What changed in this filing

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Item 1A. Risk Factors

2021-11-04 compared with 2021-08-05 · 198 added, 197 removed, 1293 unchanged (23% of the section changed)

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We have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses and cannot guarantee when, if ever, we will become profitable or attain positive cash flows.

Investment in pharmaceutical product development and commercialization is highly speculative because it entails upfront capital expenditures and significant risk that a product candidate will fail to gain marketing approval or that an approved product will not be commercially viable.

Investment in pharmaceutical product development and commercialization is highly speculative because it requires upfront capital expenditures and significant risk that a product candidate will fail to gain marketing approval or that an approved product will not be commercially viable.

Since our inception, we have devoted most of our resources to research and development, including our preclinical and clinical development activities and, following the merger, or the Merger, whereby Keryx Biopharmaceuticals, Inc., or Keryx, became a wholly owned subsidiary of ours, commercialization.

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Prior to the Merger, we had no products approved for commercial sale and had not generated any revenue from the sale of products.

We are not currently profitable and have incurred net losses each year since our inception, including net losses of $152.6 million for the six months ended June 30, 2021.

As of June 30, 2021,

we had an accumulated deficit of $1.3 billion.

We are not currently profitable and have incurred net losses each year since our inception, including net losses of $212.2 million for the nine months ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $1.4 billion.

We cannot guarantee when, if ever, we will become profitable.

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• developing, commercializing and marketing Auryxia, vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired;

• obtaining marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, and the timing of such approvals, and maintaining marketing approvals for Auryxia and any other product, including those that may be in-licensed or acquired;

• obtaining marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, and the timing and scope of such approvals, and maintaining marketing approvals for Auryxia, vadadustat, if approved, and any other product, including those that may be in-licensed or acquired;

• developing sustainable and scalable manufacturing processes for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired;

• establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate products that are compliant with good manufacturing practices, or GMPs, and services to support the clinical development and the market demand for Auryxia, vadadustat, if approved, and any other product and product candidate, including those that may be in-licensed or acquired;

• obtaining sufficient pricing and reimbursement for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired, from private and governmental payors;

• establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate products that are compliant with good manufacturing practices, or GMPs, to support the clinical development and the market demand for Auryxia, vadadustat, if approved, and any other product and product candidate, including those that may be in-licensed or acquired;

• obtaining adequate or favorable pricing and reimbursement from private and governmental payors for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired;

• obtaining and maintaining market acceptance of Auryxia, vadadustat and any other product candidate, including those that may be in-licensed or acquired;

• the size of any market in which Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired, receives approval and obtaining adequate market share in those markets;

• competing effectively with any competitive products and any disruptive technologies;

• competing effectively with any competitive products and any products that may disrupt the biotechnology industry;

• identifying, assessing, acquiring, in-licensing and/or developing new product candidates;

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• maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;

• integrating following the Merger;

• attracting, hiring and retaining qualified personnel.

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We expect to continue to incur significant expenses if and as we:

• conduct any post-marketing approval studies, Phase 4 studies or any other clinical trials for Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired;

• conduct and enroll patients in any clinical trials, including post-marketing approval studies, any Phase 4 studies or any other clinical trials for Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired;

• continue our commercialization activities for Auryxia and plan for the commercialization of vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired;

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• adapt to any changes in reimbursement practices by third party payors;

• enroll patients in our clinical trials;

• seek marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, and maintain marketing approvals for Auryxia and any other product, including those that may be in-licensed or acquired;

• seek marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired;

• maintain marketing approvals for Auryxia, vadadustat, if approved, and any other product, including those that may be in-licensed or acquired;

• have Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired, manufactured for clinical trials and for commercial sale;

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• experience any delays or encounter issues with any of the above.

We also could be forced to expend significant resources in our legal proceedings, as described under Part II, Item 1.

We have and will continue to expend significant resources in our legal proceedings, as described under Part II, Item 1.

Legal Proceedings, or any other such legal proceedings brought by or against us in the future.

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Our expenses could increase beyond expectations if we are required by the U.S.

Food and Drug Administration, or FDA, the European Medicines Agency, or the EMA, or other regulatory authorities, or if we otherwise believe it is necessary, to change our manufacturing processes or assays, to amend or replace our study protocols, to repeat any of our clinical trials, to perform studies in addition to, different from or larger than those currently expected, if there are any delays in completing our clinical trials or if there are delays to or issues with obtaining marketing approval for vadadustat in the United States, the EU or other jurisdictions.

Food and Drug Administration, or FDA, the European Medicines Agency, or the EMA, or other regulatory authorities, or if we otherwise believe it is necessary, to change our manufacturing processes or assays, to amend or replace our study protocols, to repeat any of our clinical trials, to perform studies in addition to, different from or larger than those currently expected, if there are any delays in completing our clinical trials or if there are delays in or issues with obtaining marketing approval for vadadustat in the United States, the EU or other jurisdictions.

Even if vadadustat and any other product candidate, including those that may be in-licensed or acquired, are approved for commercial sale, we anticipate incurring significant costs associated with commercialization.

In addition, our ability to generate revenue would be negatively affected if the size of our addressable patient population is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the patient population for treatment is narrowed by competition, physician choice, coverage or reimbursement, or payor or treatment guidelines.

Even though we generate product revenue from Auryxia and royalties from Riona and Vafseo TM, in Japan and may generate revenue and royalties from the sale of any products that may be approved in the future, including those that may be in-licensed or acquired, we may never generate revenue and royalties that are significant enough to become and remain profitable, and we will need to obtain additional funding to continue operations.

acquired, we may never generate revenue and royalties that are significant enough for us to become and remain profitable, and we will need to obtain additional funding to continue operations.

We will require substantial additional financing to achieve our goals.

A failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

As of June 30, 2021, our cash and cash equivalents and available for sale securities were $247.0 million.

As of September 30, 2021, our cash and cash equivalents and available for sale securities were $207.2 million.

We expect to continue to expend substantial amounts of cash for the foreseeable future as we continue to commercialize Auryxia and develop and commercialize vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired.

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In addition, other unanticipated costs may arise.

Because the outcome of our current and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amount of funding necessary to successfully complete the clinical development, including post-marketing studies, and commercialization of Auryxia and vadadustat.

Our future capital requirements depend on many factors, including:

• the scope, progress, results and costs of conducting clinical studies or any post-marketing approval requirements, Phase 4 studies or any other clinical trials for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired;

• the cost and timing of commercialization activities for Auryxia, vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired, including product manufacturing, marketing, sales and distribution costs;

• the cost and timing of commercialization activities, including product manufacturing, marketing, sales and distribution costs, for Auryxia, vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired;

• the results of our meetings with the FDA, the EMA and other regulatory authorities and any consequential effects, including on timing of and ability to obtain and maintain marketing approval, study design, study size and resulting operating costs;

• difficulties or delays in enrolling patients in our clinical trials;

• the timing of, and the costs involved in obtaining, and, if approved, maintaining, marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, including to fund the preparation and filing of regulatory submissions, and the costs of maintaining marketing approvals for Auryxia or any other product, including those that may be in-licensed or acquired;

• the timing of, and the costs involved in obtaining, and, if approved, maintaining, marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, including to fund the preparation, filing and prosecution of regulatory submissions, and the costs of maintaining marketing approvals for Auryxia or any other product, including those that may be in-licensed or acquired;

• the outcome of our efforts to obtain marketing approval for vadadustat in the United States, Europe and in other jurisdictions and any other product candidates, including those that may be in-licensed or acquired;

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• our ability to attract, hire and retain qualified personnel;

• costs related to the creation of additional infrastructure and expansion of additional resources to support our operations as a fully integrated, publicly traded biopharmaceutical company;

• any ongoing costs related to the creation of additional infrastructure and expansion of additional resources to support our operations as a fully integrated, publicly traded biopharmaceutical company;

• the extent to which we engage in transactions, including strategic, merger, collaboration, acquisition and licensing transactions, pursuant to which we would develop and market commercial products, or develop other product candidates and technologies.

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If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

We expect our cash resources to fund our current operating plan beyond the expected U.S.

launch of our product candidate, vadadustat, assuming timely regulatory approval and the receipt of associated regulatory milestones.

We believe that our cash resources will be sufficient to allow us to fund our current operating plan through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q.

We have based these estimates on assumptions that may prove to be wrong due to a variety of factors, including due to the effects of the ongoing severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), or COVID-19, pandemic, and we could use our available capital resources sooner than we currently expect.

In addition, there can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, or that our cash resources will fund our operating plan for the period anticipated by us or that additional

funding will be available on terms acceptable to us, or at all.

Furthermore, our regulatory milestones may not be achieved, we may not receive the anticipated funding from our collaboration partners, and we may not secure other sources of financing.

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Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic objectives.

In addition, if we receive regulatory approval of vadadustat in the U.S., we expect to incur significant incremental costs to our current operating plan to commercialize vadadustat, including costs of marketing, manufacturing and distribution.

The potential timely regulatory approval of vadadustat and the receipt of associated regulatory milestones is an important source of funding of our cash runway.

However, we will require additional funding to fund our operating plan beyond the next twelve months.

Any additional fundraising efforts may divert our management’s attention away from their day-to-day activities, which may adversely affect our ability to develop and commercialize Auryxia, vadadustat and any other products or product candidates, including those that may be in-licensed or acquired.

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See Note 11 to our unaudited condensed consolidated financial statements in Part I, Item 1.

Financial Statements (unaudited) for additional information regarding our obligations under the Loan Agreement.

Financial Statements (unaudited) included in this Quarterly Report on Form 10-Q for additional information regarding our obligations under the Loan Agreement.

Our Loan Agreement with Pharmakon contains affirmative and negative covenants applicable to us and our subsidiaries, including maintaining, on an annual basis, a minimum liquidity threshold starting in 2021, and on a quarterly basis, a minimum net sales threshold for Auryxia, which started in the fourth quarter of 2020.

Failure to maintain compliance with these covenants could result in an event of default under the Loan Agreement.

Failure to maintain compliance with these or other covenants could result in an event of default under the Loan Agreement.

In the event there is an acceleration of our and certain of our subsidiaries’ liabilities under the Loan Agreement as a result of an event of default, we may not have sufficient funds or may be unable to arrange for additional financing to repay the liabilities or to make any accelerated payments, and Pharmakon could seek to enforce security interests in the collateral securing the Loan Agreement and Keryx’s guarantee of the Term Loans, which could have a material adverse effect on our business, financial condition and results of operations.

