Akebia Therapeutics, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk. We are exposed to market risk related to changes in interest rates. As of March 31, 2022 and December 31, 2021, we had cash and cash equivalents of $174.6 million and $149.8 million, respectively, consisting primarily of money market mutual funds consisting of certificates of deposit and corporate debt securities. Interest rate sensitivity is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term securities. Our investments are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio. In addition, we are exposed to market risk related to exchange rates. A portion of our revenues for the three months ended March 31, 2022 was received in royalty payments converted to U.S. dollars based on the net sales of Riona and Vafseo TM in Japanese yen. Our exchange rate risk arises from such foreign currency net sales. As a result, we are exposed to movements in the exchange rates of the Japanese yen against the U.S. dollar. For the royalty payments we received based on net sales of Riona and Vafseo in Japan for the three months ended March 31, 2022 a 5.0% appreciation or depreciation of the Japanese yen against the U.S. dollar would have increased or decreased, respectively, our revenues in the three months ended March 31, 2022 by approximately $0.1 million. We have generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this foreign currency risk.