1 PART I ITEM 1. BUSINESS Overview We are a clinical-stage biopharmaceutical company specializing in novel therapeutics to treat chronic, high-prevalence retinal diseases. Our most advanced product candidate is KSI-301, a biologic therapy built with our antibody biopolymer conjugate platform, or ABC Platform, which is designed to maintain potent and effective drug levels in ocular tissues. We believe that KSI-301, if approved, has the potential to become an important anti-VEGF therapy in retinal vascular diseases including wet age-related macular degeneration, or wet AMD, and diabetic retinopathy, or DR. KSI-301 and our ABC Platform were developed at Kodiak, and we own worldwide rights to those assets, including composition of matter patent protection for KSI-301. We have applied our ABC Platform to develop additional product candidates beyond KSI-301, including KSI-501, our bispecific anti-IL-6/VEGF bioconjugate. We intend to progress these and other product candidates to address high-prevalence ophthalmic diseases. We believe that the science underlying KSI-301's design and Kodiak's ABC Platform, in particular with regards to ocular durability, ocular target tissue penetration, high molar dose and stability constitute differentiating attributes that we believe will be important for a truly next-generation retinal disease therapy. We initiated our first-in-human, single ascending dose Phase 1a clinical study of KSI-301 in the United States in nine patients with severe diabetic macular edema, or DME, in July 2018. In this study, patients were administered a single dose of KSI-301 and followed for 12 weeks, with the primary safety endpoint measured at 2 weeks. We successfully dosed all patients at the pre-planned dose levels and the final 12-week last visit took place in November 2018. The twelve-week data demonstrated safety and durability of responses following the single dose of KSI-301. Notably: • Rapid high-magnitude and durable treatment responses were seen at all dose levels tested in a heavily pre-treated Phase 1 patient population. • Twelve weeks after a single dose, median vision improvement from baseline of almost two lines of vision (9 eye chart letters) and median improvement in retinal edema of 121 microns were achieved (pooled across all three dose levels tested). • No dose-limiting toxicities, drug-related adverse events, or intraocular inflammation were observed through each patient’s last visit at 12 weeks. After a single dose, eight of nine patients responded to KSI-301, as assessed by improvement from baseline in vision, anatomy, or both. Rapid improvements were observed as early as one week after the injection. The treatment effect increased through four weeks resulting in a median Best Corrected Visual Acuity, or BCVA, improvement of 12.5 eye chart letters and median Central Retinal Thickness on optical coherence tomography, or OCT, improvement of 120 microns, pooled across all three dose levels. Among the responders to KSI-301, all had sustained improvements from baseline (vision, retinal anatomy, or both) at the twelve-week last visit. At twelve weeks after the single dose, a median BCVA improvement of nine eye chart letters (almost two lines of vision) and median OCT improvement of 121 microns were observed, pooled across all three dose levels. The single non-responder subject had previously failed to respond to a regimen of Lucentis and EYLEA treatments. Through the 12-week last visit, single doses of KSI-301 demonstrated no dose-limiting toxicities, no drug-related adverse events, and no signs of intraocular inflammation. The highest dose tested, 5 mg, has been selected for advancement into pivotal studies. We believe the depth and durability of treatment responses seen in the Phase 1 single-dose study are very encouraging. This study of KSI-301 was designed as a first-in-human, single-dose safety study but also demonstrated bioactivity and 12- week durability. DME can be a challenging retinal disease to treat due to high intraocular VEGF levels and concurrent retinal vascular inflammation. For example, the approved dosing regimen for EYLEA in DME commences with five monthly loading doses. In our Phase 1a study, we observed treatment responses after only a single dose. We believe KSI-301 has the potential to be a highly differentiated therapy that can address the heavy treatment burden and suboptimal real-world outcomes of current medicines. We are fully committed to the continued rapid clinical development of KSI-301 and intend to evaluate its potential broadly in the treatment of patients with retinal vascular diseases.