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In addition, our obligations in connection with the Loan Agreement could have additional significant adverse consequences, including, among other things:

• restricting our activities, including limitations on transferring certain of our assets, engaging in certain transactions, incurring certain additional indebtedness, creating certain liens, paying dividends or making certain other distributions and making certain investments;

• limiting our flexibility in planning for, or reacting to, changes in our business and our industry;

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Royalties from commercial sales of vadadustat under our Collaboration Agreement with MTPC will likely fluctuate and will impact our rights to receive future payments from our Royalty Agreement with HCR.

On February 25, 2021, we entered into the Royalty Agreement with HCR, pursuant to which we sold to HCR our right to receive the Royalty Interest Payments payable to us under our the MTPC Agreement, subject to the Annual Cap of $13.0 million and the Aggregate Cap of $150.0 million.

Pursuant to the Royalty Agreement with HCR, we sold to HCR our right to receive the Royalty Interest Payments payable to us under our the MTPC Agreement, subject to the Annual Cap and the Aggregate Cap.

After HCR receives Royalty Interest Payments equal to the Annual Cap in a given calendar year, we will receive 85% of the Royalty Interest Payments for the remainder of that year.

After HCR receives Royalty Interest Payments equal to the Aggregate Cap, or we pay the Aggregate Cap to HCR (net of the Royalty Interest Payments already received by HCR), the Royalty Interest Payments will revert back to us, and HCR would have no further right to any Royalty Interest Payments.

We received $44.8 million from HCR (net of certain transaction expenses) under the Royalty Agreement, and we are eligible to receive an additional $15.0 million under the Royalty Agreement if specified sales milestones are achieved for vadadustat in the territory covered by the MTPC Agreement, subject to the satisfaction of certain customary conditions.

We received $44.8 million from HCR (net of certain transaction expenses) under the Royalty Agreement, and we are eligible to receive up to an additional $15.0 million under the Royalty Agreement if specified sales milestones are achieved for vadadustat in the territory covered by the MTPC Agreement, subject to the satisfaction of certain customary conditions.

The royalty revenues under the MTPC Agreement may fluctuate considerably because they depend upon, among other things, the rate of growth of sales of vadadustat in the territory covered under the MTPC Agreement.

after the Annual Cap is achieved in a given calendar year, or our ability to receive 100% of the Royalty Interest Payments after the Aggregate Cap is achieved.

Negative fluctuations in these royalty revenues could delay, diminish or eliminate our right to receive up to the additional $15.0 million under the Royalty Agreement upon achievement of the specified sales milestones, our ability to receive 85% of the Royalty Interest Payments after the Annual Cap is achieved in a given calendar year, or our ability to receive 100% of the Royalty Interest Payments after the Aggregate Cap is achieved.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product and product candidates on unfavorable terms to us.

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, our fixed payment obligations may increase, any such securities may have rights senior to those of our common stock, and the terms may include liquidation or other preferences and anti-dilution protections that adversely affect the rights of our common stockholders.

Debt financing, if available, may involve agreements that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, make capital expenditures, declare dividends, acquire, sell or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business.

Additional debt financing, if available, may involve agreements that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, make capital expenditures, declare dividends, acquire, sell or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business.

If we raise additional funds through royalty transactions, we may have to relinquish valuable rights to our portfolio and future revenue streams, and enter into agreements that would restrict our operations and strategic flexibility.

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As part of our business strategy, we may engage in additional strategic transactions to expand and diversify our portfolio, including through the acquisition of assets, businesses, or rights to products, product candidates or technologies or through strategic alliances or collaborations, similar to the Merger and our existing collaboration and license arrangements.

We may not identify suitable strategic transactions, or complete such transactions in a timely manner, on a cost-effective basis, or at all.

We may not identify suitable strategic transactions, or complete such transactions in a timely manner, on favorable terms, on a cost-effective basis, or at all.

Moreover, we may devote resources to potential opportunities that are never completed or we may incorrectly judge the value or worth of such opportunities.

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Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to continue to integrate our business and Keryx’s business and realize anticipated growth opportunities and synergies.

If we are unable to successfully integrate the businesses, or integrate them in a timely fashion, we have faced, and may continue to face, adverse effects, some of which may be material, including, but not limited to (i) diversion of the attention of management and key personnel and potential disruption of our ongoing business, (ii) the loss of employees, (iii) challenges of managing a larger company, including challenges of conforming standards, controls, procedures and accounting and other policies and compensation structures, (iv) difficulties in achieving anticipated cost savings, (v) declines in our results of operations, financial condition or cash flows, (vi) a decline in the market price of our common stock, and (vii) potential liabilities, adverse consequences, increased expenses or other problems associated with our company following completion of the Merger.

Many of these factors are outside of our control, and any one of them could result in increased costs, decreased expected revenues and further diversion of management time and energy, which could materially impact our business, financial statements and prospects.

If we are unable to successfully integrate the businesses, or integrate them in a timely fashion, we have faced, and may continue to face, adverse effects, some of which may be material, including, but not limited to (i) diversion of the attention of management and key personnel and potential disruption of our ongoing business, (ii) the loss of employees, (iii) challenges of managing a larger company, including challenges of conforming standards, controls, procedures and accounting and other policies and compensation structures, (iv) difficulties in achieving anticipated cost savings, (v) declines in our results of operations, financial condition or cash flows, and (vi) potential liabilities, adverse consequences, increased expenses or other problems associated with our company following completion of the Merger.

Many of these factors are outside of our control, and any one of them

could result in increased costs, decreased expected revenues and further diversion of management time and energy, which could materially impact our business, financial statements and prospects and cause a decline in the market price of our common stock.

In addition, following the Merger, we have become responsible for Keryx’s liabilities and obligations, including with respect to legal, financial, regulatory and compliance matters, including certain post-approval regulatory requirements with respect to Auryxia and obligations under collaboration, license, supply and manufacturing agreements.

These obligations have, and will continue to, result in additional cost and investment by us and, if we have underestimated the amount of these costs and investments or if we fail to satisfy any such obligations, we may not realize the anticipated benefits of the transaction.

Also, due to the Merger and ongoing integration, we may forego or delay pursuit of other opportunities that may have proven to have greater commercial potential.

Further, it is possible that there may be unknown, contingent or other liabilities or problems that may arise in the future, the existence and/or magnitude of which we were previously unaware.

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Additional lawsuits arising out of the Merger may be filed in the future.

We could be forced to expend significant resources in the defense of these lawsuits, including but not limited to, costs associated with the indemnification of Keryx and Akebia directors and officers, and the lawsuits, regardless of outcome, could have a negative effect on our reputation, stock price and results of operations.

We have, and may continue to be required to, expend significant resources in the defense of these lawsuits, including but not limited to, costs associated with the indemnification of Keryx and Akebia directors and officers, and the lawsuits, regardless of outcome, could have a negative effect on our reputation, stock price and results of operations.

In addition, monetary damages or other adverse judgment would have a material adverse effect on our business and financial position.

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Any potential future impairment of goodwill or intangible assets may significantly impact our results of operations and financial condition.

As of June 30, 2021, we had approximately $181.2 million of goodwill and a definite lived intangible asset from the Merger.

As of September 30, 2021, we had approximately $172.2 million of goodwill and a definite lived intangible asset from the Merger.

In accordance with generally accepted accounting principles, or GAAP, we are required annually, or more frequently upon certain indicators of impairment, to review our estimates and assumptions underlying the fair value of our goodwill and our definite lived intangible assets when indicators of impairment are present.

Events giving rise to impairment of goodwill or intangible assets are an inherent risk in the pharmaceutical industry and often cannot be predicted.

Conditions that could indicate impairment and necessitate such a review include, but are not limited to, Auryxia’s commercial performance, our inability to

execute on our strategic initiatives, the deterioration of our market capitalization such that it is significantly below our net book value, and a significant adverse change in legal factors, unexpected adverse business conditions, and an adverse action or assessment by a regulator.

Conditions that could indicate impairment and necessitate such a review include, but are not limited to, Auryxia’s commercial performance, our inability to execute on our strategic initiatives, the deterioration of our market capitalization such that it is significantly below our net book value, a significant adverse change in legal factors, unexpected adverse business conditions, and an adverse action or assessment by a regulator.

To the extent we conclude that goodwill and/or definite lived intangible assets have become impaired, we may be required to incur material write-offs relating to such impairment and any such write-offs could have a material impact on our future operating results and financial position.

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This reduction was primarily driven by the impact of the September 2018 Centers for Medicare & Medicaid Services, or CMS, decision that Auryxia would no longer by covered by Medicare for the treatment of iron deficiency anemia, or IDA, in adult patients with CKD not on dialysis, or the IDA Indication.

While this decision does not impact CMS coverage of the Hyperphosphatemia Indication, it requires all Auryxia prescriptions for Medicare patients to undergo a prior authorization to ensure their use of Auryxia for the control of serum phosphorus levels in adult patients with CKD on dialysis, or the Hyperphosphatemia Indication.

While this decision does not impact CMS coverage for the use of Auryxia for the control of serum phosphorus levels in adult patients with CKD on dialysis, or the Hyperphosphatemia Indication, it requires all Auryxia prescriptions for Medicare patients to undergo a prior authorization to ensure their use of Auryxia for the Hyperphosphatemia Indication.

As a result, we recorded an impairment charge of $115.5 million during the three months ended June 30, 2020, which was entirely allocated to our only intangible asset, the developed product rights for Auryxia, and made a corresponding adjustment to the estimated useful life of the developed product rights for Auryxia, which we again adjusted during the three months ended December 31, 2020.

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The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition continues to depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, any resurgences or mutations of COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets where the healthcare providers with whom we interact, our partners, our CROs, our CMOs, and our other vendors operate.

We believe our revenue growth was negatively impacted in the first half of 2021 primarily as the kidney patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.

We believe our revenue growth was negatively impacted in the first three quarters of 2021 primarily as the kidney patient populations that we serve continue to experience both high hospitalization and mortality rates due to COVID-19.

While we are unable to quantify the impact of the COVID-19 pandemic on future revenues and revenue growth, COVID-19 continues to adversely and disproportionately impact our patient population;

therefore, we expect COVID-19 to continue to have a negative impact on our revenue growth for the foreseeable future.

The majority of our office-based employees have been working from home since March 13, 2020.

In addition, several healthcare facilities have restricted access for non-patients, including the members of our sales force.

The majority of our office-based employees began working from home on March 13, 2020 and continue to primarily work from home.

In addition, several healthcare facilities have previously restricted access for non-patients, including the members of our sales force.

For example, DaVita, Inc., or DaVita, and Fresenius Medical Care, or Fresenius, which account for a vast majority of the dialysis population in the United States, have restricted access to their clinics.

