December 31, 2020.

The Company expects that its cash, cash equivalents and short-term investments as of December 31, 2020, together with proceeds available from the Company’s term loan (see Note 6), will be sufficient to fund operating expenses and capital expenditure requirements for a period of at least one year from the date these audited consolidated financial statements are filed with the Securities and Exchange Commission (“SEC”).

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassification

Certain prior year footnote amounts have been updated for consistency with the current year presentation. Such reclassification has no effect on the consolidated financial statements.

Foreign Currencies

Certain transactions during the years ended December 31, 2020 and 2019 were denominated in currencies other than the U.S. dollar. Gains and losses from foreign currency transactions were not material for all periods presented and are reflected in the consolidated statements of operations and comprehensive loss as a component of other expenses, net. The Company’s subsidiary in Lithuania uses the Euro as its functional currency for financial reporting. The re-measurement from Euros to U.S. dollars results in translation gain and loss adjustments, which are reflected as a component of comprehensive loss as foreign currency translation adjustments.  

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not limited to the fair value of stock options and certain accrued expenses. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

Fair Value Measurements

Financial assets and liabilities are recorded at fair value on a recurring basis in the balance sheets. The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable, and accrued expenses approximate to their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;

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

Concentrations of Credit Risk

Financialinstrumentsthatpotentiallysubjectthe Company to a concentrationof creditriskconsist primarilyof cash and cash equivalents.Bankdepositsare held by accreditedfinancialinstitutionsand these depositsmay at timesbe in excessof insuredlimits. The Company limitsitscreditriskassociatedwith cash and cash equivalentsby placingthemwith financialinstitutionsthatit believesare of high quality.The Company has not experiencedany losseson itsdepositsof cash or cash equivalents.

Other Risks and Uncertainties

The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, the Company’s early stages of clinical drug development; the Company’s ability to advance product candidates into, and successfully complete, clinical trials on the timelines it projects; the Company’s ability to adequately demonstrate sufficient safety and efficacy of its product candidates; the Company’s ability to enroll patients in its ongoing and future clinical trials; the Company’s ability to successfully manufacture and supply its product candidates for clinical trials; the Company’s ability to obtain additional capital to finance its operations; uncertainties related to the projections of the size of patient populations suffering from the diseases the Company is targeting; the Company’s ability to obtain, maintain, and protect its intellectual property rights; developments relating to the Company’s competitors and its industry, including competing product candidates and therapies; general economic and market conditions; and other risks and uncertainties.

The Company’s product candidates will require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company.

The ongoing COVID-19 pandemic has disrupted and may continue to disrupt the Company’s business and delay its preclinical and clinical programs and timelines. The Company does not yet know the full extent of potential delays to clinical trials, which could prevent or delay the Company from obtaining approval for BIO89-100. The extent to which the COVID-19 pandemic may impact the Company’s future operating results and financial condition is uncertain.

Segment Reporting

The Company has one operatingsegment.The Company’s chiefoperatingdecisionmaker,itsChief ExecutiveOfficer,managesthe Company’s operationson a consolidatedbasisfor the purposesof allocating resourcesand evaluatingfinancialperformance.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper that are stated at fair value.

Restricted Cash

Restricted cash consists of a money market account that serves as collateral for the Company’s operating lease agreement for its facility in Israel.

Investments

Investments have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase. Generally, investments with original maturities beyond three months at the date of purchase are classified as short-term because it is management’s intent to use the investments to fund current operations or to make them available for current operations.  

Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in other expenses, net. The cost of investments sold is based on the specific-identification method. There are no material realized gains or losses on investments for the periods presented. Interest on available-for-sale securities is included in other expenses, net and is not material for all periods presented.

PropertyandEquipment, Net

Propertyand equipmentare statedat cost, lessaccumulateddepreciation.Depreciationis calculatedon a straight-linebasisover the estimatedusefullivesof the relatedassets,generallyrangingfromthreeto seven years.Leaseholdimprovementsare amortizedon a straight-linebasisover the shorterof the assets’estimated usefullifeor the remainingtermof the lease.Upon retirement or sale of the assets, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gains or losses are recorded in the consolidated statements of operations and comprehensive loss. Maintenanceand repaircostsare expensed as incurred.

Impairmentof Long-Lived Assets

The Company periodicallyevaluatesitslong-livedassets,includingpropertyand equipment,for impairmentwhenever eventsor changes in businesscircumstancesindicatethatthe carryingamountof the assets or group of assetsmay not be fullyrecoverable.If indicatorsof impairmentexistand the undiscountedfuture cash flows thatthe assetsare expectedto generateare lessthan the carryingvalue of the assets,the Company reducesthe carryingamountof the assetsthrough an impairmentcharge,to theirestimatedfairvaluesbased on a discountedcash flow approachor, whenavailableand appropriate,to comparablemarketvalues.There were no such indicatorsfor the periodspresented.

Accrued Research and Development Expenses

The Company estimates preclinicaland clinicalstudy and researchexpensesbased on the servicesperformed,pursuantto contractswith researchinstitutionsthatconduct and managepreclinicaland clinicalstudiesand researchserviceson itsbehalf. The Company recordsthe costsof researchand developmentactivitiesbased upon the estimatedamountof servicesprovidedbut not yet invoicedand includesthesecostsin accruedexpensesin the consolidatedbalance sheets.These costsare a componentof the Company’s researchand developmentexpenses.

The Company accrues for thesecostsbased on factorssuch as estimatesof the work completedand in accordancewith agreements establishedwith itsthird-partyserviceprovidersunder the serviceagreements.The Company makesjudgmentsand estimatesin determiningthe accruedexpensesbalance.Asactualcostsbecomeknown,the Company adjustsitsaccruedexpenses. The Company has not experiencedany materialdifferencesbetween accruedcostsand actualcostsincurred.However, the statusand timingof actualservicesperformedmay vary fromthe Company’s estimates,resultingin adjustmentsto expense in futureperiods.Changes in theseestimates thatresultin materialchanges to the Company’s accrued expensescould materiallyaffectthe Company’s resultsof operations.Contingentmilestonepayments,if any, are expensed whenthe milestoneresultsare probable and estimable, which is generallyupon achievementof the milestone.

Leases

The Company leasesitsofficefacilitiesunder non-cancelableoperatingleaseagreementsand recognizes relatedrentexpense on a straight-linebasisover the termof the lease.

Convertible Preferred Stock Liability

The freestanding instruments related to the commitment by the Series A convertible preferred stockholders to purchase and by the Company to sell its Series A convertible preferred stock in subsequent closings, contingent upon the achievement of certain developmental milestones and approval by the board of directors, at a fixed price per stock, were considered a liability (or an asset), measured at fair value as the shares underlying the rights contained liquidation preferences upon certain “deemed liquidation events” that were not solely within the Company’s control and which were considered in-substance contingent redemption features. The instruments were subject to revaluation at each balance sheet date until settlement or extinguishment, with revaluations recognized as either a component of other expenses, net in the consolidated statements of operations and comprehensive loss, or additional paid-in capital in the consolidated balance sheets. Upon the completion of the Company’s IPO, the remaining shares of convertible preferred stock that were previously issuable under subsequent closings were no longer issuable. Accordingly, the preferred stock liability was extinguished and because the transaction occurred between related parties, the resulting $25.6 million was accounted for as a capital contribution by the preferred stockholders.  

Research andDevelopmentExpenses

Researchand developmentexpensesconsistprimarilyof costsincurredfor the developmentof the Company’s lead productcandidate,BIO89-100. Researchand developmentexpensesconsistprimarilyof externalcostsrelatedto acquiringand licensingpatentsand intellectualproperties,preclinicaland clinical developmentand relatedsupplies, and personnelcosts.Personnelcostsconsistof salaries,employeebenefitsandshare-basedcompensationfor individualsinvolvedin researchand developmentefforts. Paymentsassociatedwith licensingagreementsto acquirelicensesto develop, use, manufactureand commercializeproductsthathave not reachedtechnologicalfeasibilityand do not have alternatecommercialuse are expensed as incurred.

Share-Based Compensation

The Company measuresitsshare-basedpaymentawards made to employees,directors,andnon-employeeserviceprovidersbased on estimated fair values and recognizes compensation over the requisite service period.

