TABLE OF CONTENTS

Filed Pursuant to Rule 424(b)(4)
Registration Number 333-204951

PROSPECTUS


7,812,500 Shares
vTv Therapeutics Inc.
Class A Common Stock

This is the initial public offering of shares of our Class A common stock. We are offering 7,812,500 shares of our Class A common stock. The initial public offering price is $15.00 per ordinary share. Prior to this offering, there has been no public market for our Class A common stock. Our Class A common stock has been approved for listing on The NASDAQ Global Market under the symbol “VTVT.”

We are an “emerging growth company” as defined under the federal securities laws and are eligible for reduced public company reporting requirements. Please see “Prospectus Summary—Implications of being an Emerging Growth Company.” We will also be a “controlled company” under the corporate governance rules for NASDAQ-listed companies and will be exempt from certain corporate governance requirements of the rules. See “Risk Factors—Risks Relating to this Offering and Ownership of Our Class A Common Stock.”

Our business and an investment in our Class A common stock involve significant risks. These risks are described under the caption “Risk Factors” beginning on page 14 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Per Share
Total
Public offering price
$
15.00
 
$
117,187,500
 
Underwriting discount(1)
$
1.05
 
$
8,203,125
 
Proceeds, before expenses, to us
$
13.95
 
$
108,984,375
 

(1)We refer you to “Underwriting” beginning on page 149 of this prospectus for additional information regarding total underwriter compensation.

Our principal equityholder, MacAndrews & Forbes Incorporated (“MacAndrews”), has agreed to purchase through one or more affiliates an aggregate of 1,666,666 shares of our Class A common stock in this offering at the initial public offering price.

The underwriters may also purchase up to an additional 1,171,875 shares of our Class A common stock from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments, if any.

The underwriters expect to deliver the shares against payment in New York, New York on August 4, 2015.

Piper Jaffray Stifel
Canaccord Genuity Janney Montgomery Scott

July 29, 2015

TABLE OF CONTENTS

For investors outside the United States: neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus and any such free writing prospectus outside of the United States.

TABLE OF CONTENTS

Page
Prospectus Summary
 
 
Risk Factors
 
 
Cautionary Note Regarding Forward-Looking Statements
 
 
Use of Proceeds
 
 
Dividend Policy
 
 
Capitalization
 
 
Dilution
 
 
Unaudited Pro Forma Condensed Combined Consolidated Financial Information
 
 
Selected Financial Data
 
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 
Business
 
 
Management
 
 
Certain Relationships and Related Party Transactions
 
 
Principal Stockholders
 
 
Description of Capital Stock
 
 
Shares Eligible for Future Sale
 
 
Certain U.S. Federal Income Tax Considerations
 
 
Underwriting
 
 
Legal Matters
 
 
Experts
 
 
Where You Can Find More Information
 
 
Index to Financial Statements
 
 

You should rely only on the information contained in this prospectus and any related free writing prospectus that we may provide to you in connection with this offering. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

The financial information provided in this prospectus consists of the combined financial information of TransTech Pharma, LLC, which will be renamed vTvx Holdings I LLC (“vTvx Holdings I”), and High Point Pharmaceuticals, LLC, which will be renamed vTvx Holdings II LLC (“vTvx Holdings II”), which are referred to together in this prospectus as the “Predecessors.” In the reorganization transactions described in “Prospectus Summary—The Reorganization Transactions” (the “Reorganization Transactions”), among other transactions, the Predecessors will directly or indirectly contribute substantially all of their assets, including all of their personnel and operations, to subsidiaries of vTv Therapeutics Inc. In this prospectus, unless otherwise indicated or the context otherwise requires, references to the “Company,” “we,” “us” and “our” refer to (1) subsequent to the completion of this offering and the Reorganization Transactions, vTv Therapeutics Inc. and its consolidated subsidiaries and (2) prior to the completion of this offering and the Reorganization Transactions, the Predecessors and their consolidated subsidiaries. Where we refer to measures or statistics on a “pro forma” basis, we are referring to such measures or statistics after giving

i

TABLE OF CONTENTS

effect to the Reorganization Transactions and this offering (including the sale by us of 7,812,500 shares of our Class A Common Stock at an initial public offering price equal to the amount set forth on the front cover of this prospectus) and the application of net proceeds from this offering.

We have proprietary rights to or are exclusively licensed to use a number of registered and unregistered trademarks that we believe are important to our business, including, without limitation, TTP Translational Technology, TTPredict, TTPSpace and TTPScreen. This prospectus contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

ii

TABLE OF CONTENTS

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, especially the “Risk Factors” section and our financial statements and the related notes appearing elsewhere in this prospectus, before making an investment decision.

Overview

Our Company

We are a clinical-stage biopharmaceutical company engaged in the discovery and development of orally administered small molecule drug candidates to fill significant unmet medical needs. We have a powerful pipeline of clinical drug candidates, led by our programs for the treatment of Alzheimer’s disease (“AD”) and type 2 diabetes. Our drug candidate for the treatment of AD, azeliragon (TTP488), is an orally administered, small molecule antagonist targeting the receptor for advanced glycation endproducts (“RAGE”), and we have commenced patient enrollment in a Phase 3 clinical trial (the “Steadfast Study”) under an FDA-agreed Special Protocol Assessment (“SPA”). Our type 2 diabetes drug candidates include TTP399, an orally administered, liver-selective glucokinase activator (“GKA”), for which we are currently enrolling patients in a Phase 2b clinical trial (the “AGATA Study”), and TTP273, an orally administered, non-peptide agonist that targets the glucagon-like peptide-1 receptor (“GLP-1r”), which we anticipate will enter a Phase 2 clinical trial in early 2016. We have three additional programs in various stages of clinical development for the prevention of muscle weakness and the treatment of inflammatory disorders.

Our Pipeline

The following table summarizes key information about our drug candidates:


Our Alzheimer’s Disease Program – Azeliragon

Alzheimer’s disease is a progressive neurodegenerative disorder that slowly destroys memory and thinking skills, with a number of other behavioral and neuropsychiatric symptoms. While estimates of the prevalence of AD vary, the Alzheimer’s Association estimates that in 2015 there are 5.3 million people in the

1

TABLE OF CONTENTS

United States suffering from AD. According to Decision Resources, in 2013, there were 8.3 million AD patients in the “G7 Pharmaceutical Markets,” including 3.1 million in the United States and 5.2 million in Western Europe (France, Germany, Italy, Spain and the United Kingdom) and Japan. Mild AD patients represent approximately 64% of the overall AD population. There are currently no disease-modifying therapies approved for the treatment of AD; however, according to Decision Resources, this segment of the market is expected to grow to $7.7 billion by 2023, representing approximately 60% of expected 2023 revenues in the global AD market.

Azeliragon is an orally administered, small molecule drug candidate that has the potential to be among the first FDA approved disease-modifying AD therapeutics due to its novel mechanism of action of inhibiting RAGE. Because of that potential, azeliragon has been awarded Fast Track designation by the FDA. RAGE is a cell surface receptor that is implicated in many of the processes thought to play a primary role in the development and progression of AD, including amyloid-beta (“Aβ”) transport into the brain, the phosphorylation of tau protein, chronic inflammation, vascular dysfunction, metabolic dysregulation and neurotoxicity. By inhibiting RAGE, azeliragon has the potential to slow the progression of cognitive decline in mild and mild-to-moderate AD patients. We are not aware of any other clinical-stage drugs targeting RAGE. Unlike development stage disease-modifying treatments from other companies that target a singular cause of AD, azeliragon is designed to interact with multiple aspects of AD etiology.

We are currently enrolling the 800-patient STEADFAST Study, a Phase 3 clinical trial, under an FDA-agreed SPA. The STEADFAST Study includes two sub-studies under one protocol (sub-study A and sub-study B). Each sub-study will enroll 400 patients with mild AD, randomized to receive a 5 mg/day dose of azeliragon or placebo on a one-to-one basis, and is powered to achieve statistical significance on the co-primary endpoints—change from baseline in ADAS-COG11 and CDR-SB scores, which are standard measures of cognitive impairment and global function in AD patients. Our Phase 2b study of azeliragon in 399 mild-to-moderate AD patients demonstrated a statistically significant benefit at the 5 mg/day dose versus placebo at 18 months with respect to ADAS-COG11 and a statistically significant lower frequency of psychiatric adverse events. At the same dose, we identified an even more pronounced benefit in ADAS-COG11 and CDR-SB scores in an analysis of the sub-population of patients with mild AD. In all of our Phase 1 and 2 clinical trials, azeliragon has been shown to be generally safe and well tolerated at a dose of 5 mg/day. We expect to report topline data from sub-study A of the STEADFAST Study in late 2017 and from sub-study B in mid-2018. If results from sub-study A are favorable, we plan to initiate discussions with the FDA regarding a new drug application (“NDA”) for azeliragon in early 2018 and submit the NDA later in 2018.

Our Diabetes Programs – Glucokinase Activator (TTP399) and GLP-1r Agonist (TTP273)

Diabetes is characterized by the body’s inability to properly use or produce insulin, the hormone necessary for the uptake of sugar from the bloodstream so that it may be converted into energy. Type 2 diabetes is an inability to properly use insulin to control sugar in the bloodstream, and 90 to 95% of diabetes patients have type 2 diabetes. According to Decision Resources, in 2013, 62.2 million adults in the G7 Pharmaceutical Markets suffered from type 2 diabetes, including 29.8 million adults in the United States aged 20 and over. There are multiple drug classes approved for the treatment of type 2 diabetes, including insulin replacement, metformin, sulfonylureas, thiazolidinedione, SGLT-2 inhibitors, DPP-4 inhibitors and injectable GLP-1r agonists. We expect our type 2 diabetes drug candidates to compete in the non-insulin segment of the market, which, according to Decision Resources, totaled sales of $13.4 billion in the G7 Pharmaceutical Markets for 2013 and is expected to grow to $27.0 billion by 2023. Despite the availability of these drugs, a substantial portion of type 2 diabetes patients are unable to maintain adequate control of blood glucose levels and eventually progress to insulin therapy, demonstrating the need for additional therapies with novel mechanisms of action and routes of administration to improve efficacy and patient compliance.

We are developing two distinct drug candidates for the treatment of type 2 diabetes: a liver-selective GKA (TTP399), for which we are currently enrolling the AGATA Study, a Phase 2b clinical trial, and an oral GLP-1r agonist (TTP273), for which we anticipate we will begin enrolling a Phase 2 clinical trial in early 2016.

2

TABLE OF CONTENTS

Glucokinase Activator

TTP399 is an orally administered, small molecule liver-selective GKA. Glucokinase (“GK”) activation represents a novel mechanism of action for the treatment of type 2 diabetes. Liver-selective activation of GK provides intensive glycemic control without inducing hypoglycemia. Treatment with TTP399 is designed to avoid the safety and tolerability issues associated with other GKA candidate drugs in clinical development. We are currently enrolling patients in a 180-patient Phase 2b trial, the AGATA Study, to demonstrate TTP399’s ability to improve control of blood glucose levels over a six-month period. The primary endpoint of the Agata Study will be the change from baseline in glycosylated hemoglobin (“HbA1c”) levels. We expect to report topline results from the AGATA Study in the first half of 2016. We previously completed a six-week Phase 2a clinical trial of TTP399 in 120 type 2 diabetes patients whose glycemic parameters were not well-controlled on metformin in which patients treated with TTP399 showed statistically significant reductions in HbA1c levels compared with placebo without induction of hypoglycemia or hyperlipidemia and with no induction of insulin secretion. We believe that TTP399 has the potential to be a first-in-class oral anti-diabetic drug (“OAD”) due to its liver-selectivity and novel mechanism of action.

GLP-1r Agonist

TTP273 is an orally administered, small molecule, non-peptide GLP-1r agonist. Currently available GLP-1r agonists (which are injectable peptides) are well established in terms of efficacy, including the ability to lower blood glucose, decrease HbA1c levels and induce weight loss, but their use has been limited due to their subcutaneous administration and gastrointestinal side effects, including nausea and vomiting. We believe that an orally administered GLP-1r agonist that has the metabolic effects of currently available GLP-1r agonists, without the gastrointestinal side effects typical of this class of compounds, would offer a competitive advantage compared to GLP-1r targeted treatment options currently available. We plan to initiate a 180-patient Phase 2 proof-of-concept trial for TTP273 in early 2016 to demonstrate the efficacy of TTP273 versus placebo in reducing HbA1c and body weight. We have previously conducted several Phase 1 trials in healthy volunteers and type 2 diabetics that showed that TTP273 was safe and well-tolerated. Our trials have indicated that TTP273 may have superior tolerability compared to competing products and no risk of antibody formation because TTP273 is a small molecule. For these reasons, we believe TTP273 has the potential to expand the market of GLP-1r agonist therapies and replace a number of current GLP-1-related therapies, including DPP-4 inhibitors and injectable GLP-1 analogues. We expect to report topline results from our Phase 2 proof-of-concept trial in late 2016. We believe that TTP273 has the potential to become accepted as a best-in-class GLP-1r agonist due to enhanced safety and ease of administration.

Our Additional Product Candidates

We have three additional programs in various stages of clinical development for the prevention of muscle weakness and the treatment of inflammatory disorders. HPP593 is a functionally selective peroxisome proliferator-activated receptor delta (“PPAR-δ”) agonist being developed for the prevention of muscle weakness associated with prolonged mechanical ventilation (“PMV”) and critical injury that has achieved proof-of-concept in a Phase 1b clinical trial. We plan to initiate a Phase 2 clinical trial in late 2015 and expect to report topline data in late 2016. HPP737 is an orally administered phosphodiesterase-4 (“PDE4”) inhibitor that is being developed for the treatment of chronic obstructive pulmonary disease (“COPD”), psoriasis and other inflammatory diseases. HPP737 was shown to be safe and well tolerated in a Phase 1 clinical trial and we plan to commence a Phase 2 trial in patients with either psoriasis or COPD in early 2016, with topline data anticipated in late 2016. HPP971, a Bach1 inhibitor, is being developed for the treatment of inflammation, autoimmune diseases and diseases associated with oxidative stress, and is currently in Phase 1 development. In addition to these programs, we have other pre-clinical and clinical programs that are not currently under active development, and we may decide to further develop or to license one or more of these other programs in the future.

Our Drug Discovery Technology Platform – TTP Translational Technology

We developed a proprietary drug discovery platform called TTP Translational Technology, which we use to discover novel small molecule therapeutics for major diseases and to validate biological pathways and targets. All of the drug candidates in our pipeline (other than HPP593) were discovered using TTP

3

TABLE OF CONTENTS

Translational Technology. Our technology platform is a fully integrated drug discovery process, amenable to automation, which works to translate genomic and proteomic data into safe and effective small molecule therapeutics in a high-throughput fashion, bypassing most of the classical requirements and bottlenecks in drug discovery. We have used this technology to discover drugs for our internal pipeline and in research collaborations with pharmaceutical and biotechnology companies.

Our Strategy

Our goal is to leverage our powerful pipeline of orally administered small molecule drug candidates to deliver novel, differentiated therapies to fill significant unmet medical needs. As key components of our strategy, we intend to:

Continue Phase 3 enrollment and seek regulatory approval of azeliragon as a disease-modifying treatment for patients with mild AD;
Complete Phase 2 development of our type 2 diabetes programs;
Evaluate strategic collaborations for the commercialization of azeliragon;
Seek strategic collaborations for Phase 3 development and commercialization of our type 2 diabetes programs;
Continue development of additional pipeline programs and seek strategic development partners for those programs; and
Evaluate opportunities to leverage our TTP Translational Technology to discover additional drug candidates for internal or external development.

Our Intellectual Property

Each of our most advanced drug candidates is the subject of patent and patent applications for composition of matter and method of use in major markets worldwide. Our patents are expected to provide us with intellectual property protection through 2029 for azeliragon, 2030 for TTP399 and 2034 for TTP273, in each case, assuming we obtain the maximum applicable extensions in the United States.

Our Risks

An investment in our Class A common stock involves a high degree of risk. You should carefully consider the risks summarized in the “Risk Factors” section of this prospectus immediately following this prospectus summary.

The Reorganization Transactions

Prior to this offering and the reorganization transactions described below (collectively, the “Reorganization Transactions”), the programs, personnel, operations and other assets that will comprise our business are held by our Predecessors, vTvx Holdings I and vTvx Holdings II.

In the Reorganization Transactions:

vTvx Holdings I and vTvx Holdings II will contribute substantially all of their assets, including all of their personnel and operations (the “Contributed Assets”), to a newly-formed holding company, vTv Therapeutics Holdings LLC (“vTv Therapeutics Holdings”), in return for interests of vTv Therapeutics Holdings. Assets that will not be contributed include restricted cash, certain receivables unrelated to our operations and land included in property and equipment, net, and liabilities that will not be assumed include debt, a contingent distribution payable and other related party liabilities. All assets and liabilities that will not be contributed or assumed will remain with vTvx Holdings I and vTvx Holdings II;
vTv Therapeutics Holdings will contribute the Contributed Assets to vTv Therapeutics LLC, a newly formed Delaware limited liability company and, for administrative convenience, vTv Therapeutics Holdings may direct that the assets be transferred directly to vTv Therapeutics LLC on behalf of vTv Therapeutics Holdings;

4

TABLE OF CONTENTS

vTv Therapeutics Inc. (the “Issuer”) will amend and restate its certificate of incorporation and bylaws to provide that it will have two classes of common stock:
Class A common stock, par value $0.01 per share, which will represent economic interests and will have one vote per share, and
Class B common stock, par value $0.01 per share, which will represent no economic interests and will have one vote per share;
vTv Therapeutics LLC will amend and restate its limited liability company agreement to provide that it will have two classes of membership units:
a managing member unit, which will represent no economic interests and will have 100% of the voting power of vTv Therapeutics LLC, and
non-voting membership units (“vTv Therapeutics LLC Units”), which will represent economic interests.
vTv Therapeutics LLC will issue the managing member unit to the Issuer;
vTv Therapeutics LLC will issue vTv Therapeutics LLC Units to vTv Therapeutics Holdings; and
the Issuer will issue one share of Class B common stock, par value $0.01 per share (which represents no economic interests in the Issuer but has the right to cast one vote per share), to vTv Therapeutics Holdings for each vTv Therapeutics LLC Unit held by vTv Therapeutics Holdings.