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Recently, such precautionary measures have been relaxed at certain healthcare facilities and, as a result, members of our sales force have resumed in person interactions with certain customers.

Nevertheless, restrictions may be put in place again due to a resurgence in COVID-19 cases, including those involving new variants of COVID-19, which may be more contagious and more severe than prior strains of the virus.

Nevertheless, some restrictions remain, and more restrictions may be put in place again due to a resurgence in COVID-19 cases, including those involving new variants of COVID-19, which may be more contagious and more severe than prior strains of the virus.

Given this uncertain environment and the disproportionate impact of the COVID-19 pandemic on CKD patients, we are actively monitoring the demand for Auryxia, including the potential for further declines or changes in prescription trends and customer orders, which could have a material adverse effect on our business, results of operations, and financial condition.

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Moreover, our future success and profitability substantially depends on the management skills of our executives and certain other key employees.

The unanticipated loss or unavailability of key employees due to the pandemic could harm our ability to operate our business or execute our business strategy.

We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.

In addition, the pandemic or the response efforts to the pandemic may cause disruptions to, closures of or other impacts on our CMOs and other vendors in our supply chain on which we rely for the supply of our products and product candidates.

The unanticipated loss or unavailability of key employees due to the pandemic could harm our ability to operate our business or execute our business strategy and we may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.

For example, in October 2021, we announced a requirement that all of our employees be fully vaccinated by January 1, 2022, subject to limited medical and religions exemptions.

At this time, it is not possible to predict with certainty the exact impact that our vaccine requirement will have on us or on our workforce, and the requirement may result in employee distraction, absences, resignations, attrition and difficulty securing future labor needs which could have an adverse effect on our business, results of operations and cash flows.

In addition, the direct and indirect impacts of the pandemic or the response efforts to the pandemic, including, among others, competition for labor and resources and increases in labor, sourcing, manufacturing and shipping costs, may cause disruptions to, closures of or other impacts on our CMOs and other vendors in our supply chain on which we rely for the supply of our products and product candidates.

At this time, our third party contract manufacturers continue to operate at or near normal levels.

However, it is possible that the COVID-19 pandemic and response efforts may have an impact in the future on our contract manufacturers' ability to manufacture and deliver Auryxia and vadadustat (if approved in the U.S.

and which is currently marketed under the trade name Vafseo TM by MTPC in Japan), which may result in delays in or disruptions to manufacturing and supply of our products.

These impacts could lead to delays, increased costs or disruptions in supply of our products and product candidates and have a negative effect on our inventory reserves, which could result in an increase in inventory write-offs due to expiry.

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We are using remote monitoring and central monitoring, where possible.

Further, the pandemic could also potentially affect the business of the FDA, the EMA or other governmental authorities, which could result in delays in meetings, reviews, inspections and approvals relating to our product and product candidate.

Further, the pandemic has impacted and is likely to continue to impact the business of the FDA, the EMA and other government authorities, which potentially could result in delays in meetings, reviews, inspections and approvals relating to our product and product candidates.

Any decision by the FDA, EMA or other governmental authorities to delay meeting with us or our collaboration partners or scheduling inspections in light of COVID-19 could have a material adverse effect on clinical trials of our product candidates or on our efforts to obtain marketing approvals for our product candidate, which could increase our operating expenses and have a material adverse effect on our financial results, including the timing and amount of future regulatory milestones we could receive from our partners.

If we or any of the third parties with whom we engage, including our collaboration partners, were to experience shutdowns, delays or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted, which could have a material adverse effect on our business and our financial results.

At this time, our third party contract manufacturing partners continue to operate at or near normal levels.

However, it is possible that the COVID-19 pandemic and response efforts may have an impact in the future on our contract manufacturing partners' ability to manufacture and deliver Auryxia and vadadustat (which is currently marketed under the trade name Vafseo TM by MTPC in Japan), which may result in delays in or disruptions to manufacturing and supply of our products.

In addition, COVID-19 precautions may cause a delay in enrolling new clinical trials.

We are using remote monitoring and central monitoring, where possible.

The pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, that could impact our ability to raise additional funds and has also impacted, and may continue to impact, the volatility of our stock price and trading in our stock.

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The global impact of COVID-19 continues to rapidly evolve, and we will continue to monitor the situation closely.

In particular, areas we are monitoring include possible COVID-related changes in our commercial revenue payor mix, overall product sales, and reserves and allowances, as well as negative trends that could potentially have a further significant impact on product demand and, ultimately, product revenue, or could indicate goodwill, intangible assets, and other assets to be impaired.

This uncertain COVID-19 pandemic environment has presented new risks to our business.

In particular, areas we are monitoring include possible COVID-related changes in our commercial revenue payor mix, overall product sales, and reserves and allowances, as well as negative trends that could potentially have a further significant impact on product demand and, ultimately, product revenue, or could cause goodwill, intangible assets, and other assets to be impaired.

This uncertain pandemic environment has presented new risks to our business.

While we are working to mitigate the impacts on our business, we are mindful that many of these risks and the impact to the larger healthcare market are outside of our control.

The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and the magnitude of which cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

Risks Related to Commercialization

Our ability to successfully commercialize any approved product, including our ability to achieve widespread market acceptance, is critical to the success of our business.

Our ability to generate significant product revenue will depend almost entirely on our ability to execute on our commercialization plans, the level of market adoption for, and the availability of and continued use of any approved product by physicians, hospitals, dialysis clinics, wholesalers, patients, and/or healthcare payors, including government payors, consumers, managed care organizations, pharmacy benefit managers, or PBMs, and pharmacies.

If we are not successful in commercializing any approved product, including achieving and maintaining an adequate level of market adoption, our

profitability and our future business prospects will be adversely impacted.

Our ability to generate significant product revenue will depend almost entirely on our ability to execute on our commercialization plans, the level of market adoption for, the availability of and continued use of any approved product by physicians, hospitals, dialysis clinics, wholesalers and patients, and the terms of arrangements with healthcare payors, including government payors, consumers, managed care organizations, pharmacy benefit managers, or PBMs, and pharmacies.

If we are not successful in commercializing any approved product, including achieving and maintaining an adequate level of market adoption, our profitability and our future business prospects will be adversely impacted.

Market acceptance of any approved product depends on a number of other factors, including:

• the availability of adequate coverage and reimbursement by third party payors, PBMs, and governmental authorities;

• the availability of adequate coverage and reimbursement by and the availability of discounts, rebates and price concessions from third party payors, PBMs, and governmental authorities;

• the safety and efficacy of the product, as demonstrated in clinical trials and in the post-marketing setting;

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• adverse publicity about our products or favorable or adverse publicity about competing products;

• the availability of discounts, rebates, and price concessions;

• the effectiveness of our and our collaborators’ sales, marketing and distribution efforts;

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Any product may achieve only limited market acceptance or none at all.

If any of our approved products is not accepted by the market to the extent that we expect, we may not be able to generate significant product revenue and our business would suffer.

If any of our approved products is not accepted by the market to the extent that we expect or market acceptance decreases, we may not be able to generate significant product revenue and our business would suffer.

Generic competitors are seeking approval of generic versions of Auryxia and the market entry of one or more generic competitors would limit Auryxia sales and have an adverse impact on our business and results of operation.

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After the introduction of a generic competitor, a significant percentage of the prescriptions written for a product may be filled with the generic version, resulting in a loss in sales of the branded product.

We have received Paragraph IV certification notice letters regarding Abbreviated New Drug Applications, or ANDAs, submitted to the FDA requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet), have filed certain complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with certain such ANDA filers.

We received Paragraph IV certification notice letters regarding Abbreviated New Drug Applications, or ANDAs, submitted to the FDA requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet).

We have filed complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with such ANDA filers.

See Part II, Item 1.

Legal Proceedings for further information relating to the ANDAs, lawsuits and settlements.

Although the United States District Court for the District of Delaware conducted a Markman hearing concerning certain claim construction issues with respect to four Orange Book-listed patents, and issued an order in favor of Keryx, we may not ultimately be successful in the ANDA litigation.

It is possible that we may receive Paragraph IV certification notice letters from additional ANDA filers, and may not ultimately be successful in an ANDA litigation.

Generic competition for Auryxia or any of our future products could have a material adverse effect on our sales, results of operations and financial condition.

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If our Orange Book-listed patents are successfully challenged by a third party and a generic version of Auryxia is approved and launched, revenue from Auryxia could decline significantly, which would have a material adverse effect on our sales, results of operations and financial condition.

If we are unable to maintain sales, marketing and distribution capabilities or to enter into additional agreements with third parties, we may not be successful in commercializing any approved product.

If we are unable to maintain sales and marketing capabilities or to enter into additional agreements with third parties, we may not be successful in commercializing Auryxia, vadadustat, if approved, and any other product candidate that may be approved.

In order to market any approved product, we intend to continue to invest in sales and marketing, which will require substantial effort and significant management and financial resources.

We will need to devote significant effort, in particular, to recruiting individuals with experience in the sales and marketing of pharmaceutical products.

We devote significant effort, in particular, to recruiting individuals with experience in the sales and marketing of pharmaceutical products.

Competition for personnel with these skills is significant.

There are risks involved with maintaining our own sales, marketing and distribution capabilities, including the following:

There are risks involved with maintaining our own sales and marketing capabilities, including the following:

• potential inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

• potential inability of sales personnel to obtain access to physicians;

• potential inability of sales personnel to obtain access to physicians, including restrictions due to COVID-19;

• potential lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines;

• costs and expenses associated with maintaining our own sales and marketing organization.

If we are unable to maintain our own sales, marketing and distribution capabilities and our arrangements with third parties with respect to sales, marketing and distribution, or we are unsuccessful in entering into additional arrangements with third parties to sell, market and distribute or are unable to do so on terms that are favorable to us, we will not be successful in commercializing any approved product.

If we are unable to maintain our own sales and marketing capabilities and our arrangements with third parties with respect to sales and marketing, or we are unsuccessful in entering into additional arrangements with third parties to sell and market or are

unable to do so on terms that are favorable to us, we will not be successful in commercializing Auryxia, vadadustat, if approved, and any other product candidate that may be approved.

Coverage and reimbursement may be limited or unavailable in certain market segments for any approved product, which could make it difficult for us or our collaboration partners to sell any approved products profitably.

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As an oral drug, Auryxia is covered by Medicare only under Part D.

In September 2018, CMS decided that Auryxia would no longer be covered by Medicare for the IDA Indication.

On October 15, 2019, we filed a complaint in the United States District Court for the District of Massachusetts against CMS and the U.S.