The Company estimatesthe fairvalue of share-basedpaymentawards on the date of grantusing aBlack-Scholesoption pricingmodel.The Company recognizescompensationfor the value of share-basedpaymentawards, which have graded vesting,using the straight-linemethodover the requisiteserviceperiodof each award. The Company accountsfor forfeituresas they occur.

The Black-Scholesoption pricingmodelrequiresa numberof assumptions,of which the most significantare expectedvolatility,expectedoption term(thetimefromthe grantdate untilthe optionsare exercisedor expire),risk-freerate,and expecteddividedrate. These assumptions include:

• Expected volatility—Since the Company has limited trading history for its common stock due to its short trading history, the expected volatility is estimated based on the volatility of comparable publicly traded biotechnology companies during the equivalent period of the calculated expected term of the options granted. The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty.

• Expected term—The expected term of options granted to employees and directors is determined using the “simplified” method. Under this approach, the expected term is presumed to be the midpoint between the weighted-average vesting term and the contractual term of the option. The simplified method makes the assumption that the employee will exercise share options evenly over the period when the share options are vested and ending on the date when the share options would expire. The expected option term for options granted to non-employees is estimated on a grant-by-grant basis.

• Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon bonds in effect on the grant date for periods with an equivalent expected term as the option.

• Expected dividend—The Company has never paid dividends and has no foreseeable plans to pay dividends on its shares of common stock. Therefore, an expected dividend of zero is used.

Income Taxes

Incometaxesare accountedfor under the assetand liabilitymethod.Under thismethod,deferredtax assetsand liabilitiesare recognizedfor the futuretax consequencesattributableto differencesbetween the consolidatedfinancialstatementscarryingamountsof existingassetsand liabilitiesand theirrespectivetax bases and operatingloss and tax creditcarryforwards.Deferredtax assetsand liabilitiesare measuredusing enactedtax ratesappliedto taxableincomein the yearsin which those temporarydifferencesare expectedto be realized.The effecton deferredtax assetsand liabilitiesof a change in tax ratesis recognizedas incomeor loss in the period thatincludesthe enactmentdate. Avaluationallowanceis establishedwhennecessaryto reducedeferredtax assetsto the amountexpectedto be realized.Interestand penaltiesrelatedto unrecognizedtax benefitsare includedwithin the provisionof incometax.

Basic andDiluted Net Loss per Share

Basic loss per shareis computedby dividingthe net loss by the weighted averagenumberof common stockoutstandingduring the period.Dilutedloss per shareis computedby dividingthe net loss by the weighted averagenumberof common stockoutstandingtogetherwith the numberof additionalcommon stockthatwould have been outstandingif allpotentiallydilutivecommon stockhad been issued.Since the Company is in a loss positionfor the periodspresented,basicnet loss per shareis the sameas dilutednet loss per sharesincethe effects of potentiallydilutivesecuritiesare antidilutive.

ComprehensiveLoss

The Company’s comprehensive loss is comprised of changes in unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments.

Recently Adopted Accounting Standards

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The Company adopted this standard effective from January 1, 2020, with the removed and modified disclosures adopted on a retrospective basis and the new disclosures adopted on a prospective basis. The standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02—Leases (“ASU 2016-02”), requiring the recognition of lease assets and liabilities on the balance sheet. The standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The standard is effective for public entities for fiscal years beginning after December 15, 2018 and for nonpublic entities for fiscal years beginning after December 15, 2021. As an emerging growth company, ASU 2016-02 is effective for the Company for the year ending December 31, 2022 and interim periods within the year ending December 31, 2023. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2020 (in thousands):

		As of December 31, 2020
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	Cost		Gains		Losses			Fair Value
Money market funds	Level 1	$	46,134	$	—	$	—		$	46,134
Commercial paper	Level 2		76,605		—		(2	)		76,603
Agency bonds	Level 2		29,654		15		—			29,669
Corporate debt securities	Level 2		11,890		—		(6	)		11,884
U.S. government bonds	Level 2		7,093		—		—			7,093
Municipal bonds	Level 2		5,592		2		(1	)		5,593
U.S. treasury bills	Level 2		4,680		—		—			4,680
Agency discount securities	Level 2		200		—		—			200
Total cash equivalents and available-for-sale securities		$	181,848	$	17	$	(9	)	$	181,856
Classified as:
Cash equivalents									$	75,410
Short-term investments										106,446
Total cash equivalents and available-for-sale securities									$	181,856

The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2020 (in thousands):

	As of December 31, 2020
Within one year	$	160,304
After one year through two years		21,552
Total cash equivalents and available-for-sale securities	$	181,856

The Company did not hold any financial assets as of December 31, 2019.

The Company’s convertible preferred stock liability represented a Level 3 financial liability measured at fair value on a recurring basis prior to its extinguishment in the fourth quarter of 2019. Accordingly, there was no Level 3 financial liability outstanding during the year ended and as of December 31, 2020.

For the year ended December 31, 2019, changes in the fair value of the Company’s Level 3 financial liability measured on a recurring basis were as follows (in thousands):

	Year Ended December 31,
	2019
Beginning balance	$	1,671
Revaluation of convertible preferred stock liability    recorded in other expenses (income), net		30,597
Partial settlement of convertible preferred stock    liability upon third closing		(6,673	)
Capital contribution related to extinguishment of    preferred stock liability		(25,595	)
Ending balance	$	—

The Company’s convertible preferred stock liability resulted from the initial sale of Series A convertible preferred stock where the investors’ committed to purchase additional shares of Series A convertible preferred stock in subsequent closings, contingent upon the achievement by the Company of certain development milestones and approval by the board of directors. The investors’ commitment to purchase and the Company’s commitment to sell shares of Series A convertible preferred stock represented a freestanding instrument accounted for at fair value and re-measured at each reporting date. The Company estimated the fair value of this commitment using the Black Scholes option pricing model using the following assumptions:

	Year Ended
	December 31,
	2019
Stock price	$0.99-$2.57
Exercise price	$1.00
Expected term (years)	0.00-2.25
Expected volatility		72.0	%
Risk-free interest rate	0.0-2.4%

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Consolidated Balance Sheet Components

12 Months Ended

Dec. 31, 2020

Balance Sheet Related Disclosures [Abstract]

Consolidated Balance Sheet Components

4. Consolidated Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

	As of December 31,
	2020			2019
Computer equipment	$	105		$	67
Furniture and office equipment		144			111
Total property and equipment		249			178
Less: accumulated depreciation		(83	)		(23	)
Total property and equipment, net	$	166		$	155

Depreciation expense for property and equipment was $60,000 and $17,000 for the years ended December 31, 2020 and 2019, respectively.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

	As of December 31,
	2020		2019
Accrued research and development expenses	$	2,884	$	2,326
Accrued employee and related expenses		2,552		1,396
Accrued professional and legal fees		453		573
Accrued other		159		325
Total accrued expenses	$	6,048	$	4,620

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies

Leases

In May 2018, the Company enteredinto an operatingleaseagreementfor itsfacilityin Israel.The lease term expires in April 2021 and the Company has an option to renew for an additional 12 months. Under the lease agreement,monthlyleasepaymentsare approximately$4,000.

In December 2019, the Company entered into an operating lease for its headquarters in San Francisco. The lease term is for 24 months, expiring in January 2022, and monthly lease payments during 2020 were approximately $17,500.

Future minimumleasepaymentsunder the Company’s non-cancellableoperatingleaseobligationsas of December31, 2020, are as follows(in thousands):

	As of December 31, 2020
2021	$	232
2022		8
Total future minimum annual payments	$	240

Rent expense was $273,000 and $159,000 for years ended December 31, 2020 and 2019, respectively. The Company has security deposit balances of $95,000, which are included in restricted cash and other assets in the consolidated balance sheets as of December 31, 2020 and 2019.

Asset Transfer and License Agreement with Teva Pharmaceutical Industries Ltd

In April 2018, the Company concurrently entered into two Asset Transfer and License Agreements (the “Teva Agreements”) with Teva Pharmaceutical Industries Ltd (“Teva”) under which it acquired certain patents and intellectual property relating to two programs: (1) Teva’s glycoPEGylated FGF21 program, including the compound TEV-47948 (BIO89-100), a glycoPEGylated long-acting FGF21 and (2) Teva’s development program of small molecule inhibitors of Fatty Acid Synthase. Pursuant to the Teva Agreements, the Company paid Teva an initial nonrefundable upfront payment of $6.0 million and the Company could be obligated to pay Teva up to $67.5 million under each program, for a total of $135.0 million, upon the achievement of certain clinical development and commercial milestones. In addition, the Company is obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales on all products containing the Teva compounds.

