KalVista Pharmaceuticals, Inc.
Annual Report 2018

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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended April 30, 2018OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIODFROM TO Commission File Number 001-36830 KalVista Pharmaceuticals, Inc.(Exact name of Registrant as specified in its Charter) Delaware 20-0915291( State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 55 Cambridge ParkwaySuite 901 EastCambridge, Massachusetts 02142(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code: (857) 999-0075 Title of Each Class Name of Exchange on Which RegisteredCommon Stock, $0.001 par value per share The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐NO ☒Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES ☒ NO ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,”“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer☐Non-accelerated filer☒(Do not check if smaller reporting company)Smaller reporting company ☐Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant toSection 13(a) of the Exchange Act. ☒Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒The aggregate market value of common stock held by non-affiliates of the registrant calculated based on the closing price of $12.73 of the registrant’s common stock as reported on The NASDAQ Global Market on October31, 2017, the last business day of the registrant’s most recently completed second quarter, was $60,287,969.The number of shares of Registrant’s Common Stock outstanding as of July 16, 2018 was 10,799,895.DOCUMENTS INCORPORATED BY REFERENCENone. Table of Contents PagePART I Item 1.Business 1Item 1A.Risk Factors 20Item 1B.Unresolved Staff Comments 45Item 2.Properties 45Item 3.Legal Proceedings 45Item 4.Mine Safety Disclosures 45 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46Item 6.Selected Financial Data 48Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations 50Item 7A.Quantitative and Qualitative Disclosures About Market Risk 58Item 8.Financial Statements and Supplementary Data 58Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 59Item 9A.Controls and Procedures 59Item 9B.Other Information 60 PART III Item 10.Directors, Executive Officers and Corporate Governance 61Item 11.Executive Compensation 64Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 68Item 13.Certain Relationships and Related Transactions, and Director Independence 71Item 14.Principal Accounting Fees and Services 72 PART IV Item 15.Exhibits, Financial Statement Schedules 73Item 16.Form 10-K Summary 75Signatures 76 Index to Consolidated Financial Statements F-1 i PART ISPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical fact are “forward-lookingstatements” for purposes of this Annual Report on Form 10-K. These forward-looking statements may include, but are not limited to, statements regarding ourfuture results of operations and financial position, business strategy, market size, potential growth opportunities, timing and results of preclinical and clinicaldevelopment activities, and potential regulatory approval and commercialization of product candidates. In some cases, forward looking-statements may beidentified by terminology such as “believe,” “may,” “will,” “should,” “predict,” “goal,” “strategy,” “potentially,” “estimate,” “continue,” “anticipate,”“intend,” “could,” “would,” “project,” “plan,” “expect,” “seek” and similar expressions and variations thereof. We have based these forward-lookingstatements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results ofoperations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subjectto a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for ourmanagement to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, maycause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties andassumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adverselyfrom those anticipated or implied in the forward-looking statements.You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in theforward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected inthe forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason afterthe date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.As used in this Annual Report on Form 10-K, the terms “KalVista,” “the Company,” “we,” “us,” and “our” refer to KalVista Pharmaceuticals, Inc. and,where appropriate, its consolidated subsidiary, unless the context indicates otherwise.Item 1. Business.OverviewWe are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of small molecule protease inhibitorsfor diseases with significant unmet need. Our first product candidates are inhibitors of plasma kallikrein being developed for two indications: hereditaryangioedema (“HAE”) and diabetic macular edema (“DME”). We apply our insights into the chemistry of proteases and, with our current programs, thebiology of the plasma kallikrein system, to develop small molecule inhibitors with high selectivity, potency and bioavailability that we believe will makethem successful treatments for disease.We have created a structurally diverse portfolio of oral plasma kallikrein inhibitors and advanced multiple drug candidates into Phase 1 clinical trialsfor HAE in order to create what we believe will be best-in-class oral therapies. In the case of DME, we are initially developing a plasma kallikrein inhibitorwhich is administered directly into the eye and anticipate ultimately developing orally delivered drugs. In December 2017 we commenced a Phase 2 clinicaltrial of KVD001, our most advanced DME drug candidate, which we anticipate will be completed in the second half of 2019. HAE is a rare and potentially life-threatening condition with symptoms that include episodes of debilitating and often painful swelling in the skin,gastrointestinal tract or airways. Despite having multiple therapies approved, we believe HAE patients are in need of alternatives that better meet theirobjectives for quality of life and ease of1 disease control. Currently marketed therapies are all administered by injection and we anticipate that there will be strong interest in safe and effective, orallydelivered, small molecule treatments. Our strategy in HAE is to develop a portfolio of molecules, both to provide best-in-class oral therapeutics as well as tohave the opportunity to evaluate molecules for different market segments, such as acute or prophylactic therapy. Our medicinal chemistry program hasdiscovered and patented a large portfolio of structurally diverse plasma kallikrein inhibitors, which enables our selection of only compounds that meetstringent selection criteria for progression. Based upon results observed in the Phase 1 trial that we initiated in December 2017, we have selected the compound KVD900 to move forward as apotential therapy for on-demand treatment of acute attacks in patients with HAE. We believe that a conveniently administered oral, on-demand product couldprovide an opportunity to capture a significant portion of the current acute treatment market as well as patients who may currently use prophylactic therapiesbecause of the lack of convenient and effective alternatives. We are currently planning to initiate a Phase 2 clinical trial for KVD900 in late 2018 that shouldbe completed in mid-2019. We anticipate that this trial will be designed as a proof of concept study in HAE patients, intended to determine the safety andefficacy of KVD900 in reducing the severity and duration of attacks when taken at the onset of symptoms. Our Phase 1 first-in-human study of KVD900 displays what we believe is a very attractive profile for on-demand therapy. In this placebo controlledstudy in healthy volunteers doses up to 600 mg have been generally well tolerated with no dose-limiting safety signals emerging and no gastrointestinaladverse events noted at any dose level. The pharmacokinetic exposure profile revealed rapid absorption of KVD900 following oral administration tomaximal concentrations more than 100x the concentration we believe is required to effectively treat HAE attacks. The rapidity of absorption was such thateffective concentrations were reached at most dose levels within 30 minutes of dosing. Exposure to KVD900, determined as both maximal concentration andoverall exposure (area under the curve) increased dose-dependently. We believe this combination of rapid uptake and very high drug levels comparesfavorably to the existing injected therapies, which show no faster absorption and generally much lower peak levels of drug concentration. Ourpharmacodynamic analysis of samples collected from the volunteers following administration of KVD900 shows high levels of plasma kallikrein inhibitionfor as long as 10 hours after a single dose. This data, combined with the level of inhibition of plasma kallikrein activity observed in HAE patient plasmatested in a separate assay, leads us to believe that a single dose of KVD900 may inhibit plasma kallikrein in patients experiencing an acute HAE attacksufficiently to provide a therapeutic alternative that is superior to current treatments. DME is the leading cause of moderate vision loss in most developed countries and diabetes, the underlying cause of DME, is the leading cause ofblindness among adults aged 20 to 74 years old, according to 2014 statistics published by the Center for Disease and Prevention. Our DME program isinitially focused on the development of an intravitreally administered small molecule plasma kallikrein inhibitor, KVD001. We believe intravitreal plasmakallikrein inhibitors may be an effective alternative therapy to vascular endothelial growth factor (“VEGF“) inhibitors and further improve visual acuity anddecrease macular thickening. Preclinical pharmacokinetic studies using KVD001 have shown that direct injection into the eye delivers a high drugconcentration at the desired site of action. The drug concentration is maintained for a prolonged period with a low systemic exposure, potentially supportingan extended dosing schedule. We have successfully completed a first-in-human trial of KVD001 in patients with DME and began a Phase 2 clinical trial in2017. In addition to KVD001, we also plan to develop an oral plasma kallikrein inhibitor to treat DME. An oral treatment may provide the opportunity toreduce treatment burden, treat patients earlier in disease progression, and provide a convenient and readily accessible treatment option for DME.In October 2017, our wholly-owned, U.K. based subsidiary KalVista Pharmaceuticals Limited (“KalVista Limited) and Merck Sharp & Dohme Corp.(“Merck”) entered into an option agreement (the “Option Agreement”) under which we granted to Merck an option to acquire KVD001 through a periodfollowing completion of a Phase 2 clinical trial. We also granted to Merck a similar option to acquire investigational orally delivered molecules for DME (the“Oral DME Compounds”) that we will continue to develop as part of our ongoing research and development activities, through a period following thecompletion of a Phase 2 clinical trial. Under the terms of the Option Agreement, Merck paid to us a non-refundable upfront fee of $37.0 million in November2017 and may pay up to an additional $715 million in milestones as well as royalties on net sales of any products commercialized under the Agreement.Merck also acquired a 9.9% ownership stake in KalVista in a separate transaction that closed concurrently with the Option Agreement.2 StrategyKey elements of our strategy include: •Apply our deep scientific expertise in the area of serine proteases to develop novel oral therapies for indications with high unmet need. Ourcore scientific team has decades of experience working on protease inhibitors and developing compounds with high potency, selectivity andbioavailability. We have assembled a team of chemists and biologists who have demonstrated the ability to design and formulate multipledrug candidate programs from a broad variety of chemical classes, as indicated by our extensive intellectual property portfolio. Our initialfocus is specifically on development of plasma kallikrein inhibitors for HAE and DME; however, we believe our scientific capabilities alsocan be applied to other proteases to develop therapies for diseases with high unmet need and orphan indications. •Advance multiple HAE product candidates into clinical development. We intend to develop best-in-class oral therapies for HAE and, toaccomplish that goal, we plan to bring multiple drug candidates into clinical trials and compare their performance before determining whichprogram, or programs, to advance. KVD900 has been chosen to advance to later stage development as an on-demand therapy for acute HAEattacks, and we anticipate that we will initiate a Phase 2 clinical trial in HAE patients in late 2018. We are still conducting preclinicaldevelopment of multiple additional drug candidates and anticipate bringing one additional candidate into clinical development in 2018 andpotentially further candidates in 2019. We expect that these additional candidates will be developed for other portions of the HAE market,such as prophylactic treatment, that are still in need of better therapeutic options. •Continue to advance our intravitreal DME program and develop an oral therapy. KVD001, our first product candidate to treat DME, begana Phase 2 clinical trial in 2017. We also intend to develop an oral therapy for this indication, which we believe could dramatically improvethe standard of care for patients, since all current therapies are delivered by injection into the eye. •Grow our capabilities internally as well as through strategic partnerships. We intend to retain ownership and control of our pipelineprograms to key milestones. For certain indications that can be addressed by a focused organization, such as HAE, we may determine to keepall program rights and develop sales and marketing capabilities. For programs that address larger markets or require greater infrastructure orresources, we may seek a partner that can provide those capabilities such as we did with Merck in DME. Decisions on whether, and when, toengage in partnerships or collaborations will be based upon our evaluations of the relative risks and rewards of those collaborations at eachpoint in the development cycle. Plasma Kallikrein in HAE and DMEPlasma kallikrein is a serine protease enzyme that is a key early mediator of inflammation and edema or swelling. The body modulates theinflammatory effects of plasma kallikrein through a circulating inhibitor protein called C1-esterase inhibitor (“C1-INH”). Most patients with HAE havegenetic mutations that lead to C1-INH deficiency, which results in an inability to control activated plasma kallikrein in affected tissues. This excessiveactivation leads to inflammation, edema, and pain.Published laboratory work has shown that the vitreous fluid of the eye is also a site of increased plasma kallikrein in DME. In diabetic patients, theretina is one of a few tissues in which edema develops. Under normal circumstances the eye is protected from the diffusion of plasma proteins by an effectiveblood vessel barrier. In diabetes this barrier becomes less effective and allows plasma proteins such as plasma kallikrein to enter the retina and vitreous. WhileC1-INH can also to enter by the same route, animal models of DME have shown that the concentration of C1-INH in the vitreous fluid is insufficient to fullysuppress the effects of plasma kallikrein on retinal edema. Over time, this edema leads to retinal damage that causes blindness.3 Hereditary AngioedemaDisease OverviewHAE is a rare and potentially life-threatening genetic condition that occurs in about 1 in 10,000 to 1 in 50,000 people, according to publishedinformation from an HAE patient advocacy group. Excessive plasma kallikrein activation not sufficiently controlled by C1-INH leads to HAE attacks, whichcan vary in regards to the affected tissue or organ and severity. HAE attacks include episodes of intense swelling or edema usually in the skin, gastrointestinaltract or airways. They often lead to temporary disfiguration of various body parts including the hands, feet, face, body trunk, and genitals. In addition,patients often have bouts of excruciating abdominal pain, nausea and vomiting that is caused by swelling in the intestinal wall. Airway swelling isparticularly dangerous and can lead to death by asphyxiation.Attacks can occur spontaneously although they often are associated with anxiety, stress, minor trauma, surgery, or illnesses. Commonly patients arealerted to an impending attack by prodromal symptoms which include rash, fatigue, and muscle aches. Trauma to the oral cavity caused by dental proceduresmakes HAE patients particularly vulnerable to airway attacks. The frequency of HAE attacks is highly variable, with some patients having attacks severaltimes per week and others very infrequently. Although life-threatening airway swelling is rare, at least half of HAE patients have experienced at least onesuch attack and airway attacks remain a major cause of mortality in HAE patients. The severity of attacks is unpredictable and not related to their underlyingfrequency. A patient with only one attack per year can nevertheless be at risk of suffering a laryngeal attack.The most common cause of HAE is a defect or mutation in the gene responsible for the production of C1-INH. HAE is an autosomal dominant disease,meaning that a defect in only one copy of the gene leads to symptoms and that it occurs at similar rates in both males and females. While HAE can resultthrough inheritance of a defective gene from a parent, a number of cases also arise from novel mutations.C1-INH is a natural plasma-borne protein that is an inhibitor of multiple serine proteases in both the complement and kallikrein kinin systems. C1-INH is the predominant physiological inhibitor of plasma kallikrein, and thereby suppresses the generation of bradykinin, a potent hormone produced byplasma kallikrein, that activates its receptors on blood vessels to increase vascular leakage. Uncontrolled plasma kallikrein activity leads to the edema that isthe hallmark of HAE. A selective plasma kallikrein inhibitor and a bradykinin receptor antagonist are approved therapies for HAE. As such, plasma kallikreinis a clinically validated target for HAE and previous studies have demonstrated that plasma kallikrein inhibition can both treat and prevent HAE attacks.Current Treatments and Market opportunitiesThere are a number of marketed and development stage therapeutics for HAE which provide evidence that inhibition of plasma kallikrein activitywill give therapeutic benefit in HAE. Ecallantide (Kalbitor®) is a small protein inhibitor of plasma kallikrein that is approved for treatment of acute attacks ofHAE. While effective, ecallantide has been associated with cases of anaphylaxis and its approval by the U.S. Food and Drug Administration (“FDA”) includesa black box warning limiting its administration to healthcare professionals. Other therapies employ C1-INH replacement to control plasma kallikrein levels.Marketed C1-INH therapies include Cinryze® and Berinert®, which are purified from human plasma, and Ruconest® which is a recombinant product.Icatibant (Firazyr®) is a synthetic peptide-based antagonist that blocks the activity of bradykinin. All of these products are administered by injection, whichis typically less convenient for patients and has the potential to reduce to compliance. We believe that a safe and effective oral agent has the potential totransform treatment for this disease. We also believe that opportunities exist for both acute and prophylactic treatments, and we intend to consider all of ourprograms as potential therapies in both segments of the market. For this reason, we plan to evaluate multiple formulations and profiles of our programs as partof our clinical development strategy.Our Portfolio of HAE ProgramsOur strategy is to develop and evaluate multiple oral molecules in pursuit of best-in-class therapies for HAE patients. This portfolio approach may lead todevelopment of multiple molecules to address unmet need in both prophylactic and acute market segments. We have promoted multiple molecules intoclinical testing and are pursuing additional candidates in order to expand the universe of properties and increase the likelihood of delivery4 of one or more best-in-class treatments for HAE. The first of these product candidates to be evaluated in later stage clinical trials will be KVD900. Weanticipate KVD900 will enter a proof-of-concept Phase 2 clinical trial in late 2018 that should be completed in mid-2019.KVD900KVD900 is a potent inhibitor of plasma kallikrein displaying 50% inhibition with a concentration of 6nM, and shows very high selectivity againstrelated proteases as shown in Table 1 below. Of particular note is that it is >6000 fold selective against tissue kallikrein (also called tissue kallikrein 1 orKLK1). This enzyme shares the same substrate as plasma kallikrein and has been linked to effects on cardiac safety, making selectivity against it an importantelement of our design process. Enzyme (Human) Fold selectivityTissue Kallikrein >6000Factor XIa >6000Factor XIIa >6000Plasmin >6000Thrombin >6000Trypsin >6000 Table 1: Selectivity of KVD900 against human proteases related to plasma kallikrein.Manufacture of KVD900 has been completed at the multi-kilogram scale to support preclinical and clinical testing and multiple formulations havebeen developed, manufactured and dosed to primates establishing the feasibility of manufacture of clinically acceptable dose forms. These dose forms aredesigned to enable variable dosing regimens.The Phase 1, first-in-human study of KVD900 is a multi-part study consisting of a single ascending dose phase, a formulation cross-over and a foodeffect being conducted in the UK and recruiting up to 84 healthy, male volunteers. In the single ascending dose phase, eight cohorts of volunteers receivedoral administration of KVD900 up to 600 mg or placebo in a 6:2 ratio to evaluate safety and tolerability. Exposure to KVD900 was assessed using a specificbioanalytical method and a plasma-based assay was used to assess inhibition of plasma kallikrein as the pharmacodynamic effect of KVD900. During theformulation cross-over 8 subjects were administered 100mg KVD900 as a capsule and 7 days later 100 mg KVD900 in a tablet formulation. The food effectphase is ongoing. There were no severe adverse events or gastrointestinal adverse events reported in any cohort. The safety data remains blinded, but over theentire eight cohorts of the single ascending dose phase twelve adverse events (“AE”) were reported, eleven of which were considered unrelated or unlikelyrelated to treatment and resolved without further intervention. The one AE considered possibly related was an episode of lightheadedness reported in the firstcohort. The most common AEs were back pain, common cold/flu symptoms, and pyrexia. No AEs were reported in the highest two dose cohorts, and noadverse events were reported during the formulation cross-over. There were no clinically significant changes in vital signs, ECG or safety laboratory findings.Based upon these blinded safety outcomes KVD900 appears to be generally well tolerated. As seen in the graph below, following administration of KVD900at all dose levels exposure increased rapidly (detectable within 20 minutes) reaching mean maximal concentrations (Cmax) at around 1 hour after dosing.Exposure (both Cmax and AUC) increased dose-dependently throughout the dose range.5 Analysis of the plasma kallikrein activity in the plasma samples revealed strong inhibition by KVD900. Plasma from volunteers was stimulated toproduce plasma kallikrein through the addition of dextran sulfate, and the level of plasma kallikrein activity was monitored in an assay. As seen in the graphbelow, at a dose of 600 mg plasma kallikrein was inhibited by 80% within 30 minutes and complete inhibition was observed within 45 minutes of dosing.The 160 mg and 300 mg dose levels also displayed high levels of inhibition in a similar timeframe. Plasma kallikrein mediates the generation of the hormone bradykinin in the body through a process known as kininogen (“HK”) cleavage. Therelease of bradykinin leads to the edema in HAE attacks. We therefore tested KVD900 in an assay to determine its ability to prevent HK cleavage in plasmasamples in which the plasma kallikrein has been generated by the addition of dextran sulfate. The results are shown below for both 160 mg and 600 mg dosesof KVD900. Following a single 160 mg dose of KVD900, we observed that stimulated plasma was protected from HK cleavage for at least six hours, and the600 mg dose significantly extended this protection period. This data further supports our belief that KVD900 can inhibit plasma kallikrein production for aperiod sufficient to reduce the duration and severity of HAE attacks. 6 C1-INH-based therapies for HAE generally yield a Cmax in the range of twice the IC50, which is the threshold level generally accepted as beingnecessary for efficacy. In contrast, KVD900 dosed at 160 mg achieves a Cmax of 10 times the IC50 and, as shown below, the 300 mg and 600 mg doses bothreached well beyond 100 times the IC50. At both doses, the 10 times IC50 level was achieved in less than 30 minutes, which we believe compares favorablyto currently approved therapies. Evidence from studies using other treatments approved for the treatment of acute HAE attacks shows that earlier treatment has a powerful effect onreducing attack duration, yet many patients delay taking treatment. In one outcome study of 207 HAE attacks, treatment was administered more than onehour after attack onset in more than 60% of patients, resulting in a statistically significant, approximately 50% increase in time to resolution of the attack. Webelieve this delay in administration is due to many factors including the inconvenience and discomfort of injectable therapies, and that patients providedwith an oral therapy would be more likely to take it earlier in attack progression. This combination of the rapid uptake of KVD900 to very high blood levelsand the likelihood of earlier dosing by patients, could lead to much better management and faster resolution of attacks. We therefore believe that a safe, oraltreatment has the potential to become a preferred alternative for patients currently using injectable treatments, including both acute and prophylactictherapies. Based upon the results of the Phase 1 study, we are currently planning a proof-of-concept Phase 2 clinical trial for KVD900 that we anticipateinitiating in late 2018, with data in mid-2019. We intend to submit an Investigational New Drug (“IND”) application to the FDA in 2019 and apply for bothFast Track and Orphan Designation.Additional HAE Development PlansIn parallel with progression of KVD900 for acute therapy, we are committed to expansion of our proprietary compound portfolio to enabledevelopment of molecules with a diverse set of properties that maximize our chance of progressing additional best-in-class treatments for HAE. We intend toconsider additional formulations of KVD900, or development of one of our other drug candidates, to provide a therapeutic option for the prophylacticsegment of the market. Our scientific team has demonstrated the ability to consistently generate new candidate7 molecules, enabling a rigorous selection process that only advances programs that meet strict internal criteria. As part of this effort, we have developed assaysthat provide proprietary insights into inhibition of plasma kallikrein, supporting selection of product candidates at an earlier stage that may have a higherlikelihood of demonstrating clinical success. A number of these earlier candidates are being profiled for progression to scale-up manufacture and entry intoformal safety studies. We continue to anticipate advancing one additional molecule in our HAE program to the clinic in 2018, and potentially moremolecules in 2019.Diabetic Macular EdemaDisease OverviewDME occurs as a result of diabetes and is caused by the breakdown of the endothelial barrier function in the retina, resulting in the accumulation offluid in the macula. This leads to edematous thickening of the macula region of the retina and loss of visual acuity, potentially leading to blindness. DME isa major complication associated with diabetes, affecting an estimated 26% of type 1 diabetic patients after 14 years of the disease, and an estimated 29%within their lifetime; 17% of type 1 diabetic patients were estimated to develop clinically significant macular edema within their lifetime. Approximately900,000 patients in the United States have active DME and are at serious risk of vision loss, according to a study published in 2015.The current standard of care for DME in the United States is therapy directed against VEGF, a hypoxia-induced protein that stimulates the growth ofblood vessels in the retina. FDA approved anti-VEGF therapies for DME are ranibizumab (Lucentis®) and aflibercept (Eylea®). Both of these products areadministered via intravitreal injection at roughly monthly intervals. In addition to these two products, a large fraction of patients is treated with bevacizumab(Avastin®), another therapy that works through the same mechanism of binding to VEGF but has not been approved for ophthalmic use. Bevacizumab ispriced based on its application in oncology and off-label use by retinal specialists typically results in treatment at a fraction of the cost seen with bothranibizumab and aflibercept. Patients are also treated with laser therapy in some circumstances.A number of other drug therapies are used to treat DME, including corticosteroid anti-inflammatories such as triamcinolone acetonide, fluocinolone,and dexamethasone. These drugs also are administered via intravitreal injection. Sustained release versions of fluocinolone (Illuvien®) and dexamethasone(Ozurdex®) have recently been approved for use in DME, substantially reducing the number of injections required to obtain and maintain clinical responses.These novel corticosteroid formulations led to 15-letter improvements in visual acuity in approximately 20-30% of patients. Corticosteroid treatment,however, is associated with a dramatic increase in cataract formation and a rise in intraocular pressure, reducing the attractiveness of these agents as potentialtherapies in many patients.In a recent large, multi-center clinical trial in DME patients, anti-VEGF therapy led to approximately 20% of patients improving their visual acuityby 15 letters or more after a median of 9 or 10 intravitreal injections, leaving a significant portion of the patients with inadequate control of their disease.Further, in one study conducted for an approved VEGF inhibitor, 40% of patients displayed no visual improvement following anti-VEGF therapy aftermonths of treatment. Unfortunately, even for those patients that do initially respond well to anti-VEGF therapy, their disease recurs within several months oftreatment cessation, thus requiring extended rounds of intravitreal injections to achieve and maintain a clinical response.Research into the biology underlying DME led by our scientific team has identified plasma kallikrein as a potential novel target for this indication.They found that plasma kallikrein levels were higher in vitreous fluid from DME patients compared to patients without diabetic retinopathy. They furtherfound that targeted disruption of the gene for plasma prekallikrein or the administration of a small molecule plasma kallikrein inhibitor led to decreases inretinal thickening in animal retinopathy models. We believe that inhibition of plasma kallikrein provides an opportunity to address DME through a novelmechanism that is independent of the current pathways targeted by anti-VEGF and steroid therapies.Our DME Development ActivitiesOur first potential DME therapy is KVD001. KVD001 is a potent inhibitor of human plasma kallikrein with an IC50 of approximately 10nM and ahigh degree of selectivity against a broad range of other proteases. We have8 developed KVD001 for intravitreal injection because we believe that trials using this delivery modality will provide a relatively early and direct proof-of-concept since the molecule is delivered directly to the site of edema. Since other products such as anti-VEGF therapies are also delivered intravitreally, webelieve this will be accepted by both physicians and patients and will not lead to any competitive disadvantages. Another inherent advantage of intravitrealadministration is that there is very limited systemic exposure, thus reducing potential systemic safety concerns.We have completed an open label single ascending dose Phase 1 trial of KVD001 in 14 DME patients, all of whom had previously received anti-VEGF treatment. Following this study, we conducted further preclinical testing to enable multiple monthly injections of KVD001, as well as allow concurrenttreatment with KVD001 and anti-VEGF therapies. We believe the ability to provide patients with multiple injections and longer duration of treatment mayfurther enhance the signal of improvement beyond that observed in the single dose Phase 1 trial.In 2017 we began a Phase 2 trial of KVD001 administered by intravitreal injection in DME patients. This study is anticipated to enroll a total of 123patients to evaluate the safety and efficacy of KVD001 in patients with DME who have received previous anti-VEGF therapy but continue to demonstratereduced visual acuity and significant edema. The double-masked study consists of two active arms receiving low or high dose injections, and a sham controlarm. Patients will receive a total of four injections over a three-month period, with evaluation at the end of the dosing period and for three months following.The endpoints include safety and tolerability, best corrected visual acuity, central subfield thickness, and the diabetic retinopathy severity scale. Based uponthe rates of patient enrollment seen to date, we continue to anticipate that data from this study will be available in the second half of 2019.KVD001 is subject to the Option Agreement with Merck. Under the terms of that Agreement once we provide certain data including results from thestudy, Merck will have a defined period to exercise the option on KVD001, as well as to make an additional payment to maintain the option on the Oral DMECompounds.Potential for Oral DME TherapiesIn parallel with the clinical development of our intravitreal product candidate KVD001, we intend to identify and advance plasma kallikreininhibitors as oral therapies for DME. We believe that a safe and effective oral therapy has the potential to transform the treatment of DME which to-date hasbeen dominated by drug therapies that must be injected intravitreally. Future trials in DME with oral kallikrein inhibitors may focus on the treatment ofearlier stage disease, a stage at which intravitreal injections are not a desirable solution due to their inherently invasive nature and consequent risk of adversereactions.CompetitionIn HAE, we expect to face competition from several FDA-approved therapeutics, including Cinryze, marketed by Shire in the United States andEurope for the prevention of angioedema attacks in adults and adolescents; Firazyr, marketed by Shire in the United States, Europe and certain othergeographic territories for the treatment of acute angioedema attacks in adult patients; Kalbitor, an injectable plasma kallikrein inhibitor marketed by Shire forthe resolution of acute attacks in adolescent and adult HAE patients; Berinert and Haegarda, marketed by CSL Behring for the prophylaxis and treatment ofacute abdominal, facial or laryngeal attacks of HAE in adults and adolescents; and Ruconest, marketed by Pharming Group for the treatment of acuteangioedema attacks in adult patients. We are also aware of companies that are engaged in the clinical development of other product candidates, including aplasma kallikrein monoclonal antibody (SHP643, known as lanadelumab, from Shire) and an oral plasma kallikrein inhibitor (BCX7353, from BioCrystPharmaceuticals), both for use as prophylaxis in HAE patients. BioCryst is also conducting clinical trials of a liquid, orally delivered formulation ofBCX7353 for use as on-demand therapy in acute attacks. We believe several other companies are conducting preclinical and early clinical development oforally delivered HAE therapeutics.In DME, we expect to face competition from several FDA-approved therapeutics, including anti-VEGF therapies Lucentis, marketed by Roche andNovartis, Eylea, marketed by Regeneron, and off label use of Avastin from Roche. We also face competition from various corticoid steroids includingextended release formulations lluvien, marketed by Alimera, and Ozurdex, marketed by Allergan. We further expect to compete with generic9 corticosteroids such as acetonide, fluocinolone, and dexamethasone and we are aware of a number of other companies that have product candidates in earlyclinical trials, including Novartis, GlaxoSmithKline, Boehringer Ingelheim, Roche, Regeneron, Ohr Pharmaceutical, Aerpio Therapeutics, Thrombogenicsand Allegro Ophthalmics. Thrombogenics has begun a clinical trial investigating a non-orally delivered plasma kallikrein inhibitor for the treatment of DME.Intellectual PropertyOur success substantially depends on our ability to obtain and maintain patents and other forms of intellectual property rights for our productcandidates, methods used to manufacture our product candidates and methods for treating patients using our product candidates, as well as our ability topreserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights ofothers. As of April 30, 2018, we are the owner of nine U.S. patents expiring between 2023 and 2034, absent any extensions, as well as eight pending U.S.patent applications and five pending U.S. provisional applications. Any patents issuing from the foregoing owned or licensed U.S. applications are expectedto expire in between 2034 and 2038, absent any adjustments or extensions. As of April 30, 2018, we owned a total of 109 pending foreign applications and95 patents in multiple jurisdictions. Any issued patents, or those issuing from these foreign patent applications, are expected to expire between 2023 and2037, absent any adjustments or extensions. As of April 30, 2018, we also controlled four pending international applications that, if issued, are expected toexpire in 2037, absent any adjustments or extensions. The chemical structures of KVD001 and KVD900 are included in composition of matter applications.KVD001 is covered by U.S. patents and patent applications covering composition of matter, methods of treatment, solid form and clinicalformulations. The anticipated expiration dates of these patents, or patents arising from applications, range from 2032 to 2038, absent any adjustments orextensions.Our portfolio of oral plasma kallikrein inhibitors, including KVD900, is covered by U.S. patent applications and pending international applicationscovering composition of matter, methods of treatment, solid form and clinical formulations and any patents arising from those applications are expected toexpire between 2034 to 2038, absent any adjustments or extensions. New U.S. provisional applications directed to solid forms and further compositions ofmatter were filed in 2017.In addition, we own a portfolio of patents and patent applications related to the former Carbylan Therapeutics product candidates following the sharepurchase transaction with KalVista Pharmaceuticals Limited. As of April 30, 2018, this included seven granted U.S. patents expiring between 2028 and 2032,as well as three pending U.S. patent applications which would be expected to expire between 2030 and 2034. Also, as of April 30, 2018, this portfolioincluded 18 pending foreign applications and 34 foreign granted patents.Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in various countries where patentprotection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of itscoverage and the availability of legal remedies in the country.We also use other forms of protection, such as trademark, copyright and trade secret protection for our intellectual property, particularly where we donot believe patent protection is appropriate or obtainable. We require our employees, consultants, contractors and other advisors to execute nondisclosureand assignment of invention agreements upon commencement of their respective employment or engagement. In addition, we also require confidentiality orservice agreements from third parties that receive confidential information or materials.Government Regulation and Product ApprovalGovernment authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the UnitedKingdom and European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval,packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and exportof10 pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along withsubsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financialresources.FDA approval processIn the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, and otherfederal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval,labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDArefusal to approve pending new drug applications (“NDA”), warning or untitled letters, product recalls, product seizures, total or partial suspension ofproduction or distribution, injunctions, fines, civil penalties, and criminal prosecution.Pharmaceutical product development for a new product or certain changes to an approved product in the United States typically involves preclinicallaboratory and animal tests, the submission to the FDA of an Investigational New Drug (“IND”) application, which must become effective before clinicaltesting may commence in the United States, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for eachindication for which FDA approval is sought. Satisfaction of FDA approval requirements prior to marketing a pharmaceutical product typically takes manyyears and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.Preclinical tests include laboratory evaluation of product chemistry, formulation and manufacturing process, as well as toxicity studies in animals toassess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations andrequirements, including good laboratory practices and good manufacturing practice (“cGMP”). The results of preclinical testing are submitted to the FDA aspart of an IND along with the information on product chemistry, manufacturing and controls, and a proposed clinical trial protocol. For the initial INDsubmission, a 30-day waiting period after the submission of the IND is required prior to the commencement of the clinical trial in humans. If the FDA hasneither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. For subsequent clinical trialprotocols submitted to the IND, there is no mandated review time for FDA. Longer duration pre-clinical studies, for example animal tests of reproductivetoxicology and carcinogenicity, if required, will be conducted and submitted to the IND throughout the development of the product until sufficient data isavailable to support submission of an NDA. Clinical trials involve the administration of the investigational drug to healthy volunteers or patients under thesupervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with good clinicalpractice (“GCP”), an international standard designed to protect the rights, safety and well-being of trial subjects and to define the roles of clinical trialsponsors, administrators and monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, andthe effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to theFDA as part of the IND.The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions if it believes that theclinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. The trialprotocol and informed consent information for patients in clinical trials must also be submitted to an institutional review board (“IRB”), for approval prior tothe start of the clinical trial. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with theIRB’s requirements, or may impose other conditions.Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, theinitial introduction of the drug into healthy human subjects or patients, the product is tested to assess metabolism, pharmacokinetics, pharmacologicalactions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness. Phase 2 usually involves trials in a limited patientpopulation to determine the effectiveness of the drug for a particular indication, dosage tolerance and optimum dose, and to identify common adverse effectsand safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertakento obtain the additional information11 about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate theoverall benefit risk relationship of the drug and to provide adequate information for the labeling of the product. In most cases, the FDA requires two adequateand well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3 trial with other confirmatory evidence may be sufficient inrare instances where the trial is a large multicenter trial demonstrating internal consistency and a statistically persuasive finding of a clinically meaningfuleffect on mortality, irreversible morbidity or prevention of a disease with a potentially serious or life-threatening outcome and confirmation of the result in asecond trial would be practically or ethically impossible.The manufacturer of an investigational drug in a Phase 2 or 3 clinical trial for a serious or life- threatening disease is required to make available, suchas by posting on its website, its policy on evaluating and responding to requests for expanded access.After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required beforemarketing of the product may begin in the United States. The NDA must include the results of all preclinical and clinical data, including pharmacology andtoxicology results, and the results of other testing and a compilation of data relating to the product’s chemistry, manufacture and controls. The cost ofpreparing and submitting a NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee, and once approved,the NDA is also subject to annual product and establishment user fees. These fees are typically increased annually. The FDA has 60 days from its receipt of anNDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permitsubstantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in thereview of NDAs. Most such applications for standard review drug products are reviewed within ten months of the date the FDA files the NDA; mostapplications for priority review drugs are reviewed within six months of the date the FDA files the NDA. Priority review can be applied to a drug that the FDAdetermines has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectivenesscompared to available therapies. The review process for both standard and priority review may be extended by the FDA for three additional months toconsider certain late-submitted information, or information intended to clarify information already provided in the submission.After the FDA evaluates the NDA and the compliance of manufacturing facilities with GMP, it issues either an approval letter or a complete responseletter. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in orderfor the FDA to reconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction, the FDA will issue an approval letter.The FDA has committed to reviewing such additional data in two or six months depending on the type of information included. An approval letter authorizescommercial marketing of the drug with specific prescribing information for the indication being supported. As a condition of NDA approval, the FDA mayrequire a risk evaluation and mitigation strategy (“REMS”) if it is considered that additional measures are needed to ensure that the benefits of the drugoutweigh the potential risks. REMS can include the use of medication guides and communication plans for healthcare professionals, and elements to assuresafe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certaincircumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability ofthe product. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy.Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified followinginitial marketing. Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturingprocesses or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented. An NDA supplementfor a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewingNDA supplements as it does in reviewing NDAs.12 Foreign clinical studies to support an NDAThe FDA will accept as support for marketing approval of a product (NDA) well-designed, well-conducted, clinical studies conducted outside of theUnited States if the studies have been conducted in accordance with the exact same standards of GCP, as required in the United States, and the protocol wassubmitted to the IND. FDA may validate the data from the study through an onsite inspection, if necessary. Clinical studies conducted outside the UnitedStates are subject to the same rigorous regulatory controls as the United States (see “— Europe / rest of world government regulation” below).A sponsor or applicant who wishes to rely on a non-IND foreign clinical study to support an IND must submit documentation to the FDA todemonstrate compliance with GCP. The FDA may also request to inspect a foreign clinical study site to confirm compliance.Orphan drug designationUnder the Orphan Drug Act, the FDA may grant orphan drug designation to a compound with the potential to treat a rare disease or condition,generally a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the UnitedStates, there is no reasonable expectation that the cost of developing and making a product available in the United States for such disease or condition willbe recovered from sales of the product.Orphan drug designation must be requested prior to submitting an NDA. After the FDA grants orphan drug designation, the generic identity of thecompound and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten theduration of, the regulatory review and approval process of an NDA. The first NDA applicant to receive FDA approval for a drug product containing acompound that has FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that drug product for thatorphan indication. During the seven-year exclusivity period, the FDA may not approve any other applications to market a drug product containing the sameactive moiety for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Aproduct is clinically superior if it is safer, more effective or makes a major contribution to patient care. Orphan drug exclusivity does not prevent the FDAfrom approving a drug product containing a different active moiety for the same disease or condition, or the same drug product for a different disease orcondition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA user fee.Disclosure of clinical trial informationSponsors of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information.Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is then madepublic as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure of the results of thesetrials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly availableinformation to gain knowledge regarding the progress of development programs.Pediatric informationUnder the Pediatric Research Equity Act (“PREA”) NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drugfor the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which thedrug product is safe and effective. The FDA may grant full or partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation,PREA does not apply to any drug product for an indication for which orphan designation has been granted.13 Post-approval requirementsOnce an NDA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approvalmarketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientificand educational activities and promotional activities involving the internet. Drugs may be marketed only for the approved indications and in accordancewith the provisions of the approved labeling.Adverse event reporting and submission of periodic reports is required following FDA approval of an NDA. The FDA also may require post-marketingtesting, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approvalthat could restrict the distribution or use of the product. In addition, quality control, drug product manufacture, packaging, and labeling procedures mustcontinue to conform to cGMPs after approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with theFDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agencyinspects manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money, and effort in the areasof production and quality-control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals or request product recalls if acompany fails to comply with regulatory standards, or if previously unrecognized problems are subsequently discovered.Other U.S. healthcare laws and compliance requirementsIn the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA,including but not limited to, the Centers for Medicare and Medicaid Services (“CMS”), other divisions of the U.S. Department of Health and Human Services(such as the Office of Inspector General), the U.S. Department of Justice (“DOJ”), and individual U.S. Attorney offices within the DOJ, and state and localgovernments. For example, sales, marketing and scientific/educational grant programs may have to comply with the anti-fraud and abuse provisions of theSocial Security Act, the false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act (“HIPAA”), andsimilar state laws, each as amended, as applicable.The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting orreceiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arrangingfor the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The Patient Protection andAffordable Care Act as amended by the Health Care and Education Reconciliation Act, collectively, the ACA, amended the intent element of the federalstatute so that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to commit a violation. Thisstatute has been interpreted broadly to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements betweenpharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other. There are a number of statutory exceptions andregulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions. The exceptions and safe harbors are drawnnarrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject toscrutiny if they do not qualify for an exception or safe harbor.14 Federal civil and criminal false claims laws, including the federal False Claims Act, prohibit, among other things, any person or entity fromknowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal healthcare programs, including Medicare andMedicaid, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federalgovernment. This includes claims made to programs where the federal government. reimburses, such as Medicaid, as well as programs where the federalgovernment is a direct purchaser, such as when it purchases off the Federal Supply Schedule. Recently, several pharmaceutical and other healthcarecompanies have been prosecuted under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by thegovernment to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customerswould bill federal programs for the product. In addition, certain marketing off-label promotion, may also violate false claims laws. Additionally, PPACAamended the federal Anti-Kickback Statute such that a violation of that statute can serve as a basis for liability under the federal False Claims Act. Themajority of states also have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other stateprograms, or, in several states, apply regardless of the payor. Additionally, to the extent that any of our products are sold in a foreign country, we may besubject to similar foreign laws.Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, theoffer or payment of remuneration to a Medicaid or Medicare beneficiary that the offerer or payor knows or should know is likely to influence the beneficiaryto order a receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the Health InsurancePortability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, knowingly and willfully executing or attempting to execute ascheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or propertyowned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.In addition, HIPAA, as amended by HITECH, imposes obligations on certain healthcare providers, health plans, and healthcare clearinghouses,known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individuallyidentifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individuallyidentifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individuallyidentifiable health information.Further, pursuant to PPACA, the Centers for Medicare & Medicaid Services, or CMS, has issued a final rule that requires manufacturers of prescriptiondrugs to collect and report information on certain payments or transfers of value to physicians and teaching hospitals, as well as investment interests held byphysicians and their immediate family members. The first reports were due in 2014 and must be submitted on an annual basis. The reported data is madeavailable in searchable form on a public website on an annual basis.Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers ofdrugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (withcertain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians and teachinghospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certainownership and investment interests held by physicians and their immediate family members. Moreover, the Drug Supply Chain Security Act imposes newobligations on manufacturers of pharmaceutical products related to product tracking and tracing. Legislative and regulatory proposals have been made toexpand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.In order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributorsof drug products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers ordistributors have no place of business within the state. Some states also impose requirements on manufacturers and distributors to establish the pedigree ofproduct in the chain of distribution, including some states that require manufacturers and others to adopt new15 technology capable of tracking and tracing product as it moves through the distribution chain. Several states have enacted legislation requiringpharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with the state, make periodic publicdisclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies andother healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing,and to prohibit certain other sales and marketing practices. All of our activities are potentially subject to federal and state consumer protection and unfaircompetition laws.If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulationsthat apply to us, we may be subject to penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement,exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individualwhistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm,administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect ourability to operate our business and our results of operations.Coverage, pricing and reimbursementSignificant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval. In theUnited States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on theextent to which third-party payors provide coverage, and establish adequate reimbursement levels for such products. In the United States, third-party payorsinclude federal and state healthcare programs, private managed care providers, health insurers and other organizations. The process for determining whether athird-party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing the reimbursementrate that such a payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary,which might not include all of the FDA-approved products for a particular indication. Third-party payors are increasingly challenging the price, examiningthe medical necessity and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy.We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of its products, inaddition to the costs required to obtain the FDA approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’sdecision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination toprovide coverage for a product does not assure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not beavailable to enable us to maintain price levels sufficient to realize an appropriate return on its investment in product development.Different pricing and reimbursement schemes exist in other countries. In the EU, governments influence the price of pharmaceutical products throughtheir pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers. Somejurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtainreimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particularproduct candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines, but monitor and controlcompany profits. The downward pressure on health care costs has become intense. As a result, increasingly high barriers are being erected to the entry of newproducts. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.16 The marketability of any product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expectwill continue to increase the pressure on healthcare pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorablecoverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies andreimbursement rates may be implemented in the future.Healthcare reformIn March 2010, President Obama enacted the ACA, which has the potential to substantially change healthcare financing and delivery by bothgovernmental and private insurers, and significantly impacts the pharmaceutical and biotechnology industry.Among the ACA provisions of importance to the pharmaceutical industries, in addition to those otherwise described above, are the following: •an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs apportioned amongthese entities according to their market share in some government healthcare programs that began in 2011; •an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, retroactive to January 1,2010, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebateamount for innovator drugs at 100% of the Average Manufacturer Price; •a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts offnegotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’outpatient drugs to be covered under Medicare Part D; •extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed careorganizations; •expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additionalindividuals beginning in 2014 and by adding new mandatory eligibility categories for individuals with income at or below 133% of thefederal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; •expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; •a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectivenessresearch, along with funding for such research; •expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigativepowers, and enhanced penalties for noncompliance; •a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that areinhaled, infused, instilled, implanted, or injected; •requirements to report certain financial arrangements with physicians and teaching hospitals; and •a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians.17 The current U.S. presidential administration and Congress have sought, and we expect will continue to seek, to modify, repeal, or otherwiseinvalidate all, or certain provisions of, the ACA. Since January 2017, the current U.S. presidential administration has issued two executive orders and otherdirectives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurancemandated by the ACA. For example, on October 12, 2017, the current U.S. presidential administration issued an executive order that expands the use ofassociation health plans and allows anyone to purchase short-term health plans that provide temporary, limited insurance. This executive order also calls forthe halt of federal payments to health insurers for cost-sharing reductions previously available to lower-income Americans to afford coverage. There is stilluncertainty with respect to the impact this executive order could have on coverage and reimbursement for healthcare items and services covered by plans thatwere authorized by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. WhileCongress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law.The Tax Cuts and Jobs Act of 2017, among other things, includes a provision repealing, effective January 1, 2019, the tax-based shared responsibilitypayment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to asthe “individual mandate”. Additionally, on January 22, 2018, the current U.S. presidential administration signed a continuing resolution on appropriationsfor fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Further, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to increasefrom 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close thecoverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. There is still uncertainty with respect to the impact the current U.S.presidential administration and the Congress may have, if any, and any changes will likely take time to unfold, and could have an impact on coverage andreimbursement for healthcare items and services covered by plans that were authorized by the ACA. However, we cannot predict the ultimate content, timingor effect of any healthcare reform legislation or the impact of potential legislation on us.In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011,the President signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction torecommend to Congress proposals in spending reductions. The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction of atleast $1.2 trillion for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction to several government programs. This includesaggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effectthrough 2025 unless additional Congressional action is taken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law,which, among other things, reduced Medicare payments to several providers, including hospitals and imaging centers. These new laws may result inadditional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our products, if approved, and,accordingly, our financial operations.The Foreign Corrupt Practices ActThe Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering ofanything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreignentity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in theUnited States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of thecorporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.Additional regulationIn addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safetyand Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern the use,handling and disposal of18 various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of theenvironment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. We believe that we are in materialcompliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannotpredict, however, how changes in these laws may affect our future operations.Europe / rest of world government regulationIn addition to regulations in the United States, we will be subject to a variety of regulations in other jurisdictions governing, among other things,clinical trials and any commercial sales and distribution of our products. Whether or not we obtain FDA approval of a product, we must obtain the requisiteapprovals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. Certaincountries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to thecommencement of human clinical trials. In the European Union, for example, a clinical trial application must be submitted to each country’s national healthauthority and an independent ethics committee, much like the FDA and IRB, respectively. Once the clinical trial application is approved in accordance witha country’s requirements, clinical trial development may proceed. The requirements and process governing the conduct of clinical trials, product licensing,pricing and reimbursement vary from country to country in the European Union. In all cases, the clinical trials are conducted in accordance with GCP and theapplicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.To obtain regulatory approval of a drug product under European Union regulatory systems, we must submit a marketing authorization application(MAA). The documentation submitted to the FDA in support of an NDA in the United States is almost identical to that required in the European Union, withthe exception of, among other things, country-specific document requirements. For other countries outside of the European Union, such as countries inEastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary fromcountry to country. In all cases, again, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethicalprinciples that have their origin in the Declaration of Helsinki.If we or our potential collaborators fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines,suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.Other regulationsWe are subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmentalprotection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws andregulations now or in the future.EmployeesAs of April 30, 2018, we had a total of 33 full-time employees, of whom 13 were located in the United States and 20 were located in the UnitedKingdom. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have not experienced any workstoppages and consider our relations with employees to be good.Corporate InformationWe were incorporated in the State of Delaware on March 26, 2004 as Sentrx Surgical, Inc. We changed our name to Carbylan Biosurgery, Inc. onDecember 14, 2005 and to Carbylan Therapeutics, Inc. (“Carbylan”) on March 7, 2014. In June 2016, we entered into a definitive share purchase agreement,with KalVista Pharmaceuticals Ltd. (“KalVista Limited”), a private company limited by shares incorporated and registered in England and Wales and theshareholders of KalVista Limited, pursuant to which the shareholders of KalVista Limited became the majority owners of the company. We changed our nameto KalVista Pharmaceuticals, Inc. on November 21, 2016 in19 connection with the completion of the share purchase transaction. Our principal executive offices are located at 55 Cambridge Parkway, Ste 901E,Cambridge, MA 02142, and our telephone number is (857) 999-0075. Our website address is www.kalvista.com. The information contained on, or that can beaccessed through, our website is not a part of this report. We have included our website address in this report solely as an inactive textual reference.Financial InformationWe manage our operations and allocate resources as a single reporting segment. Financial information regarding our operations, assets and liabilities,including our net loss for the years ended April 30, 2018, 2017 and 2016 and our total assets as of April 30, 2018 and 2017, is included in our ConsolidatedFinancial Statements in Item 8 of this Annual Report.Available InformationWe file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (“SEC”) underthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are available on our corporate website at www.kalvista.com. The public mayread and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public mayobtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website thatcontains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The publiccan obtain any documents that we file with the SEC at www.sec.gov. The information posted on or accessible through these websites are not incorporatedinto this filing.Item 1A. Risk FactorsInvesting in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, togetherwith all of the other information in this Annual Report on Form 10-K, including the consolidated financial statements, the notes thereto and the sectionentitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K before deciding whether to invest in shares of our common stock. The risks and uncertainties described below are not the only ones we face. Additionalrisks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any ofthe following risks actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected.In that event, the market price of our stock could decline, and you could lose part or all of your investment.Risks Related to Our BusinessWe have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintainprofitability. Since inception, we have incurred significant operating losses as we focused on our discovery efforts and developing our product candidates. Weexpect that it will be many years, if ever, before we have a product candidate ready for commercialization. To date, we have financed our operations primarilythrough private placements of our preferred stock, the Merck Agreement and associated private placement, and through the share purchase transaction withCarbylan. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses willincrease substantially if and as we: •continue clinical development of our current product candidates; •seek to identify additional product candidates; •acquire or in-license other products and technologies or enter into collaboration arrangements with regards to product discovery; •initiate clinical trials for additional product candidates;20 •seek marketing approvals for our product candidates that successfully complete clinical trials; •establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; •maintain, expand and protect our intellectual property portfolio; •hire additional personnel; •add operational, financial and management information systems and personnel, including personnel to support our product development andplanned future commercialization efforts; and •continue to incur increased costs as a result of operating as a public company. To become and remain profitable, we must develop and eventually commercialize a product or products with significant market potential. This willrequire us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, obtaining marketing approvalfor these product candidates and manufacturing, marketing and selling those products for which we may obtain marketing approval. We may never succeedin these activities and, even if we do, we may never generate revenues that are significant or large enough to achieve profitability. If we do achieveprofitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable woulddecrease the value of our business and could impair our ability to raise capital, maintain our discovery and preclinical development efforts, expand ourbusiness or continue our operations and may require us to raise additional capital that may dilute the ownership interest of common stockholders. A declinein the value of our business could also cause stockholders to lose all or part of their investment.Our short operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.We are an early stage clinical development company and our operations to date have been limited to organizing and staffing, business planning,raising capital, acquiring and developing the technology, identifying potential product candidates, undertaking preclinical studies and early stage clinicalstudies of our most advanced product candidates, KVD001, which is currently in a Phase 2 clinical trial, and multiple candidates from our HAE portfoliowhich we have advanced into Phase 1 clinical trials. We have not yet demonstrated our ability to successfully complete large-scale, pivotal clinical trials,obtain marketing approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketingactivities necessary for successful product commercialization. Substantial time is required to develop a new medicine from the time it is discovered to when itis available for treating patients. Consequently, any predictions made about our future success or viability based on our short operating history to date maynot be as accurate as they could be if we had a longer operating history. In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. Wewill need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such atransition.We will need substantial additional funding. If we are unable to raise capital when needed, we may need to delay, reduce or eliminate our productdevelopment programs or commercialization efforts.We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our discovery and preclinical developmentcollaborations to identify new clinical candidates and initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, if weobtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing,manufacturing and distribution. Accordingly, we will need to obtain substantial additional funding for our continuing operations. If we are unable to raisecapital when needed or on attractive terms, we may be forced to delay, reduce or eliminate our discovery and preclinical development programs or any futurecommercialization efforts. 21 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or productcandidates. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equityofferings and debt financings. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale ofequity or convertible debt securities, the ownership interest of common stockholders will be diluted, and the terms of these securities may include liquidationor other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involveagreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expendituresor declaring dividends. Risks Related to the Discovery and Development of Our Product Candidates We are very early in our development efforts. If we or our collaborators are unable to successfully develop and commercialize one or more of ourcompounds, or if we experience significant delays in doing so, the business will be materially harmed. We currently do not have any products that have gained regulatory approval. We have invested substantially all of our efforts and financial resourcesin identifying potential drug candidates and funding our preclinical and clinical studies. Our ability to generate product revenues, which we do not expectwill occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our early stage product candidates.We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in newand rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully: •execute ongoing clinical development activities; •move other product candidates into development; •obtain required regulatory approvals for the development and commercialization of one or more of our product candidates; •maintain, leverage and expand our intellectual property portfolio; •build and maintain robust sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners; •gain market acceptance for one or more of our product candidates; •develop and maintain any strategic relationships we elect to enter into, including the agreement with Merck; and •manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals andcommercialization. If we are unsuccessful in accomplishing these objectives, we may not be able to successfully develop and commercialize KVD001, KVD900 or otherproduct candidates, and our business will suffer.Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays incompleting, or ultimately be unable to complete, the development and commercialization of our product candidates. We have only recently commenced clinical development of our product candidates and the risk of failure for all of our product candidates is high.Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and thenconduct extensive clinical trials to demonstrate the safety and efficacy of its product candidates in humans. Clinical testing is expensive, difficult to designand implement and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process.Further, the results of preclinical studies and early clinical trials of22 its product candidates may not be predictive of the results of later-stage clinical trials, and interim results of a clinical trial do not necessarily predict finalresults. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed theirproduct candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. Itis impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval. We may experience delays in our clinical trials and we do not know whether planned clinical trials will begin or enroll subjects on time, need to beredesigned or be completed on schedule, if at all. There can be no assurance that the Medicines & Healthcare products Regulatory Agency (the “MHRA”), theU.K. regulatory authority, the European Medicines Agency (the “EMA”) or U.S. Food and Drug Administration (the “FDA”) will not put any of our productcandidates on clinical hold in the future. We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or preventour ability to receive marketing approval or commercialize our product candidates. Clinical trials may be delayed, suspended or prematurely terminated for avariety of reasons, such as: •delay or failure in reaching agreement with the MHRA, EMA, FDA or a comparable foreign regulatory authority on a trial design that wewant to execute; •delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authorityregarding the scope or design of a clinical study; •delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; •inability, delay, or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in otherclinical programs; •delay or failure in recruiting and enrolling suitable subjects to participate in a trial; •delay or failure in having subjects complete a trial or return for post-treatment follow-up; •clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, ordropping out of a trial; •the withdrawal of the United Kingdom from the European Union could materially impact the regulatory regime with respect to clinical trialsin the United Kingdom or the European Union; •lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements toconduct additional clinical studies and increased expenses associated with the services of its clinical research organizations (“CROs”) andother third parties; •clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us toconduct additional clinical trials or abandon product development programs; •the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinicaltrials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; •we may experience delays or difficulties in the enrollment of patients that our product candidates are designed to target; •our third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, orat all; •we may have difficulty partnering with experienced CROs that can identify patients that our product candidates are designed to target andrun our clinical trials effectively; •regulators or institutional review boards (“IRBs”) may require that we or our investigators suspend or terminate clinical research for variousreasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable healthrisks; 23 •the cost of clinical trials of our product candidates may be greater than we anticipate; •the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may beinsufficient or inadequate; or •there may be changes in governmental regulations or administrative actions. If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we areunable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are onlymodestly positive or if there are safety concerns, we may: •be delayed in obtaining marketing approval for our product candidates; •not obtain marketing approval at all; •obtain approval for indications or patient populations that are not as broad as intended or desired; •obtain approval with labeling that includes significant use or distribution restrictions or safety warnings that would reduce the potentialmarket for our products or inhibit our ability to successfully commercialize our products; •be subject to additional post-marketing restrictions and/or testing requirements; or •have the product removed from the market after obtaining marketing approval.Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of ourpreclinical studies or clinical trials will need to be restructured or will be completed on schedule, or at all. Significant preclinical or clinical trial delays alsocould shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring productsto market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed orprevented and expenses for development of our product candidates could increase.We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number ofeligible patients to participate in these trials to demonstrate safety and efficacy. We have recently initiated clinical trials of KVD001 and KVD900, and we donot know whether planned or ongoing clinical trials will enroll subjects in a timely fashion, require redesign of essential trial elements or be completed onour projected schedule. In particular, because we are focused on patients with HAE, which is a rare disease, our ability to enroll eligible patients in trials maybe limited or may result in slower enrollment than we anticipate. In addition, competitors have ongoing clinical trials for product candidates that treat thesame indications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of ourcompetitors’ product candidates. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays and couldrequire us to abandon one or more clinical trials altogether. Patient enrollment is affected by other factors including: •the eligibility criteria for the study in question; •the perceived risks and benefits of the product candidate under study; •the efforts to facilitate timely enrollment in clinical trials; •the inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trialprograms, including some that may be for the same disease indication; •the patient referral practices of physicians; 24 •the proximity and availability of clinical trial sites for prospective patients; •ambiguous or negative interim results of our clinical trials, or results that are inconsistent with earlier results; •feedback from the MHRA, EMA, FDA, IRBs, data safety monitoring boards, or a comparable foreign regulatory authority, or results fromearlier stage or concurrent preclinical and clinical studies, that might require modifications to the protocol; •decisions by the MHRA, EMA, FDA, IRBs, a comparable foreign regulatory authority or us, or recommendations by data safety monitoringboards, to suspend or terminate clinical trials at any time for safety issues or for any other reason; and •unacceptable risk-benefit profile or unforeseen safety issues or adverse effects. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of thecompany to decline and limit our ability to obtain additional financing.If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of our products may be delayedand, as a result, our stock price may decline.From time to time, we estimate the timing of the anticipated accomplishment of various scientific, clinical, regulatory and other product developmentgoals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of scientific studies and clinical trials andthe submission of regulatory filings. From time to time, we may publicly announce the expected timing of some of these milestones. All of these milestonesare and will be based on numerous assumptions. The actual timing of these milestones can vary dramatically compared to our estimates, in some cases forreasons beyond our control. If we do not meet these milestones as publicly announced, or at all, the commercialization of our products may be delayed ornever achieved and, as a result, our stock price may decline.If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit thedevelopment of some of our product candidates. If our product candidates are associated with undesirable effects in preclinical or clinical trials or have characteristics that are unexpected, we mayneed to interrupt, delay or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects orother characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. There are risks inherent in the intravitreal administrationof drugs like KVD001 which can cause injury to the eye and other complications. Our HAE programs, including KVD900, are in the early stage of clinicaltesting and we have not yet determined what, if any, significant side effects may occur from dosing. Additional or more severe side effects may be identifiedfor all our programs through further clinical studies. These or other drug-related side effects could affect patient recruitment or the ability of enrolled subjectsto complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospectssignificantly.Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters If we are not able to obtain, or if there are delays in obtaining required regulatory approvals, we will not be able to commercialize our product candidates,and our ability to generate revenue will be materially impaired. Our product candidates must be approved by the FDA pursuant to a new drug application (“NDA”) in the United States and by the EMA and similarregulatory authorities outside the United States prior to commercialization. The process of obtaining marketing approvals, both in the United States andabroad, is expensive and takes many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type,complexity and novelty of the product candidates involved. Failure to obtain marketing approval for a product candidate will prevent us fromcommercializing the product candidate. We have not received approval to market any of our product candidates from regulatory authorities in anyjurisdiction. We have no experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third party CROsto assist us in this process. Securing marketing approval requires the submission of extensive preclinical and clinical25 data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securingmarketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by,the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintendedside effects, toxicities or other characteristics that may preclude us from obtaining marketing approval or prevent or limit commercial use. Regulatoryauthorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient forapproval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinicaltesting could delay, limit or prevent marketing approval of a product candidate. Changes in marketing approval policies during the development period,changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may also causedelays in or prevent the approval of an application. Additionally, on June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union, commonly referred to as Brexit.On March 29, 2017, the country formally notified the European Union of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty. Since asignificant proportion of the regulatory framework in the United Kingdom is derived from European Union directives and regulations, the withdrawal of theUnited Kingdom from the European Union could materially impact the regulatory regime with respect to the approval of KVD001, KVD900 or any of ourother product candidates in the United Kingdom or the European Union. Any delay in obtaining, or an inability to obtain, any marketing approvals, as aresult of Brexit or otherwise, would prevent us from commercializing KVD001, KVD900 or any of our other product candidates in the United Kingdomand/or the European Union and restrict our ability to generate revenue and achieve and sustain profitability. If any of these outcomes occur, we may be forcedto restrict or delay efforts to seek regulatory approval in the United Kingdom and/or European Union for KVD001, KVD900 or any of our other productcandidates, which could significantly and materially harm our business.Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approvedproduct not commercially viable. If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our productcandidates may be harmed and our ability to generate revenues will be materially impaired.We may seek orphan drug exclusivity for some of our product candidates, and we may be unsuccessful. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations asorphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition,which is generally defined as a disease with a patient population of fewer than 200,000 individuals in the United States. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has suchdesignation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing applicationfor the same drug for the same indication during the period of exclusivity. The applicable period is seven years in the United States and ten years in Europe.The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficientlyprofitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request fordesignation was materially defective, if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare diseaseor condition. Even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate fromcompetition because different drugs can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve adifferent drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes amajor contribution to patient care.26 A fast track designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review orapproval process and does not increase the likelihood that our product candidates will receive marketing approval. We do not currently have fast track designation for any of our product candidates but may seek such designation. If a drug is intended for thetreatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drugsponsor may apply for FDA fast track designation. The FDA has broad discretion whether or not to grant this designation. Even if we believe a particularproduct candidate is eligible for this designation, we cannot assure that the FDA would decide to grant it. Even if it does receive fast track designation, wemay not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw fast trackdesignation if it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received fasttrack designation have failed to obtain drug approval.A breakthrough therapy designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatoryreview or approval process, and does not increase the likelihood that our product candidates will receive marketing approval. We do not currently have breakthrough therapy designation for any of our product candidates but may seek such designation. A breakthroughtherapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition,and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinicallysignificant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as breakthroughtherapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe, after completing early clinical trials, thatone of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make suchdesignation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review orapproval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition,even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet theconditions for qualification.Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad. In order to market and sell our products in the European Union and many other jurisdictions, we or our third party collaborators must obtain separatemarketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involveadditional testing. The time required to obtain approval may differ substantially from that required to obtain MHRA or FDA approval. The regulatoryapproval process outside the United Kingdom and United States generally includes all of the risks associated with obtaining, respectively, MHRA or FDAapproval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can beapproved for sale in that country. We, or these third parties, may not obtain approvals from regulatory authorities outside the United States on a timely basis,if at all. Approval by the MHRA or FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatoryauthority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be ableto file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.27 Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subjectto post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if weexperience unanticipated problems with our products, when and if any of them are approved. Our product candidates and the activities associated with their development and commercialization, including their testing, manufacture,recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the MHRA, FDA andother regulatory authorities. In the United States, these requirements include submissions of safety and other post-marketing information and reports,registration and listing requirements, current good manufacturing practices (“cGMP”) requirements relating to manufacturing, quality control, qualityassurance and corresponding maintenance of records and documents, including periodic inspections by the FDA and other regulatory authority, requirementsregarding the distribution of samples to physicians and recordkeeping. The FDA, or other regulatory authorities, may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitorthe safety or efficacy of the product. The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for theapproved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers’communications regarding use of their products and if we promote our products beyond their approved indications, we may be subject to enforcement actionfor off-label promotion. Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription drugs may lead to investigationsalleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws. In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, orfailure to comply with regulatory requirements, may yield various results, including: •restrictions on such products, manufacturers or manufacturing processes; •restrictions on the labeling or marketing of a product; •restrictions on product distribution or use; •requirements to conduct post-marketing studies or clinical trials; •warning or untitled letters; •withdrawal of the products from the market; •refusal to approve pending applications or supplements to approved applications that we submit; •recall of products; •fines, restitution or disgorgement of profits or revenues; •suspension or withdrawal of marketing approvals; •refusal to permit the import or export of our products; •product seizure; or •injunctions or the imposition of civil or criminal penalties. Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance, and with requirements related to thedevelopment of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the EuropeanUnion’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.28 Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our productcandidates and affect the prices we may obtain. In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regardingthe healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect ourability to profitably sell any product candidates for which we obtain marketing approval. As an example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act,(collectively, the “ACA”), was signed into law in 2010 but has continued to be the subject of legislative efforts at revision and repeal. The ACA included asubstantial number of major changes to the healthcare system that impact our business, and several other legislations since then, as well as ongoing efforts,have continued to create a complicated planning and operating environment for companies in our industry. We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteriaand in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or othergovernment programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or otherhealthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities forpharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance orinterpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition,increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to morestringent product labeling and post-marketing testing and other requirements.Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any. In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. Inthese countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. Toobtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our productcandidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactorylevels, our business could be materially harmed.If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that couldharm our business. We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and thehandling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials,including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposalof these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resultingfrom its use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed its resources. We also could incursignificant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resultingfrom the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance forenvironmental liability or toxic tort claims that may be asserted against us in connection with the storage or disposal of biological, hazardous or radioactivematerials. 29 In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Thesecurrent or future laws and regulations may impair our discovery, preclinical development or production efforts. Our failure to comply with these laws andregulations also may result in substantial fines, penalties or other sanctions.Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.As with all companies, we are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentionalfailures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish, comply withfederal and state healthcare fraud and abuse laws and regulations, report financial information or data accurately or disclose unauthorized activities to us. Inparticular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud,kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing andpromotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use ofinformation obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible toidentify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown orunmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance withsuch laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actionscould have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significantcivil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibilityto obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs,including Medicare and Medicaid, integrity oversight and reporting obligations, or reputational harm.Risks Related to the Commercialization of Our Product Candidates Even if any of our product candidates receives marketing approval, we may fail to achieve the degree of market acceptance by physicians, patients, thirdparty payors and others in the medical community necessary for commercial success. If any of our product candidates receives marketing approval, we may nonetheless fail to gain sufficient market acceptance by physicians, patients,third party payors and others in the medical community. In addition, physicians, patients and third party payors may prefer other novel products to ours. Ifour product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable.The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: •the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; •the ability to offer our products for sale at competitive prices; •the convenience and ease of administration compared to alternative treatments; •the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; •the strength of our marketing and distribution support; •the availability of third party coverage and adequate reimbursement, including patient cost-sharing programs such as copays anddeductibles; •the ability to develop or partner with third-party collaborators to develop companion diagnostics; 30 •the prevalence and severity of any side effects; and •any restrictions on the use of our products together with other medications.In addition, in order to commercialize any product candidates, we must build marketing, sales, distribution, managerial and other non-technicalcapabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. If we are unable to enter into sucharrangements when needed on acceptable terms or at all, we may not be able to successfully commercialize any of our product candidates that receiveregulatory approval or any such commercialization may experience delays or limitations. If we are not successful in commercializing our product candidates,either on our own or through collaborations with one or more third parties, our future product revenue will suffer and we may incur significant additionallosses.We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfullythan we do.The development and commercialization of new drug products is highly competitive. We face competition with respect to our current productcandidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from majorpharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical andbiotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications forwhich we are developing our product candidates. Some of these competitive products and therapies are based on scientific approaches that are the same as orsimilar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agenciesand other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research,development, manufacturing and commercialization. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective,have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. In addition, our ability to competemay be affected in many cases by insurers or other third party payors seeking to encourage the use of generic products. Generic products are expected tobecome available over the coming years, potentially creating pricing pressure. If our product candidates achieve marketing approval, we expect that they willbe priced at a significant premium over competitive generic products. Many of the companies against which we are competing or we may compete in the future have significantly greater financial resources and expertisein research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved productsthan we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among asmaller number of our competitors. Smaller and other early stage companies may also prove to be significant competitors, particularly through collaborativearrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and managementpersonnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for,our programs. The insurance coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage andreimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue. The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford expensivetreatments. Sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our productcandidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed bygovernment health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is availableonly to limited levels, we may not be able to successfully31 commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish ormaintain pricing sufficient to realize a sufficient return on our investment. There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the principaldecisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S.Department of Health and Human Services, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare.Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentallynovel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may bemore conservative than CMS. Outside the United States, international operations are generally subject to extensive governmental price controls and othermarket regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue toput pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price controlmechanisms as part of national health systems. In general, the prices of medicines under such systems are substantially lower than in the United States. Othercountries allow companies to fix their own prices for medicines, but monitor and control company profits. Additional foreign price controls or other changesin pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, thereimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues andprofits. Moreover, increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may causesuch organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequatepayment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trendtoward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure onhealthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasinglyhigh barriers are being erected to the entry of new products into the healthcare market. In addition, many private payors contract with commercial vendors who sell software that provide guidelines that attempt to limit utilization of, andtherefore reimbursement for, certain products deemed to provide limited benefit to existing alternatives. Such organizations may set guidelines that limitreimbursement or utilization of our productsProduct liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop. We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an evengreater risk if we commercially sell any products that we may develop. If we cannot successfully defend against claims that our product candidates orproducts caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in: •decreased demand for any product candidates or products that we may develop; •injury to our reputation and significant negative media attention; •withdrawal of clinical trial participants; •significant costs to defend the related litigation; •substantial monetary awards to trial participants or patients; •loss of revenue; •reduced resources of our management to pursue our business strategy; and •the inability to commercialize any products that we may develop. 32 We currently hold $8,000,000 in product liability insurance coverage in the aggregate, with a per incident limit of $8,000,000, which may not beadequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commencecommercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at areasonable cost or in an amount adequate to satisfy any liability that may arise.Risks Related to Our Dependence on Third Parties We have entered, and may in the future seek to enter, into collaborations with third parties for the development and commercialization of our productcandidates. If we fail to enter into such collaborations, or such collaborations are not successful, we may not be able to capitalize on the market potentialof our product candidates.In October 2017, KalVista Limited and Merck entered into the Option Agreement, under which we granted to Merck an option to acquire KVD001through a period following completion of a Phase 2 clinical trial. We also granted to Merck a similar option to acquire investigational orally deliveredmolecules for DME that we will continue to develop as part of our ongoing research and development activities, through a period following the completionof a Phase 2 clinical trial. Biopharmaceutical companies are our prior and likely future collaborators for any marketing, distribution, development, licensingor broader collaboration arrangements. With respect to our existing collaboration agreements, and what we expect will be the case with any futurecollaboration agreements, we have and would expect to have limited control over the amount and timing of resources that our collaborators dedicate to thedevelopment or commercialization of our product candidates. Moreover, our ability to generate revenues from these arrangements will depend on ourcollaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We face significant competition in seeking appropriatecollaborators. Our ability to reach a definitive agreement for any collaboration will depend, among other things, upon our assessment of the collaborator’sresources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. If we areunable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a productcandidate, reduce or delay our development program or one or more of our other development programs, delay our potential development schedule or reducethe scope of research activities, or increase our expenditures and undertake discovery or preclinical development activities at our own expense. If we fail toenter into collaborations and do not have sufficient funds or expertise to undertake the necessary development activities, we may not be able to furtherdevelop our product candidates or continue to develop our product candidates and our business may be materially and adversely affected. Future collaborations we may enter into may involve the following risks: •collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; •collaborators may not perform their obligations as expected; •changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or createcompeting priorities; •collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected byus, stop or abandon discovery and preclinical development for a product candidate, repeat or conduct new discovery and preclinicaldevelopment for a product candidate; •collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products orproduct candidates if the collaborators believe that competitive products are more likely to be successfully developed than our products; •product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidatesor products, which may cause collaborators to cease to devote resources to the development of its product candidates; 33 •disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course ofdevelopment, might cause delays or termination of the discovery, preclinical development or commercialization of product candidates,might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of whichwould be time-consuming and expensive; •collaborators may not properly maintain or defend their intellectual property rights or intellectual property rights licensed to us or may usetheir proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietaryinformation or expose us to potential litigation; •collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and •collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capitalto pursue further development or commercialization of the applicable product candidates. Additionally, subject to its contractual obligations to us, if a collaborator is involved in a business combination, the collaborator might deemphasizeor terminate the development of any of our product candidates. If one of our collaborators terminates its agreement with us, they may find it more difficult toattract new collaborators and the perception of us in the business and financial communities could be adversely affected. If our collaborations do not result in the successful development of products or product candidates, product candidates could be delayed and we mayneed additional resources to develop product candidates. All of the risks relating to product development, regulatory approval and commercializationdescribed in this proxy statement also apply to the activities of our collaborators. Our existing collaboration with Merck is important to our business. If our collaborators cease development efforts under our existing or futurecollaboration agreements, or if any of those agreements are terminated, these collaborations may fail to lead to commercial products and we may neverreceive milestone payments or future royalties under these agreements.We have entered into a collaboration with Merck to develop KVD001 and other Oral DME Compounds, and these activities currently represent asignificant portion of our product development efforts. A significant portion of our future revenue and cash resources is expected to be derived from thisagreement or other similar agreements into which we may enter in the future. Revenue from research and development collaborations depends uponcontinuation of the collaborations, payments for research and development services and product supply, and the achievement of milestones, contingentpayments and royalties, if any, derived from future products developed from our research. If we are unable to successfully advance the development of ourproduct candidates or achieve milestones, revenue and cash resources from milestone payments under our collaboration agreements will be substantially lessthan expected.We are unable to predict the success of our collaborations and we may not realize the anticipated benefits of our strategic collaborations. Ourcollaborators have discretion in determining and directing the efforts and resources, including the ability to discontinue all efforts and resources, they applyto the development and, if approval is obtained, commercialization and marketing of the product candidates covered by such collaborations. As a result, ourcollaborators may elect to de-prioritize our programs, change their strategic focus or pursue alternative technologies in a manner that results in reduced,delayed or no revenue to us. Our collaborators may have other marketed products and product candidates under collaboration with other companies,including some of our competitors, and their corporate objectives may not be consistent with our best interests. Our collaborators may also be unsuccessful indeveloping or commercializing our products. If our collaborations are unsuccessful, our business, financial condition, results of operations and prospectscould be adversely affected. In addition, any dispute or litigation proceedings we may have with our collaborators in the future could delay developmentprograms, create uncertainty as to ownership of intellectual property rights, distract management from other business activities and generate substantialexpense.34 Moreover, to the extent that any of our existing or future collaborators were to terminate a collaboration agreement, we may be forced toindependently develop these product candidates, including funding preclinical studies or clinical trials, assuming marketing and distribution costs anddefending intellectual property rights, or, in certain instances, abandon product candidates altogether, any of which could result in a change to our businessplan and have a material adverse effect on our business, financial condition, results of operations and prospects.We contract with third parties for the manufacture of our product candidates for preclinical and clinical testing and we expect to continue to do so forcommercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products at anacceptable cost and quality, which could delay, prevent or impair our development or commercialization efforts. We do not own or operate facilities for the manufacture of our product candidates, and we do not have any manufacturing personnel. We currentlyhave no plans to build our own clinical or commercial scale manufacturing capabilities. We rely, and expect to continue to rely, on third parties for themanufacture of our product candidates for preclinical and clinical testing and we do not have backup sources of supply established for our candidates. Wereview the manufacturing process for each of our candidates and assess the risk to supply and, as appropriate, establish multiple manufacturers and/orestablish stock levels to support future activities and do not believe we are currently substantially dependent on any one third party. Despite the drugsubstance and product risk management, this reliance on third parties presents a risk that we will not have sufficient quantities of our product candidates orproducts or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts. Any performance failure on the part of our existing or future manufacturers of drug substance or drug products could delay clinical development ormarketing approval. If current suppliers cannot supply us with our Phase 2 requirements as agreed, we may be required to identify alternative manufacturers,which would lead us to incur added costs and delays in identifying and qualifying any such replacement. The formulation used in early studies frequently is not a final formulation for commercialization. Additional changes may be required by the FDA orother regulatory authorities on specifications and storage conditions. These may require additional studies and may delay our clinical trials. We expect to rely on third party manufacturers or third-party collaborators for the manufacture of commercial supply of any other product candidatesfor which our collaborators or we obtain marketing approval. We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of ourdistributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additionallosses and depriving us of potential product revenue. We may be unable to establish any agreements with third party manufacturers or to do so on acceptable terms. Even if we are able to establishagreements with third party manufacturers, reliance on third party manufacturers entails additional risks, including: •reliance on the third party for regulatory compliance and quality assurance; •the possible breach of the manufacturing agreement by the third party; •the possible misappropriation of our proprietary information, including trade secrets and know-how; and •the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. 35 Third party manufacturers may not be able to comply with cGMP, regulations or similar regulatory requirements outside the United States. Ourfailure, or the failure of our third party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinicalholds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates orproducts, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products. Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturingfacilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us. Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our futureprofit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis. We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability todevelop and commercialize product candidates, impact our cash position, increase our expenses and present significant distractions to our management.From time to time, we may consider strategic transactions, such as additional collaborations, acquisitions of companies, asset purchases and out- orin-licensing of product candidates or technologies that we believe will complement or augment our existing business. In particular, we will evaluate and, ifstrategically attractive, seek to enter into additional collaborations, including with major biotechnology or biopharmaceutical companies. The competitionfor collaborators is intense, and the negotiation process is time-consuming and complex. Any new collaboration may be on terms that are not optimal for us,and we may not be able to maintain any new collaboration if, for example, development or approval of a product candidate is delayed, sales of an approvedproduct candidate do not meet expectations or the collaborator terminates the collaboration. In addition, there have been a significant number of recentbusiness combinations among large pharmaceutical companies that have resulted in a reduced number of potential future strategic partners. Our ability toreach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the strategic partner’s resources and expertise, theterms and conditions of the proposed collaboration and the proposed strategic partner’s evaluation of a number of factors. These factors may include thedesign or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market forthe subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competingproducts, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard tothe merits of the challenge, and industry and market conditions generally. Moreover, even if we acquire assets with promising markets or technologies, wemay not be able to realize the benefit of acquiring such assets due to an inability to successfully integrate them with our existing technologies and we mayencounter numerous difficulties in developing, manufacturing and marketing any new products resulting from a strategic acquisition that delay or prevent usfrom realizing their expected benefits or enhancing our business.We cannot assure you that following any such collaboration, or other strategic transaction, we will achieve the expected synergies to justify thetransaction. For example, such transactions may require us to incur non-recurring or other charges, increase our near- and long-term expenditures and posesignificant integration or implementation challenges or disrupt our management or business. These transactions would entail numerous operational andfinancial risks, including exposure to unknown liabilities, disruption of our business and diversion of our management’s time and attention in order tomanage a collaboration or develop acquired products, product candidates or technologies, incurrence of substantial debt or dilutive issuances of equitysecurities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill orimpairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of anyacquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management andownership and the inability to retain key employees of any acquired business. Also, such strategic alliance, joint venture or acquisition may be prohibited.36 Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, anytransactions that we do complete may be subject to the foregoing or other risks that would have a material and adverse effect on our business, financialcondition, results of operations and prospects. Conversely, any failure to enter any additional collaboration or other strategic transaction that would bebeneficial to us could delay the development and potential commercialization of our product candidates and have a negative impact on the competitivenessof any product candidate that reaches market.Risks Related to Our Intellectual Property If we are unable to obtain and maintain intellectual property protection for our technology and products or if the scope of the intellectual propertyprotection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, andour ability to successfully commercialize our technology and products may be impaired. Our success depends in large part on our ability to obtain and maintain patent protection in the European Union, the United States and othercountries with respect to our proprietary technology and products. We seek to protect our proprietary position by filing patent applications in the UnitedStates and abroad related to our novel technologies and product candidates. This patent portfolio includes issued patents and pending patent applicationscovering compositions of matter and methods of use. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patentapplications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursuepatent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable orlimited in scope. It is also possible that we will fail to identify patentable aspects of our discovery and preclinical development output before it is too late toobtain patent protection. Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patentapplications, or to maintain the patents, covering technology that we license from third parties. Therefore, these patents and applications may not beprosecuted and enforced in a manner consistent with the best interests of our business. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions,and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the lawsof the United States. For example, India and China do not allow patents for methods of treating the human body. Publications of discoveries in the scientificliterature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in ourowned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. If a third party has also fileda United States patent application prior to the effective date of the relevant provisions of the America Invents Act (i.e. before March 16, 2013) covering ourproduct candidates or a similar invention, we may have to participate in an adversarial proceeding, known as an interference, declared by the USPTO todetermine priority of invention in the United States. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights arehighly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or inpart, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation ofthe patent laws in the European Union, the United States and other countries may diminish the value of our patents or narrow the scope of our patentprotection. Moreover, we may be subject to a third party preissuance submission of prior art to the USPTO, or become involved in opposition, derivation,reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adversedetermination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties tocommercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercializeproducts without infringing third party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications isthreatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates. 37 Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection,prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our ownedor licensed patents by developing similar or alternative technologies or products in a non-infringing manner. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may bechallenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patentclaims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializingsimilar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time requiredfor the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after suchcandidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others fromcommercializing products similar or identical to ours. The risks described elsewhere pertaining to our patents and other intellectual property rights also apply to the intellectual property rights that welicense, and any failure to obtain, maintain and enforce these rights could have a material adverse effect on our business. In some cases we may not havecontrol over the prosecution, maintenance or enforcement of the patents that we license, and our licensors may fail to take the steps that we believe arenecessary or desirable in order to obtain, maintain and enforce the licensed patents. Any inability on our part to protect adequately our intellectual propertymay have a material adverse effect on our business, operating results and financial position. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with theserequirements. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to theUSPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. Weemploy an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patent agencies. The USPTO and various non-U.S. governmentalpatent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent applicationprocess. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a latefee or by other means in accordance with the applicable rules. However, there are situations in which non-compliance can result in abandonment or lapse ofthe patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might beable to enter the market and this circumstance would have a material adverse effect on our business. We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming andunsuccessful. Because competition in our industry is intense, competitors may infringe or otherwise violate our issued patents, patents of our licensors or otherintellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and timeconsuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringed theirpatents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe thepatent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology inquestion. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. We mayalso elect to enter into license agreements in order to settle patent infringement claims or to resolve disputes prior to litigation, and any such licenseagreements may require us to pay royalties and other fees that could be significant. Furthermore, because of the substantial amount of discovery required inconnection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. 38 Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain andcould have a material adverse effect on the success of our business. Our commercial success depends upon our ability, and the ability of our collaborators, to develop, manufacture, market and sell our productcandidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable intellectual property litigationin the biotechnology and pharmaceutical industries. We may become party to, or threatened with, future adversarial proceedings or litigation regardingintellectual property rights with respect to our products and technology, including interference or derivation proceedings before the USPTO. Third partiesmay assert infringement claims against us based on existing patents or patents that may be granted in the future. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continuedeveloping and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or atall. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. Wecould be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetarydamages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us fromcommercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we havemisappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets, including unpatented know-how,technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientificcollaborators, contract manufacturers, consultants, advisors and other third parties. We seek to protect our confidential proprietary information, in part, byentering into confidentiality and invention or patent assignment agreements with our employees and consultants, however, we cannot be certain that suchagreements have been entered into with all relevant parties. Moreover, to the extent we enter into such agreements, any of these parties may breach theagreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome isunpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secretswere to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicatethem, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by acompetitor, our competitive position would be harmed. Risks Related to Employee Matters, Facilities, Managing Growth and Macroeconomic Conditions Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. We are highly dependent on the research and development, clinical and business development expertise of the principal members of ourmanagement, scientific and clinical team. Although we have entered into employment letter agreements with our executive officers, each of them mayterminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or other employees. Recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing personnel will also be critical to our success. The loss ofthe services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectivesand seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficultand may take an extended period of time because of the limited number of individuals in our industry with39 the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products. Competition to hire from thislimited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition amongnumerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinicalpersonnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist usin formulating our discovery and preclinical development and commercialization strategy. Our consultants and advisors may be employed by employersother than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to provide services to us.If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. We may face operational disruptions due to lack of adequate facilities.We are highly dependent upon our U.K. operations to conduct our scientific research, and we are currently in the process of moving those operationsto new facilities. We have experienced delays in the preparation of these facilities for occupancy and we may continue to experience further delays. If we areunable to finalize and occupy these facilities in a timely fashion our scientific and business activities could be disrupted, which could materially harm ourbusiness and future prospects. We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as aresult, we may encounter difficulties in managing our growth, which could disrupt our operations. We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drugdevelopment, regulatory affairs and, if any of our product candidates receive marketing approval, sales, marketing and distribution. To manage ouranticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continueto recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing acompany with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualifiedpersonnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inabilityto manage growth could delay the execution of our business plans or disrupt our operations. The U.K. vote to leave the European Union, known as Brexit, could negatively impact our business and operations.The majority of our scientific operations are based in the United Kingdom and we have received significant funding through United Kingdomgovernment sources and tax credits. In addition, we have used the United Kingdom as our European location for interactions with European Union regulatoryauthorities related to clinical development and other activities executed or planned in the European Union. The ongoing Brexit process is complicated andmany of the details of future interactions between the United Kingdom and European Union remain unresolved. There are many risks and uncertaintiesassociated with this process, including whether Brexit has a negative economic impact on either the United Kingdom or the European Union member states,or interactions with the European Union regulatory regime are changed as a result of Brexit, any of which could have an adverse impact on our business orfuture operations. For additional risks related to Brexit, see “—If we are not able to obtain, or if there are delays in obtaining required regulatory approvals,we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.”40 Our business and operations would suffer in the event of system failures. Our internal computer systems and those of our CROs, collaborators and third-parties on whom we rely are vulnerable to damage from computerviruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Furthermore, we have little or no control over thesecurity measures and computer systems of our third-party collaborators. While we and, to our knowledge, our third party collaborators have not experiencedany such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or our third partycollaborators, it could result in a material disruption of our drug development programs. For example, the loss of research data could delay development ofour product candidates and the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approvalefforts and we may incur substantial costs to attempt to recover or reproduce the data. If any disruption or security breach resulted in a loss of or damage toour data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and/or the further development of ourproduct candidates could be delayed.Risks Related to Ownership of Our Common StockOur stock price is volatile and our stockholders may not be able to resell shares of our common stock at or above the price they paid.The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, many of which arebeyond our control. These factors include those discussed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: •announcement of a strategic transaction, including the acquisition of our company or its assets; •our decision to initiate a clinical trial or not to initiate a clinical trial; •announcements of significant changes in our business or operations, including the decision not to pursue drug development programs; •additions or departures of key personnel; •adverse results or delays in clinical trials; •changes in reimbursement or third-party coverage of treatments for HAE or DME, or changes to treatment recommendations or guidelinesapplicable to the treatment of HAE or DME; •announcements relating to collaboration partnerships or other strategic transactions undertaken by us; •announcements of therapeutic innovations or new products by us or our competitors; •adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; •changes or developments in laws or regulations applicable to any of our product candidates; •any adverse changes to our relationship with any manufacturers or suppliers; •the success of our testing and clinical trials; •the success of our efforts to acquire or license or discover additional product candidates; •any intellectual property infringement actions in which we may become involved; •announcements concerning our competitors or the pharmaceutical industry in general; •achievement of expected product sales and profitability; •manufacture, supply or distribution shortages; •actual or anticipated fluctuations in our operating results; •FDA or other regulatory actions affecting us or our industry or other healthcare reform measures in the United States, the United Kingdom orthe European Union;41 •changes in financial estimates or recommendations by securities analysts; •trading volume of our common stock; •sales of our common stock by us, our executive officers and directors or our stockholders in the future; and •general economic and market conditions and overall fluctuations in the United States equity markets.In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, haveexperienced extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affectthe trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimesinstituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantialcosts defending the lawsuit and the attention of our management would be diverted from the operation of our business, which could seriously harm ourfinancial position. Any adverse determination in litigation could also subject us to significant liabilities.If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse opinion regarding our stock, our stockprice and trading volume could decline.The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or ourbusiness. If any analysts who cover us issue an adverse regarding us, our business model, our intellectual property or our stock performance, or if our clinicaltrials and operating results fail to meet the expectations of analysts, our stock price would likely decline. If any of these analysts cease coverage of us or failto publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.We incur significant costs as a result of operating as a public company, and our management devotes substantial time to compliance initiatives. We mayfail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, which could result in sanctions orother penalties that would harm our business.We incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligationsunder the Securities Exchange Act of 1934, as amended, or the Exchange Act, and regulations regarding corporate governance practices. The listingrequirements of The NASDAQ Global Market require that we satisfy certain corporate governance requirements relating to director independence,distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Ourmanagement and other personnel have devoted, and will continue to need to devote, a substantial amount of time to ensure that we comply with all of theserequirements. Moreover, the reporting requirements, rules and regulations increase our legal and financial compliance costs and make some activities moretime consuming and costly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a publiccompany on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associatedwith being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or boardcommittees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.We are subject to Section 404 of The Sarbanes-Oxley Act of 2002, or Section 404, and the related rules of the SEC which generally require ourmanagement and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Beginning withthis annual report filed with the SEC for the year ending April 30, 2018, Section 404 requires an annual management assessment of the effectiveness of ourinternal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the Jumpstart Our Business StartupsAct of 2012, or JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companiesthat are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404.42 During the course of the review and testing of our internal control for the purpose of providing the reports required by these rules, we may identifydeficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material weakness in our internal controlover financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independentregistered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, whichcould harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. Inaddition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. Any failure toreport our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from The NASDAQ Global Market orother adverse consequences that would materially harm our business.If we fail to establish or maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulationscould be impaired.Pursuant to Section 404 of the Sarbanes-Oxley Act, beginning in the year ended April 30, 2018, our management is required annually to deliver areport that assesses the effectiveness of our internal control over financial reporting and, subject to exemptions allowed as an “emerging growth company,”our independent registered public accounting firm will be required annually to deliver an attestation report on the effectiveness of our internal control overfinancial reporting. If we are unable to maintain effective internal control over financial reporting, we may not be able to produce accurate financialstatements, and investors may therefore lose confidence in our operating results, our stock price could decline and we may be subject to litigation orregulatory enforcement actions.Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead toentrenchment of management.Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the valueof our shares to a potential acquirer or delay or prevent changes in control or changes in our management without the consent of our board of directors. Theprovisions in our charter documents include the following: •a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of amajority of our board of directors; •no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; •the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or theresignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; •the required approval of at least 66 2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal ofdirectors without cause; •the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of thoseshares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of ahostile acquirer; •the ability of our board of directors to alter our bylaws without obtaining stockholder approval; •the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal certain provisionsof our bylaws and our amended and restated certificate of incorporation regarding the election and removal of directors; •a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of ourstockholders;43 •the requirement that a special meeting of stockholders may be called only by or at the direction of our board of directors pursuant to aresolution adopted by a majority of the total number of directors that our board of directors would have if there were no vacancies, whichmay delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and •advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to proposematters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation ofproxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. In addition, these provisions would applyeven if we were to receive an offer that some stockholders may consider beneficial.We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law. Under Section 203, acorporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock forthree years or, among other exceptions, the board of directors has approved the transaction.Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reducethe amount of money available to us.Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, ineach case to the fullest extent permitted by Delaware law.In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnificationagreements that we have entered into with our directors and officers provide that: •We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to thefullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in goodfaith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to anycriminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful. •We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law. •We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that suchdirectors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification. •We will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by thatperson against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce aright to indemnification. •The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreementswith our directors, officers, employees and agents and to obtain insurance to indemnify such persons. •We may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers,employees and agents.Our ability to use our net operating losses to offset future taxable income, if any, may be subject to certain limitations.In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change”(generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change net operating losses, or NOLs, to offset future taxable income. We experienced anownership change in November 2016 that substantially limited our use of the NOLs available to us for U.S. federal income tax purposes. If we undergoadditional ownership changes (some of which changes may be outside our44 control), our ability to utilize our NOLs could be further limited by Section 382 of the Code. Our NOLs may also be impaired under state law. Accordingly,we may not be able to utilize a material portion of our NOLs. Furthermore, our ability to utilize our NOLs is conditioned upon our attaining profitability andgenerating U.S. federal taxable income. We have incurred net losses since our inception and anticipate that we will continue to incur significant losses for theforeseeable future; thus, we do not know whether or when we will generate the U.S. federal taxable income necessary to utilize our NOLs. See the risk factorsdescribed above under “-Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements.”We do not currently intend to pay dividends on our common stock, and, consequently, our stockholders’ ability to achieve a return on their investment willdepend on appreciation in the price of our common stock.We do not currently intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to invest our futureearnings, if any, to fund our growth. Therefore, our stockholders are not likely to receive any dividends on their common stock for the foreseeable future.Since we do not intend to pay dividends, our stockholders’ ability to receive a return on their investment will depend on any future appreciation in themarket value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders havepurchased it.Item 1B. Unresolved Staff Comments.None.Item 2. Properties.Our corporate headquarters are located in Cambridge, Massachusetts where we occupy approximately 2,700 square feet of office space under a five-year lease. We maintain approximately 4,500 square feet of office and research laboratory space in Porton Down, United Kingdom, under a lease which iscurrently running on a month by month basis through July 2018. We also maintain approximately 1,000 square feet of leased research laboratory space inBoston, Massachusetts.In April 2018, we entered into a lease for approximately 8,873 square feet of new office and research laboratory space in Porton Down, UnitedKingdom, that we anticipate occupying in August 2018.We believe that our current and planned facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitableadditional space will be available to accommodate any such expansion of our operations.Item 3. Legal Proceedings.From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We arecurrently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition oroperating results. Item 4. Mine Safety Disclosures.Not Applicable.45 PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Price Range of Common StockOur common stock is traded on the NASDAQ stock market under the symbol “KALV” as of November 21, 2016, the date of the share purchasetransaction with KalVista Pharmaceuticals Ltd. Prior to November 21, 2016, our common stock was traded on the NASDAQ stock market under the symbol“CBYL” since April 9, 2015. The following table sets forth the quarterly high and low sales prices per share of our common stock. The per share prices belowreflect a 14 for 1 reverse stock split effected on November 21, 2016: High Low Year ended April 30, 2018 First Fiscal Quarter $8.19 $6.82 Second Fiscal Quarter $15.80 $5.48 Third Fiscal Quarter $13.84 $8.50 Fourth Fiscal Quarter $11.37 $8.80 Year ended April 30, 2017 First Fiscal Quarter $20.02 $7.56 Second Fiscal Quarter $9.10 $6.16 Third Fiscal Quarter $10.65 $6.09 Fourth Fiscal Quarter $8.74 $6.20 As of June 30, 2018 there were 46 holders of record of our common stock. The last reported sale price of the common stock on June 30, 2018 was$8.12 per share.DividendsWe have never declared or paid cash dividends on our capital stock. We do not expect to pay dividends on our common stock for the foreseeablefuture. Instead, we anticipate that all of our earnings, if any, will be used for the operation and growth of our business. Any future determination to declarecash dividends would be subject to the discretion of our board of directors and would depend upon various factors, including our results of operations,financial condition and capital requirements, restrictions that may be imposed by applicable law and our contracts and other factors deemed relevant by ourboard of directors.46 Securities Authorized for Issuance under Equity Compensation PlansThe following table provides information as of April 30, 2018, with respect to the shares of our common stock that may be issued under our existingequity compensation plans. Number ofSecurities tobe IssueduponExercise ofOutstandingOptions,Warrantsand Rights Weighted-averageExercisePrice ofOutstandingOptions,Warrantsand Rights Number ofSecuritiesRemainingAvailable forFutureIssuanceUnder EquityCompensationPlans(excludingsecuritiesreflected incolumn (a)) Plan Category (a) (b) (c) Equity compensation plans approved by stockholders (1)(2) 833,639 $5.60 1,176,367 Equity compensation plans not approved by stockholders (3) 85,055 $8.45 — Total 918,694 1,176,367 (1)Includes 165,148 shares subject to options issued pursuant to the Carbylan 2015 Incentive Plan, 197,719 shares subject to options issuedpursuant to the Enterprise Management Incentives Plan and 470,772 shares subject to options issued pursuant to the 2017 Equity IncentivePlan. The 2017 Equity Incentive Plan contains provisions that provide for automatic increases to the authorized number of shares as ofJanuary 1st each year, of up to 4% of the outstanding shares of stock on the last day of the immediately preceding calendar year, or a lessernumber of shares as approved by our board of directors. There are currently 1,076,367 shares available for future issuance under the 2017Equity Incentive Plan. There are 100,000 shares of common stock available for future issuance under the 2017 Employee Stock PurchasePlan. As of April 30, 2018, no purchase periods under the 2017 Employee Stock Purchase Plan have been authorized by the board ofdirectors. (2)Shares reserved for issuance under the 2017 Equity Incentive Plan may be granted as restricted stock, restricted share units and other equityawards, as well as for grants of stock options and stock appreciation rights. (3)Consists of options issued pursuant to inducement grants.47 Stock Price Performance GraphThe graph below matches KalVista Pharmaceuticals, Inc.'s cumulative 37-month total shareholder return on common stock with the cumulative totalreturns of the NASDAQ Composite index and the NASDAQ Biotechnology index. The graph tracks the performance of a $100 investment in our commonstock and in each index (with the reinvestment of all dividends) from April 9, 2015, the date our common stock became publicly traded, to April 30, 2018. 4/9/154/157/1510/151/164/167/1610/161/174/177/1710/171/184/18 KalVista Pharmaceuticals, Inc.100.0090.65124.2864.7543.7113.179.739.439.039.629.3016.3513.4112.36NASDAQ Composite100.00101.15105.40104.1695.5999.15107.35107.95116.62126.11132.87140.73155.36148.53NASDAQ Biotechnology100.0097.66109.7795.1578.6179.6084.0374.6780.6285.7691.6489.0095.7187.45 Recent Sales of Unregistered SecuritiesNone.Item 6. Selected Financial Data.The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” the financial statements and related notes and other financial information included in this Annual Report on Form 10-K.48 We derived the financial data for the years ended April 30, 2018, 2017, 2016 and 2015 and the balance sheet data as of April 30, 2018, 2017, 2016and 2015 from our audited consolidated financial statements, which are included elsewhere in this Annual Report on Form 10-K. Historical results are notnecessarily indicative of the results to be expected in future periods. For the Years Ended April 30, 2018 2017 2016 2015 (in thousands, except share and per share data) Consolidated Statement of Operations Data: Revenue $8,394 $1,504 $2,133 $1,804 Operating expenses Research and development 18,237 12,666 14,661 8,285 General and administrative 8,862 11,177 2,653 1,608 Total operating expenses 27,099 23,843 17,314 9,893 Operating loss (18,705) (22,339) (15,181) (8,089)Other income, net 2,900 3,736 3,745 863 Net loss $(15,805) $(18,603) $(11,436) $(7,226)Net loss per share attributable to common stockholders, basic anddiluted $(1.53) $(4.47) $(26.17) $(34.94)Weighted average common shares outstanding, basic and diluted 10,321,780 4,646,764 591,298 263,358 April 30, 2018 2017 2016 2015 (in thousands) Consolidated Balance Sheet Data: Cash and cash equivalents $51,055 $30,950 $21,764 $2,526 Property and equipment, net 1,836 97 74 100 Working capital 36,164 31,180 21,422 1,950 Total assets 61,389 34,345 24,745 3,890 Total liabilities 23,216 3,018 3,249 1,840 Stockholders' equity (deficit) 27,253 31,327 (37,112) (23,554) 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related notes thatappear elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involverisks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors, includingthose set forth in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. For further information regarding forward-lookingstatements, please refer to the “Special Note Regarding Forward-Looking Statements” at the beginning of Part I of this Annual Report on Form 10-K.Management OverviewWe are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of small molecule protease inhibitorsfor diseases with significant unmet need. Our first product candidates are inhibitors of plasma kallikrein being developed for two indications: hereditaryangioedema (“HAE”) and diabetic macular edema (“DME”). We apply our insights into the chemistry of proteases and, with our current programs, thebiology of the plasma kallikrein system, to develop small molecule inhibitors with high selectivity, potency and bioavailability that we believe will makethem successful treatments for disease.We have created a structurally diverse portfolio of oral plasma kallikrein inhibitors and advanced multiple drug candidates into Phase 1 clinical trialsfor HAE in order to create best-in-class oral therapies. In December 2017, we initiated a first-in-human study of KVD900, the next candidate from our HAEportfolio to commence clinical testing. Based upon the results observed to date in that study, we have determined to advance KVD900 into later stageclinical testing as a potential on-demand therapy for treatment of acute HAE attacks. We currently are planning a Phase 2 proof of concept trial that we expectto initiate before the end of 2018 and complete in mid-2019. In the case of DME, we are initially developing a plasma kallikrein inhibitor which isadministered directly into the eye and anticipate ultimate development of orally delivered drugs. Also in December 2017 we commenced a Phase 2 clinicaltrial of KVD001, our most advanced DME drug candidate, that we anticipate will complete in the second half of 2019.We have devoted substantially all our efforts to research and development, including clinical trials of our product candidates. We have notcompleted the development of any product candidates. Pharmaceutical drug product candidates, like those being developed by us, require approvals from theFDA or foreign regulatory agencies prior to commercial sales. There can be no assurance that any product candidates will receive the necessary approvals andany failure to receive approval or delay in approval may have a material adverse impact on our business and financial results. We are subject to a number ofrisks and uncertainties similar to those of other life science companies developing new products, including, among others, the risks related to the necessity toobtain adequate additional financing, to successfully develop product candidates, to obtain regulatory approval of product candidates, to comply withgovernment regulations, to successfully commercialize our potential products, to the protection of proprietary technology and to our dependence on keyindividuals.We have funded operations primarily through the issuance of preferred stock and common stock, the share purchase transaction with Carbylan, theOption Agreement and grant income. As of April 30, 2018, we had an accumulated deficit of $71.7 million and $51.1 million of cash and cash equivalents.Our working capital is anticipated to fund our operations for at least the next twelve months from the date the audited consolidated financial statements areissued. Accordingly, the audited consolidated financial statements have been prepared on a going concern basis.Financial OverviewRevenueOur revenue consists primarily of a portion of the upfront fees from the Option Agreement, which is recognized as revenue on a proportionalperformance basis as the related research and development activities are conducted.50 We have received grant income to support our research and development activities primarily through an agreement with the Technology StrategyBoard (“TSB”), a United Kingdom government organization. Under the terms of the grant the TSB had authorized a total amount of up to $7.3 million overthe lifetime of the agreements between us and TSB, to accelerate the development of the oral drug program. As of April 30, 2018, the development activitiesrelated to the TSB grant have been completed and we do not anticipate any further reimbursements.Research and Development ExpensesResearch and development expenses primarily consist of costs associated with our research activities, including the preclinical and clinicaldevelopment of product candidates. We contract with clinical research organizations to manage our clinical trials under agreed upon budgets for each study,with oversight by our clinical program managers. We account for all goods and services, including non-refundable advance payments, as expenses, and allresearch and development costs are expensed as incurred.We expect to continue to incur substantial expenses related to development activities for the foreseeable future as we conduct clinical development,manufacturing and toxicology studies. Product candidates in later stages of clinical development generally have higher development costs than those inearlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, additional drug manufacturingrequirements, and later stage toxicology studies such as carcinogenicity studies. The process of conducting preclinical studies and clinical trials necessary toobtain regulatory approval is costly and time consuming. The probability of success for each product candidate is affected by numerous factors, includingpreclinical data, clinical data, competition, manufacturing capability and commercial viability. Accordingly, we may never succeed in achieving marketingapproval for any of our product candidates.Completion dates and costs for clinical development programs as well as our research program can vary significantly for each current and futureproduct candidate and are difficult to predict. As a result, we cannot estimate with any degree of certainty the costs associated with development of ourproduct candidates at this point in time. We anticipate making determinations as to which programs and product candidates to pursue and how much fundingto direct to each program and product candidate on an ongoing basis in response to the scientific success of early research programs, results of ongoing andfuture clinical trials, our ability to enter into collaborative agreements with respect to programs or potential product candidates, as well as ongoingassessments as to the commercial potential of each current or future product candidate.General and Administrative ExpensesGeneral and administrative expenses consist primarily of the costs associated with general management, obtaining and maintaining our patentportfolio, professional fees for accounting, auditing, consulting and legal services, and general overhead expenses.We expect ongoing general and administrative expenses to increase in the future as we expand our operating activities, maintain and expand thepatent portfolio and incur additional costs associated with the management of a public company and maintaining compliance with exchange listing and SECrequirements. These potential increases will likely include management costs, legal fees, accounting fees, directors’ and officers’ liability insurance premiumsand expenses associated with investor relations.Other Income, NetOther income consists of bank interest, research and development tax credits from the United Kingdom government’s tax incentive programs set upto encourage research and development in the United Kingdom and realized and unrealized exchange rate gains/losses on cash held in foreign currencies.Income TaxesWe historically have incurred net losses and have no corporation tax liabilities. We file U.S. Federal tax returns, as well as certain state returns. Wealso file returns in the United Kingdom. Under the U.K. government’s51 research and development tax incentive scheme, we have incurred qualifying research and development expenses and filed claims for research anddevelopment tax credits in accordance with the relevant tax legislation. The research and development tax credits are paid out to us in cash and reported asother income. Because of the operating losses and the full valuation allowance provided on all deferred tax assets, including the net operating losses, no taxprovision has been recognized in the periods presented.Critical Accounting Policies and Significant Judgments and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of our financial statements requires usto make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date ofour financial statements and the reported revenue and expenses during the reported periods. We evaluate these estimates and judgments, including thosedescribed below, on an ongoing basis. We base our estimates on historical experience, known trends and events, contractual milestones and various otherfactors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assetsand liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Seealso Note 2, “Summary of Significant Accounting Policies” to our Consolidated Financial Statements included in Item 8 of this report, which discusses thesignificant assumptions used in applying our accounting policies. Those accounting policies and estimates that we deem to be critical are as follows:Revenue RecognitionWe recognize revenue from research and development arrangements and grant income. Revenue is realized or realizable and earned when all of thefollowing criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the seller’s price tothe buyer is fixed or determinable; and (iv) collectability is reasonably assured.For arrangements that involve the delivery of more than one element, such as the Option Agreement, each product, service and/or right to use assets isevaluated to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has “stand-alone value”to the customer. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price ofeach deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidenceof fair value, (ii) third party evidence of selling price and (iii) best estimate of selling price (“BESP”). The BESP reflects our best estimate of what the sellingprice would be if the deliverable was regularly sold by us on a standalone basis. The consideration allocated to each unit of accounting is recognized as therelated goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Analyzing the arrangement to identifydeliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or anotherperformance obligation. Commencing in October 2017, we began recognizing revenue under the Merck arrangement. We determined that the research license granted did nothave standalone value from the respective research and development services, as the license could not be used on its own by Merck for its intended purposeof developing and commercializing KVD001 and the Oral DME Compounds. As a result, the research license has been combined with the respective researchand development services for KVD001 and the Oral DME Compounds as two units of accounting (the “KVD001 Unit of Accounting” and the “Oral DMEUnit of Accounting”). We allocated the allocable consideration of $37.0 million to these two units of accounting using the relative selling price method.Neither vendor-specific objective evidence or third party evidence is available for any of the units of accounting identified at arrangement inception.Accordingly, the selling price of each unit of accounting was developed using management’s best estimate of selling price (“BESP”). BESP for the KVD001Unit of Accounting and the Oral DME Unit of Accounting were determined by applying a risk-adjusted analysis of discounted cash flows and the allocablearrangement consideration was allocated among the separate units of accounting using the relative selling price method.52 The amount allocated to the KVD001 Unit of Accounting and the Oral DME Unit of Accounting will be recognized as revenue on a proportionalperformance basis as the research and development activities are conducted through completion of the respective Phase 2 clinical trials. If the period overwhich revenue is attributed changes or the estimates of proportional performance change, the reported revenue could be materially impacted.Preclinical and Clinical Trial AccrualsWe base our accrued expenses related to clinical trials on estimates of patient enrollment and related expenses at clinical investigator sites as well asestimates for services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conductand manage clinical trials on our behalf. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on factsand circumstances known to us and based on contracted amounts applied to the level of patient enrollment and activity according to the clinical trialprotocol. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we modify our estimates ofaccrued expenses accordingly on a prospective basis.If we do not identify costs that we have begun to incur, or if we underestimate or overestimate the level of services performed or the costs of theseservices, our actual expenses could differ from our estimates.Income TaxesWe account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on thedifference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences areexpected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.Given our history of losses, we currently provide a full valuation allowance on our net deferred tax assets.Results of OperationsYear Ended April 30, 2018 Compared to Year Ended April 30, 2017The following table sets forth the key components of our results of operations for the years ended April 30, 2018 and 2017: Years Ended April 30, Increase 2018 2017 (Decrease) (in thousands) Income Revenue $8,394 $1,504 $6,890 Operating Expenses Research and development expenses 18,237 12,666 5,571 General and administrative expenses 8,862 11,177 (2,315)Other income Interest, exchange rate gain and other income 2,900 3,736 (836)Revenue. Revenue was $8.4 million in the year ended April 30, 2018 compared to $1.5 million in the prior year. The increase of $6.9 million was dueto $8.0 million of revenue from the Option Agreement in the year ended April 30, 2018, which was offset by a decrease in grant revenue of $1.1 million. Weexpect that our reported revenues will increase in future periods as the proceeds from the Option Agreement are recognized as services are performed.Research and Development Expenses. Research and development expenses were $18.2 million in the year ended April 30, 2018 compared to$12.7 million in the prior year, primarily due to an increase in spending on the intravitreal, clinical stage oral programs, and early stage research activitieswhich was somewhat offset by a decrease in spending on our additional oral programs. The increase in expense also reflects an increase in the53 exchange rate of the British Pound Sterling (“GBP”), which is the currency in which most of our research and development expense is currently incurred.Approximately $0.7 million of the overall increase in research and development expense was due to the increase in exchange rates.Research and development expenses by major programs or categories were as follows: Years Ended April 30, Increase 2018 2017 (Decrease) (in thousands) Intravitreal $3,020 $571 $2,449 429% Clinical stage oral programs 4,212 2,785 1,427 51% Additional oral programs 1,142 2,552 (1,410) -55% Early stage research activities 9,863 6,758 3,105 46% Total $18,237 $12,666 $5,571 44%Expenses for the intravitreal program were $3.0 million in the year ended April 30, 2018 compared to $0.6 million in the prior year due to theinitiation of a Phase 2 clinical trial for KVD001. We anticipate that expenses will continue to increase as the Phase 2 clinical trial for KVD001 progresses infiscal year 2019. Expenses for the clinical stage oral programs were $4.2 million in the year ended April 30, 2018 compared to $2.8 million in the prior year due to thecommencement of the first-in-human study for KVD900. We anticipate that expenses will continue to increase as we initiate additional clinical developmentactivities for KVD900 in fiscal year 2019.Expenses for the additional oral programs were $1.1 million in the year ended April 30, 2018 compared to $2.6 million in the prior year due toKVD900 entering the clinical stage of development in the year ended April 30, 2018. We anticipate that expenses will continue to increase as we continue topursue additional preclinical oral drug candidates for our HAE portfolio as well as DME in fiscal year 2019.Expenses for early stage research activities were $9.9 million in the year ended April 30, 2018 compared to $6.8 million in the prior year due toincreased headcount and additional projects compared to the same period in the prior year. We anticipate that expenses will continue to increase as multipleprojects are assessed in discovery and drug candidates are advanced into early stage development.General and Administrative Expenses. General and administrative expenses were $8.9 million in the year ended April 30, 2018 compared to $11.2million in the prior year. The decrease of $2.3 million was substantially due to a $3.8 million decrease in professional fees attributable to the Carbylantransaction, partially offset by increases in payroll and related expenses of $0.4 million, $0.5 million of stock-based compensation and $0.6 million of otheradministrative expenses. We expect to continue to incur increasing expenses related to our operations as a public company.Other Income. Other income was $2.9 million for the year ended April 30, 2018 compared to $3.7 million for the prior year. The decrease of $0.8million was primarily due to a $2.8 million decrease in foreign currency exchange rate gains from cash and accounts payable denominated in foreigncurrency which was offset by a $2.0 million increase in income from research and development tax credits due to an increase in tax credit eligible spendingduring the year ended April 30, 2018. 54 Year Ended April 30, 2017 Compared to Year Ended April 30, 2016The following table sets forth the key components of our results of operations for the years ended April 30, 2017 and 2016: Years Ended April 30, Increase 2017 2016 (Decrease) (in thousands) Income Revenue $1,504 $2,133 $(629)Operating Expenses Research and development expenses 12,666 14,661 (1,995)General and administrative expenses 11,177 2,653 8,524 Other income Interest, exchange rate gain and other income 3,736 3,745 (9)Revenue. Revenue was $1.5 million in the year ended April 30, 2017 compared to $2.1 million in the prior year. In the year ended April 30, 2017,$1.2 million was received from the principal TSB grant and the balance from other grant sources. The decrease was due to the completion of some grantprograms during the year as well as a slight decrease in amounts earned on the TSB grant during the year.Research and Development Expenses. Research and development expenses were $12.7 million in the year ended April 30, 2017 compared to$14.7 million in the prior year, primarily due to a decrease in spending on the Intravitreal and Oral programs, which was somewhat offset by an increase inspending on our additional earlier stage oral programs and expenses related to early stage research activities. The reduction in expense also reflects a declinein the exchange rate of the GBP, which is the currency in which most of our research and development expense is currently incurred. Approximately $2.0million of the overall decline in research and development expense was due to the decline in exchange rates.Research and development expenses by major programs or categories were as follows: Years Ended April 30, Increase 2017 2016 (Decrease) (in thousands) Intravitreal $571 $3,583 $(3,012) -84% Oral 2,785 $4,264 (1,479) -35% Additional oral programs 2,552 2,262 290 13% Early stage research activities 6,758 4,552 2,206 48% Total $12,666 $14,661 $(1,995) -14%Expenses for the intravitreal program declined in the year ended April 30, 2017 compared to the prior year due to completion of toxicology studiesthat were required to support further clinical development. Expenses for the oral program decreased in the year ended April 30, 2017 compared to the prioryear as a result of the completion of toxicology studies in the prior year. The additional oral programs expenses in the year ended April 30, 2017 increased to $2.6 million from $2.3 million in the prior year due to expensesincurred in connection with the progression of multiple candidates through discovery characterization, initial scale-up manufacture and entry into earlytoxicology assessment.Early stage research expenses for the year ended April 30, 2017 increased to $6.8 million compared to $4.6 million in the prior year due to anincrease in headcount and expansion of early stage discovery activities.55 General and Administrative Expenses. General and administrative expenses were $11.2 million for the year ended April 30, 2017 which was anincrease of $8.5 million compared to $2.7 million in the prior year. The increase in general and administrative expenses for the year ended April 30, 2017 wassubstantially due to $5.6 million of professional fees and regulatory costs the majority of which were associated with the share purchase transactioncompleted in November 2016 as well as $0.8 million of severance costs and $2.1 million of payroll related, facilities and other administrative expenses as weexpanded the management team and other key positions, and incurred costs associated with operations as a public company.Other Income. Other income was $3.7 million for the year ended April 30, 2017 compared to $3.7 million for the prior year. A $0.3 million decreasein foreign currency exchange rate gains from accounts denominated in foreign currency was offset by a $0.3 million increase in income from research anddevelopment tax credits. Liquidity and Capital ResourcesWe have incurred losses since inception and cash outflows from operating activities for the years ended April 30, 2018 and 2017. As of April 30,2018, we have received cumulative equity funding totaling $67.7 million, $37.0 million from the Option Agreement and grant income of $8.9 million. Wehave an accumulated deficit of $71.7 million. We anticipate that we will continue to incur net losses for the foreseeable future as we continue the researchand development efforts on our product candidates, hire additional staff, including clinical, scientific, operational, financial and management personnel, andincur additional costs associated with being a public company.We plan to continue to fund our operations with cash and cash equivalents on hand at April 30, 2018 along with future issuances of debt and/orequity securities and potential collaborations or strategic partnerships with other entities. Capital raises from issuances of convertible debt and equitysecurities could result in additional dilution to stockholders. Incurrence of debt could result in debt service obligations and operating and financingcovenants that may restrict operations. We can provide no assurance that financing will be available in the amounts anticipated to be required or onacceptable terms, if at all. If we are not able to secure adequate additional working capital when it becomes needed, we may be required to make reductions inspending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned research programs. Any of these actionscould materially harm our business and prospects.Cash FlowsThe following table shows a summary of the net cash flow activity for the years ended April 30, 2018 and 2017: Years Ended April 30, 2018 2017 (in thousands) Cash flows provided by (used in) operating activities $10,558 $(23,722)Cash flows provided by (used in) investing activities (1,427) 34,065 Cash flows provided by financing activities 8,986 2 Effect of exchange rate changes on cash 1,988 (1,159)Net increase in cash and cash equivalents $20,105 $9,186Net cash provided by (used in) operating activitiesNet cash provided by operating activities of $10.6 million for the year ended April 30, 2018 consisted primarily of a net loss of $15.8 million, $0.6 million offavorable non-cash adjustments, and increases of $29.2 million in deferred revenue and $1.1 million of accrued expenses offset by an increase in the researchand development tax credit receivable of $4.3 million and a $0.7 million increase of prepaid expenses. Compared to the prior year, the increase in cash flowsprovided by operating activities was primarily due to the upfront payment associated with the Option Agreement. Net cash used in operating activities of$23.7 million for the year ended April 30, 2017 consisted primarily of a net loss of $18.6 million, adverse working capital movements of $4.2 million and theimpact of foreign currency re-measurement gains of $1.4 million. Included in the net cash used for operating activities was $5.6 million of expenses related tothe share purchase transaction.56 Net cash provided by (used in) investing activitiesNet cash used in investing activities for the year ended April 30, 2018 primarily consisted of the acquisition of laboratory equipment and capitalexpenditures related to the offices in Cambridge, Massachusetts and Porton Down, United Kingdom. We expect to incur additional capital expenditures infiscal year 2019 related primarily to the build out and occupancy of our new administrative and research facility in Porton Down, United Kingdom. Net cashprovided by investing activities for the year ended April 30, 2017 consisted of the net cash acquired in the Carbylan transaction of $34.1 million.Net cash provided by financing activitiesNet cash provided by financing activities for the year ended April 30, 2018 primarily consisted of proceeds from the sale of common stock to Merckin October 2017. Operating Capital RequirementsTo date, we have not generated any revenues from the sale of products and we do not have any products that have been approved forcommercialization. We do not expect to generate significant product revenue unless and until we obtain regulatory approval for, and commercialize, one ofour current or future product candidates. We anticipate that we will continue to incur losses for the foreseeable future, and we expect the losses to increase aswe continue the development of, and seek regulatory approvals for, product candidates, and begin to commercialize any approved products. We are subjectto all of the risks inherent in the development of new therapeutic products, and we may encounter unforeseen expenses, difficulties, complications, delaysand other unknown factors that may adversely affect our business. We expect to incur additional costs associated with operating as a public company. Wecurrently anticipate that, based upon our operating plans and existing capital resources, we have sufficient funding to operate for at least the next 12 months.Until such time, if ever, as we can generate substantial revenues, we expect to finance our cash needs through a combination of equity or debtfinancings, collaborations, strategic partnerships or licensing arrangements. To the extent that additional capital is raised through the sale of stock orconvertible debt securities, the ownership interest of existing stockholders will be diluted, and the terms of these newly issued securities may includeliquidation or other preferences that adversely affect the rights of common stockholders. Debt financing, if available, may involve agreements that includeincreased fixed payment obligations and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, makingcapital expenditures, declaring dividends, selling or licensing intellectual property rights and other operating restrictions that could adversely impact ourability to conduct business. Additional fundraising through collaborations, strategic partnerships or licensing arrangements with third parties may require usto relinquish valuable rights to product candidates, including our other technologies, future revenue streams or research programs, or grant licenses on termsthat may not be favorable. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate productdevelopment or future commercialization efforts or grant rights to develop and commercialize its other product candidates even if we would otherwise preferto develop and commercialize such product candidates internally.Contractual Obligations and CommitmentsWe enter into contracts in the normal course of business with contract research organizations and clinical trial sites for the conduct of clinical trials,preclinical and clinical studies, professional consultants and other vendors for clinical supply manufacturing or other services. These contracts generallyprovide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments in Note 8to the consolidated financial statements. Contractual obligations related to the expected future costs to be incurred to complete the ongoing toxicologystudies and clinical trials, which have cancellation provisions, total $8.9 million at April 30, 2018. There are no long-term debt payment obligations as ofApril 30, 2018.57 The table below summarizes our non-cancelable lease commitments: Payments Due by Period (In thousands) Contractual ObligationsTotal Less Than 1Year 1-3 Years 3-5 Years More Than 5Years Lease obligations$2,360 $560 $719 $535 $546As a result of the terms of grant income received in prior years, upon successful regulatory approval and following the first commercial sale of certainproducts, we will be required to pay royalty fees of up to $1 million within 90 days of the first commercial sale of the product subject to certain caps andfollow on payments depending upon commercial success and type of product. Given the stage of development of the current pipeline of products it is notpossible to predict with certainty the amount or timing of any such liability.Off-Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.Recent Accounting PronouncementsFor information regarding recent accounting pronouncements, please refer to Note 2, Summary of Significant Accounting Policies within ourconsolidated financial statements.Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Interest Rate RiskWe have exposure to market risk in interest income sensitivity, which is affected by changes in the general level of interest rates. However, because ofthe short-term nature of the bank deposit arrangements and the very low interest rates prevailing in the United Kingdom and the United States, a suddenchange in market interest rates would not be expected to have a material impact on our financial condition and/or results of operations. We do not believethat our cash or cash equivalents have significant risk of default or illiquidity.Foreign Exchange Rate RiskWe maintain cash balances primarily in both USD and GBP to fund ongoing operations and manage foreign exchange risk. Cash and cashequivalents as of April 30, 2018 was $51.1 million and consisted of readily available checking and bank deposit accounts held primarily in both USD andGBP. As of April 30, 2018, 60% of cash and cash equivalents were held in USD and 40% in GBP. We currently incur significant expense primarily in GBPand convert USD as needed to fund those expenses. We do not currently engage in exchange rate hedging or other similar activities to address our exchangerate risk. A 10% change in the exchange rate would result in a net gain or loss of approximately $1.7 million.Effects of InflationWe do not believe that inflation and changing prices had a significant impact on the results of operations for any periods presented herein.Item 8. Financial Statements and Supplementary Data.The financial statements and related financial statement schedules required to be filed are listed in Item 15 and incorporated herein by reference.58 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Evaluation of Disclosure Controls and ProceduresAs required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under the supervisionand with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of ourdisclosure controls and procedures as of April 30, 2018. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rulesand forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management,including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Managementrecognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectivesand management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation ofour disclosure controls and procedures as of April 30, 2018 our Chief Executive Officer and Chief Financial Officer have concluded that, as of April 30, 2018,our disclosure controls and procedures were effective at the reasonable assurance level.Management’s Annual Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, ourprincipal executive and principal financial officers and effected by our board of directors, management and other personnel to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internalcontrol over financial reporting includes those policies and procedures that: •pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and •provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that couldhave a material effect on our financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systemsdetermined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.Our management, with the participation of our principal executive officer and principal financial officer, assessed the effectiveness of our internalcontrol over financial reporting as of April 30, 2018. In making this assessment, management used the criteria set forth by the Committee of SponsoringOrganizations of the Treadway Commission (COSO) in its 2013 Internal Control – Integrated Framework. Based on our assessment, our management hasconcluded that, as of April 30, 2018, our internal control over financial reporting is effective based on those criteria.59 This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control overfinancial reporting. For as long as we remain an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, asmodified by the Jumpstart Our Business Startups Act of 2012, we intend to take advantage of the exemption permitting us not to comply with therequirement that our independent registered public accounting firm provide an attestation on the effectiveness of our internal control over financialreporting.Changes in Internal Controls over Financial ReportingThere were no changes in our internal control over financial reporting that occurred during the quarter ended April 30, 2018 that have materiallyaffected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information.None.60 PART IIIItem 10. Directors, Executive Officers and Corporate Governance.The following table sets forth certain information concerning our directors and executive officers as of April 30, 2018. DirectorName Age Position/Office Held with the Company SinceT. Andrew Crockett 43 Chief Executive Officer, Director 2016Richard Aldrich (3) 64 Director 2016Albert Cha, M.D., Ph.D. (1)(2) 46 Director 2007Arnold L. Oronsky, Ph.D. (1)(3) 78 Director 2016Joshua Resnick, M.D. (2) 43 Director 2016Edward W. Unkart (1) 68 Director 2014Benjamin L. Palleiko 52 Chief Financial Officer Edward P. Feener, Ph.D. 57 Chief Scientific Officer Andreas Maetzel, M.D., M.Sc., Ph.D. 54 Senior VP of Medical Christopher M. Yea, Ph.D. 55 Chief Development Officer ___________________________ (1)Member of the audit committee. (2)Member of the compensation committee. (3)Member of the nominating and governance committee. The following includes certain information regarding our directors individual experience, qualifications, attributes and skills that led the Board toconclude that they should serve as directors.T. Andrew Crockett, M.B.A., has served as a member of our Board and as our Chief Executive Officer since November 2016 and as a director andCEO of our wholly owned subsidiary, KalVista Pharmaceuticals Limited, since inception in 2011. From 2010 until November 2015, Mr. Crockett was theChief Executive Officer and member of the board of directors of Vantia Ltd., where he served as Vice President of Business Development prior to hispromotion. He continues to sit on the board of directors. Mr. Crockett has also held various senior management positions including Vice President ofBusiness Development and Director of Clinical and Regulatory Affairs in biotech and specialty pharmaceutical companies in the United States and UnitedKingdom. Mr. Crockett received a B.A. from the University of Utah and M.B.A. from The Wharton School, University of Pennsylvania, with a major infinance. We believe Mr. Crockett is qualified to serve on our Board because of his founding role with the Company and his broad experience in the biotechindustry.Richard Aldrich has served as Chairman of our Board since November 2016. Mr. Aldrich is a co-founder and Partner of Longwood Fund. Mr. Aldrichserves as Chairman of the Board of Concert Pharmaceuticals and lead director of Ovascience. Mr. Aldrich also serves as a Director of Longwood portfoliocompanies Renovia Inc., Axial Biotherapeutics, Sitryx Pharmaceuticals and Colorescience Inc., and is a Board observer at Bicycle Therapeutics andPulmocide Ltd. Prior to co-founding Longwood, he was General Partner of RA Capital, a biotechnology investment fund he co-founded in 2001. Mr. Aldrichwas also a founding employee of Vertex Pharmaceuticals where he held the position of Senior Vice President and Chief Business Officer and managed allcommercial and operating functions from 1989 to 2001. Prior to joining Vertex, Mr. Aldrich held several management positions at Biogen, Inc. Mr. Aldrichalso served on the board of directors of the Massachusetts Eye & Ear Infirmary from 2001 to 2015. He received his B.S. in Business from Boston College, andan M.B.A. from the Amos Tuck School at Dartmouth College. We believe Mr. Aldrich is qualified to serve on our Board because of his lengthy experience inthe biotech industry, both as a senior executive and as an investor.61 Albert Cha, M.D., Ph.D., has served as a member of KalVista’s board of directors since the consummation of the Carbylan Therapeutics, Inc.transaction in 2016. Dr. Cha served as a member of the Carbylan board of directors starting in November 2007. In September 2000, Dr. Cha joined VivoCapital, a healthcare investment firm, where he has served in various positions, most recently as a Managing Partner. Dr. Cha currently serves as a member ofthe boards of directors of Biohaven Pharmaceutical Holding Company Ltd. (NYSE: BHVN), Ascendis Pharma A/S (NASDAQ: ASND) and several privately-held biotechnology and medical device companies. During the past five years, he also served as a member of the boards of directors of Aclaris Therapeutics,Inc. (NASDAQ: ACRS), Sierra Oncology, Inc. (formerly ProNAi Therapeutics, Inc.) (NASDAQ: SRRA) and AirXpanders, Inc. (ASX: AXP). Dr. Cha received aB.S. and an M.S. from Stanford University and an M.D. and a Ph.D. from the University of California at Los Angeles. We believe Dr. Cha is qualified to serveon our Board because of his medical background, venture capital experience and significant experience serving as a director of other life sciences companies.Arnold L. Oronsky, Ph.D., has served as a member of our Board since November 2016. Dr. Oronsky has been a full-time member of InterWest’shealthcare team since 1994, where he currently serves as a Senior Partner. In addition to being a Senior Partner at InterWest, Dr. Oronsky also serves as aSenior Lecturer in the Department of Medicine at Johns Hopkins Medical School. He is a member of the board of directors of Dynavax Technologies,TESARO and a number of private pharmaceutical companies. Dr. Oronsky was formerly Vice President for Discovery Research for the Lederle Laboratoriesdivision of American Cyanamid Company where he directed all of the research for new drugs and supervised approximately three hundred employees. Dr.Oronsky holds a Ph.D. in Immunology from Columbia University and has published over 125 scientific articles. We believe Dr. Oronsky is qualified to serveon our Board because of his lengthy experience in the biotech industry as an investor and public company Board member.Joshua Resnick, M.D., M.B.A., has served as a member of our Board since November 2016. Dr. Resnick has been a Partner at SV Health Investors(“SV”) since January 2016. Before joining SV in January 2016, Dr. Resnick was President and Managing Partner at MRL Ventures Fund (“MRL Ventures”),the early-stage therapeutics-focused corporate venture fund that he built and managed within Merck & Co from December 2014 to January 2016. Prior toMRL Ventures, Dr. Resnick was a Venture Partner with Atlas Venture (“Atlas”), focusing on company formation, Seed and Series A investing. During histenure at Atlas, Dr. Resnick was also the Founder and Chief Executive Officer of two start-ups in the immuno-oncology and neuro spaces. Prior to Atlas, Dr.Resnick was a Partner at Prism Venture Partners, where he focused on early-stage biopharmaceutical, medical device, tools and diagnostics investments. Dr.Resnick is also an Attending Physician at Massachusetts General Hospital, as well as Brigham and Women’s Hospital since 2006, and an Instructor inMedicine at Harvard Medical School. Dr. Resnick graduated Magna Cum Laude with a B.A. from Williams College and received his M.D. and M.B.A. fromthe University of Pennsylvania School of Medicine and The Wharton School of Business. We believe Dr. Resnick is qualified to serve on our Board becauseof his industry experience as a biotech public and private company investor.Edward W. Unkart has served as a member of our Board since December 2014. From August 2006 to August 2009, Mr. Unkart served as a member ofthe board of directors of XTENT, a publicly traded manufacturer of drug-eluting stent systems, where he was the chair of the company’s audit committee anda member of the nominating and governance committee. From October 2004 to June 2009, Mr. Unkart served as a member of the board of directors of VNUSMedical Technologies, a publicly traded medical device company, where he was the Chair of the company’s audit committee and a member of thecompensation committee. From January 2005 to December 2008, Mr. Unkart served as Vice President of Finance and Administration and Chief FinancialOfficer of SurgRx, a manufacturer of medical devices. Mr. Unkart also currently serves on the board of directors of a privately held medical device company.Mr. Unkart is a Certified Public Accountant and holds a B.S. and an M.B.A. from Stanford University. We believe Mr. Unkart is qualified to serve on ourBoard because of his finance and accounting expertise and education and his experience gained through his board and officer positions at other life sciencescompanies.62 Benjamin L. Palleiko joined in August 2016 as Chief Financial Officer of KalVista Limited and, following the reverse merger transaction, wasappointed Chief Financial Officer of KalVista. Prior to joining us, Mr. Palleiko was a Managing Director of H.C. Wainwright & Co. LLC since January 2015.Mr. Palleiko also co-founded a private oncology drug development company, Cielo Therapeutics, Inc., in July 2012. Mr. Palleiko served as Chief FinancialOfficer of Nostrum Pharmaceuticals LLC from January 2012 to December 2013, and previously as Senior Vice President and Chief Financial Officer of OrePharmaceutical Holdings Inc. and Penwest Pharmaceuticals Co. Earlier in his career Mr. Palleiko was an investment banker with the firms Robertson Stephensand SunTrust Robinson Humphrey. Mr. Palleiko holds a B.A. in Quantitative Economics from Tufts University and an M.B.A. in Finance and M.A. inInternational Relations from the University of Chicago. He served as a Naval Aviator in the U.S. Navy.Edward P. Feener, Ph.D., is a scientific co-founder of KalVista and joined as our Chief Scientific Officer in November 2016. Previously,Dr. Feener was an Associate Professor of Medicine at Harvard Medical School and Senior Investigator in the Section on Vascular Cell Biology at JoslinDiabetes Center from July 1989 to October 2016. He has more than 27 years of research experience in vascular biology and diabetic complications. Hislaboratory identified novel mechanisms of action for the plasma kallikrein system, which are implicated in diabetic macular edema, vascular injury, andangioedema.Andreas Maetzel, M.D., M.Sc., Ph.D., joined as our Senior Vice President of Medical in March 2017. Dr. Maetzel was most recently Vice President,Global Medical Affairs at BioCryst Pharmaceuticals from August 2014 to February 2017. Prior to that he was Vice President, Clinical Development &Regulatory Affairs at Cornerstone Therapeutics Inc from May 2013 to February 2014. From September 2011 to April 2013, Dr. Maetzel held a clinicaldevelopment role at BioCryst. He previously held positions in health technology assessment strategy at Amgen and in strategy consulting. He is VisitingScientist at the University Hospital Zurich and Charité Hospital Berlin, and maintains an appointment as Adjunct Professor, Institute for Health Policy,Management & Evaluation, University of Toronto. Dr. Maetzel obtained both a Ph.D. and M.Sc. in Clinical Epidemiology from the University of Torontoand a Dr. Med. at the University of Hannover, Germany.Christopher M. Yea, Ph.D., has served as the Chief Development Officer of KalVista Limited since November 2015 and became our ChiefDevelopment Officer as of November 2016 in connection with the reverse acquisition transaction. Prior to joining us, he was the Chief Operating Officer atVantia, Ltd. from its spin-out from Ferring Pharmaceuticals in 2008, until November 2015. Prior to the spin-out of Vantia, Dr. Yea led the Biology group andwas responsible for transition of candidates into development at Ferring Pharmaceuticals. Following post-doctoral work he spent several years at Roussel-UCLAF and Hoechst Marion Roussel. Dr. Yea holds a B. Sc. and Ph.D. in Biochemistry from the University of Bristol, UK.Code of Business Conduct and EthicsOur board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including ourChief Executive Officer and other executive and senior officers. The full text of our code of conduct is posted on the investor relations section of our website(http://ir.kalvista.com/). The reference to our website address in this report does not include or incorporate by reference the information on our website intothis report. We intend to disclose future amendments to certain provisions of our code of conduct, or waivers of these provisions, on our website or in publicfilings.63 Audit CommitteeOur audit committee oversees our corporate accounting and financial reporting process. Among other matters, the audit committee: •Selects a firm to serve as the independent registered public accounting firm to audit our financial statements; •Ensures the independence of the independent registered public accounting firm; •Discusses the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and thatfirm, our interim and year-end operating results; •Establishes procedures for employees to anonymously submit concerns about questionable accounting or audit matters; •Considers the adequacy of our internal controls; •Reviews material related party transactions or those that require disclosure; and •Approves or, as permitted, pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm.The current members of our audit committee are Arnold L. Oronsky, Ph.D., Albert Cha, M.D., Ph.D. and Edward W. Unkart. Mr. Unkart serves as theChairman of the committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of theSEC and Nasdaq. Our Board has determined that Mr. Unkart is an audit committee financial expert as defined under the applicable rules of the SEC and hasthe requisite financial sophistication as defined under the applicable rules and regulations of Nasdaq. Under the rules of the SEC, members of the auditcommittee must also meet heightened independence standards. Our Board has determined that each of Drs. Oronsky and Cha and Mr. Unkart are independentunder the applicable rules of Nasdaq and the SEC. Our audit committee has been established in accordance with the rules and regulations of the ExchangeAct. The audit committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. A copy of the audit committee charteris available to security holders on the Company’s website at http://ir.kalvista.com/.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our directors, executive officers and any persons who own more than 10% of our common stock, to file initialreports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC regulation to furnish us with copies of all Section16(a) forms that they file. Based solely upon our review of the copies of such forms provided to us and written representations from our named executiveofficers and directors with respect to fiscal year 2018, we believe that all Section 16(a) filing requirements during fiscal year 2018 were complied with exceptfor one late Form 4 filing by Richard Aldrich with respect to shares held by Longwood Capital, which was filed on October 19, 2017.Item 11. Executive Compensation.The following is a discussion and analysis of compensation arrangements of our named executive officers, or “NEOs,” and directors for the yearended April 30, 2018. As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion andAnalysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.We seek to ensure that the total compensation paid to our executive officers is reasonable and competitive. Compensation of our executives isstructured around the achievement of individual performance and near-term corporate targets as well as long-term business objectives.Pursuant to SEC regulations, our NEOs are our Chief Executive Officer, and the two other highest paid executives. Our NEOs for the fiscal year endedApril 30, 2018 were as follows •T. Andrew Crockett, Chief Executive Officer; •Benjamin L. Palleiko, Chief Financial Officer; •Christopher M. Yea, Chief Development Officer64 Each year, the compensation committee of our board of directors review and determine the compensation of our NEOs.Director Compensation PolicyOur Board approves the form and amount of non-employee director compensation. Our Compensation Committee makes recommendations on theform and amount of non-employee director compensation. We pay our independent directors an annual retainer of $35,000. In addition, each independentdirector who serves as the Chairman of our audit committee, compensation committee or nominating and corporate governance committee will receive, forhis or her service in such capacity, an additional annual retainer of $15,000, $10,000 or $7,500, respectively, and each other independent director who is amember of the audit committee, compensation committee or nominating and corporate governance committee will receive an annual retainer of $7,500,$5,000 or $3,750, respectively. We reimburse each non-employee member of our board of directors for reasonable out-of-pocket expenses incurred inconnection with attending our board and committee meetings.2018 Director Compensation TableThe following table sets forth information for the year ended April 30, 2018 regarding the compensation awarded to, earned by or paid to our non-employee directors.Name Fees Earned or Paid inCash ($) Option Awards (1) ($) All OtherCompensation ($) Total ($) Richard Aldrich $63,750 $27,857 — $91,607 Albert Cha, M.D., Ph.D. $45,000 $27,857 — $72,857 Arnold L. Oronsky, Ph.D. $46,250 $27,857 — $74,107 Joshua Resnick, M.D. $40,000 $27,857 — $67,857 Rajeev Shah* $45,632 $27,857 — $73,489 Edward W. Unkart $50,000 $27,857 — $77,857___________________________ *Mr. Shah resigned as a member of the board of directors on April 16, 2018 (1)Amounts shown were computed in accordance with FASB ASC Topic 718 and exclude the value of estimated forfeitures. The assumptions usedin the valuation of these awards are set forth in Note 7 to our consolidated financial statements. As of April 30, 2018, each of our non-employeedirectors held the following outstanding options awards: Name Shares Subject to Outstanding Option Awards Richard Aldrich 18,000 Albert Cha, M.D., Ph.D. 18,000 Arnold L. Oronsky, Ph.D. 18,000 Joshua Resnick, M.D. 18,000 Rajeev Shah 8,333 Edward W. Unkart 18,00065 Summary Compensation TableThe following table presents summary information regarding the total compensation for services rendered in all capacities that was awarded to andearned by our NEOs during the years ended April 30, 2018 and 2017. Fiscal Option All Other Year Salary Bonus($)(1) Awards($)(2) Compensation(3) Total ($) T. Andrew Crockett 2018 $450,000 $675,000 $901,976 $15,300 $2,042,276 Chief Executive Officer 2017 $390,076 $213,750 $— $1,500 $605,326 Benjamin L. Palleiko 2018 $340,000 $307,000 $163,031 $10,800 $820,831 Chief Financial Officer 2017 $239,492 $95,000 $589,390 $— $923,882 Christopher M. Yea 2018 $334,567 $306,266 $163,031 $20,074 $823,938 Chief Development Officer 2017 $250,378 $107,605 $— $15,232 $373,215________________________ (1)The amount reported in the Bonus Column represents the annual cash discretionary bonuses earned by our NEOs pursuant to the achievement of certain Company andindividual performance objectives. For fiscal year 2018, a portion of these amounts were paid to the NEOs in October 2017 and a portion was paid in June 2018. (2)The amounts reported in the Option Awards column represent the grant date fair value of the stock options granted to our NEOs during fiscal years 2018 and 2017 ascomputed in accordance with ASC 718. The assumptions used in the valuation of these awards are set forth in Note 7 to our consolidated financial statements. Theamounts reported in this column exclude the impact of estimated forfeitures related to service-based vesting conditions. Note that the amounts reported in this columnreflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by the NEOs from the options. (3)“Other Compensation” consists of Company contributions to the 401(k) Plan or other retirement plan. Agreements with our Named Executive Officers We have entered into employment agreements with our NEOs that provide for at-will employment (except outside of the U.S. if such concept is notgenerally applicable) and include each NEO’s base salary, a discretionary annual incentive bonus opportunity and standard employee benefit planparticipation. These agreements also provide for severance benefits upon certain terminations of employment or a change in control of our company. See “—Potential Payments Upon Termination or Change of Control” below for additional details about these agreements. Retirement Benefits We do not maintain any qualified or non-qualified defined benefit plans or supplemental executive retirement plans that cover our NEOs. Our 401(k)plan permits eligible employees to defer their annual eligible compensation subject to certain limitations imposed by the Internal Revenue Service. Wematch up to 4% of employee contributions to our 401(k) plan. Potential Payments Upon Termination or Change in Control Each of our NEOs is party to an individual agreement that provides for certain severance benefits as described below. Mr. Crockett and Mr. Palleiko—Termination of Employment Apart from a Change in Control and in Connection with a Change in Control. Pursuantto the terms of Mr. Crockett’s and Mr. Palleiko’s employment agreements, if the executive’s employment is terminated either by us without “cause” or by theexecutive for “good reason” (as such terms are defined in the executive’s employment agreement), the executive will be entitled to (1) a lump sum paymentequal to 15 months of his respective base salary for Mr. Crockett and nine months of his respective base salary for Mr. Palleiko and (2) reimbursement forcontinuation coverage under COBRA for 15 months for Mr. Crockett and nine months for Mr. Palleiko. If within two years immediately following theconsummation of a “change in control” (as such term is defined in the executive’s employment agreement), Mr. Crockett’s or Mr. Palleiko’s employment isterminated either by us without cause or by the executive for good reason, the executive will be entitled to (1) a lump sum cash payment equal to 21 monthsof his respective base salary for Mr. Crockett and 15 months of his respective base salary for Mr. Palleiko, (2) lump sum payment equal to their full targetbonus for the fiscal year in which such termination of employment occurs for Mr. Crockett and Mr. Palleiko, (3) reimbursement for continuation coverageunder COBRA for 21 months for Mr. Crockett (with months66 19-21 consisting of a taxable lump sum cash bonus) and 15 months for Mr. Palleiko and (4) full vesting and exercisability (to the extent applicable) of alloutstanding unvested equity-based awards for Mr. Crockett and Mr. Palleiko.Dr. Yea–Termination of Employment Apart from a Change in Control and in Connection with a Change in Control. Pursuant to the terms of Dr.Yea’s service contract and certain modifications thereto that have been approved by our Compensation Committee, if his employment is terminated by usother than for certain “cause-type” reasons, including, but not limited to, any act that would warrant summary termination under local common law, Dr. Yeawill be entitled to (1) 12 months of his base salary and (2) 12 months of continued health and life insurance benefits. Pursuant to the terms of Dr. Yea’sservice contract, if within three months immediately following the consummation of a “change in control” (as such term is defined in his service contract) orthe transfer of Dr. Yea’s employment under the Transfer of Undertakings (Protection of Employment) Regulations of 2006 (TUPE), Dr. Yea gives one monthof notice of this intention to terminate his employment, he will be entitled to the same severance payments and benefits described above. In addition,pursuant to the terms of Dr. Yea’s service contract and certain modifications thereto that have been approved by our Compensation Committee, if Dr. Yea’semployment is terminated within two years immediately following the consummation of a “change in control” (as such term is defined in his servicecontract), in a manner that would otherwise trigger the severance payments and benefits described above, he will be entitled to (1) 12 months of his basesalary; (2) a lump sum payment equal to his full target bonus for the fiscal year in which such termination of employment occurs and (3) 12 months ofcontinued health and life insurance benefits. In addition, our Compensation Committee has approved that in the event that Dr. Yea’s employment isterminated within two years immediately following the consummation of a “change in control” (as such term is defined in his service contract), in a mannerthat would otherwise trigger the severance payments and benefits described above, he will also be entitled to full vesting and exercisability (to the extentapplicable) of all of his outstanding unvested equity-based awards Mr. Crockett, Mr. Palleiko and Dr. Yea—Severance Subject to Release of Claims and Restrictive Covenants. Our obligation to provide our ChiefExecutive Officer and Chief Financial Officer with any severance payments or other benefits under his employment agreement is conditioned on theexecutive signing and not revoking a separation agreement and effective release of claims in our favor. Mr. Crockett and Mr. Palleiko also entered into anEmployee Confidentiality, Invention Assignment and Non-Compete Agreement, and the equivalent terms were included in Dr. Yea’s employment agreement,that prohibits each of them from competing with us and soliciting our employees or other third parties that have a relationship with us for one year, or sixmonths in the case of Dr. Yea, following their termination of employment for any reason. Outstanding Equity Awards at 2018 Fiscal Year-End The following table sets forth specified information concerning unexercised stock options for each of the name executive officers outstanding as ofApril 30, 2018. Name Grant Date (1) Number of SecuritiesUnderlyingUnexercised Options(#) Exercisable (2) Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable Option ExercisePrice ($)(3) Option ExpirationDateT. Andrew Crockett 5/25/17 42,854 144,146 7.07 5/24/27Benjamin L. Palleiko 11/22/16 20,563 (4) 28,791 8.39 11/21/26 12/29/16 25,285 (5) 35,399 6.74 12/28/26 5/25/17 7,745 26,055 7.07 5/24/27Christopher M. Yea 3/31/16 82,740 (6) 34,070 0.0043 3/30/26 5/25/17 7,745 26,055 7.0700 5/24/27______________________ (1)The awards granted on March 31, 2016 were granted pursuant to our EMI Plan; the awards granted on November 22, 2016 and December 29,2016 were granted pursuant to our 2015 Incentive Plan and the awards granted on May 25, 2017 were granted pursuant to our 2017 EquityIncentive Plan. (2)Unless otherwise noted in these footnotes, all stock options vest monthly over a four year period following the grant date, subject to continuedservice to us through each vesting date.67 (3)Represents the fair market value of a share of our common stock, as determined by our board of directors, on the stock option’s grant date. Pleasesee Note 2 to our consolidated financial statements for a discussion of how we have valued our common stock. (4)This option vests 25% on November 22, 2017 and 1/48 of the total shares monthly thereafter, subject to continued service to us through eachvesting date. (5)This option vests 25% on August 26, 2017 and 1/48 of the total shares monthly thereafter, subject to continued service to us through eachvesting date. (6)This option vests 25% on June 29, 2016 and 1/48 of the total shares monthly thereafter, subject to continued service to us through each vestingdate. Compensation Committee Interlocks and Insider Participation During the fiscal year ended April 30, 2018, our compensation committee consisted of Dr. Cha, Dr. Resnick and, until his resignation on April 16,2018, Rajeev Shah. None of the members of our compensation committee has at any time been one of our officers or employees. None of our executiveofficers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one ormore executive officers on our Board or compensation committee.