Aerpio Reports Fourth Quarter and Full Year 2020 Financial Results and Provides Business Update Ended fourth quarter 2020 with $42.6 million in cash and cash equivalents Aerpio is currently evaluating a range of strategi

Aerpio Reports Fourth Quarter and Full Year 2020 Financial Results

and Provides Business Update

CINCINNATI, Ohio, March 11, 2021 Aerpio Pharmaceuticals, Inc. ( Aerpio or the

Company ) (Nasdaq: ARPO), a biopharmaceutical company focused on developing compounds that activate Tie2 in indications in which the Company believes that activation of Tie2 may have therapeutic potential, today reported financial results

for the fourth quarter and full year ended December 31, 2020 and provided a business update.

Recent Updates to Company s Business

The Company continues to explore strategic options for partnering

its programs, as well as the potential for an acquisition, company sale, merger, business combination, asset sale, in-license, out-license or other strategic

transaction. Ladenburg Thalmann & Co. Inc. is acting as Aerpio s financial advisor with respect to the strategic review process. There can be no assurance that this exploration of strategic alternatives will result in the Company

entering or completing any transaction. Aerpio does not intend to make any further disclosures regarding the strategic review process unless and until specific actions are approved.

Fourth Quarter and Full Year 2020 Financial Highlights

As of December 31, 2020, cash and cash equivalents totaled $42.6 million, compared to $38.5 million as of December 31, 2019. Weighted

average number of shares outstanding as of December 31, 2020 was approximately 42.6 million.

For the three months ended December 31, 2020,

operating expenses totaled $5.6 million, an increase of 21.0% compared to $4.7 million for the same period in 2019. Operating expenses for the full year ended December 31, 2020, was $21.4 million compared

to $24.4 million for the full year ended December 31, 2019.

Research and development expenses for the three months ended December 31,

2020, increased approximately $1.1 million, or 51.8%, to $3.2 million from $2.1 million in the three months ended December 31, 2019. This increase was primarily the result of increased expenses associated with the

Phase 2 clinical trials of razuprotafib. Research and development expenses for the full year ended December 31, 2020, decreased approximately $0.2 million, or 1.8% to $12.6 million from $12.8 million in the full

year ended December 31, 2019. This decrease was primarily the result of a slight decrease in expenses associated with our clinical programs.

and administrative expenses for the three months ended December 31, 2020, increased approximately $0.9 million, or 56.1%, to $2.4 million from $1.5 million, in the three months ended December 31, 2019.

This increase was primarily attributable to stock-based compensation expense offset by lower personnel related expenses. General and administrative expenses for the full year ended December 31, 2020, decreased

approximately $1.0 million, or 10.2% to $8.8 million from $9.8 million in the full year ended December 31, 2019. This decrease was primarily the result of decreased employee-related expenses and office expenses

offset by increase in consulting and insurance expenses.

Net loss attributable to common stockholders for the three months ended December 31,

2020, was $4.7 million, or $0.10 per share, compared to $4.4 million, or $0.11 per share, for the same period in 2019. Net loss attributable to common stockholders for the full year ended December 31,

2020, was $4.3 million, or $0.10 per share compared to a net loss attributable to common stockholders of $23.3 million, or $0.57 per share, for the full year ended December 31, 2019.

About Aerpio Pharmaceuticals

Aerpio Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing compounds that activate Tie2 for indications in which the Company

believes that activation of Tie2 may have therapeutic potential. The Company s lead compound, razuprotafib (formerly AKB-9778), a

first-in-class small molecule inhibitor of vascular endothelial protein tyrosine phosphatase ( VE-PTP ). The Company is

also evaluating development options for ARP-1536, a humanized monoclonal antibody, for its therapeutic potential in the treatment of diabetic vascular complications including nephropathy and diabetic macular

edema ( DME ). The Company s third asset is a bispecific antibody that binds both VEGF and VE-PTP which is designed to inhibit VEGF activation and activate Tie2. This bispecific antibody has the

potential to be an improved treatment for wet age-related macular degeneration and DME via intravitreal injection. Finally, the Company has exclusively out-licensed AKB-4924 (now called GB004), a first-in-class small molecule inhibitor of hypoxia-inducible

factor-1 (HIF). GB004 is being developed by AKB-4924 s exclusive licensor, Gossamer Bio, Inc. (Nasdaq: GOSS). In January 2021, the Company announced that it had

initiated a process to explore and review a range of strategic alternatives focused on maximizing stockholder value from the Company s clinical assets and cash resources. For more information, please visit www.aerpio.com.

Forward Looking Statements

This press release contains

forward-looking statements. Statements in this press release that are not purely historical are forward-looking statements. Such forward-looking statements include, among other things, the Company s strategic alternatives review process and the

potential transactions that may be identified and explored as a result of that process, the Company s product candidates, including razuprotafib, ARP-1536 and the bispecific antibody asset, the clinical

development plan therefor, and the therapeutic potential thereof, the Company s plans and expectations with respect to razuprotafib and the development therefor and therapeutic potential thereof in addressing

COVID-19 and ARDS related thereto and the intended benefits from the Company s collaboration with Gossamer Bio for GB004, including the continued development of GB004 and the milestone and royalty

payments related to the collaboration. Actual results could differ from those projected in any forward-looking statements due to several risk factors. Such factors include, among others, the ability to identify and consummate strategic alternatives

that yield additional value for shareholders; the timing, benefits and outcome of the Company s strategic alternatives review process, including the determination of whether or not to pursue or consummate any strategic alternative; the

structure, terms and specific risks and uncertainties associated with any potential strategic transaction; potential disruptions in our business and the stock price as a result of our exploration, review and pursuit of strategic alternatives or the

public announcement thereof and any decision or transaction resulting from such review; the continued development of GB004 and maintaining and deriving the intended benefits of the Company s collaboration with Gossamer Bio; ability to continue

to develop razuprotafib or other product candidates, including in indications related to COVID-19; our review and evaluation of strategic plans for our razuprotafib glaucoma program; the inherent

uncertainties associated with the drug development process, including uncertainties in regulatory interactions, the design of planned or future clinical trials, commencing clinical trials and

enrollment of patients in clinical trials; obtaining any necessary regulatory clearances in order to commence and conduct planned or future clinical trials; the impact of the ongoing COVID-19 pandemic on the

Company s business operations, including research and development efforts and the ability of the Company to commence, conduct and complete its planned clinical activities; and competition in the industry in which the Company operates and

overall market conditions; and the additional factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, as updated by our subsequent Quarterly Reports on Form 10-Q and our other subsequent filings with the SEC.

These forward-looking statements are made as of the date of

this press release, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors

should consult all the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents the Company files with the SEC available at www.sec.gov.

Aerpio Pharmaceuticals, Inc.

Pharmaceuticals, Inc.

AERPIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AERPIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)