The Teva Agreements can be terminated (i) by the Company without cause, after the first anniversary of the effective date, upon 120 days’ written notice to Teva, (ii) by either party, if the other party materially breaches any of its obligations under the Agreements and fails to cure such breach within 60 days after receiving notice thereof, or (iii) by either party, if a bankruptcy petition is filed against the other party and is not dismissed within 60 days. In addition, Teva can also terminate the agreement related to the Company’s glycoPEGylated FGF21 program in the event the Company, or any of its affiliates or sublicensees, challenges any of the Teva patents licensed to the Company, and the challenge is not withdrawn within 30 days of written notice from Teva.

During the years ended December 31, 2020 and 2019, there were no license payment expenses related to the Teva Agreements.

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Term Loan

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Term Loan

6. Term Loan

Loan and Security Agreement

In April 2020, the Company and certain of its subsidiaries entered into a Loan and Security Agreement (the “Loan Agreement”) with the lenders referred to therein (the “Lenders”), and Silicon Valley Bank, as collateral agent. The Loan Agreement provides for (i) a secured term A loan facility (the “Term A Loan Facility”) of up to $10.0 million and (ii) a secured term B loan facility (the “Term B Loan Facility”) of up to $5.0 million that is available upon the Company satisfying certain milestones. The Term A Loan Facility matures on November 1, 2022, provided, that if the Term B Loan Facility is funded, the facilities instead mature on September 1, 2023. The loans will bear interest at the greater of (i) 4.50% and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b) 1.25%. As of December 31, 2020, the Company had not drawn any amount under the Loan Agreement.

In connection with the execution of the Loan Agreement, the Company agreed to issue the Lenders warrants to purchase shares of the Company’s common stock. In April 2020, the Company issued Silicon Valley Bank a warrant to purchase 25,000 shares of the Company’s common stock with a warrant exercise price of $22.06 per share that is immediately exercisable. The initial expiration date of April 7, 2030 was changed to June 30, 2025 in connection with the July 2020 offering. The Company determined the fair value of the warrant at the issuance date by using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 0.75%, no dividends, expected volatility of 92.3% and expected term of 10.0 years. Upon issuance, the fair value allocated to the warrant of $0.6 million was recorded as a debt issuance cost and classified within other assets and met the requirements for equity classification within additional paid-in capital on the consolidated balance sheets. An additional warrant to purchase 8,333 shares of the Company’s common stock will be issued in connection with the Term B Loan Facility, if funded, with the exercise price determined on the Company’s stock price at the time of issuance.

Additionally, the Company incurred $0.2 million in closing costs that were recorded as debt issuance costs and classified within other assets on the consolidated balance sheets.

The deferred assets related to the debt issuance cost and warrant are recognized as interest expense over the duration of the Loan Agreement and are recorded within other expenses, net on the consolidated statements of operations and comprehensive loss. As of December 31, 2020, the remaining unamortized debt issuance costs classified within other assets on the consolidated balance sheet is $0.6 million.

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Convertible Preferred Stock

12 Months Ended

Dec. 31, 2020

Temporary Equity Disclosure [Abstract]

Convertible Preferred Stock

7. Convertible Preferred Stock

In April 2018, the Company entered into the Series A Share Purchase Agreement (the “Series A SPA”), pursuant to which the investors committed to invest an aggregate amount of up to $60.0 million for the issuance of shares of Series A convertible preferred stock at a price of $1.00 per share in subsequent closings. Upon the completion of the Company’s IPO on November 13, 2019, there were 16,000,000 remaining shares of convertible preferred stock that were previously issuable that were no longer issuable. Accordingly, the preferred stock liability was extinguished and because the transaction occurred between related parties, the resulting $25.6 million was accounted for as a capital contribution by the preferred stockholders during 2019. Additionally, immediately prior to the completion of the Company’s IPO, all outstanding shares of convertible preferred stock automatically converted into 7,077,366 shares of common stock and the related carrying value was reclassified to common stock and additional paid-in capital.

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Share-Based Compensation

12 Months Ended

Dec. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

8. Share-Based Compensation

Equity Incentive Plans

In 2018, the Company’s board of directors adopted the 89Bio Ltd. 2018 Equity Incentive Plan (the “2018 Plan”). In connection with the Reorganization in September 2019, the Company’s board of directors approved the 2019 Equity Incentive Plan (the “2019 Plan”), which became effective in September 2019. From and after the effective date of the 2019 Plan, the Company will no longer be making any future awards under the 2018 Plan.

The Company initially reserved 2,844,193 shares of common stock for issuance under the 2019 Plan. In addition, the number of shares of common stock reserved for issuance under the 2019 Plan will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2020, in an amount equal to 4% of the total number of shares of the Company’s capital stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. As of December 31, 2020, there were 1,433,991 shares of common stock available for issuance as future option grants under the 2019 Plan.

The Board determines the period over which options become exercisable and options generally vest over a four-year period, with 25% of options vesting on the first anniversary of employment, and thereafter, the remaining options vesting quarterly, over the following 36-month period. The options will expire within ten years from the date of grant. The exercise price of awards granted will not be less than the estimated fair value of the shares on the date of grant.

Employee Stock Purchase Plan

In October 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective following the date of the IPO. The Company initially reserved 225,188 shares of common stock for purchase under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on the first day of January for a period of up to ten years, in an amount equal to 1% of the total number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. Purchases will be accomplished through the participation of discrete offering periods and each offering is expected to be 6 months long. For each offering period, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s common stock on (1) the first trading day of the applicable offering period or (2) the last trading day of the applicable offering period.

The first six-month offering period under the ESPP commenced on January 1, 2020 and ended on June 30, 2020 and the second six-month offering period commenced on July 1, 2020 and ended on December 31, 2020. A total of 7,272 shares of common stock were purchased pursuant to the ESPP for the year ended December 31, 2020.As of December 31, 2020, there were 355,806 shares of common stock available for issuance under the ESPP.

The Company recorded share-based compensation for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020		2019
Research and development	$	1,250	$	30
General and administrative		2,557		359
Total share-based compensation	$	3,807	$	389

The fair value of option awards granted for the periods indicated was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

	Year Ended December 31,
	2020		2019
Expected term (years)	4.0-6.1		5.9-6.1
Contractual term (years)		10.0		10.0
Expected volatility	86.4-97.6%		61.8-87.6%
Risk-free interest rate	0.2-1.5%		1.6-2.6%
Expected dividend		—		—

The following table summarizes stock option activity for the year ended December 31, 2020:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
						(In years)		(In thousands)
Balance outstanding as of December 31, 2019		1,320,243		$	3.34		9.23	$	30,353
Granted		682,000			29.78
Exercised		(63,366	)		4.29
Cancelled		(40,482	)		2.87
Balance outstanding as of December 31, 2020		1,898,395			12.79		8.60	$	25,918
Exercisable as of December 31, 2020		535,084		$	2.58		8.11	$	11,684

During the year ended December 31, 2020, the estimated total grant date fair value of options vested was $0.8 million. The weighted-averagegrantdate fairvalue of optionsgrantedfor the years ended December 31, 2020 and 2019 was $21.88 and $2.90 per share, respectively.Asof December31, 2020, therewas $13.5 million of unrecognizedshare-based compensationcost relatedto stock optionsgrantedunder the 2019 Plan, which is expectedto be recognizedover a weighted-averageperiodof 2.5 years.