In this offering, the Issuer will issue 7,812,500 shares of its Class A common stock to investors for cash (or 8,984,375 shares if the underwriters exercise their over-allotment option in full). The Issuer will then use the net proceeds from this offering to purchase vTv Therapeutics LLC Units from vTv Therapeutics LLC.

Immediately following the consummation of the Reorganization Transactions and this offering, the members of vTv Therapeutics LLC will consist of the Issuer and vTv Therapeutics Holdings, which will hold 25,000,000 vTv Therapeutics LLC Units and the same number of shares of the Issuer’s Class B common stock, which will represent 76.2% of the combined voting power of the Issuer’s outstanding common stock (or 73.6% if the underwriters exercise their over-allotment option in full). Entities affiliated with MacAndrews will initially bear certain costs and expenses of this offering, including the fees of attorneys, consultants, financial printers and auditors incurred by us, as well as certain additional expenses incurred by such affiliated entities. We will reimburse such MacAndrews affiliates using a portion of the gross proceeds of this offering. See “Certain Relationships and Related Party Transactions—Reimbursement of Expenses.”

In connection with this offering, vTv Therapeutics Holdings will enter into an Exchange Agreement, under which, subject to the terms of the Exchange Agreement and the vTv Therapeutics LLC Operating Agreement, vTv Therapeutics LLC Units (along with a corresponding number of shares of the Issuer’s Class B common stock) will be exchangeable for (i) shares of the Issuer’s Class A common stock on a one-for-one basis or (ii) cash (based on the market price of the shares of Class A common stock), at our option (as the managing member of vTv Therapeutics LLC), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Any decision to require an exchange for cash rather than shares of Class A common stock will ultimately be determined by the entire board of directors of vTv Therapeutics Inc. (the “Board of Directors”). See “Certain Relationships and Related Party Transactions—Exchange Agreement.”

The Issuer intends to enter into a Tax Receivable Agreement with vTv Therapeutics Holdings that will provide for the payment by the Issuer to vTv Therapeutics Holdings (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Issuer actually realizes (or, in some circumstances, the Issuer is deemed to realize) as a result of (a) the exchange of Class B common stock, together with the corresponding number of vTv Therapeutics LLC Units, for shares of the Issuer’s Class A common stock (or for cash), (b) tax benefits related to imputed interest deemed to be paid by the Issuer as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

5

TABLE OF CONTENTS

Immediately after the consummation of the Reorganization Transactions and this offering, the only asset of the Issuer will be its direct interest in vTv Therapeutics LLC and its indirect interests in the subsidiaries of vTv Therapeutics LLC. Each share of Class A common stock of the Issuer will correspond to a vTv Therapeutics LLC Unit that represents an economic interest held by the Issuer in vTv Therapeutics LLC, whereas the shares of Class B common stock of the Issuer will have voting rights only in the Issuer and will represent no economic interests of any kind. Shares of Class B common stock of the Issuer will be initially owned solely by vTv Therapeutics Holdings and cannot be transferred except in connection with an exchange or transfer of a corresponding vTv Therapeutics LLC Unit. We do not intend to list the Class B common stock on any stock exchange.

In addition, as a part of the Reorganization Transactions, the Issuer will enter into an investor rights agreement with vTv Therapeutics Holdings. Under the investor rights agreement, vTv Therapeutics Holdings will be initially entitled to nominate a majority of the members of our Board of Directors and designate the members of the committees of our Board of Directors. See “Management—Board Composition” and “Certain Relationships and Related Party Transactions—Investor Rights Agreement.”

The following diagram shows our corporate structure after completion of the Reorganization Transactions and this offering (assuming no exercise of the underwriters’ over-allotment option): 


In connection with the Reorganization Transactions, the Issuer will be appointed as the sole managing member of vTv Therapeutics LLC pursuant to its limited liability company agreement. The Issuer will hold the managing member unit (which represents 100% of the voting control and no economic interest in vTv Therapeutics LLC) and will be the sole managing member of vTv Therapeutics LLC, and the other members of vTv Therapeutics LLC will take no part in the management of the Issuer's business. Therefore, the Issuer will control all aspects of the business of vTv Therapeutics LLC.

6

TABLE OF CONTENTS

Because the Issuer will manage and operate the business and control the strategic decisions and day-to-day operations of vTv Therapeutics LLC and will also have a substantial financial interest in vTv Therapeutics LLC, we will consolidate the financial results of vTv Therapeutics LLC, pursuant to the variable-interest entity (“VIE”) accounting model, and a portion of our net income (loss) will be allocated to the non-controlling interest to reflect the entitlement of vTv Therapeutics Holdings to a portion of vTv Therapeutics LLC’s net income (loss). See “Unaudited Pro Forma Condensed Combined Consolidated Financial Information—Consolidation.” In addition, because vTv Therapeutics LLC will be under the common control of MacAndrews and its affiliates before and after the Reorganization Transactions, we will account for the Reorganization Transactions as a reorganization of entities under common control and will initially measure the interests of vTv Therapeutics Inc. in the assets and liabilities of vTv Therapeutics LLC at their carrying amounts as of the date of the completion of the Reorganization Transactions. The purpose of the Reorganization Transactions and our corporate structure is to transfer assets from the Predecessors to vTv Therapeutics LLC and to potentially provide certain tax and other advantages to us and MacAndrews. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement” and “—Exchange Agreement.”

Our Principal Equityholder

Following the Reorganization Transactions and this offering, MacAndrews will indirectly control 25,000,000 shares of Class B common stock held by vTv Therapeutics Holdings and will therefore control approximately 76.2% of the combined voting power of our outstanding common stock (or 73.6% if the underwriters exercise their over-allotment option in full). In addition, MacAndrews has agreed to purchase through one or more affiliates an aggregate of 1,666,666 shares of our Class A common stock in this offering at the initial public offering price, so its holdings represent approximately 81.3% of the combined voting power of our outstanding common stock (or 78.5% if the underwriters exercise their over-allotment option in full). As a result, MacAndrews will control any action requiring the general approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and by-laws and the approval of any merger or sale of substantially all of our assets. At or around the time of the offering or subsequent to the offering, MacAndrews and its affiliates may engage in various internal reorganization transactions at vTv Therapeutics Holdings or one or more of its direct or indirect holding companies, but MacAndrews will still possess direct or indirect voting control as described above.

MacAndrews is a company that acquires and manages a diversified portfolio of public and private companies. Wholly owned by Chairman and Chief Executive Officer Ronald O. Perelman, MacAndrews’ core strategy is based on investing in companies with strong market positions, high quality management with vertical expertise, recognized growth potential and ability to increase productivity. Current investments include leading participants across a wide range of industries, from biotechnology and military equipment to cosmetics and entertainment.

Implications of being an Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or “JOBS Act.” As an emerging growth company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include, among other things:

the ability to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in this prospectus;
exemption from the auditor attestation requirement in the assessment of our internal controls over financial reporting;
exemption from new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies;

7

TABLE OF CONTENTS

exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”), requiring mandatory audit firm rotation or a supplement to our auditor’s report in which the auditor would be required to provide additional information about the audit and our financial statements;
an exemption from the requirement to seek non-binding advisory votes on executive compensation and golden parachute arrangements; and
reduced disclosure about executive compensation arrangements.

We may take advantage of these provisions until the end of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company if we have $1.0 billion or more in “total annual gross revenues” during our most recently completed fiscal year, if we become a “large accelerated filer” with market capitalization of $700 million or more, or as of any date on which we have issued more than $1.0 billion in non-convertible debt over the three-year period to such date. We may choose to take advantage of some, but not all, of these reduced burdens. For example, we have taken advantage of the reduced reporting requirement with respect to disclosure regarding our executive compensation arrangements, have presented only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus and expect to take advantage of the exemption from auditor attestation on the effectiveness of our internal control over financial reporting. For as long as we take advantage of the reduced reporting obligations, the information that we provide shareholders may be different from information provided by other public companies. We are irrevocably electing to “opt out” of the extended transition period relating to the exemption from new or revised financial accounting standards and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

In addition, upon the closing of this offering, we will be a “controlled company” within the meaning of the NASDAQ corporate governance standards because more than 50% of our voting common stock will be indirectly owned by MacAndrews. For further information on the implications of this distinction, see “Risk Factors—Risks Relating to this Offering and Ownership of Our Class A Common Stock” and “Management—Board Committees.”

Corporate Information

We were incorporated in Delaware under the name vTv Therapeutics Inc. in April 2015. Our principal executive offices are located at 4170 Mendenhall Oaks Pkwy, High Point, North Carolina 27265, and our telephone number is (336) 841-0300. Our website address is www.vtvtherapeutics.com. Our website and the information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference in, and are not considered part of, this prospectus. You should not rely on our website or any such information in making your decision whether to purchase our Class A common stock.

8

TABLE OF CONTENTS

The Offering

Issuer
vTv Therapeutics Inc.
Class A common stock offered
7,812,500 shares.
Class A common stock to be outstanding after this offering and the use of proceeds therefrom
7,812,500 shares (8,984,375 shares if the underwriters exercise their over-allotment option in full).
Class B common stock to be outstanding after this offering and the use of proceeds therefrom
25,000,000 shares. Each share of our Class B common stock will have one vote on all matters submitted to a vote of stockholders but will represent no economic interests (including no rights to dividends or distributions upon liquidation). Shares of our Class B common stock will be issued to vTv Therapeutics Holdings. The aggregate voting power of the outstanding Class B common stock will be equal to the aggregate percentage of vTv Therapeutics LLC Units held by vTv Therapeutics Holdings. See “Description of Capital Stock.”
Voting rights
One vote per share; Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders. See “Description of Capital Stock.”
Exchange
Subject to the terms and conditions of the vTv Therapeutics LLC Operating Agreement, vTv Therapeutics LLC Units (along with a corresponding number of shares of our Class B common stock) may, subject to the terms of the Exchange Agreement, be exchanged with vTv Therapeutics LLC at any time for (i) shares of our Class A common stock on a one-for-one basis or (ii) cash (based on the market price of the shares of Class A common stock), at our option (as the managing member of vTv Therapeutics LLC), subject to customary exchange rate adjustments for stock splits, stock dividends and reclassifications. Any decision to require an exchange for cash rather than shares of Class A common stock will ultimately be determined by our entire Board of Directors. When a vTv Therapeutics LLC Unit and the corresponding share of our Class B common stock are exchanged by a holder of vTv Therapeutics LLC Units for a share of Class A common stock or for cash, the corresponding share of our Class B common stock will be canceled.
Controlled company
Because, on a pro forma basis, vTv Therapeutics Holdings is expected to beneficially own more than 50% of the voting power of our outstanding voting stock, we expect to avail ourselves of the “controlled company” exemptions under the rules of the NASDAQ, including exemptions from the requirement to have a majority of independent directors, the requirement to have a fully independent nominating and corporate governance committee and the requirement to have a fully independent compensation committee.

9

TABLE OF CONTENTS

Over-allotment option
We have granted to the underwriters an option to purchase up to 1,171,875 additional shares of Class A common stock from us at the initial public offering price (less underwriting discounts and commissions) to cover over-allotments, if any, for a period of 30 days from the date of this prospectus.
Use of proceeds
We estimate that the net proceeds from the sale of our Class A common stock in this offering before the payment of expenses will be approximately $109.0 million ($125.3 million if the underwriters exercise their over-allotment option in full) based on the initial public offering price of $15.00 per share. vTv Therapeutics Inc. will use the net proceeds of this offering to acquire vTv Therapeutics LLC Units. We intend to use such proceeds to fund the STEADFAST Study, further clinical development of our drug candidates and for working capital and other general corporate purposes. Entities affiliated with MacAndrews will initially bear certain costs and expenses of this offering, including the fees of attorneys, consultants, financial printers and auditors incurred by us, as well as certain additional expenses incurred by such affiliated entities. We will reimburse such MacAndrews affiliates using a portion of the gross proceeds of this offering. For additional information, see “Use of Proceeds.”
Dividend policy
We do not intend to pay dividends on our common stock or to make distributions from vTv Therapeutics LLC to its members (other than to vTv Therapeutics Inc. to fund its operations). We plan to retain any earnings for use in the operation of our business and to fund future growth.
Directed share program
At our request, the underwriters have reserved up to 390,625 shares of Class A common stock, or approximately 5% of the shares of Class A common stock offered by this prospectus (not including any shares of Class A common stock that may be issued pursuant to the underwriters’ exercise of their over-allotment option), for sale at the initial public offering price to our employees, directors and other persons associated with us. The number of shares of Class A common stock available for sale to the general public in the offering will be reduced by the number of shares sold pursuant to the directed share program. Any directed shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares of Class A common stock offered by this prospectus.
Listing
Our Class A common stock has been approved for listing on NASDAQ under the symbol “VTVT.”
Tax Receivable Agreement
We intend to enter into a Tax Receivable Agreement with vTv Therapeutics Holdings that will provide for the payment by us to vTv Therapeutics Holdings (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (or, in some circumstances, we are deemed to realize) as a result of (a) the exchange of Class B common stock, together with the corresponding number of vTv Therapeutics Holdings LLC Units, for shares of our Class A common stock (or for cash), (b) tax benefits related to imputed interest deemed

10

TABLE OF CONTENTS

to be paid by us as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

Risk factors
Investing in our Class A common stock involves a high degree of risk. Please read “Risk Factors” beginning on page 14 of this prospectus for a discussion of factors you should carefully consider before deciding to purchase shares of our Class A common stock.

Except as otherwise indicated, all information in this prospectus:

assumes no exercise of the underwriters’ option to purchase 1,171,875 additional shares of Class A common stock to cover over-allotments;
assumes 3,250,000 shares are issuable under options to purchase shares of Class A common stock, restricted stock units or other similar awards, including those that may be granted in connection with this offering under the vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan (the “2015 Plan”); and
assumes 25,000,000 shares of Class A common stock are reserved for issuance upon the exchange of vTv Therapeutics LLC Units (along with the corresponding number of shares of our Class B common stock).

MacAndrews has agreed to purchase through one or more affiliates an aggregate of 1,666,666 shares of our Class A common stock in this offering at the initial public offering price.

11

TABLE OF CONTENTS

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

vTv Therapeutics Inc. was formed in April 2015 and does not have historical financial data. The historical financial data presented in this prospectus are the historical combined financial data of our Predecessors, vTvx Holdings I and vTvx Holdings II. The summary statements of operations data for the years ended December 31, 2014 and 2013 are derived from the audited combined consolidated statements of operations of the Predecessors for such periods, which are included in this prospectus. The summary statements of operations data for the three months ended March 31, 2014 and 2015 are derived from the unaudited condensed combined consolidated statements of operations of the Predecessors for such periods, which are included in this prospectus. The summary unaudited reorganization pro forma condensed combined consolidated statement of operations data for the three months ended March 31, 2015 and the year ended December 31, 2014 give pro forma effect to the Reorganization Transactions as if they had been completed as of January 1, 2014, and the summary unaudited reorganization pro forma condensed combined consolidated balance sheet data as of March 31, 2015 give pro forma effect to the Reorganization Transactions as if they had been completed as of March 31, 2015, in each case, as described in “Unaudited Pro Forma Condensed Consolidated Financial Information.” The summary balance sheet data as of March 31, 2015 are derived from the unaudited condensed combined balance sheets of the Predecessors as of such date, which is included in this prospectus. The summary unaudited pro forma condensed combined consolidated statement of operations data for the three months ended March 31, 2015 and the year ended December 31, 2014 give pro forma effect to the Reorganization Transactions, this offering and the application of the net proceeds from this offering as if they had been completed as of January 1, 2014, and the summary unaudited pro forma condensed combined consolidated balance sheet data as of March 31, 2015 give pro forma effect to the Reorganization Transactions, this offering and the application of the net proceeds from this offering as if they had been completed as of March 31, 2015, in each case, as described in “Unaudited Pro Forma Condensed Combined Consolidated Financial Information.” The summary unaudited pro forma condensed combined consolidated financial data are presented for information purposes only and should not be considered indicative of actual results of operations that would have been achieved had the Reorganization Transactions and this offering been consummated on the dates indicated, and do not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period.

You should read the Summary Historical and Pro Forma Financial Data together with the sections entitled “Capitalization,” “Selected Financial Data,” “Unaudited Pro Forma Condensed Combined Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus.