Department of Health and Human Services challenging CMS’s decision that Auryxia would no longer be covered by Medicare for the IDA Indication and imposing a prior authorization requirement for Auryxia in the Hyperphosphatemia Indication, or the CMS Decision.

However, in September 2018, CMS decided that Auryxia would no longer be covered by Medicare for the IDA Indication.

While this decision does not impact CMS coverage of the Hyperphosphatemia Indication, it requires Part D plan sponsors to impose prior authorization or other steps to ensure that Auryxia is used only for the Hyperphosphatemia Indication.

While we believe that the vast majority of the Medicare prescriptions written for Auryxia today are for the Hyperphosphatemia Indication and therefore will continue to be covered by Medicare with prior authorization, the CMS Decision has had and will continue to have an adverse impact on the sales and future growth of Auryxia for the Hyperphosphatemia Indication and the IDA Indication.

For example, in the second quarter of 2020, we reduced our short-term and long-term Auryxia revenue forecast, primarily driven by

the compounding impact of the CMS Decision.

For example, in the second quarter of 2020, we reduced our short-term and long-term Auryxia revenue forecast, primarily driven by the compounding impact of the CMS Decision.

As a result, we recorded an impairment charge of $115.5 million to the Auryxia intangible asset associated with the developed product rights for Auryxia during the three months ended June 30, 2020.

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Furthermore, vadadustat was approved in Japan for the treatment of adult patients with anemia due to CKD and is being marketed by MTPC in Japan under the trade name Vafseo TM .

Pricing and reimbursement strategy is a key component of MTPC's commercialization plans for Vafseo in Japan.

Pricing and reimbursement strategy is a key component of

MTPC's commercialization plans for Vafseo in Japan.

If coverage and reimbursement terms change, MTPC may not be able to, or may decide not to, continue commercialization of Vafseo in Japan.

If we are unable to obtain or maintain contracts with key distribution partners, our business could be materially harmed.

If we are unable to obtain or maintain contracts with key distribution partners, or adequate or favorable reimbursement for our products, our business could be materially harmed.

We have four distributors, Fresenius Medical Care Rx, McKesson Corporation, Cardinal Health, Inc.

and Amerisource Bergen Drug Corporation, that, in the aggregate, accounted for a significant percentage of our gross accounts receivable as of June 30, 2021.

and Amerisource Bergen Drug Corporation, that, in the aggregate, accounted for a significant percentage of our gross accounts receivable as of September 30, 2021.

If we are not able to maintain our contracts with these key distributors on favorable terms, on a timely basis or at all, or if there is any adverse change in one or more of these distributors’ business practices or financial condition, or such distributors’ end users’ prescribing practices or clinical protocols, it would adversely impact the market opportunity for Auryxia, our product revenues and operating results.

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Although we currently believe it is likely that vadadustat, if approved, will be reimbursed using the TDAPA followed by reimbursement via the bundled reimbursement model, if vadadustat is neither reimbursed under the TDAPA nor the bundled reimbursement model, then the Vifor Agreement will not become effective, and patients would access vadadustat through contracts we negotiate with third party payors for reimbursement of vadadustat, which would be subject to the risks and uncertainties described above.

Additionally, applying for and obtaining reimbursement under the TDAPA may take several months following approval, which would affect adoption, uptake and product revenue for vadadustat, and if there are updates to

the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected .

Additionally, applying for and obtaining reimbursement under the TDAPA is expected to take several months following approval, which would affect adoption, uptake and product revenue for vadadustat during that time, and if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected .

For example, the Medicare Payment Advisory Commission, or MedPAC, an independent legislative branch advisory body to Congress on issues related to the Medicare program, has recommended that TDAPA not be provided to newly approved drug products considered to fall within “functional categories” for which costs are already accounted for in the bundled reimbursement model, such as for anemia management drugs.

In addition, we may be unable to sell vadadustat, if approved, to dialysis providers on a profitable basis if CMS significantly reduces the level of reimbursement for dialysis services and providers choose to use alternative therapies or look to negotiate their contracts with us.

In addition, we may be unable to sell Auryxia or vadadustat, if approved, to dialysis providers on a profitable basis if CMS significantly reduces the level of reimbursement for dialysis services and providers choose to use alternative therapies or look to negotiate their contracts with us.

Our profitability may also be affected if our costs of production increase faster than increases in reimbursement levels.

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Third party payors are increasingly attempting to contain healthcare costs by limiting both coverage and reimbursement levels for new drugs.

As a result, significant uncertainty exists as to whether and how much reimbursement third party payors will provide for newly approved drugs which, in turn, will put downward pressure on the pricing of drugs.

As a result, significant uncertainty exists as to whether and how much reimbursement third party payors will

provide for newly approved drugs which, in turn, will put downward pressure on the pricing of drugs.

Cost control initiatives may decrease coverage and payment levels for any drug and, in turn, the price that we will be able to charge and/or the volume of our sales.

Certain third party payors require prior authorization for, or even refuse to provide, reimbursement for Auryxia, and others may do so in the future with respect to Auryxia, vadadustat and any of our other products or product candidates.

In addition, certain third party payors require some form of prior authorization for the administration of ESAs for the treatment of anemia due to CKD within the non-dialysis patient population, and a similar prior authorization may be applicable to the HIF-PHI class for the treatment of anemia due to CKD within the non-dialysis patient population.

Our business would be materially adversely affected if we are not able to receive approval for reimbursement from third party payors on a broad, timely or satisfactory basis;

if reimbursement is subject to overly broad or restrictive prior authorization requirements;

or if reimbursement is not maintained at satisfactory levels or becomes subject to prior authorization.

or if reimbursement is not maintained at satisfactory levels.

We are unable to predict all changes to the coverage or reimbursement methodologies that will be applied by private or government payors.

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There have also been several recent state legislative efforts to address drug costs, which generally have focused on increasing transparency around drug costs or limiting drug prices or price increases.

Adoption of new legislation at the federal or state level could affect demand for, or pricing of, our product candidates, if approved, and could diminish our ability to establish what we believe is a fair price for our products, ultimately diminishing our revenue for our products if they are approved.

Adoption of new legislation at the federal or state level could affect demand for, or pricing of, our products or product candidates, if approved, and could diminish our ability to establish what we believe is a fair price for our products, ultimately diminishing our revenue for our products if they are approved.

We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do.

The development and commercialization of new drugs is highly competitive and subject to rapid and significant technological change.

Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the development and commercialization of Auryxia, vadadustat and any other product or product candidate, including those that

may be in-licensed or acquired.

Our objective is to continue to commercialize Auryxia and develop and commercialize new products with superior efficacy, convenience, tolerability and/or safety.

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Auryxia is competing in the IDA market in the United States with over-the-counter oral iron, ferrous sulfate, other prescription oral iron formulations, including ferrous gluconate, ferrous fumerate, and polysaccharide iron complex, and intravenous iron formulations, including Feraheme ® (ferumoxytol injection), Venofer ® (iron sucrose injection), Ferrlicit ® (sodium ferric gluconate complex in sucrose injection), Injectafer ® (ferric carboxymaltose injection), and Triferic ® (ferric pyrophosphate citrate).

In addition, other new therapies for the treatment of IDA may impact the market for Auryxia, such as Shield Therapeutics plc's Feraccru ® (ferric maltol), which is available in Europe for the treatment of IDA and Accrufer ® (ferric maltol), which was launched in the United States for the treatment of IDA on July 1, 2021.

In addition, other new therapies for the treatment of IDA may impact the market for Auryxia, such as Shield

Therapeutics plc's Feraccru ® (ferric maltol), which is available in Europe for the treatment of IDA and Accrufer ® (ferric maltol), which was launched in the United States for the treatment of IDA on July 1, 2021.

Furthermore, Auryxia’s commercial opportunities may be reduced or eliminated if our competitors develop and market products that are less expensive, more effective, safer or offer greater patient convenience than Auryxia.

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and AstraZeneca PLC, Japan Tobacco International, or JT, GlaxoSmithKline plc, or GSK, and Bayer HealthCare AG, or Bayer.

In the United States, FibroGen Inc., or FibroGen, has filed an NDA for its product candidate, roxadustat, with the FDA.

In Europe, the EMA Committee for Medical Products for Human Use recently recommended that roxadustat be approved for the treatment of anemia in patients with CKD.

In the United States, FibroGen Inc., or FibroGen, filed an NDA for its product candidate, roxadustat, with the FDA, but the FDA issued a complete response letter indicating the FDA will not approve the NDA in its present form and requested that an additional clinical trial of roxadustat be conducted prior to resubmission of the NDA or additional response to the FDA's complete response letter.

In Europe however, roxadustat is approved for the treatment of anemia in patients with CKD.

In Japan, roxadustat is approved for the treatment of anemia due to CKD in patients on dialysis, or DD-CKD, and patients not on dialysis, or NDD-CKD.

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Because injectable ESAs are biologic products, the introduction of biosimilars into the injectable ESA market in the United States will constitute additional competition for vadadustat if we are able to obtain approval for and commercially launch our product.

Several biosimilar versions of injectable ESAs are available

for sale in the EU.

Several biosimilar versions of injectable ESAs are available for sale in the EU.

In the United States, Pfizer’s biosimilar version of injectable ESAs, Retacrit ® (epoetin alfa-epbx), was approved by the FDA in May 2018 and launched in November 2018.

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Smaller and other early stage companies may also prove to be significant competitors.

As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval, or discovering, developing and commercializing competitive products, before, or more effectively than, we do.

As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval, or discovering, developing and

commercializing competitive products, before, or more effectively than, we do.

If we are not able to compete effectively against potential competitors, our business will not grow and our financial condition and operations will suffer.

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In Japan and certain other countries in Asia, we granted Mitsubishi Tanabe Pharma Corporation, or MTPC, exclusive rights to commercialize vadadustat, which has been approved and is being marketed by MTPC in Japan under the trade name Vafseo TM .

In addition, we have conducted and in the future plan to conduct clinical trials outside of the United States for Auryxia, vadadustat and any other product or product candidate that may be in-licensed or acquired.

As a result of these and other activities, we are or may become subject to additional risks in developing and commercializing Auryxia and vadadustat outside the United States, including:

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In addition to Auryxia, we will continue to depend heavily on the success of our product candidate, vadadustat, for which we submitted an NDA to the FDA, which was accepted for filing in May 2021.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome.

Clinical drug development involves a lengthy and

expensive process with an uncertain outcome.

We will incur additional costs in connection with, and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of vadadustat and any other product candidates.

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We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay, prevent or make more challenging our ability to receive or maintain marketing approval or commercialize our product candidates.