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Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

Tax Rates Applicable to the Income of the Company and its Subsidiaries

As a result of the Reorganization described in Note 1, the Company is taxed according to U.S. federal and state tax laws and Israeli tax laws. The statutory tax rates applicable to the income of the Company and its subsidiaries are as follows:

	Year Ended December 31,
	2020			2019
89bio, Inc.		21	%		21	%
89Bio Ltd		23	%		23	%
89bio Management, Inc.		21	%		21	%
UAB 89bio Lithuania		15	%		15	%

The incometax benefit (expense)is comprisedof (in thousands):

	Year Ended December 31,
	2020			2019
Current:
Federal	$	(11	)	$	(167	)
State		1			(1	)
Foreign		—			(30	)
Total		(10	)		(198	)
Deferred:
Federal		69			(20	)
Total		69			(20	)
Income tax benefit (expense)	$	59		$	(218	)

DeferredIncome Taxes

Deferredincometaxesreflectthe net tax effectsof temporarydifferencesbetween the carryingamounts of assetsand liabilitiesfor financialreportingpurposesand the amountsused for incometax purposes. Significantcomponentsof the Company’s deferredtax assetsare as follows(in thousands):

	As of December 31,
	2020			2019
U.S. net operating loss carryforwards	$	11,342		$	1,916
Israel net operating loss carryforwards		3,978			4,328
Research and development expenses		5,392			3,419
Accrued expenses		635			349
Other		658			10
Total deferred tax assets		22,005			10,022
Less: valuation allowance		(21,936	)		(10,022	)
Net deferred tax assets	$	69		$	—

U.S. research and development expenses and accrued expenses disclosed for the year ended December 31, 2019 were previously reported in the 2019 notes to the consolidated financial statements as a component of other. The reclassification had no impact on the consolidated financial statements for the year ended December 31, 2019.

Asof December31, 2020 and 2019, the Company recordeda valuationallowanceof $21.9 million and $10.0 million, respectively,in respectof deferredtax assetsresultingfromtax loss carryforwardsand othertemporarydifferences.Realization of deferred tax assets is dependent upon future earnings, if any, the time and amount of which are uncertain. The Company regularly assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes based upon the weight of available evidence that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through an adjustment to income tax expense. The valuation allowance increased by $11.9 million in 2020, which primarily relates to significant taxable losses. The change in valuation allowance during 2020 also includes a partial release of the valuation allowance against deferred tax assets in Israel due to achievement of recent profitability and the expectation of future profitability in the jurisdiction, which decreased the valuation allowance by $69,000 in 2020. The valuation allowance increased by $6.5 million in 2019, which primarily relates to significant taxable losses. It also includes a recapture of the valuation allowance against the Company’s deferred tax assets in the United States due to the Reorganization that occurred in 2019, which increased the valuation allowance by $20,000.  

AvailableCarryforwardTax Losses and Credits

As of December 31, 2020, the Company has an accumulatedtax loss carryforwardof approximately $54.1 million and $17.3 million for U.S. and Israeli tax purposes, respectively. As of December 31, 2019, the Company has an accumulated tax loss carryforward of approximately $9.1 million and $23.8 million for U.S. and Israeli tax purposes. Federal net operating losses generated after 2017 can be carried forward indefinitely but utilization will be limited to 80% of taxable income in the period that net operating losses are being utilized. Carryforward tax losses in Israel have no expiration date.

As of December 31, 2020, the Company has federal research and development credit carryforwards of approximately $0.6 million, which expire beginning in 2040. As of December 31, 2020 and 2019, the Company has state research and development credit carryforwards of approximately $0.7 million and $0.2 million, respectively, which will carry forward indefinitely.

Loss from Continuing Operations, Before Income Tax

The Company recorded a loss from continuing operations, before income tax for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020			2019
United States	$	(58,760	)	$	(19,502	)
Lithuania		(73	)		200
Israel		9,275			(37,900	)
Net loss before income tax	$	(49,558	)	$	(57,202	)

Reconciliation of Income Tax Benefit (Expense)

The reconciliationof income tax benefit (expense) based on the statutorytax rateto the effectivetax rateis as follows(in thousands):

	Year Ended December 31,
	2020			2019
Income tax benefit computed at statutory rates	$	8,285		$	13,095
Research and development credits, net of   uncertain tax position		815			93
Change in valuation allowance		(11,914	)		(6,520	)
Change in Israel effective tax rate due to the 2019    reorganization		647			(734	)
Foreign rate differential		1,671			—
Revaluation of convertible preferred stock liability		—			(6,039	)
Other		555			(113	)
Income tax benefit (expense)	$	59		$	(218	)

Research and development credits, net of uncertain tax position disclosed for the year ended December 31, 2019 were previously reported in the 2019 notes to the consolidated financial statements as a component of other. The reclassification has no impact on the consolidated financial statements for the year ended December 31, 2019.

Utilization of the U.S. federal and state net operating losses and credit carryforwards may be subject to an annual limitation provided for in Section 382 of the Internal Revenue Code and similar state codes. Any annual limitation could result in a deferral of the utilization of the net operating loss and credit carryforwards.

Unrecognized Tax Benefits

During the years ended December 31, 2020 and 2019, the amount of gross unrecognized tax benefits increased by $0.3 million and $39,000, respectively. If the total amount of unrecognized tax benefits was recognized, it would not have an impact to the effective tax rate as it would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance.   

The Company recognizes interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2020 and 2019, such interest and penalties are not material.

The Company is subject to taxation in the United States, California, and several foreign jurisdictions. To date, the Company has not been subject to any federal or state income tax audits. The Company is currently under examination by the Israeli taxing authorities for 2019 and 2018. As of December 31, 2020, all tax years remain open to examination.

In March 2020 and December 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and the Consolidated Appropriation Act (“CAA”), respectively, as a result of the COVID-19 pandemic, which contain among other things, numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. The Company has evaluated the current legislation and at this time, does not anticipate the CARES Act or the CAA to have a material impact on its consolidated financial statements.

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Net Loss Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Net Loss Per Share

10. Net Loss Per Share

The following outstanding potentially dilutive shares, including all outstanding stock options, have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect:

	Year Ended December 31,
	2020		2019
Stock options to purchase common stock		1,898,395		1,320,243
Shares available for future option grants		1,433,991		1,523,950
Total		3,332,386		2,844,193

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Subsequent Event

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Event

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassification

Reclassification

Certain prior year footnote amounts have been updated for consistency with the current year presentation. Such reclassification has no effect on the consolidated financial statements.

Foreign Currencies

Foreign Currencies

Certain transactions during the years ended December 31, 2020 and 2019 were denominated in currencies other than the U.S. dollar. Gains and losses from foreign currency transactions were not material for all periods presented and are reflected in the consolidated statements of operations and comprehensive loss as a component of other expenses, net. The Company’s subsidiary in Lithuania uses the Euro as its functional currency for financial reporting. The re-measurement from Euros to U.S. dollars results in translation gain and loss adjustments, which are reflected as a component of comprehensive loss as foreign currency translation adjustments.  

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not limited to the fair value of stock options and certain accrued expenses. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

Fair Value Measurements

Fair Value Measurements

Financial assets and liabilities are recorded at fair value on a recurring basis in the balance sheets. The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable, and accrued expenses approximate to their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;

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

Concentrations of Credit Risk

Concentrations of Credit Risk

Financialinstrumentsthatpotentiallysubjectthe Company to a concentrationof creditriskconsist primarilyof cash and cash equivalents.Bankdepositsare held by accreditedfinancialinstitutionsand these depositsmay at timesbe in excessof insuredlimits. The Company limitsitscreditriskassociatedwith cash and cash equivalentsby placingthemwith financialinstitutionsthatit believesare of high quality.The Company has not experiencedany losseson itsdepositsof cash or cash equivalents.

Other Risks and Uncertainties

Other Risks and Uncertainties

The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, the Company’s early stages of clinical drug development; the Company’s ability to advance product candidates into, and successfully complete, clinical trials on the timelines it projects; the Company’s ability to adequately demonstrate sufficient safety and efficacy of its product candidates; the Company’s ability to enroll patients in its ongoing and future clinical trials; the Company’s ability to successfully manufacture and supply its product candidates for clinical trials; the Company’s ability to obtain additional capital to finance its operations; uncertainties related to the projections of the size of patient populations suffering from the diseases the Company is targeting; the Company’s ability to obtain, maintain, and protect its intellectual property rights; developments relating to the Company’s competitors and its industry, including competing product candidates and therapies; general economic and market conditions; and other risks and uncertainties.

The Company’s product candidates will require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company.

The ongoing COVID-19 pandemic has disrupted and may continue to disrupt the Company’s business and delay its preclinical and clinical programs and timelines. The Company does not yet know the full extent of potential delays to clinical trials, which could prevent or delay the Company from obtaining approval for BIO89-100. The extent to which the COVID-19 pandemic may impact the Company’s future operating results and financial condition is uncertain.

Segment Reporting

Segment Reporting

The Company has one operatingsegment.The Company’s chiefoperatingdecisionmaker,itsChief ExecutiveOfficer,managesthe Company’s operationson a consolidatedbasisfor the purposesof allocating resourcesand evaluatingfinancialperformance.