Years Ended
December 31,
Reorganization
Pro Forma
Year Ended
December 31,
Pro Forma
Year Ended
December 31,
Three Months
Ended
March 31,
Reorganization
Pro Forma
Three Months
Ended
March 31,
Pro Forma
Three Months
Ended
March 31,
2013
2014
2014(a)
2014(b)
2014
2015
2015(a)
2015(b)
(Predecessor) (Predecessor)
(dollars in thousands, except for per unit and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of operations data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
976
 
$
1,549
 
$
1,549
 
$
1,549
 
$
14
 
$
50
 
$
50
 
$
50
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
 
25,434
 
 
18729
 
 
18,729
 
 
18,729
 
 
4,404
 
 
7,776
 
 
7,776
 
 
7,776
 
General and administrative
 
11,375
 
 
11,717
 
 
11,717
 
 
11,717
 
 
5,127
 
 
1,995
 
 
1,995
 
 
1,995
 
Total operating expenses
 
36,809
 
 
30,446
 
 
30,446
 
 
30,446
 
 
9,531
 
 
9,771
 
 
9,771
 
 
9,771
 
Operating loss
 
(35,833
)
 
(28,897
)
 
(28,897
)
 
(28,897
)
 
(9,517
)
 
(9,721
)
 
(9,721
)
 
(9,721
)
Other income (expense), net
 
41
 
 
(503
)
 
(503
)
 
(503
)
 
8
 
 
660
 
 
8
 
 
8
 
Other (expenses) – related party
 
(575
)
 
(623
)
 
 
 
 
 
(187
)
 
(168
)
 
 
 
 
Interest (expense)
 
(476
)
 
(282
)
 
 
 
 
 
(34
)
 
(45
)
 
 
 
 
Interest (expense), net – related party
 
(11,346
)
 
(5,727
)
 
 
 
 
 
(5,378
)
 
(539
)
 
 
 
 

12

TABLE OF CONTENTS

Years Ended
December 31,
Reorganization
Pro Forma
Year Ended
December 31,
Pro Forma
Year Ended
December 31,
Three Months
Ended
March 31,
Reorganization
Pro Forma
Three Months
Ended
March 31,
Pro Forma
Three Months
Ended
March 31,
2013
2014
2014(a)
2014(b)
2014
2015
2015(a)
2015(b)
(Predecessor) (Predecessor)
Investment (loss) – related party
 
(14
)
 
(69
)
 
 
 
 
 
(4
)
 
 
 
 
 
 
Combined consolidated net loss
$
(48,203
)
$
(36,101
)
$
(29,400
)
$
(29,400
)
$
(15,112
)
$
(9,813
)
$
(9,713
)
$
(9,713
)
Net loss attributable to non-controlling interests
 
 
 
 
 
(29,400
)
 
(22,400
)
 
 
 
 
 
(9,713
)
 
(7,400
)
Net loss available to Predecessor/vTv Therapeutics Inc.
$
(48,203
)
$
(36,101
)
$
 
$
(7,000
)
$
(15,112
)
$
(9,813
)
$
 
$
(2,313
)
vTvx Holdings I:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per member unit, basic and diluted
$
(12.82
)
$
(16.81
)
 
 
 
 
 
 
$
(7.94
)
$
(14.39
)
 
 
 
 
 
 
Units used to compute basic and diluted net loss per member unit(1)
 
13,288,327
 
 
13,263,676
 
 
 
 
 
 
 
 
13,288,608
 
 
4,188,607
 
 
 
 
 
 
 
vTvx Holdings II:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings (loss) per member unit, basic and diluted
$
0.06
 
$
(0.64
)
 
 
 
 
 
 
$
(0.42
)
$
(0.42
)
 
 
 
 
 
 
Units used to compute basic and diluted net earnings (loss) per member unit(1)
 
19,597,888
 
 
19,570,078
 
 
 
 
 
 
 
 
19,609,698
 
 
5,148,485
 
 
 
 
 
 
 
Pro forma net loss per share, basic and diluted (unaudited)(2)
 
 
 
 
 
 
 
 
 
$
(0.90
)
 
 
 
 
 
 
 
 
 
$
(0.30
)
Shares used to compute pro forma net loss per share, basic and diluted (unaudited)(2)
 
 
 
 
 
 
 
 
 
 
7,812,500
 
 
 
 
 
 
 
 
 
 
 
7,812,500
 

(1)See Note 16 (for the periods ended December 31, 2013 and 2014) of our Notes to Combined Consolidated Financial Statements and See Note 11 (for the periods ended March 31, 2014 and 2015) of our Notes to Unaudited Condensed Combined Consolidated Financial Statements appearing elsewhere in this prospectus for an explanation of the method used to calculate the basic and diluted net loss per common unit.

(2) Pro forma basic and diluted earnings per share were computed using 7,812,500 shares of Class A common stock, and 25,000,000 shares of Class B common stock were excluded from the calculation as their effect would be anti-dilutive due to the pro forma net loss.

(a)Refer to the notes to the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2014 and the three months ended March 31, 2015 in the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” in this prospectus for the details of the Reorganization Transactions adjustments.

(b)Refer to the notes to the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2014 and the three months ended March 31, 2015 in the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information in this prospectus for the details of the adjustments as a result of this offering.

As of March 31, 2015
Predecessor
Reorganization
Pro Forma(a)
Pro Forma(b)
(dollars in thousands)
 
 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
776
 
$
776
 
$
104,960
 
Working capital (deficiency) surplus
 
(45,638
)
 
(4,784
)
 
99,719
 
Total assets
 
14,964
 
 
4,593
 
 
108,458
 
Current liabilities
 
47,404
 
 
6,420
 
 
6,101
 
Long-term debt, net of current portion
 
2,070
 
 
 
 
 
Other liabilities, net of current portion
 
36,023
 
 
75
 
 
75
 
vTvx Holdings I and vTvx Holdings II redeemable convertible preferred units
 
490,679
 
 
 
 
 
(Deficit) equity attributable to non-controlling interest
 
 
 
(1,902
)
 
77,929
 
Total (deficit) equity (excluding non-controlling interest)
 
(561,212
)
 
 
 
24,353
 

(a)Refer to the notes to the unaudited pro forma condensed combined balance sheet as of March 31, 2015 in the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” in this prospectus for the details of the Reorganization Transactions adjustments.

(b)Refer to the notes to the unaudited pro forma condensed combined balance sheet as of March 31, 2015 in the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” in this prospectus for the details of the adjustments as a result of this offering.

13

TABLE OF CONTENTS

RISK FACTORS

An investment in shares of our Class A common stock involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this prospectus, before deciding to invest in our Class A common stock. The occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In these circumstances, the market price of our Class A common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Financial Position and Need for Additional Capital

We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future. We may never achieve or maintain profitability.

We are a clinical-stage biopharmaceutical company with limited operating history. We have never been profitable and do not expect to be profitable in the foreseeable future. We have incurred net losses in each year since beginning to develop our drug candidates, including net losses of approximately $36.1 million and $48.2 million for 2014 and 2013, respectively. We incurred net losses of $9.8 million and $15.1 million for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, we had a total members’ deficit of approximately $561.2 million. In addition, we have not commercialized any products and have never generated any revenue from the commercialization of any product. We have devoted most of our financial resources to research and development, including our preclinical development activities and clinical trials. We expect to incur significant additional operating losses for the next several years, at least, as we conduct our research and development activities, advance drug candidates through clinical development, complete clinical trials, seek regulatory approval and, if we receive FDA approval, commercialize our products. Furthermore, the costs of advancing drugs into each succeeding clinical phase tend to increase substantially over time. The total costs to advance any of our drug candidates to marketing approval in even a single jurisdiction would be substantial. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to begin generating revenue from the commercialization of products or achieve or maintain profitability. We expect to incur increased expenses as we continue our parallel group 18-month 800-patient Phase 3 trial of azeliragon, or the Steadfast Study, begin outsourcing of the commercial manufacturing of azeliragon for any indications for which we receive regulatory approval, advance our other drug candidates and expand our research and development programs. Furthermore, our ability to successfully develop, commercialize and license our products and generate product revenue is subject to substantial additional risks and uncertainties, as described under “—Risks Relating to the Development and Regulatory Approval of Our Drug Candidates” and “—Risks Relating to the Commercialization of Our Drug Candidates.” As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. The amount of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. In addition, we may not be able to enter into any collaborations that will generate significant cash. If we are unable to develop and commercialize one or more of our drug candidates either alone or with collaborators, or if revenues from any drug candidate that receives marketing approval are insufficient, we will not achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability. If we are unable to achieve and then maintain profitability, the value of our equity securities will be materially and adversely affected.

Currently, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales. As a result, our ability to generate revenue from products, curtail our losses and reach profitability is unproven, and we may never generate substantial product revenue.

We have no products approved for commercialization and have never generated any revenue from the commercialization of any product. Our ability to generate revenue and achieve profitability depends on our ability, alone or with strategic collaboration partners, to successfully complete the development of, and obtain the regulatory and marketing approvals necessary to commercialize one or more of our product candidates. We do not anticipate generating revenue from product sales for a number of years. Our ability

14

TABLE OF CONTENTS

to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to:

completing research and nonclinical and clinical development of our product candidates;
obtaining regulatory and marketing approvals for product candidates for which we complete clinical studies;
establishing collaborations for the development of certain of our drug candidates;
establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and the market demand for our product candidates, if approved;
launching and commercializing product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor;
obtaining market acceptance of our product candidates as viable treatment options;
addressing any competing technological and market developments;
negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;
maintaining, protecting and expanding our portfolio of intellectual property rights; and
attracting, hiring and retaining qualified personnel.

Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory authorities to perform clinical and other studies in addition to those that we currently anticipate. Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

We will need additional capital to complete the Steadfast Study and to complete the development and commercialization of azeliragon and our other drug candidates. Even if this offering is successful, if we are unable to raise sufficient capital, we would be forced to delay, reduce or eliminate our product development programs.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect our research and development expenses to increase in connection with our ongoing activities, particularly as we continue the Steadfast Study, undertake additional clinical trials of our other drug candidates and continue to work on our other research programs. The expected net proceeds of this offering may not be sufficient for us to complete the Steadfast Study and our planned Phase 2 trials for the clinical development of TTP399 and TTP273 and will not be sufficient for the development of our other drug candidates. We may need to raise substantial additional capital to complete the development and commercialization of azeliragon. We may fund a portion of the Steadfast Study through licensing or other monetization of our other drug candidates, including TTP399 and TTP273. If we are unable to successfully license our other drug candidates, we may need to raise additional capital to finance the completion of the Steadfast Study through equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements.

If the FDA or other regulators require that we perform additional studies beyond those we currently expect, or if there are any delays in completing our clinical trials or the development of any of our drug candidates, our expenses could increase beyond what we currently anticipate and the timing of any potential product approval may be delayed. We have no commitments or arrangements for any additional financing to fund our research and development programs. We also will need to raise substantial additional capital in the future to complete the development and commercialization of azeliragon for additional indications and for developing our other drug candidates. Because successful development of our drug candidates is uncertain, we are unable to estimate the actual funds required to complete research and development and commercialize and license our products under development.

15

TABLE OF CONTENTS

Until we can generate a sufficient amount of revenue from our drug candidates, if ever, we expect to finance future cash needs through equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our research or development programs. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. If worldwide economic conditions and the international equity and credit markets deteriorate and return to depressed states, it will be more difficult for us to obtain additional equity or credit financing, when needed.

Our future capital requirements will depend on many factors, including:

the progress, costs, results and timing of the STEADFAST Study, and the clinical development of azeliragon;
the willingness of the FDA to accept the STEADFAST Study, as well as our other completed and planned clinical and preclinical studies and other work, as the basis for review and approval of azeliragon;
the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;
the number and characteristics of drug candidates that we pursue, including our drug candidates in preclinical development;
the ability of our drug candidates to progress through clinical development successfully;
our need to expand our research and development activities;
the costs associated with securing, establishing and maintaining commercialization capabilities;
the costs of acquiring, licensing or investing in businesses, products, drug candidates and technologies;
our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
our need and ability to hire additional management and scientific and medical personnel;
the effect of competing technological and market developments;
our need to implement additional internal systems and infrastructure, including financial and reporting systems; and
the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.

Raising additional capital may cause dilution to our stockholders, including purchasers of Class A common stock in this offering, restrict our operations or require us to relinquish rights to our technologies or drug candidates.

Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our

16

TABLE OF CONTENTS

technologies, future revenue streams or drug candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.

We have a limited operating history and we expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

We are a clinical stage biopharmaceutical company with a limited operating history. Our operations to date have been primarily limited to developing our technology and undertaking preclinical studies and clinical trials of azeliragon and our other drug candidates. We have not yet obtained regulatory approvals for azeliragon or any of our other drug candidates. Consequently, any statements about our future success or viability are not based on any substantial operating history or commercialized products. Our financial condition and operating results have varied significantly in the past and will continue to fluctuate from quarter-to-quarter or year-to-year due to a variety of factors, many of which are beyond our control. As a result, we may never successfully develop and commercialize a product, which could lead to a material adverse effect on the value of any investment in our securities.

Risks Relating to the Development and Regulatory Approval of Our Drug Candidates

Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and failure can occur at any stage of clinical development. Because the results of earlier clinical trials are not necessarily predictive of future results, any drug candidate we advance through various stages of clinical trials or development may not have favorable results in later stages of clinical trials or development or receive regulatory approval.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any stage of clinical development. Clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical or preclinical trials. In addition, data obtained from trials are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval. For example, although treatment in our Phase 2b clinical trial in mild-to-moderate AD patients was discontinued early due to the findings of an interim futility analysis conducted approximately 12 months after all subjects were randomized, subsequent statistical analyses conducted in accordance with the protocol-specified statistical analysis plan found a statistically significant improvement, as described further under “Business—Our Alzheimer’s Program − Azeliragon—Completed Phase 2b Trial (TTP488-203).” Furthermore, an analysis of azeliragon in the subgroup of AD patients with MMSE scores of 21-26 (which are the mild AD patients that are the subjects of our Phase 3 STEADFAST Study) found that azeliragon had more pronounced efficacy in that subgroup. While we have reached an agreement with the FDA for our Phase 3 trial of azeliragon under a special protocol assessment, or SPA, there can be no assurance that the results of this Phase 3 trial will be consistent with the findings of our analyses. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will generate the same results or otherwise provide adequate data to demonstrate the efficacy and safety of a drug candidate. Frequently, drug candidates that have shown promising results in early clinical trials have subsequently suffered significant setbacks in later clinical trials. In addition, the design of a clinical trial can determine whether its results will support approval of a product and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. While members of our management team have experience in designing clinical trials, our company has limited experience in designing clinical trials, and we may be unable to design and execute a clinical trial to support regulatory approval. Further, clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts. For example, if the results of the Steadfast Study do not achieve the primary efficacy endpoints or demonstrate safety, the prospects for approval of azeliragon would be materially and adversely affected. If azeliragon or our other drug candidates are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for them and our business would be harmed.

17

TABLE OF CONTENTS

While we have negotiated a special protocol assessment, or SPA, agreement with the FDA relating to the STEADFAST Study, this agreement does not guarantee approval of azeliragon or any other particular outcome from regulatory review of the study or the drug candidate.

We have reached agreement with the FDA to conduct the STEADFAST Study, our Phase 3 trial of azeliragon pursuant to an SPA agreement. The FDA’s SPA process is designed to facilitate the FDA’s review and approval of drugs by allowing the FDA to evaluate the proposed design and size of Phase 3 trials that are intended to form the primary basis for determining a drug product’s efficacy. Upon specific request by a clinical trial sponsor, the FDA will evaluate the protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial design and data analysis plans, within 45 days of receipt of the request. The FDA ultimately assesses whether the protocol design and planned analysis of the trial are acceptable to support regulatory approval of the drug candidate with respect to its effectiveness against the indication studied. All agreements and disagreements between the FDA and the sponsor regarding an SPA must be clearly documented in an SPA letter or the minutes of a meeting between the sponsor and the FDA. Nevertheless, an SPA agreement does not guarantee approval of a drug candidate, and even if the FDA agrees to the design, execution and analysis proposed in protocols reviewed under the SPA process, the FDA may revoke or alter its agreement in certain circumstances. In particular, an SPA agreement is not binding on the FDA if public health concerns emerge that were unrecognized at the time of the SPA agreement, other new scientific concerns regarding product safety or efficacy arise, the sponsor company fails to comply with the agreed upon trial protocols, or the relevant data, assumptions or information provided by the sponsor in a request for the SPA change or are found to be false or omit relevant facts. In addition, even after an SPA agreement is finalized, the SPA agreement may be modified, and such modification will be deemed binding on the FDA review division, except under the circumstances described above, if the FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study. The FDA retains significant latitude and discretion in interpreting the terms of the SPA agreement and the data and results from any study that is the subject of the SPA agreement.

In addition to the risk that the FDA may decide it is not bound by the terms of the SPA, our Phase 3 trial may not be completed in material accordance with the SPA agreement and the data generated may not meet the endpoints that have been agreed in the SPA to represent adequate evidence of effectiveness, and, for those or other reasons, may not result in any FDA approval for azeliragon. We expect that the FDA will review our compliance with the protocol under our SPA agreement and that it will conduct inspections of some of the approximately 100 sites where the clinical trial will be conducted. Each of the clinical trial sites may not pass such FDA inspections, and negative inspection results could significantly delay or prevent any potential approval for azeliragon. Even if we believe that the data collected from the Phase 3 trial demonstrate adequate evidence of efficacy in accordance with the SPA, if the FDA revokes or alters its agreement under the SPA, or if the FDA interprets the data collected from the clinical trial differently than we do, the FDA may not deem the data sufficient to support an application for regulatory approval, which could materially adversely affect our business, financial condition and results of operations.

We cannot be certain that azeliragon or any of our other drug candidates will receive regulatory approval, and without regulatory approval we will not be able to market our drug candidates and generate revenue from products. Any delay in the regulatory review or approval of azeliragon or any of our other drug candidates will materially or adversely harm our business.