For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we are remaining cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.

Our clinical trials may take longer to complete than currently anticipated, or may be delayed, suspended, required to be repeated, prematurely terminated or may not successfully demonstrate safety and/or efficacy for a variety of other reasons, such as:

• the costs are greater than we anticipate;

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• lack of adequate funding to continue a clinical trial, including unforeseen costs due to enrollment delays, requirements to conduct additional clinical trials or repeat a clinical trial and increased expenses associated with the services of our CROs and other third parties;

• failure to initiate, delay of or failure to complete a clinical trial as a result of an Investigational New Drug application, or IND, being placed on clinical hold by the FDA, the EMA, the Japanese Pharmaceuticals and Medical Devices Agency, or PMDA, or other regulatory authorities, or for other reasons, such as failure to recruit or enroll suitable patients or patients' failure to return for post-treatment follow up;

• we may determine to change or expand a clinical trial, including after it has begun;

• clinical trial sites and investigators deviating from the clinical protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial, or failure by us or our CROs to communicate effectively or provide the appropriate level of oversight of such clinical sites and investigators;

• delay or failure in having patients complete a clinical trial or return for post-treatment follow-up;

• delay or failure in recruiting and enrolling suitable patients to participate in a clinical trial;

• inability, delay, or failure in identifying and maintaining a sufficient number of clinical trial sites, many of which may already be engaged in other clinical programs;

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• the FDA, the EMA, the PMDA or other regulatory authorities may disagree with our clinical trial design and our interpretation of data from clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our clinical trials;

• the design of our clinical trials;

• failure to comply with good practice quality guidelines and regulations, or GXP, including good laboratory practice, good clinical practice, or GCP, and current good manufacturing practice, or cGMP;

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In addition, in the case of clinical studies of any product candidate, patients currently receiving treatment with the current standard of care or a competitor product may be reluctant to participate in a clinical trial with an investigational drug.

Finally, competition for clinical trial sites may limit our access to patients appropriate for our clinical trials.

Furthermore, COVID-19 resulted in closures of, and may continue to impact, clinical trial sites on which we rely for the

conduct of certain clinical trials and COVID-19 pandemic precautions have caused moderate delays in enrolling new clinical trials and may cause delays in enrolling other new clinical trials.

We are using remote monitoring and central monitoring, where possible.

Finally, competition for clinical study sites may limit our access to patients appropriate for our clinical trials.

As a result, the timeline for recruiting patients and conducting studies may be delayed.

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• patient referral practices of physicians.

• ability to monitor patients adequately during and after treatment.

We may not be able to initiate or continue clinical studies if we cannot enroll a sufficient number of eligible patients to participate in the clinical studies required by regulatory agencies.

If we have difficulty enrolling a sufficient number of patients to conduct our clinical studies as planned, we may need to delay, limit or terminate ongoing or planned clinical studies, any of which could have a material adverse effect on our business.

We may not be able to conduct clinical trials in some jurisdictions outside of the United States.

We may not be able to initiate or complete clinical studies in a timely manner, or at all, if we cannot enroll a sufficient number of eligible patients to participate in the clinical studies required by regulatory agencies.

If we have difficulty enrolling a sufficient number of patients to conduct our clinical studies as planned, we may need to delay, limit or terminate ongoing or planned clinical studies, any of which may delay approval, or result in failure to obtain approval, of our product candidates, which would have a material adverse effect on our business.

Conducting clinical trials outside of the United States makes us subject to additional risks and complexities and we may not complete such trials successfully, in a timely manner, or at all, which could affect our ability to obtain regulatory approvals.

Our ability to successfully initiate, enroll and complete a clinical study in any country outside of the United States is subject to numerous additional risks unique to conducting business in jurisdictions outside the United States, including:

• difficulty in establishing or managing relationships with qualified CROs, physicians and clinical trial sites;

• different local standards for the conduct of clinical studies;

• difficulty in complying with different local standards for the conduct of clinical studies;

• difficulty in complying with various and complex import laws and regulations when shipping drug to certain countries;

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Success in preclinical studies may not be predictive of similar results in humans during clinical trials, successful results from early or small clinical trials may not be replicated in later and larger clinical trials, and successful interim results from ongoing clinical studies may not be indicative of results obtained when those studies are completed.

For example, while we announced positive top-line results from INNO 2 VATE and vadadustat achieved the primary and key secondary efficacy endpoint in each of the two PRO 2 TECT studies, the PRO 2 TECT program did not meet the primary MACE safety endpoint.

Many companies in the biopharmaceutical industry have suffered significant setbacks in late-stage clinical trials after achieving positive results in early stage development, and we may face similar setbacks.

If the results of our ongoing or future clinical trials for a product candidate are inconclusive with respect to efficacy, if we do not meet our clinical endpoints with statistical significance, or if there are safety concerns or adverse events, we may be prevented from or delayed in obtaining marketing approval a product candidate.

MACE safety endpoint.

Many companies in the biopharmaceutical industry have suffered significant setbacks in late-stage clinical studies after achieving positive results in early stage development, and we may face similar setbacks.

If the results of our ongoing or future clinical studies for a product candidate are inconclusive with respect to efficacy, if we do not meet our clinical endpoints with statistical significance, or if there are safety concerns or adverse events, we may be prevented from or delayed in obtaining marketing approvals of a product candidate.

If the results from any of our studies are not positive, our business could be materially adversely affected.

We may not be successful in our efforts to identify, acquire, discover, develop and commercialize additional products or product candidates, which could impair our ability to grow.

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• we may not be able or willing to assemble sufficient resources to acquire or discover additional product candidates;

• a product candidate may be shown to have harmful side effects, a lack of efficacy or otherwise does not meet applicable regulatory criteria;

• a product candidate may be shown to have harmful side effects, a lack of efficacy or otherwise not meet applicable regulatory criteria;

• product candidates we develop may nevertheless be covered by third party patents or other exclusive rights;

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The success of this strategy depends partly upon our ability to identify, select, and acquire promising product candidates and products.

The process of proposing, negotiating and implementing a license or acquisition of a product candidate or an approved product is lengthy and complex.

The process of identifying, selecting, negotiating and implementing a license or acquisition of a product candidate or an approved product is lengthy and complex.

Other companies, including some with substantially greater financial, marketing and sales resources, may compete with us for the license or acquisition of a product candidate or an approved product.

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The patient populations treated with Auryxia and potential patient populations for vadadustat, if approved, have CKD, a serious disease that increases the risk of cardiovascular disease including heart attacks and stroke and, in its most severe form, results in, kidney failure and the need for dialysis or kidney transplant.

Many patients with CKD are elderly with comorbidities making

them susceptible to significant health risks.

Many patients with CKD are elderly with comorbidities making them susceptible to significant health risks.

Therefore, the likelihood of these patients having adverse events, including serious adverse events is high.

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Serious treatment emergent adverse events were slightly lower for vadadustat treated patients at 55.0% and 58.3% for darbepoetin alfa-treated patients.

With respect to the global PRO 2 TECT Phase 3 program, the incidence of treatment emergent adverse events during the erythropoiesis stimulating agent, or ESA,-untreated patients study ( Correction ) in the vadadustat-treated patients was 90.9%, and 91.6% in darbepoetin alfa-treated patients.

and 91.6% in darbepoetin alfa-treated patients.

During the study, the most common treatment emergent adverse events reported in vadadustat/darbepoetin alfa-treated patients were end-stage renal disease (34.7%/ 35.2%), hypertension (17.7%/ 22.1.%), hyperkalemia (12.3.%/ 15.6%), urinary tract infection (12.9%/ 12.0%), diarrhea (13.9%/ 10.0%), peripheral oedema (12.5%/ 10.5%), fall (9.6%/ 10%) and nausea (10%/ 8.2%).

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Diarrhea was the most common reason for discontinuing Auryxia (2.6%) in clinical trials for the IDA Indication.

Any post-marketing clinical trials conducted, if successful, may expand the patient populations treated with Auryxia, vadadustat or any other product we acquire or for which we receive marketing approval, within or outside of their current indications or patient populations, which could result in the identification of previously unknown undesirable effects, increased frequency or severity of known undesirable effects, or result in the identification of unexpected safety signals.

In addition, as Auryxia and any other products are commercialized, they will be used in significantly larger patient populations, in less rigorously controlled environments and, in some cases, by less experienced and less expert treating practitioners, than in clinical studies.

As a result, regulatory authorities, healthcare practitioners, third party payors or patients may perceive or conclude that the use of Auryxia or any other products are associated with serious undesirable effects, undermining our commercialization efforts.

Further, if we or others identify previously unknown undesirable effects, if known undesirable effects are more frequent or severe than in the past, if we or others detect and confirm unexpected safety signals for Auryxia, vadadustat, or any other product or product candidate perceived to be similar to Auryxia, vadadustat, or if any of the foregoing are perceived to have occurred, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:

If we or others identify previously unknown undesirable effects, if known undesirable effects are more frequent or severe than in the past, if we or others detect and confirm unexpected safety signals for Auryxia, vadadustat, or any other product or product candidate perceived to be similar to Auryxia or vadadustat, or if any of the foregoing are perceived to have occurred, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:

• sales may be impaired;

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• government investigations or lawsuits, including class action suits, may be brought against us.

Any of the above occurrences could delay or prevent us from achieving or maintaining marketing approval, harm or prevent sales of Auryxia or, if approved, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired, increase our expenses and impair or prevent our ability to successfully commercialize Auryxia, vadadustat or any other products or product candidate.

In addition, any post-marketing clinical trials conducted, if successful, may expand the patient populations treated with Auryxia, vadadustat or any other product we acquire or for which we receive marketing approval, within or outside of their

current indications or patient populations, which could result in the identification of previously unknown undesirable effects, increased frequency or severity of known undesirable effects, or result in the identification of unexpected safety signals.

In addition, as Auryxia, vadadustat, if approved, and any other products are commercialized, they will be used in significantly larger patient populations, in less rigorously controlled environments and, in some cases, by less experienced and less expert treating practitioners, than in clinical studies, which could result in increased or more serious adverse effects being reported.

As a result, regulatory authorities, healthcare practitioners, third party payors or patients may perceive or conclude that the use of Auryxia or any other products are associated with serious adverse effects, undermining our commercialization efforts.

Risks Related to Regulatory Approval

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Of the large number of drugs in development in the United States and in other jurisdictions, only a small percentage successfully complete the FDA’s and other jurisdictions’ marketing approval processes and are commercialized.

Accordingly, even if we are able to obtain the requisite capital to continue to fund our development and commercialization efforts, we may be unable to continue commercialization of Auryxia or successfully develop or commercialize vadadustat or any other product or product candidate, including those that may be in-licensed or acquired.