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The following table presents information as to the beneficial ownership of our common stock as of July 31, 2018 for: •each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; •each NEO as set forth in the summary compensation table above; •each of our directors; and •all executive officers and directors as a group.Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect tosecurities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power withrespect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that arecurrently exercisable or exercisable within 60 days of July 31, 2018 are deemed to be outstanding and to be beneficially owned by the person holding theoptions for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentageownership of any other person.68 Percentage ownership of our common stock in the table is based on 10,799,895 shares of our common stock issued and outstanding on June 30,2018. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o KalVista Pharmaceuticals, Inc., 55 CambridgeParkway, Suite 901E, Cambridge, Massachusetts 02142. Shares of Common Stock Beneficially Owned (1) Name of Beneficial Owner Common Stock SecuritiesExercisable Within60 Days Number of SharesBeneficially Owned Percent 5% Stockholders: Entities affiliated with SV Life Sciences (1) 2,579,490 — 2,579,490 23.9%Entities affiliated with RA Capital (2) 1,441,070 — 1,441,070 13.3%Merck & Co., Inc. (3) 1,070,589 — 1,070,589 9.9%Longwood Fund II, L.P. (4) 934,484 — 934,484 8.7%Eventide Asset Management, LLC (5) 709,000 — 709,000 6.6% Named Executive Officers and Directors: T. Andrew Crockett (6) 281,420 58,437 339,857 3.1%Benjamin L. Palleiko (7) — 65,580 65,580 * Christopher M. Yea, Ph.D. (8) 82,969 103,036 186,005 1.7%Richard Aldrich (9) 934,484 12,500 946,984 8.8%Albert Cha, M.D., Ph.D.(10) 300,325 12,500 312,825 2.9%Arnold Oronsky, PhD. (11) 329,942 12,500 342,442 3.2%Joshua Resnick, M.D. (12) 2,579,490 12,500 2,591,990 24.0%Edward Unkart (13) — 12,500 12,500 * All 10 directors and executive officers as a group (14) 4,606,664 331,909 4,938,573 44.4%______________________*Represents beneficial ownership of less than 1% of our outstanding shares of common stock. (1)SV Life Sciences. Share ownership information is based upon a Schedule 13D/A1 filed by (i) SV Life Sciences Fund IV, L.P. a Delaware limitedpartnership (“SVLS IV LP”) and SV Life Sciences Fund IV Strategic Partners, L.P. a Delaware limited partnership (“Strategic Partners”), on March 2,2017. Consists of (i) 2,508,279 shares of our common stock owned directly by SVLS IV LP; and (ii) 71,211 shares of our common stock owneddirectly by Strategic Partners. SVLS IV LP and Strategic Partners (each a “SVLS Fund”, or collectively the “SVLS Funds”) may be deemed tobeneficially own the shares held by each other SVLS Fund because of certain contractual relationships among the SVLS Funds and their affiliates. TheSVLS Funds disclaim beneficial ownership of shares held by any other SVLS Fund except to the extent of any pecuniary interest therein. SVLS IV GP,the general partner of SVLS IV LP and Strategic Partners, may be deemed to share voting and dispositive power over the shares held by SVLS IV LPand Strategic Partners. SVLS IV GP disclaims beneficial ownership of shares held by SVLS IV LP and Strategic Partners except to the extent of anypecuniary interest therein. SVLSF IV, LLC, the general partner of SVLS IV GP, may be deemed to share voting and dispositive power over the sharesheld by SVLS IV LP and Strategic Partners. SVLSF IV, LLC disclaims beneficial ownership of shares held by SVLS IV LP and Strategic Partners exceptto the extent of any pecuniary interest therein. Dr. Resnick, one of our directors, is a partner of SV Life Sciences. The address for SV Life SciencesFund is One Boston Place, Suite 3900, Boston, MA 02108. (2)RA Capital. Share ownership information is based upon a Form 4 filed by RA Capital Management, LLC (the "Adviser") on October 16,2017. Consists of (i) 1,171,353 shares held by RA Capital Healthcare Fund, L.P. (the "Fund"); and (ii) 269,717 shares held in an account owned byBlackwell Partners LLC-Series A (the "Blackwell Account"). The Adviser is the general partner of the Fund and the investment adviser of theBlackwell Account. Peter Kolchinsky is the sole manager of the Adviser, and Mr. Shah is a managing director of the Adviser. Mr. Shah has nopecuniary interest in the reported securities held in the Blackwell Account and therefore disclaims beneficial ownership of those securities. Mr. Shahserved as one of our directors until April 16, 2018 and is the Managing Director and Portfolio Manager of the Adviser. Mr. Shah disclaims beneficialownership of the reported securities held by the Fund except to the extent of his pecuniary interest therein. The address for RA Capital HealthcareFund, L.P. is 20 Park Plaza, Ste. 1200, Boston, MA 02116.69 (3)Merck & Co., Inc. Share ownership information is based upon a Schedule 13G filed by Merck & Co., Inc. (“Merck”) on October 16, 2017. Thereported securities are owned directly by Merck Sharp & Dohme Corp. (“MSD”), which is a wholly owned subsidiary of Merck. Merck is an indirectbeneficial owner of the reported securities. The address for Merck is 2000 Galloping Hill Road, Kenilworth, NJ 07033. The address for MSD is OneMerck Drive, Whitehouse Station, NJ 08889 (4)Longwood Fund II, L.P. Share ownership information is based upon a Schedule 13D filed on behalf of each of the following persons: LongwoodFund II, L.P., Longwood Fund II GP, LLC, Christoph Westphal, M.D., Ph.D., and Richard Aldrich (collectively, the “Reporting Persons”) on October20, 2017. The securities are owned directly by Longwood Fund II, LP, a Delaware limited partnership ("Longwood II"). Longwood Fund II GP, LLC, aDelaware limited liability company ("Longwood II GP"), is the general partner of Longwood II and exercises voting and investment power withrespect to the securities owned directly by Longwood II. Longwood II's investment adviser is Longwood Fund Management, LLC ("LongwoodManagement"). Each of the Reporting Person, who is a member of the Issuer's board of directors, and Christoph Westphal, M.D., Ph.D. ("Westphal") arethe Managers (and are members) of Longwood II GP and may be deemed to share voting and investment power with respect to the securities owned byLongwood II. Mr. Aldrich, one of our directors, is a managing member of Longwood Fund Management LLC. Michelle Dipp, M.D., Ph.D., ChristophWestphal, M.D. and Mr. Aldrich are the managers of the Fund II General Partner and share voting and dispositive power with respect to the securitiesheld by Longwood Fund II, L.P., each of whom disclaims beneficial ownership of the shares held by Longwood Fund II, L.P. except to the extent ofher or his pecuniary interest therein. The address for Longwood Fund II L.P. is Prudential Tower, 800 Boylston Street, Suite 1555, Boston, MA 02199. (5)Eventide Assets Management, LLC. Share ownership information is based upon a Schedule 13G filed by Eventide Asset Management, LLC onFebruary 12, 2018. Eventide Asset Management, LLC, a Delaware limited liability company located at One International Place, Suite 3510, Boston,MA 02110 is the beneficial owner of 709,000 common shares, as of December 31, 2017, by virtue of being the investment adviser to registeredinvestment companies (mutual funds). All 709,000 common shares were held by the Eventide Healthcare & Life Sciences Fund. (6)T. Andrew Crockett. Consists of (i) 281,420 shares of our common stock held by Mr. Crockett; and (ii) 58,437 shares of our common stock issuableto Mr. Crockett upon exercise of stock options within 60 days of June 30, 2018. (7)Benjamin L. Palleiko. Consists of 65,580 shares of our common stock issuable to Mr. Palleiko upon exercise of stock options within 60 days of June30, 2018. (8)Christopher Yea. Consists of (i) 82,969 shares of our common stock held by Dr. Yea; and (ii) 103,036 shares of our common stock issuable to Dr. Yeaupon exercise of stock options within 60 days of June 30, 2018. (9)Rich Aldrich. Consists of (i) common stock referenced in footnote (4) above; and (ii) 12,500 shares of our common stock issuable to Mr. Aldrich uponexercise of stock options exercisable within 60 days of June 30, 2018. Mr. Aldrich, one of the Company’s directors, is managers of Longwood Fund II,LP, a Delaware limited partnership. Longwood Fund II GP, LLC (the “Fund II General Partner”) and share voting and dispositive power with respectto the securities held by Longwood Fund II, L.P. (10)Albert Cha. Consists of (i) 298,141 shares of our common stock held by Vivo Ventures Fund VI, L.P.; (ii) 2,184 shares of our common stock held byVivo Ventures VI Affiliates Fund, L.P.; and (iii) 12,500 shares of our common stock issuable to Dr. Cha upon exercise of stock options exercisablewithin 60 days of June 30, 2018. Vivo Ventures Fund VI, L.P., and Vivo Ventures VI Affiliates Fund, L.P. are Delaware limited partnerships, whosegeneral partner is Vivo Ventures VI, LLC, a Delaware limited liability company. Dr. Cha, one of the Company’s directors, is a managing member ofVivo Ventures Fund VI, LLC and exercises shared voting and investment power with the other managing members of Vivo Ventures VI, LLC withrespect to the securities held by Vivo Ventures VI, L.P. and Vivo Ventures VI Affiliates Fund, L.P. Each managing member of Vivo Ventures VI, LLChereby disclaims any beneficial ownership of any shares directly held by Vivo Ventures Fund VI, L.P. and Vivo Ventures VI Affiliates Fund, L.P.,except to the extent of the pecuniary interest therein. The address of Vivo Ventures Fund VI, L.P. and Vivo Ventures VI Affiliates Fund, L.P. is 505Hamilton Avenue, Suite 207, Palo Alto, California 94301.70 (11)Arnold Oronsky. Consists of (i) 329,942 shares of our common stock held by InterWest Partners IX, L.P., a California limited partnership(“InterWest”), whose general partner is InterWest Management Partners IX, LLC, a California limited liability company; and (ii) 12,500 shares of ourcommon stock issuable to Dr. Oronsky upon exercise of stock options exercisable within 60 days of June 30, 2018. Dr. Oronsky, one of theCompany’s directors, currently serves as a Managing Director of InterWest. Each managing director and venture member of InterWest ManagementPartners IX, LLC shares voting and investment power with respect to the securities held by InterWest and disclaims beneficial ownership of suchshares except to the extent of his or her pecuniary interest therein. The address for InterWest Partners IX, L.P. is 2710 Sand Hill Road, Second Floor,Menlo Park, California 94025. (12)Joshua Resnick. Consists of the common stock referenced in footnote (1) above; and (ii) 12,500 shares of our common stock issuable to Dr. Resnickupon exercise of stock options exercisable within 60 days of June 30, 2018. Dr. Resnick, one of the Company’s directors, is a partner of SV LifeSciences. (13)Edward Unkart. Consists of 12,500 shares of our common stock issuable to Mr. Unkart upon exercise of stock options within 60 days of June 30,2018. (14)All Executive Officers and Directors as a Group. Consists of (i) 4,606,664 shares of common stock held by all our directors and executive officers asa group; and (ii) 331,909 shares of our common stock issuable to all our directors and executive officers as a group upon exercise of stock optionsexercisable within 60 days of June 30, 2018.Item 13. Certain Relationships and Related Transactions, and Director Independence.Under the rules and regulations of The Nasdaq Stock Market (“Nasdaq”), a majority of the members of a listed company’s board of directors mustqualify as “independent,” as affirmatively determined by such board. The Board consults with the Company’s counsel to ensure that the Board’sdeterminations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forthin pertinent Nasdaq listing standards, as in effect from time to time.Consistent with these considerations, our Board has determined that all of our directors, other than Mr. Crockett, qualify as “independent” directorsin accordance with Nasdaq listing requirements. Mr. Crockett is not considered independent because he is an employee of KalVista. The Nasdaqindependence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees andthat neither the director nor any of his family members has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, ourBoard has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board, would interferewith the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed anddiscussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate tous and our management. There are no family relationships among any of our directors or executive officers.As required under Nasdaq rules and regulations, our independent directors meet in regularly scheduled executive sessions at which only independentdirectors are present. As described more fully below, all of the committees of our Board are comprised entirely of directors determined by the Board to meetthe independence standards applicable to those committees prescribed by Nasdaq, the SEC and the Internal Revenue Service.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require usto indemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that mayarise by reason of their service to us or at our direction, and to advance expenses incurred as a result of any proceeding against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising underapplicable securities laws.71 Policies and Procedures for Transactions with Related PersonsWe have adopted a written related person transaction approval policy that has governed the review of related person transactions since the closing ofour initial public offering. Pursuant to this policy, if we want to enter into a transaction with a related person or an affiliate of a related person, our ChiefFinancial Officer will review the proposed transaction to determine, based on applicable Nasdaq and SEC rules, if such transaction qualifies as a relatedperson transaction. If our Chief Financial Officer determines that the proposed transaction is a related person transaction, then the proposed transaction shallbe submitted to the audit committee for pre-approval at the next regular or special audit committee meeting; if our Chief Financial Officer, in consultationwith our Chief Executive Officer, determines that it is not practicable to wait until the next meeting of the audit committee, then our Chief Financial Officermay submit the proposed transaction to the Chairman of the audit committee. In the event that our Chief Executive Officer or Chief Financial Officerbecomes aware of a related person transaction that has not been previously approved or previously ratified under our related person transaction approvalpolicy, the transaction, if ongoing, will be promptly submitted to the audit committee or the Chairman of the audit committee for consideration. If thetransaction is already completed, the audit committee or the Chairman of the audit committee shall evaluate the transaction to determine if rescission of thetransaction and/or any disciplinary action is appropriate.Item 14. Principal Accounting Fees and Services.The following table summarizes the fees for services provided by Deloitte & Touche LLP for fiscal years ended April 30, 2018 and 2017. Fees Billed to KalVista Fiscal Year 2018 Fiscal Year 2017 Audit fees (1) $398,467 $474,555 Audit-related fees — — Tax fees — — All other fees (2) — 286,937 Total fees $398,467 $761,492 (1)“Audit fees” include fees for professional services rendered for the audits of our financials statements, review of our quarterly financial statements, and services normallyprovided by the independent registered accounting firm in connection with statutory and regulatory filings. (2)“All other fees” consist of the aggregate fees billed for products and services provided by Deloitte & Touche LLP and PriceWaterhouseCoopers LLP, other than thoseincluded in “Audit Fees” and “Tax Fees.”Pre-Approval Policies and ProceduresOur audit committee generally pre-approves all audit and permissible non-audit services provided by the independent registered public accountingfirm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to the particular service orcategory of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required toperiodically report to the audit committee regarding the extent of services provided by the independent registered public accounting firm in accordance withthis pre-approval, and the fees for the services performed to date. Our audit committee may also pre-approve particular services on a case-by-case basis. All ofthe services relating to the fees described in the table above were approved by our audit committee. 72 PART IVItem 15. Exhibits, Financial Statement Schedules. (a)The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K: (1)Consolidated Financial Statements. See Index to Financial Statements beginning on page F-1 of this Annual Report, which areincorporated by reference. (2)Financial Statement Schedules. All schedules have been omitted because the information required to be presented in them is notapplicable or is shown in the financial statements or related notes. (3)Exhibits. We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the accompanyingExhibit Index. (b)Exhibits. Incorporated by reference ExhibitNumber Description of Document Form FileNo. Exhibit Filing Date FiledHerewith3.1 Amended and Restated Certificate of Incorporation. S-1/A 333-201278 3.2 January 23, 2015 3.2 Certificate of Amendment of Amended and RestatedCertificate. 8-K 001-36830 3.1 November 23,2016 3.3 Certificate of Amendment of Amended and RestatedCertificate. 8-K 001-36830 3.2 November 23,2016 3.4 Amended and Restated Bylaws. 8-K 001-36830 3.2 April 16, 2015 4.1 Form of Common Stock Certificate. S-1/A 333-201278 4.2 January 23, 2015 4.2 Registration Rights Agreement, dated June 15, 2016, byand among the Registrant and the Sellers. 8-K 001-36930 10.1 November 23,2016 10.1# Form of Indemnification Agreement. S-1 333-201278 10.14 December 29, 2014 10.2# Carbylan 2015 Incentive Plan and forms of awardagreements. S-1/A 333-201278 10.3 January 23, 2015 10.3# 2017 Equity Incentive Plan. DEF 14A 001-36830 Appendix A March 2, 2017 10.4# 2017 Employee Stock Purchase Plan. DEF 14A 001-36830 Appendix B March 2, 2017 10.5# Employment Agreement between the Registrant and T.Andrew Crockett, dated March 14, 2017. 10-Q 001-36830 10.1 March 16, 2017 10.6# Employment Agreement between the Registrant andBenjamin L. Palleiko, dated March 14, 2017. 10-Q 001-36830 10.2 March 16, 2017 10.7 Forms of Equity Agreements. 8-K 001-36830 99.1 June 29, 2018 10.8 Office Lease Agreement by and between the Registrantand 55 Cambridge Parkway, LLC, dated May 30, 2017. 10-K 001-36830 10.12 July 27, 2017 10.9 Underlease by and between the Registrant and WiltshireCouncil, dated April 30, 2018. 8-K 001-36830 10.1 May 2, 2018 10.10 Option Agreement, dated October 6, 2017, by andbetween KalVista Pharmaceuticals Limited and MerckSharp & Dohme Corp. 10-Q 001-36830 10.1 December 14, 2017 73 Incorporated by reference ExhibitNumber Description of Document Form FileNo. Exhibit Filing Date FiledHerewith10.11 Stock Purchase Agreement, dated October 6, 2017, byand between the Registrant and Merck Sharp & DohmeCorp. 10-Q 001-36830 10.2 December 14, 2017 10.12 Voting Agreement, dated October 6, 2017, by andbetween the Registrant and Merck Sharp & DohmeCorp. 10-Q 001-36830 10.3 December 14, 2017 10.13# Executive Employment Agreement dated August 21,2017, by and between the Registrant and AndreasMaetzel. 10-Q 001-36830 10.4 December 14, 2017 10.14# Forms of Equity Agreements under the 2017 EquityIncentive Plan. 8-K 001-36830 99.1 June 29, 2018 10.15# Service Agreement dated November 1, 2015, by andbetween KalVista Pharmaceuticals Ltd and Dr.Christopher M. Yea. X21.1 Subsidiary of the Registrant. 10-K 001-36830 21.1 July 27, 2017 23.1 Consent of Deloitte & Touche LLP. X23.2 Consent of Deloitte LLP. X24.1 Power of Attorney. (See signature page hereto.) X31.1 Certification of Principal Executive Officer, pursuant toRule 13a-14(a)/15d-14(a), as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 2002. X31.2 Certification of Principal Financial Officer, pursuant toRule 13a-14(a)/15d-14(a), as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 2002. X32.1* Certification of Chief Executive Officer, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. X32.2* Certification of Chief Financial Officer, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. X101.INS XBRL Instance Document. X101.SCH XBRL Taxonomy Extension Schema Document. X101.CAL XBRL Taxonomy Extension Calculation LinkbaseDocument. X101.DEF XBRL Taxonomy Extension Definition LinkbaseDocument. X101.LAB XBRL Taxonomy Extension Labels LinkbaseDocument. X101.PRE XBRL Taxonomy Extension Presentation LinkbaseDocument. X #Management contract or compensatory plan or arrangement.*This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it bedeemed incorporated by reference into any filing under the Securities Act or the Exchange Act.74 **All schedules and exhibits to the Share Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omittedschedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.Item 16. Form 10-K Summary.None.75 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report tobe signed on its behalf by the undersigned, thereunto duly authorized. KalVista Pharmaceuticals, Inc. Date: July 30, 2018 By:/s/ T. Andrew Crockett T. Andrew Crockett Chief Executive Officer POWER OF ATTORNEYEach person whose individual signature appears below hereby authorizes and appoints Thomas Andrew Crockett and Benjamin L. Palleiko, and eachof them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent toact in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to fileany and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, withthe Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform eachand every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfullydo or cause to be done by virtue thereof.Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons onbehalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ T. Andrew Crockett Chief Executive Officer and Director July 30, 2018T. Andrew Crockett (Principal Executive Officer) /s/ Benjamin L Palleiko Chief Financial Officer July 30, 2018Benjamin L. Palleiko (Principal Financial and Accounting Officer) /s/ Richard Aldrich Director and Chairman July 30, 2018Richard Aldrich /s/ Albert Cha Director July 30, 2018Albert Cha, M.D., Ph.D. /s/ Arnold Oronsky Director July 30, 2018Arnold L. Oronsky, Ph.D. /s/ Joshua Resnick Director July 30, 2018Joshua Resnick, M.D. /s/ Edward W Unkart Director July 30, 2018Edward W. Unkart 76 KALVISTA PHARMACEUTICALS, INC.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting FirmsF-2Consolidated Balance SheetsF-4Consolidated Statements of Operations and Comprehensive LossF-5Consolidated Statements of Changes in Convertible Preferred Shares and Stockholders’ Equity (Deficit)F-6Consolidated Statements of Cash FlowsF-8Notes to Consolidated Financial StatementsF-9 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of KalVista Pharmaceuticals, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of KalVista Pharmaceuticals, Inc. and subsidiaries (the "Company") as of April 30, 2018 and2017, the related consolidated statements of operations and comprehensive loss, changes in convertible preferred shares and stockholders’ equity (deficit),and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financialstatements present fairly, in all material respects, the financial position of the Company as of April 30, 2018 and 2017, and the results of its operations and itscash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, norwere we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding ofinternal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control overfinancial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Boston, MassachusettsJuly 30, 2018 We have served as the Company's auditor since 2016. F-2 Report of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of KalVista Pharmaceuticals Limited We have audited the accompanying statements of operations and comprehensive loss, changes in convertible preferred shares and shareholders’ deficit, andcash flows of KalVista Pharmaceuticals Limited (the “Company”) for the year ended April 30, 2016. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controlover financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forour opinion.In our opinion, such financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year endedApril 30, 2016, in conformity with accounting principles generally accepted in the United States of America.As discussed in Note 2 to the financial statements, the statement of operations and comprehensive loss for the year ended April 30, 2016 has been restated tocorrect a misstatement./s/ Deloitte LLPReading, United KingdomAugust 22, 2016(July 27, 2017 as to the effects of the adjustment of net loss per share arising from theCarbylan transaction discussed in Note 2 and the misstatement of other comprehensiveloss discussed in Note 2) F-3 KALVISTA PHARMACEUTICALS, INC.Consolidated Balance SheetsApril 30, 2018 and 2017(in thousands except share and per share amounts) 2018 2017 Assets Current assets: Cash and cash equivalents $51,055 $30,950 Research and development tax credit receivable 6,834 2,250 Grants and other receivables — 297 Prepaid expenses and other current assets 1,491 701 Total current assets 59,380 34,198 Other assets 173 50 Property and equipment, net 1,836 97 Total assets $61,389 $34,345 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $1,433 $1,153 Accrued expenses 3,087 1,865 Deferred revenue - current portion 18,475 — Capital lease liability - current portion 221 — Total current liabilities 23,216 3,018 Long-term liabilities: Deferred revenue - net of current portion 10,862 — Capital lease liability - net of current portion 58 — Total long-term liabilities 10,920 — Commitments and contingencies (Note 8) Stockholders’ equity: Common stock, $0.001 par value, 100,000,000 authorized Shares issued and outstanding: 10,799,895 at April 30, 2018 and 9,713,042 at April 30, 2017 11 10 Additional paid-in capital 100,011 89,815 Accumulated deficit (71,660) (55,855)Accumulated other comprehensive loss (1,109) (2,643)Total stockholders’ equity 27,253 31,327 Total liabilities and stockholders’ equity $61,389 $34,345 See notes to consolidated financial statements. F-4 KALVISTA PHARMACEUTICALS, INC.Consolidated Statements of Operations and Comprehensive LossYears Ended April 30, 2018, 2017 and 2016(in thousands, except share and per share amounts) 2018 2017 2016 Revenue $8,394 $1,504 $2,133 Operating expenses: Research and development expenses 18,237 12,666 14,661 General and administrative expenses 8,862 11,177 2,653 Total operating expenses 27,099 23,843 17,314 Operating loss (18,705) (22,339) (15,181)Other income: Interest income 82 36 50 Foreign currency exchange rate (loss) gain (1,574) 1,371 1,661 Other income 4,392 2,329 2,034 Total other income 2,900 3,736 3,745 Net loss (15,805) (18,603) (11,436) Other comprehensive income (loss): Foreign currency translation adjustments 1,534 (2,568) (2,240)Comprehensive loss $(14,271) $(21,171) $(13,676)Net loss per share attributable to common stockholders, basic and diluted $(1.53) $(4.47) $(26.17)Weighted average common shares outstanding, basic and diluted 10,321,780 4,646,764 591,298 See notes to consolidated financial statements. F-5 KALVISTA PHARMACEUTICALS, INC.Consolidated Statements of Changes in Convertible Preferred Shares and Stockholders’ Equity (Deficit)Years Ended April 30, 2018, 2017, and 2016(in thousands, except share and per share amounts) Series BPreferred Stock Series APreferred Stock Total Preferred Stock Number ofShares Amount Number ofShares Amount Shares Amount Balance, May 1, 2015 — $- 15,900,000 $25,606 15,900,000 $25,606 Issuance of Series B convertible preferred stocknet of issuance costs of approximately $186 8,422,898 33,002 — — 8,422,898 33,002 Issuance of ordinary shares — — — — — Stock-based compensation expense — — — — — Net loss — — — — — Foreign currency translation — — — — — Balance, April 30, 2016 8,422,898 33,002 15,900,000 25,606 24,322,898 58,608 Issuance of ordinary shares — — — Carbylan transaction (8,422,898) (33,002) (15,900,000) (25,606) (24,322,898) (58,608)Stock-based compensation expense — — — — — — Net loss — — — — — — Foreign currency translation — — — — — — Balance, April 30, 2017 — — — — — — Issuance of common stock — — — — — — Issuance of common stock from stock optionsexercised — — — — — — Stock-based compensation expense — — — — — — Net loss — — — — — — Foreign currency translation — — — — — — Balance, April 30, 2018 — $— — $— — $— F-6 Accumulated Additional Other Total Ordinary Shares Common Stock Paid-in Accumulated Comprehensive Stockholders’ Shares Amount Shares Amount Capital Deficit Income (Loss) Equity(Deficit) Balance, May 1, 2015 1,302,367 $2 — $- $94 $(25,816) $2,165 $(23,555)Issuance of Series B convertiblepreferred stock net of issuance costs ofapproximately $186 — — — — — — — — Issuance of ordinary shares 865,000 1 — — — — — 1 Stock-based compensation expense — — — — 118 — — 118 Net loss — — — — — (11,436) — (11,436)Foreign currency translation — — — — — — (2,240) (2,240)Balance, April 30, 2016 2,167,367 3 — — 212 (37,252) (75) (37,112)Issuance of ordinary shares 396,719 2 — — — — — 2 Carbylan transaction (2,564,086) (5) 9,713,042 10 89,209 — — 89,214 Stock-based compensation expense — — — — 394 — — 394 Net loss — — — — — (18,603) — (18,603)Foreign currency translation — — — — — — (2,568) (2,568)Balance, April 30, 2017 — — 9,713,042 10 89,815 (55,855) (2,643) 31,327 Issuance of common stock — — 1,070,589 1 9,100 — — 9,101 Issuance of common stock from stockoptions exercised — — 16,264 — 36 — — 36 Stock-based compensation expense — — — — 1,060 — — 1,060 Net loss — — — — — (15,805) — (15,805)Foreign currency translation — — — — — — 1,534 1,534 Balance, April 30, 2018 — $— 10,799,895 $11 $100,011 $(71,660) $(1,109) $27,253 See notes to consolidated financial statements. F-7 KALVISTA PHARMACEUTICALS, INC.Consolidated Statements of Cash FlowsYears Ended April 30, 2018, 2017, and 2016(in thousands) 2018 2017 2016 Cash flows from operating activities: Net loss $(15,805) $(18,603) $(11,436)Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 180 40 33 Stock-based compensation expense 1,060 394 118 Foreign currency remeasurement loss (651) (1,371) (1,661)Changes in operating assets and liabilities, net of changes from business acquired: Research and development tax credit receivable (4,256) (600) (1,148)Grants and other receivables 319 29 (137)Prepaid expenses and other current assets (746) (81) (475)Other assets (123) — — Accounts payable 217 (1,599) 374 Accrued expenses 1,132 (1,931) 1,176 Deferred revenue 29,231 — — Net cash provided by (used in) operating activities 10,558 (23,722) (13,156)Cash flows from investing activities: Cash acquired in transaction — 34,139 — Acquisition of property and equipment (1,427) (74) (11)Net cash provided by (used in) investing activities (1,427) 34,065 (11)Cash flows from financing activities: Capital lease principal payments (151) — — Proceeds from issuance of common stock 9,137 2 1 Proceeds from issuance of Series B Preferred Stock, net of issuance costs — — 33,002 Net cash provided by financing activities 8,986 2 33,003 Effect of exchange rate changes on cash and cash equivalents 1,988 (1,159) (598)Net increase in cash and cash equivalents 20,105 9,186 19,238 Cash and cash equivalents, beginning year 30,950 21,764 2,526 Cash and cash equivalents, end of year $51,055 $30,950 $21,764 Supplemental disclosures of cash flow information: Conversion of preferred stock and ordinary shares to common stock $- $58,613 $- Capital leases $513 $- $- Acquisition of property and equipment in accounts payable $291 $- $- See notes to consolidated financial statements. F-8 KALVISTA PHARMACEUTICALS, INC.Notes to Consolidated Financial StatementsNote 1. Description of Business, Basis of Presentation and Going ConcernKalVista Pharmaceuticals, Inc. (“KalVista” or the “Company”) is a clinical stage pharmaceutical company focused on the discovery, developmentand commercialization of small molecule protease inhibitors for diseases with significant unmet need. The Company’s first product candidates are inhibitorsof plasma kallikrein being developed for two indications: hereditary angioedema (“HAE”) and diabetic macular edema (“DME”). The Company applies itsinsights into the chemistry of proteases and, with current programs, the biology of the plasma kallikrein system, to develop small molecule inhibitors withhigh selectivity, potency and bioavailability that it believes will make them successful treatments for disease. KalVista has created a structurally diverse portfolio of oral plasma kallikrein inhibitors and advanced multiple drug candidates into Phase 1 clinicaltrials for HAE in order to create best-in-class oral therapies. In December 2017, the Company initiated a first-in-human study of KVD900, the next candidatefrom its HAE portfolio to commence clinical testing. Based upon the results observed to date in that study, the Company has determined to advance KVD900into later stage clinical trials as a potential on-demand therapy for acute HAE attacks. In the case of DME, the Company is initially developing a plasmakallikrein inhibitor which is administered directly into the eye and anticipates ultimate development of orally delivered drugs. Also in December 2017KalVista commenced a Phase 2 clinical trial of KVD001, the Company’s most advanced DME drug candidate, that it anticipates will complete in the secondhalf of 2019.In October 2017, the Company’s wholly-owned, U.K. based subsidiary KalVista Pharmaceuticals Limited (“KalVista Limited) and Merck Sharp &Dohme Corp. (“Merck”) entered into an option agreement (the “Option Agreement”) under which the Company granted to Merck an option to acquireKVD001 through a period following completion of a Phase 2 clinical trial. The Company also granted to Merck a similar option to acquire investigationalorally delivered molecules for DME (the “Oral DME Compounds”) that the Company will continue to develop as part of its ongoing research anddevelopment activities, through a period following the completion of a Phase 2 clinical trial. Under the terms of the Option Agreement, Merck paid to theCompany a non-refundable upfront fee of $37 million in November 2017. See Note 5 for further discussion of the arrangement with Merck.The Company’s headquarters is located in Cambridge, Massachusetts, with research activities located in Porton Down, United Kingdom and Boston,Massachusetts. The Company has devoted substantially all of its efforts to research and development, including clinical trials of its product candidates. TheCompany has not completed the development of any product candidates. Pharmaceutical drug product candidates, like those being developed by theCompany, require approvals from the U.S. Food and Drug Administration (“FDA”) or foreign regulatory agencies prior to commercial sales. There can be noassurance that any product candidates will receive the necessary approvals and any failure to receive approval or delay in approval may have a materialadverse impact on the Company’s business and financial results. The Company has not yet commenced commercial operations. The Company is subject to anumber of risks and uncertainties similar to those of other life science companies developing new products, including, among others, the risks related to thenecessity to obtain adequate additional financing, to successfully develop product candidates, to obtain regulatory approval of product candidates, tocomply with government regulations, to successfully commercialize its potential products, to the protection of proprietary technology and to the dependenceon key individuals.The Company has funded its operations primarily through the issuance of preferred stock and common stock, the share purchase transaction withCarbylan Therapeutics, Inc. (“Carbylan”), the Option Agreement and grant income. As of April 30, 2018, the Company had an accumulated deficit of $71.7million and cash and cash equivalents totaling $51.1 million. The Company’s working capital, primarily cash, is anticipated to fund the Company’soperations for at least 12 months beyond the date of issuance of the consolidated financial statements. Accordingly, the consolidated financial statementshave been prepared on a going concern basis.F-9 The Company will need to expend substantial resources for research and development, including costs associated with the clinical testing of itsproduct candidates and will need to obtain additional financing to fund its operations and to conduct trials for its product candidates. The Company willseek to finance future cash needs through equity offerings, future grants, corporate partnerships and product sales.The Company has never been profitable and has incurred significant operating losses in each year since inception. Cash requirements may varymaterially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive andtechnical advances, patent developments, regulatory changes or other developments. Additional financing will be required to continue operations after theCompany exhausts its current cash resources and to continue its long-term plans for clinical trials and new product development. There can be no assurancethat any such financing can be obtained by the Company, or if obtained, what the terms thereof may be, or that any amount that the Company is able to raisewill be adequate to support the Company’s working capital requirements until it achieves profitable operations. If adequate additional working capital is notsecured when needed, the Company may be required to make reductions in spending, extend payment terms with suppliers, liquidate assets where possibleand/or suspend or curtail planned research programs. Any of these actions could materially harm the Company’s business and prospects. Note 2. Summary of Significant Accounting PoliciesPrinciples of consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly ownedsubsidiaries. All intercompany balances and transactions have been eliminated in consolidation.Use of estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidatedfinancial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.Foreign currency: The functional currency of the Company’s foreign subsidiary is the Great Britain Pound Sterling. Assets and liabilities of theforeign subsidiary are translated using the exchange rate existing on each respective balance sheet date. Revenues and expenses are translated using averageexchange rates prevailing throughout the year. The translation adjustments resulting from this process are included as the only component of theaccumulated other comprehensive loss. In addition, the Company’s foreign subsidiary engages in transactions and holds balances denominated and settled incurrencies other than the functional currency, and transaction gains or losses are recorded in the consolidated statement of operations.Segment Reporting: The Chief Operating Decision Maker, the CEO, manages the Company’s operations as a single operating segment for thepurposes of assessing performance and making operating decisions.Cash and cash equivalents: Cash and cash equivalents consist of bank deposits and money market accounts. Cash equivalents are carried at costwhich approximates fair value due to their short-term nature. The Company considers all highly liquid investments with an original maturity of 90 days orless to be cash equivalents.The Company maintains its cash and cash equivalent balances with financial institutions that management believes are of high credit quality. TheCompany’s cash and cash equivalent accounts at times may exceed federally insured limits. The Company has not experienced any losses in such accounts.The Company believes it is not exposed to any significant credit risk of cash and cash equivalents.Research and development tax credit receivable: The research and development tax credit receivable consists of research and developmentexpenses that have been claimed as research and development tax credits in accordance with the relevant U.K. tax legislation. These refundable tax creditsare payable to the Company in cash and are carried on the consolidated balance sheet at the amount claimed and expected to be received from the U.K.government.F-10 Property and equipment: Property and equipment are stated at cost less accumulated depreciation. Expenditures for repairs and maintenance arecharged to expense as incurred. Upon retirement or sale, the costs of the assets disposed of and the related accumulated depreciation are eliminated from theaccounts and any resulting gain or loss is reflected in the statement of operations. Depreciation is provided using the straight-line method over the estimateduseful lives of the assets, which are as follows: Asset Classification Estimated Useful LifeMachinery and equipment 1-5 YearsComputer equipment 3-4 YearsMotor vehicles 4 YearsLeasehold improvements 5 Years or term of lease, if shorter The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of suchassets, or asset groups, may not be recoverable. Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets may notbe recoverable, the future undiscounted cash flows expected to be generated by the asset, or asset groups, from its use or eventual disposition is estimated. Ifthe sum of the expected future undiscounted cash flows is less than the carrying amount of those assets, or asset groups, an impairment loss is recognizedbased on the excess of the carrying amount over the fair value of the assets, or asset groups.Revenue recognition: The Company recognizes revenue from research and development arrangements and grant income. Revenue is realized orrealizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services havebeen rendered; (iii) the seller’s price to the buyer is fixed or determinable; and (iv) collectability is reasonably assured.Grant income is received for the development and commercialization of product candidates through sponsored research arrangements with non-profitorganizations and from federal research and development grant programs. Revenue is recognized as qualifying research and development costs are incurred.The existing grant program is sponsored by the U.K. government and is substantially complete, with no significant further reimbursements anticipated.For arrangements that involve the delivery of more than one element, such as the Option Agreement, each product, service and/or right to use assets isevaluated to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has “stand-alone value”to the customer. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price ofeach deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidenceof fair value, (ii) third-party evidence of selling price and (iii) best estimate of selling price (“BESP”). The BESP reflects the Company’s best estimate of whatthe selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis. The consideration allocated to each unit ofaccounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables.Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right orlicense to use an asset, or another performance obligation.Research and development: Research and development costs are expensed as incurred and include, but are not limited to: •Employee-related expenses including salaries, benefits, travel, and share-based compensation expense for research and developmentpersonnel; •Costs associated with preclinical and development activities; •Costs associated with regulatory operations.F-11 Income taxes: The Company uses the asset and liability method for accounting for income taxes. Under this method, deferred tax assets andliabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets andliabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable incomein the years in which those temporary differences are expected to be recovered or settled. The Company evaluates the realizability of its deferred tax assetsand establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. The Company hasprovided a full valuation allowance on its deferred tax assets.Relative to accounting for uncertainties in tax positions, the Company recognizes the tax benefit of tax positions to the extent that the benefit willmore likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits ofthe tax position as well as consideration of the available facts and circumstances. For those tax positions where it is more likely than not that a tax benefitwill be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with ataxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit willbe sustained, the Company does not recognize a tax benefit in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. As the Company hasno uncertain tax positions, there were no interest or penalties charges recognized in the statement of operations for any years.Stock based compensation: The Company accounts for stock based compensation arrangements at fair value. The fair value is recognized over theperiod during which the recipient is required to provide services (usually the vesting period), on a straight-line basis.Net Loss per Share Attributable to Common Shareholders: Basic and diluted net loss per share is presented in conformity with the two-classmethod required for participating securities. Under the two-class method, basic net loss per share is computed by dividing the net loss attributable to commonstockholders by the weighted average number of common shares outstanding during the period. Net loss attributable to common stockholders is determinedby allocating undistributed earnings between holders of common and convertible preferred shares, based on the contractual dividend rights contained in thepreferred share agreement. Where there is an undistributed loss, no amount is allocated to the convertible preferred shares. Diluted net loss per share iscomputed by dividing net loss by the sum of the weighted average number of common stock and the number of dilutive potential common stock equivalentsoutstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vestedshare options or the conversion of preferred stock.Potential dilutive common share equivalents consist of: April 30, 2018 2017 2016 Preferred stock — — 24,322,898 Stock options 388,366 148,469 76,643 F-12 In computing diluted earnings per share, common stock equivalents are not considered in periods in which a net loss is reported, as the inclusion ofthe common stock equivalents would be anti-dilutive. As a result, there is no difference between the Company’s basic and diluted loss per share in theperiods presented (in thousands, except share and per share amounts): Basic and diluted net loss per share April 30, 2018 2017 2016 Net loss $(15,805) $(18,603) $(11,436)Less: dividend on Series A — (935) (1,918)Less: dividend on Series B — (1,237) (2,121)Loss available to common stockholders (15,805) (20,775) (15,475)Weighted average common shares, basic and diluted 10,321,780 4,646,764 591,298 Net loss per share, basic and diluted $(1.53) $(4.47) $(26.17) The weighted average shares outstanding, reported loss per share and potential dilutive common share equivalents for the periods prior to November21, 2016, the date of the Carbylan transaction, have been retrospectively adjusted to reflect historical weighted-average number of common sharesoutstanding multiplied by the exchange ratio established in the share purchase agreement. Fair value measurement: The Company classifies fair value measurements using a three-level hierarchy that prioritizes the inputs used to measurefair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputsused to measure fair value are as follows: Level 1, quoted market prices in active markets for identical assets or liabilities; Level 2, observable inputs otherthan quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can becorroborated by observable market data; and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fairvalue of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significantunobservable inputs.The Company’s financial instruments as of April 30, 2018 and 2017 consisted primarily of cash and cash equivalents, grants receivable, capital leaseobligations and accounts payable. The carrying amount of these assets and liabilities approximate fair value given the short term maturity of theseinstruments.Correction: The statements of operations and comprehensive loss for the year ended April 30, 2016 was restated in the prior year to correct errors inthe foreign currency translation adjustments which were reported as a gain rather than a loss and to correct the resulting summation of comprehensive loss. Asa result of the correction of these errors, the total comprehensive loss for the year ended April 30, 2016 increased from a loss of $9,196,000 to a loss of$13,676,000. There is no impact on the Company’s previously reported net loss, the balance sheet, the statement of changes in convertible preferred sharesand stockholders’ equity (deficit) or the statement of cash flows for any period. Recently issued accounting pronouncements not yet adopted: In May 2014, the Financial Accounting Standards Board (“FASB”) issuedAccounting Standards update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” requiring an entity to recognize the amount of revenue to whichit expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognitionguidance in US GAAP when it becomes effective. The Company will adopt the updated standard in the first quarter of fiscal 2019 using the modifiedretrospective method of adoption. The adoption of this standard is not expected to have a material impact on the consolidated financial statements.In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, “Leases” (Topic 842). Under the new guidance, lessees willbe required to recognize for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligationto make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right touse, or control the use of, a specified asset for the lease term. The new lease guidance is effective forF-13 the Company beginning May 1, 2019. The Company is assessing the impact that adoption of this new guidance will have on the consolidated financialstatements, but expects to recognize a material lease obligation and right of use asset. See additional discussion of the Company’s lease obligation includedin Note 8.Recently adopted accounting pronouncementsIn March 2016, the FASB issued ASU No. 2016-09, Compensation –Stock Compensation (Topic 718) (“ASU 2016-09”) to require changes to severalareas of employee share-based payment accounting in an effort to simplify share-based reporting. The update revises requirements in the following areas:minimum statutory withholding, accounting for income taxes and forfeitures. The Company adopted this standard effective May 1, 2017, and is nowaccounting for forfeitures as incurred. The adoption of this standard did not have a material impact on the consolidated financial statements. Note 3. Property and EquipmentAt April 30, 2018 and 2017, property and equipment consisted of (in thousands): 2018 2017 Laboratory equipment $1,277 $373 Office equipment 33 31 Furniture & fixtures 76 6 Leasehold improvements 1,005 — 2,391 410 Less accumulated depreciation (555) (313) $1,836 $97 For the years ended April 30, 2018, 2017, and 2016, depreciation expense was $180,000, $40,000 and $33,000, respectively.Note 4. Accrued ExpensesAt April 30, 2018 and 2017, accrued expenses consisted of (in thousands): 2018 2017 Accrued research expense $1,192 $348 Accrued compensation 1,393 1,300 Accrued professional fees 164 146 Other accrued expenses 338 71 $3,087 $1,865 Note 5. Merck Arrangement On October 6, 2017, the Company’s wholly-owned U.K. based subsidiary KalVista Pharmaceuticals Limited (“KalVista Limited) and Merck Sharp &Dohme Corp. (“Merck”) entered into an option agreement (the “Option Agreement”). The Company is the guarantor of KalVista Limited’s obligations underthe Option Agreement. Under the terms of the Option Agreement, the Company, through KalVista Limited, has granted to Merck an option to acquireKVD001 through a period following completion of a Phase 2 clinical trial. The Company, through KalVista Limited, has also granted to Merck a similaroption to acquire investigational orally delivered molecules for DME that the Company will continue to develop as part of its ongoing research anddevelopment activities, through a period following the completion of a Phase 2 clinical trial. The Company, through KalVista Limited, also granted to Mercka non-exclusive license to use the compounds solely for research purposes, and is required to use its diligent efforts to develop the two compounds throughthe completion of Phase 2 clinical trials. The Company will fund and retain control over the planned Phase 2 clinical trial of KVD001 as well as developmentof the investigational oralF-14 DME compounds through Phase 2 clinical trials unless Merck determines to exercise its options earlier, at which point Merck will take responsibility for alldevelopment and commercialization activities for the compounds. The Company’s development efforts under the Option Agreement are governed by a jointsteering committee consisting of equal representatives from the Company and Merck.Under the terms of the Option Agreement, Merck paid a non-refundable upfront fee of $37 million to KalVista Limited in November 2017. If Merckexercises both options under the Option Agreement, KalVista Limited could receive up to an additional $715 million composed of option exercise paymentsand clinical, regulatory, and sales-based milestone payments. In addition, the Company is eligible for tiered royalties on global net sales ranging from mid-single digits to double digit percentages. Merck may terminate the Option Agreement at any time upon written notice to the Company. KalVista Limited mayterminate the Option Agreement in the event of Merck’s material breach of the Option Agreement, subject to cure.Concurrent with the Option Agreement, the Company and Merck also entered into a stock purchase agreement (the “Stock Purchase Agreement”)pursuant to which Merck paid approximately $9.1 million to purchase 1,070,589 new shares of the Company’s common stock at a price of $8.50 per share.The Company determined that the Option Agreement and the Stock Purchase Agreement were negotiated and executed contemporaneously, andtherefore should be combined as one arrangement for accounting purposes. The Company evaluated the arrangement in accordance with the provisions ofASC 605-25. The Company determined that the arrangement contains the following deliverables: (i) a non-exclusive license to use the two compoundssolely for research purposes, (ii) research and development services related to the development of KVD001 through completion of a Phase 2 clinical trial, (iii)research and development services related to the development of the Oral DME Compounds, and (iv) unregistered shares of the Company’s common stock.The Company has determined that Merck’s options to acquire KVD001 and the Oral DME Compounds are substantive options. Merck is notcontractually obligated to exercise the options. The Company has determined that Merck’s options to acquire KVD001 and the Oral DME Compounds arenot priced at a significant and incremental discount. Consequently, the Company determined that Merck’s options are not deliverables in the arrangement.The Company further determined that the research license granted did not have standalone value from the respective research and developmentservices, as the license could not be used on its own by Merck for its intended purpose of developing and commercializing KVD001 and the Oral DMECompounds on a standalone basis. As a result, the research license has been combined with the respective research and development services for KVD001and the Oral DME Compounds as two units of accounting (the “KVD001 Unit of Accounting” and the “Oral DME Unit of Accounting”). The Company hasconcluded that the common stock deliverable identified at the inception of the arrangement has standalone value from the other deliverables and thereforerepresents a separate unit of accounting (the “Common Stock Unit of Accounting”).Therefore, the Company has identified three units of accounting under the arrangement as follows: (i) the KVD001 Unit of Accounting, (ii) the OralDME Unit of Accounting, and (iii) the Common Stock Unit of Accounting. Allocable arrangement consideration at inception of the arrangement is comprisedof the non-refundable up-front payment of $37.0 million and the payment for the common stock of $9.1 million. The Company allocated the $9.1 millionpayment to the common stock, as this represented the fair value of the shares issued based on arms-length negotiations between the Company and Merck. Theamount allocated to the common stock is recorded to stockholders’ equity at the date of issuance. The Company allocated the remaining allocableconsideration of $37.0 million to the remaining units of accounting using the relative-selling price method. The Company determined that neither vendor-specific objective evidence or third-party evidence is available for any of the units of accountingidentified at arrangement inception. Accordingly, the selling price of each unit of accounting was developed using management’s best estimate of sellingprice.F-15 The Company developed the Best Estimate of Selling Price (“BESP”) for the KVD001 Unit of Accounting and Oral DME Unit of Accounting byapplying an analysis of discounted cash flows and the allocable arrangement consideration was allocated among the separate units of accounting using therelative selling price method. The amount allocated to each Unit of Accounting will be recognized as revenue on a proportional performance basis. For thefiscal year ended April 30, 2018, the Company recognized approximately $8.0 million of revenue with respect to the arrangement with Merck. As of April 30,2018, deferred revenue on the consolidated balance sheet is $29.3 million.Note 6. Grant IncomeGrant income is primarily recognized through an agreement with the Technology Strategy Board (“TSB”), a United Kingdom governmentorganization. The Company recognizes revenue for reimbursements of research and development costs as the services are performed up to an agreed uponthreshold. The Company records these reimbursements as revenue and not as a reduction of research and development expenses, as the Company has the risksand rewards as the principal in the research and development activities. Any services performed and not yet collected upon are shown as a receivable. Duringyears ended April 30, 2018, 2017 and 2016, revenue recognized through the TSB grant amounted to $0.4 million, $1.2 million and $1.8 million,respectively. As of April 30, 2018, the development activities related to the TSB grant have been completed and the Company does not anticipate any furtherreimbursements from this grant.The Company evaluates the terms of sponsored research agreement grants and federal grants to assess the Company’s obligations and if theCompany’s obligations are satisfied by the passage of time, revenue is recognized as described above. For grants with refund provisions, the Companyreviews the grant to determine the likelihood of repayment. If the likelihood of repayment of the grant is determined to be remote, the grant is recognized asrevenue. If the probability of repayment is determined to be more than remote, the Company records the grant as a deferred revenue liability, until such timethat the grant requirements have been satisfied.Note 7. Stock-Based CompensationThe Company has three plans that provide for equity-based compensation. There are two legacy plan that were maintained by Carbylan and KalVistaLimited and for which no further grants are to be made. Under the 2017 Equity Incentive Plan (“2017 Plan”), 1,712,287 shares of the Company’s commonstock are reserved for issuance upon exercise of stock options. As of April 30, 2018, 1,076,367 stock options remain available for grant under the 2017 Plan.Initial awards generally vest 25% after one year and then ratably on a monthly basis over the next three years. Recurring grants typically vest on amonthly basis over four years. Stock option grants expire after ten years.The Company recognizes stock-based compensation expense over the requisite service period based on the grant date fair value of the award. TheCompany has elected to use the Black-Scholes option pricing model to determine the fair value of awards granted. The determination of the fair value ofstock-based awards utilizing the Black-Scholes model is affected by the share price and a number of assumptions, including expected volatility, expectedlife, risk-free interest rate and expected dividends. Due to insufficient history of the Company’s stock price, the stock-price volatility assumption is based onthe historical volatility of a peer group of publicly traded companies. The expected life of the awards is estimated based on the simplified method. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history andexpectation of paying no dividends. Forfeitures have not been material in the periods presented.F-16 The fair value of the share-based awards was measured with the following weighted-average assumptions for the fiscal years ended April 30: 2018 2017 2016Risk-free interest rate 1.94% 2.08% 1.38%Expected life of the options 6.25 years 6.25 years 6.25 yearsExpected volatility of the underlying stock 76.9% 82.3% 80.9%Expected dividend rate 0% 0% 0% Stock-based compensation was reflected in the Company’s consolidated statement of operations and comprehensive loss as follows (in thousands): Year ended April 30, 2018 2017 2016 Research and development $320 $143 $118 General and administrative 740 251 — Total stock-based compensation expense $1,060 $394 $118A summary of option activity for the year ended April 30, 2018 and changes during the years then ended is presented below: Shares WeightedAverageExercisePrice WeightedAverageRemainingContractualLife AggregateIntrinsicValue Outstanding at May 1, 2017 537,768 $4.82 9.05 $1,631 Exercised (16,264) 2.13 Granted 409,320 7.10 Cancelled (12,130) Outstanding at April 30, 2018 918,694 $5.87 8.51 $3,465 Exercisable at April 30, 2018 388,366 $4.57 8.02 $1,967 Vested and expected to vest at April 30, 2018 918,694 $5.87 8.51 $3,465 The weighted-average grant date fair value of stock options granted during the years ended, April 30, 2018, 2017, and 2016 was $4.87, $5.68 and$1.41, respectively.As of April 30, 2018, there was $2.5 million of unrecognized compensation expense related to unvested awards, which is expected to be recognizedover a weighted-average period of 2.55 yearsNote 8. Commitments and ContingenciesClinical Studies: The Company enters into contractual agreements with contract research organizations in connection with preclinical andtoxicology studies and clinical trials. Amounts due under these agreements are invoiced to the Company on predetermined schedules during the course of thetoxicology studies and clinical trials and are not refundable regardless of the outcome. The Company has a contractual obligation related to the expectedfuture costs to be incurred to complete the ongoing toxicology studies and clinical trials. The remaining commitment, which has cancellation provisions,totals $8.9 million at April 30, 2018.Lease commitments: The Company is party to several operating leases for office and laboratory space as well as certain lab equipment. Rent expensewas $0.6 million, $0.5 million and $0.1 million for the years ended April 30, 2018, 2017, 2016, respectively, and is reflected in general and administrativeexpenses and research and development expenses as determined by the underlying activities.F-17 Future minimum payments under these leases as of April 30, 2018 are as follows (in thousands): Capital Operating Year ended April 30: Leases Leases 2019 $229 $331 2020 58 329 2021 — 332 2022 — 335 2023 and thereafter 746 Total minimum lease payments 287 $2,073 Less amounts representing interest (8) Present value of minimum payments 279 Current portion (221) Long-term portion $58 Indemnification: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations andwarranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves future claims that maybe made against the Company but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to itsindemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. No amounts associatedwith such indemnifications have been recorded to date.Contingencies: From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. TheCompany accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.There were no contingent liabilities requiring accrual at April 30, 2018 and 2017.As a result of the terms of grant income received in prior years, upon successful regulatory approval and following the first commercial sale of certainproducts, the Company will be required to pay royalty fees of up to $1 million within 90 days of the first commercial sale of the product subject to certaincaps and follow on payments depending upon commercial success and type of product. Given the stage of development of the current pipeline of products itis not possible to predict with certainty the amount or timing of any such liability.Note 9. Income TaxesThe Company has incurred net losses since inception and, consequently, has not recorded any U.S. Federal and state income tax expense or benefitfor the years presented. The Company files tax returns in the United Kingdom as well as U.S. Federal and various state tax returns. Tax years 2018 and 2017in the U.K. subsidiary remain open to examination by the Her Majesty’s Revenue and Customs (“HMRC”). Further, HMRC will be able to open an inquiryunder the ‘discovery assessment’ for the 2014 tax year until April 30, 2018 if HMRC discovers facts which were not disclosed or readily inferable from thetax returns or accounts. The U.S. returns are open for all tax years since inception. The Company is not currently under examination in any jurisdiction forany tax years. The components of the Company’s loss before income taxes for the years ended April 30 consisted of the following: 2018 2017 2016 Domestic $(4,020) $(2,110) $— Foreign (11,785) (16,493) (11,436) $(15,805) $(18,603) $(11,436) F-18 A reconciliation between the effective tax rates and statutory rates for the years ended April 30, is as follows: 2018 2017 2016 Income tax benefit at U.S. federal statutory rate 30.40% 34.00% 34.00%Foreign rate differential (4.26)% (11.72)% (14.00)%Nondeductible expenses (16.34)% (9.16)% (6.85)%Other (4.52)% (1.29)% — Effect of change in tax rates (3.61)% — — Valuation allowance (1.67)% (11.83)% (13.15)% 0.00% 0.00% 0.00% The Company has net operating loss carry forwards available to offset future taxable income for federal and state income tax purposes. The ability toutilize the Company’s domestic net operating losses is limited due to changes in ownership as defined by Section 382 of the Internal Revenue Code (the“Code”). Under the provisions of Sections 382 and 383 of the Code, a change of control, as defined in the Code, imposes an annual limitation on the amountof the Company’s net operating loss and tax credit carryforwards, and other tax attributes that can be used to reduce future tax liabilities. The Companydetermined that an ownership change occurred as a result of the Company’s transaction in November 2016. As a result of this ownership change, theCompany’s U.S. federal and California NOL carryforwards may be limited to the extent of recognizing any previously unrecognized built-in gains ofCarbylan as of November 2016. The tax effect of significant temporary differences representing deferred tax assets and liabilities as of April 30, 2018 and 2017 is as follows (inthousands): 2018 2017 Net operating loss (“NOL”) carryforwards $6,596 $5,602 Other 240 282 Valuation allowance (6,836) (5,884)Net deferred tax asset $— $— Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which arecomprised principally of NOL carryforwards. As a result of the fact that the Company has incurred tax losses from inception, management has determined thatit is more likely than not that the Company will not recognize the benefits of net deferred tax assets and, as a result, a full valuation allowance has beenestablished against its net deferred tax assets as of April 30, 2018 and 2017. During the years ended April 30, 2018, 2017, and 2016 the valuation allowancechanged by $1.0 million, $3.0 million and $0.4 million, respectively. Realization of deferred tax assets is dependent upon the generation of future taxableincome. As of April 30, 2018, the Company had NOL carryforwards for federal income tax purposes of approximately $4.6 million that begin to expire in2036, NOL carryforwards for state income taxes of $3.4 million that begin to expire in 2036 and NOL carryforwards for U.K. income taxes of $29.2 millionthat do not expire. In December 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law. Among other things, the TCJA permanently lowers the corporate federalincome tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reductionof the corporate federal income tax rate to 21%, U.S. GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date ofenactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a reduction of the Company’sdeferred tax assets of $578,000 and a corresponding reduction in the valuation allowance. As a result, there was no impact on our consolidated statements ofoperations from the reduction in tax rate. The other provisions of the TCJA did not have a material impact on the consolidated financial statements.F-19 The Company recognizes the financial statement effects of a tax position when it becomes more likely than not, based upon the technical merits, thatthe position will be sustained upon examination. The Company has no unrecognized tax benefits as of April 30, 2018 and 2017, respectively. The Companydoes not expect any material changes in the next 12 months in unrecognized tax benefits. The Company has not recognized interest and penalties related touncertain tax positions. Note 10. Defined Contribution PlansParticipation in a personal pension plan is available to all U.K. based employees of the Company upon commencement of their employment.Employer contributions are made in accordance with the terms and conditions of the employment contract. Employees may contribute in accordance with theprevailing statutory limitations. Employees of the U.S. parent company are eligible to participate in the Company's 401(k) Plan. The Company will match upto 4% of employee contributions to the Plan. Total employer contributions to both plans for the years ended April 30, 2018, 2017, and 2016 were $219,000,$90,000 and $70,000 respectively.Note 11. Other IncomeAs of April 30, 2018 and 2017, the Company had research and development tax credits totaling $6.8 million and $2.2 million, respectively. This taxcredit is related to a tax scheme for small and medium enterprises in the United Kingdom as well as the R&D expenditure credit system. The Company is ableto file a claim for cash credit in proportion to the Company’s R&D expenditure for the year. This amount was included in other income, as it is a refundablecredit that does not depend on the Company’s ongoing tax status or position. The Company recognized $4.4 million, $2.3 million and $2.0 million related tothese programs in the years ended April 30, 2018, 2017, and 2016, respectively. Note 12. Unaudited Quarterly Financial Information (in thousands): Fiscal year 2018Quarter endedJuly 31,2017 Quarter endedOctober 31, 2017 Quarter endedJanuary 31, 2018 Quarter endedApril 30,2018 Revenue$96 $1,127 $2,331 $4,840 Operating expenses 5,549 7,064 6,677 7,809 Net loss (4,928) (4,986) (5,234) (657)Net loss per share$(0.51) $(0.50) $(0.49) $(0.06) Fiscal year 2017Quarter endedJuly 31,2016 Quarter endedOctober 31, 2016 Quarter endedJanuary 31, 2017 Quarter endedApril 30,2017 Revenue$975 $197 $248 $114 Operating expenses 6,095 4,223 8,365 5,200 Net loss (3,436) (3,297) (7,644) (4,202)Net loss per share$(6.66) $(5.98) $(1.03) $(0.43) F-20 Exhibit 10.15SERVICE AGREEMENT(1)KALVISTA PHARMACEUTICAS LIMITED(2)DR CHIRSTOPHER MARTYN YEA ContentsClausePage 1.DEFINITIONS1 2.APPOINTMENT4 3.TERM AND NOTICE4 4.HOURS OF WORK5 5.DUTIES AND POWERS5 6.OBLIGATIONS5 7.RESTRICTIONS DURING EMPLOYMENT6 8.INFORMATION7 9.LOCATION7 10.REMUNERATION AND BENEFITS7 11.INSURED BENEFITS AND PENSlON8 12.EXPENSES AND TRAVEL ALLOWANCE8 13.HOLIDAYS8 14.CONFIDENTIALITY9 15.COMPANY PROPERTY11 16.INTELLECTUAL PROPERTY11 17.TERMINATION12 18.SICKNESS14 19.GRIEVANCE, DISMISSAL AND DISCIPLINARY PROCEDURES15 20.PROTECTION OF THE COMPANY’S INTERESTS15 21.APPLICATION OF RESTRICTIONS17 22.DIRECTORSHIP17 i 23.DATA PROTECTION18 24.POWER OF ATTORNEY18 25.NOTICES18 26.OTHER AGREEMENTS19 27.COUNTERPARTS19 28.GOVERNING LAW ANO JURISDICTION19 ii DATED:1st November 2015BETWEEN:1.KALVISTA PHARMACEUTICALS LIMITED (company no. 07543947) whose registered office is at Building 227Tetricus Science Park, Porton Down, Salisbury, Wiltshire, SP4 0JQ (the “Company”); and2.DR CHRISTOPHER MARTYN YEA of ***** (the “Executive”).RECITALS:(A)The Company has requested the Executive to serve the Company as Chief Development Officer on the terms and conditionscontained in this Agreement and the Executive has agreed so to do.(B)All references in this Agreement to legislation shall be deemed to include a reference to statutory amendments, statutory re-enactments or superseding legislation and all statutory regulations thereunder.(C)The clause headings in this Agreement are for the convenience of the parties only and shall not affect its interpretation in anyway.OPERATIVE PROVISIONS1.DEFINITIONSUnless the contrary intention appears, the following definitions apply:“Board”the board of directors of the Company from time to time or anycommittee of the board of directors to Which powers have beenproperly delegated. including a remuneration committee;“Business”the business carried on by the Company (or any part of thebusiness carried on by the Company) as at the Termination Dateor at any time during the Relevant Period and the business of anyGroup Company at the Termination Date, in either case in respectof which the Executive has been concerned or involved to anymaterial extent and/or has possessed Confidential Information atany time during the Relevant Period;“Change of Control”occurs if a person who controls any body corporate ceases to doso or if another person acquires Control of it, but does not occurin the circumstances described in clause 17.6; “Control”in relation to a body corporate , the power of a person to securethat the affairs of the body corporate are conducted in accordancewith the wishes of that person (i) by means of the holding ofshares, or the possession of voting power, in or in relation to thator any other body corporate or (ii) as a result of any powersconferred by the articles of association or any other documentregulating that or any other body corporate;“Client”any person, firm, company or other entity (i) who or which at anytime during the Relevant Period was to the knowledge of theExecutive provided with goods or services by the Company orany Group Company or was negotiating with the Company or anyGroup Company for the supply of goods or services by theCompany or any Group Company or (ii) about whom or whichthe Executive has confidential information, and in each case withwhom or which the Executive or any person who reported directlyto him had dealings at any time during the Relevant Period;“Commencement Date”the date of this Agreement;“Competing Business”any business in the fields of ophthalmology or hereditaryangioedema (HAE) which competes or is preparing to competewith the business, carried on by the Company or any GroupCompany in which the Executive has been involved to a materialextent during the Relevant Period;“Confidential Information”the information specified in clause 14.2;“Contractual Benefits”means the contractual benefits to which the Executive is entitledpursuant to clause 11.1 and 11.2;“Group Company”means any parent undertaking of the Company and any subsidiaryundertaking of the Company or of any such parent undertaking(where “parent undertaking” and “subsidiary undertaking” havethe meanings attributed to them under section 1162 CompaniesAct 2006);2 “Intellectual Property Rights”means all existing and future copyright, design rights, registereddesigns, trade marks, patents. domain names, database rights,applications for any of these, the right to apply for any of theseand all other intellectual property rights, in any part of the world,for the full term and any renewals and extensions of such rights;“Key Employee”any officer or employee of or consultant to the Company or anyGroup Company earning £50,000 (including bonuses andcommission, if any, but excluding any appropriate VAT) or moreon an annualised basis of the Company or any Group Companywith whom the Executive in the course of his employment has haddealings at any time during the Relevant Period;“Material”all ideas, information, methods, techniques, inventions, processes,reports, drawings, plans, research, know-how, systems, software,Confidential Information, creative works, concepts and othermaterial produced, invented, created, developed, reduced topractice or discovered by the Executive (either alone or withothers) relating to the business of the Company or pertaining to,resulting from or suggested by the work the Executive does forthe Company (either alone or with others), during the term of thisAgreement;“Material Interest”any direct or indirect interest, whether as an agent, beneficiary,consultant, director, employee, partner, proprietor, shareholder(other than a minority shareholder holding not more than 3% ofany class of securities quoted or dealt in on RecognisedInvestment Exchange) , or otherwise;“Recognised Investment Exchange”a recognised investment exchange or an overseas investmentexchange, each as defined in section 285 of the Financial Servicesand Markets Act 2000;“Relevant Period”the period of 12 months immediately preceding the TerminationDate;“Restricted Goods or Services”goods or services of a type provided by the Company or anyGroup Company at the Termination Date;3 “Share Plan”any share option, share award, share purchase or other share-based arrangement, however structured, operated by theCompany, any Group Company or any third party;“Supplier”means any person, firm, company or other entity who or which atany time during the Relevant Period: (i) supplied goods orservices (other than utilities and goods or services supplied foradministrative purposes) to the Company or any Group Companyor (ii) was negotiating with the Company or any Group Companyto supply goods or services (other than utilities and goods orservices supplied for administrative purposes) to the Company orany Group Company, and in each case with whom or which theExecutive or any person who reported directly to him had materialdealings at any time during the Relevant Period;“Termination Date”the date on which this Agreement terminates irrespective of thecause or manner; and“WTR”the Working Time Regulations 1998. 