We have invested a significant portion of our efforts and financial resources in the development of azeliragon, our most advanced drug candidate. Our ability to generate revenue related to product sales, which we do not expect will occur for at least the next several years, if ever, will depend on the successful development and regulatory approval of our drug candidates. We commenced the STEADFAST Study in April 2015. We may conduct the STEADFAST Study only to learn that azeliragon is not a safe or effective treatment, in which case the STEADFAST Study may not lead to regulatory approval for azeliragon. Similarly, our clinical development programs for our other drug candidates may not lead to regulatory approval from the FDA and similar foreign regulatory agencies. This failure to obtain regulatory approvals would prevent our drug candidates from being marketed and would prevent us from generating revenue from our drug candidates, which would have a material and adverse effect on our business.

All of our drug candidates require regulatory review and approval prior to commercialization, and generally, only a small percentage of pharmaceutical products under development are ultimately approved

18

TABLE OF CONTENTS

for commercial sale. Moreover, any delays in the regulatory review or approval of our drug candidates would delay market launch, increase our cash requirements and result in additional operating losses.

The process of obtaining FDA and other required regulatory approvals, including foreign approvals, often takes many years and can vary substantially based upon the type, complexity and novelty of the products involved. Furthermore, this approval process is extremely complex, expensive and uncertain, and failure to comply with applicable regulatory requirements can, among other things, result in the suspension of regulatory approval as well as possible civil and criminal sanctions. We may be unable to submit any new drug application, or an NDA, in the United States or any marketing approval application in foreign jurisdictions for any of our products. If we submit an NDA including any amended NDA or supplemental NDA, to the FDA seeking marketing approval for any of our drug candidates, the FDA must decide whether to accept or reject the submission for filing. We cannot be certain that any of these submissions will be accepted for filing and reviewed by the FDA, or that the marketing approval application submissions to any other regulatory authorities will be accepted for filing and review by those authorities. We cannot be certain that we will be able to respond to any regulatory requests during the review period in a timely manner, or at all, without delaying potential regulatory action. We also cannot be certain that any of our drug candidates will receive favorable recommendations from any FDA advisory committee or foreign regulatory bodies or be approved for marketing by the FDA or foreign regulatory authorities. In addition, delays in approvals or rejections of marketing applications may be based upon many factors, including regulatory requests for additional analyses, reports, data and studies, regulatory questions regarding data and results, changes in regulatory policy during the period of product development and the emergence of new information regarding azeliragon or our other drug candidates.

Data obtained from preclinical studies and clinical trials are subject to different interpretations, which could delay, limit or prevent regulatory review or approval of any of our drug candidates. Furthermore, regulatory attitudes towards the data and results required to demonstrate safety and efficacy can change over time and can be affected by many factors, such as the emergence of new information, including on other products, policy changes and agency funding, staffing and leadership. We do not know whether future changes to the regulatory environment will be favorable or unfavorable to our business prospects.

In addition, the environment in which our regulatory submissions may be reviewed changes over time. For example, average review times at the FDA for NDAs have fluctuated over the last ten years, and we cannot predict the review time for any of our submissions with any regulatory authorities. Review times can be affected by a variety of factors, including budget and funding levels and statutory, regulatory and policy changes. Moreover, in light of widely publicized events concerning the safety risk of certain drug products, regulatory authorities, members of the U.S. Government Accountability Office, medical professionals and the general public have raised concerns about potential drug safety issues. These events have resulted in the withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and establishment of Risk Evaluation and Mitigation Strategy, or “REMS,” measures that may, for instance, place restrictions on the distribution of drug products. The increased attention to drug safety issues may result in a more cautious approach by the FDA to clinical trials. Data from clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to delay or terminate clinical trials before completion, or require longer or additional clinical trials that may result in substantial additional expense and a delay or failure in obtaining approval or may result in approval for a more limited indication than originally sought.

In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a drug candidate’s clinical development and may vary among jurisdictions, and approval in one jurisdiction does not guarantee approval in any other jurisdiction. Our drug candidates could fail to receive regulatory approval for many reasons, including the following:

the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication;
the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

19

TABLE OF CONTENTS

we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks;
the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
the data collected from clinical trials of our drug candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere;
the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;
the FDA or comparable foreign regulatory authorities may fail to approve the companion diagnostics we contemplate developing with partners; and
the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

This lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our drug candidates, which would significantly harm our business, results of operations and prospects.

In addition, even if we were to obtain approval, regulatory authorities may approve any of our drug candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a drug candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that drug candidate. For example, even if azeliragon receives regulatory approval, it may not be approved by the FDA as a disease modifying treatment. To date, the FDA has not approved any drugs for the treatment of AD as disease modifying. Any of the foregoing scenarios could materially harm the commercial prospects for our drug candidates.

Delays in the commencement, enrollment and completion of our clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for azeliragon and our other drug candidates.

Delays in the commencement, enrollment and completion of clinical trials could increase our product development costs or limit the regulatory approval of our drug candidates. We commenced the STEADFAST Study in April 2015; however, this clinical trial and reports of data from the study may not be completed on schedule, if at all. In addition, we do not know whether planned clinical trials of azeliragon in additional indications and of our other drug candidates will begin on time or will be completed on schedule or at all. The commencement, enrollment and completion of the STEADFAST Study or other clinical trials can be delayed for a variety of reasons, including:

inability to reach agreements on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
regulatory objections to commencing a clinical trial;
inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our drug candidates;
withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care or the ineligibility of a site to participate in our clinical trials;
inability to obtain institutional review board, or IRB, approval to conduct a clinical trial;

20

TABLE OF CONTENTS

difficulty recruiting and enrolling subjects to participate in clinical trials for a variety of reasons, including willingness of subjects to undergo required study procedures, meeting the enrollment criteria for our study and competition from other clinical trial programs for the same indication as our drug candidates;
inability to retain subjects in clinical trials due to the treatment protocol, personal issues, side effects from the therapy or lack of efficacy; and
difficulty in importing and exporting clinical trial materials and study samples.

Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating. Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including:

failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
failure to pass inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities;
failure of any contract manufacturing organizations, or CMOs, that we use to comply with current Good Manufacturing Practices, or cGMPs;
unforeseen safety issues or any determination that a clinical trial presents unacceptable health risks;
failure to demonstrate benefit from using the drug;
changes in the regulatory requirement and guidance; or
lack of adequate funding to continue the clinical trial due to unforeseen costs resulting from enrollment delays, requirements to conduct additional trials and studies, increased expenses associated with the services of our CROs and other third parties or other reasons.

Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

If we experience delays in the completion of, or termination of, any clinical trial of our drug candidates, the commercial prospects of our drug candidates will be harmed, and our ability to generate product revenues from any of these drug candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our drug candidates.

21

TABLE OF CONTENTS

We have never completed a Phase 3 clinical trial or submitted an NDA before and may be unable to do so for azeliragon and other drug candidates we are developing.

We commenced the STEADFAST Study in April 2015. The conduct of Phase 3 clinical trials and the submission of a successful NDA is a complicated process. We have never conducted a Phase 3 clinical trial before, have limited experience in preparing, submitting and prosecuting regulatory filings, and have not submitted an NDA before. Consequently, we may be unable to successfully and efficiently execute and complete these planned clinical trials in a way that leads to NDA submission and approval of azeliragon and other drug candidates we are developing. We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of drug candidates that we develop. Failure to commence or complete, or delays in, our planned clinical trials would prevent or delay commercialization of azeliragon and other drug candidates we are developing.

Our drug candidates may cause serious adverse events or undesirable side effects which may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales.

Serious adverse events or undesirable side effects from azeliragon or any of our other drug candidates could arise either during clinical development or, if approved, after the approved product has been marketed. The results of future clinical trials, including the STEADFAST Study, may show that our drug candidates cause serious adverse events or undesirable side effects, which could interrupt, delay or halt clinical trials, resulting in delay of, or failure to obtain, marketing approval from the FDA and other regulatory authorities or could result in a more restrictive label if our drug candidates are approved. For example, in a Phase 2 study, patients treated with azeliragon at a dose of 20 mg/day experienced a higher level of adverse events including confusion and falls, but such elevated levels of adverse events were not observed at the 5 mg/day dose.

If azeliragon or any of our other drug candidates cause serious adverse events or undesirable side effects either during clinical development, or after marketing approval, if obtained:

regulatory authorities, IRBs, or the DSMB may impose a clinical hold, or we may decide on our own to suspend or terminate a study, which could result in substantial delays and adversely impact our ability to continue development of the product;
regulatory authorities may require the addition of labeling statements, specific warnings, contraindications or field alerts to study subjects, investigators, physicians or pharmacies;
we may be required to change the product design or the way the product is administered, conduct additional clinical trials or change the labeling of the product;
we may be required to implement a REMS, which could result in substantial cost increases or signification limitations on distribution or have a negative impact on our ability to successfully commercialize the product;
we may be required to limit the patients who can receive the product;
we may be subject to limitations on how we promote the product;
sales of the product may decrease significantly;
regulatory authorities may require us to take our approved product off the market;
we may be subject to litigation or product liability claims; and
our reputation may suffer.

Any of these events could prevent us from obtaining approval, or achieving or maintaining market acceptance of the affected product, if approved, or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale of our products.

22

TABLE OF CONTENTS

Azeliragon and our other drug candidates employ novel mechanisms of action and may never be approved or accepted by their intended markets.

Azeliragon and a number of our other drug candidates have novel mechanisms of action. Azeliragon targets RAGE, a novel mechanism of action for the treatment of AD. We are not aware of any other products under development that target RAGE. Our future success depends on our ability to complete the Steadfast Study of azeliragon successfully, obtain market approval for and successfully commercialize azeliragon, as well as our ability to develop and market other drug candidates. The scientific discoveries that form the basis of our drug candidates are relatively new. We are not aware of any other drugs for the treatment of AD that have the same mechanism of action as azeliragon and even if azeliragon is approved, physicians may not be willing to use it. If we do not successfully develop and commercialize drug candidates based upon our technological approach, we may not become profitable and the value of our common stock may decline.

Evidence of the effectiveness of azeliragon in humans is limited to data generated in a single Phase 2b study and to the group of patients in that study receiving the lower, 5 mg/day, dose of the drug. Patients in that study who received the higher, 20 mg/day, dose of the drug tended to experience adverse events. The FDA has granted Fast Track designation to our azeliragon development program based on our pre-clinical (animal) studies and not based on our Phase 2b study. The results of the Phase 2b study may not be replicated in our Phase 3 STEADFAST Study, and the FDA may not approve azeliragon for commercial use.

In addition, regulatory approval of novel drug candidates such as azeliragon and our other drug candidates using novel mechanisms of action can be more expensive and take longer than other, more well-known or extensively studied pharmaceutical or biopharmaceutical products, due to our and regulatory agencies’ lack of experience with them. We are not aware of the FDA reviewing any other products targeting RAGE as a mechanism of action to date. This lack of experience may lengthen the regulatory review process, require us to conduct additional studies or clinical trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of these drug candidates or lead to significant post-approval limitations or restrictions.

Risks Relating to the Commercialization of Our Drug Candidates

If any of our drug candidates for which we receive regulatory approval do not achieve broad market acceptance, the revenues that are generated from their sales will be limited.

The commercial success of azeliragon and our other drug candidates, if approved, will depend upon the acceptance of these products among physicians, healthcare payors, patients and others in the medical community. The degree of market acceptance of our drug candidates will depend on a number of factors, including:

limitations or warnings contained in a product’s FDA-approved labeling;
changes in the standard of care or the availability of alternative therapies for the targeted indications for any of our drug candidates;
limitations in the approved indications for our drug candidates;
demonstrated clinical safety and efficacy compared to other products;
lack of significant adverse side effects;
education, sales, marketing and distribution support;
availability and degree of coverage and reimbursement from third-party payors;
timing of market introduction and perceived effectiveness of competitive products;
cost-effectiveness;
availability of alternative therapies at similar or lower cost, including generics, biosimilar and over-the-counter products;
adverse publicity about our drug candidates or favorable publicity about competitive products;

23

TABLE OF CONTENTS

convenience and ease of administration of our products;
potential product liability claims; and
government-imposed pricing restrictions.

If our drug candidates are approved, but do not achieve an adequate level of acceptance by physicians, healthcare payors, patients and others in the medical community, sufficient revenue may not be generated from these products, and we may not become or remain profitable. In addition, efforts to educate the medical community and third-party payors on the benefits of our drug candidates may require significant resources and may never be successful.

We do not have the capability to sell, distribute and market our drug candidates. If we are unable to establish an effective sales force and marketing infrastructure, or enter into acceptable third-party sales and marketing or licensing arrangements, we may not be able to commercialize our drug candidates successfully.

We do not have the capability to sell, distribute and market our drug candidates. We will need to build a commercial organization or secure a strategic partner to commercialize azeliragon and our other drug candidates. If we are unable to build a commercial infrastructure or secure a strategic collaboration, our business and results of operations will be materially and adversely affected. Development of an internal commercial organization will require substantial resources and will be time consuming. These costs may be incurred in advance of any approval of our drug candidates. In addition, we may not be able to hire a sales force in the United States that is sufficient in size or has adequate expertise in the markets that we intend to target. If we are unable to establish a sales and marketing capability, our operating results may be adversely affected. If we seek to enter into sales and marketing or licensing arrangements with third parties for the marketing and sale of any approved products, we may be unable to enter into any such arrangements on acceptable terms, or at all.

Even if our drug candidates receive regulatory approval, we will still be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense, and we may still face future development and regulatory difficulties.

Even if regulatory approval is obtained for any of our drug candidates, regulatory authorities may still impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies. Given the number of high profile adverse safety events with certain drug products, regulatory authorities may require, as a condition of approval, costly REMS, which may include safety surveillance, restricted distribution and use, patient education, enhanced labeling, expedited reporting of certain adverse events, pre-approval of promotional materials and restrictions on direct-to-consumer advertising. For example, any labeling approved for any of our drug candidates may include a restriction on the term of its use, or it may not include one or more of our intended indications or patient populations. Furthermore, any new legislation addressing drug safety issues could result in delays or increased costs during the period of product development, clinical trials and regulatory review and approval, as well as increased costs to assure compliance with any new post-approval regulatory requirements.

Our drug candidates will also be subject to ongoing regulatory requirements for the labeling, packaging, storage, advertising, promotion, record-keeping and submission of safety and other post-market information. In addition, sellers of approved products, manufacturers and manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMP. As such, we and our CMOs are subject to continual review and periodic inspections to assess compliance with cGMP and the terms and conditions of approvals. Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. We will also be required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with certain requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote our products for indications or uses for which they do not have approval.

24

TABLE OF CONTENTS

If a regulatory agency discovers problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or objects to the promotion, marketing or labeling of a product, it may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If our drug candidates fail to comply with applicable regulatory requirements, a regulatory agency may:

issue warning letters or untitled letters;
mandate modifications to promotional materials or require us to disseminate corrective information to healthcare practitioners or other parties;
require us to enter into a consent decree or permanent injunction, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
impose other civil or criminal penalties;
suspend or withdraw regulatory approval;
suspend any ongoing clinical trials;
refuse to approve pending applications or supplements to approved applications filed by us;
impose restrictions on operations, including costly new manufacturing requirements; or
seize or detain products or require a product recall.

The FDA’s policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.

We expect that our existing and future drug candidates will face competition, and most of our competitors have significantly greater resources than we do.

The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical companies, generic or biosimilar drug companies, universities and other research institutions. Our drug candidates, if successfully developed and approved, will compete in crowded and competitive markets. In order to compete with approved products, our drug candidates will need to demonstrate compelling advantages. We believe the key competitive factors that will affect the development and commercial success of our drug candidates are efficacy, safety and tolerability profile, mechanism of action, control and predictability, convenience of dosing and price and reimbursement. Our most advanced drug candidate, azeliragon, is being developed for use in the treatment of patients with mild AD receiving a standard of care with an aceytlcholinesterase inhibitor and/or memantine. If approved for this indication, new competitors may emerge and azeliragon may face competition from several therapies currently in clinical development that address different mechanisms of action than azeliragon. Potential competitors with products in late stage clinical development are Eli Lilly and Company, with its drug candidates solanezumab and gantenerumab, and Merck & Co., with its drug candidate MK-8931. Our drug candidates TTP399 and TTP273, compounds for treating type 2 diabetes, would compete with both currently available non-insulin medication products and marketed non-insulin anti-diabetic agents that are in clinical development. Competition is high among novel drug classes for the treatment of type 2 diabetes. Products that are currently available that may compete with TTP399 and TTP273 include DPP-4 inhibitors, such as sitagliptin or saxagliptin, and SGLT-2 inhibitors, such as dapagliflozin and canagliflozin. Companies with GKAs in early clinical development that may compete with TTP399 include Advinus Therapeutics Ltd., Eli Lilly and Company, Pfizer Inc., Hua Medicine Ltd. and Teijin Pharma Limited. TTP273 would face competition from GLP-1r agonists that are being developed and are currently available, including Trulicity, which is marketed by Eli Lilly and Company, Tanzeum, which is marketed by GlaxoSmithKline plc, Bydureon, which is marketed by AstraZeneca plc, and Victoza, which is marketed by Novo Nordisk A/S.

25

TABLE OF CONTENTS

Many of our potential competitors have substantially greater:

resources, including capital, personnel and technology;
research and development capability;
clinical trial expertise;
regulatory expertise;
intellectual property rights, including patent rights;
expertise in obtaining, maintaining, defending and enforcing intellectual property rights, including patent rights;
manufacturing and distribution expertise; and
sales and marketing expertise.