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper that are stated at fair value.

Restricted Cash

Restricted cash consists of a money market account that serves as collateral for the Company’s operating lease agreement for its facility in Israel.

Investments

Investments

Investments have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase. Generally, investments with original maturities beyond three months at the date of purchase are classified as short-term because it is management’s intent to use the investments to fund current operations or to make them available for current operations.  

Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in other expenses, net. The cost of investments sold is based on the specific-identification method. There are no material realized gains or losses on investments for the periods presented. Interest on available-for-sale securities is included in other expenses, net and is not material for all periods presented.

Property and Equipment, Net

PropertyandEquipment, Net

Propertyand equipmentare statedat cost, lessaccumulateddepreciation.Depreciationis calculatedon a straight-linebasisover the estimatedusefullivesof the relatedassets,generallyrangingfromthreeto seven years.Leaseholdimprovementsare amortizedon a straight-linebasisover the shorterof the assets’estimated usefullifeor the remainingtermof the lease.Upon retirement or sale of the assets, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gains or losses are recorded in the consolidated statements of operations and comprehensive loss. Maintenanceand repaircostsare expensed as incurred.

Impairment of Long-Lived Assets

Impairmentof Long-Lived Assets

The Company periodicallyevaluatesitslong-livedassets,includingpropertyand equipment,for impairmentwhenever eventsor changes in businesscircumstancesindicatethatthe carryingamountof the assets or group of assetsmay not be fullyrecoverable.If indicatorsof impairmentexistand the undiscountedfuture cash flows thatthe assetsare expectedto generateare lessthan the carryingvalue of the assets,the Company reducesthe carryingamountof the assetsthrough an impairmentcharge,to theirestimatedfairvaluesbased on a discountedcash flow approachor, whenavailableand appropriate,to comparablemarketvalues.There were no such indicatorsfor the periodspresented.

Accrued Research and Development Expenses

Accrued Research and Development Expenses

The Company estimates preclinicaland clinicalstudy and researchexpensesbased on the servicesperformed,pursuantto contractswith researchinstitutionsthatconduct and managepreclinicaland clinicalstudiesand researchserviceson itsbehalf. The Company recordsthe costsof researchand developmentactivitiesbased upon the estimatedamountof servicesprovidedbut not yet invoicedand includesthesecostsin accruedexpensesin the consolidatedbalance sheets.These costsare a componentof the Company’s researchand developmentexpenses.

The Company accrues for thesecostsbased on factorssuch as estimatesof the work completedand in accordancewith agreements establishedwith itsthird-partyserviceprovidersunder the serviceagreements.The Company makesjudgmentsand estimatesin determiningthe accruedexpensesbalance.Asactualcostsbecomeknown,the Company adjustsitsaccruedexpenses. The Company has not experiencedany materialdifferencesbetween accruedcostsand actualcostsincurred.However, the statusand timingof actualservicesperformedmay vary fromthe Company’s estimates,resultingin adjustmentsto expense in futureperiods.Changes in theseestimates thatresultin materialchanges to the Company’s accrued expensescould materiallyaffectthe Company’s resultsof operations.Contingentmilestonepayments,if any, are expensed whenthe milestoneresultsare probable and estimable, which is generallyupon achievementof the milestone.

Leases

Leases

The Company leasesitsofficefacilitiesunder non-cancelableoperatingleaseagreementsand recognizes relatedrentexpense on a straight-linebasisover the termof the lease.

Convertible Preferred Stock Liability

Convertible Preferred Stock Liability

The freestanding instruments related to the commitment by the Series A convertible preferred stockholders to purchase and by the Company to sell its Series A convertible preferred stock in subsequent closings, contingent upon the achievement of certain developmental milestones and approval by the board of directors, at a fixed price per stock, were considered a liability (or an asset), measured at fair value as the shares underlying the rights contained liquidation preferences upon certain “deemed liquidation events” that were not solely within the Company’s control and which were considered in-substance contingent redemption features. The instruments were subject to revaluation at each balance sheet date until settlement or extinguishment, with revaluations recognized as either a component of other expenses, net in the consolidated statements of operations and comprehensive loss, or additional paid-in capital in the consolidated balance sheets. Upon the completion of the Company’s IPO, the remaining shares of convertible preferred stock that were previously issuable under subsequent closings were no longer issuable. Accordingly, the preferred stock liability was extinguished and because the transaction occurred between related parties, the resulting $25.6 million was accounted for as a capital contribution by the preferred stockholders.  

Research and Development Expenses

Research andDevelopmentExpenses

Researchand developmentexpensesconsistprimarilyof costsincurredfor the developmentof the Company’s lead productcandidate,BIO89-100. Researchand developmentexpensesconsistprimarilyof externalcostsrelatedto acquiringand licensingpatentsand intellectualproperties,preclinicaland clinical developmentand relatedsupplies, and personnelcosts.Personnelcostsconsistof salaries,employeebenefitsandshare-basedcompensationfor individualsinvolvedin researchand developmentefforts. Paymentsassociatedwith licensingagreementsto acquirelicensesto develop, use, manufactureand commercializeproductsthathave not reachedtechnologicalfeasibilityand do not have alternatecommercialuse are expensed as incurred.

Share-Based Compensation

Share-Based Compensation

The Company measuresitsshare-basedpaymentawards made to employees,directors,andnon-employeeserviceprovidersbased on estimated fair values and recognizes compensation over the requisite service period.

The Company estimatesthe fairvalue of share-basedpaymentawards on the date of grantusing aBlack-Scholesoption pricingmodel.The Company recognizescompensationfor the value of share-basedpaymentawards, which have graded vesting,using the straight-linemethodover the requisiteserviceperiodof each award. The Company accountsfor forfeituresas they occur.

The Black-Scholesoption pricingmodelrequiresa numberof assumptions,of which the most significantare expectedvolatility,expectedoption term(thetimefromthe grantdate untilthe optionsare exercisedor expire),risk-freerate,and expecteddividedrate. These assumptions include:

• Expected volatility—Since the Company has limited trading history for its common stock due to its short trading history, the expected volatility is estimated based on the volatility of comparable publicly traded biotechnology companies during the equivalent period of the calculated expected term of the options granted. The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty.

• Expected term—The expected term of options granted to employees and directors is determined using the “simplified” method. Under this approach, the expected term is presumed to be the midpoint between the weighted-average vesting term and the contractual term of the option. The simplified method makes the assumption that the employee will exercise share options evenly over the period when the share options are vested and ending on the date when the share options would expire. The expected option term for options granted to non-employees is estimated on a grant-by-grant basis.

• Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon bonds in effect on the grant date for periods with an equivalent expected term as the option.

• Expected dividend—The Company has never paid dividends and has no foreseeable plans to pay dividends on its shares of common stock. Therefore, an expected dividend of zero is used.

Income Taxes

Income Taxes

Incometaxesare accountedfor under the assetand liabilitymethod.Under thismethod,deferredtax assetsand liabilitiesare recognizedfor the futuretax consequencesattributableto differencesbetween the consolidatedfinancialstatementscarryingamountsof existingassetsand liabilitiesand theirrespectivetax bases and operatingloss and tax creditcarryforwards.Deferredtax assetsand liabilitiesare measuredusing enactedtax ratesappliedto taxableincomein the yearsin which those temporarydifferencesare expectedto be realized.The effecton deferredtax assetsand liabilitiesof a change in tax ratesis recognizedas incomeor loss in the period thatincludesthe enactmentdate. Avaluationallowanceis establishedwhennecessaryto reducedeferredtax assetsto the amountexpectedto be realized.Interestand penaltiesrelatedto unrecognizedtax benefitsare includedwithin the provisionof incometax.

Basic and Diluted Net Loss per Share

Basic andDiluted Net Loss per Share

Basic loss per shareis computedby dividingthe net loss by the weighted averagenumberof common stockoutstandingduring the period.Dilutedloss per shareis computedby dividingthe net loss by the weighted averagenumberof common stockoutstandingtogetherwith the numberof additionalcommon stockthatwould have been outstandingif allpotentiallydilutivecommon stockhad been issued.Since the Company is in a loss positionfor the periodspresented,basicnet loss per shareis the sameas dilutednet loss per sharesincethe effects of potentiallydilutivesecuritiesare antidilutive.

