ACHN 2017 Annual Report

Operating Activities Cash used in operating activities was $59.5 million for the year ended December 31, 2017 and was primarily attributable to our net loss during the period of $85.2 million, partially offset by a $15.2 million decrease in accounts receivable, primarily related to the receipt of a $15.0 million Janssen milestone payment in January 2017, combined with $11.7 million in non-cash stock-based compensation. Cash used in operating activities was $65.7 million for the year ended December 31, 2016 and was primarily attributable to our net loss during the period of $61.7 million, combined with an increase in other receivables of $14.8 million and a decrease in accrued expenses of $3.7 million. This amount was partially offset by $12.9 million in non-cash charges related to depreciation, amortization of premiums on marketable securities and stock-based compensation combined with a $2.7 million increase in accounts payable. Cash provided by operating activities was $5.6 million for the year ended December 31, 2015 and was primarily attributable to our net loss during the period of $5.0 million, adjusted for $12.8 million in non-cash charges related to depreciation, amortization of premiums on marketable securities and stock-based compensation combined with a $3.9 million increase in accrued expenses. This amount was partially offset by our $5.0 million net loss combined with $2.5 million in premiums paid on the purchase of investments and a $2.3 million decrease in accounts payable. Investing Activities Cash provided by investing activities was $26.0 million for the year ended December 31, 2017 and was primarily attributable to maturities of marketable securities and was partially offset by purchases of marketable securities. Cash provided by investing activities was $60.7 million for the year ended December 31, 2016 and was primarily attributable to maturities of marketable securities and was partially offset by purchases of marketable securities. Cash used in investing activities was $298.7 million for the year ended December 31, 2015 and was primarily attributable to the purchase of marketable securities and partially offset by maturities of marketable securities. Financing Activities Cash used in financing activities was $0.3 million for the year ended December 31, 2017 and was primarily attributable to repayments of debt combined with $175,000 of deferred financing costs related to the universal shelf registration on Form S-3 filed in February 2017 and our entry into the sales agreement with Cantor. Cash provided by financing activities was $0.5 million for the year ended December 31, 2016 and was primarily attributable to borrowings of debt under the 2016 Credit Facility combined with proceeds from our employee stock purchase plan and the exercise of stock options, partially offset by repayments of debt. Cash provided by financing activities was $301.1 million for the year ended December 31, 2015 and was primarily attributable to $158.9 million in proceeds related to the JJDC Stock Purchase Agreement, $132.6 million in net proceeds from our February 2015 public offering of common stock combined with $5.6 million in net proceeds from the issuance of stock under an at-the-market sales agreement with Cantor. We expect to incur substantial losses for at least the next several years as we seek to continue preclinical and clinical development of our complement inhibitor compounds and drug candidates. We do not expect our existing capital resources to be sufficient to fund the completion of the development of our complement inhibitor program. As a result, we may need to raise additional funds prior to, among other things, being able to further the development of our complement inhibitor program, market any drug candidates associated with that program, obtain regulatory approvals, fund operating losses, and if deemed appropriate, establish manufacturing and sales and marketing capabilities. We may need to raise such additional financing through a combination of public or private equity or debt financings, collaborations, partnerships or other arrangements with third parties or other sources of financing. 88