In addition, academic and government institutions are increasingly likely to enter into exclusive licensing agreements with commercial enterprises, including our competitors, to market commercial products based on technology developed at such institutions. Many of these competitors have significant products approved or in development that could be competitive with our products.

Accordingly, our competitors may be more successful than us in obtaining regulatory approval for drugs and achieving widespread market acceptance. Our competitors’ drugs may be more effective, less costly, or more effectively marketed and sold, than any drug candidate we may commercialize and may render our drug candidates obsolete or non-competitive before we can recover the expenses of their development and commercialization. We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. Finally, the development of new treatment methods for the diseases we are targeting could render our drug candidates non-competitive or obsolete.

Healthcare cost containment initiatives and the growth of managed care may limit our revenues and profitability.

Our ability to commercialize our products successfully may be negatively affected by the ongoing efforts of governmental and third-party payors to contain the cost of health care. In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, was passed, which substantially changes the way health care is financed by both governmental and private insurers, and significantly impacts the U.S. pharmaceutical industry. The Affordable Care Act, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and established a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

In addition, other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. On August 2, 2011, the Budget Control Act of 2011 among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These automatic reductions include aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2024 unless additional Congressional action is taken. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers

26

TABLE OF CONTENTS

and cancer treatment centers. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our drug candidates or additional pricing pressures.

Both governmental and third-party payers are challenging the cost of healthcare products and services, denying or limiting coverage and reimbursement amounts for new therapeutic products, for FDA-approved products considered experimental or investigational or used for disease indications without FDA marketing approval. Any restrictions in coverage or reductions in reimbursement rates under government programs often result in reductions in reimbursement rates by insurance companies and other third-party payors.

Even if we succeed in bringing azeliragon or any of our other drug candidates to the market, we may not be considered cost-effective, and governmental or third-party payor coverage and reimbursement might not be available or sufficient. If adequate governmental or third-party coverage or reimbursement is not available, we may not be able to maintain price levels sufficient to realize an appropriate return on our investment in research and product development. In addition, legislation and regulations affecting the pricing of pharmaceuticals may change in ways adverse to us before or after any of our proposed products are approved for marketing.

Therefore, adverse changes in third-party payor coverage and reimbursement and/or new state and federal healthcare reform measures that may be adopted in the future could have a material adverse effect on our businesses, financial conditions and results of operations.

Our current and future relationships with healthcare professionals, principal investigators, consultants, customers (actual and potential) and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable healthcare laws and regulations.

Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any drug candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers (actual and potential) and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation:

the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the Affordable Care Act provided that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
federal civil and criminal false claims laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent;
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or

27

TABLE OF CONTENTS

under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered entities, including healthcare providers, health plans, and healthcare clearinghouses, as well as their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
the federal Physician Payments Sunshine Act and its implementing regulations, which imposed annual reporting requirements for certain manufacturers of drugs, devices, biologicals and medical supplies for payments and “transfers of value” provided to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and
analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business activities, including our relationships with physician consultants, some of whom may prescribe our product candidates, if approved, in the future, may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, which could significantly harm our business.

If we try to obtain approval to commercialize any products outside the United States, many of the same risks that apply to obtaining approvals in the United States will likely apply to such a process, and even if we obtain approval to commercialize any such products outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

If we try to obtain approval to commercialize any of our products outside the United States, many of the same risks with respect to obtaining such approvals in the United States will apply to that process. If azeliragon or any of our other drug candidates are approved for commercialization outside of the United States, we intend to enter into agreements with third parties to market them on a worldwide basis or in more limited geographical regions. In that event, we expect that we will be subject to additional risks related to entering into international business relationships, including:

different regulatory requirements for drug approvals;
reduced protection for intellectual property rights, including trade secret and patent rights;

28

TABLE OF CONTENTS

existing tariffs, trade barriers and regulatory requirements and expected or unexpected changes;
economic weakness, including inflation, or political instability in foreign economies and markets;
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
foreign taxes, including withholding of payroll taxes;
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
workforce uncertainty in countries where labor unrest is more or less common than in the United States;
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, hurricanes, floods and fires; and
difficulty in importing and exporting clinical trial materials and study samples.

Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Also, confidential patient and other information may be compromised in a cyber-attack or cyber-intrusion. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, damage to our reputation, and the further development of our drug candidates could be delayed.

Risks Relating to Our Dependence on Third Parties

We may not succeed in establishing and maintaining collaborative relationships, which may significantly limit our ability to develop and commercialize our drug candidates successfully, if at all.

We intend to seek collaborative relationships for the development and commercialization of our drug candidates, including azeliragon. Failure to obtain a collaborative relationship for azeliragon, particularly in the European Union and for other markets requiring extensive sales efforts, may significantly impair the potential for this drug candidate. We also will need to enter into collaborative relationships to provide funding to support our other research and development programs. The process of establishing and maintaining collaborative relationships is difficult, time-consuming and involves significant uncertainty, including:

a collaboration partner may shift its priorities and resources away from our drug candidates due to a change in business strategies, or a merger, acquisition, sale or downsizing;
a collaboration partner may seek to renegotiate or terminate their relationships with us due to unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control or other reasons;
a collaboration partner may cease development in therapeutic areas which are the subject of our strategic collaboration;

29

TABLE OF CONTENTS

a collaboration partner may not devote sufficient capital or resources towards our drug candidates;
a collaboration partner may change the success criteria for a drug candidate thereby delaying or ceasing development of such candidate;
a significant delay in initiation of certain development activities by a collaboration partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities;
a collaboration partner could develop a product that competes, either directly or indirectly, with our drug candidate;
a collaboration partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product;
a collaboration partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements;
a partner may exercise a contractual right to terminate a strategic alliance;
a dispute may arise between us and a partner concerning the research, development or commercialization of a drug candidate resulting in a delay in milestones, royalty payments or termination of an alliance and possibly resulting in costly litigation or arbitration which may divert management attention and resources; and
a partner may use our products or technology in such a way as to invite litigation from a third party.

For example, we previously licensed the development of azeliragon to Pfizer Inc. in 2006, before Pfizer determined not to pursue the development of the program and we reacquired azeliragon in 2011, and Forest Laboratories had previously licensed our GKA programs, including TTP399, but decided to return the GKA programs to us in 2013, shortly before its acquisition by Actavis plc. Any collaborative partners we enter into agreements with in the future may also shift their priorities and resources away from our drug candidates or seek to renegotiate or terminate their relationships with us.

If any collaborator fails to fulfill its responsibilities in a timely manner, or at all, our research, clinical development, manufacturing or commercialization efforts related to that collaboration could be delayed or terminated, or it may be necessary for us to assume responsibility for expenses or activities that would otherwise have been the responsibility of our collaborator. If we are unable to establish and maintain collaborative relationships on acceptable terms or to successfully transition terminated collaborative agreements, we may have to delay or discontinue further development of one or more of our drug candidates, undertake development and commercialization activities at our own expense or find alternative sources of capital.

We rely on third parties to conduct, supervise and monitor certain of our clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We rely on contract research organizations, or “CROs,” and clinical trial sites to ensure the proper and timely conduct of certain of our clinical trials, including the STEADFAST Study. While we have agreements governing their activities, we will have limited influence over their actual performance. We will control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that our clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our CROs are required to comply with the FDA’s good clinical practices requirements, or GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected. The FDA enforces these GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. If we or our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving any marketing applications. Upon inspection, the FDA may determine that our clinical trials did not comply with GCPs. In addition, our clinical trials conducted by third parties will

30

TABLE OF CONTENTS

require a sufficiently large number of test subjects to evaluate the safety and effectiveness of a drug candidate. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, our clinical trials may be delayed or we may be required to repeat such clinical trials, which would delay the regulatory approval process.

Our CROs are not our employees, and we are not able to control whether or not they devote sufficient time and resources to our clinical trials. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our competitive position. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize our drug candidates. As a result, our financial results and the commercial prospects for such drug candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.

We also rely on other third parties to store and distribute drug products for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our drug candidates or commercialization of our products, if approved, producing additional losses and depriving us of potential product revenue.

We do not have multiple sources of supply for the components used in azeliragon and our other drug candidates. If we were to lose a supplier, it could have a material adverse effect on our ability to complete the development of azeliragon or our other drug candidates. If we obtain regulatory approval for azeliragon or our other drug candidates we would need to expand the supply of its components in order to commercialize them.

We do not have multiple sources of supply for the components used in azeliragon and our other drug candidates. We also do not have long-term supply agreements with any of our suppliers. We are currently evaluating drug manufacturers that will produce the commercial supply of both the drug substance and drug product of azeliragon. It is our expectation that only one supplier of drug substance and one supplier of product will be qualified as vendors with the FDA. If for any reason we are unable to obtain drug substance or drug product from the manufacturers we select, we would have to seek to obtain these from other manufacturers. We may not be able to establish additional sources of supply for our drug candidates, or may be unable to do so on acceptable terms. Such suppliers are subject to regulatory requirements, covering manufacturing, testing, quality control and record keeping relating to our drug candidates and subject to ongoing inspections by the regulatory agencies. Failure by any of our suppliers to comply with applicable regulations may result in long delays and interruptions.

The number of suppliers of the raw material components of our drug candidates is limited. In the event it is necessary or desirable to acquire supplies from an alternative supplier, we might not be able to obtain them on commercially reasonable terms, if at all. It could also require significant time and expense to redesign our manufacturing processes to work with another company.

As part of any marketing approval, a manufacturer and its processes are required to be qualified by the FDA prior to commercialization. If supply from the approved supplier is interrupted, there could be a significant disruption in commercial supply. An alternative vendor would need to be qualified through an NDA amendment or supplement which could result in further delay. The FDA or other regulatory agencies outside of the United States may also require additional studies if a new supplier is relied upon for commercial production. Switching vendors may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.

If we are unable to obtain the supplies we need at a reasonable price or on a timely basis, it could have a material adverse effect on our ability to complete the development of azeliragon and our other drug candidates or, if we obtain regulatory approval for azeliragon or our other drug candidates, to commercialize them.

31

TABLE OF CONTENTS

We intend to rely on third-party manufacturers to produce our drug candidates. If we experience problems with any of these suppliers, the manufacturing of our drug candidates or products could be delayed.

We do not have the capability to manufacture our drug candidates and do not intend to develop that capability. In order to continue to develop our drug candidates, apply for regulatory approvals and ultimately commercialize products, we need to develop, contract for or otherwise arrange for the necessary manufacturing capabilities. The facilities used by our CMOs to manufacture our drug candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our NDA to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements, known as cGMPs, for manufacture of both active drug substances and finished drug products. If our CMOs cannot successfully manufacture material that conforms to our specifications and the regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our drug candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our drug candidates, if approved.

In addition, there are a limited number of manufacturers that operate under the FDA’s cGMP regulations capable of manufacturing our drug candidates. As a result, we may have difficulty finding manufacturers for our drug candidates with adequate capacity for our needs. If we are unable to arrange for third-party manufacturing of our drug candidates on a timely basis, or to do so on commercially reasonable terms, we may not be able to complete development of our drug candidates or market them.

Reliance on third-party manufacturers entails risks to which we might not be subject if we manufactured drug candidates ourselves, including:

the limited number of manufacturers that could produce our drug candidates for us;
the inability to meet our product specifications and quality requirements consistently;
inability to access production facilities on a timely basis;
inability or delay in increasing manufacturing capacity;
manufacturing and product quality issues related to scale-up of manufacturing;
costs and validation of new equipment and facilities required for commercial level activity;
a failure to satisfy the FDA’s cGMP requirements and similar foreign standards on a consistent basis;
the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;
termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;
the reliance on a single sources of supply which, if unavailable, would delay our ability to complete our clinical trials or to sell any product for which we have received marketing approval;
the lack of qualified backup suppliers for supplies that are currently purchased from a single source supplier;
carrier disruptions or increased costs that are beyond our control; and
the failure to deliver products under specified storage conditions and in a timely manner.

Any of these risks could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our products, cause us to incur higher costs and prevent us from commercializing our drug candidates successfully. Manufacturing of our drug candidates and any approved products could be disrupted or halted if our third-party manufacturers do not comply with cGMP or foreign manufacturing standards, even if the compliance failure does not relate to our drug candidates or approved products.

32

TABLE OF CONTENTS

Furthermore, if any of our drug candidates are approved and our third-party manufacturers fail to deliver the required commercial quantities of finished product on a timely basis and at commercially reasonable prices and we are unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis, we would likely be unable to meet demand for our products and could lose potential revenue. It may take several years to establish an alternative source of supply for our drug candidates and to have any such new source approved by the FDA or a foreign regulator.

Risks Relating to Our Intellectual Property

It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.

Our commercial success will depend in part on our ability to:

apply for, obtain, maintain and enforce patents;
protect trade secrets; and
operate without infringing upon the proprietary rights of others.

We will be able to protect our proprietary technology from unauthorized use by third parties only to the extent that such proprietary rights are covered by valid and enforceable patents or are effectively maintained as trade secrets. Any non-confidential disclosure to or misappropriation by third parties of our confidential or proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.

As of July 1, 2015, we were the owner of record of at least 77 issued U.S. patents and at least 325 issued non-U.S. patents, as well as the licensee of at least 11 issued U.S. patents and at least 55 issued non-U.S. patents. We are actively pursuing 19 U.S. patent applications, of which three are provisional and 16 are non-provisional, three international patent applications and at least 149 non-U.S. patent applications in twelve or more jurisdictions as the owner of record, in addition to at least one U.S. patent application and one non-U.S. patent application under license.

The patent application process, also known as patent prosecution, is expensive and time-consuming, and we and our current or future licensors and licensees may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we or our current licensors, or any future licensors or licensees, will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Therefore, these and any of our patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims or inventorship. If we or our current licensors or licensees, or any future licensors or licensees, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our current licensors or licensees, or any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form or preparation of our patents or patent applications, such patents or applications may be invalid and unenforceable. Any of these outcomes could impair our ability to prevent competition from third parties, which may harm our business.

The patent applications that we own or license may fail to result in issued patents in the United States or in other countries. Even if patents do issue on such patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. For example, U.S. patents can be challenged by any person before the new USPTO Patent Trial and Appeals Board at any time within the one year period following that person’s receipt of an allegation of infringement of the patents. Patents granted by the European Patent Office may be similarly opposed by any person within nine months from the publication of the grant. Similar proceedings are available in other jurisdictions, and in the United States, Europe and other jurisdictions third parties can raise questions of validity with a patent office even before a patent has granted. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property

33

TABLE OF CONTENTS

or prevent others from designing around our claims. If the breadth or strength of protection provided by the patents and patent applications we hold or pursue with respect to our product candidates is successfully challenged, then our ability to commercialize such product candidates could be negatively affected, and we may face unexpected competition that could harm our business. Further, if we encounter delays in our clinical trials, the period of time during which we or our collaborators could market our product candidates under patent protection would be reduced.

The degree of future protection of our proprietary rights is uncertain. Patent protection may be unavailable or severely limited in some cases and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

we might not have been the first to invent or the first to file the inventions covered by each of our pending patent applications and issued patents;
others may be able to make, use, sell, offer to sell or import products that are similar to our products or product candidates but that are not covered by the claims of our patents; others may independently develop similar or alternative technologies or duplicate any of our technologies;
the proprietary rights of others may have an adverse effect on our business;
any proprietary rights we do obtain may not encompass commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties;
any patents we obtain or our in-licensed issued patents may not be valid or enforceable; or
we may not develop additional technologies or products that are patentable or suitable to maintain as trade secrets.

If we or our current licensors or licensees, or any future licensors or licensees, fail to prosecute, maintain and enforce patent protection for our product candidates, our ability to develop and commercialize our product candidates could be harmed and we might not be able to prevent competitors from making, using and selling competing products. This failure to properly protect the intellectual property rights relating to our product candidates could harm our business, financial condition and operating results. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

Even where laws provide protection, costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and the outcome of such litigation would be uncertain. If we or one of our collaborators were to initiate legal proceedings against a third party to enforce a patent covering the product candidate, the defendant could assert an affirmative defense or counterclaim that our patent is not infringed, invalid and/or unenforceable. In patent litigation in the United States, defendant defenses and counterclaims alleging noninfringement, invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, anticipation or obviousness, and lack of written description, definiteness or enablement. Patents may be unenforceable if someone connected with prosecution of the patent withheld material information from the USPTO, or made a misleading statement, during prosecution. The outcomes of proceedings involving assertions of invalidity and unenforceability are unpredictable. It is possible that prior art of which we and the patent examiner were unaware during prosecution exists, which would render our patents invalid. Moreover, it is also possible that prior art may exist that we are aware of, but that we do not believe are relevant to our current or future patents, that could nevertheless be determined to render our patents invalid. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability of our patents covering one of our product candidates, we would lose at least part, and perhaps all, of the patent protection on such product candidate. Such a loss of patent protection would harm our business. Moreover, our competitors could counterclaim in any suit to enforce our patents that we infringe their intellectual property. Furthermore, some of our competitors have substantially greater intellectual property portfolios, and resources, than we do.

Our ability to stop third parties from using our technology or making, using, selling, offering to sell or importing our products is dependent upon the extent to which we have rights under valid and enforceable patents that cover these activities. If any patent we currently or in the future may own or license is deemed not infringed, invalid or unenforceable, it could impact our commercial success. We cannot predict the

34

TABLE OF CONTENTS

breadth of claims that may be issued from any patent applications we currently or may in the future own or license from third parties.