Comprehensive Loss

ComprehensiveLoss

The Company’s comprehensive loss is comprised of changes in unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The Company adopted this standard effective from January 1, 2020, with the removed and modified disclosures adopted on a retrospective basis and the new disclosures adopted on a prospective basis. The standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02—Leases (“ASU 2016-02”), requiring the recognition of lease assets and liabilities on the balance sheet. The standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The standard is effective for public entities for fiscal years beginning after December 15, 2018 and for nonpublic entities for fiscal years beginning after December 15, 2021. As an emerging growth company, ASU 2016-02 is effective for the Company for the year ending December 31, 2022 and interim periods within the year ending December 31, 2023. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value on Recurring Basis

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2020 (in thousands):

		As of December 31, 2020
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	Cost		Gains		Losses			Fair Value
Money market funds	Level 1	$	46,134	$	—	$	—		$	46,134
Commercial paper	Level 2		76,605		—		(2	)		76,603
Agency bonds	Level 2		29,654		15		—			29,669
Corporate debt securities	Level 2		11,890		—		(6	)		11,884
U.S. government bonds	Level 2		7,093		—		—			7,093
Municipal bonds	Level 2		5,592		2		(1	)		5,593
U.S. treasury bills	Level 2		4,680		—		—			4,680
Agency discount securities	Level 2		200		—		—			200
Total cash equivalents and available-for-sale securities		$	181,848	$	17	$	(9	)	$	181,856
Classified as:
Cash equivalents									$	75,410
Short-term investments										106,446
Total cash equivalents and available-for-sale securities									$	181,856

Schedule of Contractual Maturities of Cash Equivalents and Available-for-Sale Securities

The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2020 (in thousands):

	As of December 31, 2020
Within one year	$	160,304
After one year through two years		21,552
Total cash equivalents and available-for-sale securities	$	181,856

Summary of Changes in Fair Value of Level 3 Liability

For the year ended December 31, 2019, changes in the fair value of the Company’s Level 3 financial liability measured on a recurring basis were as follows (in thousands):

	Year Ended December 31,
	2019
Beginning balance	$	1,671
Revaluation of convertible preferred stock liability    recorded in other expenses (income), net		30,597
Partial settlement of convertible preferred stock    liability upon third closing		(6,673	)
Capital contribution related to extinguishment of    preferred stock liability		(25,595	)
Ending balance	$	—

Summary of Fair Value Assumptions

The Company estimated the fair value of this commitment using the Black Scholes option pricing model using the following assumptions:

	Year Ended
	December 31,
	2019
Stock price	$0.99-$2.57
Exercise price	$1.00
Expected term (years)	0.00-2.25
Expected volatility		72.0	%
Risk-free interest rate	0.0-2.4%

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Consolidated Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2020

Balance Sheet Related Disclosures [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

	As of December 31,
	2020			2019
Computer equipment	$	105		$	67
Furniture and office equipment		144			111
Total property and equipment		249			178
Less: accumulated depreciation		(83	)		(23	)
Total property and equipment, net	$	166		$	155

Schedule of Accrued Expenses

Accrued expenses consist of the following (in thousands):

	As of December 31,
	2020		2019
Accrued research and development expenses	$	2,884	$	2,326
Accrued employee and related expenses		2,552		1,396
Accrued professional and legal fees		453		573
Accrued other		159		325
Total accrued expenses	$	6,048	$	4,620

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Lease Obligations

Future minimumleasepaymentsunder the Company’s non-cancellableoperatingleaseobligationsas of December31, 2020, are as follows(in thousands):

	As of December 31, 2020
2021	$	232
2022		8
Total future minimum annual payments	$	240

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Share-Based Compensation

The Company recorded share-based compensation for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020		2019
Research and development	$	1,250	$	30
General and administrative		2,557		359
Total share-based compensation	$	3,807	$	389

Summary of Estimated Fair Value of Option Awards Granted Using Black-Scholes Option-Pricing Model

The fair value of option awards granted for the periods indicated was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

	Year Ended December 31,
	2020		2019
Expected term (years)	4.0-6.1		5.9-6.1
Contractual term (years)		10.0		10.0
Expected volatility	86.4-97.6%		61.8-87.6%
Risk-free interest rate	0.2-1.5%		1.6-2.6%
Expected dividend		—		—

Summary of Stock Option Activity

The following table summarizes stock option activity for the year ended December 31, 2020:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
						(In years)		(In thousands)
Balance outstanding as of December 31, 2019		1,320,243		$	3.34		9.23	$	30,353
Granted		682,000			29.78
Exercised		(63,366	)		4.29
Cancelled		(40,482	)		2.87
Balance outstanding as of December 31, 2020		1,898,395			12.79		8.60	$	25,918
Exercisable as of December 31, 2020		535,084		$	2.58		8.11	$	11,684

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate of Company and Subsidiaries [Table Text Block]

As a result of the Reorganization described in Note 1, the Company is taxed according to U.S. federal and state tax laws and Israeli tax laws. The statutory tax rates applicable to the income of the Company and its subsidiaries are as follows:

	Year Ended December 31,
	2020			2019
89bio, Inc.		21	%		21	%
89Bio Ltd		23	%		23	%
89bio Management, Inc.		21	%		21	%
UAB 89bio Lithuania		15	%		15	%

Summary of Income Tax Benefit (Expense)

The incometax benefit (expense)is comprisedof (in thousands):

	Year Ended December 31,
	2020			2019
Current:
Federal	$	(11	)	$	(167	)
State		1			(1	)
Foreign		—			(30	)
Total		(10	)		(198	)
Deferred:
Federal		69			(20	)
Total		69			(20	)
Income tax benefit (expense)	$	59		$	(218	)

Summary of Components of Deferred Tax Assets

Significantcomponentsof the Company’s deferredtax assetsare as follows(in thousands):

	As of December 31,
	2020			2019
U.S. net operating loss carryforwards	$	11,342		$	1,916
Israel net operating loss carryforwards		3,978			4,328
Research and development expenses		5,392			3,419
Accrued expenses		635			349
Other		658			10
Total deferred tax assets		22,005			10,022
Less: valuation allowance		(21,936	)		(10,022	)
Net deferred tax assets	$	69		$	—

Summary of Loss from Continuing Operations Before Taxes on Income

The Company recorded a loss from continuing operations, before income tax for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020			2019
United States	$	(58,760	)	$	(19,502	)
Lithuania		(73	)		200
Israel		9,275			(37,900	)
Net loss before income tax	$	(49,558	)	$	(57,202	)

Summary of Reconciliation of Income Tax Benefit (Expense) Statutory Tax Rate to Effective Tax Rate

The reconciliationof income tax benefit (expense) based on the statutorytax rateto the effectivetax rateis as follows(in thousands):

	Year Ended December 31,
	2020			2019
Income tax benefit computed at statutory rates	$	8,285		$	13,095
Research and development credits, net of   uncertain tax position		815			93
Change in valuation allowance		(11,914	)		(6,520	)
Change in Israel effective tax rate due to the 2019    reorganization		647			(734	)
Foreign rate differential		1,671			—
Revaluation of convertible preferred stock liability		—			(6,039	)
Other		555			(113	)
Income tax benefit (expense)	$	59		$	(218	)

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Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Schedule of Outstanding Potentially Dilutive Securities Excluded From Calculation of Diluted Net Loss

The following outstanding potentially dilutive shares, including all outstanding stock options, have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect:

	Year Ended December 31,
	2020		2019
Stock options to purchase common stock		1,898,395		1,320,243
Shares available for future option grants		1,433,991		1,523,950
Total		3,332,386		2,844,193