Accordingly, even if we are able to obtain the requisite capital to continue to fund our development and commercialization efforts, we may be unable to continue commercialization of Auryxia or successfully develop, obtain regulatory approval for, or commercialize vadadustat or any other product or product candidate, including those that may be in-licensed or acquired.

We and Otsuka, our collaboration partner, are not permitted to market vadadustat in the United States until we receive approval from the FDA, in the EU until we receive approval from the EMA, or in any other jurisdiction until the requisite approval from regulatory authorities in such jurisdiction is received.

As a condition to receiving marketing approval for vadadustat, we must complete Phase 3 studies and any additional preclinical or clinical studies required by the FDA, the EMA or other regulatory authorities.

Vadadustat may not receive marketing approval.

As a condition to receiving marketing approval for vadadustat, we may be required to conduct additional preclinical or clinical studies required by the FDA, the EMA or other regulatory authorities.

We submitted an NDA to the FDA for vadadustat for the treatment of anemia due to CKD in adult dialysis-dependent and non-dialysis dependent patients in March 2021.

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At the time of filing, the FDA also indicated that they were not currently planning to hold an Advisory Committee meeting to discuss the application for vadadustat .

Vadadustat may not receive marketing approval.

While we remain cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients as vadadustat did not meet the primary safety endpoint of the PRO 2 TECT program, we look forward to working with the FDA in their review of all of the data.

Further, vadadustat may not receive marketing approval even if it is approved in other countries.

For example, although vadadustat is approved in Japan for the treatment of adult patients with anemia due to CKD, such approval does not guarantee approval in the United States by the FDA.

Obtaining marketing approval in the United States and other jurisdictions depends upon numerous factors, many of which are subject to the substantial discretion of the regulatory authorities, including that regulatory agencies may not complete their review processes in a timely manner and, following completion of the review process, may not grant marketing approval.

Further, vadadustat may not receive marketing approval in the United States or the EU even if it is approved in other countries.

For example, although vadadustat is approved in Japan for the treatment of adult patients with anemia due to CKD, such approval does not guarantee approval in the United States by the FDA or in the EU by the EMA.

Furthermore, approval of a drug does not ensure successful commercialization.

For example, on September 23, 2015, the

European Commission, or EC, approved Fexeric for the control of hyperphosphatemia in adult patients with CKD.

For example, on September 23, 2015, the European Commission, or EC, approved Fexeric for the control of hyperphosphatemia in adult patients with CKD.

Pursuant to the sunset clause under EU law, the EC’s approval of Fexeric in the EU was contingent on, among other things, our commencing marketing of Fexeric within three years;

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Further, the policies or regulations, or the type and amount of clinical data necessary to gain approval, may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

It is possible that vadadustat and any other product candidate, including those that may be in-licensed or acquired, will never obtain marketing approval in certain jurisdictions or at all.

It is possible that vadadustat and any other product candidate, including those that may be in-licensed or acquired, will never obtain marketing approval in certain jurisdictions.

The FDA may delay, limit or deny approval of vadadustat or any other product candidate, including those that may be in-licensed or acquired, for many reasons including, among others:

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• the results of our clinical trials may only be modestly positive, or there may be concerns with the profile due to efficacy or safety;

• the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for review and/or for marketing approval;

• the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for review and/or marketing approval;

• the FDA may disagree with the number, design, size, conduct or implementation of our clinical trials;

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• we, or our CROs or other vendors, may fail to comply with GXP or fail to pass any regulatory inspections or audits;

• the CROs that we retain to conduct our clinical trials may not perform effectively or take actions that adversely impact our clinical trials, or we may fail to communicate effectively or provide the appropriate level of oversight of our CROs;

• we or our third party manufacturers may fail to perform in accordance with the FDA’s cGMP requirements and guidance;

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• the FDA could deem that our financial relationships with certain principal investigators constitute a conflict of interest, such that the data from those principal investigators may not be used to support our applications;

• although at the time of filing the NDA, the FDA indicated that they were not currently planning to hold an Advisory Committee meeting to discuss the NDA, the FDA may ask an Advisory Committee to review portions of the NDA, the FDA may have difficulty scheduling an Advisory Committee meeting in a timely manner or, if convened, an FDA Advisory Committee could recommend non-approval, conditions of approval or restrictions on approval, and the FDA may ultimately agree with the recommendations;

• although at the time of filing the NDA for vadadustat, the FDA indicated that they were not currently planning to hold an Advisory Committee meeting to discuss the NDA, the FDA may ask an Advisory Committee to review portions of the NDA, the FDA may have difficulty scheduling an Advisory Committee meeting in a timely manner or, if convened, an FDA Advisory Committee could recommend non-approval, conditions of approval or restrictions on approval, and the FDA may ultimately agree with the recommendations;

• the FDA may require development of a REMS as a condition of approval or post-approval;

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With regard to the IDA Indication, we did not meet a milestone relating to the post-approval pediatric study of Auryxia in a timely manner and received a notification from the FDA.

Subsequently, the FDA agreed to extend the pediatric clinical study

timelines for the IDA Indication.

Subsequently, the FDA agreed to extend the pediatric clinical study timelines for the IDA Indication.

We subsequently communicated to the FDA that we would be delaying the start of the clinical trial to produce smaller size tablets.

In response, the FDA issued a clinical hold until we manufacture the smaller tablets and provide the FDA with relevant information regarding the smaller sized product for review.

If we are unable to complete these studies successfully, we will need to inform the FDA, have further discussions, and if the FDA finds that we failed to comply with pediatric study requirements, it could initiate proceedings to seize or enjoin the sale of Auryxia, which would have a material adverse impact on our ability to commercialize Auryxia and our ability to generate revenues from Auryxia.

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These requirements and guidance include manufacturing processes and procedures (including record keeping), the implementation and operation of quality systems to control and assure the quality of the product, submissions of safety and other post-marketing information and reports, as well as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval.

If we, our CMOs or other third parties we engage fail to adhere to such regulatory requirements and guidance, we could suffer significant consequences, including product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, loss of customer confidence, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs, and our development or commercialization efforts may be materially harmed.

If we, our CMOs or other third parties we engage fail to adhere to such regulatory requirements and guidance, we could suffer significant consequences, including

product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, loss of customer confidence, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs, and our development or commercialization efforts may be materially harmed.

Moreover, the FDA and other regulatory authorities closely regulate the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling.

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These and any other recalls or any supply, quality or manufacturing issues in the future could result in significant negative consequences, including reputational harm, loss of customer confidence, and a negative impact on our financials, any of which could have a material adverse effect on our business and results of operations, and may impact our ability to supply Auryxia, Vafseo TM, in Japan or vadadustat for commercial and clinical use.

Non-compliance with FDA, the EMA, the PMDA and other regulatory authorities’ requirements regarding safety monitoring or pharmacovigilance can also result in significant financial penalties.

Non-compliance with the FDA, the EMA, the PMDA and other regulatory authorities’ requirements regarding safety monitoring or pharmacovigilance can also result in significant financial penalties.

The FDA’s policies and those of other regulatory authorities may change, and additional government regulations may be enacted.

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In addition, laws and regulations govern the distribution and tracing of prescription drugs and prescription drug samples, including the Prescription Drug Marketing Act of 1976 and the Drug Supply Chain Security Act, which regulate the distribution and tracing of prescription drugs and prescription drug samples at the federal level and set minimum standards for the regulation of drug distributors by the states.

A company that is found to have improperly promoted off-label uses or to have otherwise

engaged in false or misleading promotion or improper distribution of drugs will be subject to significant liability, potentially including civil and administrative remedies as well as criminal sanctions.

A company that is found to have improperly promoted off-label uses or to have otherwise engaged in false or misleading promotion or improper distribution of drugs will be subject to significant liability, potentially including civil and administrative remedies as well as criminal sanctions.

It may also be subject to exclusion and debarment from federal healthcare reimbursement programs.

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We intend to engage in these discussions and communicate with healthcare providers, payors and other constituencies in compliance with all applicable laws, regulatory guidance and industry best practices.

Although we believe we have put in place a robust compliance program and processes designed to ensure that all such activities are performed in a legal and compliant manner, Auryxia is our first commercial product in the United States, so our implementation of our compliance program in connection with commercialization activities is still relatively new.

United States, so our implementation of our compliance program in connection with commercialization activities is still relatively new.

In addition, if a company’s activities are determined to have violated the federal Anti-Kickback Statute, this can also give rise to liability under the federal False Claims Act and such violations can result in significant fines, criminal and civil remedies, and exclusion from Medicare and Medicaid.

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The GDPR increases our obligations with respect to sponsors with clinical trial sites in the EEA by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial patients and investigators.

In addition, the GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States.

In addition, the GDPR also imposes strict rules

on the transfer of personal data to countries outside the EU, including the United States and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States.

The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

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Our arrangements with healthcare providers, physicians and third party payors expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute Auryxia and vadadustat, if approved, and any other products for which we may obtain marketing approval.

In addition, we may be subject to transparency laws and patient privacy regulation by federal and state governments and by governments in foreign

jurisdictions in which we conduct our business.

In addition, we may be subject to transparency laws and patient privacy regulation by federal and state governments and by governments in foreign jurisdictions in which we conduct our business.

Restrictions under applicable federal and state healthcare laws and regulations include the following:

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• federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs, and laws requiring notification of price increases;

• the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

• the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties, currently set at $11,181 to $22,363, per false claim for penalties assessed between January 29, 2018 and June 19, 2020 , and $11,665 to $23,331, per false claim for penalties assessed after June 19, 2020 , and violations of the FD&C Act, the federal government pricing laws, and the federal Anti-Kickback Statute trigger liability under the federal False Claims Act;

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One of the potential areas for governmental scrutiny involves federal and state requirements for pharmaceutical manufacturers to submit accurate price reports to the government.

Because our processes for calculating

applicable government prices and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to risk of errors and differing interpretations.

Because our processes for calculating applicable government prices and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to risk of errors and differing interpretations.

In addition, they are subject to review and challenge by the applicable governmental agencies, or potential qui tam complaints, and it is possible that such reviews could result in changes, recalculations, or defense costs that may have adverse legal or financial consequences.

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Any new legislative or regulatory changes may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for Auryxia or vadadustat, if approved, or the frequency with which Auryxia and vadadustat, if approved, is prescribed or used.

We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product.

reimbursement physicians receive for administering any approved product.

Reductions in reimbursement levels may negatively impact the prices we receive or the frequency with which our products are prescribed or administered.