To the extent that consultants or key employees apply technological information independently developed by them or by others to our product candidates, disputes may arise as to who has the proprietary rights to such information and product candidates, and certain of such disputes may not be resolved in our favor. Consultants and key employees that work with our confidential and proprietary technologies are required to assign all intellectual property rights in their inventions and discoveries created during the scope of their work to our company. However, these consultants or key employees may terminate their relationship with us, and we cannot preclude them indefinitely from dealing with our competitors.

If we are unable to prevent disclosure of our trade secrets or other confidential information to third parties, our competitive position may be impaired.

We also may rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable. Our ability to stop third parties from obtaining the information or know-how necessary to make, use, sell, offer to sell or import our products or practice our technology is dependent in part upon the extent to which we prevent disclosure of the trade secrets that cover these activities. Trade secret rights can be lost through disclosure to third parties. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our trade secrets to third parties, resulting in loss of trade secret protection. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how, which would not constitute a violation of our trade secret rights. Enforcing a claim that a third party is engaged in the unlawful use of our trade secrets is expensive, difficult and time consuming, and the outcome is unpredictable. In addition, recognition of rights in trade secrets and a willingness to enforce trade secrets differs in certain jurisdictions.

Changes to the patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Recent patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act, or Leahy-Smith Act, signed into law on September 16, 2011, could increase those uncertainties and costs. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents. In addition, the Leahy-Smith Act has transformed the U.S. patent system into a “first to file” system. The first-to-file provisions, however, only became effective on March 16, 2013. Accordingly, it is not yet clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our or our collaborators’ patent applications and the enforcement or defense of our or our collaborators’ issued patents, all of which could harm our business, results of operations and financial condition.

The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. Additionally, there have been recent proposals for additional changes to the patent laws of the United States and other countries that, if adopted, could impact our ability to obtain patent protection for our proprietary technology or our ability to enforce our proprietary technology. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

35

TABLE OF CONTENTS

If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation could harm our business.

Our commercial success depends significantly on our ability to operate without infringing, violating or misappropriating the patents and other proprietary rights of third parties. Our own technologies may infringe, violate or misappropriate the patents or other proprietary rights of third parties, or we may be subject to third-party claims of such infringement. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties, exist in the fields in which we are developing our product candidates. Because some patent applications may be maintained in secrecy until the patents are issued, because publication of patent applications is often delayed, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that we were the first to invent the technology or that others have not filed patent applications for technology covered by our pending applications. We may not be aware of patents that have already issued that a third party might assert are infringed by our product candidates. It is also possible that patents of which we are aware, but which we do not believe are relevant to our product candidates, could nevertheless be found to be infringed by our product candidates. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect. In the future, we may agree to indemnify our manufacturing partners against certain intellectual property claims brought by third parties.

Intellectual property litigation involves many risks and uncertainties, and there is no assurance that we will prevail in any lawsuit brought against us. Third parties making claims against us for infringement, violation or misappropriation of their intellectual property rights may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. Defense of these claims, regardless of their merit, would cause us to incur substantial expenses and, would be a substantial diversion of resources from our business. In the event of a successful claim of any such infringement, violation or misappropriation, we may need to obtain licenses from such third parties and we and our partners may be prevented from pursuing product development or commercialization and/or may be required to pay damages. We cannot be certain that any licenses required under such patents or proprietary rights would be made available to us, or that any offer to license would be made available to us on commercially reasonable terms. If we cannot obtain such licenses, we and our collaborators may be restricted or prevented from manufacturing and selling products employing our technology. These adverse results, if they occur, could adversely affect our business, results of operations and prospects, and the value of our shares.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

The biotechnology and pharmaceutical industries have been characterized by extensive litigation regarding patents and other intellectual property rights. The defense and prosecution of contractual or intellectual property lawsuits, USPTO interference or derivation proceedings, European Patent Office oppositions and related legal and administrative proceedings in the United States, Europe and other countries, involve complex legal and factual questions. As a result, such proceedings may be costly and time-consuming to pursue and their outcome is uncertain.

Litigation may be necessary to:

protect and enforce our patents and any future patents issuing on our patent applications;
enforce or clarify the terms of the licenses we have granted or may be granted in the future;
protect and enforce trade secrets, know-how and other proprietary rights that we own or have licensed, or may license in the future; or
determine the enforceability, scope and validity of the proprietary rights of third parties and defend against alleged patent infringement.

Competitors may infringe our intellectual property. As a result, we may be required to file infringement claims to stop third-party infringement or unauthorized use. This can be expensive, particularly for a

36

TABLE OF CONTENTS

company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patent claims do not cover its technology or that the factors necessary to grant an injunction against an infringer are not satisfied. An adverse determination of any litigation or other proceedings could put one or more of our patents at risk of being invalidated, interpreted narrowly, or amended such that they do not cover our product candidates. Moreover, such adverse determinations could put our patent applications at risk of not issuing, or issuing with limited and potentially inadequate scope to cover our product candidates or to prevent others from marketing similar products.

Interference, derivation or other proceedings brought at the USPTO, may be necessary to determine the priority or patentability of inventions with respect to our patent applications or those of our licensors or potential collaborators. Litigation or USPTO proceedings brought by us may fail or may be invoked against us by third parties. Even if we are successful, domestic or foreign litigation or USPTO or foreign patent office proceedings may result in substantial costs and distraction to our management. We may not be able, alone or with our licensors or potential collaborators, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or other proceedings. In addition, during the course of this kind of litigation or proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.

Some of our competitors may be able to sustain the costs of patent-related disputes, including patent litigation, more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

We may not be able to enforce our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive. The requirements for patentability may differ in certain countries, particularly in developing countries. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. Additionally, laws of some countries outside of the United States do not afford intellectual property protection to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our ability to enforce our patents to stop infringing activities is inadequate. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business. Furthermore, while we intend to protect our intellectual property rights in major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

37

TABLE OF CONTENTS

If we do not obtain patent term extensions for our drug candidates, our business may be materially harmed.

Depending upon the timing, duration and specifics of any FDA marketing approval of our drug candidates, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or Hatch-Waxman Act. The Hatch-Waxman Act permits a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be granted an extension, and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. For example, patents providing intellectual property protection for azeliragon are scheduled to expire in 2023, but if we obtain the maximum possible extension in the United States, a period of patent extension for the approved azeliragon product could extend into 2029. If we are unable to obtain patent term extension or the term of any such extension is less than we request, our competitors may obtain approval of competing products following the original expiration dates of our patents, and our business may be materially harmed.

Risks Relating to Employee Matters and Managing Growth

We will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth.

As we advance our drug candidates through preclinical studies and clinical trials and develop new drug candidates, we will need to increase our product development, scientific and administrative headcount to manage these programs. If we commercialize our products, we will be required to expand our staff further, particularly in sales and marketing. See “—Risks Relating to the Commercialization of Our Drug Candidates.” We do not have the capability to sell, distribute and market our drug candidates. If we are unable to establish an effective sales force and marketing infrastructure, or enter into acceptable third-party sales and marketing or licensing arrangements, we may not be able to commercialize our drug candidates successfully. In addition, to meet our obligations as a public company, we will need to increase our general and administrative capabilities. Our management, personnel and systems currently in place may not be adequate to support this future growth. Our need to effectively manage our operations, growth and various projects requires that we:

successfully attract and recruit new employees with the expertise and experience we will require;
manage our clinical programs effectively, which we anticipate being conducted at numerous clinical sites;
develop a marketing, distribution and sales infrastructure if we seek to market our products directly; and
continue to improve our operational, manufacturing, financial and management controls, reporting systems and procedures.

If we are unable to successfully manage this growth and increased complexity of operations, our business may be adversely affected.

We may not be able to manage our business effectively if we are unable to attract and retain key personnel.

We may not be able to attract or retain qualified management, finance, scientific and clinical personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses. If we are not able to attract and retain necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

38

TABLE OF CONTENTS

Our industry has experienced a high rate of turnover of management personnel in recent years. We are highly dependent on the development, regulatory, commercialization and business development expertise of our executive officers and key employees identified in the “Management” section of this prospectus. If we lose one or more of our executive officers or key personnel, our ability to implement our business strategy successfully could be seriously harmed. Any of our executive officers or key employees may terminate their employment at any time. Replacing executive officers and key employees may be difficult, will be costly and may take an extended period of time because of the limited number of individuals in our industry with the mix of skills and experience required to develop, gain regulatory approval of and commercialize products successfully. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key personnel. Our failure to attract and retain key personnel could materially harm our business.

Failure to build our finance infrastructure and improve our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies.

As a public company, we will operate in an increasingly demanding regulatory environment, which requires us to comply with applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission, expanded disclosure requirements, accelerated reporting requirements and more complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud.

We will need to hire additional finance personnel and build our financial infrastructure as we transition to operating as a public company, including complying with the applicable requirements of Section 404 of the Sarbanes-Oxley Act. We may be unable to do so on a timely basis.

Until we are able to expand our finance and administrative capabilities and establish necessary financial reporting infrastructure, we may not be able to prepare and disclose, in a timely manner, our financial statements and other required disclosures or comply with the applicable provisions of the Sarbanes-Oxley Act or existing or new reporting requirements. If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed and investors could lose confidence in our reported financial information.

Our employees, independent contractors, principal investigators, CROs, consultants and collaborators may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, consultants and collaborators may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or unauthorized activities that violate the regulations of the FDA and non-U.S. regulators, including those laws requiring the reporting of true, complete and accurate information to the FDA and non-U.S. regulators, healthcare fraud and abuse laws and regulations in the United States and abroad, or laws that require the reporting of true and accurate financial information and data. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. These activities also include the improper use or disclosure of information obtained in the course of clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted a code of conduct, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in

39

TABLE OF CONTENTS

Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.

Other Risks Relating to Our Business

We may use our financial and human resources to pursue a particular research program or drug candidate and fail to capitalize on programs or drug candidates that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and human resources, we intend to focus primarily on the regulatory approval of azeliragon, including the completion of the STEADFAST Study. As a result, we may forego or delay pursuit of opportunities with other drug candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on existing and future drug candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish valuable rights to that drug candidate through strategic alliance, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such drug candidate, or we may allocate internal resources to a drug candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any future products we develop.

We face an inherent risk of product liability as a result of the clinical testing of our drug candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our products. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

decreased demand for azeliragon or any future drug candidates or products we develop;
injury to our reputation and significant negative media attention;
withdrawal of clinical trial participants or cancellation of clinical trials;
costs to defend the related litigation;
a diversion of management’s time and our resources;
substantial monetary awards to trial participants or patients;
regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;
loss of revenue;
the inability to commercialize any products we develop; and
a decline in our share price.

Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of azeliragon or any future products we develop. We currently carry clinical trial liability insurance in the amount of $10,000,000 in the aggregate. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.

40

TABLE OF CONTENTS

Our insurance policies also have various exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses. If and when we obtain approval for marketing azeliragon, we intend to expand our insurance coverage to include the sale of azeliragon, however, we may be unable to obtain this liability insurance on commercially reasonable terms.

Our operations involve hazardous materials, which could subject us to significant liabilities.

Our research and development processes involve the controlled use of hazardous materials, including medical waste. Our operations produce hazardous waste products. We cannot eliminate the risk of accidental contamination or discharge or injury from these materials. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of these materials. We could be subject to civil damages in the event of exposure of individuals to hazardous materials. In addition, claimants may sue us for injury or contamination that results from our use of these materials and our liability may exceed our total assets. We have general liability and umbrella insurance of up to $6 million per occurrence, with an annual aggregate limit of $7 million, which excludes pollution liability. This coverage may not be adequate to cover all claims related to our hazardous materials. Furthermore, if we were to be held liable for a claim involving hazardous materials, this liability could exceed our insurance coverage, if any, and our other financial resources. Compliance with environmental and other laws and regulations may be expensive and current or future regulations may impair our research, development or production efforts.

Our insurance policies are expensive and protect us only from some business risks, which will leave us exposed to significant uninsured liabilities.

We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include general liability, employment practices liability, property, auto, workers’ compensation, umbrella, clinical trial and directors’ and officers’ insurance. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our Board of Directors, our board committees or as executive officers. We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.

The market for our proposed products is rapidly changing and competitive, and new drugs and new treatments that may be developed by others could impair our ability to maintain and grow our businesses and remain competitive.

The pharmaceutical and biotechnology industries are subject to rapid and substantial technological change. Developments by others may render proposed products noncompetitive or obsolete, or we may be unable to keep pace with technological developments or other market factors. Technological competition from pharmaceutical and biotechnology companies, universities, governmental entities and others diversifying into the field is intense and is expected to increase.

As a company with nominal revenues engaged in the development of drug technologies, our resources are limited, and we may experience technical challenges inherent in such technologies. Competitors have developed or are in the process of developing technologies that are, or in the future may be, the basis for competition. Some of these technologies may have an entirely different approach or means of accomplishing similar therapeutic effects compared to our proposed products. Our competitors may develop drugs that are safer, more effective or less costly than our proposed products and, therefore, present a serious competitive threat to us.

The potential widespread acceptance of therapies that are alternatives to those of ours may limit market acceptance of our drug candidates, even if commercialized. Some of our targeted diseases and

41

TABLE OF CONTENTS

conditions can also be treated by other medication. These treatments may be widely accepted in medical communities and have a longer history of use. The established use of these competitive drugs may limit the potential for our technologies, formulations and products to receive widespread acceptance if commercialized.

Therefore, changes in the market for our products and the availability of new or alternative treatments could have a material adverse effect on our businesses, financial conditions and results of operations.

Risks Relating to this Offering and Ownership of Our Class A Common Stock

MacAndrews has substantial influence over our business, and their interests may differ from our interests or those of our other stockholders.

Following this offering, MacAndrews will continue to hold, directly or indirectly, a majority of our combined voting power. Due to its ownership and rights under our investor rights agreement, amended and restated certificate of incorporation and amended and restated bylaws, MacAndrews has the power to control us and our subsidiaries, including the power to:

nominate a majority of our directors, elect a majority of our directors and appoint our executive officers, set our management policies and exercise overall control over our company and subsidiaries;
determine the composition of the committees on our Board of Directors;
agree to sell or otherwise transfer a controlling stake in our company; and
determine the outcome of substantially all actions requiring stockholder approval, including transactions with related parties, corporate reorganizations, acquisitions and dispositions of assets and dividends.

The interests of MacAndrews may differ from our interests or those of our other stockholders and the concentration of control in MacAndrews will limit other stockholders’ ability to influence corporate matters. The concentration of ownership and voting power with MacAndrews may also delay, defer or even prevent an acquisition by a third party or other change of control of our company and may make some transactions more difficult or impossible without the support of MacAndrews, even if such events are in the best interests of our other stockholders. The concentration of voting power with MacAndrews may have an adverse effect on the price of our Class A common stock. Our company may take actions that our other stockholders do not view as beneficial, which may adversely affect our results of operations and financial condition and cause the value of your investment to decline.

Our directors who have relationships with MacAndrews may have conflicts of interest with respect to matters involving our company.

The majority of our directors are affiliated with MacAndrews. These persons will have fiduciary duties to us and in addition will have duties to MacAndrews. In addition, our amended and restated certificate of incorporation will provide that none of MacAndrews, any of our non-employee directors who are employees, affiliates or consultants of MacAndrews or its affiliates (other than us or our subsidiaries) or any of their respective affiliates will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such individual directs a corporate opportunity to MacAndrews or its affiliates instead of us, or does not communicate information regarding a corporate opportunity to us that such person or affiliate has directed to MacAndrews or its affiliates. As a result, such circumstances may entail real or apparent conflicts of interest with respect to matters affecting both us and MacAndrews, whose interests, in some circumstances, may be adverse to ours. In addition, as a result of MacAndrews’ indirect ownership interest, conflicts of interest could arise with respect to transactions involving business dealings between us and MacAndrews or their affiliates, including potential business transactions, potential acquisitions of businesses or properties, the issuance of additional securities, the payment of dividends by us and other matters.

42

TABLE OF CONTENTS

We do not anticipate paying cash dividends on our Class A common stock, and accordingly, stockholders must rely on stock appreciation for any return on their investment.

We have never declared or paid any cash dividend on our Class A common stock and do not anticipate paying cash dividends on our Class A common stock in the future. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, the only return to stockholders will be appreciation in the price of our Class A common stock, which may never occur. Investors seeking cash dividends should not invest in our Class A common stock.

Our share price may be volatile, which could subject us to securities class action litigation and prevent you from being able to sell your shares at or above the offering price.

The initial public offering price for our shares was determined by negotiations between us and the representative of the underwriters and may not be indicative of prices that will prevail in the trading market. The market price of shares of our Class A common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

results and timing of our clinical trials and receipt of data from the trials;
results of clinical trials of our competitors’ products;
failure or discontinuation of any of our research programs;
delays in the development or commercialization of our potential products;
regulatory actions with respect to our products or our competitors’ products;
actual or anticipated fluctuations in our financial condition and operating results;
actual or anticipated changes in our growth rate relative to our competitors;
actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate;
competition from existing products or new products that may emerge;
announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;
issuance of new or updated research or reports by securities analysts;
fluctuations in the valuation of companies perceived by investors to be comparable to us;
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
additions or departures of key management or scientific personnel;
disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain, maintain, defend or enforce proprietary rights relating to our products and technologies;
announcement or expectation of additional financing efforts;
sales of our Class A common stock by us, our insiders or our other stockholders;
issues in manufacturing our potential products;
market acceptance of our potential products;
market conditions for biopharmaceutical stocks in general; and
general economic and market conditions.

Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such

43

TABLE OF CONTENTS

as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of shares of our Class A common stock. In addition, such fluctuations could subject us to securities class action litigation, which could result in substantial costs and divert our management’s attention from other business concerns, which could potentially harm our business. If the market price of shares of our Class A common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment.