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Organization and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands	1 Months Ended			12 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares	Jul. 31, 2020 USD ($) $ / shares shares	Nov. 30, 2019 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($) shares	Nov. 13, 2019 shares
Subsidiary Sale Of Stock [Line Items]
Date of incorporation				Jun. 30, 2019
Reorganization exchange of equity percentage of ordinary shares exchanged				100.00%
Reorganization exchange of equity percentage of common stock issued upon exchange				100.00%
Proceeds from issuance of common stock					$ 11
Reverse stock split conversion ratio			0.160849
Proceeds from issuance of common stock, net of underwriters discount and commissions					$ 11
Cash and cash equivalents				$ 204,600
Common Stock
Subsidiary Sale Of Stock [Line Items]
Convertible preferred stock automatically converted into common stock | shares			7,077,366			7,077,366
Public Offerings | Common Stock
Subsidiary Sale Of Stock [Line Items]
Shares issued and sold | shares			6,100,390	6,072,040	6,100,390
IPO price per share | $ / shares			$ 16.00
Proceeds from issuance of common stock			$ 87,700
Payment of underwriting discounts, commissions			6,800
Other offering expenses			3,100
Proceeds from issuance of common stock, net of underwriters discount and commissions			$ 87,700
Underwriters option | Common Stock
Subsidiary Sale Of Stock [Line Items]
Shares issued and sold | shares		397,440	795,703
Underwritten public offering | Common Stock
Subsidiary Sale Of Stock [Line Items]
Shares issued and sold | shares	3,025,000	3,047,040
IPO price per share | $ / shares	$ 28.00	$ 27.50
Proceeds from issuance of common stock	$ 79,500	$ 78,200
Payment of underwriting discounts, commissions	4,600	5,000
Other offering expenses	600	600
Gross proceeds from issue of common stock	84,700	83,800
Proceeds from issuance of common stock, net of underwriters discount and commissions	$ 79,500	$ 78,200

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Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) Segment
Summary Of Significant Accounting Policies [Line Items]
Number of operating segments | Segment	1
Realized gains or losses on investments	$ 0
Capital contribution by the preferred stockholders	$ 25,600
Leasehold Improvements
Summary Of Significant Accounting Policies [Line Items]
Leasehold improvements amortization, description	Leasehold improvements are amortized on a straight-line basis over the shorter of the assets’ estimated useful life or the remaining term of the lease.
Minimum
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives	7 years

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Fair Value Measurements - Summary of Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring $ in Thousands	Dec. 31, 2020 USD ($)
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	$ 181,848
Short-term investments, Gross Unrealized Holding Gains	17
Short-term investments, Gross Unrealized Holding Losses	(9)
Short-term investments, Aggregated Fair Value	181,856
Cash equivalents
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Aggregated Fair Value	75,410
Short-term investments
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Aggregated Fair Value	106,446
Level 1
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Aggregated Fair Value	181,856
Within one year	160,304
After one year through two years	21,552
Level 1 | Money Market Funds
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	46,134
Short-term investments, Aggregated Fair Value	46,134
Level 2 | Commercial Paper
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	76,605
Short-term investments, Gross Unrealized Holding Losses	(2)
Short-term investments, Aggregated Fair Value	76,603
Level 2 | Agency bonds
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	29,654
Short-term investments, Gross Unrealized Holding Gains	15
Short-term investments, Aggregated Fair Value	29,669
Level 2 | U.S. government bonds
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	7,093
Short-term investments, Aggregated Fair Value	7,093
Level 2 | Corporate Debt
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	11,890
Short-term investments, Gross Unrealized Holding Losses	(6)
Short-term investments, Aggregated Fair Value	11,884
Level 2 | U.S. treasury bills
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	4,680
Short-term investments, Aggregated Fair Value	4,680
Level 2 | Agency discount securities
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	200
Short-term investments, Aggregated Fair Value	200
Level 2 | Municipal Bonds
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, Amortized Cost	5,592
Short-term investments, Gross Unrealized Holding Gains	2
Short-term investments, Gross Unrealized Holding Losses	(1)
Short-term investments, Aggregated Fair Value	$ 5,593

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Fair Value Measurements - Additional Information (Details)	Dec. 31, 2020 USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value measurement, financial assets	$ 0
Level 3
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value measurement, financial liability	$ 0

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Fair Value Measurements - Summary of Changes in Fair Value of Level 3 Liability (Details) - Recurring - Level 3 $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 1,671
Revaluation of convertible preferred stock liability recorded in other expenses (income), net	30,597
Partial settlement of convertible preferred stock liability upon third closing	(6,673)
Capital contribution related to extinguishment of preferred stock liability	$ (25,595)

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Fair Value Measurements - Summary of Fair Value Assumptions (Details) - Convertible Preferred Stock Liability - Black Scholes Option Pricing Model	12 Months Ended
	Dec. 31, 2019 $ / shares
Stock Price | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	0.99
Stock Price | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	2.57
Exercise Price
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	1.00
Expected Term (Years) | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	0 years
Expected Term (Years) | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	2 years 2 months 30 days
Expected Volatility
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	72.0
Risk-free Interest Rate | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	0.0
Risk-free Interest Rate | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Measurement Input	2.4

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Consolidated Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property Plant And Equipment [Line Items]
Total property and equipment	$ 249	$ 178
Less: accumulated depreciation	(83)	(23)
Total property and equipment, net	166	155
Computer Equipment
Property Plant And Equipment [Line Items]
Total property and equipment	105	67
Furniture and Office Equipment
Property Plant And Equipment [Line Items]
Total property and equipment	$ 144	$ 111

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Consolidated Balance Sheet Components - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Depreciation expense for property and equipment	$ 60,000	$ 17,000

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Consolidated Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payables And Accruals [Abstract]
Accrued research and development expenses	$ 2,884	$ 2,326
Accrued employee and related expenses	2,552	1,396
Accrued professional and legal fees	453	573
Accrued other	159	325
Total accrued expenses	$ 6,048	$ 4,620

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Commitments and Contingencies - Additional Information (Details) - USD ($)	1 Months Ended			12 Months Ended
	Dec. 31, 2019	May 31, 2018	Apr. 30, 2018	Dec. 31, 2020	Dec. 31, 2019
Loss Contingencies [Line Items]
Lessee, operating lease, description	The lease term is for 24 months, expiring in January 2022	The lease term expires in April 2021 and the Company has an option to renew for an additional 12 months.
Operating lease, payments		$ 4,000		$ 17,500
Lessee, operating lease term of contract	24 months	12 months			24 months
Operating leases, rent expense				$ 273,000	$ 159,000
Teva Agreements
Loss Contingencies [Line Items]
Nonrefundable upfront payment			$ 6,000,000
Payment upon achievement of certain clinical and commercial milestones			135,000,000
Asset transfer and license agreement, termination period after written notice				120 days
Asset transfer and license agreement, termination period notice of breach				60 days
Asset transfer and license agreement termination notice period if bankruptcy petition filed				60 days
Teva Agreements | Research and Development Expenses
Loss Contingencies [Line Items]
Up-front license payment				$ 0	0
Teva Agreements | Teva?s GlycoPEGylated FGF21 Program
Loss Contingencies [Line Items]
Payment upon achievement of certain clinical and commercial milestones			67,500,000
Teva Agreements | Teva?s Development Program
Loss Contingencies [Line Items]
Payment upon achievement of certain clinical and commercial milestones			$ 67,500,000
Restricted Cash And Other Assets Member
Loss Contingencies [Line Items]
Security deposit	$ 95,000			$ 95,000	$ 95,000

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Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Lease Obligations (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2021	$ 232
2022	8
Total future minimum annual payments	$ 240

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Term Loan - Additional Information (Details) - Loan Agreement	1 Months Ended
	Apr. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2020 USD ($)	Jul. 31, 2020
Debt Instrument [Line Items]
Credit facility maturity date	Sep. 01, 2023
Line of credit facility, description	In April 2020, the Company and certain of its subsidiaries entered into a Loan and Security Agreement (the “Loan Agreement”) with the lenders referred to therein (the “Lenders”), and Silicon Valley Bank, as collateral agent. The Loan Agreement provides for (i) a secured term A loan facility (the “Term A Loan Facility”) of up to $10.0 million and (ii) a secured term B loan facility (the “Term B Loan Facility”) of up to $5.0 million that is available upon the Company satisfying certain milestones. The Term A Loan Facility matures on November 1, 2022, provided, that if the Term B Loan Facility is funded, the facilities instead mature on September 1, 2023. The loans will bear interest at the greater of (i) 4.50% and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b) 1.25%.
Warrant expiration date	Apr. 07, 2030		Jun. 30, 2025
Debt issuance costs, gross	$ 600,000	$ 600,000
Debt issuance costs		200,000
Dividends
Debt Instrument [Line Items]
Fair value of warrant assumptions, dividends	$ 0
Black Scholes Option Pricing Model | Risk-free Interest Rate
Debt Instrument [Line Items]
Fair Measurement Input	0.0075
Black Scholes Option Pricing Model | Expected Volatility
Debt Instrument [Line Items]
Fair Measurement Input	0.923
Black Scholes Option Pricing Model | Expected Term (Years)
Debt Instrument [Line Items]
Fair Measurement Input	10 years
Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.25%
Minimum
Debt Instrument [Line Items]
Debt instrument, interest rate	4.50%
Term A Loan Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000
Credit facility maturity date	Nov. 01, 2022
Amount drawn		0
Warrants to purchase common stock | shares	25,000
Warrant exercise price | $ / shares	$ 22.06
Term B Loan Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 5,000,000
Amount drawn		$ 0
Warrants to purchase common stock | shares	8,333