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We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for Auryxia and any product candidates for which we receive marketing approval or additional pricing pressures.

We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.

We cannot predict the reform initiatives that may be adopted in the future or whether initiatives

that have been adopted will be repealed or modified.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect:

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If we do not meet our obligations in a timely manner, or if we otherwise breach the terms of the Panion License Agreement, Panion could terminate the agreement, and we would lose the rights to Auryxia.

For example, following announcement of the Merger, Panion notified Keryx in writing that Panion would terminate the Panion License Agreement on November 21, 2018 if Keryx did not cure the breach alleged by Panion, specifically, that Keryx failed to use commercially reasonable best efforts to commercialize Auryxia

outside the United States.

Keryx disagreed with Panion’s claims, and the parties entered discussions to resolve this dispute.

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The third parties on whom we rely may fail to perform effectively, or terminate their engagement with us, for a number of reasons, including the following:

• if the quantity or accuracy of the data obtained by the third parties is compromised due to their failure to adhere to clinical trial protocols or to regulatory requirements, or if the third parties otherwise fail to comply with clinical trial protocols, perform effectively or meet expected deadlines;

• if third parties experience staffing difficulties;

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• if they form relationships with other entities, some of which may be our competitors.

If the third parties on whom we rely to conduct our trials fail to adhere to clinical trial protocols or to regulatory requirements, the quantity or accuracy of the data obtained by the third parties may be compromised.

Any of these events could cause our preclinical and clinical trials, including post-approval clinical trials, to be extended, delayed, suspended, required to be repeated or terminated, or we may receive untitled warning letters or be the subject of an enforcement action, which could result in our failing to obtain and maintain marketing approval of vadadustat or any other product candidates on a timely basis, or at all, or fail to maintain marketing approval of Auryxia, or any other products, any of which would adversely affect our business operations.

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If we or any of our CROs, their subcontractors, or clinical or preclinical trial sites fail to comply with applicable GXP requirements, the clinical data generated in our trials may be deemed unreliable or insufficient, our clinical trials could be put on hold, and/or the FDA, the EMA or other regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

In addition, our clinical and

preclinical trials must be conducted with drug product that meets certain specifications and is manufactured under applicable cGMP regulations.

In addition, our clinical and preclinical trials must be conducted with drug product that meets certain specifications and is manufactured under applicable cGMP regulations.

These requirements include, among other things, quality control, quality assurance, and the satisfactory maintenance of records and documentation.

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The delays associated with the qualification of a new manufacturer and validation of manufacturing processes would negatively affect our ability to supply clinical trials, obtain and maintain marketing approval, or commercialize or satisfy patient demand for Auryxia and vadadustat, where approved, in a timely manner within budget or at all.

There are a limited number of manufacturers that are capable of manufacturing Auryxia and vadadustat for us and complying with cGMP regulations and guidance and other stringent regulatory requirements and guidance enforced by the FDA, EMA, PDMA and other regulatory authorities.

These requirements include, among other things, quality control, quality assurance and the maintenance of records and documentation, which occur in addition to our own quality assurance releases.

The facilities and processes used by our third party manufacturers to manufacture Auryxia may be inspected by the FDA and other regulatory authorities at any time, and the facilities and processes used by our third party manufacturers to manufacture vadadustat will be inspected by the FDA, the EMA and other regulatory authorities prior to or after we submit our marketing applications.

Although we have general visibility into the manufacturing processes of our third party manufacturers, we do not ultimately

control such manufacturing processes of, and have little control over, our third party manufacturers, including, without limitation, their compliance with cGMP requirements and guidance for the manufacture of certain starting materials, drug substance and finished drug product.

Although we have general visibility into the manufacturing processes of our third party manufacturers, we do not ultimately control such manufacturing processes of, and have little control over, our third party manufacturers, including, without limitation, their compliance with cGMP requirements and guidance for the manufacture of certain starting materials, drug substance and finished drug product.

Similarly, although we review final production, we have little control over the ability of our third party manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

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We may also encounter difficulties relating to our own quality processes and procedures, including regulatory compliance, lot release, quality control and quality assurance, as well as shortages of qualified personnel.

If our third party manufacturers cannot successfully manufacture material that conforms to our specifications and regulatory requirements and guidance, or if we or our third party manufacturers experience manufacturing, operations and/or quality issues, including an inability or unwillingness to continue manufacturing our products at all, in accordance with agreed-upon processes or on currently validated manufacturing lines, we may not be able to supply patient demand or maintain marketing approval for Auryxia or secure and maintain marketing approval for vadadustat.

may not be able to supply patient demand or maintain marketing approval for Auryxia or secure and maintain marketing approval for vadadustat.

If the FDA, the EMA or other regulatory authorities do not approve the facilities being used to manufacture vadadustat, or if they withdraw any approval of the facilities being used to manufacture Auryxia or Vafseo TM, in Japan, we may need to find alternative manufacturing facilities, which would significantly impact our ability to continue commercializing Auryxia or develop, obtain marketing approval for or market our product candidates, if approved.

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This supply interruption negatively impacted Keryx’s revenues in 2016.

Although this supply interruption was resolved and actions designed to prevent future interruptions in the supply of Auryxia are ongoing, any future supply

interruptions, whether quality or quantity based, for Auryxia and vadadustat, if and where approved, would negatively and materially impact our reputation and financial condition.

Although this supply interruption was resolved and actions designed to prevent future interruptions in the supply of Auryxia are ongoing, any future supply interruptions, whether quality or quantity based, for Auryxia and vadadustat, if and where approved, would negatively and materially impact our reputation and financial condition.

In addition, in order to complete our development of and commercialize vadadustat, if approved in regions beyond Japan, we will need to work with third party manufacturers to manufacture vadadustat in large quantities, including to prepare for launch demand.

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On February 27, 2018, we withdrew the ’005 EP Patent from appeal and filed a divisional patent application to pursue a focused claim set that includes claims for vadadustat, as well as pharmaceutical compositions and methods of treating anemia.

We cannot be assured that such claims in

the divisional application will be granted by the European Patent Office.

We cannot be assured that such claims in the divisional application will be granted by the European Patent Office.

If such claims are not granted, or the scope of the claims is significantly narrowed, we may not be able to adequately protect our rights, provide sufficient exclusivity, or preserve our competitive advantage.

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In the United States, the FDA has the authority to grant additional regulatory exclusivity protection for approved drugs where the sponsor conducts specified testing in pediatric or adolescent populations.

If granted, this pediatric exclusivity may provide

an additional six months which are added to the term of any non-patent exclusivity that has been awarded as well as to the regulatory protection related to the term of a relevant patent, to the extent these protections have not already expired.

If granted, this pediatric exclusivity may provide an additional six months which are added to the term of any non-patent exclusivity that has been awarded as well as to the regulatory protection related to the term of a relevant patent, to the extent these protections have not already expired.

In addition to patent protection, we may utilize, if granted by the FDA, pediatric exclusivity or other provisions of the FDCA such as new chemical entity, or NCE, exclusivity, or exclusivity for a new use or new formulation, to provide non-patent exclusivity for a drug product.

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During the exclusivity period, the FDA may not accept for review an ANDA or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.

However, an ANDA or 505(b)(2) NDA that references an NDA product with NCE exclusivity may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

However, an ANDA or 505(b)(2)

NDA that references an NDA product with NCE exclusivity may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

The FDCA also provides three years of exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application (for example, for new indications, dosages, or strengths of an existing drug).

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On January 19, 2019, the FDA responded that Auryxia is eligible for a three-year exclusivity period for the IDA Indication, which expired on November 6, 2020.

FDA, however, denied the NCE exclusivity based on its determination that Auryxia contains a previously-approved active moiety (ferric cation).

The FDA, however, denied the NCE exclusivity based on its determination that Auryxia contains a previously-approved active moiety (ferric cation).

FDA’s decision on the Citizen Petition is subject to further review both within the FDA and in the courts.

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The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.

We have received Paragraph IV certification notice letters regarding ANDAs submitted to the FDA, from generic drug manufacturers requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet), have filed certain complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with certain such ANDA filers.

We have received Paragraph IV certification notice letters regarding ANDAs submitted to the FDA, from generic drug manufacturers requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet), have filed complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with such ANDA filers.

See Part II, Item 1.

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The pharmaceutical and biotechnology industries are characterized by extensive litigation over patent and other intellectual property rights.

We have in the past and may in the future become a party to, or be threatened with, future adversarial litigation or other proceedings regarding intellectual property rights with respect to our product and product candidate.

As the pharmaceutical and biotechnology industries expand and more patents are issued, the risk increases that our drug candidates may give rise to claims of infringement of the patent rights of others.

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Legal Proceedings of this Quarterly Report on Form 10-Q.

There may be other patents of FibroGen or patents of other third parties of which we are currently unaware with claims to compounds, materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidate.

Also, because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe.

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Competitors may infringe our patents or misappropriate our trade secrets or confidential information.

To counter infringement or unauthorized use, we may be required to file infringement or misappropriation claims, which can be expensive and time-

To counter infringement or unauthorized use, we may be required to file infringement or misappropriation claims, which can be expensive and time-consuming.

We may not be able to prevent infringement of our patents or misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States.

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Interference proceedings provoked by third parties or brought by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications.

Various administrative proceedings are also available for challenging patents, including interference, reexamination, inter partes review, and post-grant review proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.

jurisdictions.

An unfavorable outcome in any current or future proceeding in which we are challenging third party patents could require us to cease using the patented technology or to attempt to license rights to it from the prevailing party.

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Even if we are successful, participation in interference or other administrative proceedings before the USPTO or a foreign patent office may result in substantial costs and distract our management and other employees.

For example, we are currently involved in a patent infringement lawsuit against a generic company in the federal district courts.

We are also involved in an action against our competitors in the federal district court to obtain a declaratory judgment of non-infringement and invalidity of certain patents of the competitors.

We are involved in an action against our competitors in the federal district court to obtain a declaratory judgment of non-infringement and invalidity of certain patents of the competitors.

In addition, we are currently involved in opposition and invalidation proceedings in the European Patent Office, the Japan Patent Office, and the Patents Court of the UK.

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We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees’ former employers.

We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents or other

intellectual property.

We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents or other intellectual property.

We may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates.

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As a result, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other countries.

Competitors may use our technologies in countries where we have not obtained patent protection to develop their own products and, further, may infringe our patents in territories where we have patent protection, but enforcement is not as strong as in the United States.

Competitors may use our technologies in countries where we have not obtained patent protection to develop their own products and, further, may infringe our patents in territories where we have

patent protection, but enforcement is not as strong as in the United States.