No public market for our Class A common stock currently exists and an active trading market may not develop or be sustained following this offering.

Prior to this offering, there has been no public market for our Class A common stock. An active trading market may not develop following the completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.

The trading market for our Class A common stock will be influenced by the research and reports that equity research analysts publish about us and our business. We do not currently have and may never obtain research coverage by equity research analysts. Equity research analysts may elect not to provide research coverage of our Class A common stock after this offering, and such lack of research coverage may adversely affect the market price of our Class A common stock. In the event we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.

A substantial portion of our total outstanding shares may be sold into the market at any time. This could cause the market price of our Class A common stock to drop significantly, even if our business is doing well.

The market price of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate. After the consummation of this offering, we will have 32,812,500 shares of outstanding Class A common stock on a fully diluted basis, assuming that all the vTv Therapeutics LLC Units outstanding (and the corresponding shares of Class B common stock) after giving effect to the Reorganization Transactions and this offering described under “Prospectus Summary—The Reorganization Transactions,” excluding those held by us, are exchanged into shares of our Class A common stock and assuming no exercise of the underwriters’ over-allotment option.

Immediately following the consummation of the Reorganization Transactions and this offering, the members of vTv Therapeutics LLC will consist of the Issuer and vTv Therapeutics Holdings, which will hold 25,000,000 vTv Therapeutics LLC Units and the same number of shares of vTv Therapeutics Inc. Class B common stock, which will represent 76.2% of the combined voting power of our outstanding common stock (or 73.6% if the underwriters exercise their over-allotment option in full). In addition, MacAndrews has agreed to purchase through one or more affiliates an aggregate of 1,666,666 shares of our Class A common stock in this offering at the initial public offering price, so its holdings represent approximately 81.3% of the combined voting power of our outstanding common stock (or 78.5% if the underwriters exercise their over-allotment option in full). Pursuant to the terms of the Exchange Agreement, vTv Therapeutics LLC Units (along with the corresponding number of shares of our Class B common stock) will be exchangeable for (i) shares of our Class A common stock on a one-for-one basis or (ii) cash (based on the market price of the shares of Class A common stock), at our option (as the managing member of vTv

44

TABLE OF CONTENTS

Therapeutics LLC). Shares of our Class A common stock issuable upon an exchange of vTv Therapeutics LLC Units as described above would be considered “restricted securities,” as that term is defined in Rule 144 under the Securities Act, unless the exchange is registered under the Securities Act. We, our executive officers and directors, shareholders and each holder of Class A common stock purchased through our directed share program that is a director or executive officer will also agree with the underwriters not to sell, otherwise dispose of or hedge any Class A common stock, Class B common stock or vTv Therapeutics LLC Units or securities convertible or exchangeable for shares of Class A common stock, subject to specified exceptions, during the period from the date of this prospectus continuing through the date that is 180 days after the date of this prospectus, except with the prior written consent of the representatives of the underwriters. After the expiration of the 180-day lock-up period, the shares of Class A common stock issuable upon exchange of vTv Therapeutics LLC Units will be eligible for resale from time to time, subject to certain contractual restrictions and the requirements of the Securities Act.

We intend to file a registration statement under the Securities Act registering 3,250,000 shares of our Class A common stock reserved for issuance under our 2015 Plan, and we have entered into an investor rights agreement with vTv Therapeutics Holdings providing certain governance and registration rights. See the information under the heading “Shares Eligible for Future Sale” and “Certain Relationships and Related Party Transactions—Investor Rights Agreement” for a more detailed description of the shares of Class A common stock that will be available for future sale upon completion of this offering.

Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.

The initial public offering price of the shares offered by this prospectus will be substantially higher than the pro forma as adjusted net tangible book value per share of our Class A common stock based on the total value of our tangible assets less our total liabilities immediately following this offering. Therefore, if you purchase shares of our Class A common stock in this offering, you will experience immediate and substantial dilution of approximately $11.89 per share ($11.52 per share if the underwriters’ exercise their over-allotment option in full) in the price you pay for shares of our Class A common stock as compared to the pro forma as adjusted net tangible book value per share. To the extent outstanding options to purchase shares of Class A common stock are exercised, there may be further dilution. For further information on this calculation, see “Dilution” elsewhere in this prospectus.

Future sales and issuances of our Class A common stock or rights to purchase Class A common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell Class A common stock, convertible securities or other equity securities. If we sell Class A common stock, convertible securities or other equity securities, your investment in our Class A common stock will be diluted. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

We are an “emerging growth company,” and will be able take advantage of reduced disclosure requirements applicable to “emerging growth companies,” which could make our Class A common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and, for as long as we continue to be an “emerging growth company,” we intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in

45

TABLE OF CONTENTS

Rule 12b-2 under the Exchange Act, which would occur if the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on these exemptions. If some investors find our Class A common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

We will incur significantly increased costs and devote substantial management time as a result of operating as a public company particularly after we are no longer an “emerging growth company.”

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. For example, we will be required to comply with certain of the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the Securities and Exchange Commission, and NASDAQ, our stock exchange, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. In that regard, we currently do not have an internal audit function, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

Under the JOBS Act, “emerging growth companies” can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not “emerging growth companies.”

After we are no longer an “emerging growth company,” we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

We will be exempt from certain corporate governance requirements since we will be a “controlled company” within the meaning of the NASDAQ rules, and as a result our stockholders will not have the protections afforded by these corporate governance requirements.

MacAndrews will continue to control more than 50% of our combined voting power upon the completion of this offering. As a result, we will be considered a “controlled company” for the purposes of NASDAQ rules and corporate governance standards, and therefore we will be permitted to, and we intend to, elect not to comply with certain NASDAQ corporate governance requirements, including those that would otherwise require our Board of Directors to have a majority of independent directors and require that we either establish compensation and nominating and corporate governance committees, each comprised

46

TABLE OF CONTENTS

entirely of independent directors, or otherwise ensure that the compensation of our executive officers and nominees for directors are determined or recommended to the Board of Directors by the independent members of the Board of Directors. Accordingly, holders of our Class A common stock will not have the same protections afforded to stockholders of companies that are subject to all of the NASDAQ rules and corporate governance standards, and the ability of our independent directors to influence our business policies and affairs may be reduced. See “Management—Board Committees.”

Provisions in our charter and bylaws and provisions of Delaware law may delay or prevent our acquisition by a third party, which might diminish the value of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain several provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of the Board of Directors. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. The provisions include, among others:

a prohibition on actions by written consent of the stockholders;
authorized but unissued shares of common stock and preferred stock that will be available for future issuance;
the ability of our Board of Directors to increase the size of the Board of Directors and fill vacancies without a stockholder vote;
provisions that have the same effect as a modified version of Section 203 of the Delaware General Corporation Law, an antitakeover law (as further described below); and
advance notice requirements for stockholder proposals and director nominations.

Section 203 of the Delaware General Corporation Law may affect the ability of an “interested stockholder” to engage in certain business combinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law. Nevertheless, the amended and restated certificate of incorporation will contain provisions that have the same effect as Section 203 of the Delaware General Corporation Law, except that they provide that MacAndrews and its various successors and affiliates (and transferees of any of them) will not be deemed to be “interested stockholders,” regardless of the percentage of our stock owned by them, and accordingly will not be subject to such restrictions.

For more information, see “Description of Capital Stock.” The provisions of our amended and restated certificate of incorporation and amended and restated bylaws, the significant common stock ownership of MacAndrews and the ability of the Board of Directors to create and issue a new series of preferred stock or implement a stockholder rights plan could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of our common stock in the future, which could reduce the market price of our common stock.

We will be required to pay vTv Therapeutics Holdings for certain tax benefits we may claim that arise in connection with this offering and related transactions. In certain circumstances, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual tax benefits we realize.

As described under “Use of Proceeds” we intend to use the net proceeds from this offering to acquire equity interests in vTv Therapeutics LLC. In the future, Class B common stock, together with the corresponding number of vTv Therapeutics LLC Units, may be exchanged for shares of our Class A common stock, or for cash, at our option (as the managing member of vTv Therapeutics LLC). See “Certain Relationships and Related Party Transactions—Exchange Agreement.” These future exchanges of Class B common stock, together with the corresponding number of vTv Therapeutics LLC Units, may result in increases in the tax basis of the assets of vTv Therapeutics LLC that otherwise would not have been available. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization

47

TABLE OF CONTENTS

deductions and therefore reduce the amount of income tax we would otherwise be required to pay in the future and may also decrease gain (or increase loss) on future dispositions of certain assets to the extent the increased tax basis is allocated to those assets. The IRS may challenge all or part of these tax basis increases and a court could sustain such a challenge.

We have entered into a Tax Receivable Agreement with vTv Therapeutics Holdings that will provide for the payment by us to vTv Therapeutics Holdings (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (or, in some circumstances, we are deemed to realize) as a result of (a) the exchange of Class B common stock, together with the corresponding number of vTv Therapeutics LLC Units, for shares of our Class A common stock (or for cash), (b) tax benefits related to imputed interest deemed to be paid by us as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement. Although the actual increase in tax basis and the amount and timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the nature of the assets, the extent to which such exchanges are taxable, the tax rates then applicable, and the amount and timing of our income, we expect that the payments that we may make to vTv Therapeutics Holdings could be substantial.

vTv Therapeutics Holdings generally will not reimburse us for any payments that may previously have been made under the Tax Receivable Agreement even if the IRS subsequently disallows the tax basis increase or any other relevant tax item. Instead, any excess cash payments made by us to vTv Therapeutics Holdings will be netted against any future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement. However, we might not determine that we have effectively made an excess cash payment to vTv Therapeutics Holdings for a number of years following the initial time of such payment. As a result, in certain circumstances we could make payments to vTv Therapeutics Holdings under the Tax Receivable Agreement in excess of our cash tax savings. Our ability to achieve benefits from any tax basis increase and the payments to be made under the Tax Receivable Agreement, will depend upon a number of factors, including the timing and amount of our future income and the nature of our assets.

To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid. In addition, the Tax Receivable Agreement provides that, upon a merger, asset sale or other form of business combination or certain other changes of control or if, at any time, we elect an early termination of the Tax Receivable Agreement, our (or our successor’s) obligations under the Tax Receivable Agreement with respect to exchanged or acquired Class B common stock, together with the corresponding number of vTv Therapeutics LLC Units (whether exchanged or acquired before or after such change of control or early termination), would be required to be paid significantly in advance of the actual realization, if any, of any future tax benefits and would be based on certain assumptions, including that we would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the Tax Receivable Agreement, and, in the case of certain early termination elections, that any Class B common stock, together with the corresponding number of vTv Therapeutics LLC Units, that have not been exchanged will be deemed exchanged for the market value of the Class A common stock at the time of termination. Consequently, it is possible that the actual cash tax savings realized by us may be significantly less than the corresponding Tax Receivable Agreement payments.

The only asset of vTv Therapeutics Inc. after the completion of this offering will be its interest in vTv Therapeutics LLC, and accordingly it will depend on distributions from vTv Therapeutics LLC to pay taxes and expenses, including payments under the Tax Receivable Agreement. vTv Therapeutics LLC’s ability to make such distributions may be subject to various limitations and restrictions.

Upon consummation of this offering, vTv Therapeutics Inc. will be a holding company, will have no material assets other than its ownership of vTv Therapeutics LLC Units and will have no independent means of generating revenue or cash flow. vTv Therapeutics LLC will be treated as a partnership for U.S. federal income tax purposes and, as such, will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of its common units, including us. As a result, we will incur U.S. federal, state and local income taxes on our allocable share of any net taxable income of vTv Therapeutics LLC. Under the terms of vTv Therapeutics LLC Operating Agreement, vTv Therapeutics LLC

48

TABLE OF CONTENTS

will be obligated to make tax distributions to holders of its common units, including us. In addition to tax expenses, we will also incur expenses related to our operations, including expenses under the Tax Receivable Agreement, which could be significant. We intend, as its managing member, to cause vTv Therapeutics LLC to make distributions in an amount sufficient to allow us to pay our taxes and operating expenses, including any payments due under the Tax Receivable Agreement. However, vTv Therapeutics LLC’s ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, restrictions on distributions that would either violate any contract or agreement to which vTv Therapeutics LLC is then a party, including potential debt agreements, or any applicable law, or that would have the effect of rendering vTv Therapeutics LLC insolvent. If vTv Therapeutics LLC does not distribute sufficient funds for us to pay our taxes or other liabilities, we may have to borrow funds, which could adversely affect our liquidity and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid.

Our organizational structure confers certain benefits upon vTv Therapeutics Holdings and certain of its successors and assigns that will not benefit Class A common stockholders to the same extent as it will benefit the vTv Therapeutics Holdings.

Our organizational structure, including the fact that vTv Therapeutics Holdings is expected to own more than 50% of the voting power of our outstanding voting stock and own part of its economic interest in our business through vTv Therapeutics LLC, confers certain benefits upon vTv Therapeutics Holdings that will not benefit the holders of our Class A common stock to the same extent as it will benefit vTv Therapeutics Holdings. For example, the Tax Receivable Agreement will provide for the payment by us to vTv Therapeutics Holdings (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (or, in some circumstances, we are deemed to realize) as a result of (a) the exchange of Class B common stock, together with the corresponding number of vTv Therapeutics Holdings LLC Units, for shares of our Class A common stock (or for cash), (b) tax benefits related to imputed interest deemed to be paid by us as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement. Although we will retain 15% of the amount of such tax benefits, it is possible that the interests of vTv Therapeutics Holdings may in some circumstances conflict with our interests and the interests of our other stockholders, including you. For example, vTv Therapeutics Holdings may have different tax positions from us, especially in light of the Tax Receivable Agreement, that could influence their decisions regarding whether and when we should dispose of assets, whether and when we should incur new or refinance existing indebtedness, and whether and when we should terminate the Tax Receivable Agreement and accelerate our obligations thereunder. In addition, the determination of future tax reporting positions, the structuring of future transactions and the handling of any future challenges by any taxing authority to our tax reporting positions may take into consideration vTv Therapeutics Holdings’s tax or other considerations, which may differ from the considerations of us or our other stockholders. To the extent that vTv Therapeutics Holdings is dissolved or liquidated, MacAndrews and/or its affiliates will succeed to the rights and obligations of vTv Therapeutics Holdings under the Tax Receivable Agreement, and the same considerations described above apply to any such successor parties.

Participation in this offering by MacAndrews would reduce the available public float for the Class A common stock.

Our principal equityholder, MacAndrews, has agreed to purchase through one or more affiliates an aggregate of 1,666,666 shares of our Class A common stock in this offering at the initial public offering price, which would increase its holdings up to approximately 81.3% of the combined voting power of our outstanding common stock (or 78.5% if the underwriters exercise their over-allotment option in full). Such purchase reduces the available public float for the Class A common stock, because MacAndrews and its affiliates are restricted from selling such shares by lock-up agreements they have entered into with the underwriters and by restrictions under applicable securities laws. Such purchase of shares by any such entities in this offering reduces the liquidity of the Class A common stock relative to what it would have been had these shares been purchased by investors that were not affiliated with existing stockholders. Lack of liquidity could have a material, adverse effect on the price of the Class A common stock and impose limitations on investors’ ability to dispose of their shares of Class A common stock.

49

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which involve risks and uncertainties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this prospectus, including statements regarding the timing of our clinical trials, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our results to vary from expectations include, but are not limited to:

our ability to raise sufficient capital to complete the Steadfast Study and to complete the development and commercialization of azeliragon and of our other drug candidates;
failure of azeliragon or our other drug candidates to advance through clinical trials with favorable results;
delays in the commencement, enrollment or completion of our clinical trials or the reporting of data from those trials;
our ability to satisfy domestic and international regulatory requirements with respect to azeliragon and our other drug candidates and the labeling under any approval we may obtain;
the performance of contract research organizations who conduct our clinical trials for us;
our ability to establish relationships with third-party manufacturers for supplying or manufacturing our products and drug candidates;
our ability to develop commercialization and marketing capabilities or to enter into strategic partnerships to develop and commercialize azeliragon or any of our other drug candidates;
the timing and success of the commercialization of azeliragon or any of our other drug candidates;
the rate and degree of market acceptance of azeliragon or any of our other drug candidates;
the size and growth of the potential markets for azeliragon or any of our other drug candidates and our ability to serve those markets;
our plans to expand the indications of azeliragon or our other drug candidates;
regulatory developments in the United States and foreign countries;
competition from existing drugs or new drugs that may emerge;
cost containment initiatives and growth of managed care;
potential product liability claims;
our ability to attract and retain a sufficient number of scientists, clinicians, sales personnel and other key personnel;
our ability to obtain, maintain, defend and enforce intellectual property rights protecting azeliragon and our other drug candidates;
our ability to obtain patent term extensions;
liabilities due to our use of hazardous materials and our uninsured liabilities;

50

TABLE OF CONTENTS

our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; and
our ability to adequately support future growth.

These forward-looking statements reflect our views with respect to future events as of the date of this prospectus 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. These forward-looking statements represent our estimates and assumptions only as of the date of this prospectus and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus. We anticipate that subsequent events and developments will cause our views to change. You should read this prospectus and the documents referenced in this prospectus and filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. Our forward-looking statements do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.

51

TABLE OF CONTENTS

USE OF PROCEEDS

We estimate that the net proceeds from the sale of our Class A common stock in this offering before the payment of expenses will be approximately $109.0 million ($125.3 million if the underwriters exercise their over-allotment option in full) based on the initial public offering price of $15.00 per share.

vTv Therapeutics Inc. will use the net proceeds of this offering to acquire vTv Therapeutics LLC Units. We intend to use such proceeds for the following purposes:

approximately $70.0 to $80.0 million to fund the Phase 3 clinical development of azeliragon, including the STEADFAST Study;
approximately $10.0 to $15.0 million to fund our planned Phase 2 trials for the clinical development of our type 2 diabetes drug candidates; and
the remainder to fund further clinical development of our other drug candidates and for working capital and other general corporate purposes.

Entities affiliated with MacAndrews will initially bear certain costs and expenses of this offering, including the fees of attorneys, consultants, financial printers and auditors incurred by us, as well as certain additional expenses incurred by such affiliated entities, currently estimated to be approximately $4.8 million in the aggregate. We will reimburse such MacAndrews affiliates using a portion of the gross proceeds of this offering.

The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from clinical trials, as well as any collaborations that we may enter into with third parties for our drug candidates, and any unforeseen cash needs.

Pending these uses, we plan to invest these net proceeds in short-term, interest bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States.

52

TABLE OF CONTENTS

DIVIDEND POLICY

We have never declared or paid any cash dividends on our Class A common stock, and currently do not plan to declare cash dividends on shares of our Class A common stock in the foreseeable future. We expect that we will retain all of our available funds and future earnings, if any, for use in the operation and expansion of our business. Subject to the foregoing, the payment of cash dividends in the future, if any, will be at the discretion of our Board of Directors and will depend upon such factors as earnings levels, capital requirements, restrictions imposed by applicable law, our overall financial condition and any other factors deemed relevant by our Board of Directors.

53

TABLE OF CONTENTS

CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of March 31, 2015:

on an actual basis;
on a reorganization pro forma basis to reflect the Reorganization Transactions; and
on a pro forma basis to further reflect the issuance and sale by us of 7,812,500 shares of our Class A common stock in this offering at an initial public offering price of $15.00 per share, after deducting the underwriting discount and estimated offering expenses payable by us, including the reimbursement of certain costs and expenses borne by entities affiliated with MacAndrews, and the application of the expected net proceeds of such sale to purchase vTv Therapeutics LLC Units, and assuming no exercise of the underwriters’ over-allotment option.

You should read this information together with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” and “Selected Financial Data” as well as our financial statements and the related notes, which appear elsewhere in this prospectus.

As of March 31, 2015
(unaudited, dollars in thousands, except per unit and per share data)
Actual
Reorganization
Pro Forma(1)
Pro Forma(1)
Cash and cash equivalents
$
776
 
$
776
 
$
104,960
 
Long-term debt, including current portion
$
38,337
 
$
 
$
 
Redeemable convertible preferred units:
 
 
 
 
 
 
 
 
 
vTvx Holdings I:
 
 
 
 
 
 
 
 
 
Series A redeemable convertible preferred units, no par value, 8,571,337 units authorized, issued and outstanding
 
3,071
 
 
 
 
 
Series B redeemable convertible preferred units, no par value, 2,547,593 units authorized, issued and outstanding
 
3,500
 
 
 
 
 
Series C redeemable convertible preferred units, no par value, 2,343,922 units authorized, and 2,243,922 issued and outstanding
 
8,777
 
 
 
 
 
Series D redeemable convertible preferred units, no par value, 2,442,361 units authorized, issued and outstanding
 
9,556
 
 
 
 
 
Series E redeemable convertible preferred units, no par value, 32,789,595 units authorized, issued and outstanding
 
86,700
 
 
 
 
 
Series F redeemable convertible preferred units, no par value, 1,367,157,023 units authorized and 1,145,947,422 issued and outstanding
 
363,605
 
 
 
 
 
Total vTvx Holdings I redeemable convertible preferred units
 
475,209
 
 
 
 
 
vTvx Holdings II:
 
 
 
 
 
 
 
 
 
Series A redeemable convertible preferred units, no par value; 49,766,563 units authorized, issued and outstanding
 
1,194
 
 
 
 
 
Series B redeemable convertible preferred units, no par value, 704,118,921 units authorized and 594,834,833 issued and outstanding
 
14,276
 
 
 
 
 
Total vTvx Holdings II redeemable convertible preferred units
 
15,470
 
 
 
 
 
vTvx Holdings I:
 
 
 
 
 
 
 
 
 
Members’ deficit
 
(514,578
)
 
 
 
 
Common member units, no par value; 1,512,722,844 units authorized, 4,188,607 issued and outstanding as of
March 31, 2015
 
 
 
 
 
 
Total vTvx Holdings I members’ deficit
 
(514,578
)
 
     —
 
 
 

54

TABLE OF CONTENTS

As of March 31, 2015
(unaudited, dollars in thousands, except per unit and per share data)
Actual
Reorganization
Pro Forma(1)
Pro Forma(1)
vTvx Holdings II:
 
 
 
 
 
 
 
 
 
Members’ deficit
 
(46,634
)
 
     —
 
 
 
Common member units, no par value; 805,219,377 units authorized; 5,148,485 issued and outstanding as of
March 31, 2015
 
 
 
 
 
 
Total vTvx Holdings II members’ deficit
 
(46,634
)
 
 
 
 
vTv Therapeutics Inc.:
 
 
 
 
 
 
 
 
 
Common stock, par value $0.01 per share, no shares authorized, issued and outstanding as of March 31, 2015
 
 
 
 
 
 
Class A - Common stock, $0.01 par value; no shares authorized, issued and outstanding as of March 31, 2015 (actual and reorganization pro forma), 100,000,000 shares authorized and 7,812,500 shares outstanding (pro forma)
 
 
 
 
 
78
 
Class B - Common stock, $0.01 par value; no shares authorized, issued and outstanding as of March 31, 2015 (actual), 100,000,000 shares authorized and 25,000,000 shares outstanding (reorganization pro forma and pro forma)
 
 
 
250
 
 
250
 
Additional paid-in capital
 
 
 
(250
)
 
24,025
 
Retained (deficit) earnings
 
 
 
 
 
 
Total (deficit) equity (excluding non-controlling interest)
 
(561,212
)
 
0
 
 
24,353
 
(Deficit) equity attributable to non-controlling interest
 
 
 
(1,902
)
 
77,929
 
Total (deficit) equity
 
(561,212
)
 
(1,902
)
 
102,282
 
Total capitalization
$
(32,196
)
$
(1,902
)
$
102,282
 

(1)No vTvx Holdings I or vTvx Holdings II units authorized or issued or outstanding on a reorganization pro forma or a pro forma basis for vTv Therapeutics Inc.

The pro forma share information in the table above is based on 7,812,500 shares of our Class A common stock being issued in this offering, as if they were outstanding as of March 31, 2015 on a pro forma basis, and excludes the following:

3,250,000 shares issuable under options to purchase shares of Class A common stock, restricted stock units or other similar awards, including those that may be granted in connection with this offering under the 2015 Plan; and
25,000,000 shares of Class A common stock reserved for issuance upon the exchange of vTv Therapeutics LLC Units (along with the corresponding number of shares of our Class B common stock).

55

TABLE OF CONTENTS

DILUTION

If you invest in our Class A common stock, you will experience dilution to the extent of the difference between the initial public offering price per share of our Class A common stock and the pro forma net tangible book value per share of our Class A common stock. Dilution results from the fact that the per share offering price of the Class A common stock is substantially in excess of the book value per share attributable to the Class A common stock held by us (including all shares issuable upon exchange and/or conversion).

Our pro forma net tangible book value as of March 31, 2015 would have been a deficit of approximately $2.2 million, or $0.09 per share of our Class A common stock. Pro forma net tangible book value represents the amount of total tangible assets less total liabilities, and pro forma net tangible book value per share represents pro forma net tangible book value divided by the number of shares of our Class A common stock outstanding, in each case after giving effect to the Reorganization Transactions (based on an initial public offering price of $15.00 per share) assuming that all of the Class B common stock is exchanged for newly-issued shares of our Class A common stock, on a one-for-one basis.

After giving effect to the Reorganization Transactions, assuming all of the Class B common stock is exchanged for newly-issued shares of Class A common stock, on a one-for-one basis, and after giving further effect to the sale of 7,812,500 shares of Class A common stock in this offering at the initial public offering price of $15.00 per share and the application of the net proceeds from this offering, our pro forma as adjusted net tangible book value would have been a surplus of approximately $102.0 million, or $3.11 per share, representing an immediate increase in net tangible book value of $3.20 per share to us and an immediate dilution in net tangible book value of $11.89 per share to new investors in this offering.

The following table illustrates the dilution per share of our Class A common stock, assuming the underwriters do not exercise their option to purchase additional shares of our Class A common stock:

Initial public offering price per share
$
15.00
 
Pro forma net tangible book value per share as of March 31, 2015(1)
$
(0.09
)
Increase in pro forma net tangible book value per share attributable to this offering
 
3.20
 
Pro forma as adjusted net tangible book value per share after this offering(2)
 
3.11
 
Dilution in pro forma net tangible book value per share to new investors
$
11.89
 

(1)Reflects 25,000,000 outstanding shares of Class A common stock immediately prior to this offering, equal to the 25,000,000 shares of Class A common stock issuable upon the exchange of the Class B common stock.

(2)Reflects 32,812,500 outstanding shares, consisting of (i) 7,812,500 shares of Class A common stock to be issued in this offering and (ii) the 25,000,000 outstanding shares described in note (1) above issuable upon the exchange of Class B common stock.

Dilution is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share of Class A common stock.

The following table sets forth, on a pro forma basis as of March 31, 2015, the number of shares of Class A common stock purchased from us, the total consideration paid to us and the average price per share paid by the existing equity holders and by new investors purchasing shares of Class A common stock in this offering, at the initial public offering price of $15.00 per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, including the reimbursement of certain costs and expenses borne by entities affiliated with MacAndrews, and after giving effect to the Reorganization Transactions, assuming that all of the Class B common stock are exchanged for newly-issued shares of our Class A common stock, on a one-for-one basis, and after giving further effect to this offering and the application of the net proceeds from this offering:

Shares of Class A
Common Stock Purchased
Total
Consideration
Average
Price
Number
Percent
Amount
Percent
Per Share
New investors in this offering(1)
 
7,812,500
 
 
23.8
%
$
117,187,500
 
 
100.0
%
$
15.00
 
vTv Therapeutics Holdings
 
25,000,000
 
 
76.2
%
 
 
 
 
 
 
Total
 
32,812,500
 
 
100.0
%
$
117,187,500
 
 
100.0
%
$
3.57
 

(1)Includes 7,812,500 shares of Class A common stock to be sold in this offering, the net proceeds of which we intend to use to acquire vTv Therapeutics LLC Units from vTv Therapeutics LLC, as described under “Use of Proceeds.”

56

TABLE OF CONTENTS

To the extent the underwriters’ option to purchase additional shares is exercised, there will be further dilution to new investors.

We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

57

TABLE OF CONTENTS

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED
FINANCIAL INFORMATION

Basis of Presentation

vTv Therapeutics Inc. was formed in April 2015 and does not have historical financial data. The historical financial data presented in this prospectus are the historical combined consolidated financial data of our Predecessors, vTvx Holdings I and vTvx Holdings II. The unaudited pro forma condensed combined consolidated statement of operations data for the year ended December 31, 2014 and the three months ended March 31, 2015 gives pro forma effect to the Reorganization Transactions, this offering and the application of the net proceeds from this offering to purchase units of vTv Therapeutics LLC as if they had been completed as of January 1, 2014 and the unaudited pro forma condensed combined consolidated balance sheet data as of March 31, 2015 gives pro forma effect to the Reorganization Transactions, this offering and the application of the net proceeds from this offering to purchase units of vTv Therapeutics LLC as if they had been completed as of March 31, 2015. The unaudited pro forma condensed combined consolidated financial data are presented for information purposes only and should not be considered indicative of actual results of operations that would have been achieved had the Reorganization Transactions and this offering been consummated on the date indicated, and do not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period. The pro forma condensed combined consolidated financial statements reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable, but are subject to change. We have made, in our opinion, all adjustments that are necessary to present fairly the pro forma financial data.

The pro forma adjustments principally give effect to the following items:

the Reorganization Transactions described in the section entitled “The Reorganization Transactions”; and
this offering and the use of the net proceeds to purchase units of vTv Therapeutics LLC and its payment of estimated offering expenses from the gross proceeds, including the reimbursement of certain costs and expenses borne by entities affiliated with MacAndrews.

Within the Unaudited Pro Forma Condensed Combined Consolidated Financial Information, we have presented “reorganization pro forma” financial information in columnar format. The Reorganization Transactions will occur immediately prior to this offering. The financial information in the reorganization pro forma column in the unaudited pro forma condensed combined consolidated statement of operations data for the three months ended March 31, 2015 and the year ended December 31, 2014 give pro forma effect to the Reorganization Transactions as if they had been completed as of January 1, 2014. The financial information in the reorganization pro forma column in the unaudited pro forma condensed combined consolidated balance sheet data as of March 31, 2015 give pro forma effect to the Reorganization Transactions as if they had been completed as of March 31, 2015.

Consolidation

We have determined that vTv Therapeutics LLC is a variable-interest entity (“VIE”) for accounting purposes and that vTv Therapeutics Inc. is the primary beneficiary of vTv Therapeutics LLC because (through its managing member interest in vTv Therapeutics LLC and the fact that the senior management of vTv Therapeutics Inc. is also the senior management of vTv Therapeutics LLC) it has the power to direct all of the activities of vTv Therapeutics LLC, which include those that most significantly impact vTv Therapeutics LLC’s economic performance. vTv Therapeutics Inc. has therefore consolidated vTv Therapeutics LLC’s results under the VIE accounting model in its pro forma financial statements and will continue to consolidate these results using the VIE model subsequent to the Reorganization Transactions and the completion of this offering. vTv Therapeutics Holdings LLC owns a non-voting interest in vTv Therapeutics LLC, representing a 76.2% economic interest in vTv Therapeutics LLC, effectively restricting vTv Therapeutics Inc.’s interest to 23.8% of vTv Therapeutics LLC’s economic results (assuming no exercise of the underwriters’ over-allotment option), subject to increase in the future, should vTv Therapeutics Inc. purchase additional vTv Therapeutics LLC Units or should the holders of vTv Therapeutics LLC Units decide to exchange such units (together with shares of Class B common stock) for shares of Class A

58

TABLE OF CONTENTS

common stock (or cash) pursuant to the Exchange Agreement. Other than its purchase of vTv Therapeutics LLC Units with the net proceeds of this offering, as of the closing date of this offering, vTv Therapeutics Inc. will not have provided any financial or other support to vTv Therapeutics LLC. In the future, vTv Therapeutics Inc. will not be required to provide financial or other support for vTv Therapeutics LLC, although it will control its business and other activities through its managing member interest in vTv Therapeutics LLC, and its management will be the management of vTv Therapeutics LLC. Because vTv Therapeutics Inc. is not a guarantor or obligor with respect to any of the liabilities of vTv Therapeutics LLC, absent any such guarantee or other arrangement, the creditors of vTv Therapeutics LLC will not have any recourse to the general credit of vTv Therapeutics Inc. Nevertheless, because vTv Therapeutics Inc. will have no material assets other than its interests in vTv Therapeutics LLC, any financial difficulties at vTv Therapeutics LLC could result in vTv Therapeutics Inc. recognizing a loss.

Additional Information

You should read the Unaudited Pro Forma Condensed Combined Consolidated Financial Information and accompanying notes in conjunction with the combined consolidated historical financial statements and related notes and the financial and other information included elsewhere in this prospectus, including the sections entitled “Capitalization,” “Selected Financial Data,” “Use of Proceeds,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

59

TABLE OF CONTENTS

vTv Therapeutics Inc.
Unaudited Pro Forma Condensed Combined Consolidated Statements of Operations
Year ended December 31, 2014
(dollars in thousands except per share data)

Predecessors’
Combined
Actual
Reorganization
Adjustments
(a)
Reorganization
Pro Forma
Offering
Adjustments
(b)
vTv
Therapeutics Inc.
Pro Forma
Revenue
$
1,549
 
$
 
$
1,549
 
$
 
$
1,549
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
 
17,378
 
 
 
 
17,378
 
 
 
 
17,378
 
Research and development – related party
 
1,351
 
 
 
 
1,351
 
 
 
 
1,351
 
General and administrative
 
11,717
 
 
 
 
11,717
 
 
 
 
11,717
 
Total operating expenses
 
30,446
 
 
 
 
30,446
 
 
 
 
30,446
 
Operating loss
 
(28,897
)
 
 
 
(28,897
)
 
 
 
(28,897
)
Other (expense), net
 
(503
)
 
 
 
(503
)
 
 
 
(503
)
Other (expense) – related party
 
(623
)
 
623
 
 
 
 
 
 
 
Interest (expense)
 
(282
)
 
282
 
 
 
 
 
 
 
Interest (expense), net – related party
 
(5,727
)
 
5,727
 
 
 
 
 
 
 
Investment (loss) – related party
 
(69
)
 
69
 
 
 
 
 
 
 
Combined consolidated net loss
$
(36,101
)
$
6,701
 
$
(29,400
)
$
 
$
(29,400
)
Net loss attributable to non-controlling interests
 
 
 
(29,400
)
 
(29,400
)
 
7,000
 
 
(22,400
)
Net loss available to Predecessor / vTv Therapeutics Inc.
$
(36,101
)
$
36,101
 
$
 
$
(7,000
)
$
(7,000
)
Net loss attributable to vTv Therapeutics Inc. per share Class A common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted, pro forma (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
$
(0.90
)(c)
Weighted average shares of Class A common stock outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted, pro forma (unaudited)