Aerpio Reports First Quarter 2019 Financial Results and Provides Business Update

On Track to Initiate Phase 1b Clinical Trial of Topical Drop
Formulation of AKB-9778 for Primary Open-Angle Glaucoma (POAG) in the
Second Quarter of 2019

CINCINNATI–(BUSINESS WIRE)–Aerpio Pharmaceuticals, Inc. (Nasdaq: ARPO), a biopharmaceutical company
focused on developing compounds that activate Tie2 to treat ocular
diseases and diabetic complications, today reported financial results
for the first quarter ended March 31, 2019, and provided a business
update.

“Although the TIME-2b study of the Tie2 activator, AKB-9778, did not
meet its primary endpoint in non-proliferative diabetic retinopathy
(NPDR), we continue to be encouraged by pre-specified secondary endpoint
data that suggest the potential for AKB-9778 to treat primary open-angle
glaucoma (POAG) and possibly diabetic nephropathy,” said Stephen
Hoffman, M.D., Ph.D., Chief Executive Officer of Aerpio. “In the
near-term, our top priority is the development of our topical drop
formulation of AKB-9778 for POAG, for which we expect to begin a Phase
1b clinical trial this quarter, with data anticipated by the end of the
year. Our glaucoma program, combined with our license with Gossamer Bio,
Inc. for GB004, a hypoxia inducible factor (HIF)-1 alpha stabilizer in
clinical development for inflammatory bowel disease, represent two
promising clinical-stage programs, each with near-term milestones.
Additionally, we have reduced our company expenses and are committed to
moving forward in a capital-efficient manner. Based on our current
development plans, we have sufficient capital to fund our operations
through at least the second quarter of 2021.”

Recent Company Highlights and Upcoming Milestones

• Announced top-line results of the TIME-2b clinical trial designed to
  evaluate the safety and efficacy of AKB-9778, a Tie2 activator, in
  NPDR; the study did not meet its primary endpoint; however, the study
  generated encouraging data in a number of prespecified, key secondary
  endpoints, including reductions in urine albumin-to-creatinine ratio
  (UACR), a measure of kidney function, suggesting potential utility as
  a treatment for diabetic nephropathy, and reductions in intraocular
  pressure (IOP), suggesting potential utility in open-angle glaucoma;
• Presented encouraging preliminary IOP data from the Company’s TIME-2b
  study at the Association for Research in Vision and Ophthalmology
  Annual Meeting 2019; and,
• Anticipate initiating a Phase 1b clinical trial to evaluate the safety
  and pharmacokinetics of a topical drop formulation of AKB-9778 in
  healthy subjects in the second quarter of 2019, with results
  anticipated by the end of 2019.

First Quarter 2019 Financial Highlights

As of March 31, 2019, cash and cash equivalents totaled $53.4 million,
compared to $62.6 million as of December 31, 2018. Total shares
outstanding, as of March 31, 2019, were 40.6 million.

For the three months ended March 31, 2019, operating expenses totaled
$8.8 million, including $0.6 million in non-cash stock compensation
expense, compared to $7.5 million, including $1.1 million in non-cash
stock compensation expense, for the same period in 2018.

Research and development expenses for the three months ended March 31,
2019, increased $1.6 million, or 39%, compared to the same period in
2018. This increase was primarily the result of increased expenses
associated with the TIME-2b clinical trial of AKB-9778.

General and administrative expenses for the three months ended March 31,
2019, decreased $0.2 million, or 6%, compared to the same period in
2018. This decrease was primarily attributable to decreased stock-based
compensation costs.

Net loss attributable to common shareholders for the three months ended
March 31, 2019 was $8.5 million, or $0.21 per share, compared to a net
loss attributable to common shareholders of $7.4 million, or $0.27 net
loss per share, for the same period in 2018.

About Aerpio Pharmaceuticals

Aerpio Pharmaceuticals, Inc. is a biopharmaceutical company focused on
advancing first-in-class compounds that activate Tie2 to treat ocular
diseases and complications of diabetes. Tie2 is an important regulator
of vascular stability and its down-regulation is found in patients with
diabetes and other conditions. Down-regulation is caused by activation
of two inhibitors of Tie2, VE-PTP and Ang-2. The Company’s lead
compound, AKB-9778, is being investigated, in a topical drop
formulation, for its potential as a treatment for open-angle glaucoma.
For more information, please visit www.aerpio.com

About AKB-9778

AKB-9778 binds to and inhibits vascular endothelial protein tyrosine
phosphatase (VE-PTP), an important negative regulator of Tie2. Decreased
Tie2 activity contributes to vascular instability in many diseases
including diabetes. AKB-9778 activates the Tie2 receptor irrespective of
extracellular levels of its binding ligands, angiopoietin-1 (agonist) or
angiopoietin-2 (antagonist) and may be the most efficient pharmacologic
approach to maintain normal Tie2 activation.

Forward Looking Statements

This press release contains forward-looking statements. Statements in
this press release that are not purely historical are forward-looking
statements. Such forward-looking statements include, among other things,
projections regarding future revenue and financial performance, the
Company’s long-term growth, the development of the Company’s product
candidates, including AKB-9778, the Company’s plans for future
development of its product candidates, including the timing and
commencement of the Company’s planned clinical trials and expected
results from such clinical trials, the therapeutic potential of the
Company’s product candidates, and the Company’s collaboration with
Gossamer Bio. Actual results could differ from those projected in any
forward-looking statements due to several risk factors. Such factors
include, among others, the ability to continue to develop AKB-9778 or
other product candidates, the inherent uncertainties associated with the
drug development process, including uncertainties in regulatory
interactions, commencing clinical trials and enrollment of patients in
clinical trials, our ability to realize the intended benefits of our
collaboration with Gossamer Bio, and competition in the industry in
which the Company operates and overall market conditions.

These forward-looking statements are made as of the date of this press
release, and the Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual results
could differ from those projected in the forward-looking statements,
except as required by law. Investors should consult all the information
set forth herein and should also refer to the risk factor disclosure set
forth in the reports and other documents the Company files with the SEC
available at www.sec.gov.

Contacts

Investor & Media:
Aerpio
Pharmaceuticals, Inc.
Michael Rogers
Chief Financial
Officer
[email protected]

or

Burns McClellan, on behalf of Aerpio Pharmaceuticals, Inc.
Media:
Nancie
Steinberg / Robert Flamm, Ph.D.
[email protected]
/ [email protected]
or
Investors:
John
Grimaldi
[email protected]