Background: The continued emergence of SARS-CoV-2 variants has caused concern that a constantly evolving virus will escape vaccines and antibody therapies. New approaches are needed. Methods: We created and manufactured an ACE2 extracellular domain (ECD) fragment Fc fusion drug candidate, G921, and engineered the compound for enhanced delivery of drug to peripheral tissues by minimizing the size of the ACE2 ECD and by incorporating an Fc domain to enhance transcytosis. G921 was assessed for binding, neutralization, in vivo anti-inflammatory effect, and pharmacokinetic profile. Results: G921 was expressed as an IgG4 Fc fusion protein presenting two ACE2 domains to ACE2 ligands while avoiding risk of infection via antibody-dependent enhancement. G921 strongly binds to the SARS-CoV-2 Wuhan-Hu-1 spike protein and demonstrates further diminished off rate to the spike protein from each of the currently identified variants of concern. G921 demonstrates ACE2 enzymatic activity comparable to positive control and binding to the neonatal Fc receptor (FcRn) without binding to low affinity Fc-gamma receptors (FcγRs). G921 is effective in a concentration-dependent manner in a focus reduction neutralization assay with EC50=16.3±4.2 μg/mL without cytotoxicity in Vero E6 cells when tested at 200 μg/mL in an MTS cell proliferation assay. G921 demonstrates statistically significant reduction of lung inflammation in relevant models of both SARS-CoV-2 and influenza. The pharmacokinetic profile demonstrated dose-dependent exposure with a multi-day half-life in monkeys and rats. Conclusion: G921 data are consistent with both antiviral and anti-inflammatory modes of action. G921 is a novel approach for the prevention and treatment of COVID-19 and possible other diseases characterized by deficiency of ACE2.