2.APPOINTMENT2.1The Company shall employ the Executive and the Executive shall serve the Company as Chief Development Officer andshall serve any other Group Company as may from time to time be required by the Board upon the following terms andconditions.2.2The Company shall be entitled at any time to appoint any other person or persons to act jointly with the Executive.3.TERM AND NOTICE3.1The appointment under this Agreement shall commence on the Commencement Date and shall (subject to the terms of thisAgreement) continue until the expiration of not less than three months’ prior written notice to be given by either party to theother.3.2The Executive’s period of continuous employment is deemed to have commenced on the Commencement Date.3.3Without prejudice to clause 3.4, on notice being served by either party for any reason to terminate this Agreement or at anytime subsequently during the unexpired period of this Agreement, the Company may elect (but shall not be obliged) toterminate this Agreement summarily on payment to the Executive of his Salary only (at the rate then payable under clause10) calculated over the unexpired period of this Agreement (subject to deduction of applicable tax and National InsuranceContributions) that would have been payable during the shorter of: 3.3.1the minimum period of notice to which .the Executive would have been entitled under clause 3.1; and4 3.3.2any unexpired period of notice.3.4Should this Agreement be terminated by the Company in accordance with clause 3.1 or clauses 17.1.1 to 17.1.6, theCompany will pay the Executive severance pay (“Severance Pay”) within 10 working days of the Termination Dateconsisting of: 3.4.19 months’ basic Salary as per clause 10.1: and 3.4.29 months’ Contractual Benefits.This clause 3.4 will not apply where the Executive resigns or the Company terminates this Agreement pursuant to clauses17.1.7 to 17.1.13.3.5Where the Executive is entitled to Severance Pay, and should he receive a payment in lieu in accordance with clause 3.3, theSeverance Pay will be reduced by the amount paid to the executive during the period of notice.3.6If there is a Change of Control of the Company, or the Executive’s employment is transferred to an entity other than theCompany or .an y Group Company pursuant to the Transfer of Undertakings (Protection of Employment Regulations 2006 (a“Transfer”), the Executive may serve one month’s notice to terminate this Agreement within three months following theChange of Control or Transfer, and receive the Severance Pay.4.HOURS OF WORKThe Executive’s normal working hours are 9.0.0 am - 5.30 pm but he will work such additional hours (including atweekends), without additional pay, as are reasonably necessary in order for him properly to carry out his duties under thisAgreement. By signing this Agreement the Executive agrees to exclude Regulation 4(1) WTR.5.DUTIES AND POWERSThe Executive will perform such duties and exercise such powers on behalf of the Company as may from time to time beassigned or delegated to or vested In him by the Board and such duties and powers may relate or concern the business of anyGroup Company consistent with his status as Chief Development Officer.6.OBLIGATIONS6.1During the continuance of this Agreement the Executive will, unless prevented by ill health or accident: 6.1.1devote the whole of his working time, skill, ability and attention to the business of the Company; 6.1.2in all respects conform to and comply with lawful directions given and regulations made by the Board;5 6.1.3ensure that the Board is aware as soon as practicable of any matter that might affect the interests of the Companyand/or any Group Company; 6.1.4at all times comply with the codes, policies, procedures and rules of the Company and any Group Company and ofany association of professional body to which the Company and any Group Company and/or the Executive mayfrom time to time belong; 6.1.5well and faithfully serve the Company and use his utmost endeavours to promote its interests; and 6.1.6generally co-operate to the fullest extent with the Board and any delegated authority from the Board.7.RESTRICTIONS DURING EMPLOYMENT7.1Other than in the proper and normal course of his duties, the Executive will not at any time during the continuance of hisemployment , without the prior written consent of the Board: 7.1.1have any Material interest in any trade, business or occupation whatsoever other than the business of the Companyor any Group Company; 7.1.2incur on behalf of the Company or any Group Company any capital expenditure in excess of such sum as may beauthorised from time to time by resolution of the Board; 7.1.3enter into on behalf of the Company or any Group Company any commitment, contract or arrangement which isotherwise than in the normal course of the Company’s or the relevant Group Company’s business or is outside thescope of his normal duties or authorisations or is of an unusual or onerous or longterm nature; 7.1.4engage any person on terms which vary from those established from time to time by resolution of the Board; 7.1.5employ or engage or attempt to employ or engage, induce, solicit or entice away or attempt to induce, solicit orentice away any agent, consultant, employee, officer or worker of the Company or any Group Company; 7.1.6directly or indirectly make preparations to compete with any business carried on by the Company or any GroupCompany; 7.1.7induce or attempt to induce any Client or customer of the Company or any Group Company to cease conductingany business or to reduce the amount of business or adversely to vary the terms upon which any business isconducted with the Company or any Group Company or to exclude the Company or any Group Company fromnew business opportunities in relation to goods or services of a kind normally dealt in by the Company or anyGroup Company; 7.1.8inform any agent, client, consultant, customer, employee , officer, supplier or worker of the Company or anyGroup Company or any third party agent who may be in the habit of dealing with the Company or any GroupCompany that he may resign or has resigned from the Company or any Group Company or that he has acceptedemployment with or is to join or be associated with any competitor of the Company or any Group Company.6 7.2Notwithstanding Claus 7.1, the Executive may hold office as a non-executive director of a business which is not a CompetingBusiness with the prior written consent of the CEO of the Company.7.3Notwithstanding Clause 7.1, the Executive may be engaged as a consultant of Vantia Limited.8.INFORMATIONThe executive will at all times and as soon as reasonably practicable give to the Board (in writing if so requested) or suchperson .as the Board may from tJme to time determine all information. advice and explanations as it may reasonably requirein connect ion with m atier s rel a ting to his employment under this Agreement or with the business of the Compan ygenerally.9.LOCATION9.1The Executive’s normal place of work will be Tetricus Science Park, Salisbury, but the Company reserves the right to changethis, whether on a permanent or temporary basis, to any place within the United Kingdom. If the Company requires theExecutive to work permanently at a place which necessitates a move from his address at the time, any such change will onlybe effected after reasonable consultation.9.2The Executive must travel to such places and at such times and for such periods (whether within or outside the UK) as maybe reasonably necessary for the proper performance of his duties. The Company does not envisage at the present time thatthe Executive will be required to work outside the United Kingdom for a continuous period of more than one month duringhis employment. The Executive will be given written notification if there is a change in this position.10.REMUNERATION AND BENEFITS10.1Subject to the provisions of this clause the Executive will be entitled to a salary at the rate of £153,000 per annum (the“Salary”). Such Salary shall accrue from day to day and will be paid monthly in arrears on such day of each calendar monthas the Company may nominate.10.2The Executive’s Salary will be reviewed annually by the Board in each calendar year unless otherwise agreed. Any increaseawarded will be entirely a matter for the discretion of the Board.10.3The Executive will be eligible to participate in a discretionary performance related bonus each year dependent upon theachievement of pre-determined personal and corporate objectives. In making any bonus award, the Board will assess theExecutive’s success in achieving the pre-determined objectives and any bonus will only be paid if the Executive remains inthe Company’s employment and is not under notice (either given or received) on the bonus payment date. The target amountof bonus for which the Executive will be eligible will be 25% of the Executive’s Salary (less applicable tax and NationalInsurance contributions) and which shall be remitted in the proportions and on the basis set out in clause 10.1.10.4The Company will be entitled to deduct from any amount payable to the Executive by way of salary or otherwise under or inrelation to this Agreement any amount required by law to be deducted including, but without limitation; income tax andNational Insurance contributions and any other amount for the time being due and owing by the Executive to the Companyincluding the recoupment of the lease premium, if any.7 11.INSURED BENEFITS AND PENSlON11.1During the period of this Agreement, the Company will procure and maintain: 11.1.1a policy of private medical insurance cover for the Executive and his spouse or civil partner and his children under25 years; 11.1.2a policy of life assurance of not less than three times the Executive’s Salary under Clause 10.1; and 11.1.3a policy of permanent health insurance for the Executive.Such insured benefits will be pursuant to schemes of the Company’s choice and the Executive will be responsible for anytaxation or statutory levy assessed upon him in respect of such benefit. Any entitlement to benefit from those schemes isconditional upon the Executive (and spouse/civil partner and children} satisfying all the conditions imposed by the insurerand subject always to the rules of such schemes. The Company reserves the right to vary the cover provided under suchschemes and the provider of the benefit, in its discretion, from time to time.11.2During each year of the Executive’s employment the Company shall contribute an amount equal to 6% of his Salary to theCompany’s pension scheme (the “Scheme”) subject to the rules of the Scheme as may be amended from time to time. Fulldetails of the Scheme are available on request from the Company.12.EXPENSES AND TRAVEL ALLOWANCEThe Executive will make such journeys on the business of the Company as may be reasonably required of him. Allreasonable travelling, hotel and other expenses wholly, exclusively and necessarily incurred by- him in the performance ofhis business duties under this Agreement will be reimbursed to him monthly by the Company on production of appropriatevouchers or receipts.13.HOLIDAYS13.1The Company’s holiday year runs from 1st January to 31st December.13.2In each holiday year the Executive will be entitled to 28 days’ paid holiday plus public holidays (pro-rata for part-time staff).13.3Application for leave of absence must be submitted in writing on the appropriate leave forms. The Executive must completesuch holiday request forms as requested by the Company. Proposed holiday dates must be agreed in advance with theExecutive’s supervisor. Such agreement is to be obtained before the Executive has committed to bookings or any otheralternative positive arrangements.13.4The Company reserves the right to nominate up to 4 days of holiday entitlement to be taken in the event that the Companydecides to close the business over the Christmas/New Year period. The Executive will be notified by the Company eitherindividually or by way of a general notice to staff no later than 31st January in each year of the number of days holidayrequired to be retained for this purpose.8 13.5Up to 5 days holiday can be carried over to a subsequent year. Should the Executive wish to carry over holiday entitlement inaddition to this, the express permission of the CEO will be required. The Executive will not be entitled to receive pay in lieuof any unused holiday entitlement except in accordance with clause 13.6 and 13.7 below.13.6In the year of commencement or termination of employment, holiday entitlement will be calculated on a pro-rata basis foreach complete month worked. On termination of employment at the discretion of the Company the Executive may berequired to take outstanding holiday during the notice period. Alternatively, the Executive will be paid in lieu of any unusedholiday entitlement. The Executive will be required to repay the Company for holiday taken in excess of entitlement and anysums so due may be deducted from any money owing to the Executive.13.7For the purpose of calculating any pay due or owed in accordance with clause 13.6 above, one day’s pay shall be 1/260 ofthe basic annual Salary.13.8The Company reserves the right to require the Executive to work on a public holiday in return for which the Executive shallbe entitled to extra holiday, equal to the period worked, to be taken as agreed with the Executive’s supervisor.14.CONFIDENTIALITY14.1The Executive recognises that confidential information (which may include commercially sensitive information) is importantto the business of the Company and will from time to time become known to the Executive. The Executive acknowledgesthat the following restraints are necessary for the reasonable protection of the Company, of its business, the business of theother Group Companies, its or their clients, customers and their respective affairs,14.2The Executive will during the continuance of his employment and after the Termination Date observe strict secrecy as to theaffairs and dealings of the Company and any Group Company and (1) will not during the continuance of his employment(except in the proper performance of his duties of employment) or after the Termination Date (without limit in time), withoutthe prior written consent of the Board, make use of or divulge to any person and (2) during the continuance of hisemployment, will use his best endeavours to prevent the publication or disclosure of: 14.2.1financial information relating to the Company and any Group Company including (but not limited to) managementaccounts, sales forecasts, dividend forecasts, profit and loss accounts and balance sheets, draft accounts, results,order schedules, profit margins, pricing strategies and other information regarding the performance or futureperformance of the Company or any Group Company; 14.2.2client or customer lists and contact lists, details of the terms of business with, the fees and commissions charged toor by and the requirements of customers or clients, prospective customers or clients, buyers and suppliers of theCompany or any Group Company; 14.2.3any information relating to expansion plans, business strategy, marketing plans, and presentations, tenders,projects, joint ventures or acquisitions and developments contemplated, offered or undertaken by the Company orany Group Company; 14.2.4A details of the employees, officers and workers of and consultants to the Company or any Group Company, theirjob skills and capabilities and of the remuneration and other benefits paid to them;9 14.2.5copies or details of and. in formation relating to the Materials, know-how, research activities, inventions, creativebriefs, ideas, computer programs (whether in•Source code or object code) secret processes, designs and formulaeor other intellectual property undertaken, commissioned or produced by or on behalf of the Company or anyGroup Company; 14.2.6confidential reports or research commissioned by or provided to the Company or any Group Comp-any and anytrade secrets and confidential transactions of the Company or any Group Company: 14.2.7details of any marketing, development, pre-selling or other exploitation of any intellectual property or other rightsof the Company or any Group Company, any proposed options or agreements to purchase, licence or otherwiseexploit any intellectual property of the Company or any Group Company, any intellectual property which is underconsideration for development by the Company or any Group Company, any advertising, marketing orpromotional campaign which the Company or any Group Company is to conduct; and 14.2.8any information which the Executive ought reasonably to know is confidential and any information which hasbeen given to the Company or any Group Company in confidence by agents, buyers, clients, consultants,customers, suppliers or other persons.14.3The list in clause 14.2 is indicative only and is not exhaustive.14.4The obligations contained in clause 14.2 will cease to apply to the Confidential Information upon it coming into the publicdomain, other than as a result or in connection with the direct or indirect disclosure by the Executive in breach of clause 14.2.14.5The Executive undertakes that he will not while an employee of the Company nor after the Termination Date disclose,publish or reveal to any unauthorised person any incident, conversation or information concerning any director. employee•,agent or consultant of the Company or any Group Company or any of its customers, guests or visitors which comes to hisknowledge during the continuance of his employment, or any incident, conversation or information relating to hisemployment by the Company unless duly authorised in advance in writing by the Board so to do. The Executiveacknowledges and understands that this undertaking includes an agreement on his part not to publish or procure or facilitateor encourage the publication of any such matter in any book, newspaper, periodical or pamphlet or by broadcasting ontelevision, cable, satellite. film, internet or any other medium now known or devised after the date of this Agreement or bycommunication to any third party including a representative of the media.14.6The Executive will not at any time during the continuance of his employment with the Company make otherwise than for thebenefit of the Company (or any Group Company for whom the Executive is directed to provide his services) any notes ormemoranda relating to any matter within the scope of the business of the Company or any Group Company or concerningany of the dealings or affairs of the Company or any Group Company.14.7Nothing in this Agreement shall preclude the Executive from making a protected disclosure as the same is defined in section43A Employment Rights Act 1996.10 15.COMPANY PROPERTY15.1The Executive shall promptly whenever requested by the Company and in any event upon the termination of this Agreement(for whatsoever cause) deliver up to the Company or its authorised representative all statistics, documents, records or papers,software, tapes, disks, cassettes, programs, notes or memoranda which may be in his possession or under his control andwhich relate in any way to the property, business or affairs of the Company or any Group Company and no copies or extractswill be retained by him and he will at the same time deliver up to the Company or its authorised representative all creditcards, motor cars, motor keys, computers, laptops, personal organisers, mobile phones and all other property of the Companyor any Group Company in his possession or under his control.15.2The Company may withhold any sums owing to the Executive on the termination of his employment until the obligations inclause 15.1 have been complied with.16.INTELLECTUAL PROPERTY16.1The Executive will promptly disclose and deliver all Material to the Company, or as it may direct. To the extent the executivebecomes aware of anything he reasonably considers will be patentable he will inform the Company of it. The Company willbe entitled to make such use of the Material as it deems appropriate (including seeking any Intellectual Property Rightsprotection for the same) and the Executive will not use the Material in any manner, save as is necessary in performing hisduties pursuant to this Agreement, and will keep confidential arid will not disclose , or permit any third party to use, theMaterial and/or Intellectual Property Rights, in any manner, at any time either during or after the term of this Agreement.16.2To the extent that the Intellectual Property Rights have not vested in the Company by operation of law, the Executive herebyirrevocably assigns to the Company, including by way of future assignment, with full title guarantee, absolutely and freefrom all encumbrances, all his legal and beneficial right, title and interest in any and all Intellectual Property Rights in, orrelating to, the Material together with all accrued rights of action in respect of any infringement of any such IntellectualProperty Rights, including without limitation the right to apply for patent protection.16.3The Executive will, without charge to, but at the cost and expense of, the Company, execute and do all such acts, matters,documents and things as may be necessary or reasonably required to obtain patent, decision or other protection for any of theMaterial or improvements or developments of or to the Material and to vest title to the Intellectual Property Rights in, orrelating to, the Material in the. Company (or such company as it directs) absolutely.16.4To the extent permitted by law, the Executive hereby irrevocably and unconditionally waives any and all moral rightsconferred by Chapter IV of the Copyright, Designs and Patents Act 1988 or any rights of a similar nature under law now or inthe future in force in any other jurisdiction in and to any and all Material, such waiver in favour of the Company, itssuccessors in title and assigns.16.5The provisions of this clause will not be affected by reason of the termination of this Agreement for whatever reason and willcontinue after it ends.16.6The Company is under no obligation to apply for or seek to obtain patent, design or other protection in relation to any of theMaterial or in any way to use, exploit or seek to benefit from any of the Material.11 16.7The Executive hereby warrants and agrees that all Material created by him will be created solely by him and will be originaland/or if created by or with a third party he has obtained a full unconditional assignment of any and all Intellectual PropertyRights on or relating to such Material.17.TERMINATION17.1The Company will be entitled to terminate this Agreement at any time, without giving the period of notice set out in clause.3.1 or payment in lieu of such notice, by summary notice in writing if the Executive: 17.1.1is adjudicated bankrupt or makes any arrangement or composition with his creditors; 17.1.2becomes a patient under any statute dealing with mental health; 17.1.3resigns as a director of the Company or any Group Company otherwise than at the request of the Board or thedirectors of any Group Company; 17.1.4is incapacitated due to sickness, or disability or mental illness for a continuous period of 60 working days or forperiods aggregating 60 working clays in any consecutive period of 12 months (notwithstanding the fact that suchdismissal would terminate the Executive’s entitlement under any permanent health or permanent disabilityinsurance scheme in force in respect of the Executive); 17.1.5is found to be addicted or habitually under the influence of alcohol or any drug, the possession of which iscontrolled by law (other than any drug prescribed for the Executive by a medical practitioner); 17.1.6neglects to carry out any action, where the effect of so doing may, in the reasonable opinion of the Board,seriously damage the. interests of the Company or any Group Company or negligently breaches any legislation orany regulation to which the Company or any Group Company may be subject which results in any penalties beingimposed on him or any penalties being imposed on any directors of the Company or any Group Company or theCompany itself; 17.1.7wilfully carries out, or wilfully neglects to carry out any act ion , where the effect of so doing may, ln thereasonable opinion of the Board, seriously damage the interests of the Company or any Group Company orwilfully breaches any legislation or any regulation to which the Company or any Group Company may be subjectwhich results in any penalties being imposed on him or any penalties being imposed on any directors of theCompany or any Group Company or the Company itself; 17.1.8is guilty of any serious breach of any of the provisions of this Agreement or directions of the Board or is guilty ofany continued or successive breaches of any of such provisions or directions having received a written warning bythe Board; 17.1.9is convicted of any criminal offence (other than a minor motoring offence that does not render him unable properlyto discharge his duties); 17.1.10commits any other act warranting summary termination at common law:12 17.1.11knowingly commits any deliberate act of discrimination, victimisation or harassment on any unlawful ground; 17.1.12commits a material breach of any of the provisions of the articles of association of the Company; or 17.1.13is disqualified from being a director of a company by reason of an order made by a competent court.The termination by the Company of the appointment will be without prejudice to any claim which the Company may havefor damages arising from a breach of this Agreement by the Executive.17.2Any delay or forbearance by the Company in exercising any right of termination hereunder will not constitute a waiver ofsuch right.17.3The Company is under no obligation to vest in or assign to the Executive any powers•or duties or to provide any work for theExecutive and the Company will have the right (in its absolute discretion): (i) during the whole or any part of any period ofnotice to terminate this Agreement; and/or (ii) otherwise when in the opinion of the Board the interests of the Company sorequire, suspend the Executive from the performance of his duties and/or require the Executive: 17.3.1not to perform his duties and/or to carry out alternative duties of a broadly similar nature to the work he normallyperforms; and/or 17.3.2to abstain from contacting any client, consultant, customer, supplier, adviser, agent, director, employee or workerof the Company or of any Group Company); and/or 17.3.3not to enter any premises of the Company or any Group Company; and/or 17.3.4to resign from any or all offices in the Company and any Group Company; and/or 17.3.5to return to the Company all documents and other materials (including copies) belonging to the Company and/orany Group Company except that (subject to the provisions of clause 14) the Executive will be entitled to retainuntil the Termination Date or for as long as he continues as a director of the Company or any Group Companycopies of board papers received by him during the course of his employment in his capacity as a director of theCompany or any Group Company.17.4Salary and, subject clause 11, Contractual Benefits (excluding bonus and share options) will not cease to be payable to theExecutive by reason of any suspension or exclusion pursuant to clause 19.3 and the Executive will throughout any suchperiod of suspension or exclusion continue to be an employee of the Company and will continue to be bound by the duty offidelity and by the terms of this Agreement and may not directly or indirectly be employed by nor provide services to anythird party, except subject to clause 7.3, nor make any preparations to compete with the Company or any Group Company.17.5If the employment of the Executive is terminated: 17.5.1by reason of the liquidation of the Company for the purposes of amalgamation or reconstruction; or13 17.5.2as part of any arrangement for the amalgamation of the undertaking of the Company not involving liquidation orfor the transfer of the whole or part of the undertaking of the Company to any of its subsidiaries or associates; and 17.5.3the Executive is offered employment of a similar nature with the amalgamated or reconstructed or transfereecompany on terms not generally less favourable to him than the terms of this Agreement,the Executive will have no claim against the Company or Group Company or associate of the Company in respect of thattermination.18.SICKNESS18.1If the Executive is at any time prevented by ill health from performing his duties under this Agreement he will, if required,furnish the Board with evidence satisfactory to them of his incapacity. Subject to that, he will receive his full remuneration forthe first 60 working days off due to ill health in any period of 12 consecutive months (payment to be inclusive of anystatutory sick pay or social security benefits to which. he may be entitled). If he continues to be incapacitated for a periodlonger than 60 working clays in any period of 12 consecutive months, then any further remuneration payable to him will beat the express discretion of the Board without prejudice to the Company’s right to dismiss the Executive under clause 17.1.4above.18.2If so required by the Board at any time, (and whether or not the E:xecutive is absent by reason of sickness, injury or otherincapacity) the Executive will undergo, at the expense of the Company, medical or psychological examinations by suchdoctor or doctors as the Board nominates. The Executive authorises the Company pursuant to the Access to Medical ReportsAct 1988 to have unconditlonal access to any such report (including copies of and documents referred to in such reports)prepared as a result of any such examination and authorises the doctor(s) concerned to discuss the same with any appropriaterepresentative of the Company.18.3If the Executive is absent from his employment as a .result of sickness or injury he will: 18.3.1notify the Company by telephone as soon as practicable on the first day of his absence; 18.3.2if the period of absence is less than eight consecutive calendar days, submit to the Company on his return acertificate of sickness completed by himself; 18.3.3if the period of .c1bsence is eight consecutive calendar days or more, submit to the Company without delay amedical certificate signed by a practising medical practitioner in respect of the duration of the absence after the firstweek and will send further medical certificates in respect of any continued absence every seven days.18.4The Company may also require a medical certificate from the Executive’s doctor and/or any doctor(s) nominated by it,confirming that the Executive is fit to return to work after any period of absence. The Company has the right to postpone theExecutive’s return to work (and the. continuance or reinstatement of his normal pay, if appropriate) until the Company’snominated doctor has confirmed he is fit to return to his current role and duties.14 19.GRIEVANCE, DISMISSAL AND DISCIPLINARY PROCEDURES19.1The disciplinary rules applicable to the Executive are set out in the Company’s dismissal and disciplinary policy.19.2The Company’s dismissal and disciplinary policy from time to time sets out the procedure applicable to the taking ofdisciplinary decisions relating to the Executive or to a decision to dismiss the Executive.19.3The Company may at any time and from Ume to time in its discretion suspend the Executive from his duties on payment offull Salary and/or exclude the Executive from any premises of the Company and/or any Group Company whilst it carries outany investigation or disciplinary process.19.4If the Executive is dissatisfied with a disciplinary decision relating to him or any decision to dismiss him he should apply inaccordance with the procedure set out in the Company’s dismissal and disciplinary policy, in writing to the Chairman. If theExecutive wishes to seek redress of any grievance relating to his employment, he should apply in accordance with theprocedure set out in the Company’s grievance procedure, in writing to the Chairman. Further details are given in the relevantpolicies.19.5The Executive hereby agrees that he will not at any time after the termination of this Agreement either personally or by hisagent, directly or indirectly, falsely represent himself as being in any way still connected with or interested in the business ofthe Company.20.PROTECTION OF THE COMPANY’S INTERESTS20.1The Executive agrees with the Company that he will not directly or indirectly: 20.1.1for a period of six months immediately following the Termination Date: 20.1.1.1carry on or be interested in a Competing Business, save that he may hold up to 3% of any crass ofsecurities quoted or dealt in on a recognised investment exchange or 20%, of any class of securitiesnot so dealt; 20.1.1.2act as a consultant, employee or officer or any other capacity in a Competing Business; 20.1.1.3either on his own account or on behalf of any Competing Business supply Restricted Goods orServices to any Client; 20.1.1.4on behalf of any Competing Business deal with a Client; 20.1.1.5either on his own account or for any person, firm or company or other undertaking employ orotherwise engage the services of any Key Employee whether or not any such Key Employee wouldin entering into the employment or engagement commit a breach of contract; 20.1.1.6either on his own account or on behalf of any Competing Business deal with a Supplier;15 20.1.2for a period of 12 months immediately following the Termination Date: 20.1.2.1either on his own account or for any company, firm, person or other undertaking induce, solicit orentice or endeavour to induce, solicit or entice any Key Employee to cease working for orproviding their services to the Company or any relevant Group Company whether or not any suchKey Employee would by entering into the employment or engagement commit a breach ofcontract; 20.1.2.2either on his own account or on behalf of any Competing Business directly or indirectly induce,solicit or entice or endeavour to induce, so licit or entice any Client to cease conducting anybusiness with the Company or any Group Company or to reduce the amount of business conductedwith the Company or any Group Company or adversely to vary the terms upon which any businessis conducted with the Company or any Group Company or to exclude the Company or any GroupCompany from new business opportunities in relation to any Restricted Goods or Services; 20.1.2.3on behalf or any Competing Business directly or indirectly induce, solicit or entice or endeavour toinduce, solicit or entice any Supplier to cease conducting business with the Company or any GroupCompany or to reduce the amount of business conducted with the Company or any GroupCompany or adversely to vary the terms upon which any business is conducted with the Companyor any Group Company.20.2The Executive will not at any time after the Termination Date or, if later, the date on which he ceases to be a director of theCompany or any Group Company) present himself or allow himself to be held out or presented as being in any wayconnected with or interested in the business of the Company or any Group Company (other than as a shareholder orconsultant. if that is the case).20.3The Executive agrees that each of the restrict ions set out in sub-clauses 20. 1.1 to 20.1.2.2 constitute entirely separate,severable and independent restrictions on him. The Executive acknowledges that he has had the opportunity to receiveindependent legal advice on the terms and effect of the provisions of this Agreement, including the restrictions above.20.4The duration of each of the restrictions set out in clause 20.1 above will be reduced pro rata by any period during which theCompany suspends the Executive from the performance of his duties pursuant to clause 17.3 above.20.5If the Executive accepts employment or engagement (whether as a consultant or in any other capacity) with any third partyduring the period of any of the restrictions set out in clause 20.1 he will on or before such acceptance provide the third partywith full details of these restrictions.20.6The Executive will not induce, procure, authorise or encourage any other person, firm, corporation or organisation to do orprocure to be done anything that if done by the Executive would be a breach of any of the provisions of sub-clauses 20.1.1to 20.1.2.2.16 20.7Other than when the Executive exercises his right under clause 3.6 above, if the Executive’s employment is transferred to anentity other than the Company or any Group Company (“the new employer”) pursuant to the Transfer of Undertakings(Protection of Employment) Regulations 2006, he will, if required, enter into an agreement with the new employer that willcontain provisions that provide protection to the new employer similar to that provided to the Company and any GroupCompany in dc:1uses 20.1.1 to 20.1.2.2 above.21.APPLICATION OF RESTRICTIONS21.1The Executive agrees that the restrictions in clause 20 above are no wider or more restrictive than is reasonably necessary forthe protection of the goodwill, trade connections, employee base and Confidential Information of the Business.21.2The benefit of the restrictions in clause 20 above extend to any Group Company and the Company contracts as trustee forany other Group Company that (without prejudice to the Company’s right to enforce any such restriction both for itself andfor any other Group Company) any such other Group Company may enforce the same against the Executive. The Executivewill at any time (whether before or after the Termination Date) upon written request execute under seal directly with anyother Group Company a •deed or deeds in its favour provided that the same does not contain restrictions or other provisionswhich are more restrictive or onerous than those contained in this Agreement.21.3It is hereby agreed and declared that each of the restrictions contained in clause 20 of this Agreement shall be read andconstrued independently of the others and that all such restrictions are considered reasonable by the parties to this Agreementbut, in the event that any such restriction shall be found or held to be void in circumstances where it would be valid if somepart of it were deleted , the parties to this Agreement agree that such restriction shall apply with such deletion as may benecessary to make it valid and effective and that any such modification shall not affect the validity of any other restrictioncontained in this Agreement.21.4If the Company requires the Executive not to perform any of his duties and/or excludes the Executive from the Company’spremises as set out in clause 20 above for some or all of any period of notice (“Garden Leave Period”), the period of thepost-termination restrictions set out in clause 20 will be reduced by the length of the Garden Leave Period served before theTermination Date.22.DIRECTORSHIP22.1The Executive will, if so requested, become a director of the Company or any Group Company and remain in such capacitywithout any additional remuneration.22.2In the event of the Executive holding office as. a director of the Company or any Group Company at the date of his ceasingfor any reason to be an employee of the Company he will immediately, if so required by the Board, resign such directorshipwithout compensation but without prejudice to his rights under this Agreement.22.3In the course of any such directorship the Executive will act at all times in the best interests of the Company and shall adhereto the highest standards of corporate governance applicable to a company of the size and nature of the Company.17 23.DATA PROTECTION23.1The Executive consents to the Company and/or any Group Company and its or their duly authorised agents and employeesholding and processing both electronically and manually the data (including personal sensitive data and informationcontained in email, email attachments and other forms of electronic communications) it collects, stores or processes whichrelates to the Executive, in the course of the Executive’s employment , for the purposes of the administration andmanagement of its employees and its business and for compliance with applicable procedures, laws and regulations. It mayalso be necessary for the Company and/or any Group Company to forward such data to other offices it may have or toanother Group Company outside the European Economic Area where such a company has. offices for storage and processingfor administration purposes and the Executive consents to the Company and/or any Group Company doing so as may benecessary from time to time.23.2To ensure regulatory compliance and for the protection of its workers, clients/customers and business, the Company reservesthe right to monitor, intercept, review and access the Executive’s telephone log, internet usage, voicemail, email and othercommunication facilities provided by the Company which the Executive may use during his employment. The Company willuse this right of access reasonably but it is important that the Executive is aware that communications and activities on theequipment or premises of the Company and any Group Company cannot be presumed to be private.23.3The Executive agrees to abide by the terms of the Company’s email/communications policy from time to time in force.24.POWER OF ATTORNEYThe Executive hereby irrevocably and by way of security appoints the Company and each other director of the Companyfrom time to time, jointly and severally to be his attorney in his name and on his behalf to perform, sign, execute and deliverall acts, things and documents which he is obliged to execute and perform, sign and execute under the provisions of thisAgreement (including, but not limited to clauses 16.3 and 22.2) and the Executive hereby agrees immediately on the requestof the Company to ratify and confirm all such acts, things and documents signed, executed or performed in the pursuance ofthis power.25.NOTICESAny notice under this Agreement will be given in writing by either party to the other and will be deemed to be duly served ifhand delivered or sent by facsimile or by first-class pre-paid post addressed, in the case of the Company, to its registeredoffice marked for the attention of the Secretary of the Company and in the case of the Executive, to his address last known tothe Company. Any such notice will, in the case of delivery, be deemed to have been served at the time of delivery and, in thecase of posting, on the expiration of 48 hours after it has been posted by first-class mail.18 26.OTHER AGREEMENTSThe Executive acknowledges and warrants that this is the entire and only agreement and understanding of the parties and thatthere are no agreements or arrangements whether written or oral between the Company and the Executive relating to theemployment of the Executive. This Agreement supersedes all previous arrangements between any Group Company and theExecutive as to the employment of the Executive. The Executive acknowledges that he is not entering into this Agreement lnreliance upon any representation not expressly set out in this Agreement. In particular, no collective agreement forms anypart of the Executive’s terms of employment.27.COUNTERPARTSThis Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts, each ofwhich will be an original but all of which together will constitute one and the same instrument. The Agreement is noteffective until each party has executed at least one counterpart and it has been received by the other party (transmission byfacsimile being acceptable for this purpose) and the Agreement has been dated by agreement between the representatives ofthe parties.28.GOVERNING LAW ANO JURISDICTIONThe validity, construction and performance of this Agreement and any claim, dispute or matter arising under or in connectionwith it or its enforceability will be governed by and construed in accordance with the laws of England and Wales. Each partyirrevocably submits to the exclusive jurisdiction of the Courts of England over any claim, dispute or matter arising under orin connection with this Agreement or its enforceability or the legal relationships established by this Agreement. 19 THIS DEED has been executed by or on behalf of the parties on the date written at the top of page 1. EXECUTED as a DEED ) by KALVISTA PHARMACEUTICALS LIM1TED ) acting by: ) /s/ T. Andrew Crockett, Director , Secretary SIGNED as a DEED and DELIVERED) /s/ Christopher Martyn Yea by DR CHRISTOPHER MARTYN YIZA) in the presence of:) Witness signature:/s/ Clive Balcombe Witness name: Clive Balcombe Witness address: EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-2152815 and 333-217009 on Form S-3 and RegistrationStatement Nos. 333-203721, 333-215184, 333-216032 and 333-217008 each on Form S-8 of our report dated July 30, 2018, relating tothe financial statements of KalVista Pharmaceuticals, Inc. appearing in this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc. forthe year ended April 30, 2018./s/ Deloitte & Touche LLPBoston, MassachusettsJuly 30, 2018 EXHIBIT 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-215185 and 333-217009 each on Form S-3 andRegistration Statement Nos. 333-203721, 333-215184, 333-216032 and 333-217008 each on Form S-8 of our report dated August 22,2016 (July 27, 2017 as to the effects of the adjustment of net loss per share arising from the Carbylan transaction discussed in Note 2 andthe misstatement of other comprehensive loss discussed in Note 2), relating to the financial statements of KalVista Pharmaceuticals Limited(which report expresses an unqualified opinion and includes an emphasis of matter paragraph relating to the restatement of othercomprehensive loss discussed in Note 2) appearing in this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc. for the year endedApril 30, 2018./s/ Deloitte LLPReading, United KingdomJuly 30, 2018 Exhibit 31.1CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, T. Andrew Crockett, certify that: 1.I have reviewed this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. Date: July 30, 2018By: /s/ T. Andrew Crockett T. Andrew CrockettChief Executive Officer Exhibit 31.2CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Benjamin L. Palleiko, certify that: 1.I have reviewed this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. Date: July 30, 2018By: /s/ Benjamin L. Palleiko Benjamin L. PalleikoChief Financial Officer Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, T. Andrew Crockett, Chief Executive Officer of KalVista Pharmaceuticals, Inc. (Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: •this Annual Report on Form 10-K of the Company for the year ended April 30, 2018 (Report), as filed with the Securities and ExchangeCommission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and •the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: July 30, 2018By: /s/ T. Andrew CrockettT. Andrew CrockettChief Executive Officer Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Benjamin L. Palleiko, Chief Financial Officer of KalVista Pharmaceuticals, Inc. (Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: •this Annual Report on Form 10-K of the Company for the year ended April 30, 2018 (Report), as filed with the Securities and ExchangeCommission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and •the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: July 30, 2018By: /s/ Benjamin L. Palleiko Benjamin L. PalleikoChief Financial Officer

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