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Convertible Preferred Stock - Additional Information (Details) - USD ($)		12 Months Ended
	Nov. 13, 2019	Dec. 31, 2019	Dec. 31, 2020	Nov. 30, 2019	Apr. 30, 2018
Temporary Equity [Line Items]
Per share price of issuance of shares		$ 0.001	$ 0.001
Capital contribution related to extinguishment of convertible preferred stock liability	$ 25,600,000	$ 25,595,000
Common Stock
Temporary Equity [Line Items]
Convertible preferred stock automatically converted into common stock	7,077,366			7,077,366
Series A Convertible Preferred Stock
Temporary Equity [Line Items]
Number of shares committed to purchase, no longer issuable	16,000,000
Series A Share Purchase Agreement | Series A Convertible Preferred Stock
Temporary Equity [Line Items]
Per share price of issuance of shares					$ 1.00
Series A Share Purchase Agreement | Series A Convertible Preferred Stock | Maximum
Temporary Equity [Line Items]
Total amount of preferred shares issuable by the entity					$ 60,000,000

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Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Oct. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares issued		19,931,660	13,788,982
ESPP Purchases
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common shares issuable under the plan (in shares)	225,188
Percentage of increase in number of shares of capital stock issued and outstanding	1.00%
Percent of purchase shares of common stock	85.00%
First offering period	6 months
Commencement date of first six month offering period	Jan. 01, 2020
Second offering period	6 months
Commencement date of second six month offering period	Jul. 01, 2020
Common stock, shares issued		7,272
Number of shares of common stock available for issuance under ESPP		355,806
2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common shares issuable under the plan (in shares)		2,844,193
Percentage of increase in number of shares of capital stock issued and outstanding		4.00%
Common stock reserved and available for issuance as future option grants		1,433,991
Vesting period		4 years
Percentage of option vesting		25.00%
Terms of award		The Board determines the period over which options become exercisable and options generally vest over a four-year period, with 25% of options vesting on the first anniversary of employment, and thereafter, the remaining options vesting quarterly, over the following 36-month period. The options will expire within ten years from the date of grant.
Remaining option vesting period		36 months
Expiration period		10 years
Unrecognized stock option granted under plan		$ 13.5
Unrecognized weighted average period		2 years 6 months
2020 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Estimated total grant date fair value of options vested		$ 800,000
Weighted average fair value options granted		$ 21.88	$ 2.90
Maximum | ESPP Purchases
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Period for increase in number of shares of common stock reserved for issuance	10 years
Maximum | 2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Period for increase in number of shares of common stock reserved for issuance		10 years

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Share-Based Compensation - Summary of Share-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation	$ 3,807	$ 389
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation	1,250	30
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation	$ 2,557	$ 359

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Share-Based Compensation - Summary of Estimated Fair Value of Option Awards Granted Using Black-Scholes Option-Pricing Model (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Contractual term (years)	P10Y	P10Y
Expected volatility, minimum	86.40%	61.80%
Expected volatility, maximum	97.60%	87.60%
Risk-free interest rate, minimum	0.20%	1.60%
Risk-free interest rate, maximum	1.50%	2.60%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	4 years	5 years 10 months 24 days
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	6 years 1 month 6 days	6 years 1 month 6 days

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Share-Based Compensation - Summary of Stock Option Activity (Details) - 2019 Plan - USD ($) $ / shares in Units, $ in Thousands	11 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2020
Number of Options
Outstanding, Beginning Balance		1,320,243
Granted		682,000
Exercised		(63,366)
Cancelled		(40,482)
Outstanding, Ending Balance	1,320,243	1,898,395
Exercisable as of December 31, 2020		535,084
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, Beginning Balance		$ 3.34
Weighted Average Exercise Price, Granted		29.78
Weighted Average Exercise Price, Exercised		4.29
Weighted Average Exercise Price, Cancelled		2.87
Weighted Average Exercise Price Outstanding, Ending Balance	$ 3.34	12.79
Weighted Average Exercise Price, Exercisable as of December 31, 2019		$ 2.58
Weighted Average Remaining Contractual Term (In years)
Weighted Average Remaining Contractual Term (In years), Outstanding	9 years 2 months 23 days	8 years 7 months 6 days
Weighted Average Remaining Contractual Term (In years), Exercisable as of December 31, 2019		8 years 1 month 9 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding		$ 30,353
Aggregate Intrinsic Value Outstanding	$ 30,353	25,918
Aggregate Intrinsic Value, Exercisable as of December 31, 2019		$ 11,684

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Income Taxes - Summary of Statutory Tax Rates Applicable to Income of Company and Subsidiaries (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Line Items]
Effective income tax rate	21.00%	21.00%
89Bio Ltd
Income Tax Disclosure [Line Items]
Effective income tax rate	23.00%	23.00%
89bio Management, Inc.
Income Tax Disclosure [Line Items]
Effective income tax rate	21.00%	21.00%
UAB 89bio Lithuania
Income Tax Disclosure [Line Items]
Effective income tax rate	15.00%	15.00%

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Income Taxes - Income Taxes - Summary of Income Tax Benefit (Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ (11)	$ (167)
State	1	(1)
Foreign		(30)
Total	(10)	(198)
Deferred:
Federal	69	(20)
Total	69	(20)
Income tax benefit (expense)	$ (59)	$ 218

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Income Taxes - Summary of Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Line Items]
Research and development expenses	$ 5,392	$ 3,419
Accrued expenses	635	349
Other	658	10
Total deferred tax assets	22,005	10,022
Less: valuation allowance	(21,936)	(10,022)
Net deferred tax assets	69
United States
Income Tax Disclosure [Line Items]
Net operating loss carryforwards	11,342	1,916
Israel
Income Tax Disclosure [Line Items]
Net operating loss carryforwards	$ 3,978	$ 4,328

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Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Line Items]
Deferred tax assets, valuation allowance	$ 21,936,000	$ 10,022,000
Deferred tax assets, change in valuation allowance	$ 11,900,000	6,500,000
Operating loss carryforwards limitations on use	Federal net operating losses generated after 2017 can be carried forward indefinitely but utilization will be limited to 80% of taxable income in the period that net operating losses are being utilized.
Taxable income utilization percentage	80.00%
Federal research and development credit carryforwards	$ 600,000
State research and development credit carryforwards	700,000	200,000
Increase in unrecognized tax benefits	300,000	39,000
Unrecognized Tax Benefits	0
United States
Income Tax Disclosure [Line Items]
Deferred tax assets, change in valuation allowance		20,000,000
Accumulated tax loss carryforward	54,100,000	9,100,000
Israel
Income Tax Disclosure [Line Items]
Deferred tax assets, change in valuation allowance	(69,000)
Accumulated tax loss carryforward	$ 17,300,000	$ 23,800,000

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Income Taxes - Summary of Loss from Continuing Operations Before Taxes on Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Line Items]
Net loss before income tax	$ (49,558)	$ (57,202)
United States
Income Tax Disclosure [Line Items]
Net loss before income tax	(58,760)	(19,502)
Lithuania
Income Tax Disclosure [Line Items]
Net loss before income tax	(73)	200
Israel
Income Tax Disclosure [Line Items]
Net loss before income tax	$ 9,275	$ (37,900)

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Income Taxes - Summary of Reconciliation of Income Tax Benefit (Expense) Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax benefit computed at statutory rates	$ 8,285	$ 13,095
Research and development credits, net of uncertain tax position	815	93
Change in valuation allowance	(11,914)	(6,520)
Change in Israel effective tax rate due to the 2019 reorganization	647	(734)
Foreign rate differential	1,671
Revaluation of convertible preferred stock liability		(6,039)
Other	555	(113)
Income tax benefit (expense)	$ 59	$ (218)

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Net Loss Per Share - Schedule of Outstanding Potentially Dilutive Securities Excluded From Calculation of Diluted Net Loss (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share	3,332,386	2,844,193
Stock Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share	1,898,395	1,320,243
Shares Available for Future Option Grants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share	1,433,991	1,523,950