These products may compete with our product and product candidate and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

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Outside parties may also subject us to distributed denial of services attacks or introduce viruses or other malware through “trojan horse” programs to our users’ computers in order to gain access to our systems and the data stored therein.

the recent past, cyber-attacks have become more prevalent and much harder to detect and defend against and, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and continuously become more sophisticated, often are not recognized until launched against a target and may be difficult to detect for a long time, we may be unable to anticipate these techniques or to implement adequate preventive or detective measures, and we might not immediately detect such incidents and the damage caused by such incidents.

In the recent past, cyber-attacks have become more prevalent and much harder to detect and defend against and, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and continuously become more sophisticated, often are not recognized until launched against a target and may be difficult to detect for a long time, we may be unable to anticipate these techniques or to implement adequate preventive or detective measures, and we might not immediately detect such incidents and the damage caused by such incidents.

Such attacks, whether successful or unsuccessful, or other compromises with respect to our information security and the measures we implement to prevent, detect and respond to them, could result in our incurring significant costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages or fines, or taking other remedial steps with respect to third parties, inadvertent diversion of cash, divert the attention of our management and key information technology resources, disrupt key business operations, harm our reputation and deter business partners from working with us.

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For example, any loss of clinical trial data could result in delays in our regulatory approval efforts for our product candidates and significantly increase our costs to recover or reproduce the data.

In addition, such attacks could compromise our ability to protect our trade secrets and proprietary information from unauthorized access or misappropriation and a loss of, or damage to, our data or marketing applications.

such attacks could compromise our ability to protect our trade secrets and proprietary information from unauthorized access or misappropriation and a loss of, or damage to, our data or marketing applications.

Inappropriate public disclosure of confidential or proprietary information could subject us to liability and cause delays in our product research, development and commercialization efforts.

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• United States state and federal securities laws and regulations and their non-U.S.

We are currently closing out global clinical trials in countries where corruption is prevalent, and violations of any of these laws by our personnel or by any of our vendors or agents, such as our CROs or CMOs, could have a material adverse impact on our clinical trials and our business and could result in criminal or civil fines and sanctions.

We are currently closing out global clinical trials for vadadustat and plan to initiate pediatric trials in countries where corruption is prevalent, and violations of any of these laws by our personnel or by any of our vendors or agents, such as our CROs or CMOs, could have a material adverse impact on our clinical trials and our business and could result in criminal or civil fines and sanctions.

We are subject to complex laws that govern our international business practices.

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We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods, currency, products, materials, services and technology to, and certain operations in, various countries or with certain persons.

Our ability to transfer people and products among certain countries is subject to maintaining required licenses and complying with these laws and regulations.

to transfer people and products among certain countries is subject to maintaining required licenses and complying with these laws and regulations.

Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

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We could also be liable for unpaid past taxes, interest and other costs and subject to penalties.

Likewise, our service providers themselves may later successfully challenge their classification as independent contractors, which may result in additional damages, including back wages,

penalties, interest and attorneys’ fees.

Likewise, our service providers themselves may later successfully challenge their classification as independent contractors, which may result in additional damages, including back wages, penalties, interest and attorneys’ fees.

As a result, any legally binding determination that the service providers we characterize as independent contractors are actually our employees could have a material adverse effect on our business, financial condition and results of operations.

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Future growth will impose significant added responsibilities on members of management.

In addition, in connection with the Merger and our increasingly diversified business, we have experienced and may to continue to experience significant growth in our employee base.

This growth has imposed and will continue to impose significant added responsibilities on members of management, including the need to recruit, hire, retain, motivate and integrate additional employees, including employees who joined us in connection with the Merger.

Also, our management may have to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities, including the integration of Keryx’s business with our business.

In addition, we have experienced and may continue to experience significant growth in our employee base.

This growth to date has imposed, and future growth or attrition will continue to impose, significant added responsibilities on members of management, including the need to recruit, hire, retain, motivate and integrate additional employees, including employees who joined us in connection with the Merger or since the COVID-19 pandemic.

Our future financial performance and our ability to commercialize Auryxia and vadadustat, if and where approved, and to compete effectively will depend, in part, on our ability to manage any future growth effectively.

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If we have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, we may not have, or be able to obtain, sufficient capital to pay such amounts.

In addition, insurance coverage is becoming increasingly expensive, and we may not be able to maintain insurance coverage at a reasonable cost.

In addition, insurance coverage is becoming

increasingly expensive, and we may not be able to maintain insurance coverage at a reasonable cost.

We also may not be able to obtain additional insurance coverage that will be adequate to cover product liability risks that may arise.

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Since our initial public offering in March 2014, the price of our common stock as reported on The Nasdaq Global Market has ranged from a low of $2.09 on October 30, 2020 to a high of $31.00 on June 20, 2014.

The daily closing market price for our common stock has varied between a high price of $13.08 on July 2, 2020 and a low price of $2.22 on October 30, 2020 in the twelve-month period ending on June 30, 2021.

The daily closing market price for our common stock has varied between a high price of $5.06 on February 8, 2021 and a low price of $2.22 on October 30, 2020 in the twelve-month period ending on September 30, 2021.

During this time, the price of our common stock has ranged from an intra-day low of $2.09 per share to an intra-day high of $5.14 per share.

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These sales, or the perception in the market that the holders of a large number of shares intend to sell such shares, could reduce the market price of our common stock.

As of June 30, 2021 and based on the amounts reported in the most recent filings made under Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, State Street Corporation, or State Street, beneficially owned approximately 8.8% of our outstanding shares of common stock, Wellington Management Group LLP, or Wellington, beneficially owned approximately 7.9% of our outstanding common stock, and BlackRock, Inc., or BlackRock, beneficially owned approximately 7.2% of our outstanding shares of common stock.

In addition, as of June 30, 2021, our former director, Muneer Satter, beneficially owned approximately 1.9% of our outstanding common stock.

As of September 30, 2021 and based on the amounts reported in the most recent filings made under Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, State Street Corporation, or State Street, beneficially owned approximately 8.0% of our outstanding shares of common stock and BlackRock, Inc., or BlackRock, beneficially owned approximately 6.5% of our outstanding shares of common stock.

In addition, as of September 30, 2021, our former director, Muneer Satter, beneficially owned approximately 1.8% of our outstanding common stock.

In addition, pursuant to our Fourth Amended and Restated Investors’ Rights Agreement, as amended, with Mr.

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Following their registration and sale under the applicable registration statement, those shares would become freely tradable.

By selling a large number of shares of common stock, BlackRock, State Street, Wellington, or Mr.

By selling a large number of shares of common stock, BlackRock, State Street, or Mr.

Satter could cause the price of our common stock to decline.

We have a significant number of shares that are subject to outstanding options, restricted stock units and a warrant, and in the future we may issue additional options, restricted stock units, warrants or other derivative securities convertible into our common stock.

common stock.

The exercise or vesting of any such options, restricted stock units, warrants or other derivative securities, and the subsequent sale of the underlying common stock, could cause a further decline in our stock price.

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Insiders and significant stockholders could cause us to take actions that may not be, or refrain from taking actions that may be, in our best interest or in the best interest of all of our stockholders.

As of June 30, 2021, we believe that our directors and executive officers, together with their affiliates, owned, in the aggregate, approximately 1.8% of our outstanding common stock.

In addition, we have certain significant stockholders, including Wellington, which beneficially owned approximately 7.9% of our outstanding common stock, State Street, which beneficially owned approximately 8.8% of our outstanding shares of common stock, and BlackRock, which beneficially owned approximately 7.2% of our outstanding shares of common stock based on the amounts reported in the most recent filings made by such significant stockholders under Section 13(d) and 13(g) of the Exchange Act.

As of September 30, 2021, we believe that our directors and executive officers, together with their affiliates, owned, in the aggregate, approximately 1.6% of our outstanding common stock.

In addition, we have certain significant stockholders, including State Street, which beneficially owned approximately 8.0% of our outstanding shares of common stock, and BlackRock, which beneficially owned approximately 6.5% of our outstanding shares of common stock based on the amounts reported in the most recent filings made by such significant stockholders under Section 13(d) and 13(g) of the Exchange Act.

If they were to choose to act together, they would have significant influence on all matters submitted to our stockholders for approval, as well as our management and affairs, such as:

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The Sarbanes-Oxley Act of 2002, or the SOX Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Global Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and certain corporate governance practices.

Our management and other personnel will need to continue to devote a substantial amount of time to these compliance initiatives.

Our management and other personnel will need to continue to

devote a substantial amount of time to these compliance initiatives.

Moreover, these rules and regulations have and will continue to increase our legal and financial compliance costs and make some activities more time-consuming and costly.

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For example, as of December 31, 2019, management and our independent registered public accounting firm concluded that our internal control over financial reporting relating to our inventory process was not effective because of a material weakness due to our failure to design and maintain effective controls over the completeness, accuracy and presentation and disclosure of inventory.

Despite remediation efforts we undertook during fiscal 2020 and continue to make, our management and independent registered public accounting firm concluded that, as of December 31, 2020, our internal control over financial reporting relating to our inventory process was not effective because of a material weakness due to our failure to design and

maintain effective controls over the completeness, accuracy and presentation and disclosure of inventory.

For more information about this material weakness, see Part I, Item 4.

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Controls and Procedures of our Annual Report on Form 10-K for the year ended December 31, 2020.

Additionally, as revised and enhanced controls need to be in operation for a sufficient period of time and be tested to ensure that the controls are operating as designed, management has concluded that the material weakness cannot be considered remediated as of June 30, 2021.

Although we have initiated remediation measures to address the material weakness, we cannot provide assurance that we will be able to correct this material weakness in a timely manner or that our remediation efforts will be adequate to allow us to conclude that our internal controls will be effective in the future.

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Our Charter and our Bylaws contain provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of Delaware, or DGCL, the personal liability of our directors and executive officers for monetary damages for breach of their fiduciary duties as a director or officer.

Our Charter and our Bylaws also provide that we will indemnify our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the DGCL.

Our Charter and our Bylaws also provide that we will indemnify our

directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the DGCL.

In addition, as permitted by Section 145 of the DGCL our Bylaws and our indemnification agreements that we have entered into with our directors and executive officers provide that:

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Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our Charter described above.

This choice of forum provision may limit a

stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees.

Alternatively, if a court were to find these provisions of our Charter inapplicable to, or unenforceable with respect to, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

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Sales of Unregistered Securities

During the quarter ended June 30, 2021, we did not have any sales of unregistered securities.

During the quarter ended September 30, 2021, we did not have any sales of unregistered securities.

Defaults Upon Senior Securities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors