6 unchanged sentences
We are a biopharmaceutical company with the purpose of bettering the life of each person impacted by kidney disease.
−Removed: Since our initial public offering in 2014, we have built a business focused on developing and commercializing innovative renal therapeutics that we believe serves as a foundation for future growth.
−Removed: As a leader in the kidney community, we remain committed to helping patients and others where we believe our current and future products have the ability to deliver value.
+Added: Since our initial public offering in 2014, we have built a business focused on developing and commercializing innovative therapeutics that we believe serves as a foundation for future growth.
+Added: We have established ourselves as a leader in the kidney community, and we remain committed to helping patients and others where we believe our current and future products have the ability to deliver value.
+Added: We believe that delivering value broadly to the kidney community, as well as others who may benefit from our medicines, will result in delivering value for shareholders.
Our portfolio includes a late-stage product candidate and a commercial product:
−Removed: • Vadadustat is an investigational oral hypoxia-inducible factor prolyl hydroxylase inhibitor, or HIF-PHI, designed to mimic the physiologic effect of altitude on oxygen availability.
+Added: • Vadadustat is an investigational oral hypoxia-inducible factor prolyl hydroxylase, or HIF-PH, inhibitor designed to mimic the physiologic effect of altitude on oxygen availability.
At higher altitudes, the body responds to lower oxygen availability with stabilization of hypoxia-inducible factor, or HIF, which stimulates erythropoietin, or EPO, production and leads to red blood cell, or RBC, production and improved oxygen delivery to tissues.
−Removed: The significance of the HIF pathway was recognized by the 2019 Nobel Prize and the 2016 Albert Lasker Basic Medical Research Award, which honored the three physician-scientists who discovered the HIF pathway and elucidated this primary oxygen sensing mechanism that is essential for survival.
−Removed: We believe that, based on the HIF-PHI mechanism of action and clinical data to date, vadadustat has the potential to set a new oral standard of care for the treatment of anemia due to chronic kidney disease, or CKD.
−Removed: We recently completed the global Phase 3 clinical development program for vadadustat, which included two separate programs, INNO 2 VATE and PRO 2 TECT.
+Added: The significance of the HIF pathway was recognized by the 2019 Nobel Prize and the
+Added: 2016 Albert Lasker Basic Medical Research Award, which honored the three physician-scientists who discovered the HIF pathway and elucidated this primary oxygen sensing mechanism that is essential for survival.
+Added: We believe that, based on the HIF-PH inhibitor mechanism of action and the results of our Phase 3 clinical trials, vadadustat has the potential to become the new oral standard of care for the treatment of anemia due to chronic kidney disease, or CKD.
+Added: We completed the global Phase 3 clinical development program for vadadustat in September 2020 to support regulatory filings in the United States, Europe, and other countries, which included two separate programs, INNO 2 VATE and PRO 2 TECT.
INNO 2 VATE evaluated vadadustat for the treatment of anemia due to CKD in adult patients on dialysis, or DD-CKD, and PRO 2 TECT evaluated vadadustat for the treatment of anemia due to CKD in adult patients not on dialysis, or NDD-CKD.
−Removed: In May of 2020, we announced positive top-line results from our Phase 3 INNO 2 VATE program that showed vadadustat was non-inferior to darbepoetin alfa, an injectable erythropoiesis-stimulating agent, or ESA, with respect to hematological efficacy (change in hemoglobin concentration) and cardiovascular safety (assessed in a time to the first occurrence of a major adverse cardiovascular event (MACE) analysis, which is the composite of all-cause mortality, nonfatal myocardial infarction, or a nonfatal stroke) in treating anemia due to CKD in DD-CKD adult patients.
+Added: In May of 2020, we announced positive top-line results from our Phase 3 INNO 2 VATE program that showed vadadustat was non-inferior to darbepoetin alfa, an injectable erythropoiesis-stimulating agent, or ESA, with respect to hematological efficacy (change in hemoglobin concentration) and cardiovascular safety (assessed in a time to the first occurrence of a major adverse cardiovascular event, or MACE, analysis, which is the composite of all-cause mortality, nonfatal myocardial infarction, or a nonfatal stroke) in treating anemia due to CKD in DD-CKD adult patients.
In addition to meeting the primary endpoints of the INNO 2 VATE program, vadadustat met the key secondary hematological efficacy endpoint in each of the two studies in the program and also met the program's key secondary safety endpoints.
−Removed: The results of the INNO 2 VATE program were presented at American Society of Nephrology, or ASN, in October of 2020.
+Added: The results of the INNO 2 VATE program were presented at American Society of Nephrology, or ASN, in October of 2020 and published in the New England Journal of Medicine in April of 2021.
In September of 2020, we announced top-line results from our Phase 3 PRO 2 TECT program that showed vadadustat was non-inferior to darbepoetin alfa with respect to hematological efficacy in treating anemia due to CKD in NDD-CKD adult patients.
−Removed: While the PRO 2 TECT data showed that vadadustat achieved both the primary and key secondary hematological efficacy endpoints, it did not meet the program's primary cardiovascular safety (MACE) endpoint.
+Added: While the PRO 2 TECT data showed that vadadustat achieved both the primary and key secondary hematological efficacy endpoints, it did not meet the program's primary cardiovascular safety, or MACE, endpoint.
These cardiovascular outcomes contrast with those reported within the INNO 2 VATE program, which evaluated vadadustat for the treatment of anemia due to CKD in DD-CKD adult patients.
−Removed: The results of the PRO 2 TECT program were presented at ASN in October of 2020.
−Removed: S imultaneous with the PRO 2 TECT ASN presentation, we presented additional analyses, conducted by Akebia, of data from the PRO 2 TECT program that revealed that the greater number of MACE events observed among vadadustat patients as compared to the active comparator was primarily related to an excess of non-cardiovascular death and death-of-unknown-cause in regions outside of the United States where significant differences in treatment patterns for NDD-CKD patients were observed.
−Removed: We plan to proceed with the submission of a New Drug Application, or NDA, for vadadustat by the middle of the second quarter of 2021 for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients.
−Removed: We are also working in close collaboration with our collaboration partner, Otsuka Pharmaceutical
−Removed: Ltd., to prepare a Marketing Authorization Application, or MAA, for vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients for submission to the European Medicines Agency, or EMA, expected in 2021.
−Removed: However, a s vadadustat did not meet the PRO 2 TECT program's primary safety endpoint, we are remaining cautious in our outlook for potential approval of vadadustat in NDD-CKD adult patients in the United States and Europe.
+Added: The results of the PRO 2 TECT program were presented at ASN in October of 2020 and published in the New England Journal of Medicine in April of 2021.
+Added: We submitted a New Drug Application, or NDA, to the U.S.
+Added: Food and Drug Administration, or FDA, for vadadustat in March of 2021 for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients.
+Added: Our NDA submission was accepted for filing by the FDA in May of 2021 and the FDA has indicated that they are not currently planning to hold an Advisory Committee meeting to discuss the NDA for vadadustat.
+Added: The FDA also assigned the application standard review and a Prescription Drug User Fee Act, or PDUFA, target action date of March 29, 2022.
+Added: Our collaboration partner, Otsuka Pharmaceutical Co.
+Added: Ltd., or Otsuka, submitted a Marketing Authorization Application, or MAA, for vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients to the European Medicines Agency, or EMA, in October 2021.
+Added: As vadadustat did not meet the PRO 2 TECT program's primary safety endpoint, we are remaining cautious in our outlook for potential approval of vadadustat in NDD-CKD adult patients in the United States and Europe.
In June of 2020, we announced the first regulatory approval of vadadustat for the treatment of anemia due to CKD in DD-CKD and NDD-CKD adult patients in Japan.
Our collaboration partner in Japan, Mitsubishi Tanabe Pharma Corporation, or MTPC, commenced commercial sales of vadadustat in Japan under the trade name, Vafseo TM , in August 2020.
+Added: In addition, MTPC filed a new drug application for vadadustat for the treatment of anemia due to CKD in adult patients in Taiwan in January of 2022.
In addition to anemia due to CKD, we believe that vadadustat has the potential to treat other serious or life-threatening conditions, including preventing and lessening the severity of acute respiratory distress syndrome, or ARDS, a complication of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), or COVID-19, infection.
−Removed: More specifically, in July of 2020, we announced an investigator-sponsored clinical study by The University of Texas Health Science Center at Houston, or UTHealth, in Houston, Texas, evaluating the use of vadadustat as a potential therapy to prevent and lessen the severity of ARDS in up to 400 adult patients who have been hospitalized due to COVID-19.
+Added: More specifically, in July of 2020, we announced an investigator-sponsored clinical study by The University of Texas Health Science Center at Houston, or UTHealth, in Houston, Texas, evaluating the use of vadadustat as a potential therapy to prevent and lessen the severity of ARDS adult patients who have been hospitalized due to COVID-19.
+Added: With the support of their data monitoring committee, UTHealth decided to expand their study beyond the initial 400 patients, an enrollment target they have now surpassed.
Within this randomized, double-blind, placebo-controlled study, pa tients will be dosed with vadadustat or a placebo starting within 24 hours of hospital admission and continuing for up to 14 days.
−Removed: This study is being conducted under a U.S.
−Removed: Food and Drug Administration, or FDA, Investigational New Drug application, or IND, with UTHealth as the study sponsor and is currently enrolling patients.
+Added: This study is being conducted under an Investigational New Drug application, or IND, with UTHealth as the study sponsor and is currently enrolling patients.
In January of 2021, UTHealth announced that it had been awarded $5.1 million in funding from the U.S.
2 unchanged sentences
(1) the control of serum phosphorus levels in adult patients with DD-CKD, or the Hyperphosphatemia Indication, and (2) the treatment of iron deficiency anemia, or IDA, in adult patients with NDD-CKD, or the IDA Indication.
−Removed: Ferric citrate is also approved and marketed in Japan as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, under the trade name Riona (ferric citrate hydrate).
−Removed: Top-line Results from Global Phase 3 INNO 2 VATE Program within DD-CKD Adult Patients
−Removed: The two INNO 2 VATE studies ( Correction/Conversion and Conversion ), which collectively enrolled 3,923 patients, evaluated the efficacy and safety of vadadustat versus darbepoetin alfa for the treatment of anemia due to CKD in DD-CKD adult patients.
−Removed: Vadadustat achieved the primary and key secondary efficacy endpoint in each of the two INNO 2 VATE studies, demonstrating non-inferiority to darbepoetin alfa as measured by a mean change in hemoglobin, or Hb, between baseline and the primary evaluation period (weeks 24 to 36) and secondary evaluation period (weeks 40 to 52).
−Removed: Vadadustat also achieved the primary safety endpoint of the INNO 2 VATE program, defined as non-inferiority of vadadustat versus darbepoetin alfa in time to first occurrence of MACE across both INNO 2 VATE studies.
−Removed: Primary and Key Secondary Efficacy Endpoint Results
−Removed: Vadadustat achieved each of the INNO 2 VATE studies’ primary efficacy endpoints of mean change in Hb between baseline and the primary evaluation period compared to darbepoetin alfa, in DD-CKD adult patients, demonstrating non-inferiority to darbepoetin alfa based on using a non-inferiority margin of -0.75 g/dL.
−Removed: In INNO 2 VATE’s Correction/Conversion study of incident dialysis patients (n=369):
−Removed: • Primary Efficacy Endpoint Result :
−Removed: Vadadustat was non-inferior to darbepoetin alfa.
−Removed: The least square mean difference in Hb was -0.31 g/dL (95% CI:
−Removed: -0.53, -0.10), achieving the pre-specified non-inferiority criterion of -0.75 g/dL.
−Removed: The mean (SD) Hb level at week 24 to week 36 was 10.36 (1.13) g/dL for vadadustat-treated patients compared to 10.61 (0.94) g/dL for darbepoetin alfa-treated patients.
−Removed: • Key Secondary Efficacy Endpoint Result :
−Removed: Vadadustat sustained the target Hb efficacy response at weeks 40 to 52 achieving non-inferiority compared to darbepoetin alfa.
−Removed: The least square mean difference in Hb was -0.07 g/dL (95%
−Removed: -0.34, 0.19).
−Removed: The mean (SD) Hb level at week 40 to week 52 was 10.51 (1.19) g/dL for vadadustat treated-patients compared to 10.55 (1.14) g/dL for darbepoetin alfa-treated patients.
−Removed: In INNO 2 VATE’s Conversion study of dialysis patients (n=3,554):
−Removed: • Primary Efficacy Endpoint Result :
−Removed: Vadadustat was non-inferior to darbepoetin alfa.
−Removed: The least square mean difference in Hb was -0.17 g/dL (95% CI:
−Removed: -0.23, -0.10), achieving the pre-specified non-inferiority criterion of -0.75 g/dL.
−Removed: The mean (SD) Hb level at week 24 to week 36 was 10.36 (1.01) g/dL for vadadustat-treated patients compared to 10.53 (0.96) g/dL for darbepoetin alfa-treated patients.
−Removed: • Key Secondary Efficacy Endpoint Result :
−Removed: Vadadustat sustained efficacy in the Conversion study demonstrating non-inferiority to darbepoetin with a least square mean difference in Hb of -0.18 g/dL (95% CI:
−Removed: -0.25, -0.12).
−Removed: The mean (SD) Hb level at week 40 to week 52 was 10.40 (1.04) g/dL in the vadadustat-treated patients compared to 10.58 (0.98) g/dL for darbepoetin treated patients.
−Removed: Primary Safety Major Adverse Cardiovascular Events (MACE) Endpoint Result
−Removed: Vadadustat achieved the INNO 2 VATE program’s primary safety endpoint of non-inferiority for MACE.
−Removed: In the primary analysis of time to first MACE event, vadadustat demonstrated non-inferiority to darbepoetin alfa using a non-inferiority margin of 1.25 prospectively agreed to by FDA and a non-inferiority margin of 1.3 prospectively agreed to by EMA.
−Removed: The INNO 2 VATE program ( Correction/Conversion and Conversion studies) of dialysis patients (n=3,902):
−Removed: • Vadadustat was non-inferior to darbepoetin alfa.
−Removed: The upper bound of the 95% confidence interval (CI) of the Hazard Ratio (HR) was below the pre-specified non-inferiority margin of 1.25 for primary MACE analysis (HR 0.96, 95% CI:
−Removed: 0.83, 1.11.).
−Removed: The incidence of treatment emergent adverse events during the Correction/Conversion study in vadadustat treated patients was 83.8% and 85.5 % in darbepoetin alfa treated patients.
−Removed: During the study, the most common treatment emergent adverse events reported in vadadustat/darbepoetin alfa treated patients were hypertension (16.2%/ 12.9%) and diarrhea (10.1%/ 9.7%).
−Removed: Serious treatment emergent adverse events were lower in vadadustat treated patients at 49.7% compared to 56.5% for darbepoetin alfa treated patients.
−Removed: The incidence of treatment emergent adverse events during the Conversion study in the vadadustat treated patients was 88.3%, and 89.3% in darbepoetin alfa treated patients.
−Removed: During the study, the most common treatment emergent adverse events reported in vadadustat/darbepoetin alfa treated patients were diarrhea (13.0%/ 10.1%), pneumonia (11.0%/ 9.7%), hypertension (10.6%/ 13.8%), and hyperkalemia (9.0%/ 10.8%).
−Removed: Serious treatment emergent adverse events were slightly lower for vadadustat treated patients at 55.0% and 58.3% for darbepoetin alfa-treated patients.
−Removed: INNO 2 VATE results on key secondary safety endpoints showed that vadadustat also demonstrated non-inferiority to darbepoetin alfa in analyses of expanded MACE, cardiovascular MACE, cardiovascular mortality, and all-cause mortality.
−Removed: Top-line Results from Global Phase 3 PRO 2 TECT Program within NDD-CKD Adult Patients
−Removed: The two PRO 2 TECT studies ( Correction and Conversion ), which collectively enrolled 3,476 patients, evaluated the efficacy and safety of vadadustat for the treatment of anemia due to CKD in NDD-CKD adult patients.
−Removed: Vadadustat achieved the primary and key secondary efficacy endpoint in each of the two PRO 2 TECT studies, demonstrating non-inferiority to darbepoetin alfa as measured by a mean change in Hb between baseline and the primary evaluation period (weeks 24 to 36) and secondary evaluation period (weeks 40 to 52).
−Removed: Vadadustat did not meet the primary safety endpoint of the PRO 2 TECT program, defined as non-inferiority of vadadustat versus darbepoetin alfa in time to first occurrence of MACE across both PRO 2 TECT studies.
−Removed: Primary and Key Secondary Efficacy Endpoint Results
−Removed: Vadadustat achieved each of the PRO 2 TECT studies' primary efficacy endpoints of mean change in Hb between baseline and the primary evaluation period compared to darbepoetin alfa, in adult patients on dialysis, demonstrating non-inferiority to darbepoetin alfa using an NI margin of -0.75 g/dL.
−Removed: In PRO 2 TECT's Correction study (n=1,751):
−Removed: • Primary Efficacy Endpoint Result :
−Removed: Vadadustat was non-inferior to darbepoetin alfa.
−Removed: The least square mean difference in Hb was 0.05 g/dL (95% CI:
−Removed: -0.04, 0.15), achieving the pre-specified NI criterion of -0.75 g/dL.
−Removed: The mean (SD) Hb level at week 24 to week 36 was 10.39 (0.99) g/dL for vadadustat-treated patients compared to 10.35 (1.03) g/dL for darbepoetin alfa-treated patients.
−Removed: • Key Secondary Efficacy Endpoint Result :
−Removed: Vadadustat sustained the target Hb efficacy response at weeks 40 to 52 achieving non-inferiority compared to darbepoetin alfa.
−Removed: The least square mean difference in Hb was 0.04 g/dL (95% CI:
−Removed: -0.06, 0.14).
−Removed: The mean (SD) Hb level at week 40 to week 52 was 10.48 (1.05) g/dL for vadadustat-treated patients compared to 10.45 (1.01) g/dL for darbepoetin alfa-treated patients.
−Removed: In PRO 2 TECT's Conversion study (n=1,725):
−Removed: • Primary Efficacy Endpoint Result :
−Removed: Vadadustat was non-inferior to darbepoetin alfa.
−Removed: The least square mean difference in Hb was -0.01 g/dL (95% CI:
−Removed: -0.09, 0.07), achieving the pre-specified NI criterion of -0.75 g/dL.
−Removed: The mean (SD) Hb level at week 24 to week 36 was 10.77 (0.98) g/dL for vadadustat-treated patients compared to 10.77 (0.99) g/dL for darbepoetin alfa-treated patients.
−Removed: • Key Secondary Efficacy Endpoint Result :
−Removed: Vadadustat sustained efficacy in the Conversion study demonstrating non-inferiority to darbepoetin with a least square mean difference in Hb of 0.00 g/dL (95% CI:
−Removed: -0.10, 0.09).
−Removed: The mean (SD) Hb level at week 40 to week 52 was 10.80 (1.04) g/dL in the vadadustat-treated patients compared to 10.79 (1.05) g/dL for darbepoetin alpha-treated patients.
−Removed: Primary Safety Major Adverse Cardiovascular Events (MACE) Endpoint Result
−Removed: The PRO 2 TECT program (Correction and Conversion studies) (n=3,471):
−Removed: • Primary Safety MACE Endpoint Result :
−Removed: Vadadustat did not meet the PRO 2 TECT program's primary safety endpoint of non-inferiority for MACE.
−Removed: The upper bound of the 95% confidence interval of the Hazard Ratio (HR) was above the pre-specified NI margin of 1.25 for primary MACE analysis (HR 1.17, 95% CI:
−Removed: Analysis of MACE events conducted by Akebia in the PRO 2 TECT program revealed that the greater number of MACE events observed among vadadustat patients as compared to the active comparator was primarily related to an excess of non-cardiovascular death and death-of-unknown-cause in regions outside of the United States where significant differences in treatment patterns for NDD-CKD patients were observed.
−Removed: The PRO 2 TECT analysis plan was prospectively designed to analyze the effect of regional differences, most notably, well-known differences in Hb treatment targets.
−Removed: Within PRO 2 TECT, U.S.
−Removed: patients were treated to a target Hb range of 10 to 11 g/dL and non-U.S.
−Removed: patients were treated to a target Hb range of 10 to 12 g/dL.
−Removed: In October of 2020, we presented a pre-specified regional analysis using age as a dichotomous variable, that showed vadadustat was not associated with a clinically meaningful increase in cardiovascular risk compared to darbepoetin alfa in U.S.
−Removed: patients treated to a target Hb range of 10 to 11 g/dL, in an analysis of MACE (HR 1.06, 95% CI:
−Removed: In October 2020, we announced that based on these analyses and the totality of the data from our Phase 3 program, we plan to pursue regulatory approval in the United States for vadadustat for the treatment of anemia in adult NDD-CKD patients.
−Removed: However, a s vadadustat did not meet the PRO 2 TECT program's primary safety endpoint, we are remaining cautious in our outlook for potential approval of vadadustat in adult NDD-CKD patients and we look forward to working with the FDA in their review of these data.
−Removed: The incidence of treatment emergent adverse events during the Correction study in the vadadustat-treated patients was 90.9%, and 91.6% in darbepoetin alfa-treated patients.
−Removed: 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%).
−Removed: Serious treatment emergent adverse events were 65.3% for vadadustat-treated patients and 64.5% for darbepoetin alfa-treated patients.
−Removed: The incidence of treatment emergent adverse events during the Conversion study in vadadustat treated patients was 89.1% and 87.7% in darbepoetin alfa-treated patients.
−Removed: During the study, the most common treatment emergent adverse events reported in vadadustat/darbepoetin alfa-treated patients were end-stage renal disease (27.5%/ 28.4%), hypertension (14.4%/ 14.8%), urinary tract infection (12.2%/ 14.5%), diarrhea (13.8.%/ 8.8.%), peripheral oedema (9.9%/ 10.1%) and pneumonia (10.0%/ 9.7%).
−Removed: Serious treatment emergent adverse events were 58.5% for vadadustat-treated patients and 56.6% for darbepoetin alfa-treated patients.
−Removed: Regulatory and Commercialization Strategy
−Removed: Based on t he strength of the INNO 2 VATE data, the additional analyses of data from PRO 2 TECT conducted by Akebia and the totality of the data from our Phase 3 program, following our October 2020 pre-NDA meeting with the FDA, we plan to proceed with the submission of an NDA for vadadustat by the middle of the second quarter of 2021 for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients.
−Removed: We are also working in close collaboration with Otsuka Pharmaceutical Co.
−Removed: Ltd., to prepare a Marketing Authorization Application, or MAA, for vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients for submission to the European Medicines Agency, or EMA, expected in 2021.
−Removed: However, a s vadadustat did not meet the PRO 2 TECT program's primary safety endpoint, we are remaining cautious in our outlook for potential approval of vadadustat in NDD-CKD adult patients in the United States and Europe.
−Removed: We are in the process of supporting MTPC's commercial launch of vadadustat in Japan, preparing for a potential commercial launch of vadadustat in the United States and supporting potential commercial launches of vadadustat in certain other markets.
−Removed: Our ability to launch vadadustat in the United States is dependent on the successful filing and defense of an NDA, and approval by the FDA.
−Removed: We plan to commercialize vadadustat, subject to FDA approval, in the United States with our well-established, nephrology-focused commercial organization, while leveraging our collaboration with Otsuka and its U.S.
+Added: Ferric citrate is also approved and marketed in Japan as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of patients with IDA, under the trade name Riona (ferric citrate hydrate).
+Added: Since 2018, Auryxia product revenue has grown at a compounded annual growth rate of 14% due to market share gains and improved net price per pill, while total prescriptions for phosphate binders in the United States have declined 8%.
+Added: We believe this growth is due to the benefits of the product perceived by the prescribing nephrologists as communicated by our nephrology-focused commercial and medical organizations.
+Added: If we obtain FDA approval of vadadustat, we plan to commercialize vadadustat in the United States with our well-established, nephrology-focused commercial organization, while also leveraging our collaboration with Otsuka and its U.S.
nephrology commercial organization.
−Removed: We granted Otsuka exclusive rights to commercialize vadadustat in Europe, China and certain other markets, subject to marketing approvals.
−Removed: We granted MTPC exclusive rights to commercialize vadadustat in Japan, where MTPC commenced commercial sales of vadadustat under the trade name, Vafseo TM , in August 2020, and in certain other countries in Asia, subject to marketing approvals.
−Removed: In addition, we granted Vifor (International) Ltd., or Vifor Pharma, an exclusive license to sell vadadustat to FKC and Third Party Dialysis Organizations, which combined manage up to approximately 60% of the dialysis patients in the United States, which would be effective upon FDA approval of vadadustat, the earlier of vadadustat’s reimbursement under a bundled reimbursement model or using the TDAPA, and a milestone payment by Vifor Pharma.
−Removed: During the term of the license agreement, Vifor Pharma is not permitted to sell any HIF product that competes with vadadustat in the United States to FKC or its affiliates or to any Third Party Dialysis Organization, and we may not directly supply vadadustat to FKC or any other affiliate of Fresenius Medical Care North America, or FMCNA, or any Third Party Dialysis Organization.
−Removed: For more information about our license, collaboration and strategic agreements relating to vadadustat, see Part I, Item 1.
−Removed: Business – License, Collaboration and Other Strategic Agreements – Vadadustat.
−Removed: We entered into a letter agreement on February 14, 2020, or the Letter Agreement, with Vifor Pharma, relating to Vifor Pharma’s agreement with a third party to purchase a Priority Review Voucher, or the PRV, issued by the FDA subject to satisfaction of customary closing conditions, or the PRV Purchase.
−Removed: A PRV entitles the holder to priority review of an NDA, or a Biologics License Application, or BLA, for a new drug, which reduces the target FDA review time to six months after official acceptance of the submission, and could lead to expedited approval.
−Removed: Pursuant to the Letter Agreement, we paid Vifor Pharma $10.0 million in connection with the closing of the PRV Purchase.
−Removed: Vifor Pharma is obligated to retain all rights to, and maintain the validity of, the PRV until we and Vifor Pharma (a) enter into a definitive agreement setting forth the financial and other terms by which Vifor Pharma will assign the PRV to us for use with our planned NDA for vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients, or (b) make a mutual decision to sell the PRV and share the proceeds based on certain terms.
−Removed: Japan Approval and Launch
−Removed: In June 2020, we announced the first regulatory approval of vadadustat for the treatment of anemia due to CKD in DD-CKD and NDD-CKD patients in Japan.
−Removed: Our collaboration partner, MTPC, commenced commercial sales of vadadustat in Japan under the trade name, Vafseo TM , in August 2020.
−Removed: The regulatory approval triggered a $15.0 million regulatory milestone payment from MTPC to Akebia.
−Removed: Study in COVID-19-Related Indication
−Removed: In July 2020, we announced the initiation of an investigator-sponsored clinical study by The University of Texas Health Science Center at Houston, or UTHealth, in Houston, Texas, evaluating the use of vadadustat as a potential therapy to prevent and lessen the severity of acute respiratory distress syndrome, or ARDS, a complication of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), or COVID-19, infection.
−Removed: The randomized, double-blind, placebo-controlled study is intended to evaluate the safety and efficacy of vadadustat in up to 400 adult patients who have been hospitalized due to COVID-19.
−Removed: Patients will be dosed with vadadustat or a placebo starting within 24 hours of hospital admission and continuing for up to 14 days.
−Removed: This study is being conducted under an FDA Investigational New Drug application with UTHealth as the study sponsor and is currently enrolling patients.
−Removed: In January of 2021, UTHealth announced that it had been awarded $5.1 million in funding from the U.S.
−Removed: Department of Defense, or DOD, to expand this clinical trial at its facilities.
+Added: In addition, in February 2022, we entered into a Second Amended and Restated License Agreement, or the Vifor Second Amended Agreement with Vifor (International) Ltd., or Vifor Pharma, which amended and restates the Amended and Restated License Agreement, dated April 8, 2019, or the Vifor First Amended Agreement.
+Added: Pursuant to the Vifor Second Amended Agreement, we granted Vifor Pharma an exclusive license to sell vadadustat to Fresenius Medical Care North America and its affiliates, including Fresenius Kidney Care Group LLC, to certain third-party dialysis organizations approved by us, to independent dialysis organizations that are members of group purchase organizations, and to certain non-retail specialty pharmacies in the United States, or the Territory.
+Added: We refer to Fresenius Medical Care North America and its affiliates, these organizations and specialty pharmacies collectively as the “Supply Group".
+Added: We currently retain rights to commercialize vadadustat for use in the non-dialysis dependent CKD market and to sell to dialysis organizations outside of the Supply Group.
+Added: During the term of the Vifor Second Amended Agreement, Vifor Pharma is not permitted to sell any HIF product that competes with vadadustat in the Territory to the Supply Group.
We market Auryxia in the United States with our well-established, nephrology-focused commercial organization.
2 unchanged sentences
product sales during the year ended December 31, 2021.
−Removed: We have funded our operations primarily through equity offerings, strategic collaborations, product revenues and debt.
+Added: In addition, we continue to explore additional development opportunities to expand our pipeline and portfolio of novel therapeutics through both internal research and external innovation.
+Added: Our development pipeline includes several earlier stage opportunities, including praliciguat, an investigational oral soluble guanylate cyclase, or sGC, stimulator, that we licensed from Cyclerion Therapeutics, Inc., or Cyclerion, in June 2021.
+Added: Praliciguat is in development for the treatment of focal segmental glomerulosclerosis, which is highly complementary of our strategy to identify and develop novel therapeutics for people impacted by kidney diseases.
+Added: Further, our internal innovation efforts include several preclinical opportunities, both in the HIF pathway, leveraging our learnings from the research and development of vadadustat, as well as new areas of focus we are currently exploring.
Operating Overview
1 unchanged sentence
Our net losses were $282.8 million, $383.5 million and $279.7 million for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Substantially all of our net losses resulted from costs incurred in connection with the continued commercialization of Auryxia and development efforts relating to vadadustat, including preparing for and conducting clinical studies of vadadustat, providing general and administrative support for these operations and protecting our intellectual property.
+Added: Substantially all of our net losses resulted from costs incurred in connection with the continued commercialization of Auryxia and development efforts relating to vadadustat, including conducting clinical trials of, and seeking regulatory approval for, vadadustat, providing general and administrative support for these operations and protecting our intellectual property.
We expect to continue to incur significant expenses and operating losses for the foreseeable future.
−Removed: The amount of our future net losses will depend, in part, on the rate of our future expenditures, and our financial position will depend, in part, on product revenue, collaboration revenue, and our ability to obtain additional funding.
+Added: The amount of our future net losses will depend, in part, on the rate of our future expenditures, and our financial position will depend, in part, on product
+Added: revenue, collaboration revenue, and our ability to obtain additional funding.
We expect to continue to incur significant expenses if and as we:
−Removed: • 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;
−Removed: • 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;
−Removed: • adapt to any regulatory changes, including changes relating to reimbursement;
−Removed: • adapt to any changes in reimbursement practices by third party payors;
−Removed: • continue our integration activities as a result of our merger, or the Merger, with Keryx Biopharmaceuticals, Inc., or Keryx;
−Removed: • enroll patients in our clinical trials;
−Removed: • 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;
+Added: • conduct and enroll patients in any clinical trials, including any post-marketing 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;
+Added: • continue our commercialization activities for Auryxia and vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired;
+Added: • seek marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired,
+Added: • 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;
−Removed: • seek to discover and develop additional product candidates or platforms that may lead to the discovery of additional product candidates;
+Added: • conduct discovery and development activities for additional product candidates or platforms that may lead to the discovery of additional product candidates;
• engage in transactions, including strategic, merger, collaboration, acquisition and licensing transactions, pursuant to which we would market and develop commercial products, or develop and commercialize other product candidates and technologies;
9 unchanged sentences
We expect to finance future cash needs through product revenue, public or private equity or debt transactions, payments from our collaborators, royalty transactions, strategic transactions, or a combination of these approaches.
−Removed: If we are unable to raise additional capital in sufficient amounts when needed or on attractive terms, we may not be able to pursue development and commercial activities related to Auryxia and
−Removed: vadadustat, if approved, or any additional products and product candidates, including those that may be in-licensed or acquired.
+Added: If we are unable to raise additional capital in sufficient amounts when needed or on attractive terms, we may not be able to pursue development and commercial activities related to Auryxia and vadadustat, if approved, or any additional products and product candidates, including those that may be in-licensed or acquired.
Any of these events could significantly harm our business, financial condition and prospects.
From inception through December 31, 2021, we raised approximately $792.7 million of net proceeds from the sale of equity, including $519.8 million from various underwritten public offerings, $222.9 million from at-the-market offerings, or ATM offerings, pursuant to sales agreements with Cantor Fitzgerald & Co., and $50.0 million from the sale of 3,571,429 shares of common stock to Vifor Pharma.
−Removed: During the year ended December 31, 2020, we completed an underwritten public offering of our common stock with aggregate net proceeds of $142.4 million and we raised $67.3 million of net proceeds from ATM offerings.
−Removed: In addition, on November 11, 2019, we entered into a loan agreement, or the Loan Agreement, with funds managed by Pharmakon Advisors LP, or Pharmakon, pursuant to which term loans in an aggregate principal amount of $100.0 million were made available to us in two tranches, subject to certain terms and conditions, or the Term Loans.
−Removed: On November 25, 2019, we drew down the first tranche of $80.0 million from the Term Loans and received net proceeds of $77.3 million.
−Removed: On December 10, 2020, we drew down the second tranche of $20.0 million from the Term Loans and received net proceeds of $20.0 million.
−Removed: Subsequent to December 31, 2020 and through the date of this Annual Report on Form 10-K, the Company raised $15.9 million in net proceeds from ATM offerings.
+Added: During the year ended December 31, 2021, we raised $88.4 million of net proceeds from ATM offerings.
At the inception of our collaboration agreements with Otsuka and MTPC, our collaborators committed to an aggregate of approximately $573.0 million or more in cost-share funding, which we generally continue to receive on a quarterly prepaid basis, and license payments.
Of these commitments, we received approximately $272.0 million at the onset of the collaboration agreements.
+Added: On November 11, 2019, we entered into a loan agreement, or the Loan Agreement, with funds managed by Pharmakon Advisors LP, or Pharmakon, pursuant to which term loans in an aggregate principal amount of $100.0 million were made available to us in two tranches, subject to certain terms and conditions, or the Term Loans.
+Added: As of March 31, 2021, we had drawn down the full $100.0 million made available to us under the Loan Agreement.
+Added: In addition, on February 25, 2021, we received an upfront payment of $44.8 million (net of certain transaction expenses) in connection with our sale to HealthCare Royalty Partners IV, L.P., or HCR, of the right to receive all royalties and sales milestones payable to us under our collaboration agreement with MTPC, or the MTPC Agreement, subject to certain caps and other terms and conditions described in Note 4 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Impacts of COVID-19 Pandemic
The ongoing severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), or COVID-19, pandemic has presented a substantial public health and economic challenge around the world and continues to affect our employees, patients, healthcare providers with whom we interact, customers, collaboration partners, CROs, contract manufacturing organizations, or CMOs, vendors, communities and business operations.
−Removed: 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 the COVID-19 pandemic, 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.
−Removed: While we did not experience a significant impact from COVID-19 on our revenues during the first nine months of 2020, we believe our revenue growth was negatively impacted during the fourth quarter of 2020 primarily as the kidney patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.
−Removed: 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;
+Added: 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 the COVID-19 pandemic, any resurgences or variants 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.
+Added: We believe our revenue growth was negatively impacted during 2021 primarily as the CKD patient population that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.
+Added: 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 CKD patients;
therefore, we expect COVID-19 to continue to have a negative impact on our revenue growth for the foreseeable future.
−Removed: The majority of our office-based employees have been working from home since March 13, 2020.
−Removed: In addition, healthcare facilities have continued, or begun again, to restrict access for non-patients, including the members of our sales force.
−Removed: 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.
−Removed: As a result, we continue to primarily engage with healthcare providers and other customers virtually, where possible.
−Removed: 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.
−Removed: At this time, our third party contract manufacturing partners continue to operate at or near normal levels.
−Removed: 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.
+Added: The majority of our office-based employees began working from home in March 2020, and continue to primarily work from home.
+Added: While most of our office-based operations can be performed remotely, there is no guarantee that we will continue to be as effective while working remotely because our team is dispersed, which has limited valuable in-person employee team interactions, and employees may become sick themselves and be unable to work.
+Added: Further, our increased reliance on remote access to our information systems increases our exposure to potential cybersecurity breaches.
+Added: Moreover, our future success and profitability substantially depends on the management skills of our executives and certain other key employees.
+Added: 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.
+Added: For example, as of January 1, 2022, we have required all of our employees be fully vaccinated, subject to limited medical and religions exemptions in accordance with applicable laws.
+Added: At this time, it is not possible to predict with certainty the exact impact that our vaccine requirement will continue to have on us or on our workforce.
+Added: The vaccine requirement has resulted, and may continue to result, in employee distraction and could result in litigation and difficulty securing future labor needs.
+Added: This could have an adverse effect on our business, results of operations and cash flows.
+Added: In addition, several healthcare facilities have previously restricted access for non-patients, including the members of our sales force.
+Added: 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 previously restricted access to their clinics.
+Added: As a result, we continue to engage with some healthcare providers and other customers virtually, where possible.
+Added: The restrictions on our customer-facing employees' in-person interactions with healthcare providers could negatively impact our access to healthcare providers and, ultimately, our sales, including with respect to vadadustat, if approved.
+Added: 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.
+Added: 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.
+Added: Given this uncertain environment and the disproportionate impact of the COVID-19 pandemic on CKD patients, we are actively monitoring the demand for Auryxia, and will be for vadadustat, if approved, including the potential for further declines or changes in prescription trends and customer orders.
+Added: 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.
+Added: At this time, our third party contract manufacturers continue to operate at or near normal levels.
+Added: 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 United States and which is currently marketed under the trade name Vafseo TM by MTPC in Japan), which may result in increased costs and delays, or disruptions to manufacturing and 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.
COVID-19 pandemic precautions have caused moderate delays in enrolling new clinical trials and may cause delays in enrolling other new clinical trials.
1 unchanged sentence
This uncertain COVID-19 pandemic environment has presented new risks to our business.
−Removed: While we are working aggressively 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.
+Added: 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.
For additional information on the various risks posed by the COVID-19 pandemic, please refer to Part I, Item 1A.
3 unchanged sentences
Cost-sharing revenue represents amounts reimbursed by our collaboration partners for expenses incurred by us for research and development activities and, potentially, co-promotion activities, under our collaboration agreements.
−Removed: We expect our revenue to continue to be generated primarily from our collaborations with Otsuka and MTPC and any other collaborations into which we may enter, as well as commercial sales of Auryxia in the United States, and royalty revenue from JT and Torii, based on net sales of Riona in Japan.
+Added: We expect our revenue to continue to be generated primarily from our collaborations with Otsuka and MTPC and any other collaborations into which we may enter, as well as commercial sales of Auryxia and vadadustat, if approved, in the United States, and royalty revenue from JT and Torii, based on net sales of Riona in Japan.
Cost of Goods Sold
−Removed: Cost of goods sold includes direct costs to manufacture commercial drug substance and drug product for Auryxia, as well as indirect costs, including costs for packaging, shipping, insurance and quality assurance, idle capacity charges, write-offs for inventory that fails to meet specifications or is otherwise no longer suitable for commercial sale, and royalties due to the licensor of Auryxia related to the U.S.
+Added: Cost of goods sold includes direct costs to manufacture commercial drug substance and drug product for Auryxia, as well as indirect costs, including costs for packaging, shipping, insurance and quality assurance, idle capacity charges, write-offs for inventory that fails to meet specifications or is otherwise no longer suitable for commercial sale, changes in our excess purchase commitment liability, and royalties due to the licensor of Auryxia related to the U.S.
product sales recognized during the period.
+Added: Cost of goods sold also includes costs to manufacture drug product provided to MTPC for commercial sale of Vafseo in Japan.
As a result of the Merger and the application of purchase accounting, costs of goods sold also includes both amortization expense and, if applicable, impairment charges associated with the fair value of the developed product rights for Auryxia as well as expense associated with the fair value inventory step-up.
The fair value of the developed product rights for Auryxia is being amortized over its estimated useful life, which as of December 31, 2021 is estimated to be six years.
−Removed: The fair value inventory step-up is expected to be incurred over approximately three years from the date of the Merger.
+Added: The fair value inventory step-up as a result of the Merger was fully amortized as of the first quarter of 2021.
Research and Development Expenses
1 unchanged sentence
• personnel-related expenses, including salaries, benefits, recruiting fees, travel and stock-based compensation expense of our research and development personnel;
−Removed: • expenses incurred under agreements with CROs and investigative sites that conduct our clinical studies;
+Added: • expenses incurred under agreements with CROs and investigative sites that conduct our clinical trials;
• the cost of acquiring, developing and manufacturing clinical study materials through CMOs;
1 unchanged sentence
• costs associated with preclinical, clinical and regulatory activities;
+Added: • costs associated with vadadustat pre-launch inventory build, which remains subject to approval in the United States.
Research and development costs are expensed as incurred.
Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.
−Removed: We cannot determine with certainty the duration and completion costs of current or future clinical studies of Auryxia and vadadustat or if, when, or to what extent we will generate revenue from the commercialization and sale of vadadustat, if approved.
+Added: We cannot determine with certainty the duration and completion costs of current or future clinical trials of Auryxia and vadadustat or if, when, or to what extent we will generate revenue from the commercialization and sale of vadadustat, if approved.
We may never succeed in achieving marketing approval for vadadustat.
−Removed: The duration, costs and timing of clinical studies and development of Auryxia and vadadustat will depend on a variety of factors including, but not limited to, those described in Part I, Item 1A.
+Added: The duration, costs and timing of clinical trials and development of Auryxia and vadadustat will depend on a variety of factors including, but not limited to, those described in Part I, Item 1A.
Risk Factors.
−Removed: A change in the outcome of any of these variables with respect to the development of Auryxia and vadadustat could mean a significant change in the costs and timing associated with that development.
−Removed: For example, if the FDA, the EMA, or other regulatory authorities were to require us to conduct clinical studies in addition to or different from those that we currently anticipate, or if we experience delays in any of our clinical studies, we could be required to expend significant additional financial resources and time on the completion of clinical development.
+Added: A change in the outcome of any of these variables with respect to the development of Auryxia and vadadustat could mean a significant change in the costs and timing associated
+Added: with that development.
+Added: For example, if the FDA, the EMA, or other regulatory authorities were to require us to conduct clinical trials in addition to or different from those that we currently anticipate, or if we experience delays in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
From inception through December 31, 2021, we have incurred $1.4 billion in research and development expenses.
−Removed: We expect to have significant research and development expenditures for the foreseeable future as we continue the development of Auryxia and vadadustat.
−Removed: Our direct research and development expenses consist principally of external costs, such as fees paid to clinical trial sites, consultants, central laboratories and CROs in connection with our clinical studies, and drug substance and drug product manufacturing for clinical studies.
−Removed: We recently completed our global Phase 3 clinical program for vadadustat to which the majority of our research and development costs are attributable.
+Added: We expect to have significant research and development expenditures for the foreseeable future as we continue the development of Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired.
+Added: Our direct research and development expenses consist principally of external costs, such as fees paid to clinical trial sites, consultants, central laboratories and CROs in connection with our clinical trials, and drug substance and drug product manufacturing for clinical trials.
+Added: In 2020, we completed our global Phase 3 clinical program for vadadustat to which the majority of our research and development costs are attributable.
A significant portion of our research and development costs have been external costs, which we track on a program-by-program basis.
−Removed: These external costs include fees paid to investigators, consultants, central laboratories and contract research organizations in connection with our clinical trials, and costs related to acquiring and manufacturing clinical trial materials.
+Added: These external costs include fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials, and costs related to acquiring and manufacturing clinical trial materials.
Our internal research and development costs are primarily personnel-related costs, depreciation and other indirect costs.
We do not track our internal research and development expenses on a program-by-program basis as they are deployed across multiple projects under development.
−Removed: Prior to 2019, we did not track or record our external research and development expenses on a program-by-program basis.
The following table summarizes our external research and development expenses by program, as well as expenses not allocated to programs, for the years ended December 31, 2021 and 2020:
35 unchanged sentences
Net product revenue was $142.2 million for the year ended December 31, 2021, compared to net product revenue of $128.9 million for the year ended December 31, 2020.
−Removed: The increase was primarily due to an increase in units sold.
−Removed: While we did not experience a significant impact from COVID-19 on our revenues during the first nine months of 2020, we believe our revenue growth was negatively impacted during the fourth quarter of 2020 primarily as the kidney patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.
−Removed: 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;
−Removed: therefore, we expect COVID-19 to continue to have a negative impact on our revenue growth for the foreseeable future.
−Removed: For additional information regarding the impact that the COVID-19 pandemic has had on our company and revenue, please refer to Part I, Item 1A.
−Removed: Risk Factors.
−Removed: In September 2018, CMS decided that Auryxia would no longer be covered by Medicare for the IDA Indication.
−Removed: 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 in the Hyperphosphatemia Indication.
−Removed: 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.
+Added: The increase was primarily due to an increase in units sold and improved payer mix, partially offset by the negative impact from COVID-19 on our revenues during 2021.
+Added: We believe our revenue growth continues to be negatively impacted primarily as the CKD patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.
+Added: As an oral drug, Auryxia is covered by Medicare only under Part D.
+Added: However, in September 2018, CMS decided that Auryxia would no longer be covered by Medicare for the IDA Indication.
+Added: 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.
+Added: However, due to the COVID-19 pandemic, CMS has issued a guidance that expressly encouraged Part D plans to waive all prior authorization requirements.
+Added: This guidance was issued in March of 2020 and updated in May of 2020.
+Added: In both versions of the guidance, CMS clarified that due to COVID-19, Part D plan sponsors are encouraged to waive prior authorization requirements.
+Added: Further, 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.
+Added: On October 22, 2021, the parties agreed to dismiss the litigation.
See Part I, Item 3.
4 unchanged sentences
We recognized $65.5 million in collaboration revenue for the year ended December 31, 2021 from our cost sharing arrangement under the Otsuka collaboration agreement for the United States, or the Otsuka U.S.
−Removed: Agreement, and the Otsuka collaboration agreement for certain territories outside the United States, or the Otsuka International Agreement, and recognition of a milestone and royalty revenue earned under our collaboration agreement with MTPC, or the MTPC Agreement.
−Removed: We recognized $216.9 million in collaboration revenue for the year ended December 31, 2019 from our cost sharing arrangement under the Otsuka U.S.
−Removed: Agreement and the Otsuka International Agreement and recognition of a milestone under the MTPC Agreement.
−Removed: The decrease in revenue between
−Removed: the two periods was primarily attributable to a decrease of $68.0 million of revenue recognized under both the Otsuka U.S.
−Removed: Agreement and Otsuka International Agreement.
−Removed: This decrease was partially offset by an additional $5.4 million of revenue recognized under the MTPC Agreement due to timing of milestone recognition and royalty revenue, with $15.4 million recognized during the year ended December 31, 2020 compared to $10.0 million during the year ended December 31, 2019.
−Removed: We expect our Otsuka collaboration revenue to continue to decrease in the near term as we recently completed our global Phase 3 clinical development program for vadadustat and are currently engaged in close-out activities with respect to the program.
+Added: Agreement, and the Otsuka collaboration agreement for certain territories outside the United States, or the Otsuka International Agreement, and royalty revenue earned under our collaboration agreement with MTPC, or the MTPC Agreement.
+Added: We recognized $154.3 million in collaboration revenue for the year ended December 31,
+Added: 2020 from our cost sharing arrangement under the Otsuka U.S.
+Added: Agreement and the Otsuka International Agreement and recognition of a milestone and royalty revenue under the MTPC Agreement.
+Added: The decrease in collaboration revenue was driven by lower payments recognized under both the Otsuka U.S.
+Added: Agreement and the Otsuka International Agreement as we completed our global Phase 3 clinical development program for vadadustat in 2020 and are currently engaged in close-out activities with respect to the program.
Cost of Goods Sold - Product .
−Removed: Cost of goods sold of $148.9 million for the year ended December 31, 2020 primarily consists of costs associated with the manufacturing of Auryxia, $68.2 million in non-cash charges related to the fair-value inventory step-up from the application of purchase accounting, $25.1 million in non-cash charges related to an increase in the liability for excess purchase commitments as a result of reductions in the short-term and long-term Auryxia revenue sales forecast during the year ended December 31, 2020, and $20.1 million primarily related to the write-down of inventory associated with specific lots of Auryxia because it was determined that these lots were not manufactured in conformance with the FDA's GMP guidance relating to validation.
−Removed: Cost of goods sold of $108.9 million for the year ended December 31, 2019 consisted primarily of costs associated with the manufacturing of Auryxia and $70.4 million in non-cash charges related to the fair-value inventory step-up from the application of purchase accounting.
+Added: Cost of goods sold of $117.4 million for the year ended December 31, 2021 primarily consisted of costs associated with the manufacturing of Auryxia and supply of Vafseo to MTPC for commercial sale in Japan, $33.4 million in non-cash charges related to our excess purchase commitment liability, $21.6 million in non-cash charges related to the fair-value inventory step-up from the application of purchase accounting, and $15.6 million primarily related to excess and obsolescence reserves associated with Auryxia as well as inventory reserves associated with a previously disclosed manufacturing quality issue related to Auryxia.
+Added: See Note 14 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K for further details of the increase to the liability for excess purchase commitments.
+Added: Cost of goods sold of $148.9 million for the year ended December 31, 2020 primarily consisted of costs associated with the manufacturing of Auryxia, $68.2 million in non-cash charges related to the fair-value inventory step-up from the application of purchase accounting, $25.1 million in non-cash charges related to an increase in the liability for excess purchase commitments, and $20.1 million primarily related to the write-down of inventory associated with specific lots of Auryxia because it was determined that these lots were not manufactured in conformance with the FDA's GMP guidance relating to validation.
Cost of Goods Sold - Amortization of Intangibles.
Amortization of intangibles relates to the acquired developed product rights for Auryxia.
−Removed: This intangible asset was being amortized using a straight-line method over its estimated useful life of approximately nine years during the six months ended June 30, 2020 and approximately seven years during the six months ended December 31, 2020.
Amortization of intangibles during the years ended December 31, 2021 and 2020 was $36.0 million and $31.5 million, respectively.
−Removed: The combined effect of the lower carrying value of the Auryxia intangible asset following impairment in the second quarter of 2020, as further described below, and the corresponding adjustment to the estimated useful life of the developed product rights for Auryxia, resulted in a decrease in 2020 amortization expense compared to 2019.The Company expects the future amortization charges to increase from 2020 due to the prospective adjustment of the estimated useful life of the developed product rights for Auryxia from seven years to six years as of December 31, 2020.
+Added: The increase in amortization charges is due to the prospective adjustment of the estimated useful life of the developed product rights for Auryxia from seven years to six years that occurred in the fourth quarter of 2020.
Cost of Goods Sold - Impairment of Intangible Asset.
12 unchanged sentences
The decrease in the costs related to the development of vadadustat is primarily attributable to a decrease in external costs related to our global Phase 3 program (INNO 2 VATE and PRO 2 TECT), for which we reported top-line data in the second and third quarters of 2020, respectively.
−Removed: Although we expect our research and development expenses to continue to decrease in the near term as we recently completed our global Phase 3 clinical development program for vadadustat, we will continue to incur significant research and development expenses in future periods in support of our overall development program for vadadustat and ongoing or planned studies with respect to Auryxia, vadadustat and development of other potential product candidates.
+Added: Although we expect our research and development expenses to continue to decrease in the near term as we completed our global Phase 3 clinical development program for vadadustat in 2020, we will continue to incur significant research and development expenses in future periods in support of ongoing or planned studies with respect to Auryxia and vadadustat and development of other potential product candidates.
Selling, General and Administrative Expenses .
Selling, general and administrative expenses were $174.2 million for the year ended December 31, 2021, compared to $153.9 million for the year ended December 31, 2020.
−Removed: The increase of $4.5 million was primarily due to increases in headcount and consulting costs.
−Removed: In 2021, we expect our selling, general and administrative
−Removed: expenses for our ongoing commercialization of Auryxia and for support of our ongoing research and development and potential commercialization of vadadustat and other product candidates to increase modestly from 2020.
+Added: The increase of $20.2 million was primarily due to higher marketing expenses, increased headcount related costs, and one-time legal costs.
+Added: In 2022, we expect our selling, general and administrative expenses for our ongoing commercialization of Auryxia and for support of our potential commercialization of vadadustat to increase modestly from 2021.
License Expenses.
2 unchanged sentences
Other expense, net, was $17.5 million for the year ended December 31, 2021, compared to $7.0 million for the year ended December 31, 2020.
+Added: The increase was primarily due to $9.1 million in non-cash interest expense on the liability related to the sale of our right to receive royalties and sales milestones from MTPC as further described in Note 5 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K as well as interest expense associated with our Term Loans.
Other expense, net for the year ended December 31, 2020 was primarily due to interest expense associated with our Term Loans.
−Removed: Other expense, net for the year ended December 31, 2019 was primarily due to interest expense associated with our former line of credit with Silicon Valley Bank, or SVB, in the first quarter of 2019, which line of credit was terminated in November 2019, and interest expense associated with our Term Loans in the fourth quarter of 2019, offset by interest income from investment balances during the year ended December 31, 2019.
−Removed: Benefit from Income Taxes.
−Removed: There was no benefit from income taxes for the year ended December 31, 2020.
−Removed: Benefit from income taxes was $6.6 million for the year ended December 31, 2019 due to a decrease in our deferred tax liabilities, or DTLs.
−Removed: During the year ended December 31, 2019, there was an increase in deferred tax assets associated with the state net operating loss generated during the period.
−Removed: This increase in deferred tax assets reduced our net DTLs which created a benefit from income taxes for the year ended December 31, 2019.
Comparison of the Years Ended December 31, 2020 and 2019
−Removed: Year ended December 31, Increase (Decrease)
−Removed: (In Thousands)
−Removed: Product revenue, net $ 111,119 $ 6,824 $ 104,295
−Removed: License, collaboration and other revenue 223,882 200,918 22,964
−Removed: Total revenues 335,001 207,742 127,259
−Removed: Cost of goods sold:
−Removed: Product 108,935 6,251 102,684
−Removed: Amortization of intangible assets 36,401 1,517 34,884
−Removed: Total cost of goods sold 145,336 7,768 137,568
−Removed: Operating expenses:
−Removed: Research and development 322,969 291,007 31,962
−Removed: Selling, general and administrative 149,455 87,061 62,394
−Removed: License expense 3,529 67 3,462
−Removed: Total operating expenses 475,953 378,135 97,818
−Removed: Operating loss (286,288) (178,161) (108,127)
−Removed: Other income (expense), net (2) 6,235 (6,237)
−Removed: Net loss before income taxes (286,290) (171,926) (114,364)
−Removed: Benefit from income taxes (6,631) (28,338) 21,707
−Removed: Net loss $ (279,659) $ (143,588) $ (136,071)
−Removed: Product Revenue, Net .
−Removed: Net product revenue is derived from sales of our only commercial product in the United States, Auryxia.
−Removed: We distribute our product principally through a limited number of wholesale distributors as well as certain specialty pharmacy providers.
−Removed: We began recording product revenue on sales of Auryxia in the United States on December 12, 2018 following the consummation of the Merger.
−Removed: Net product revenue was $111.1 million for the year ended December 31, 2019 and $6.8 million for the period from December 12, 2018 through December 31, 2018.
−Removed: This increase as compared to the period from December 12, 2018 through December 31, 2018 was due to net product revenue associated with Auryxia, as there was no comparable net product revenue in the period from January 1, 2018 through December 11, 2018 prior to the Merger.
−Removed: License, collaboration and other revenue.
−Removed: License, collaboration and other revenue was $223.9 million for the year ended December 31, 2019, compared to $200.9 million for the year ended December 31, 2018.
−Removed: We recognized $216.9 million in
−Removed: collaboration revenue for the year ended December 31, 2019 from our cost sharing arrangement under the Otsuka U.S.
−Removed: Agreement and the Otsuka International Agreement and recognition of a milestone earned under the MTPC Agreement.
−Removed: We recognized $200.5 million in collaboration revenue for the year ended December 31, 2018 from our cost sharing arrangement under the Otsuka U.S.
−Removed: Agreement, the Otsuka International Agreement, as well as revenue recognized in connection with the MTPC Agreement.
−Removed: The increase in revenue between the two periods was primarily attributable to an additional $15.7 million of revenue recognized under both the Otsuka U.S.
−Removed: Agreement and Otsuka International Agreement and an additional $0.7 million of revenue recognized in connection with the MTPC Agreement.
−Removed: The remaining variance was primarily due to an increase in license revenue relating to our sublicense agreement with JT and Torii and includes license fees and royalties on net product sales of Riona in Japan.
−Removed: Cost of Goods Sold - Product .
−Removed: Cost of goods sold of $108.9 million for the year ended December 31, 2019 consisted primarily of costs associated with the manufacturing of Auryxia and a $70.4 million charge related to the fair-value inventory step-up from the application of purchase accounting.
−Removed: Cost of goods sold of $6.3 million for the period from December 12, 2018 through December 31, 2018 consisted primarily of costs associated with the manufacturing of Auryxia and a $4.8 million charge related to the fair-value inventory step-up from the application of purchase accounting.
−Removed: This increase as compared to the period from December 12, 2018 through December 31, 2018 was due to costs associated with Auryxia, as there were no comparable costs in the period from January 1, 2018 through December 11, 2018 prior to the Merger.
−Removed: Cost of Goods Sold - Amortization of Intangibles.
−Removed: Amortization of intangibles relates to the acquired developed product rights for Auryxia.
−Removed: For the years ended December 31, 2019 and December 31, 2018, this intangible asset was being amortized over its estimated useful life of approximately nine years using a straight-line method.
−Removed: Amortization of intangibles for the years ended December 31, 2019 and 2018 was $36.4 million and $1.5 million, respectively.
−Removed: Research and Development Expenses .
−Removed: Research and development expenses were $323.0 million for the year ended December 31, 2019, compared to $291.0 million for the year ended December 31, 2018.
−Removed: The net increase of $32.0 million was due to the following:
−Removed: (in millions)
−Removed: Vadadustat development expenses (5.3)
−Removed: Headcount, consulting and facilities 24.1
−Removed: Other research and development 13.2
−Removed: Total net increase $ 32.0
−Removed: The decrease in the costs related to the development of vadadustat was primarily attributable to a decrease in external costs related to other supporting clinical and preclinical activities, as well as regulatory activities, and a decrease in costs for the Japan Phase 2 studies, which were completed in 2018.
−Removed: There was also a decrease in external costs for the PRO 2 TECT and INNO 2 VATE Phase 3 program and a decrease in costs related to the manufacture of drug substance and drug product.
−Removed: The overall increase in research and development expenses was primarily impacted by increases in headcount and consulting costs to support our research and development programs.
−Removed: Selling, General and Administrative Expenses .
−Removed: Selling, general and administrative expenses were $149.5 million for the year ended December 31, 2019, compared to $87.1 million for the year ended December 31, 2018.
−Removed: The increase of $62.4 million was primarily due to commercialization costs associated with Auryxia as there were no comparable commercialization costs during the first eleven months of 2018, and an increase in costs to support our research and development programs.
−Removed: License Expenses.
−Removed: License expense related to royalties due to Panion relating to sales of Riona in Japan were $3.5 million for the year ended December 31, 2019, compared to $67,000 for the year ended December 31, 2018.
−Removed: The increase of $3.4 million was primarily due to no license expense in the period from January 1, 2018 through December 11, 2018 prior to the Merger.
−Removed: Other Expense, Net .
−Removed: The decrease in other income, net of $6.2 million was primarily due to interest expense associated with our former line of credit with SVB, in the first quarter of 2019 and interest expense associated with our Term Loans in the fourth quarter of 2019 offset by interest income from investment balances during the year ended December 31, 2018.
−Removed: We did not have similar income during the year ended December 31, 2019.
−Removed: Benefit for Income Taxes.
−Removed: Benefit for income taxes was $6.6 million for the year ended December 31, 2019 due to a decrease in our net DTLs.
−Removed: During the year ended December 31, 2019, there was an increase in deferred tax assets associated with the state net operating loss generated during the period.
−Removed: This increase in deferred tax assets reduced our net DTLs which created a benefit from income taxes for the year ended December 31, 2019.
+Added: For discussion of our 2020 results and a comparison with 2019 results please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 25, 2021, or the 2020 Form 10-K.
Liquidity and Capital Resources
−Removed: We have incurred losses and cumulative negative cash flows from operations since our inception in February 2007, and as of December 31, 2020, we had an accumulated deficit of $1.2 billion.
−Removed: We anticipate that we will continue to incur losses for the foreseeable future.
−Removed: We expect to continue to incur additional research and development and selling, general and administrative expenses for our ongoing research and development and potential commercialization of vadadustat and our ongoing development and commercialization of Auryxia.
−Removed: Consistent with our expectation of an NDA submission by the middle of the second quarter of 2021, we expect our cash resources to fund our current operating plan beyond the expected U.S.
−Removed: launch of our product candidate, vadadustat, assuming timely regulatory approval and the receipt of associated regulatory milestones.
−Removed: Although we believe we have the cash resources to fund our operating plan beyond the expected U.S.
−Removed: launch of vadadustat, as noted above, we expect to continue to incur significant costs and we anticipate that we will need to obtain substantial additional funding in connection with our operating plan beyond that period.
−Removed: We have based these estimates on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
−Removed: 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.
−Removed: The period over which our cash runway extends is also dependent on the execution of our commercial plan, which is dependent on the overall market, the competitive environment, and the execution of our reimbursement strategies.
We have funded our operations principally through sales of our common stock, payments received from our collaboration partners and, following the Merger, product sales, debt and a royalty transaction.
−Removed: As of December 31, 2020, we had cash and cash equivalents and available for sale securities of approximately $268.7 million.
+Added: As of December 31, 2021, we had cash and cash equivalents of approximately $149.8 million.
Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.
−Removed: Accordingly, available for sale securities, consisting principally of corporate and government debt securities stated at fair value, are also available as a source of liquidity.
+Added: At inception of our collaboration agreements with Otsuka and MTPC, our collaborators committed to an aggregate of approximately $573.0 million or more in cost-share funding, of which we received approximately $272.0 million at the onset of the collaborations, as further described in Note 4 contained in this Annual Report on Form 10-K and the remainder of which we will generally continue to receive on a quarterly prepaid basis, and through license payments.
The following table sets forth the primary sources and uses of cash for each of the periods set forth below:
8 unchanged sentences
Operating Activities .
−Removed: Net cash used in operating activities in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in the components of working capital.
−Removed: Net cash used in operating activities during the year ended December 31, 2020 of $110.4 million was largely driven by timing of payments on our Phase 3 development program for vadadustat, rebate payments and payments for inventory.
−Removed: These payments were partially offset by adjustments for non-cash items, including the intangible asset impairment charge of $115.5 million, fair value step-up of inventory sold or written off of $68.2 million, amortization of intangibles of $31.5 million, an increase to the liability for excess purchase commitments of $25.1 million, stock-based compensation expense of $24.5 million, and write-downs of inventory of $20.1 million primarily associated with specific lots of Auryxia because it was determined that these lots were not manufactured in conformance with the FDA's GMP guidance relating to validation.
+Added: Net cash used in operating activities during the year ended December 31, 2021 of $253.0 million was largely driven by payroll-related expenses, rebate payments and payments for inventory.
+Added: These payments were partially offset by adjustments for non-cash items, including amortization of intangibles of $36.0 million, increases to the liability for excess purchase commitments of $33.4 million, stock-based compensation expense of $22.7 million, fair value step-up of inventory sold or written off of $21.6 million, write-downs of inventory of $15.6 million, and non-cash interest expense related to the sale of future royalties of $9.1 million.
Net cash used in operating activities during the year ended December 31, 2020 of $110.4 million was largely driven by timing of payments on our Phase 3 development program for vadadustat, payments for inventory and merger-related liabilities.
−Removed: These payments were partially offset by adjustments for non-cash items, including the fair value write-up of inventory sold or written off of $70.4 million, amortization of intangibles of $36.4 million, and stock-based compensation expense of $11.9 million.
−Removed: Net cash used in operating activities during the year ended December 31, 2018 of $97.5 million was largely driven by our Phase 3 development program for vadadustat, partially offset by receipt of cash from collaboration agreements.
+Added: These payments were partially offset by adjustments for non-cash items, including the intangible asset impairment charge of $115.5 million, the fair value write-up of inventory sold or written off of $68.2 million, amortization of intangibles of $31.5 million, increases to the liability for excess purchase commitments of $25.1 million, stock-based compensation expense of $24.5 million, and write-downs of inventory of $20.1 million primarily associated with specific lots of Auryxia because it was determined that these lots were not manufactured in conformance with the FDA's GMP guidance relating to validation.
Investing Activities .
+Added: Net cash provided by investing activities during the year ended December 31, 2021 of $39.9 million was comprised of proceeds from the maturities of available for sale securities of $40.0 million, partially offset by immaterial purchases of equipment.
Net cash used in investing activities during the year ended December 31, 2020 of $40.0 million was comprised primarily of purchase of available for sale securities of $99.9 million, partially offset by proceeds from the maturities of available for sale securities of $60.2 million.
−Removed: Net cash provided by investing activities during the year ended December 31, 2019 of $211.2 million was comprised primarily of proceeds from the maturities of available for sale securities of
−Removed: $153.1 million and proceeds from the sales of available for sale securities of $64.7 million, partially offset by purchases of equipment of $6.7 million.
−Removed: Net cash provided by investing activities during the year ended December 31, 2018 of $36.6 million was comprised primarily from the sale and maturities of available for sale securities, partially offset by purchases of available for sale securities, purchases of equipment and acquisition of the business, net of cash acquired.
Financing Activities.
−Removed: During the years ended December 31, 2020, 2019 and 2018 our net cash provided by financing activities was $231.7 million, $89.0 million and $96.6 million, respectively.
−Removed: Net cash provided by financing activities for the years ended December 31, 2020, 2019 and 2018 consisted primarily of net proceeds from the issuance of debt, net proceeds from the public issuance of common stock, proceeds from the exercise of stock options and proceeds from the sale of stock under our employee stock purchase plan, partially offset by payments on loans payable.
−Removed: Operating Capital Requirements
−Removed: We have one product, Auryxia, approved for commercial sale in the United States, but have not generated, and may not generate, enough product revenue from the sale of Auryxia to realize net profits from product sales.
−Removed: We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek marketing approvals for vadadustat and any other potential product candidates.
−Removed: We are subject to all risks incident to the development and commercialization of novel therapeutics, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
−Removed: We expect to continue to incur additional costs associated with operating as a public company and we anticipate that we will need substantial additional funding in connection with our continuing operations.
−Removed: As of December 31, 2020, we had cash and cash equivalents and available for sale securities of approximately $268.7 million.
−Removed: At the inception of our collaboration agreements with Otsuka and MTPC, our collaborators committed to an aggregate of approximately $573.0 million or more in cost-share funding, of which we received approximately $272.0 million at the onset of the collaborations, and the remainder of which we generally continue to receive on a quarterly prepaid basis, and through license payments.
−Removed: We expect to finance future cash needs through product revenue, public or private equity or debt transactions, payments from our collaboration partners, royalty transactions, strategic transactions, or a combination of these approaches.
−Removed: Additionally, we will require additional capital to pursue development and commercial activities related to Auryxia and vadadustat, if approved, or any additional products and product candidates, including those that may be in-licensed or acquired.
−Removed: However, additional funds may not be available to us on acceptable terms or at all.
−Removed: If we are unable to raise additional capital in sufficient amounts when needed or on attractive terms, we may not be able to pursue development and commercial activities related to Auryxia and vadadustat, if approved, or any additional products or product candidates, including those that may be in-licensed or acquired.
−Removed: If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing stockholders or increased fixed payment obligations, and any such securities may have rights senior to those of our common stock.
−Removed: Any of these events could significantly harm our business, financial condition and prospects.
−Removed: Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors.
+Added: Net cash provided by financing activities for the year ended December 31, 2021 was $133.7 million and consisted of net proceeds from the sale of future royalties of $44.8 million, net proceeds from the public issuance of common stock in connection with our ATM sales agreement of $88.2 million, and proceeds from the sale of stock under our employee stock purchase plan.
+Added: Net cash provided by financing activities for the year ended December 31, 2020 was $231.7 million and consisted of net proceeds from the public issuance of common stock in connection with our ATM sales agreement of $209.4 million, proceeds from the issuance of debt of $20.0 million, and proceeds from the exercise of stock options and from the sale of stock under our employee stock purchase plan.
+Added: A discussion of changes in our cash flow from the year ended December 31, 2019 to the year ended December 31, 2020 can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of the 2020 Form 10-K.
+Added: Operating Capital Requirements and Going Concern
+Added: We have one product, Auryxia, approved for commercial sale in the United States and one product candidate, vadadustat, subject to FDA approval in the U.S., but have not generated, and may not generate, enough product revenue from the sale of Auryxia or sales of vadadustat, if approved, to realize net profits from product sales.
+Added: We have incurred losses and cumulative negative cash flows from operations since our inception in February 2007, and as of December 31, 2021, we had an accumulated deficit of $1.5 billion.
+Added: We anticipate that we will continue to incur losses for the foreseeable future, and we expect to continue to incur additional research and development and selling, general and administrative expenses for our ongoing research and development and potential commercialization of vadadustat and our ongoing development and commercialization of Auryxia.
+Added: We expect our cash resources to fund our current operating plan for at least twelve months from the date of this filing.
+Added: However, the potential timely regulatory approval of vadadustat and the receipt of associated regulatory milestones and product revenues are an important source of funding of our cash runway, which are outside of our control.
+Added: We expect to finance future cash needs through product revenue, public or private equity or debt transactions, payments from our collaborators (including associated regulatory approval milestones), royalty transactions, strategic transactions, or a combination of these approaches.
+Added: In any event, we will require additional funding to fund our strategy and operating plan beyond the next twelve months, including to pursue development and commercial activities related to Auryxia and vadadustat, if approved, or any additional products and product candidates, including those that may be in-licensed or acquired.
+Added: If we are unable to obtain sufficient funding, we could be required to delay our development efforts, limit activities and reduce costs, which could adversely affect our business prospects.
+Added: There can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, or that its 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.
+Added: In addition, on February 18, 2022, we entered into the First Amendment and Waiver with BioPharma Credit PLC, or the Collateral Agent, BPCR Limited Partnership, as a Lender, and BioPharma Credit Investments V (Master) LP, as a Lender, or the First Amendment and Waiver, which amends and waives certain provisions of the Loan Agreement, dated November 11, 2019.
+Added: The Collateral Agent and the lenders are collectively referred to as Pharmakon (see Note 18).
+Added: Pursuant to the covenants in the Loan Agreement, as amended, our Quarterly Reports on Form 10-Q for the fiscal quarters ending June 30, 2022 and September 30, 2022 and our future Annual Reports on Form 10-K must not be subject to any qualification as to going concern.
+Added: If any of these filings are subject to any qualification related to going concern, it will result in an event of default under the Loan Agreement.
+Added: If an event of default occurs and is continuing under the Loan Agreement, the Collateral Agent is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement, which we may not have the available cash resources to repay at such time.
+Added: Should we not be able to meet the quarterly or annual covenants in the future, we would seek a waiver of this provision.
+Added: However, there can be no assurances that we would be successful in obtaining such waiver.
+Added: Going Concern
+Added: Because the potential timely regulatory approval of vadadustat and the receipt of associated regulatory milestones and product revenues are outside of our control, there is uncertainty as to whether or not we will meet our quarterly and annual debt covenants.
+Added: The conditions above, including the going concern covenants in our Loan Agreement, raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date the financial statements are issued.
+Added: Management’s plans to alleviate the conditions that raise substantial doubt include raising additional funding through the sources detailed above for us to continue as a going concern for a period of twelve months from the date the financial statements are issued.
+Added: We have concluded that the likelihood that our plan to obtain sufficient funding from one or more of these sources will be successful, while reasonably possible, is less than probable.
+Added: Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least twelve months from the date of issuance of these financial statements.
+Added: Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves numerous risks and uncertainties, and actual results could vary as a result of a number of factors, many of which are outside our control.
We have based this estimate on assumptions that may be substantially different than actual results, and we could utilize our available capital resources sooner than we currently expect.
Our future funding requirements, both near- and long-term, will depend on many factors including, but not limited to, those described under Part I, Item 1A.
−Removed: Risk Factors.
−Removed: If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected.
+Added: Risk Factors under the heading "Risks Related to our Financial Position, Need for Additional Capital and Growth Strategy."
Contractual Obligations and Commitments
−Removed: At December 31, 2020, our future contractual obligations are as follows:
−Removed: Payments due by period
−Removed: (in thousands)
−Removed: Total Less than 1
−Removed: year 1-3 years 3-5 years More than 5
−Removed: Operating Lease Obligations $ 35,596 $ 6,667 $ 13,269 $ 11,556 $ 4,104
−Removed: Manufacturing Agreements 215,607 130,177 44,962 31,218 9,250
−Removed: Debt Obligations 128,991 9,632 55,728 63,631 —
−Removed: Total $ 380,194 $ 146,476 $ 113,959 $ 106,405 $ 13,354
We lease approximately 65,167 square feet of office and lab space in Cambridge, Massachusetts under a lease which was most recently amended in November 2020, collectively the Cambridge Lease.
6 unchanged sentences
In November 2020, we entered into a Sixth Amendment to the Cambridge Lease, or the Sixth Amendment, to extend the term of the Cambridge Lease with respect to the lab space from November 30, 2021 to January 31, 2025.
−Removed: The Sixth Amendment includes two months of free rent starting in December 2020 and additional monthly lease payments of approximately $48,000 commencing in December 2021, and is subject to annual rent escalations, which commence in December 2022.
+Added: The Sixth Amendment includes two months of free rent starting in December 2020 and additional monthly lease payments of approximately $48,000 which commenced in December 2021, and is subject to annual rent escalations, which commence in December 2022.
Additionally, as a result of the Merger, we have a lease for 27,300 square feet of office space in Boston, Massachusetts, or the Boston Lease, which expires on February 28, 2023.
The total monthly lease payments under the base rent are approximately $136,000 and are subject to annual rent escalations.
+Added: On February 24, 2022, we entered into a First Amendment to Lease, or the First Lease Amendment, with CLPF One Marina Park Drive LLC (successor-in-interest to Fallon Cornerstone One MPD LLC), or the Landlord, amending the Boston Lease.
+Added: Pursuant to the First Lease Amendment, we agreed to extend the term of the Boston Lease until July 31, 2031.
+Added: The monthly lease payment pursuant to the First Amendment will be $200,122 commencing on August 1, 2023 and subject to annual rent escalation of approximately 2% commencing on August 1, 2024.
+Added: The First Lease Amendment also includes a Landlord’s allowance for certain leasehold improvements to the Premises in an amount of up to $1,954,680, provided that such allowance must be used prior to August 1, 2024.
+Added: See Note 18 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K for more information.
In September 2019, Keryx entered into an agreement to sublease the Boston office space to Foundation Medicine, Inc., or Foundation.
5 unchanged sentences
BioPharma Credit PLC subsequently transferred its interest in the Term Loans, solely in its capacity as a lender, to its affiliate, BPCR Limited Partnership.
−Removed: The Collateral Agent and the lenders are collectively referred to as Pharmakon.
+Added: The Collateral Agent
+Added: and the lenders are collectively referred to as Pharmakon.
The first tranche of $80.0 million, or Tranche A, was drawn on November 25, 2019, or the Tranche A Funding Date, and the second tranche of $20.0 million, or Tranche B, was drawn on December 10, 2020, or the Tranche B Funding Date.
−Removed: Each of the Tranche A Funding Date and the Tranche B Funding Date, a Funding Date.
−Removed: Proceeds from the Term Loans may be used for general corporate purposes.
−Removed: We and Keryx entered into a Guaranty and Security Agreement with the Collateral Agent, or the Guaranty and Security Agreement, on the Tranche A Funding Date.
−Removed: Pursuant to the Guaranty and Security Agreement, our obligations under the Term Loans are unconditionally guaranteed by Keryx, or the Guarantee.
−Removed: Additionally, our and Keryx’s obligations under the Term Loans and the Guarantee are secured by a first priority lien on certain assets of ours and Keryx’s, including Auryxia and certain related assets, cash, and certain equity interests held by us and Keryx, collectively the Collateral.
−Removed: The Term Loans bear interest at a floating rate per annum equal to the three-month LIBOR rate plus 7.50%, subject to a 2.00% LIBOR floor and a 3.35% LIBOR cap, payable quarterly in arrears.
−Removed: The Term Loans will mature on the fifth anniversary of the Tranche A Funding Date, or the Maturity Date.
−Removed: We will repay the principal under the Term Loans in equal quarterly payments starting on the 33rd-month anniversary of the applicable Funding Date or, if certain conditions are met, it will have the option to repay the principal in equal quarterly payments starting on the 48th-month anniversary of the applicable Funding Date, or collectively the Amortization Schedule.
−Removed: Under certain circumstances, unless certain liquidity conditions are met, the Maturity Date may decrease by up to one year, and the Amortization Schedule may correspondingly commence up to one year earlier.
−Removed: On the Tranche A Funding Date, we paid to Pharmakon a facility fee equal to 2.00% of the aggregate principal amount of the Term Loans, or $2.0 million, in addition to other expenses incurred by Pharmakon and reimbursed by us, or Lender Expenses.
−Removed: The Tranche A draw was $77.3 million, net of facility fee, Lender Expenses and issuance costs.
−Removed: The Tranche B draw was $20.0 million, net of immaterial Lender Expenses and issuance costs.
−Removed: The Loan Agreement permits voluntary prepayment at any time in whole or in part, subject to a prepayment premium.
−Removed: The prepayment premium would be 2.00% of the principal amount being prepaid prior to the third anniversary of the applicable Funding Date, 1.00% on or after the third anniversary, but prior to the fourth anniversary, of the applicable Funding Date, and 0.50% on or after the fourth anniversary of the applicable Funding Date but prior to the Maturity Date, and a make-whole premium on or prior to the second anniversary of the applicable Funding Date in an amount equal to foregone interest through the second anniversary of the applicable Funding Date.
−Removed: A change of control triggers a mandatory prepayment of the Term Loans.
−Removed: The Loan Agreement contains customary representations, warranties, events of default and covenants of ours 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.
−Removed: If an event of default occurs and is continuing under the Loan Agreement, the Collateral Agent is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement.
−Removed: Under certain circumstances, a default interest rate will apply on all outstanding obligations during the occurrence and continuance of an event of default.
−Removed: As of December 31, 2020, we determined that no events of default had occurred.
−Removed: We assessed the terms and features of the Loan Agreement in order to identify any potential embedded features that would require bifurcation or any beneficial conversion feature.
−Removed: As part of this analysis, we assessed the economic characteristics and risks of the Loan Agreement, including put and call features.
−Removed: The terms and features assessed include a potential extension to the interest-only period dependent on both no event of default having occurred and continuing and on our achieving certain regulatory and revenue conditions.
−Removed: We also assessed the acceleration of the obligations under the Loan Agreement under an event of default.
−Removed: In addition, under certain circumstances, a default interest rate will apply on all outstanding obligations during the occurrence and continuance of an event of default.
−Removed: In accordance with ASC 815, we concluded that these features are not clearly and closely related to the host instrument, and represent a single compound derivative that is required to be re-measured at fair value on a quarterly basis.
+Added: A more detailed description of the term loans can be found in Note 11 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
+Added: On February 18, 2022, in connection with entering into the Vifor Second Amended Agreement, we, BioPharma Credit PLC, or the Collateral Agent, BPCR Limited Partnership, as a Lender, and BioPharma Credit Investments V (Master) LP, as a Lender, entered into the First Amendment and Waiver, which amends and waives certain provisions of the Loan Agreement, dated November 11, 2019, between the parties.
+Added: See Note 18 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K for more information.
Manufacturing Agreements
As a result of the Merger, our contractual obligations include Keryx’s commercial supply agreements with BioVectra Inc., or BioVectra, and Siegfried Evionnaz SA, or Siegfried, to supply commercial drug substance for Auryxia.
−Removed: Pursuant to the Manufacture and Supply Agreement with BioVectra and the Product Manufacture and Supply and Facility Construction Agreement with BioVectra, collectively the BioVectra Agreement, we agreed to purchase minimum quantities of Auryxia drug substance annually at predetermined prices.
+Added: Pursuant to the Manufacture and Supply Agreement with BioVectra and the Product Manufacture and Supply and Facility Construction Agreement with BioVectra, we agreed to purchase minimum quantities of Auryxia drug substance annually at predetermined prices.
On September 4, 2020, we and BioVectra entered into an Amended and Restated Product Manufacture and Supply and Facility Construction Agreement, which provided for reduced minimum quantity commitments and revised the predetermined prices.
The price per kilogram decreases with an increase in quantity above the predetermined purchase quantity tiers.
−Removed: In addition, the Manufacture and Supply Agreement with BioVectra and the Amended and Restated Product Manufacture and Supply and Facility Construction Agreement with BioVectra, collectively the Amended BioVectra Agreement, requires us to reimburse BioVectra for certain costs in connection with construction of a new facility for the manufacture and supply of Auryxia drug substance.
+Added: In addition, the Manufacture and Supply Agreement with BioVectra and the Amended and Restated Product Manufacture and Supply and Facility Construction Agreement with BioVectra, requires us to reimburse BioVectra for certain costs in connection with construction of a new facility for the manufacture and supply of Auryxia drug substance.
These construction costs are recorded in other assets and amortized into drug substance as inventory is released to us from BioVectra.
3 unchanged sentences
As of December 31, 2021 , we are required to reimburse BioVectra for certain costs in connection with the construction of the new facility and to purchase minimum quantities of Auryxia drug substance annually for a total cost of approximately $83.6 million through the end of the contract term.
−Removed: Pursuant to the Siegfried Master Manufacturing Services and Supply Agreement, or the Siegfried Agreement, we have agreed to purchase a minimum quantity of drug substance of Auryxia at predetermined prices.
−Removed: The price per kilogram will decrease with an increase in quantity above the minimum purchase quantity.
−Removed: The term of the Siegfried Agreement expires on December 31, 2021, after which, it automatically renews for one-year terms until terminated.
−Removed: The Siegfried Agreement provides us with certain termination rights prior to December 31, 2021.
−Removed: As of December 31, 2020, we are required to purchase a minimum quantity of drug substance for Auryxia annually at a total cost of approximately $47.9 million through the year ending December 31, 2021.
+Added: Pursuant to the Siegfried Master Manufacturing Services and Supply Agreement, as amended (the most recent amendment having been executed on February 11, 2021), or the Siegfried Agreement, we have agreed to purchase a minimum quantity of drug substance of Auryxia at predetermined prices.
+Added: The term of the Siegfried Agreement expires on December 31, 2022, subject to our option to extend the term through December 31, 2023, by providing 12 months' prior written notice to Siegfried.
+Added: As of the date of the filing of this Annual Report on Form 10-K, we have notified Siegfried that we have elected not to exercise our option to extend the term of the Siegfried Agreement through December 31, 2023.
+Added: In addition, the Siegfried Agreement provides us and Siegfried with certain early termination rights.
+Added: As of December 31, 2021, we are required to purchase a minimum quantity of drug substance under the Siegfried Agreement for Auryxia annually at a total cost of approximately $15.6 million through the year ending December 31, 2022.
As part of purchase accounting, we identified executory contracts in the commercial supply agreements between Keryx and its contract manufacturers for Auryxia, which include future firm purchase commitments.
1 unchanged sentence
The liability related to the amount of purchase commitments that exceed the current forecast was $76.7 million and $55.8 million as of December 31, 2021 and 2020, respectively.
−Removed: The $25.6 million increase in liability, which was largely driven by reductions in the short-term and long-term Auryxia revenue sales forecast during the year ended December 31, 2020, was primarily recorded to cost of goods sold.
−Removed: On February 11, 2021, Keryx and Siegfried entered into an amendment to the Siegfried Agreement, or the Siegfried Amendment.
−Removed: The Siegfried Agreement, as amended, includes the terms and conditions under which Siegfried will manufacture and supply finished Auryxia drug substance for commercial purposes.
−Removed: Siegfried currently manufactures Auryxia drug substance at two approved sites.
−Removed: Pursuant to the Siegfried Amendment, the term of the Siegfried Agreement was extended for one site such that the Siegfried Agreement will expire on December 31, 2022, subject to Keryx’s option to extend the term for such site through December 31, 2023 by providing 12 months’ prior written notice to Siegfried.
−Removed: The Siegfried Amendment provides for minimum annual quantity commitments and predetermined prices for the remainder of the term as well as certain other changes.
−Removed: Subsequent to December 31, 2020, the amount of Auryxia drug substance we have committed to purchase from Siegfried is $45.4 million through December 31, 2022.
+Added: The $20.9 million increase in liability, which was driven by reductions in the short-term and long-term Auryxia revenue sales forecast and related estimates of expiry during the year ended December 31, 2021 partially offset by a decrease due to inventory received that had been previously reserved within the excess purchase commitment liability and a reduction in commitments related to an amendment to the Siegfried Agreement during the year ended December 31, 2021.
+Added: The increase in the liability was recorded to cost of goods sold.
On April 9, 2019, we entered into a Supply Agreement with Esteve Química, S.A., or Esteve, or the Esteve Agreement.
4 unchanged sentences
The Esteve Agreement has an initial term of four years, beginning April 9, 2019 and ending April 9, 2023.
−Removed: Pursuant to the Esteve Agreement, we have agreed to purchase a certain percentage of the global demand for vadadustat drug substance from Esteve.
−Removed: As of December 31, 2020, we have committed to purchase $26.0 million of vadadustat drug substance from Esteve through the second quarter of 2022.
−Removed: Subsequent to December 31, 2020, the amount of vadadustat drug substance we have committed to purchase from Esteve increased to $47.6 million through the fourth quarter of 2022.
+Added: Pursuant to the Esteve Agreement, we have agreed to purchase a certain percentage of the global
+Added: demand for vadadustat drug substance from Esteve.
+Added: As of December 31, 2021, we have committed to purchase $28.9 million of vadadustat drug substance from Esteve through the fourth quarter of 2022.
On March 11, 2020, we entered into a Supply Agreement with Patheon Inc., or Patheon, or the Patheon Agreement.
5 unchanged sentences
Pursuant to the Patheon Agreement, we have agreed to purchase a certain percentage of the global demand for vadadustat drug product from Patheon.
−Removed: As of December 31, 2020, we had a minimum commitment with Patheon for $1.3 million through the third quarter of 2021.
−Removed: On April 2, 2020, we entered into a Supply Agreement with STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec, or WuXi STA, or the WuXi STA DS Agreement.
+Added: As of December 31, 2021, we had a minimum commitment with Patheon for $4.0 million through the fourth quarter of 2022.
+Added: On April 2, 2020, we entered into a Supply Agreement with STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec, or WuXi STA, as amended on April 15, 2021, or the WuXi STA DS Agreement.
The WuXi STA DS Agreement includes the terms and conditions under which WuXi STA will manufacture vadadustat drug substance for commercial use.
4 unchanged sentences
Pursuant to the WuXi STA DS Agreement, we have agreed to purchase a certain percentage of the global demand for vadadustat drug substance from WuXi STA.
−Removed: As of December 31, 2020, we have committed to purchase $44.7 million of vadadustat drug substance from WuXi STA through the first quarter of 2022.
+Added: As of December 31, 2021, we have committed to purchase $29.2 million of vadadustat drug substance from WuXi STA through the third quarter of 2022.
On February 10, 2021, we entered into a Supply Agreement with WuXi STA, or the WuXi STA DP Agreement.
12 unchanged sentences
Under our agreement with IQVIA to provide contract research organization services for the PRO 2 TECT and INNO 2 VATE programs, the total remaining contract costs as of December 31, 2021 were approximately $5.0 million, of which Otsuka reimburses a significant portion back to us.
−Removed: Substantive performance for the committed work with IQVIA was completed in 2020 and close out activities will be performed through the first quarter of 2021.
+Added: Substantive performance for the committed work with IQVIA was completed in 2020 and close out activities were performed throughout 2021 and will continue to be performed throughout 2022.
We also contract with various other organizations to conduct research and development activities with remaining contract costs to us of approximately $237.8 million as of December 31, 2021.
1 unchanged sentence
In some instances, the contracts may be cancelled by the third party upon written notice.
−Removed: Off-Balance Sheet Arrangements
−Removed: As of December 31, 2020, we did not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
2 unchanged sentences
The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.
−Removed: On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue, prepaid and accrued research and development expenses and stock-based compensation.
+Added: On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue, inventory, our excess purchase commitment liability, liabilities related to sale of future royalties, impairment of intangible assets, and income
We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
2 unchanged sentences
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
−Removed: Derivative Financial Instruments
−Removed: We account for warrants and other derivative financial instruments as either equity or liabilities in accordance with ASC Topic 815, Derivatives and Hedging, or ASC 815, based upon the characteristics and provisions of each instrument.
−Removed: Warrants classified as equity are recorded at fair value as of the date of issuance on our consolidated balance sheets and no further adjustments to their valuation are made.
−Removed: Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense.
−Removed: The warrant issued by us in connection with the Janssen Pharmaceutica NV Research and License Agreement, the Janssen Agreement, is classified as equity in our consolidated balance sheet.
−Removed: (See Note 12 to our consolidated financial statements in Part 2, Item 8.
−Removed: Statements and Supplementary Data).
−Removed: The derivative liability recorded in connection with the Loan Agreement with Pharmakon is classified as a liability in our consolidated balance sheet.
−Removed: (See Note 11 to our consolidated financial statements in Part 2, Item 8.
−Removed: Financial Statements and Supplementary Data).
−Removed: We value our inventories at the lower-of-cost or net realizable value.
−Removed: We determine the cost of our inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis.
−Removed: We classify inventory costs as long-term, in other assets in our consolidated balance sheets, when we expect to utilize the inventory beyond our normal operating cycle.
−Removed: Prior to the regulatory approval of our product candidates, we incur expenses for the manufacture of material that could potentially be available to support the commercial launch of our products.
−Removed: Until the first reporting period when regulatory approval has been received or is otherwise considered probable and the future economic benefit is expected to be realized, we record all such costs as research and development expense.
−Removed: Inventory used in clinical trials is also expensed as research and development expense, when selected for such use.
−Removed: Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical manufacturing campaign.
−Removed: We perform an assessment of the recoverability of capitalized inventory during each reporting period, and write down any excess and obsolete inventory to our net realizable value in the period in which the impairment is first identified.
−Removed: Such impairment charges, should they occur, are recorded as a component of cost of product sales in the consolidated statements of operations and comprehensive loss.
−Removed: The determination of whether inventory costs will be realizable requires the use of estimates by management.
−Removed: If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required.
−Removed: Additionally, our product is subject to strict quality control and monitoring that we perform throughout the manufacturing process.
−Removed: In the event that certain batches or units of product do not meet quality specifications, we will record a charge to cost of product sales, to write-down any unmarketable inventory to its estimated net realizable value.
−Removed: In all cases, product inventory is carried at the lower of cost or its estimated net realizable value.
−Removed: We perform an assessment of all embedded features of a debt instrument to determine if (1) such features should be bifurcated and separately accounted for, and (2) if bifurcation requirements are met, whether such features should be classified and accounted for as equity or liability instruments.
−Removed: If the embedded feature meets the requirements to be bifurcated and accounted for as a liability, the fair value of the embedded feature is measured initially, included as a liability on the consolidated balance sheet, and re-measured to fair value at each reporting period.
−Removed: Any changes in fair value are recorded in the consolidated statement of operations.
−Removed: We monitor, on an ongoing basis, whether events or circumstances could give rise to a change in the classification of embedded features.
−Removed: Excess Purchase Commitment Liability
−Removed: We identified executory contracts in the commercial supply agreements between Keryx and its contract manufacturers for Auryxia, which include future firm purchase commitments.
−Removed: These executory contracts were deemed to have an off-market element related to the amount of purchase commitments that exceed the current forecast and as such, we recorded a liability in purchase accounting.
−Removed: We re-evaluate the excess purchase commitments each reporting period to assess whether any adjustments to the excess purchase commitment liability are necessary.
−Removed: This evaluation includes reviewing the contractual minimums, expiration and utilization assumptions, and sales forecasts.
−Removed: We generate revenues primarily from sales of Auryxia, see Note 3 to our consolidated financial statements in Part II, Item 8.
−Removed: Financial Statements and Supplementary Data, and from our collaborations with MTPC and Otsuka, see Note 4 to our consolidated financial statements in Part II, Item 8.
−Removed: Financial Statements and Supplementary Data.
−Removed: We recognize revenue in accordance with ASC 606, which applies to all contracts with customers, except for contracts that are within the scope of other standards.
−Removed: Under ASC 606, we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.
−Removed: To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps:
−Removed: (i) identify the contract(s) with a customer;
−Removed: (ii) identify the performance obligations in the contract;
−Removed: (iii) determine the transaction price;
−Removed: (iv) allocate the transaction price to the performance obligations in the contract;
−Removed: (v) recognize revenue when (or as) the entity satisfies a performance obligation.
−Removed: We only apply the five-step model to contracts when it is probable that the entity will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.
−Removed: At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct.
−Removed: We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
−Removed: We do not include a financing component in our estimated transaction price at contract inception unless we estimate that certain performance obligations will not be satisfied within one year.
−Removed: Additionally, we recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less.
Product Revenue, Net
4 unchanged sentences
We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less.
−Removed: Reserves for Variable Consideration
−Removed: Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that are offered within contracts between us and our Customers, health care providers, payors and other indirect customers relating to our sales of our products.
−Removed: These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount will be credited to the Customer) or as a current liability (if the amount is payable to a Customer or a party other than a Customer).
−Removed: When appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns.
−Removed: Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the respective underlying contracts.
−Removed: The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.
−Removed: Actual amounts of consideration ultimately received may differ from our estimates.
−Removed: If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.
+Added: Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and are based on various incentives that are offered within contracts between us and our Customers, health care providers, payors and other indirect customers relating to sales of our products.
+Added: These reserves are based on the amounts earned or to be claimed on the related sales.
+Added: These reserves include:
• Trade Discounts and Allowances:
−Removed: We generally provide Customers with discounts that include incentive fees that are explicitly stated in our contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized.
+Added: Discounts that include incentive fees that are explicitly stated in our contracts.
In addition, we compensate (through trade discounts and allowances) our Customers for sales order management, data, and distribution services.
−Removed: However, we have determined such services received to date are not distinct from our sale of products to the Customer and, therefore, these payments have been recorded as a reduction of revenue within the consolidated statement of operations and comprehensive loss through December 31, 2020.
−Removed: We record a corresponding reduction to accounts receivable (if the trade discount and/or allowance will be credited to the Customer) or an increase to accrued expense (if the trade discount and/or allowance is payable to a Customer) on the consolidated balance sheets.
• Product Returns:
1 unchanged sentence
This right of return generally lapses once the product is provided to a patient.
−Removed: We estimate the amount of our product sales that may be returned for credit by our Customers and record this estimate as a reduction of revenue in the period the related product revenue is
+Added: We estimate the amount of our product sales that may be returned for credit by our Customers.
We currently estimate product return reserve using available industry data and our own historical sales information, including our visibility into the inventory remaining in the distribution channel.
2 unchanged sentences
Customers charge us for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers.
−Removed: These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable.
−Removed: Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider by Customers, and we generally issue credits for such amounts within a few weeks of the Customer’s resale of the product.
Reserves for chargebacks consist of credits that we expect to issue for units that remain in the distribution channel at each reporting period end that we expect will be sold to qualified healthcare providers, and chargebacks that Customers have claimed but for which we have not yet issued a credit.
2 unchanged sentences
We estimate the rebates for commercial and Medicare Part D payors based upon (i) our contracts with the payors and (ii) information obtained from our Customers and other third parties regarding the payor mix for Auryxia.
−Removed: We estimate these rebates and record such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability.
• Other Government Rebates:
1 unchanged sentence
We estimate Medicaid and other government programs rebates based upon a range of possible outcomes that are probability-weighted for the estimated payor mix.
−Removed: These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses and other current liabilities on the consolidated balance sheets.
For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program.
3 unchanged sentences
The calculation of the accrual for co-pay assistance is based on actual claims processed during a given period, as well as historical utilization data to estimate the amount we expect to receive associated with product that has been recognized as revenue, but remains in in the distribution channel at the end of each reporting period.
+Added: When appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying
+Added: and payment patterns.
+Added: Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the respective underlying contracts.
+Added: The preceding estimates and judgments materially affect our recognition of net product revenues.
+Added: Changes in our estimates of net product revenues could have a material effect on net product revenues recorded in the period in which we determine that change occurs.
Collaboration Revenues
6 unchanged sentences
Each of these payments may result in license, collaboration and other revenue, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues.
−Removed: In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under each of our agreements, we implement the five-step model noted above.
−Removed: As part of the accounting for these arrangements, we must develop assumptions that require judgment to determine whether the individual promises should be accounted for as separate performance obligations or as a combined performance obligation, and to determine the stand-alone selling price for each performance obligation identified in the contract.
−Removed: A deliverable represents a separate performance obligation if both of the following criteria are met:
−Removed: (i) the customer can benefit from the good or service either on our own or together with other resources that are readily available to the customer, and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.
+Added: For elements of our collaboration agreements that are accounted for pursuant to ASC 606, we must develop assumptions that require judgment to determine whether the individual promises should be accounted for as separate performance obligations or as a combined performance obligation, and to determine the stand-alone selling price for each performance obligation identified in the contract.
We use key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success.
−Removed: With regard to the MTPC and Otsuka collaboration agreements, we recognize revenue related to amounts allocated to the identified performance obligation on a proportional performance basis as the underlying services are performed.
−Removed: Licenses of Intellectual Property
If the license to our intellectual property is determined to be distinct from the other performance obligations identified in an out-license and collaboration arrangement, we recognize revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.
For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.
−Removed: We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
−Removed: Milestone Payments
−Removed: At the inception of each arrangement that includes development milestone payments, we evaluate whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method.
−Removed: We evaluate factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to assess the milestone as probable of being achieved.
−Removed: There is considerable judgment involved in determining whether a milestone is probable of being reached at each specific reporting period.
−Removed: Milestone payments that are not within our control or the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.
−Removed: If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.
−Removed: The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenues as, or when, the performance obligations under the contract are satisfied.
−Removed: At the end of each subsequent reporting period, we will re-evaluate the probability of achievement of such development milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price.
−Removed: Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenue in the period of adjustment.
−Removed: Manufacturing Supply Services
−Removed: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options.
−Removed: We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations.
−Removed: If we are entitled to additional payments when the licensee exercises these options, any additional payments are recorded in license, collaboration and other revenues when the licensee obtains control of the goods, which is upon delivery.
−Removed: We will recognize sales-based royalties, including milestone payments based on the level of sales, at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
−Removed: We receive royalty payments from JT and Torii, based on net sales of Riona in Japan.
−Removed: Collaborative Arrangements
−Removed: We record the elements of our collaboration agreements that represent joint operating activities in accordance with ASC Topic 808, Collaborative Arrangements (ASC 808).
−Removed: Accordingly, the elements of the collaboration agreements that represent activities in which both parties are active participants and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities are recorded as collaborative arrangements.
−Removed: We consider the guidance in ASC 606-10-15, Revenue from Contracts with Customers – Scope and Scope Exceptions , in determining the appropriate treatment for the transactions between us and our collaborative partner and the transactions between us and third parties.
−Removed: Generally, the classification of transactions under the collaborative arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants.
−Removed: Therefore, we recognize our allocation of the shared costs incurred with respect to the jointly conducted medical affairs and commercialization and non-promotional activities under the Otsuka U.S.
−Removed: Agreement, as defined below in Note 4 to our consolidated financial statements in Part II, Item 8.
−Removed: Financial Statements and Supplementary Data, as a component of the related expense in the period incurred.
−Removed: To the extent product revenue is generated from the collaboration, we recognize our share of the net sales on a gross basis if it is deemed to be the principal in the transactions with customers, or on a net basis if it is instead deemed to be the agent in the transactions with customers, consistent with the guidance in ASC 606.
+Added: With regard to the Otsuka collaboration agreements, we recognize revenue related to amounts allocated to the identified performance obligation on a proportional performance basis as the underlying services are performed.
+Added: The preceding estimates and judgments materially affect our recognition of collaboration revenues.
+Added: Changes in our estimates of forecasted development costs could impact proportional performance percentages and could have a material effect on collaboration revenue recorded in the period in which we determine that change occurs.
+Added: We value our inventories at the lower-of-cost or net realizable value.
+Added: We determine the cost of our inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis.
+Added: We classify inventory costs as long-term, in other assets in our consolidated balance sheets, when we expect to utilize the inventory beyond our normal operating cycle.
+Added: We perform an assessment of the recoverability of capitalized inventory during each reporting period, and write down any excess and obsolete inventory to our net realizable value in the period in which the impairment is first identified.
+Added: Such impairment charges, should they occur, are recorded as a component of cost of product sales in the consolidated statements of operations and comprehensive loss.
+Added: The determination of whether inventory costs will be realizable requires the use of estimates by management.
+Added: If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required.
+Added: Additionally, our product is subject to strict quality control and monitoring that we perform throughout the manufacturing process.
+Added: In the event that certain batches or units of product do not meet quality specifications, we will record a charge to cost of product sales, to write-down any unmarketable inventory to its estimated net realizable value.
+Added: In all cases, product inventory is carried at the lower of cost or its estimated net realizable value.
+Added: Excess Purchase Commitment Liability
+Added: We identified executory contracts in the commercial supply agreements between Keryx and its contract manufacturers for Auryxia, which include future firm purchase commitments.
+Added: These executory contracts were deemed to have an off-market element related to the amount of purchase commitments that exceed the current forecast and as such, we recorded a liability in purchase accounting.
+Added: We re-evaluate the excess purchase commitments each reporting period to assess whether any adjustments to the excess purchase commitment liability are necessary.
+Added: This evaluation includes reviewing the contractual minimums, expiration and utilization assumptions, and sales forecasts.
+Added: Inventory receipts that have been previously identified as excess are recorded as a reduction to the excess purchase commitment liability.
+Added: Liability Related to Sale of Future Royalties
+Added: We treat the liability related to sale of future royalties as a debt financing, amortized under the effective interest rate method over the estimated life of the related expected royalty stream.
+Added: The liability related to sale of future royalties and the debt amortization are based on our current estimates of future royalties expected to be paid over the life of the arrangement.
+Added: periodically assess the expected royalty payments.
+Added: To the extent our estimates of future royalty payments are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, we will adjust the effective interest rate and recognize related non-cash interest expense on a prospective basis.
+Added: Changes in our estimates of future royalty payments could have a material effect on the liability related to sale of future royalties balance recorded in the period in which we determine that change occurs.
Intangible Assets
8 unchanged sentences
In determining estimated future cash flows associated with the intangible asset group, we use market participant assumptions pursuant to ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820).
−Removed: During the second quarter of 2020, we identified indicators of impairment related to the developed product rights for Auryxia and recorded an impairment charge of $115.5 million (see Note 9 to our consolidated financial statements in Part II, Item 8.
−Removed: Financial Statements and Supplementary Data for additional information).
+Added: During the second quarter of 2020, we identified indicators of impairment related to the developed product rights for Auryxia and recorded an impairment charge of $115.5 million (see Note 9 contained in this Annual Report on Form 10-K for additional information).
Income taxes are recorded in accordance with FASB Topic 740, Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach.
2 unchanged sentences
Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
−Removed: All deferred taxes as of December 31, 2020 and 2019 are classified as noncurrent within the income tax provision (see Note 14 to our consolidated financial statements in Part 2, Item 8.
+Added: All deferred taxes as of December 31, 2021 and 2020 are classified as noncurrent within the income tax provision (see Note 14 to our consolidated financial statements in Part II, Item 8.
Financial Statements and Supplementary Data).
−Removed: We account for uncertain tax positions in accordance with the provisions of ASC 740.
−Removed: When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will more likely than not be realized.
−Removed: The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances.
−Removed: As of December 31, 2020 and 2019, we do not have any significant uncertain tax positions.
−Removed: We recognize interest and penalties related to uncertain tax positions in income tax expense.
−Removed: Stock-Based Compensation
−Removed: We account for stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation, or ASC 718.
−Removed: ASC 718 requires all stock-based payments to employees and non-employees, including grants of stock options, restricted stock, restricted stock units, or RSUs, performance-based restricted stock units, or PSUs, and modifications to existing stock awards, to be recognized in the statements of operations and comprehensive loss based on their fair values.
−Removed: Our stock-based awards are comprised of stock options and RSUs.
−Removed: We estimate the fair value of options granted using the Black-Scholes option pricing model.
−Removed: We use a blend of our stock price and the quoted market price of comparable public companies to determine the fair value of restricted stock awards and common stock awards.
−Removed: The Black-Scholes option pricing model requires the input of certain subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate and (d) expected dividends.
−Removed: Due to the lack of company-specific historical and implied volatility data for trading our stock in the public market, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded.
−Removed: The historical volatility is calculated based on a period of time commensurate with the expected term assumption.
−Removed: The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to us, including stage of product development and life science industry focus.
−Removed: During 2017, we began to estimate our volatility by using a blend of our stock price history for the length of time we have market data for our stock and the historical volatility of similar public companies for the expected term of each grant.
−Removed: We are a commercial-stage biopharmaceutical company and the representative group of companies has certain similar characteristics to us.
−Removed: We believe the group selected has sufficient similar
−Removed: economic and industry characteristics and includes companies that are most representative of us.
−Removed: We use the simplified method as prescribed by the SEC Staff Accounting Bulletin No.
−Removed: 107, Share-Based Payment, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.
−Removed: The expected term is applied to the stock option grant group as a whole, as we do not expect substantially different exercise or post-vesting termination behavior among our employee population.
−Removed: For options granted to non-employees, we utilize the contractual term of the arrangement as the basis for the expected term assumption.
−Removed: The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options.
−Removed: The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on our common stock, which is similar to our peer group.
−Removed: Our stock-based awards are subject to either service- or performance-based vesting conditions.
−Removed: Compensation expense related to awards to employees and non-employees with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term, and is adjusted for pre-vesting forfeitures in the period in which the forfeitures occur.
−Removed: Compensation expense related to awards to employees and non-employees with performance-based vesting conditions is recognized based on the grant date fair value over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable.
−Removed: For awards with performance conditions in which the award does not vest unless the performance condition is met, we recognize expense if, and to the extent that, we estimate that achievement of the performance condition is probable.
−Removed: If we conclude that vesting is probable, we recognize expense from the date we reach this conclusion through the estimated vesting date.
Recent Accounting Pronouncements
−Removed: For additional discussion of recent accounting pronouncements, please refer to New Accounting Pronouncements – Recently Adopted and New Accounting Pronouncements – Not Yet Adopted included within Note 2 to our consolidated financial statements in Part 2, Item 8.
−Removed: Financial Statements and Supplementary Data.
+Added: For additional discussion of recent accounting pronouncements, please refer to New Accounting Pronouncements – Recently Adopted and New Accounting Pronouncements – Not Yet Adopted included within Note 2 to our consolidated financial statements in Part II, Item 8.
+Added: Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
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.